EXHIBIT 4.1
EXECUTION COPY
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[JPMORGAN LOGO]
$325,000,000
CREDIT AGREEMENT
dated as of
June 17, 2005
among
TBC CORPORATION
and
TBC PRIVATE BRANDS, INC.,
as Borrowers
The Lenders Party Hereto,
U.S. BANK NATIONAL ASSOCIATION and
REGIONS BANK
each as a Documentation Agent,
SUNTRUST BANK
as Syndication Agent,
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
as Administrative Agent
and
JPMORGAN CHASE BANK, N.A.
as Co-Administrative Agent
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▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
as Advisor, Lead Arranger and Bookrunner
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SUNTRUST ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
a division of SunTrust Capital Markets, Inc.,
as Arranger
TABLE OF CONTENTS
PAGE
ARTICLE I Definitions......................................................................... 1
SECTION 1.01. Defined Terms...................................................... 1
SECTION 1.02. Classification of Loans and Borrowings............................. 22
SECTION 1.03. Terms Generally.................................................... 22
SECTION 1.04. Accounting Terms; GAAP............................................. 22
ARTICLE II The Credits........................................................................ 23
SECTION 2.01. Revolving and Term Loan Commitments................................ 23
SECTION 2.02. Loans and Borrowings............................................... 23
SECTION 2.03. Requests for Borrowings............................................ 25
SECTION 2.04. Swingline Loans.................................................... 25
SECTION 2.05. Letters of Credit.................................................. 26
SECTION 2.06. Funding of Borrowings.............................................. 31
SECTION 2.07. Interest Elections................................................. 31
SECTION 2.08. Termination and Reduction of Revolving Credit Commitments.......... 32
SECTION 2.09. Repayment of Loans; Evidence of Debt............................... 33
SECTION 2.10. Prepayment of Loans................................................ 34
SECTION 2.11. Fees............................................................... 36
SECTION 2.12. Interest........................................................... 37
SECTION 2.13. Alternate Rate of Interest......................................... 38
SECTION 2.14. Increased Costs.................................................... 38
SECTION 2.15. Break Funding Payments............................................. 39
SECTION 2.16. Taxes.............................................................. 40
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of Set-offs........ 41
SECTION 2.18. Mitigation Obligations; Replacement of Lenders..................... 42
ARTICLE III Representations and Warranties.................................................... 43
SECTION 3.01. Organization; Powers............................................... 43
SECTION 3.02. Authorization; Enforceability...................................... 44
SECTION 3.03. Governmental Approvals; No Conflicts............................... 44
SECTION 3.04. Financial Condition; No Material Adverse Change.................... 44
SECTION 3.05. Properties......................................................... 44
SECTION 3.06. Litigation and Environmental Matters............................... 45
SECTION 3.07. Compliance with Laws and Agreements................................ 45
SECTION 3.08. Investment and Holding Company Status.............................. 45
SECTION 3.09. Taxes.............................................................. 46
SECTION 3.10. ERISA.............................................................. 46
SECTION 3.11. Disclosure......................................................... 46
SECTION 3.12. Margin Stock....................................................... 46
SECTION 3.13. Compliance with Conditions Precedent............................... 47
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PAGE
SECTION 3.14. Labor Matters...................................................... 47
SECTION 3.15. Security Documents................................................. 47
SECTION 3.16. Solvency........................................................... 47
SECTION 3.17. Regulation H....................................................... 47
ARTICLE IV Conditions......................................................................... 48
SECTION 4.01. Effective Date..................................................... 48
SECTION 4.02. Each Credit Event.................................................. 49
ARTICLE V Affirmative Covenants............................................................... 50
SECTION 5.01. Punctual Payment................................................... 50
SECTION 5.02. Financial Statements and Other Information......................... 50
SECTION 5.03. Notices of Material Events......................................... 51
SECTION 5.04. Existence; Conduct of Business..................................... 52
SECTION 5.05. Payment of Obligations............................................. 52
SECTION 5.06. Maintenance of Properties; Insurance............................... 52
SECTION 5.07. Books and Records; Inspection Rights............................... 52
SECTION 5.08. Compliance with Laws............................................... 52
SECTION 5.09. Use of Proceeds.................................................... 53
SECTION 5.10. Intercompany Loans/Payments........................................ 53
SECTION 5.11. Subsidiary Guarantees and Collateral............................... 53
SECTION 5.12. Environmental Laws................................................. 54
SECTION 5.13. Additional Collateral, etc......................................... 54
SECTION 5.14. Title Insurance, etc............................................... 55
ARTICLE VI Negative Covenants................................................................. 56
SECTION 6.01. Indebtedness....................................................... 56
SECTION 6.02. Liens.............................................................. 57
SECTION 6.03. Fundamental Changes................................................ 58
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions.......... 59
SECTION 6.05. Hedging Agreements................................................. 60
SECTION 6.06. Transactions with Affiliates....................................... 60
SECTION 6.07. Restrictive Agreements............................................. 60
SECTION 6.08. Fixed Charge Coverage Ratio........................................ 61
SECTION 6.09. Maximum Leverage Ratio............................................. 61
SECTION 6.10. Asset Test......................................................... 61
SECTION 6.11. Disclosure......................................................... 61
SECTION 6.12. Sale of Assets..................................................... 62
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PAGE
ARTICLE VII Events of Default................................................................. 62
ARTICLE VIII The Administrative Agent and the Co-Administrative Agent......................... 65
ARTICLE IX Miscellaneous...................................................................... 67
SECTION 9.01. Notices............................................................ 67
SECTION 9.02. Waivers; Amendments................................................ 68
SECTION 9.03. Expenses; Indemnity; Damage Waiver................................. 69
SECTION 9.04. Successors and Assigns; Participations and Assignments............. 70
SECTION 9.05. Survival........................................................... 73
SECTION 9.06. Counterparts; Integration; Effectiveness........................... 74
SECTION 9.07. Severability....................................................... 74
SECTION 9.08. Right of Setoff.................................................... 74
SECTION 9.09. Governing Law, Jurisdiction; Consent to Service of Process......... 75
SECTION 9.10. WAIVER OF JURY TRIAL............................................... 75
SECTION 9.11. Headings........................................................... 76
SECTION 9.12. Confidentiality.................................................... 76
SECTION 9.13. Interest Rate Limitation........................................... 76
SECTION 9.14. Joint and Several Liability of Borrowers........................... 77
SECTION 9.15. USA PATRIOT Act.................................................... 77
Schedule 1.01A FORM OF ASSIGNMENT AND ACCEPTANCE
Schedule 1.01B FORM OF INCREMENTAL FACILITY ACTIVATION NOTICE
Schedule 1.01C EXISTING LETTERS OF CREDIT
Schedule 2.01 COMMITMENTS
Schedule 2.02 FORM OF NEW LENDER SUPPLEMENT
Schedule 3.01 BORROWERS AND SUBSIDIARIES AND JURISDICTIONS OF ORGANIZATION
Schedule 4.01(f) FORM OF GUARANTEE AND COLLATERAL AGREEMENT
Schedule 6.01 EXISTING INDEBTEDNESS
Schedule 6.01(e) GUARANTEE OBLIGATIONS OF BIG O TIRES, INC. AND SUBSIDIARIES
Schedule 6.02 EXISTING LIENS
Schedule 6.04(b) EXISTING INVESTMENTS AND LOANS
Schedule 6.07 EXISTING RESTRICTIONS
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of June 17, 2005, is among TBC
Corporation, a Delaware corporation with its principal office located at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Holdings"), TBC
Private Brands, Inc., a Delaware corporation with an office located at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("TBC Private Brands") (Holdings and
TBC Private Brands, each a "Borrower" and together the "Borrowers"), the Lenders
from time to time party to this Agreement (each a "Lender"), First Tennessee
Bank National Association, a banking corporation with its principal office
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as administrative agent
for the Lenders (in such capacity, the "Administrative Agent") and JPMorgan
Chase Bank, N.A., a banking corporation with an office located at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as co-administrative agent for the Lenders (in
such capacity the "Co-Administrative Agent").
RECITALS
WHEREAS, the Borrowers are parties to the $273,500,000 Second
Amended and Restated Credit Agreement (the "Existing Credit Agreement"), dated
as of November 19, 2004 among the Borrowers, the lenders party thereto, the
Administrative Agent and the Co-Administrative Agent;
WHEREAS, the Borrowers intend to refinance, terminate and replace
the Existing Credit Agreement (the "Refinancing"); and
WHEREAS, to facilitate the Refinancing, and to finance the
Borrowers' working capital needs, capital expenditures, further acquisitions and
other general corporate purposes, the Borrowers wish to establish with the
Lenders credit facilities providing for term loans, revolving loans, letters of
credit and swingline loans of up to $325,000,000 in the aggregate maximum
principal amount at any time outstanding, and the Lenders and the Administrative
Agent are willing to establish such credit facilities on the terms and
conditions set forth herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Acceptable Acquisition" means any transaction completed after the
Effective Date pursuant to which any Borrower or any of its Wholly-Owned
Subsidiaries (a) acquires all
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of the outstanding equity securities of any Person other than the Borrowers or
any Person which is then a Wholly-Owned Subsidiary of any Borrower, (b)
otherwise makes any Person a Wholly-Owned Subsidiary of any Borrower, in any
case pursuant to a merger, purchase of assets or any reorganization or (c)
purchases all or substantially all of the business or assets of any Person other
than a Wholly-Owned Subsidiary of the Borrowers or of any business unit or line
of business of any such Persons if (i) such transaction has been either (1)
approved by the Board of Directors of the corporation, or the comparable or
appropriate body of any other Person, which is the subject of such transaction
or (2) recommended by such Board to the shareholders of such corporation, or by
such other body to the equity holders of such other Person, (ii) the target of
the transaction is a Person which is engaged in the replacement tire industry,
(iii) no Default or Event of Default shall have occurred and be continuing or
would result therefrom and (iv) pro forma financial statements and projections
including Holdings, its Subsidiaries and the Person and/or assets to be
acquired, covering the most recent 12 month period for which financial
statements are available and the twelve months following the transaction, show
that no Default or Event of Default would result from such transaction.
"Additional Note Agreement" means the Note Agreement dated as of
April 1, 2003 between TBC Private Brands (formerly known as TBC Corporation) and
Prudential, as amended by (i) Amendment No. 1 to Note Purchase Agreement, dated
as of November 29, 2003, (ii) by Amendment No. 2 to Note Purchase Agreement,
dated as of November 19, 2004 and (iii) Amendment No. 3 to the Purchase
Agreement, dated as of June 17, 2005.
"Additional Prudential Notes" means the Senior Notes the Borrowers
issued and Prudential purchased pursuant to the Additional Note Agreement.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means First Tennessee Bank National
Association, in its capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Agreement" means this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Alternate Base Rate" means, for any day, a rate per annum equal to
the highest of (a) the Prime Rate in effect on such day, and (b) the Federal
Funds Effective Rate in effect on such day plus 0.5%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate, or the Federal Funds Effective Rate,
respectively.
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"Applicable Percentage" means, with respect to any Lender, at any
time, the percentage of the total Revolving Credit Commitments represented by
such Lender's Revolving Credit Commitment at such time. If the Revolving Credit
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the principal amount of all Revolving Loans outstanding,
giving effect to any assignments and any increase pursuant to Section 2.02(d).
"Applicable Rate" means, for any day, with respect to any ABR Loan
or Eurodollar Loan, or with respect to the commitment fees payable hereunder, as
the case may be, the applicable rate per annum, stated in basis points, set
forth below under the caption "ABR Spread", "Eurodollar Spread" or "Commitment
Fee Rate", as the case may be, based upon the Leverage Ratio as in effect on
such date:
Commitment
Leverage Ratio: ABR Spread Eurodollar Spread Fee Rate
---------------------------- ---------- ----------------- ----------
Category 1:
equal to or higher than 2.50 0.75% 1.75% 30 bps
Category 2:
less than 2.50 but equal to
or higher than 2.25 0.50% 1.50% 25 bps
Category 3:
less than 2.25 but equal to
or higher than 1.75 0.25% 1.25% 20 bps
Category 4:
less than 1.75, but equal
to or higher than 1.25 0% 1.00% 17.5 bps
Category 5:
less than 1.25 0% 0.875% 15 bps
For purposes of the foregoing, the Leverage Ratio shall be
determined and adjusted on the first day of the month after the month in which
Holdings provides the Financial Officer's certificate in accordance with the
provisions of Section 5.02(c) (each a "Ratio Calculation Date"). The initial
Applicable Rate shall be 0.50% for ABR Loans and 1.50% for Eurodollar
Borrowings, and shall not be less than such rate until the first Ratio
Calculation Date subsequent to September 30, 2005. If Holdings fails to provide
a Financial Officer's certificate required by Section 5.02(c) on or before the
date required pursuant to such Section, the Applicable Rate shall be based on
Category 1 from such date until such time that an appropriate Financial
Officer's certificate is provided, whereupon the Applicable Rate shall then be
determined by the Leverage Ratio reflected on such Financial Officer's
certificate, until the next Ratio Calculation Date. Subject to the preceding
sentence, each determination of the Applicable
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Rate shall be effective from one Ratio Calculation Date until the next Ratio
Calculation Date. Any adjustment in the Applicable Rate shall be applicable to
all existing Loans as well as any new Loans made, as long as the adjusted
Applicable Rate remains in effect.
"Approved Fund" has the meaning assigned to such term in Section
9.04(b).
"Arranger" means ▇. ▇. ▇▇▇▇▇▇ Securities Inc. in its capacity as
lead arranger of the Commitments.
"Assignee" has the meaning assigned to such term in Section 9.04(b).
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Schedule 1.01A or any other form approved by the Administrative
Agent.
"Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Revolving Credit Maturity
Date or the date of termination of the Revolving Credit Commitments.
"Available Revolving Credit Commitment" means, with respect to each
Lender, at any time, the amount of its Revolving Credit Commitment minus its
Revolving Credit Exposure, at such time.
"Board" means the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrowers" has the meaning set forth in the introductory paragraph
of this Agreement.
"Borrowing" means (a) Loans that are of the same Class and Type,
that are made, converted or continued on the same date and, in the case of
Eurodollar Loans, as to which a single Interest Period is in effect or (b) a
Swingline Loan.
"Borrowing Request" means a request by either Borrower for a
Revolving Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in Memphis, Tennessee are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Capital Expenditures" mean, for any period, expenditures (excluding
the aggregate amount of Capital Lease Obligations incurred during such period)
made directly or indirectly by Holdings or any Subsidiary to acquire or
construct fixed assets, property, plant and equipment (including renewals,
improvements, replacements and substitutions, but excluding repairs) during such
period, computed in accordance with GAAP.
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"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" means (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of shares
representing more than 20% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of Holdings; (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of
Holdings by Persons who were neither (i) nominated by the board of directors of
Holdings nor (ii) appointed by directors so nominated; or (c) the acquisition of
direct or indirect Control of Holdings by any Person or group.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender (or,
for purposes of Section 2.14(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Term Loans or Swingline Loans.
"Co-Administrative Agent" means JPMorgan Chase Bank, N.A. in its
capacity as co-administrative agent for the Lenders hereunder.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral Agent" has the meaning assigned to such term in the
Guarantee and Collateral Agreement.
"Commitment" means, with respect to each Lender, the commitment of
such Lender to make Loans of a given Class, and to acquire participations in
Letters of Credit and Swingline Loans, hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.08 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04. The initial amount of each Lender's Commitment to make Loans of a
given Class is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Commitment, as applicable.
"Conduit Lender" means any special purpose corporation organized and
administered by any Lender for the purpose of making Loans otherwise required to
be made by such Lender and designated by such Lender in a written instrument;
provided, that the
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designation by any Lender of a Conduit Lender shall not relieve the designating
Lender of any of its obligations to fund a Loan under this Agreement if, for any
reason, its Conduit Lender fails to fund any such Loan, and the designating
Lender (and not the Conduit Lender) shall have the sole right and responsibility
to deliver all consents and waivers required or requested under this Agreement
with respect to its Conduit Lender, and provided, further, that no Conduit
Lender shall (a) be entitled to receive any greater amount pursuant to Section
2.14, 2.15, 2.16 or 9.03 than the designating Lender would have been entitled to
receive in respect of the extensions of credit made by such Conduit Lender or
(b) be deemed to have any Commitment.
"Consolidated Funded Indebtedness" means all Funded Indebtedness of
Holdings and its Subsidiaries after eliminating inter-company items, including
any Funded Indebtedness outstanding pursuant to and under this Agreement, in
each case determined on a consolidated basis in accordance with GAAP.
"Consolidated Cash Interest Expense" means for any period for which
such amount is being determined, (a) the interest expense of Holdings and the
Consolidated Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP, including (i) the portion of any rents payable under
Capital Lease Obligations allocable to interest expense in accordance with GAAP
and (ii) commissions, discounts, yield and other fees, charges and amounts
incurred in connection with Permitted Securitizations during such period that
are payable to any person other than Holdings or any Subsidiary and that are
comparable to or in the nature of interest under any Permitted Securitization,
including losses on the sale of assets relating to any receivables
securitization transaction accounted for as a "true sale" (other than any
one-time financing fees paid upon entering into any Permitted Securitization)
minus (b) to the extent included in such consolidated interest expense for such
period, non-cash amounts attributable to amortization of debt discounts, accrued
interest payable in kind or amortization of fees paid in a previous period.
"Consolidated Net Income" means the net income of Holdings and its
Consolidated Subsidiaries, after taxes and after extraordinary items as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Rental Expense" means for any period for which such
amount is being determined, the aggregate rental payments (net of any sublease
income) of Holdings and its Consolidated Subsidiaries for such period determined
on a consolidated basis in accordance with GAAP.
"Consolidated Subsidiaries" means Subsidiaries whose accounts are
consolidated with the accounts of Holdings in Holdings' consolidated financial
statements prepared in accordance with GAAP.
"Consolidated Total Liabilities" means, at any date the consolidated
total liabilities of Holdings and its Subsidiaries at such date determined in
accordance with GAAP.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to
7
exercise voting power, by contract or otherwise. "Controlling" and "Controlled"
have meanings correlative thereto.
"Default" means any event or condition which constitutes an Event of
Default or which solely upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"dollars" or "$" refers to lawful money of the United States of
America.
"EBITDA" means the sum of the following items measured for each
Fiscal Quarter:
(i) Consolidated Net Income, plus
(ii) depreciation, amortization, and all other non-cash charges,
plus
(iii) income taxes to the extent they reduce Consolidated Net
Income, plus
(iv) Consolidated Cash Interest Expense.
In addition, (a) EBITDA shall include, on a pro forma basis for each Fiscal
Quarter (including any pro forma cost savings to the extent the same could be
reflected in pro forma financial statements contained in filings with the
Securities and Exchange Commission pursuant to its Regulation S-X), the
foregoing information with respect to each Person that was either acquired in an
Acceptable Acquisition or disposed of as permitted by this Agreement during such
Fiscal Quarter, determined as if the Acquisition or disposition had taken place
on the first day of such Fiscal Quarter; and (b) whenever in this Agreement
EBITDA is determined for a period of four Fiscal Quarters, it shall include, on
a pro forma basis for such period (including any pro forma cost savings), the
foregoing information with respect to each Person that was either acquired in an
Acceptable Acquisition or disposed of as permitted by this Agreement during such
period, determined as if the Acceptable Acquisition or disposition had taken
place on the first day of such four Fiscal Quarter period.
"EBITDAR" means, for any period for which such amount is being
determined, the sum of EBITDA for such period plus Consolidated Rental Expense
for such period.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
------------
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of any Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract,
8
agreement or other consensual arrangement pursuant to which liability is assumed
or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with Holdings, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by Holdings or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by Holdings or any ERISA Affiliate from
the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by Holdings or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the receipt by Holdings or any ERISA Affiliate of any notice, or
the receipt by any Multiemployer Plan from Holdings or any ERISA Affiliate of
any notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, insolvent or in
reorganization, within the meaning of Title IV of ERISA. Notwithstanding the
foregoing, the termination of the TBC Corporation Retirement Plan, and either
Borrower's incurrence of liability under Title IV of ERISA with respect to such
termination, shall not constitute an ERISA Event if, after giving effect to the
termination and any liability incurred by either Borrower in connection
therewith, Holdings remains in compliance with the financial covenants set forth
in Sections 6.08 through 6.11, inclusive.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Excluded Foreign Subsidiary" means any Foreign Subsidiary in
respect of which either (a) the pledge of all of the Capital Stock of such
Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the
Obligations, would, in the good faith judgment of Holdings, result in adverse
tax consequences to Holdings.
"Excluded Taxes" means, with respect to the Administrative Agent,
any Lender, the Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of the Borrowers hereunder, (a) income or
franchise taxes imposed on (or measured
9
by) its net income by the United States of America, or by the jurisdiction under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable lending office
is located, (b) any branch profits taxes imposed by the United States of America
or any similar tax imposed by any other jurisdiction in which any Borrower is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrowers under Section 2.18(b)), any withholding tax that
is imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender's failure to comply with Section 2.16(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from the Borrowers with respect to such withholding
tax pursuant to Section 2.16(a).
"Existing Credit Agreement" has the meaning assigned thereto in the
recitals hereto.
"Existing Letters of Credit" means any letter of credit issued under
the Existing Credit Agreement and outstanding on the Effective Date as listed on
Schedule 1.01C.
"Existing Note Agreement" has the meaning assigned thereto in the
definition of "Prudential Debt".
"Facility Obligations" means, in each case, whether now in existence
or hereafter arising, (i) the principal of, and interest and premium, if any,
on, the Loans; (ii) the LC Exposure; and (iii) all other Indebtedness,
covenants, duties and obligations (including contingent obligations) now or at
any time or times hereafter owing by any Borrower to Administrative Agent, the
Co-Administrative Agent or any Lender under or pursuant to this Agreement or any
of the other Loan Documents, whether evidenced by any note or other writing,
whether arising from any extension of credit, opening of a Letter of Credit,
acceptance, loan, Guarantee, indemnification or otherwise and whether direct or
indirect, absolute or contingent, due or to become due, primary or secondary, or
joint or several, including all interest, charges, expenses, fees or other sums
chargeable to any Borrower or any Guarantor under this Agreement or under any of
the other Loan Documents.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer, assistant treasurer (to the extent authorized to
act) or controller of Holdings.
10
"Fiscal Quarter" means each fiscal quarter-year period of Holdings,
ending on the last day of each March, June, September and December.
"Fiscal Year" means the fiscal year of Holdings, which is the
calendar year.
"Foreign Lender" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrowers are located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"Funded Indebtedness" means any outstanding Indebtedness of a Person
for borrowed money, including all such Indebtedness of the Person to the Lenders
and other financial institutions, domestic or foreign, and all secured and
unsecured notes payable, all industrial revenue bonds, all Capital Lease
Obligations, the amount of any Permitted Securitization and other similar debt
obligations and the current maturities thereof, but excluding all Guarantees of
Funded Indebtedness. (Checks that have not been presented for payment shall not
constitute Funded Indebtedness.)
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Grantors" means the Borrowers and their Subsidiaries that are
parties to the Guarantee and Collateral Agreement.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantee and Collateral Agreement" means the Guarantee and
Collateral Agreement to be executed and delivered by each of the Borrowers and
each Grantor on the date hereof, substantially in the form of Schedule 4.01(f).
11
"Guarantor" means a Person liable pursuant to a Guarantee of any of
the Facility Obligations, which Guarantee is in form satisfactory to the
Required Lenders (the Guarantee and Collateral Agreement being in such a form).
"Hazardous Materials" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Holdings" has the meaning set forth in the introductory paragraph
of this Agreement.
"Incremental Facility Activation Notice" means a notice
substantially in the form of Schedule 1.01B.
"Incremental Facility Closing Date" means any Business Day
designated as such in an Incremental Facility Activation Notice.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances, (k)
all obligations of such Person related to synthetic leases and (l) the amount of
any Permitted Securitizations of such Person. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Information Memorandum" means the Confidential Information
Memorandum dated June 2005 relating to the Borrowers and the Transactions.
12
"Intercompany Loan" means any Indebtedness for borrowed money loaned
by any Borrower to any of its Wholly-Owned Subsidiaries, by any Wholly-Owed
Subsidiary to any Borrower or by any Wholly-Owned Subsidiary to another
Wholly-Owned Subsidiary.
"Intercreditor Agreement" means the Intercreditor Agreement among
Prudential, each Lender, the Administrative Agent, the Co-Administrative Agent
and the Collateral Agent, dated as of June 17, 2005, as the same may be amended,
supplemented or otherwise modified from time to time.
"Interest Election Request" means a request by either Borrower to
convert or continue a Borrowing in accordance with Section 2.07, in each case in
a form approved by the Administrative Agent and signed by the applicable
Borrower.
"Interest Payment Date" means (a) with respect to any ABR Loan and
Swingline Loan, the last day of each March, June, September and December and (b)
with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period.
"Interest Period" means with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the applicable Borrower may elect; provided, that (i)
if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day, unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day and
(ii) any Interest Period that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made
and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Issuing Bank" means JPMorgan Chase Bank, N.A. and any other Lender
issuing a Letter of Credit hereunder upon the request of either Borrower, and
any successors of JPMorgan Chase Bank, N.A. or such Lender in its capacity as
issuer of Letters of Credit as provided in Section 2.05(j). The Issuing Bank
may, in its discretion, arrange for one or more Letters of Credit to be issued
by Affiliates of the Issuing Bank, in which case the term "Issuing Bank" shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.
"Joint Venture" means a joint venture formed to provide distribution
for the products of TBC Private Brands, Big O Tires, Inc. or any other
Subsidiary, which joint venture is accounted for under GAAP as an investment and
not as a Subsidiary or as an acquisition or a capital expenditure.
"LC Disbursement" means a payment made by any Issuing Bank pursuant
to a Letter of Credit.
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"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrowers at such time. The LC Exposure of any Lender at any
time shall be the aggregate of the Lender's participations under Section 2.05(e)
in the outstanding Letters of Credit at such time, including its aggregate
participations in Letters of Credit with respect to which one or more LC
Disbursements that have not yet been reimbursed by or on behalf of the
Borrowers.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant to
this Agreement.
"Leverage Ratio" at any time means the ratio of Consolidated Funded
Indebtedness as of the end of the most recent Fiscal Quarter to the aggregate
EBITDA for the four Fiscal Quarter period ended with the most recent Fiscal
Quarter, and includes any adjustments based on Acceptable Acquisitions and
dispositions as provided in the definition of EBITDA.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of JPMorgan Chase Bank, N.A. in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means this Agreement, the Guarantee and Collateral
Agreement, any Mortgage and any other Guarantee of any of the Facility
Obligations that may from time to time be in effect.
14
"Loans" means the loans made by the Lenders to the Borrowers
pursuant to this Agreement.
"Long-Term Indebtedness" means any Indebtedness that, in accordance
with GAAP, constitutes (or, when incurred, constituted) a long-term liability.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
Holdings and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent of the Lenders hereunder or
thereunder.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit) or obligations in respect of one or more Hedging Agreements,
of any one or more of Holdings and its Subsidiaries in an aggregate principal
amount exceeding $5,000,000. For purposes of determining Material Indebtedness,
the "principal amount" of the obligations of Holdings or any Subsidiary in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that Holdings or such
Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means any mortgage referred to in Section 4.01(g) and any
mortgage executed and delivered after the Effective Date pursuant to Section
5.13(a).
"Mortgaged Property" means the real property owned by TBC Private
Brands, located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ and containing
approximately 475,000 square feet of executive office space and warehouse
facilities, and any other real property as to which the Collateral Agent for the
benefit of the Lenders shall be granted a Mortgage pursuant to Section 5.13(a).
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event, (a) the cash
proceeds received in respect of such event, including (i) any cash received in
respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty or other insured damage, insurance proceeds, and (iii) in the
case of a condemnation or similar event, condemnation awards and similar
payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket
expenses paid by Holdings and its Subsidiaries to third parties in connection
with such event, (ii) in the case of a sale, transfer or other disposition of an
asset (including pursuant to a sale and leaseback transaction permitted under
Section 6.12(d) or a casualty or a condemnation or similar proceeding), the
amount of all payments required to be made by Holdings and its Subsidiaries as a
result of such event to repay Indebtedness (other than Loans, the Prudential
Debt and the Additional Prudential Notes) secured by such asset or otherwise
subject to mandatory prepayment as a result of such event (to the extent such
repayment is permitted hereunder), and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by Holdings or any Subsidiary, and the
amount of any reserves established by Holdings and its Subsidiaries to fund
15
contingent liabilities or contingent obligations reasonably estimated to be
available, in each case during the year that such event occurred or the next
succeeding year and that are directly attributable to such event (as determined
reasonably and in good faith by the chief financial officer of Holdings),
provided that the amount of any subsequent reduction of any such reserve (other
than in connection with a payment in respect of any such liability) shall be
deemed to be Net Proceeds of a Prepayment Event occurring on the date of such
reduction.
"New Lender" has the meaning set forth in Section 2.02(e).
"New Lender Supplement" has the meaning set forth in Section
2.02(e).
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"Participant" has the meaning set forth in Section 9.04(c).
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 30 days or are being contested in compliance with Section 5.05;
(c) pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary
course of business;
(e) judgment liens in respect of judgments that do not constitute
an Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of any Borrower or any Subsidiary;
and
16
(g) Liens of landlords on fixtures and leasehold improvements
granted or arising in the ordinary course of business;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of acquisition,
the highest credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances
and time deposits maturing within 180 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any Lender or any domestic office of any
commercial bank organized under the laws of the United States of America
or any State thereof which, in any case, has a combined capital and
surplus and undivided profits of not less than $500,000,000; and
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and entered
into with a financial institution satisfying the criteria described in
clause (c) above.
"Permitted Securitization" means any transaction or series of
transactions that may be entered into by Holdings or any Subsidiary pursuant to
which it may sell, convey, contribute to capital or otherwise transfer (which
sale, conveyance, contribution to capital or transfer may include or be
supported by the grant of a security interest) Receivables or interests therein
and all collateral securing such Receivables, all contracts and contract rights,
purchase orders, security interests, financing statements or other documentation
in respect of such Receivables, any guarantees, indemnities, warranties or other
obligations in respect of such Receivables, any other assets that are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving receivables similar to such Receivables and any collections or
proceeds of any of the foregoing (collectively, the "Related Assets") (i) to a
trust, partnership, corporation or other Person (other than Holdings or any
Subsidiary other than a SPE Subsidiary), which transfer is funded in whole or in
part, directly or indirectly, by the incurrence or issuance by the transferee or
any successor transferee of Indebtedness, fractional undivided interests or
other securities that are to receive payments from, or that represent interests
in, the cash flow derived from such Receivables and Related Assets or interests
in such Receivables and Related Assets, or (ii) directly to one or more
investors or other purchasers (other than Holdings or any Subsidiary), it being
understood that a Permitted Securitization may involve (A) one or more
sequential transfers or pledges of the same
17
Receivables and Related Assets, or interests therein (such as a sale, conveyance
or other transfer to an SPE Subsidiary followed by a pledge of the transferred
Receivables and Related Assets to secure Indebtedness incurred by the SPE
Subsidiary), and all such transfers, pledges and Indebtedness incurrences shall
be part of and constitute a single Permitted Securitization, and (B) periodic
transfers or pledges of Receivables and/or revolving transactions in which new
Receivables and Related Assets, or interests therein, are transferred or pledged
upon collection of previously transferred or pledged Receivables and Related
Assets, or interests therein, provided that any such transactions shall provide
for recourse to Holdings or such Subsidiary (other than any SPE Subsidiary) only
in respect of the cash flows in respect of such Receivables and Related Assets
and to the extent of other customary securitization undertakings in the
jurisdiction relevant to such transactions. The "amount" or "principal amount"
of any Permitted Securitization shall be deemed at any time to be (1) the
aggregate principal or stated amount of the Indebtedness, fractional undivided
interests (which stated amount may be described as a "net investment" or similar
term reflecting the amount invested in such undivided interest) or other
securities incurred or issued pursuant to such Permitted Securitization, in each
case outstanding at such time, or (2) in the case of any Permitted
Securitization in respect of which no such Indebtedness, fractional undivided
interests or securities are incurred or issued, the cash purchase price paid by
the buyer in connection with its purchase of Receivables less the amount of
collections received by the respective Subsidiary in respect of such Receivables
and paid to such buyer, excluding any amounts applied to purchase fees or
discount or in the nature of interest. Each Lender authorizes the Administrative
Agent and the Co-Administrative Agent to enter into an intercreditor agreement
in respect of each Permitted Securitization from time to time in effect and to
take all actions it deems appropriate or necessary in connection with any such
intercreditor agreement.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which Holdings or any
ERISA Affiliate is (or, if such plan were terminated, would under Section 4069
of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Prepayment Event" means:
(a) any sale and leaseback transaction permitted pursuant to
Section 6.12(d), and requiring a prepayment in accordance with the proviso
to such Section, or any other sale, transfer, or other disposition of any
property or asset of Holdings or any Subsidiary, other than dispositions
permitted pursuant to Section 6.12(a), (b), (c), (e), (f), or (g);
(b) any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of, any
property or asset of Holdings or any Subsidiary, but only to the extent
that the Net Proceeds therefrom, together with any other such Net Proceeds
received after the Effective Date, exceed $5,000,000 in the aggregate and
have not been applied to repair, restore or replace such
18
property or asset or to acquire other real property, equipment or other
tangible assets to be used in the business of Holdings or any Subsidiary
within one year after such event; or
(c) the incurrence by Holdings or any Subsidiary of any
Indebtedness, other than Indebtedness permitted by Section 6.01.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Properties" has the meaning set forth in Section 3.06(b).
"Prudential" means The Prudential Insurance Company of America
together with any of its affiliates, managed accounts and funds from time to
time holding Prudential Debt or Additional Prudential Notes.
"Prudential Debt" means the Borrowers' obligations pursuant to a
certain Second Amended and Restated Note Agreement dated as of April 1, 2003
between TBC Private Brands (formerly known as TBC Corporation) and The
Prudential Insurance Company of America, as amended by Amendment No. 1 to Second
Amended and Restated Note Agreement dated as of November 29, 2003, Amendment No.
2 to Second Amended and Restated Note Agreement, dated as of November 19, 2004
and Amendment No. 3 to Second Amended and Restated Note Agreement, dated as of
June 17, 2005 (the "Existing Note Agreement"), governing the terms of the
Borrowers' (i) 8.30% Series A Senior Notes due July 10, 2003, (ii) 8.62% Series
B Senior Notes due July 10, 2005 and (iii) 8.81% Series C Senior Notes due July
10, 2008.
"Receivables" means accounts receivable (including all rights to
payment created by or arising from the sales of goods, leases of goods or the
rendition of services, no matter how evidenced (including in the form of chattel
paper) and whether or not earned by performance).
"Register" has the meaning set forth in Section 9.04(b).
"Reimbursement Obligation" means the obligation of the Borrowers to
reimburse any Issuing Bank pursuant to Section 2.05(e) for amounts drawn under
Letters of Credit.
"Related Assets" has the meaning set forth in the definition of
"Permitted Securitization".
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having aggregate
Revolving Credit Exposures, Term Loan Exposures and unused Revolving Credit
Commitments representing more than 50% of the sum of the total Revolving Credit
Exposures, Term Loan Exposures and unused Revolving Credit Commitments at such
time.
19
"Restricted Payment" means, without duplication, for any period, the
sum of (i) dividends or other distributions paid during such period (whether in
cash, securities or other property) with respect to any shares of any class of
capital stock of Holdings and (ii) payments made during such period (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any shares of capital stock of Holdings or any
option, warrant or other right to acquire any such shares of capital stock of
Holdings, provided that any such dividends, distributions or payments made
solely with additional shares of Holdings' common stock shall not constitute
Restricted Payments.
"Revolving Credit Commitment" means, with respect to each Lender,
the commitment of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08, (b)
reduced or increased from time to time pursuant to assignments by or to such
Lenders pursuant to Section 9.04 and (c) increased from time to time pursuant to
Section 2.02(d). The initial amount of each Lender's Revolving Credit Commitment
is set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to
which such Lender shall have assumed its Revolving Credit Commitment, as
applicable. The initial aggregate amount of the Lenders' Revolving Credit
Commitments is $225,000,000.
"Revolving Credit Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amounts of such Lender's Revolving
Loans and its LC Exposure and Swingline Exposure at such time.
"Revolving Credit Maturity Date" means June 17, 2010.
"Revolving Loan" means a Loan made pursuant to Section 2.01(a).
"S&P" means Standard & Poor's.
"Scheduled Payments" means, for any period, the sum (without
duplication) of the aggregate amount of (i) scheduled principal payments made
during such period in respect of Long-Term Indebtedness of Holdings and its
Subsidiaries (other than payments made by Holdings or any Subsidiary to Holdings
or a Subsidiary) and (ii) scheduled principal cash payments made during such
period on account of Capital Lease Obligations.
"Solvent", when used with respect to any Person, means that, as of
any date of determination, (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated,
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unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (y) right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or unsecured.
"SPE Subsidiary" means any Wholly-Owned Subsidiary formed solely for
the purpose of, and that engages only in, one or more Permitted Securitizations
and activities ancillary thereto
"Statutory Reserve Rate" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"subsidiary" means, with respect to any Person (the "parent") at any
date, (a) any corporation, limited liability company, partnership, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, and (b) any
other corporation, limited liability company, partnership, association or other
entity (i) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (ii) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent, except that no Joint
Venture in which the entire amount invested by Holdings and its Subsidiaries
complies with Section 6.04(d), shall be deemed to be a subsidiary.
"Subsidiary" means any subsidiary of Holdings; provided, however,
that (a) in no event shall TBC de Mexico be considered to be a Subsidiary for
purposes hereof (but, to the extent required by GAAP, shall be consolidated in
the consolidated financial statements of Holdings and as such included in the
calculation of the covenants in Sections 6.08, 6.09 and 6.10) until such time,
if any, as Holdings' interest in TBC de Mexico exceeds 60%, Holdings is required
by GAAP to consolidate TBC de Mexico into Holdings' consolidated financial
statements, and Holdings' equity investment in TBC de Mexico exceeds $2,500,000;
and (b) no subsidiary under clause (a) of the definition thereof shall be
considered to be a Subsidiary for purposes hereof solely because, under FASB
Interpretation No. 46, GAAP requires such Person to be consolidated in the
consolidated financial statements of Holdings.
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"Substantial Portion" means, with respect to the property of
Holdings and its Subsidiaries, property which (i) represents more than 10% of
the consolidated assets of Holdings and its Subsidiaries as would be shown in
the consolidated financial statements of Holdings and its Subsidiaries as at the
beginning of the twelve-month period ending at the end of 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 Holdings and its
Subsidiaries as reflected in the financial statements referred to in clause (i)
above.
"Swingline Exposure" means, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the total
Swingline Exposure at such time.
"Swingline Lender" means First Tennessee Bank National Association,
in its capacity as lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.04.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TBC Private Brands" has the meaning set forth in the introductory
paragraph of this Agreement.
"Term Commitment" means as to any Lender the obligation of such
Lender, if any, to make a Term Loan to the Borrowers in a principal amount not
to exceed the amount set forth under the heading "Term Commitment" opposite such
Lender's name on Schedule 2.01. The initial aggregate amount of the Lenders'
Term Commitments is $100,000,000.
"Term Lender" means each Lender that holds a Term Loan.
"Term Loan" means a Loan made pursuant to Section 2.01(b).
"Term Loan Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amounts of such Lender's Term Loans at such
time.
"Term Loan Maturity Date" means June 17, 2010.
"Transactions" means the execution, delivery and performance by the
Borrowers of the Loan Documents, the borrowing of Loans, the use of the proceeds
thereof and the issuance of Letters of Credit hereunder and the execution,
delivery and performance by the Guarantors of the Facility Obligations.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Wholly-Owned Subsidiary" of a Person means any subsidiary all of
whose outstanding voting securities, or ownership interests having ordinary
voting power, are at
22
the time owned (i) directly by such Person, (ii) directly and indirectly by such
Person and one or more of such Person's Wholly-Owned Subsidiaries or (iii) by
one or more of such Person's Wholly-Owned Subsidiaries.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes
of this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles, Sections
and Schedules shall be construed to refer to Articles and Sections of, and
Schedules to, this Agreement and (e) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts, contract rights and all other real and personal property.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed, and all financial information and reports provided pursuant to this
Agreement shall be prepared, in accordance with GAAP, as in effect from time to
time; provided that, if Holdings notifies the Co-Administrative Agent that
Holdings requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Co-Administrative Agent
notifies any Borrower that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.
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ARTICLE II
The Credits
SECTION 2.01. Revolving and Term Loan Commitments. (a) Subject to
the terms and conditions set forth herein, each Lender agrees to make Revolving
Loans to the Borrowers from time to time during the Availability Period in an
aggregate principal amount that will not result in (i) such Lender's Revolving
Credit Exposure exceeding such Lender's Revolving Credit Commitment or (ii) the
sum of the total Revolving Credit Exposures exceeding the total Revolving Credit
Commitments. Within the foregoing limits and subject to the terms and conditions
set forth herein, each Borrower may borrow, prepay and reborrow Revolving Loans.
(b) Subject to the terms and conditions set forth herein, each Term
Lender agrees to make a Term Loan to the Borrowers on the Effective Date in an
amount equal to the Term Commitment of such Lender. Once a Term Loan is repaid
or prepaid, it may not be reborrowed.
SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be made as
part of a Borrowing consisting of Loans made by the Lenders ratably to a
Borrower in accordance with their respective Commitments to make Loans of the
applicable Class, provided that Borrowings of Revolving Loans shall consist of
Loans made by the Lenders ratably in accordance with their respective Available
Revolving Credit Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as
required.
(b) Subject to Section 2.13, (i) each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the applicable Borrower
may request in accordance herewith and (ii) each Term Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the applicable Borrower
may request in accordance herewith. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrowers to repay such Loan in accordance with the
terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $100,000 and not less than $1,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $100,000 and not less than $100,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Revolving Credit Commitments, or
that is required to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.05(e). Each Swingline Loan shall be in an amount that
is an integral multiple of $100,000 and not less than $100,000. At the
commencement of each Interest Period for any Eurodollar Term Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$100,000 and not less than $1,000,000. Borrowings of more than one Type may be
24
outstanding at the same time; provided that there shall not at any time be more
than a total of twelve Eurodollar Borrowings outstanding.
(d) The Borrowers and any one or more Lenders (including New
Lenders) may from time to time agree that without the consent of the other
Lenders hereunder such Lenders shall increase the amount of such Lenders'
Revolving Commitments (or in the case of New Lenders establish Revolving
Commitments) by executing and delivering to the Co-Administrative Agent an
Incremental Facility Activation Notice specifying (i) the respective amounts of
such increases (or such new Revolving Commitments) and (ii) the applicable
Incremental Facility Closing Date, provided, that (A) no Default or Event of
Default has occurred and is continuing or would result after giving effect to
the increase of the Revolving Commitments or the intended application of the
proceeds therefrom, (B) the Applicable Rate determined as of the applicable
Incremental Facility Closing Date shall not be greater than the Applicable Rate
then in effect for Revolving Loans, (C) the aggregate Revolving Commitments
after giving effect to any increase pursuant to this Section 2.02(d) shall not
exceed $300,000,000 and (D) each increase in the Revolving Commitments pursuant
to this Section 2.02(d) shall be in a minimum amount of at least $5,000,000. Any
incremental Revolving Commitments shall be governed by this Agreement and the
other Loan Documents. No Lender shall have any obligation to participate in any
increase described in this paragraph unless it agrees in writing to do so in its
sole discretion.
(e) Any additional bank, financial institution or other entity that,
with the consent of the Borrowers and the Co-Administrative Agent (which consent
shall not be unreasonably withheld), elects to become a "Lender" under this
Agreement in connection with any transaction described in Section 2.02(d) shall
execute a New Lender Supplement (each, a "New Lender Supplement"), substantially
in the form of Schedule 2.02, whereupon such bank, financial institution or
other entity (a "New Lender") shall become a Lender for all purposes and shall
be bound by and entitled to the benefits of this Agreement.
(f) Each Borrower shall borrow Revolving Loans under the increased
Revolving Commitments from each Lender participating in any increase in the
Revolving Commitments pursuant to Section 2.2(d) (i) on the relevant Incremental
Facility Closing Date, if ABR Revolving Loans are then outstanding to such
Borrower, in an amount of ABR Loans that will result in each such participating
Lender having ABR Loans outstanding to such Borrower in a principal amount equal
to its Applicable Percentage of the total outstanding principal amount of ABR
Loans to such Borrower and (ii) on such Incremental Facility Closing Date, if a
Eurodollar Borrowing to such Borrower is being continued for another Interest
Period on such date, and in and on any later date on which a Eurodollar
Borrowing to such Borrower outstanding on such Incremental Facility Closing Date
is being continued for another Interest Period, in each case in an amount that
will result in each such participating Lender having Eurodollar Revolving Loans
made by it to such Borrower included in such Eurodollar Borrowing in a principal
amount equal to its Applicable Percentage of the total outstanding principal
amount of Eurodollar Loans included in such Eurodollar Borrowing.
(g) Notwithstanding any other provision of this Agreement, neither
Borrower shall be entitled (i) to request, or to elect to convert or continue,
any Borrowing of Revolving Loans if the Interest Period requested with respect
thereto would end after the Revolving Credit
25
Maturity Date or (ii) to convert or continue any Borrowing of Term Loans if the
Interest Period requested with respect thereto would end after the Term Loan
Maturity Date.
SECTION 2.03. Requests for Borrowings. To request a Revolving
Borrowing, a Borrower shall give to the Administrative Agent irrevocable notice
which notice must be received by the Administrative Agent (1) in the case of a
Eurodollar Borrowing, not later than 11:30 a.m., Memphis, Tennessee time, three
Business Days before the date of the proposed Borrowing or (2) in the case of an
ABR Borrowing, not later than 11:30 a.m., Memphis, Tennessee time, on the
Business Day of the proposed Borrowing; provided that any such notice of an ABR
Revolving Borrowing to finance any Reimbursement Obligation may be given no
later than 10:00 am, Memphis, Tennessee time on the date of the proposed
Borrowing. Each such Borrowing Request shall specify the following information:
(i) the applicable Borrower;
(ii) the aggregate amount of the requested Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether such Borrowing is to be an ABR Borrowing, or a
Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(vi) the location and number of the applicable Borrower's account
to which funds are to be disbursed, which shall comply with the
requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the applicable Borrower
shall be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04. Swingline Loans. (a) Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline Loans
to the Borrowers from time to time during the Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of outstanding Swingline Loans exceeding
$25,000,000 or (ii) the sum of the total Revolving Credit Exposures exceeding
the total Revolving Credit Commitments; provided that the Swingline Lender shall
not be required to make a Swingline Loan to refinance an outstanding Swingline
Loan. Within the foregoing limits and subject to the terms and conditions set
forth herein, each Borrower may borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, a Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 3:00 p.m., Memphis,
26
Tennessee time, on the day of a proposed Swingline Loan. Each such notice shall
be irrevocable and shall specify the requested date (which shall be a Business
Day) and amount of the requested Swingline Loan. The Administrative Agent will
promptly advise the Swingline Lender of any such notice received from a
Borrower. The Swingline Lender shall make each Swingline Loan available to the
applicable Borrower by means of a credit to the general deposit account of such
Borrower with the Swingline Lender (or, in the case of a Swingline Loan made to
finance the reimbursement of an LC Disbursement as provided in Section 2.05(e),
by remittance to the Issuing Bank) by 3:00 p.m., Memphis, Tennessee time, on the
requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., Memphis, Tennessee time, on any
Business Day require the Lenders to acquire participations on such Business Day
in all or a portion of the Swingline Loans outstanding. Such notice shall
specify the aggregate amount of Swingline Loans in which Lenders will
participate. Promptly upon receipt of such notice, the Administrative Agent will
give notice thereof to each Lender, specifying in such notice such Lender's then
Applicable Percentage of such Swingline Loan or Loans. Each Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the Swingline Lender,
such Lender's then Applicable Percentage of such Swingline Loan or Loans. Each
Lender acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Revolving Credit
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Each Lender shall comply with
its obligation under this paragraph by wire transfer of immediately available
funds, in the same manner as provided in Section 2.06 with respect to Loans made
by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Swingline Lender the amounts so received by it from the Lenders. The
Administrative Agent shall notify the Borrowers of any participations in any
Swingline Loan acquired pursuant to this paragraph, and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and not
to the Swingline Lender. Any amounts received by the Swingline Lender from the
Borrowers (or other party on behalf of the Borrowers) in respect of a Swingline
Loan after receipt by the Swingline Lender of the proceeds of a sale of
participations therein shall be promptly remitted to the Administrative Agent;
any such amounts received by the Administrative Agent shall be promptly remitted
by the Administrative Agent to the Lenders that shall have made their payments
pursuant to this paragraph and to the Swingline Lender, as their interests may
appear. The purchase of participations in a Swingline Loan pursuant to this
paragraph shall not relieve the Borrowers of any default in the payment thereof.
SECTION 2.05. Letters of Credit. (a) General. Subject to the terms
and conditions set forth herein, each Borrower may request the issuance of
Letters of Credit for the account of such Borrower, but in the name of such
Borrower or any Subsidiary as may be specified by such Borrower, in a form
reasonably acceptable to each Issuing Bank, at any time and from time to time
during the Availability Period. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of
27
credit application or other agreement submitted by either Borrower to, or
entered into by either Borrower with, any Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
(b) Existing Letters of Credit. From and after the Effective Date,
the Existing Letters of Credit shall be deemed outstanding pursuant to, and
shall constitute "Letters of Credit" for all purposes of, this Agreement.
(c) Notice of Issuance, Amendment, Renewal, Extension, Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), a Borrower shall hand
deliver or telecopy (or transmit by electronic communication, if arrangements
for doing so have been approved by such Issuing Bank) to any Issuing Bank and
the Administrative Agent (reasonably in advance of the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day), the date on which such Letter of Credit is to
expire (which shall comply with paragraph (d) of this Section), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. If requested by such Issuing Bank, the applicable Borrower
also shall submit a letter of credit application on such Issuing Bank's standard
form in connection with any request for a Letter of Credit. A Letter of Credit
shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit, each Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure shall not exceed $75,000,000
and (ii) the sum of the total Revolving Credit Exposures shall not exceed the
total Revolving Credit Commitments.
(d) Expiration Date. Each Letter of Credit shall expire at or prior
to the close of business on the earlier of (i) the date one year after the date
of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Revolving Credit Maturity Date.
(e) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, each Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from such Issuing
Bank, a participation in such Letter of Credit equal to such Lender's Applicable
Percentage as may be adjusted from time to time to reflect assignments or
transfers of Revolving Credit Commitments and any increase in the Revolving
Credit Commitment pursuant to Section 2.02(d), of the aggregate amount available
to be drawn under such Letter of Credit. In consideration and in furtherance of
the foregoing, each Lender hereby absolutely and unconditionally agrees to pay
to the Administrative Agent, for the account of such Issuing Bank, such Lender's
Applicable Percentage, determined as of the date the Letter of Credit was
issued, of each LC Disbursement made by such Issuing Bank and not reimbursed by
the Borrowers on the date due as provided in paragraph (f) of this Section, or
of any reimbursement payment required to be refunded to the Borrowers for any
reason. Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph
28
in respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance of a Default
or reduction or termination of the Revolving Credit Commitments, and that each
such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.
(f) Reimbursement Obligation. If any Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrowers shall reimburse
such LC Disbursement by paying to the Administrative Agent an amount equal to
such LC Disbursement not later than 12:00 noon, Memphis, Tennessee time, on the
date that such LC Disbursement is made, if such Borrower shall have received
notice of such LC Disbursement prior to 10:00 a.m., Memphis, Tennessee time, on
such date, or, if such notice has not been received by such Borrower prior to
such time on such date, then not later than 12:00 noon, Memphis, Tennessee time,
on (i) the Business Day that such Borrower receives such notice, if such notice
is received prior to 10:00 a.m., Memphis, Tennessee time, on the day of receipt,
or (ii) the Business Day immediately following the day that such Borrower
receives such notice, if such notice is not received prior to such time on the
day of receipt; provided that if such LC Disbursement is not less than $100,000,
the Borrowers may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 or 2.04 that such payment be financed
with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and,
to the extent so financed, the Borrowers' obligation to make such payment shall
be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan. If the Borrowers fail to make such payment when due, the Issuing Bank
shall notify the Administrative Agent thereof and the Administrative Agent shall
then notify each Lender of the applicable LC Disbursement, the payment then due
from the Borrowers in respect thereof and such Lender's Applicable Percentage
thereof. Promptly following receipt of such notice from the Administrative
Agent, each Lender shall pay to the Administrative Agent such Applicable
Percentage of the payment then due from the Borrowers, in the same manner as
provided in Section 2.06 with respect to Loans made by such Lender (and Section
2.06 shall apply, mutatis mutandis, to the payment obligations of the Lenders),
and the Administrative Agent shall promptly pay to such Issuing Bank the amounts
so received by it from the Lenders. Promptly following receipt by the
Administrative Agent of any payment from any Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to such
Issuing Bank or, to the extent that Lenders have made payments pursuant to this
paragraph to reimburse such Issuing Bank, then to such Lenders and such Issuing
Bank as their interests may appear. Any payment made by a Lender pursuant to
this paragraph to reimburse any Issuing Bank for any LC Disbursement (other than
the funding of ABR Revolving Loans or a Swingline Loan as contemplated above)
shall not constitute a Loan and shall not relieve the Borrowers of their
obligation to reimburse such LC Disbursement.
(g) Obligations Absolute. The Borrowers' obligation to reimburse LC
Disbursements as provided in paragraph (f) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the
29
Issuing Bank under a Letter of Credit against presentation of a draft or other
document that does not comply with the terms of such Letter of Credit, or (iv)
any other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of, or provide a right of setoff against, the
Borrowers' obligations hereunder. Neither the Administrative Agent, the Lenders
nor any Issuing Bank, nor any of their Related Parties, shall have any liability
or responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of any Issuing Bank; provided that the foregoing shall
not be construed to excuse any Issuing Bank from liability to the Borrowers to
the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by each of the Borrowers to the extent
permitted by applicable law) suffered by any Borrower that are caused by such
Issuing Bank's failure to exercise care when determining whether drafts and
other documents presented under a Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of any Issuing Bank (as finally
determined by a court of competent jurisdiction), such Issuing Bank shall be
deemed to have exercised care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, each Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(h) Disbursement Procedures. Each Issuing Bank shall, in accordance
with standard banking practice following its receipt thereof, examine all
documents purporting to represent a demand for payment under a Letter of Credit.
Each Issuing Bank shall promptly notify the Administrative Agent, any other
Issuing Bank and the applicable Borrower by telephone (confirmed by telecopy) of
such demand for payment and whether such Issuing Bank has made or will make an
LC Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrowers of their obligation to reimburse
such Issuing Bank and the Lenders with respect to any such LC Disbursement. On
the Business Day three Business Days prior to the last day of March, June,
September and December of each year and at such other times as the
Administrative Agent shall request, each Issuing Bank shall report to the
Administrative Agent all Letters of Credit issued by it during the then current
calendar quarter and the average daily undrawn and unexpired amounts for all
Letters of Credit for each day in such calendar quarter.
(i) Interim Interest. If any Issuing Bank shall make any LC
Disbursement, then, unless the Borrowers shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrowers reimburse such LC
Disbursement, at the rate per annum then applicable to ABR Revolving
30
Loans; provided that, if the Borrowers fail to reimburse such LC Disbursement
when due pursuant to paragraph (f) of this Section, then Section 2.12(d) shall
apply. Interest accrued pursuant to this paragraph shall be for the account of
such Issuing Bank, except that interest accrued on and after the date of payment
by any Lender pursuant to paragraph (f) of this Section to reimburse such
Issuing Bank shall be for the account of such Lender to the extent of such
payment.
(j) Replacement of the Issuing Bank. Each Issuing Bank may be
replaced at any time by written agreement among the Borrowers, the
Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank.
The Administrative Agent shall notify the Lenders of any such replacement of any
Issuing Bank. At the time any such replacement shall become effective, the
Borrowers shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.11(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(k) Cash Collateralization. If any Event of Default shall occur and
be continuing, on the Business Day that either Borrower receives notice from the
Co-Administrative Agent or the Required Lenders (or, if the maturity of the
Loans has been accelerated, Lenders with LC Exposure representing greater than
50% of the total LC Exposure) demanding the deposit of cash collateral pursuant
to this paragraph, the Borrowers shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon; provided that the obligation
to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to any
Borrower described in clause (h) or (i) of Article VII. Such deposit shall be
held by the Administrative Agent as collateral for the payment and performance
of the obligations of the Borrowers under this Agreement. The Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Administrative Agent and at the Borrowers' risk and
expense, such deposits shall not bear interest. Interest or profits, if any, on
such investments shall accumulate in such account. Moneys in such account shall
be applied by the Administrative Agent to reimburse each Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrowers for the LC Exposure at such time. If the Borrowers are required to
provide an amount of cash collateral hereunder as a result of the occurrence of
an Event of Default, such amount (to the extent not applied as aforesaid) shall
be returned to the Borrowers within three Business Days after all Events of
Default have been cured or waived.
31
SECTION 2.06. Funding of Borrowings. (a) Provided that it has
received timely advice of the related Borrowing Request as required by Section
2.03, each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 2:00
p.m., Memphis, Tennessee time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders; provided
that Swingline Loans shall be made as provided in Section 2.04. The
Administrative Agent will make each Borrowing available to the applicable
Borrower by promptly crediting the amounts so received, in like funds, to an
account of the applicable Borrower maintained with the Administrative Agent in
Memphis, Tennessee and designated by the applicable Borrower in the applicable
Borrowing Request; provided that ABR Revolving Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be
remitted by the Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from
a Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the applicable
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender, severally with the Borrowers agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the applicable Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the Interest Rate
applicable to the Borrowing or (ii) in the case of the Borrowers, the interest
rate applicable to ABR Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.07. Interest Elections. (a) Each Revolving or Term
Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, the
applicable Borrower may elect to convert such Borrowing to a different Type or
to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The applicable
Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing. This
Section shall not apply to Swingline Borrowings, which may not be converted or
continued.
(b) To make an election pursuant to this Section, a Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if such Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by electronic mail
to the Administrative Agent of such Interest Election Request.
32
(c) Each telephonic and electronic mail Interest Election Request
shall specify the following information:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of
the term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the applicable Borrower shall be deemed to
have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the applicable Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Borrowers, then, so long
as an Event of Default is continuing (i) no outstanding Borrowing may be
converted to or continued as Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
SECTION 2.08. Termination and Reduction of Revolving Credit
Commitments. (a) Unless previously terminated, the Revolving Credit Commitments
shall terminate on the Revolving Credit Maturity Date.
(b) The Borrowers may at any time terminate, or from time to time
reduce, the Revolving Credit Commitments; provided that (i) each reduction of
the Revolving Credit Commitments shall be in an amount that is an integral
multiple of $1,000,000 and not less than $5,000,000, (ii) the Borrowers shall
not terminate or reduce the Revolving Credit Commitments if, after giving effect
to any concurrent prepayment of the Revolving Loans in accordance with Section
2.10, the sum of the Revolving Credit Exposures would exceed the total Revolving
Credit Commitments.
33
(c) The Borrowers shall notify the Co-Administrative Agent of any
election to terminate or reduce the Revolving Credit Commitments under paragraph
(b) of this Section at least three Business Days prior to the effective date of
such termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Co-Administrative Agent
shall advise the Administrative Agent and the Lenders of the contents thereof.
Each notice delivered by the Borrowers pursuant to this Section shall be
irrevocable; provided that a notice of termination delivered by the Borrowers
may state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrowers (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction shall be permanent.
Each reduction shall be made ratably among the Lenders in accordance with their
respective Revolving Credit Commitments.
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The
Borrowers hereby unconditionally promise to pay (i) to the Administrative Agent
for the account of each Lender, on the Revolving Credit Maturity Date, the then
unpaid principal amount of each of the Revolving Loans and (ii) to the Swingline
Lender the then unpaid principal amount of the Swingline Loans on the earlier of
the Revolving Credit Maturity Date or the first date after such Swingline Loans
are made that is the 15th or last day of a calendar month; provided that on each
date that a Revolving Borrowing is made, the Borrowers shall repay all Swingline
Loans then outstanding.
(b) The Borrowers hereby unconditionally promise to pay to the
Administrative Agent for the account of the Term Lenders the unpaid principal of
all Term Loans, on the dates and in the amounts set forth below, with the entire
unpaid principal balance due and payable on the Term Loan Maturity Date:
Date Payment Amount
-------- --------------
9/30/05 $2,500,000
12/31/05 2,500,000
3/31/06 2,500,000
6/30/06 2,500,000
9/30/06 3,750,000
12/31/06 3,750,000
3/31/07 3,750,000
6/30/07 3,750,000
9/30/07 5,000,000
12/31/07 5,000,000
3/31/08 5,000,000
6/30/08 5,000,000
9/30/08 6,250,000
12/31/08 6,250,000
3/31/09 6,250,000
6/30/09 6,250,000
9/30/09 7,500,000
12/31/09 7,500,000
34
Date Payment Amount
------- --------------
3/31/10 7,500,000
6/17/10 7,500,000
(c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrowers to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(d) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period, if any, applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrowers to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(e) The entries made in the accounts maintained pursuant to
paragraph (c) or (d) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrowers
to repay the Loans in accordance with the terms of this Agreement.
(f) Any Lender may request that Loans made by it be evidenced by a
promissory note only in order to facilitate pledges of the Loans in accordance
with Section 9.04(d). In such event, the Borrowers shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
in a form approved by the Co-Administrative Agent. Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04(d) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.10. Prepayment of Loans. (a) The Borrowers shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to prior notice in accordance with paragraph (b) of this Section.
(b) The applicable Borrower shall notify the Administrative Agent
(and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:30 a.m., Memphis,
Tennessee time, three Business Days before the date of prepayment, or (ii) in
the case of prepayment of an ABR Borrowing, not later than 11:30 a.m., Memphis,
Tennessee time, or (iii) in the case of prepayment of a Swingline Loan, not
later than 11:30 a.m., Memphis, Tennessee time, on the Business Day of
prepayment. Each such notice shall be irrevocable, shall identify the
Borrowing(s) being prepaid and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid; provided
that, if a notice of prepayment is given in connection with a conditional notice
of
35
termination of the Revolving Credit Commitments as contemplated by Section 2.08,
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Promptly following receipt of any such
notice relating to a Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Borrowing shall
be in an amount that would be permitted in the case of an advance of a Revolving
Borrowing of the same Type as provided in Section 2.02. Each prepayment of a
Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.12.
(c) The Borrowers shall prepay the principal of the Term Loans, of
the Prudential Debt and of the Additional Prudential Notes, upon notice and
otherwise in compliance with Section 2.10(b) and/or the Revolving Credit
Commitments shall be reduced in accordance with Section 2.08, as follows:
(i) In the event that and on each occasion on which any Net
Proceeds are received by or on behalf of Holdings or any Subsidiary
in respect of any Prepayment Event, Holdings shall, within three
Business Days after such Net Proceeds are received, prepay the
principal of the Term Loans, the Prudential Debt and the Additional
Prudential Notes and/or the Revolving Credit Commitments shall be
subject to automatic reduction, in an aggregate amount equal to such
Net Proceeds, such prepayment and/or reduction to be effected in
each case in the manner and to the extent specified in clause (ii)
of this paragraph.
(ii) Order of Application. Prepayments and/or reductions of
Revolving Credit Commitments pursuant to this paragraph shall be
applied as follows:
first, (A) to prepay the Term Loans, the Prudential Debt and
the Additional Prudential Notes and
second, after the payment in full of the Term Loans, the
Prudential Debt and the Additional Prudential Notes, to reduce the aggregate
amount of the Revolving Credit Commitments (and to the extent that, after giving
effect to such reduction, the total Revolving Credit Exposures would exceed the
Revolving Credit Commitments, the Borrowers shall, first, prepay Revolving
Credit Loans and second, provide cover for LC Exposure as specified in Section
2.05(k) in an aggregate amount equal to such excess).
Any prepayment of the Term Loans, the Prudential Debt and the Additional
Prudential Notes pursuant to this paragraph shall be applied (x) to each Term
Loan, the Prudential Debt and the Additional Prudential Notes, pro rata in the
same proportions as the then balance of each Term Loan, the Prudential Debt and
the Additional Prudential Notes bears to the total balance of all Term Loans
plus the Prudential Debt and the Additional Prudential Notes, provided that if
prepayment is waived with respect to the Prudential Debt and/or the Additional
Prudential Notes, the amounts that would have been payable absent such waiver
shall be reallocated on a pro rata basis among the Term Loans and any
non-waiving note holders, and (xx) with respect to each, to the last maturing
installments thereof. Notwithstanding the foregoing, the Borrowers shall not be
required to apply any prepayment to the Prudential Debt or the Additional
Prudential Notes if
36
such prepayment is not required pursuant to the terms thereof and would cause
the Borrowers to incur any prepayment premium or penalty and, in each event, any
amount which would otherwise have been used to make a prepayment of the
Prudential Debt or the Additional Prudential Notes shall instead be used, first,
to prepay the Term Loans and, second, to reduce the aggregate amount of the
Revolving Commitments (and to the extent that, after giving effect to such
reduction, the total Revolving Credit Exposures would exceed the Revolving
Credit Commitments, the Borrowers shall, first, prepay Revolving Credit Loans
and second, provide cover for LC Exposure as specified in Section 2.05(k) in an
aggregate amount equal to such excess).
SECTION 2.11. Fees. (a) The Borrowers agree to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Rate on the average daily amount of the Available
Revolving Credit Commitment of such Lender during the period from and including
the Effective Date to but excluding the date on which such Revolving Credit
Commitment terminates; provided that, (i) if such Lender continues to have any
Revolving Credit Exposure after its Revolving Credit Commitment terminates, then
such commitment fee shall continue to accrue on the daily amount of such
Lender's Revolving Credit Exposure from and including the date on which its
Revolving Credit Commitment terminates to but excluding the date on which such
Lender ceases to have any Revolving Credit Exposure; and (ii) the commitment fee
payable to the Swingline Lender shall accrue on the average daily amount of its
Available Revolving Credit Commitment minus the average daily principal balance
of the Swingline Loans during such period. Accrued commitment fees shall be
payable in arrears on the last day of March, June, September and December of
each year and, on the date on which the Revolving Credit Commitments terminate,
commencing on the first such date to occur after the Effective Date; provided
that any commitment fees accruing after the date on which the Revolving Credit
Commitments terminate shall be payable on demand. All commitment fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
(b) The Borrowers agree to pay to the Administrative Agent, for the
account of the Revolving Lenders, a participation fee on all outstanding Letters
of Credit at a per annum rate equal to the Applicable Rate then in effect with
respect to Revolving Loans that are Eurodollar Loans less the fronting fees
payable to the Issuing Banks under this Section 2.11(b), shared ratably among
the Revolving Lenders. In addition, the Borrowers agree to pay to each Issuing
Bank for its own account a fronting fee, which shall accrue at the rate agreed
upon with the respective Issuing Bank not to exceed 12.5 basis points per annum
on the average daily amount of such Issuing Bank's LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date of
termination of the Revolving Credit Commitments and the date on which there
ceases to be any LC Exposure, as well as such Issuing Bank's standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of Credit
or processing of drawings thereunder. Participation fees and fronting fees
accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following such
last day, commencing on the first such date to occur after the Effective Date;
provided that all such fees shall be payable on the date on which the Revolving
Credit Commitments terminate and any such fees accruing after the date on which
the Revolving
37
Credit Commitments terminate shall be payable on demand. Any other fees payable
to any Issuing Bank pursuant to this paragraph shall be payable within 10 days
after demand. All participation fees and fronting fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).
(c) The Borrowers agree to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Borrowers and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to such Issuing
Bank, in the case of fees payable to it) for distribution, in the case of Letter
of Credit participation fees and commitment fees, to the Lenders. Fees paid
shall not be refundable under any circumstances.
SECTION 2.12. Interest. (a) The Loans comprising each ABR Borrowing
shall bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
(c) Swingline Loans shall bear interest at the Federal Funds
Effective Rate plus the applicable Eurodollar Spread plus 15 basis points.
(d) Notwithstanding the foregoing, if any principal of or interest
on any Loan or any fee or other amount payable by the Borrowers hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.
(e) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and upon termination of the Revolving
Credit Commitments; provided that (i) interest accrued pursuant to paragraph (c)
of this Section shall be payable on demand, (ii) in the event of any repayment
or prepayment of any Loan (other than a prepayment of a Revolving Loan prior to
the end of the Availability Period) accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment
and (iii) in the event of any conversion of any Eurodollar Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.
(f) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate,
Federal
38
Funds Effective Rate or Adjusted LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
demonstrable error.
SECTION 2.13. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent demonstrable error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their
Loans included in such Borrowing for such Interest Period; or
(c) the Administrative Agent is advised by one or more Lender(s),
but less than the Required Lenders, that the Adjusted LIBO Rate for such
Interest Period will not adequately and fairly reflect the cost to such
Lender(s) of making or maintaining their Loans (or its Loan) included in
such Borrowing for such Interest Period;
then, in the case of clause (a) or (b) above, the Administrative Agent shall
give notice thereof to the Borrowers and the Lenders by telephone or telecopy as
promptly as practicable thereafter and, until the Administrative Agent notifies
the Borrowers and the Lenders that the circumstances giving rise to such notice
no longer exist, (i) any Interest Election Request that requests the conversion
of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing
shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar
Borrowing, such Borrowing shall be made as an ABR Borrowing; and in the case of
clause (c) above, the Administrative Agent shall give notice thereof to the
Borrowers and the Lenders by telephone or telecopy as promptly as practicable
thereafter and, until the Administrative Agent notifies the Borrowers and the
Lenders that the circumstances giving rise to such notice no longer exist, (i)
any Interest Election Request that requests the conversion of any Borrowing to,
or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
as to the Lender(s) giving notice under clause (c), (ii) if any Borrowing
Request requests a Eurodollar Borrowing, the Loans made by such clause (c)
Lender(s) as part of such Borrowing shall be made as ABR Loans and (iii) the
Interest Election Request or Borrowing Request shall be effective as against the
other Lenders and the affected Borrowings shall have all of the characteristics
specified in such Interest Election Request or Borrowing Request, except that
interest on the Loans made by the clause (c) Lenders shall be computed at the
ABR Rate.
SECTION 2.14. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in the Adjusted LIBO Rate) or any Issuing Bank, or
39
(ii) impose on any Lender or any Issuing Bank, or the London
interbank market, any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or such
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank, hereunder (whether of principal, interest or otherwise), then the
Borrowers will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender or any Issuing Bank, determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's capital or on the capital of such Lender's or
such Issuing Bank's, holding company, if any, as a consequence of this Agreement
or the Loans made by, or participations in Letters of Credit held by, such
Lender, or the Letters of Credit issued by such Issuing Bank, to a level below
that which such Lender or such Issuing Bank, or such Lender's or such Issuing
Bank's, holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or such Issuing Bank's policies and the
policies of such Lender's or such Issuing Bank's holding company with respect to
capital adequacy), then from time to time the Borrowers will pay to such Lender
or such Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or such Issuing Bank, or such Lender's or such
Issuing Bank's, holding company for any such reduction suffered.
(c) A certificate of a Lender or an Issuing Bank, setting forth the
amount or amounts necessary to compensate such Lender or such Issuing Bank, or
its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrowers and shall be conclusive absent
demonstrable error. The Borrowers shall pay such Lender or such Issuing Bank, as
the case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the part of any Lender or any Issuing Bank,
to demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or such Issuing Bank's, right to demand such compensation;
provided that the Borrowers shall not be required to compensate a Lender or an
Issuing Bank, pursuant to this Section for any increased costs or reductions
incurred more than 120 days prior to the date that such Lender or such Issuing
Bank, as the case may be, notifies the Borrowers of the Change in Law giving
rise to such increased costs or reductions and of such Lender's or such Issuing
Bank's, intention to claim compensation therefor; provided further that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 120-day period referred to above shall be extended to include the
period of retroactive effect thereof.
SECTION 2.15. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan
40
other than on the last day of the Interest Period applicable thereto, (c) the
failure to borrow, convert, continue or prepay any Loan on the date specified in
any notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.10(b) and is revoked in accordance therewith), or (d)
the assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by either Borrower pursuant
to Section 2.18, then, in any such event, the Borrowers shall compensate each
Lender for the loss, cost and expense attributable to such event. In the case of
a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrowers and shall be conclusive absent demonstrable error. The
Borrowers shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.
SECTION 2.16. Taxes. (a) Any and all payments by or on account of
any obligation of the Borrowers hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if a
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, each
Lender or each Issuing Bank (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) such Borrower
shall make such deductions and (iii) such Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) In addition, each Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrowers shall indemnify the Administrative Agent, each
Lender and each Issuing Bank, within 10 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent or such Lender or such Issuing Bank, as the case may be, on
or with respect to any payment by or on account of any obligation of the
Borrowers hereunder or under any other Loan Document (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrowers by a Lender or an Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or an Issuing
Bank, shall be conclusive absent demonstrable error.
41
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by a Borrower to a Governmental Authority, such Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which a
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement, shall deliver to such Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by such Borrower as will permit such payments to be
made without withholding or at a reduced rate.
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Borrowers shall make each payment required to be made by them
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements or of amounts payable under Section 2.14, 2.15 or 2.16, or
otherwise) prior to 12:00 noon, Memphis time, on the date when due, in
immediately available funds, without setoff or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, except payments to be made directly to any Issuing
Bank or Swingline Lender as expressly provided herein and except that payments
pursuant to Sections 2.14, 2.15, 2.16 and 9.03 shall be made directly to the
Persons entitled thereto. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, unreimbursed
LC Disbursements, interest and fees then due hereunder, such funds shall be
applied (i) first, towards payment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, towards payment of
principal and unreimbursed LC Disbursements, then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements or Swingline
Loans resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans or participations in LC Disbursements or Swingline
Loans and accrued interest thereon than the proportion received by any other
Lender, then the Lender receiving such greater proportion shall purchase (for
cash at
42
face value) participations in the Loans or participations in LC Disbursements or
Swingline Loans of other Lenders to the extent necessary so that the benefit of
all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective Loans
or participations in LC Disbursements or Swingline Loans; provided that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrowers pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements or Swingline Loans to any assignee or
participant, other than to the Borrowers or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). Each of the
Borrowers consents to the foregoing and agrees, to the extent it may effectively
do so under applicable law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against any Borrower rights of
set-off and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of such Borrower in the amount of such
participation.
(d) Unless the Administrative Agent shall have received notice from
any Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Banks hereunder that the
Borrowers will not make such payment, the Administrative Agent may assume that
the Borrowers have made such payment on such date in accordance herewith and
may, in reliance upon such assumption, distribute to the Lenders or the Issuing
Banks, as the case may be, the amount due. In such event, if the Borrowers have
not in fact made such payment, then each of the Lenders or each of the Issuing
Banks, as the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or Issuing Bank
with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.04(c), 2.05(e) or (f), 2.06(b) or 2.17(d), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.18. Mitigation Obligations; Replacement of Lenders. (a) If
any Lender exercises its rights under Section 2.13 or requests compensation
under Section 2.14, or if a Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 2.16, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce the cost referred to in Section 2.11(c) or amounts
payable pursuant to Section 2.12 or 2.14, as the case may be, in the future and
(ii) would not subject such Lender to any
43
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrowers hereby agree to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(a) If any Lender exercises its rights under Section 2.13 or
requests compensation under Section 2.14, or if a Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.16, or if any Lender defaults in its
obligation to fund Loans hereunder, then each Borrower may, at its sole expense
and effort, upon notice to such Lender and the Administrative Agent, require
such Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 9.04), all its interests,
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) such Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrowers (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from an exercise of rights under Section 2.13
or a claim for compensation under Section 2.14 or payments required to be made
pursuant to Section 2.16, such assignment will result in elimination of the
Section 2.13 rights on the part of the assignee or a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrowers to require such
assignment and delegation cease to apply.
ARTICLE III
Representations and Warranties
Each Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers.
(a) Holdings and each of its Subsidiaries is a corporation, limited
liability company, partnership, association or other business entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required. The
jurisdiction of organization of each Borrower and each of its Subsidiaries
existing on the Effective Date is indicated on Schedule 3.01.
(b) As of the Effective Date, Holdings owns the direct and indirect
interests in the Subsidiaries specified in Schedule 3.01. Holdings' record and
beneficial ownership, direct and indirect, of each Subsidiary is free from any
material restriction, equity, security interest, or other
44
Lien other than the Lien granted to the Collateral Agent pursuant to the
Guarantee and Collateral Agreement.
SECTION 3.02. Authorization; Enforceability. The Transactions are
within each Borrower's and each Grantor's corporate powers and have been duly
authorized by all necessary corporate and, if required, stockholder action. This
Agreement and each of the other Loan Documents has been duly executed and
delivered by each Borrower and Grantor executing the same and constitutes a
legal, valid and binding obligation of such Borrower and/or such Grantor,
enforceable in accordance with its respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions
and the execution, delivery and performance of the Loan Documents by the
respective parties thereto (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority,
except such as have been obtained or made and are in full force and effect, (b)
will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of any Borrower or any of its Subsidiaries or any
order of any Governmental Authority, (c) will not violate or result in a default
under any indenture, agreement or other instrument binding upon any Borrower or
any of its Subsidiaries or its assets, or give rise to a right thereunder to
require any payment to be made by any Borrower or any of its Subsidiaries, and
(d) will not result in the creation or imposition of any Lien on any asset of
any Borrower or any of its Subsidiaries except pursuant to the Loan Documents.
SECTION 3.04. Financial Condition; No Material Adverse Change. (a)
The Borrowers have heretofore furnished to the Lenders (i) audited consolidated
and unaudited consolidating balance sheet and statements of income, stockholders
equity and cash flows of (x) TBC Private Brands as of and for the Fiscal Year
ended December 31, 2003, and (y) Holdings as of and for the Fiscal Year ended
December 31, 2004, in each case reported on by PricewaterhouseCoopers LLP,
independent public accountants, and (ii) unaudited interim consolidated and
consolidating financial statements of Holdings, certified by its chief financial
officer, for each Fiscal Quarter ended after the date of the latest applicable
financial statements delivered pursuant to clause (i) of this paragraph as to
which such financial statements are available. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of TBC Private Brands and its Consolidated
Subsidiaries or Holdings and its Subsidiaries, as applicable, as of such dates
and for such periods in accordance with GAAP, subject to year end audit
adjustments and the absence of footnotes in the case of the statements referred
to in clause (ii) above.
(b) Since December 31, 2004, there has been no material adverse
change in the business, assets, operations, prospects or condition, financial or
otherwise, of Holdings and its Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Holdings and each of its Subsidiaries
has good title to, or valid leasehold interests in, all its real and personal
property material to its business, free and clear of all Liens except for the
Liens set forth on Schedule 6.02, for Liens permitted by
45
Section 6.02 and for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes. As of the Effective Date, the only
parcel of real property owned by Holdings or any of its Subsidiaries having a
value (together with improvements thereof) of at least $10,000,000 is the real
property owned by TBC Private Brands located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇.
(b) Holdings and each of its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by Holdings and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No claim has been
asserted and is pending by any Person challenging or questioning the use of any
such intellectual property or the validity or effectiveness of such intellectual
property, nor does Holdings know of any valid basis for any such claim, which
could, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of Holdings, threatened against
or affecting Holdings or any of its Subsidiaries (i) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect or (ii) that involve this Agreement or the
Transactions.
(b) To the knowledge of Holdings, the facilities and properties
owned, leased or operated by Holdings and each of its Subsidiaries (the
"Properties") do not contain, and have not previously contained, any Hazardous
Materials in amounts or concentrations or under circumstances that constitute or
constituted a violation of, or could give rise to liability under, any
Environmental Law, except for such violation or liability that, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
(c) Except with respect to any matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, neither Borrower nor any of its Subsidiaries (i) has failed to comply
with any Environmental Law or to obtain, maintain or comply with any permit,
license or other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any claim
with respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
SECTION 3.07. Compliance with Laws and Agreements. Holdings and each
Subsidiary is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default (determined after
giving effect to this Agreement) has occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. Neither
Holdings nor any of its Subsidiaries is (a) an "investment company" or a company
"controlled" by an
46
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Holdings and each of its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which Holdings or such Subsidiary, as
applicable, has set aside on its books adequate reserves to the extent required
by GAAP or (b) to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $2,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $2,000,000 the fair
market value of the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. Holdings has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other information furnished by or on behalf of any Borrower to the
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) prior to the Effective Date contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, Holdings represents only that such information was prepared in good
faith based upon assumptions believed to be reasonable at the time.
SECTION 3.12. Margin Stock. Neither Holdings nor any Subsidiary is
engaged principally, or as one of its important activities, in the business of
extending or arranging for the extension of credit for the purpose of purchasing
or carrying "margin securities" or "margin Stock" (as defined in Regulations G
and U issued by the Board). Neither Holdings nor any Subsidiary owns or intends
to carry or purchase any "margin security" or "margin Stock." Neither Holdings
nor any Subsidiary will use the proceeds of any Loan to purchase or carry (or
refinance any borrowings the proceeds of which were used to purchase or carry)
any "margin security" or "margin Stock." If requested by any Lender or the
Administrative Agent, Holdings will furnish to the Administrative Agent and each
Lender a statement to the foregoing effect in
47
conformity with the requirements of FR Form G-3 or FR Form U-1, as applicable,
referred to in Regulation U.
SECTION 3.13. Compliance with Conditions Precedent. Each Borrower
and each Subsidiary has (a) executed and delivered to the Co-Administrative
Agent and the Lenders the documents described in Section 4.01 hereto; (b)
obtained and delivered to the Co-Administrative Agent and the Lenders the
opinions of counsel described in Section 4.01 (b); and (c) otherwise complied
with all other conditions hereto.
SECTION 3.14. Labor Matters. There are no strikes, lockouts or
slowdowns against Holdings or any Subsidiary pending or, to the knowledge of
Holdings, threatened that could reasonably be expected to have a Material
Adverse Effect.
SECTION 3.15. Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Collateral Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in the
Collateral defined and described therein and proceeds thereof. In the case of
the Pledged Stock described in the Guarantee and Collateral Agreement, when
stock certificates representing such Pledged Stock are delivered to the
Collateral Agent, and in the case of the other Collateral described in the
Guarantee and Collateral Agreement, when financing statements in appropriate
form are filed in the offices of the Secretary of State of each jurisdiction of
incorporation or organization of the individual Grantor, the Guarantee and
Collateral Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of Holdings and the Subsidiaries in
such Collateral and the proceeds thereof, as security for the Obligations (as
defined in the Guarantee and Collateral Agreement), in each case prior and
superior in right to any other Person (except, in the case of Collateral other
than Pledged Stock, Liens permitted by Section 6.02).
(b) Each Mortgage is effective to create in favor of the Collateral
Agent, for the benefit of the Lenders, a legal, valid and enforceable Lien on
the Mortgaged Property described therein and proceeds thereof, and when the
Mortgage is filed at the request of the Collateral Agent in the appropriate
offices, each such Mortgage shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of Holdings and the
Subsidiaries in the Mortgaged Property and the proceeds thereof, as security for
the Secured Indebtedness (as defined in the relevant Mortgage), in each case
prior and superior in right to any other Person.
SECTION 3.16. Solvency. Each Borrower is, and after giving effect to
the Refinancing will be and will continue to be, Solvent.
SECTION 3.17. Regulation H. No Mortgage encumbers improved real
property that is located in an area that has been identified by the Secretary of
Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968.
48
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders to make
Loans and of each Issuing Bank to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The Co-Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement signed
on behalf of such party or (ii) written evidence satisfactory to the
Co-Administrative Agent (which may include telecopy transmission of a
signed signature page of this Agreement) that such party has signed a
counterpart of this Agreement.
(b) The Co-Administrative Agent shall have received a favorable
written opinion (addressed to the Co-Administrative Agent and the Lenders
and dated the Effective Date) of ▇▇▇▇▇▇▇▇ ▇▇▇▇ LLP, counsel for the
Borrowers, covering such matters relating to the Borrowers, the Grantors,
this Agreement and the other Loan Documents and the Transactions the
Required Lenders shall reasonably request. Each Borrower hereby requests
such counsel to deliver such opinion.
(c) The Co-Administrative Agent shall have received such documents
and certificates as the Co-Administrative Agent or its counsel may
reasonably request relating to the organization, existence and good
standing of the Borrowers and the Grantors referred to in Section 4.01(f),
the authorization of the Transactions and any other legal matters relating
to the Borrowers, such Grantors, this Agreement and the other Loan
Documents and the Transactions, all in form and substance satisfactory to
the Co-Administrative Agent and its counsel.
(d) The Co-Administrative Agent shall have received a certificate,
dated the Effective Date and signed by the President, a Vice President or
a Financial Officer of each of the Borrowers, confirming compliance with
the conditions set forth in paragraphs (a) and (b) of Section 4.02.
(e) The Administrative Agent, the Book Manager, the Arranger, the
Co-Administrative Agent and each Lender shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Borrowers
hereunder.
(f) The Co-Administrative Agent shall have received (i) the
Guarantee and Collateral Agreement, executed and delivered by the
Borrowers and each Grantor and (ii) an Intercreditor Agreement executed
and delivered by the Lenders and Prudential.
(g) TBC Private Brands shall have agreed to provide the Collateral
Agent with a Mortgage on real property owned by TBC Private Brands,
located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, and containing an
approximately 475,000 square foot
49
executive office and warehouse facility (the "Mortgaged Property") which
Mortgage shall be perfected if requested by the Collateral Agent. It is
understood that failure to provide the Collateral Agent with such Mortgage
on or prior to the tenth Business Day following the Closing Date shall
constitute an immediate Event of Default.
(h) The Lenders shall have received (i) the financial statements
referred to in Section 3.04 and (ii) satisfactory projections through
2010, accompanied by pro forma calculations of projected compliance with
Sections 6.08 though 6.10 for each quarter of 2005.
(i) The Co-Administrative Agent shall have received satisfactory
evidence that the Existing Credit Agreement shall have been terminated and
all amounts owing thereunder shall have been paid in full.
(j) The Co-Administrative Agent shall have received the results of a
recent lien search in each of the jurisdictions where assets of Holdings
and each of its Subsidiaries are located, and such search shall reveal no
liens on any of the assets of Holdings or its Subsidiaries except for
liens permitted by Section 6.02 or discharged on or prior to the Effective
Date pursuant to documentation satisfactory to the Administrative Agent.
(k) The Collateral Agent shall have received (i) the certificates
representing the shares of Capital Stock pledged pursuant to the Guarantee
and Collateral Agreement, together with an undated stock power for each
such certificate executed in blank by a duly authorized officer of the
pledgor thereof, and (ii) each promissory note (if any) pledged to the
Collateral Agent pursuant to the Guarantee and Collateral Agreement
endorsed (without recourse) in blank (or accompanied by an executed
transfer form in blank) by the pledgor thereof.
(l) The Existing Note Agreement and the Additional Note Agreement
between the Borrowers and Prudential shall have been amended in
substantially the same form as the most recent draft of such agreements
distributed to the Lenders.
The Co-Administrative Agent shall notify the Borrowers and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Banks to issue Letters of Credit hereunder shall not become effective unless
each of the foregoing conditions is satisfied (or waived pursuant to Section
9.02) at or prior to 3:00 p.m., Memphis, Tennessee time, on June 30, 2005 (and,
in the event such conditions are not so satisfied or waived, the Commitments
shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to
make a Loan on the occasion of any Borrowing and of each Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to the satisfaction of
the following conditions:
(a) The representations and warranties of each Borrower set forth in
this Agreement shall be true and correct on and as of the date of such
Borrowing, or the date
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of issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, as if made on such date.
(b) At the time of and immediately after giving effect to such
Borrowing, or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be
continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by each
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, and all Letters of Credit shall have expired or terminated
and all LC Disbursements shall have been reimbursed, Holdings covenants and
agrees with the Lenders that:
SECTION 5.01. Punctual Payment. The Borrowers will punctually pay or
cause to be paid the principal and interest due in respect of each Borrowing
according to the terms hereof and the Borrowers will punctually pay or cause to
be paid the commitment, Letter of Credit participation and other fees for which
they are responsible pursuant to Section 2.11 hereof.
SECTION 5.02. Financial Statements and Other Information. Holdings
will furnish to each Lender:
(a) within 90 days after the end of each Fiscal Year of Holdings,
its audited consolidated balance sheet and related statement of
operations, stockholders' equity and cash flows as of the end of and for
such year, setting forth in each case in comparative form the figures for
the previous Fiscal Year, all reported on by PricewaterhouseCoopers LLP or
other independent public accountants of recognized national standing
(without a "going concern" or like qualification or exception and without
any qualification or exception as to the scope of such, audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of
Holdings and its Consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied; and within 90 days after the
end of each Fiscal Year of Holdings, its unaudited consolidating balance
sheets and related statements of operations as of the end of and for such
year, all certified by one of its Financial Officers as presenting fairly
in all material respects the financial condition and results of operations
of each of Holdings' Consolidated Subsidiaries in accordance with GAAP
consistently applied;
(b) within 45 days after the end of each of the first three Fiscal
Quarters of each Fiscal Year of Holdings, (i) its consolidated balance
sheets and related statements of operations, stockholders' equity and cash
flows as of the end of and for such Fiscal
51
Quarter and the then elapsed portion of the Fiscal Year, setting forth in
each case in comparative form the figures for the corresponding period and
quarter of the previous Fiscal Year, and (ii) its consolidating balance
sheets and related statements of operations as of the end of and for such
Fiscal Quarter and the then elapsed portion of the Fiscal Year, all
certified by one of its Financial Officers as presenting fairly in all
material respects the financial condition and results of operations of
Holdings and its Consolidated Subsidiaries on a consolidated and
consolidating basis in accordance with GAAP consistently applied, subject
to normal year-end audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of Holdings
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed
to be taken with respect thereto, (ii) in case of a certificate furnished
concurrently with any financial statements delivered after September 30,
2005, setting forth reasonably detailed calculations demonstrating
compliance with Sections 6.08 through 6.10 and (iii) stating whether any
change in GAAP or in the application thereof has occurred since the date
of the audited financial statements referred to in Section 3.04 and, if
any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;
(d) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
Holdings or any Subsidiary with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, or distributed
by Holdings to its shareholders generally, as the case may be; and
(e) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of
Holdings or any Subsidiary, or compliance with the terms of this Agreement
and the other Loan Documents, as the Administrative Agent or any Lender
may reasonably request.
SECTION 5.03. Notices of Material Events. Holdings will furnish to
the Co-Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting
Holdings or any Subsidiary or Affiliate thereof that, if adversely
determined, could reasonably be expected to result in a Material Adverse
Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of Holdings and its Subsidiaries in an aggregate
amount exceeding $2,000,000;
52
(d) the occurrence of the events described in the definition of
"Subsidiary" resulting in TBC de Mexico being considered a Subsidiary for
all purposes of this Agreement; and
(e) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of Holdings setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.04. Existence; Conduct of Business. Holdings will, and
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; provided that the foregoing shall not prohibit
any merger, consolidation, conversion, restructuring, liquidation, dissolution
or other transaction permitted under Section 6.03.
SECTION 5.05. Payment of Obligations. Holdings will, and will cause
each of its Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b)
Holdings or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.06. Maintenance of Properties; Insurance. Holdings will,
and will cause each of its Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and (b) maintain, with financially sound and
reputable insurance companies, insurance in such amounts and against such risks
as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.
SECTION 5.07. Books and Records; Inspection Rights. Holdings will,
and will cause each of its Subsidiaries to, keep proper books of record and
account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. Holdings will, and will
cause each of its Subsidiaries to, permit any representatives designated by the
Co-Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.
SECTION 5.08. Compliance with Laws. Holdings will, and will cause
each of its Subsidiaries to, comply with all laws, rules, regulations and orders
of any Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
53
SECTION 5.09. Use of Proceeds. The proceeds of the Term Loans will
be used for the Refinancing, and the proceeds of the Revolving Loans will be
used for general corporate purposes of the Borrowers and their Subsidiaries,
including Acceptable Acquisitions. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations U and X. Letters
of Credit will be used only to support general corporate purposes.
SECTION 5.10. Intercompany Loans/Payments. Holdings agrees with the
Lenders that (i) except as provided in clause (ii), any payments made by a
Guarantor in reduction of its obligation under the Guarantee executed by it,
shall reduce dollar for dollar its total obligation to the Borrowers for
repayment of any Intercompany Loans owed to the Borrowers, (ii) it will require
that any payments made by a Guarantor that is an indirect Wholly-Owned
Subsidiary of any Borrower, in reduction of its obligation under the Guarantee
executed by it, shall reduce dollar for dollar its total obligation for
repayment of any Intercompany Loans owed to another Guarantor and (iii) neither
it nor any Wholly-Owned Subsidiary will demand, enforce or accept any payments
on account of any Intercompany Loans owed to either Borrower by any Guarantor
other than Northern States Tire, Inc. and Big O Development, Inc. at a time when
such Guarantor is insolvent or if such payments could reasonably be expected to
render such Guarantor insolvent, to leave it with unreasonably small capital for
the business in which it is engaged and in which it intends to engage, or to
leave it unable to pay its other Indebtedness as the same matures.
SECTION 5.11. Subsidiary Guarantees and Collateral. (a) With respect
to any new Subsidiary (other than an Excluded Foreign Subsidiary) created or
acquired after the Effective Date by Holdings or any Subsidiary (which, for the
purposes of this paragraph (a), shall include any existing Subsidiary that
ceases to be an Excluded Foreign Subsidiary), Holdings will promptly (i) execute
and deliver to the Collateral Agent such amendments to the Guarantee and
Collateral Agreement as the Collateral Agent deems necessary or advisable to
grant to the Collateral Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary that is
owned by Holdings or any Subsidiary, (ii) deliver to the Collateral Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of
Holdings or the relevant Subsidiary, (iii) cause such new Subsidiary (other than
an SPE Subsidiary) (A) to become a party to the Guarantee and Collateral
Agreement and (B) to take such actions necessary or advisable to grant to the
Collateral Agent for the benefit of the Lenders a perfected first priority
security interest in the Collateral described in the Guarantee and Collateral
Agreement with respect to such new Subsidiary, including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by
the Guarantee and Collateral Agreement or by law or as may be requested by the
Collateral Agent, and (iv) if requested by the Collateral Agent, deliver to the
Collateral Agent legal opinions relating to the matters described above, which
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Collateral Agent.
(b) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Effective Date by Holdings or any Subsidiary (other than by
any Subsidiary that is an Excluded Foreign Subsidiary), Holdings will promptly
(i) execute and deliver to the Collateral Agent such amendments to the Guarantee
and Collateral Agreement as the Collateral Agent
54
deems necessary or advisable to grant to the Collateral Agent, for the benefit
of the Lenders, a perfected first priority security interest in the Capital
Stock of such new Subsidiary that is owned by Holdings or such Subsidiary
(provided that in no event shall more than 66% of the total outstanding voting
Capital Stock of any such new Subsidiary be required to be so pledged), (ii)
deliver to the Collateral Agent the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of Holdings or the relevant Subsidiary, and take such
other action as may be necessary or, in the opinion of the Collateral Agent,
desirable to perfect the Collateral Agent's security interest therein, and (iii)
if requested by the Collateral Agent, deliver to the Collateral Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the Collateral
Agent.
SECTION 5.12. Environmental Laws. (a) Holdings will, and will cause
each of its Subsidiaries to, comply in all material respects with, and ensure
compliance in all material respects by all tenants and subtenants, if any, with,
all applicable Environmental Laws, and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants obtain
and comply in all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(b) Holdings will, and will cause each of its Subsidiaries to,
conduct and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws and
promptly comply in all material respects with all lawful orders and directives
of all Governmental Authorities regarding Environmental Laws, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.13. Additional Collateral, etc. (a) With respect to any
fee interest in any real property having a value (together with improvements
thereof) of at least $15,000,000 acquired after the Effective Date by Holdings
or any of its Subsidiaries (other than any such real property subject to a Lien
expressly permitted by Section 6.02(d)), if requested by the Collateral Agent,
Holdings shall, or shall cause its Subsidiary to, promptly (i) execute and
deliver a first priority Mortgage, in favor of the Collateral Agent, for the
benefit of the Lenders, covering such real property, (ii) provide the Lenders
with (x) title and extended coverage insurance covering such real property in an
amount at least equal to the purchase price of such real property (or such other
amount as shall be reasonably specified by the Collateral Agent) as well as a
current ALTA survey thereof, together with a surveyor's certificate and (y) any
consents or estoppels reasonably deemed necessary or advisable by the Collateral
Agent in connection with such Mortgage, each of the foregoing in form and
substance reasonably satisfactory to the Collateral Agent and (iii) deliver to
the Collateral Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Collateral Agent.
(b) With respect to any property acquired after the Effective Date
by Holdings or its Subsidiaries (other than (x) any property described in
paragraph (a) or Section 5.11, (y) any property subject to a Lien expressly
permitted by Section 6.02(d) and (z) properly acquired by
55
any Excluded Foreign Subsidiary) as to which the Collateral Agent, for the
benefit of the Lenders, does not have a perfected Lien, if requested by the
Collateral Agent, Holdings shall promptly (i) execute and deliver to the
Collateral Agent such amendments to the Guarantee and Collateral Agreement or
such other documents as the Collateral Agent deems necessary or advisable to
grant to the Collateral Agent, for the benefit of the Lenders, a security
interest in such property and (ii) take all actions necessary or advisable to
grant to the Collateral Agent, for the benefit of the Lenders, a perfected first
priority security interest in such property, including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by
the Guarantee and Collateral Agreement or by law or as may be requested by the
Collateral Agent.
SECTION 5.14. Title Insurance, etc. (a) If requested by the
Collateral Agent, Holdings will provide to the Collateral Agent and the title
insurance company issuing the policy referred to in paragraph (b) below (the
"Title Insurance Company") maps or plats of an as-built survey of the sites of
the Mortgaged Properties, and such maps or plats shall be certified to the
Collateral Agent and the Title Insurance Company in a manner satisfactory to
them, dated a date satisfactory to the Collateral Agent and the Title Insurance
Company by an independent professional licensed land surveyor satisfactory to
the Collateral Agent and the Title Insurance Company, which maps or plats and
the surveys on which they are based shall be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly established and
adopted by the American Land Title Association and the American Congress on
Surveying and Mapping in 1992, and, without limiting the generality of the
foregoing, there shall be surveyed and shown on such maps, plats or surveys the
following: (A) the locations on such sites of all the buildings, structures and
other improvements and the established building setback lines; (B) the lines of
streets abutting the sites and width thereof; (C) all access and other easements
appurtenant to the sites; (D) all roadways, paths, driveways, easements,
encroachments and overhanging projections and similar encumbrances affecting the
site, whether recorded, apparent from a physical inspection of the sites or
otherwise known to the surveyor; (E) any encroachments on any adjoining property
by the building structures and improvements on the sites; (F) if the site is
described as being on a filed map, a legend relating the survey to said map; and
(G) the flood zone designations, if any, in which any Mortgaged Property is
located.
(b) If requested by the Collateral Agent, Holdings will provide to
the Collateral Agent in respect of each Mortgaged Property a mortgagee's title
insurance policy (or policies) or marked up unconditional binder for such
insurance. Each such policy shall (A) be in an amount satisfactory to the
Collateral Agent; (B) be issued at ordinary rates; (C) insure that the Mortgage
insured thereby creates a valid first Lien on such Property free and clear of
all defects and encumbrances, except as disclosed therein; (D) name the
Collateral Agent for the benefit of the Lenders as the insured thereunder; (E)
be in the form of ALTA Loan Policy - 1970 (Amended 10/17/70 and 10/17/84) (or
equivalent policies); (F) contain such endorsements and affirmative coverage as
the Collateral Agent may reasonably request and (G) be issued by title companies
satisfactory to the Collateral Agent (including any such title companies acting
as co-insurers or reinsurers, at the option of the Collateral Agent). The
Collateral Agent shall have received evidence satisfactory to it that all
premiums in respect of each such policy, all charges for mortgage recording tax,
and all related expenses, if any, have been paid.
56
(c) If requested by the Collateral Agent, Holdings will provide to
the Collateral Agent (A) a policy of flood insurance that (1) covers any parcel
of improved real property that is encumbered by any Mortgage (2) is written in
an amount not less than the outstanding principal amount of the indebtedness
secured by such Mortgage that is reasonably allocable to such real property or
the maximum limit of coverage made available with respect to the particular type
of property under the National Flood Insurance Act of 1968, whichever is less,
and (3) has a term ending not later than the maturity of the Indebtedness
secured by such Mortgage and (B) confirmation that the applicable Borrower has
received the notice required pursuant to Section 208(e)(3) of Regulation H of
the Board.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full, and all Letters of Credit have expired or been terminated and all LC
Disbursements shall have been reimbursed, Holdings covenants and agrees with the
Lenders that:
SECTION 6.01. Indebtedness. Holdings will not, nor will it permit
any of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness created hereunder, and Guarantees executed pursuant
to this Agreement;
(b) Indebtedness and Guarantees existing on the Effective Date and
set forth in Schedule 6.01 and extensions, renewals and replacements of
any such Indebtedness that do not increase the outstanding principal
amount thereof over the amount set forth on such Schedule 6.01;
(c) Indebtedness owed to any Borrower or to any Wholly-Owned
Subsidiary by any Borrower or any Wholly-Owned Subsidiary, that in each
case is permitted under Sections 6.04(c);
(d) [Intentionally Omitted];
(e) Guarantee obligations entered into by Big O Tires, Inc. or its
Subsidiaries on behalf of its franchisees, other than those existing
Guarantee obligations listed on Schedule 6.01(e), provided that the
aggregate principal amount of such guaranteed obligations arising after
the Effective Date plus the aggregate principal amount of loans permitted
under Section 6.04(h) at no time exceeds $30,000,000;
(f) Indebtedness of any Subsidiary which becomes such as a result of
an Acceptable Acquisition, including such Indebtedness that is assumed or
becomes the subject of a Guarantee, but not any extensions, renewals or
replacements thereof; provided, that any such Indebtedness is not created
in contemplation of or in connection with such Acceptable Acquisition;
57
(g) Guarantees by any Borrower or any Wholly-Owned Subsidiary of
Indebtedness of any Borrower or any Wholly-Owned Subsidiary, provided such
Subsidiary or Borrower Indebtedness is permitted pursuant to this Section;
(h) Guarantee obligations entered into by (x) any Borrower or any
Wholly-Owned Subsidiary, of obligations of any Borrower or any
Wholly-Owned Subsidiary to Persons other than their Affiliates, which
obligations are incurred by them in the ordinary course of business and do
not constitute Indebtedness, such as trade accounts payable, customer
advances, accrued expenses and lease payments that do not constitute
Indebtedness, and (y) any Borrower or any Wholly-Owned Subsidiary, of
obligations of Persons other than Holdings, Subsidiaries and their
Affiliates, provided that the aggregate principal amount of the guaranteed
obligations under this clause (y) plus the aggregate amount of the
investments permitted under Section 6.04(d) at no time exceeds
$30,000,000;
(i) Guarantees and Indebtedness arising in connection with (x) sale
and leaseback transactions existing on the Effective Date and set forth on
Schedule 6.01 and extensions, renewals and replacements of any such sale
and leaseback transactions that do not increase the outstanding principal
amount thereof over the amount set forth on such Schedule 6.01 and (y)
sale and leaseback transactions permitted under Section 6.12(d);
(j) [Intentionally Omitted];
(k) Guarantees and Indebtedness under Permitted Securitizations up
to an aggregate maximum amount of $100,000,000 at any time outstanding;
and
(l) other Indebtedness which does not have an aggregate principal
amount exceeding $35,000,000 at any time outstanding.
SECTION 6.02. Liens. Holdings will not, nor will it permit any of
its Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of Holdings or any Subsidiary
existing on the Effective Date and set forth in Schedule 6.02, provided
that, if such Lien is not released within sixty days after the Effective
Date, (i) such Lien shall not apply to any other property or asset of
Holdings or any Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the Effective Date and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof over the amount set forth on such Schedule 6.02;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by Holdings or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the
Effective Date prior to the time such Person becomes a Subsidiary;
provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary, as
the case may be, (ii) such
58
Lien shall not apply to any other property or assets of Holdings or any
Subsidiary; (iii) such Lien secures Indebtedness permitted by Section
6.01(l) and (iv) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be;
(d) Liens on fixed or capital assets acquired by Holdings or any
Subsidiary; provided that (i) such Liens secure Indebtedness permitted by
Section 6.01(l), (ii) such Liens and the Indebtedness secured thereby are
incurred prior to such acquisition or simultaneously therewith, (iii) the
Indebtedness secured thereby does not exceed 100% of the cost of acquiring
such fixed or capital assets, (iv) such security interests shall not apply
to any other property or assets of Holdings or any Subsidiary; and (v) the
aggregate Indebtedness secured by all such Liens does not exceed
$10,000,000;
(e) Liens arising in connection with sale and leaseback transactions
(i) described in Section 6.01(i)(x) or (ii) permitted under Section
6.12(d);
(f) a security interest granted by Tire Kingdom, Inc. to Michelin
Tire Corporation, as secured party, with respect to all inventory
previously and hereafter purchased from Michelin Tire Corporation by Tire
Kingdom, Inc. and all proceeds thereof; and
(g) sales or transfers of Receivables under, and Liens existing or
deemed to exist in connection with, Permitted Securitizations permitted by
Section 6.01(k).
SECTION 6.03. Fundamental Changes. (a) Holdings will not, nor will
it permit any of its Subsidiaries to, merge into or with or consolidate with any
other Person, or permit any other Person to merge into or with it or consolidate
with it, or sell, transfer, lease or otherwise dispose of (in one transaction or
in a series of transactions) any of the stock of its Subsidiaries (in each case,
whether now owned or hereafter acquired), or liquidate or dissolve, except that,
if at the time thereof and immediately after giving effect thereto no Default
shall have occurred and be continuing (i) any Wholly-Owned Subsidiary may merge
into any Borrower or into another Wholly-Owned Subsidiary and any Borrower may
merge into the other Borrower; (ii) any Wholly-Owned Subsidiary may sell,
transfer, lease or otherwise dispose of any portion of its assets to any
Borrower or to another Wholly-Owned Subsidiary; (iii) any Wholly-Owned
Subsidiary may liquidate or dissolve if Holdings determines in good faith that
such liquidation or dissolution is in the best interests of the Borrowers and is
not materially disadvantageous to the Lenders; (iv) Acceptable Acquisitions
shall be permitted; (v) the disposal of Northern States Tire, Inc. shall be
permitted, whether by sale of assets or stock, or by merger, consolidation,
dissolution or liquidation; and (vi) any Wholly-Owned Subsidiary may change its
form of entity to, or otherwise convert to another form of entity, which is also
a Wholly-Owned Subsidiary and is a Grantor and Guarantor under the Guarantee and
Collateral Agreement, or engage in any other restructuring, provided that no
assets of or ownership interests in any such Wholly-Owned Subsidiary shall be
transferred to a Person which is not also a Wholly-Owned Subsidiary and a
Grantor and Guarantor under the Guarantee and Collateral Agreement.
(b) Holdings will not, nor will it permit any of its Subsidiaries
to, engage to any material extent in any business not reasonably related to (i)
the distribution of tires and other
59
products in the automotive replacement market, (ii) providing financing to
Holdings and its other Subsidiaries, (iii) owning and licensing intellectual
property used by Holdings or its other Subsidiaries or (iv) in the case of SPE
Subsidiaries, Permitted Securitizations.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. Holdings will not, nor will it permit any of its Subsidiaries to,
purchase, hold or acquire (including pursuant to any merger with any Person that
was not a Wholly-Owned Subsidiary prior to such merger) any capital stock,
evidences of Indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit, except:
(a) Permitted Investments;
(b) capital investments in any Subsidiary (provided that the
Subsidiary is in existence on the Effective Date or becomes a Subsidiary at any
time after the Effective Date in a manner which complies with all other
provisions of this Agreement without giving effect to this clause (b)); and
other investments and loans as otherwise described in Schedule 6.04(b);
(c) Intercompany Loans or advances made by any Borrower or any
Wholly-Owned Subsidiary to any Borrower or any Wholly-Owned Subsidiary;
(d) loans and advances to, purchases of equity interests in and
contributions to the capital of Joint Ventures and other Persons, not otherwise
permitted pursuant to this Section, provided that the aggregate amount of such
investments, plus the aggregate amount of the obligations guaranteed pursuant to
Section 6.01(h)(y), shall not exceed $30,000,000 at any one time; (Joint Venture
profits and losses that are passed through to its equity holders shall not be
included in the calculation of the aggregate amount of such investments);
(e) investments in evidences of Indebtedness representing amounts
formerly constituting accounts receivable owed to Holdings or any Subsidiary in
the ordinary course of business;
(f) Guarantees permitted under Section 6.01;
(g) Acceptable Acquisitions so long as either (i) the Leverage Ratio
as of the time immediately after giving effect to such Acceptable Acquisition
would be at least 0.50 to 1.00 less than the maximum ratio required under
Section 6.09 for the end of the Fiscal Quarter during which the Acceptable
Acquisition is made or (ii) the aggregate consideration paid in respect of all
Acceptable Acquisitions made in any Fiscal Year does not exceed $20,000,000; and
(h) loans by Big O Tires, Inc. or its Wholly-Owned Subsidiaries to
Big O franchisees, provided that the aggregate principal amount of such loans
arising after the Effective Date plus the aggregate amount of the obligations
guaranteed pursuant to Section 6.01(e) at no time exceeds $30,000,000.
Investments in evidences of Indebtedness permitted under Section 6.04(e) and Big
O franchisee loans that have been sold to third parties shall be excluded from
the loans and obligations required to be within the $30,000,000 limit.
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SECTION 6.05. Hedging Agreements. Holdings will not, nor will it
permit any of its Subsidiaries to, enter into any Hedging Agreement, other than
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which Holdings or such Subsidiary is exposed in the conduct of
its business or the management of its liabilities.
SECTION 6.06. Transactions with Affiliates. Holdings will not, nor
will it permit any of its Subsidiaries 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 of its Affiliates except in the
ordinary course of business and pursuant to the reasonable requirements of
Holdings' or such Subsidiary's business and upon fair and reasonable terms no
less favorable to Holdings or such Subsidiary than Holdings or such Subsidiary
would obtain in a comparable arms-length transaction; provided that the
foregoing shall not apply (i) to transactions between the Borrowers, between any
Borrower and any Wholly-Owned Subsidiary or between or among any Wholly-Owned
Subsidiaries of the Borrowers, as long as such transactions do not violate
Section 6.04 or (ii) if such transactions occur in the ordinary course of
business consistent with past practices of any Borrower and/or Subsidiary, (x)
to transactions between such Borrower or any Wholly-Owned Subsidiary and TBC de
Mexico or (y) to transactions between Big O Tires, Inc. or any of its
Subsidiaries and any Joint Venture established by Big O Tires, Inc. or any of
its Subsidiaries in the ordinary course of business, the entire investment in
which is permitted under Section 6.04(d).
SECTION 6.07. Restrictive Agreements. Holdings will not, nor will it
permit any of its Subsidiaries to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of Holdings or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to Holdings or any other Subsidiary or to Guarantee Indebtedness of Holdings or
any other Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by this Agreement, (ii) the
foregoing shall not apply to restrictions and conditions identified on Schedule
6.07 (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition), (iii)
the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be sold
and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement (other than in respect of a Permitted
Securitization) if such restrictions or conditions apply only to the property or
assets securing such Indebtedness, (v) clause (a) of the foregoing shall not
apply to customary provisions in leases restricting the assignment thereof and
(vi) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to Permitted Securitizations permitted by this
Agreement if such restrictions or conditions apply only to the Receivables and
the Related Assets that are the subject of the Permitted Securitization, and
neither clause (a) nor clause (b) of the foregoing shall apply to restrictions
or conditions imposed on any SPE Subsidiary in connection with any Permitted
Securitization.
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SECTION 6.08. Fixed Charge Coverage Ratio. Holdings will not permit
the Fixed Charge Coverage Ratio as of the last day of any Fiscal Quarter of
Holdings to be less than the amount set forth in the following table. For
purposes of this Section, "Fixed Charge Coverage Ratio" means as of the last day
of any Fiscal Quarter of Holdings, the ratio of (a) EBITDAR for the period of
four Fiscal Quarters ending on the last day of such quarter less Capital
Expenditures for such period to (b) the sum of the Consolidated Cash Interest
Expense, Scheduled Payments, Consolidated Rental Expense and Restricted Payments
for such period:
Quarter Ending Ratio
-------------- -----
9/30/05 1.15:1
12/31/05 1.15:1
3/31/06 1.15:1
6/30/06 and thereafter 1.20:1
SECTION 6.09. Maximum Leverage Ratio. Holdings will not permit the
Leverage Ratio as of the end of any Fiscal Quarter to be greater than that set
forth in the following table:
Quarter Ending Ratio
-------------- -----
9/30/05 3.00:1
12/31/05 3.00:1
3/31/06 3.00:1
6/30/06 and thereafter 2.75:1
SECTION 6.10. Asset Test. Holdings will not permit the ratio of (a)
the sum of (i) Holdings' consolidated accounts receivable (including accounts
receivable sold or otherwise transferred under Permitted Securitizations
permitted by Section 6.01(k)) and (ii) Holdings' consolidated inventories which
inventories are subject to a first priority perfected security interest in favor
of the Collateral Agent pursuant to the Guarantee and Collateral Agreement (and,
in any event, exclusive of any then outstanding amounts secured by a security
interest on inventory permitted by Section 6.02(f)) to (b) Consolidated Funded
Indebtedness at the end of any Fiscal Quarter to be less than the amount set
forth in the following table:
Quarter Ending Ratio
-------------- -----
9/30/05 1.20:1
12/31/05 1.20:1
3/31/06 1.20:1
6/30/06 and thereafter 1.25:1
SECTION 6.11. Disclosure. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Borrowers to
the Administrative Agent or any Lender pursuant to this Agreement or any of the
other Loan Documents will, when so furnished, contain any material misstatement
of fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they are
62
made, not misleading; provided that, with respect to projected financial
information, such information may be prepared in good faith based upon
assumptions believed to be reasonable at the time.
SECTION 6.12. Sale of Assets. Holdings will not sell, lease, assign,
transfer or otherwise dispose of, or permit any of its Subsidiaries to sell,
lease, assign, transfer or otherwise dispose of, any of its or their now owned
or hereafter acquired assets (including, without limitation, shares of stock and
indebtedness of such Subsidiaries, receivables and leasehold interests), except:
(a) for inventory disposed of in the ordinary course of business; (b) for
transactions with Affiliates permitted under Section 6.06; (c) for the sale or
other disposition of assets that are obsolete or no longer used or usable for
the conduct of business in the ordinary course; (d) for one or more transactions
in which fixed or capital assets are sold and leased back, on terms that do not
constitute Capital Lease Obligations (other than any transaction described in
clause (e) below), provided that if the aggregate sale price of the assets sold
exceeds $15,000,000, the Net Proceeds of each such sale are used to prepay
principal of the Term Loans, of the Prudential Debt and of the Additional
Prudential Notes, pursuant to Section 2.10(c); (e) (i) for the sale by Big O
Tires, Inc. and its Subsidiaries of Big O franchisee loans to third parties, and
(ii) for the sale by, or the sale and leaseback for subleasing by, Big O Tires,
Inc. and its Subsidiaries of Big O stores to Big O franchisees (including real
estate, fixtures and equipment), provided that, in each case under clauses (i)
and (ii) the transaction is in the ordinary course of business and consistent
with past practice; (f) for sales, transfers and other dispositions of
Receivables and Related Assets under Permitted Securitizations permitted by
Section 6.01(k) and (g) for sales. transfers and other dispositions of assets
that are not permitted by any other clause of this Section, provided that the
aggregate fair market value of all assets sold, transferred or otherwise
disposed of in reliance upon this clause (g) shall not exceed $15,000,000 during
any Fiscal Year.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall occur:
(a) the Borrowers shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) the Borrowers shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement or any other Loan Document when
and as the same shall become due and payable, and such failure shall
continue unremedied for a period of three days;
(c) any representation or warranty made or deemed made by or on
behalf of any Borrower or any Subsidiary in or in connection with this
Agreement or any other Loan Document or any amendment or modification
hereof or thereof, or waiver hereunder or thereunder, or in any report,
certificate, financial statement or other document furnished
63
pursuant to or in connection with this Agreement or any other Loan
Document or any amendment or modification hereof or thereof or waiver
hereunder or thereunder, shall prove to have been materially incorrect
when made or deemed made;
(d) (i) Holdings shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.03, 5.04 (with respect to
Holdings' existence) or 5.08, or (ii) Holdings shall fail to observe or
perform any covenant or agreement contained in Article VI, and in each
case in clauses (i) and (ii), either (x) such failure is not remedied
within two Business Days after any of the Chief Executive Officer of
Holdings or any Financial Officer obtains knowledge thereof or (xx) within
such two-day period, the Required Lenders, or the Co-Administrative Agent
on instructions of the Required Lenders, gives Holdings notice that such
failure constitutes a Default;
(e) any Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement and binding on it
(other than those specified in clauses (a), (b), (c) or (d) of this
Article), and such failure shall continue unremedied for a period of 30
days after the earlier to occur of (i) the date such Borrower shall have
obtained knowledge thereof and (ii) written notice thereof from the
Co-Administrative Agent to such Borrower (which notice will be given at
the request of any Lender);
(f) any Borrower or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of
any Material Indebtedness, when and as the same shall become due and
payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due or, in case of a Permitted Securitization,
terminating (except voluntary terminations) prior to its scheduled
maturity or that enables or permits (with or without the giving of notice,
the lapse of time or both) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause any
Material Indebtedness to become due, or, in the case of a Permitted
Securitization, to be terminated, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of Holdings or any Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for Holdings or any
Subsidiary or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(i) Holdings or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or
other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in
64
effect, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or petition described in clause (h)
of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for Holdings or any Subsidiary or for a substantial part of its
assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(j) any Borrower shall become unable, admit in writing its inability
or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $3,000,000 shall be rendered against Holdings, any
Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of Holdings or any
Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that
have occurred, could reasonably be expected to result in liability of
Holdings and its Subsidiaries in an aggregate amount exceeding $2,000,000;
(m) a Change in Control shall occur;
(n) Holdings or any Subsidiary shall be subject to any Environmental
Liability or the subject of any proceeding or investigation pertaining to
the release by Holdings or any Subsidiary, or any other Person of any
Hazardous Material into the environment, or pertaining to any violation of
any Environmental Law, which, in any case, could reasonably be expected to
have a Material Adverse Effect; or
(o) the Guarantee and Collateral Agreement, the guarantee contained
in Section 2 of the Guarantee and Collateral Agreement or any Mortgage
shall for any reason cease to be an enforceable obligation of any Borrower
or any Grantor, as the case may be, that executed the same or if such
party or any other Person should contest the validity of such guarantee,
the Guarantee and Collateral Agreement or Mortgage or shall seek in any
way to have it declared null and void or to have such party's obligations
thereunder in any way limited, or if such party shall in any respect not
described elsewhere in this Article fail to perform any of its obligations
under such Guarantee and Collateral Agreement or any Mortgage, and such
failure shall continue unremedied for a period of fifteen days after the
earlier to occur of (i) the date Holdings shall have obtained knowledge
thereof or (ii) written notice thereof from the Collateral Agent to
Holdings (which notice will be given at the request of any Lender);
then, and in every such event (other than an event with respect to any Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Co-Administrative Agent shall,
pursuant to the request of the Required Lenders, by notice to
65
the Borrowers, take either or both of the following actions, at the same or
different times: (i) terminate the Revolving Credit Commitments, and thereupon
the Revolving Credit Commitments shall terminate immediately, and (ii) declare
the Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrowers accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by each Borrower; and in case of any
event with respect to any Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrowers accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by each Borrower.
ARTICLE VIII
The Administrative Agent and the Co-Administrative Agent
Each of the Lenders and the Issuing Banks hereby irrevocably
appoints each of the Administrative Agent and the Co-Administrative Agent as its
agent under this Agreement and the other Loan Documents, and authorizes the
Administrative Agent and the Co-Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated respectively to the
Administrative Agent and the Co-Administrative Agent by the terms hereof and of
the other Loan Documents together with such actions and powers as are reasonably
incidental thereto.
Each bank serving as the Administrative Agent and the
Co-Administrative Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it
were not the Administrative Agent or the Co-Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with any Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent or the Co-Administrative
Agent hereunder.
Neither the Administrative Agent nor the Co-Administrative Agent
shall have any duties or obligations except those expressly set forth herein and
in the other Loan Documents. Without limiting the generality of the foregoing,
(a) neither shall be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing, (b) neither
shall have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby and in the other Loan Documents that the Administrative
Agent or the Co-Administrative Agent is required to exercise in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02), and (c) except
as expressly set forth herein, neither the Administrative Agent nor the
Co-Administrative Agent shall have any duty to disclose, nor shall it be liable
for the failure to disclose, any information relating to the Borrowers or any of
the Subsidiaries that is communicated to or obtained by the bank serving as
66
Administrative Agent or Co-Administrative Agent, as the case may be, or any of
its respective Affiliates in any capacity. Neither the Administrative Agent nor
the Co-Administrative Agent shall be liable for any action taken or not taken by
it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or for any action taken or not taken
by it in the absence of its own gross negligence or willful misconduct. Neither
the Administrative Agent nor the Co-Administrative Agent shall be deemed to have
knowledge of any Default (including any event of default under any other Loan
Document) unless and until written notice thereof is given to it by the
Borrowers or a Lender, and neither the Administrative Agent nor the
Co-Administrative Agent shall be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement or any other Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article IV or
elsewhere herein or in any other Loan Document other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent or the
Co-Administrative Agent, as the case may be.
The Administrative Agent and the Co-Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing believed by it in good faith to be genuine and to have been signed or
sent by the proper Person. Each of the Administrative Agent and the
Co-Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it in good faith to be made by the proper Person, and
shall not incur any liability for relying thereon. Each of the Administrative
Agent and the Co-Administrative Agent may consult with legal counsel (who may be
counsel for the Borrowers), independent accountants and other experts selected
by it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.
Each of the Administrative Agent and the Co-Administrative Agent may
perform any and all its duties and exercise its rights and powers by or through
any one or more sub-agents appointed by it in good faith. The Administrative
Agent and the Co-Administrative Agent and any such sub-agent may perform any and
all duties and exercise rights and powers through their respective Related
Parties. The exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of the Administrative Agent and
the Co-Administrative Agent, and any such sub-agent.
Upon the appointment and acceptance of a successor Administrative
Agent or Co-Administrative Agent as provided in this paragraph, the
Administrative Agent or Co-Administrative Agent may resign at any time by
notifying the Lenders, the Issuing Bank and the Borrowers. Upon any such
resignation, the Required Lenders shall have the right, with the approval of the
Borrowers (provided the Borrowers' approval shall not be required during the
existence of a Default), to appoint a successor. If no successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent or Co-Administrative
Agent gives notice of its resignation, then the
67
retiring Administrative Agent or Co-Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent or
Co-Administrative Agent, which shall be a bank with an office in the United
States, or an Affiliate of any such bank. Upon the acceptance of its appointment
as Administrative Agent or Co-Administrative Agent hereunder and under the other
Loan Documents by a successor, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent or Co-Administrative Agent, and the retiring Administrative
Agent or Co-Administrative Agent shall be discharged from any further duties and
obligations hereunder and under the other Loan Documents. The fees payable by
the Borrowers to a successor Administrative Agent or Co-Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrowers and such successor. After the Administrative Agent's or
Co-Administrative Agent's resignation hereunder, the provisions of this Article
and Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent or Co-Administrative Agent, its sub agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while acting as Administrative Agent or Co-Administrative
Agent, as the case may be.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent, the Co-Administrative Agent, or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent, the Co-Administrative Agent or any other
Lender and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking
action under or based upon this Agreement, any related agreement or any document
furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to any Borrower, to it at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of Chief Financial Officer, (Fax
No. (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Administrative Agent, to National Department, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of Manager, National
Department (Fax No. (▇▇▇) ▇▇▇-▇▇▇▇);
(c) if to any Issuing Bank, to First Tennessee Bank National
Association at National Department, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention of Manager (Fax No. (▇▇▇) ▇▇▇-▇▇▇▇), and to each other
Issuing Bank at its address (or telecopy number) set forth in its
Administrative Questionnaire;
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(d) if to the Swingline Lender, to it at National Department, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention of Manager, National
Department (Fax No. (▇▇▇) ▇▇▇-▇▇▇▇);
(e) if to the Co-Administrative Agent, to it at it at Corporate
Banking Department, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Fax No. (▇▇▇) ▇▇▇-▇▇▇▇);
(f) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, the Co-Administrative Agent, any Issuing Bank or any
Lender in exercising any right or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the
Co-Administrative Agent, the Issuing Banks and the Lenders hereunder are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by any Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the making of
a Loan or issuance of a Letter of Credit shall not be construed as a waiver of
any Default, regardless of whether the Administrative Agent, the
Co-Administrative Agent, any Lender or any Issuing Bank may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement, any Loan Document nor any provision
hereof or thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by each Borrower and the
Required Lenders or by each Borrower and the Co-Administrative Agent with the
consent of the Required Lenders; provided that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder, or
waive or release the obligation of any Borrower with respect to any such
principal, interest, fees, or LC Disbursement without the written consent of
each Lender affected thereby, (iii) postpone the scheduled date of payment of
the principal amount of any Loan or LC Disbursement, or any interest thereon, or
any fees payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment, without
the written consent of each Lender affected thereby, (iv) change Section 2.17(b)
or (c) in a manner that would alter the pro rata sharing of payments required
thereby, without the written consent of each Lender, (v) change any of the
provisions of this Section or the definition of "Required Lenders" or any other
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provision hereof specifying the number or percentage of Lenders required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender, or (vi)
waive, amend or modify any of the provisions of Article VIII or, except as
provided in Section 4(a) of the Intercreditor Agreement, release any of the
Collateral or release all or substantially all of the Guarantors from their
obligations under the Guarantee and Collateral Agreement, without the written
consent of all Lenders; provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent, the
Co-Administrative Agent, the Issuing Banks or the Swingline Lender hereunder
without the prior written consent of the Administrative Agent, the
Co-Administrative Agent, the Issuing Banks or the Swingline Lender, as the case
may be.
(c) Should any Borrower or any Guarantor become a party to a case
under the United States Bankruptcy Code, each Lender shall be entitled to file
its own claim, to the extent that a filing may be necessary. The
Co-Administrative Agent shall review each claim before being filed by a Lender
to assure that the claim is filed on a basis consistent with the Administrative
Agent's and the Co-Administrative Agent's records and the legal position, if
any, taken by the Administrative Agent or the Co-Administrative Agent on behalf
of the Lenders pursuant to this Agreement. Should any Borrower or any Guarantor
become a party to a reorganization proceeding under the United States Bankruptcy
Code, each Lender shall be recognized as the holder of a separate claim for the
purpose of the approval or rejection of a plan under 11 U.S.C. Section 1126, may
freely vote such claim, and the provisions of this Section shall control Section
9.02(b) and the other provisions of this Agreement that might otherwise require
the consent of the Required Lenders or of all Lenders in such circumstances. The
Administrative Agent and Co-Administrative Agent shall continue as such under
this Agreement and the other Loan Documents as they may be amended by any
adopted plan of reorganization in such a proceeding.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrowers
agree to pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Co-Administrative Agent and their respective
Affiliates, including the reasonable fees, charges and disbursements of their
respective counsel, in connection with the syndication of the credit facilities
provided for herein, and the preparation and administration of this Agreement
and the other Loan Documents or any amendments, modifications or waivers of the
provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by any Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment related thereto and (iii) all out-of-pocket expenses incurred by the
Collateral Agent under the Guarantee and Collateral Agreement, any Issuing Bank
or any Lender, including the fees, charges and disbursements of any counsel for
the Administrative Agent, the Co-Administrative Agent, any Issuing Bank or any
Lender, in connection with the enforcement or protection of its rights in
connection with this Agreement, and the other Loan Documents including its
rights under this Section, or in connection with the Loans made or Letters of
Credit issued hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.
(b) The Borrowers agree to indemnify the Administrative Agent, the
Co-Administrative Agent, each Issuing Bank and each Lender, and each Related
Party of any of the
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foregoing Persons (each such Person being called an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery by any Borrower or any Grantor of this Agreement, the
other Loan Documents and any agreement or instrument contemplated hereby or
thereby, the performance by any Borrower or any Grantor of their respective
obligations hereunder and under the other Loan Documents or the consummation of
the Transactions or any other transactions contemplated hereby, (ii) any Loan or
Letter of Credit or the use of the proceeds therefrom (including any refusal by
the Issuing Bank to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit) (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or operated by
Holdings or any of its Subsidiaries, or any Environmental Liability related in
any way to Holdings or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
(c) To the extent that the Borrowers fail to pay any amount required
to be paid by it to the Administrative Agent, the Co-Administrative Agent, each
Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this Section,
each Lender severally agrees to pay to the Administrative Agent, the
Co-Administrative Agent, each Issuing Bank or the Swingline Lender, as the case
may be, such Lender's pro rata share (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought based on such
Lender's Revolving Credit Commitment as a percentage of all Revolving Credit
Commitments) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent, the
Co-Administrative Agent, the Issuing Bank or the Swingline Lender, in its
capacity as such.
(d) To the extent permitted by applicable law, no Borrower shall
assert, and each Borrower hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit, or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 9.04. Successors and Assigns; Participations and
Assignments. (a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of any Issuing Bank that
issues any Letter of Credit), except that (i) no Borrower may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of
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each Lender (and any attempted assignment or transfer by any Borrower without
such consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees (each, an "Assignee") all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitments and the Loans at the time owing to it) with the
prior written consent (such consent not to be unreasonably withheld) of:
(A) the Borrowers, provided that no consent of the Borrowers shall
be required for an assignment to a Lender, an affiliate of a Lender, an
Approved Fund (as defined below) or, if an Event of Default under Article
VII has occurred and is continuing, any other Person; and
(B) the Co-Administrative Agent, provided that no consent of the
Co-Administrative Agent shall be required for an assignment of (x) any
Revolving Commitment to an assignee that is a Lender with a Revolving
Commitment immediately prior to giving effect to such assignment or (y)
all or any portion of a Term Loan to a Lender, an Affiliate of a Lender or
an Approved Fund.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender, an affiliate of
a Lender or an Approved Fund or an assignment of the entire remaining
amount of the assigning Lender's Commitments or Loans under any Term Loan
or Revolving Loan, the amount of the Commitments or Loans of the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to
the Administrative Agent) shall not be less than $2,000,000 unless each of
the Borrowers and the Administrative Agent otherwise consent, provided
that (1) no such consent of the Existing Borrower shall be required if an
Event of Default under Article VII has occurred and is continuing and (2)
such amounts shall be aggregated in respect of each Lender and its
affiliates or Approved Funds, if any;
(B) the parties to each assignment shall execute and deliver to the
Co-Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500; and
(C) the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.
For the purposes of this Section 9.04, the term "Approved Fund" has
the following meaning:
"Approved Fund" means any Person (other than a natural person) that
is engaged in making, purchasing, holding or investing in bank loans and
similar extensions of credit in the ordinary course of its business and
that is administered or managed by (a) a Lender,
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(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity
that administers or manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in each
Assignment and Acceptance the Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 9.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.
(iv) The Co-Administrative Agent, acting for this purpose as an
agent of the Borrowers, shall maintain at one of its offices a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amount of the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and each Borrower, the Administrative Agent, the
Co-Administrative Agent, each Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by each Borrower, each
Issuing Bank, any Lender, and the Administrative Agent, at any reasonable time
and from time to time upon reasonable prior notice. The Co-Administrative Agent
shall provide a copy of the Register to the Administrative Agent from time to
time upon request of the Co-Administrative Agent.
(v) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an Assignee, the Assignee's completed
Administrative Questionnaire (unless the Assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Co-Administrative Agent shall accept such Assignment
and Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrowers or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitments and the
Loans owing to it); provided that (A) such Lender's obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrowers, the Administrative Agent, the Co-Administrative Agent,
each Issuing Bank and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such
73
Lender's rights and obligations under this Agreement. Any agreement pursuant to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver that (1) requires
the consent of each Lender directly affected thereby pursuant to the proviso to
Section 9.02(b) and (2) directly affects such Participant. Subject to paragraph
(c)(ii) of this Section, each Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 9.08 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.17(c) as
though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 2.14 or 2.16 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrowers' prior written consent. Any Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.16 unless
the Borrowers are notified of the participation sold to such Participant and
such Participant agrees, for the benefit of each Borrower, to comply with
Section 2.16(e) as though it were a Lender.
(d) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or Assignee for such Lender as a party hereto.
(e) The Borrowers, upon receipt of written notice from the relevant
Lender, agree to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (d) above.
(f) Notwithstanding the foregoing, any Conduit Lender may assign any
or all of the Loans it may have funded hereunder to its designating Lender
without the consent of the Borrowers or the Administrative Agent and without
regard to the limitations set forth in Section 9.04(b). Each Borrower, each
Lender, the Administrative Agent and the Co-Administrative Agent hereby confirms
that it will not institute against a Conduit Lender or join any other Person in
instituting against a Conduit Lender any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any state bankruptcy or
similar law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Conduit Lender; provided, however,
that each Lender designating any Conduit Lender hereby agrees to indemnify, save
and hold harmless each other party hereto for any loss, cost, damage or expense
arising out of its inability to institute such a proceeding against such Conduit
Lender during such period of forbearance.
SECTION 9.05. Survival. All covenants, agreements, representations
and warranties made by the Borrowers or either of them herein and in the other
Loan Documents and
74
in the certificates or other instruments delivered in connection with or
pursuant to this Agreement and the other Loan Documents shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the making of any Loans and the
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Administrative
Agent, the Co-Administrative Agent, any Issuing Bank or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement or the other Loan Documents
is outstanding and unpaid or any Letter of Credit is outstanding and so long as
the Revolving Credit Commitments have not expired or terminated. The provisions
of Sections 2.14, 2.15, 2.16, 9.03 and 9.12 and Article VIII shall survive and
remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Revolving Credit Commitments or the
termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent, any Issuing Bank or any Lender constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof including, without limitation, each Commitment Letter
between Holdings and each Lender, to the extent, but only to the extent, that it
relates to such Lender. Except as provided in Section 4.01, this Agreement shall
become effective when it shall have been executed by the Administrative Agent
and the Co-Administrative Agent and when the Co-Administrative Agent shall have
received counterparts hereof which, when taken together, bear the signatures of
each of the parties hereto, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement. Execution and delivery of this Agreement as provided above shall
constitute authorization to the Co-Administrative Agent to execute and deliver
the Intercreditor Agreement on its behalf, and each Assignee of any Lender shall
become a party to the Intercreditor Agreement upon its becoming a Lender
pursuant to the term and conditions hereof.
SECTION 9.07. Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized, provided that it has the consent of the Co-Administrative Agent
(which consent may not be unreasonably withheld), at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and
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other obligations at any time owing by such Lender or Affiliate to or
for the credit or the account of any Borrower against any and all of the
obligations of the Borrowers now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 9.09. Governing Law, Jurisdiction; Consent to Service of
Process. (a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York applicable to contracts made and to be
performed in such state, without regard to conflict of laws principles.
(b) Each Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Courts of
the State of New York sitting in New York County and of the United States
District Court sitting in New York County, New York and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York state or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent, the Co-Administrative Agent, the
Issuing Bank or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement against any Borrower or its properties in the courts
of any jurisdiction.
(c) Each Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE
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BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent, the
Co-Administrative Agent, the Issuing Banks and the Lenders agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates' directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority, (c) subject to an agreement to comply with the provisions of this
Section, to any actual or prospective assignee or any direct or indirect
counterparty to any Hedging Agreement (or any professional advisor to such
counterparty), (d) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (e) to any other party to this
Agreement, (f) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or the enforcement of
rights hereunder, (g) if an agreement containing provisions substantially the
same as those of this Section has been obtained, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (h) with the consent of the
Borrowers or (i) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Administrative Agent, the Co-Administrative Agent, any Issuing Bank or any
Lender on a nonconfidential basis from a source other than the Borrowers. For
the purposes of this Section, "Information" means all information received from
any Borrower relating to any Borrower or its Subsidiaries' businesses, other
than any such information that is available to the Administrative Agent, the
Co-Administrative Agent, the Issuing Bank or any Lender on a nonconfidential
basis prior to disclosure by any Borrower; provided that, in the case of
information received from any Borrower after the Effective Date, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan
or LC Disbursement, together with all fees, charges and other amounts which are
treated as interest on such Loan or LC Disbursement under applicable law
(collectively the "Charges"), shall exceed the maximum lawful rate (the "Maximum
Rate") which may be contracted for, charged, taken, received or reserved by the
Lender holding such Loan in accordance with applicable law, the rate of interest
payable in respect of such Loan hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful,
the interest and Charges that would have been payable in respect of such Loan
but were not payable as a result of the operation of this Section shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
77
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender.
SECTION 9.14. Joint and Several Liability of Borrowers. Unless
otherwise specified herein, the Borrowers shall be jointly and severally liable
for all obligations undertaken by them in this Agreement, including, but not
limited to, the repayment of Loans pursuant to Section 2.09 hereof, the payment
of fees pursuant to Section 2.11 hereof, the payment of costs and other amounts
pursuant to Sections 2.14, 2.15 and 2.18 hereof, and the payment of expenses and
indemnities pursuant to Section 9.03 hereof.
SECTION 9.15. USA PATRIOT Act. Each Lender hereby notifies the
Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it is required
to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender to identify the Borrower in accordance with the Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
TBC CORPORATION
By: /s/ ▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: VP and Treasurer
TBC PRIVATE BRANDS, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: VP and Treasurer
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION,
as Administrative Agent and as a Lender
By: /s/ R. ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: R. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
JPMORGAN CHASE BANK, N.A.,
as Co-Administrative Agent and as a
Lender
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
U.S. BANK NATIONAL ASSOCIATION,
as a Documentation Agent and as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
REGIONS BANK,
as a Documentation Agent and as a Lender
By:/s/ ▇▇▇▇▇▇▇ May
----------------------------------
Name: ▇▇▇▇▇▇▇ May
Title: Senior Vice President
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
SUNTRUST BANK,
as Syndication Agent and as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Director
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
BANK OF AMERICA, N.A.,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Director
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
BNP PARIBAS,
as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
FIFTH THIRD BANK,
as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Fifth Third Bank
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
GUARANTY BANK,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
KEYBANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
LA SALLE BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CTP
Title: Senior Vice-President and
Division Head
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
NATIONAL CITY BANK,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. Pearl
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Pearl
Title: Account Officer
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
SCHEDULE 1.01A
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of June 17, 2005 (as
amended and in effect on the date hereof, the "Credit Agreement"), among TBC
Corporation, TBC Private Brands, Inc., the Lenders named therein, First
Tennessee Bank National Association, as Administrative Agent for the Lenders,
and JPMorgan Chase Bank, N.A., as Co-Administrative Agent for the Lenders. Terms
defined in the Credit Agreement are used herein with the same meanings.
The Assignor named on the reverse hereof hereby sells and assigns, without
recourse, to the Assignee named on the reverse hereof, and the Assignee hereby
purchases and assumes, without recourse, from the Assignor, effective as of the
Assignment Date set forth on the reverse hereof, the interests set forth on the
reverse hereof (the "Assigned Interest") in the Assignor's rights and
obligations under the Credit Agreement, including, without limitation, the
interests set forth on the reverse hereof in the Revolving Credit Commitment of
the Assignor on the Assignment Date and Loans owing to the Assignor which are
outstanding on the Assignment Date, together with the participations in Letters
of Credit, LC Disbursements and Swingline Loans held by the Assignor on the
Assignment Date, but excluding accrued interest and fees to and excluding the
Assignment Date. The Assignee hereby acknowledges receipt of a copy of the
Credit Agreement and the other Loan Documents. From and after the Assignment
Date (i) the Assignee shall be a party to and be bound by the provisions of the
Credit Agreement and the Intercreditor Agreement and, to the extent of the
Assigned Interest, have the rights and obligations of a Lender thereunder and
under the other Loan Documents and (ii) the Assignor shall, to the extent of the
Assigned Interest, relinquish its rights and be released from its obligations
under the Credit Agreement and the other Loan Documents.
This Assignment and Acceptance is being delivered to the Administrative
Agent together with (i) if the Assignee is a Foreign Lender, any documentation
required to be delivered by the Assignee pursuant to Section 2.16(e) of the
Credit Agreement, duly completed and executed by the Assignee, and (ii) if the
Assignee is not already a Lender under the Credit Agreement, an Administrative
Questionnaire in the form supplied by the Administrative Agent, duly completed
by the Assignee. The Assignee shall pay the fee payable to the Administrative
Agent pursuant to Section 9.04(b) of the Credit Agreement.
This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
("Assignment Date"):
Percentage Assigned of
Facility/Revolving Credit
Commitment (set forth, to at least 8
decimals, as a percentage of the
Facility and the aggregate Revolving
Principal Amount Credit Commitments of all Lenders
Facility Assigned thereunder
-------- ---------------- -------------------------------------
Revolving Credit
Commitment Assigned: $ %
Revolving Loans: $ %
Term Commitment Assigned: $ %
Term Loans: $ %
The terms set forth above and on the reverse side hereof are hereby agreed to:
[Name of Assignor], as Assignor
By: __________________________
Name:
Title:
[Name of Assignee], as Assignee
By: __________________________
Name:
Title:
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
The undersigned hereby consent to the within assignment:
TBC Corporation JPMorgan Chase Bank, N.A.,
as Co-Administrative Agent
By: ________________________ By: __________________________
Name: Name:
Title: Title:
TBC Private Brands, Inc.
By: _________________________
Name:
Title:
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
SCHEDULE 1.01B
FORM OF INCREMENTAL FACILITY ACTIVATION NOTICE
To: JPMORGAN CHASE BANK, N.A.
as Co-Administrative Agent under the Credit Agreement referred to below
Reference is hereby made to the Credit Agreement, dated as of June
17, 2005 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among TBC Corporation ("Holdings"), TBC Private Brands,
Inc. ("TBC Private Brands") (Holdings and TBC Private Brands, each a "Borrower"
and together the "Borrowers"), the Lenders party thereto, the Syndication Agent
and Documentation Agents named therein, First Tennessee Bank National
Association, as administrative agent (in such capacity, the "Administrative
Agent") and JPMorgan Chase Bank, N.A. as co-administration agent for the Lenders
(in such capacity the "Co-Administrative Agent"). Terms defined in the Credit
Agreement shall have their defined meanings when used herein.
This notice is an Incremental Facility Activation Notice referred to
in the Credit Agreement, and the Borrowers and each of the Lenders party hereto
hereby notify you that:
1. Each Lender party hereto agrees to make or increase the amount of
its Revolving Commitments in the amount set forth opposite such
Lender's name below under the caption "Increased Facility Amount".
2. The Increased Facility Closing Date is ______.
Each of the undersigned [Chief Financial Officer][Vice President -
Finance] of the Borrowers certifies as follows:
1. I am the duly elected, qualified and acting [Chief Financial
Officer][Vice President - Finance] of the Borrower or Holdings, as
applicable.
2. I have reviewed and am familiar with the contents of this Increased
Facility Activation Notice.
3. I have reviewed the terms of the Credit Agreement and the Loan
Documents and have made or caused to be made under my supervision, a
review in reasonable detail of the transactions and condition of the
Borrower or Holdings, as applicable, during the accounting period
ended __________ __, 200_ [insert most recent period for which
Financial Statements have been delivered]. Such review did not
disclose the existence during or at the end of the accounting period
covered by the Financial Statements, and I have no knowledge of the
existence, as of the date of this Certificate, of any Default or
Event of Default, both on the date hereof and after giving pro forma
effect to any Loans made pursuant to this Increased Facility
Activation Notice and the application of the proceeds therefrom.
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
4. The requirements set forth in clauses (B), (C) and (D) of the
proviso to Section 2.02(d) of the Credit Agreement have been
complied with in connection with this Increased Facility Activation
Notice.
IN WITNESS WHEREOF, the undersigned have executed this Increased
Facility Activation Notice this _____ day of ____, 200__.
_____________________________________
Name:
Title: [Chief Financial Officer][Vice
President-Finance]
_____________________________________
Name:
Title: [Chief Financial Officer][Vice
President-Finance]
TBC CORPORATION
By:______________________________
Name:
Title:
TBC PRIVATE BRANDS, INC.
By:______________________________
Name:
Title:
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
Increased Facility Amount [NAME OF LENDER]
$
By:______________________________
Name:
Title:
CONSENTED TO:
JPMORGAN CHASE BANK, N.A.
as Co-Administrative Agent
By:______________________________
Name:
Title:
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
SCHEDULE 1.01C
EXISTING LETTERS OF CREDIT
Zurich American Insurance Company $ 2,700,000
First Tennessee National Association $ 1,560,000
Traveler's Insurance Company $ 118,000
Zurich American Insurance Company $ 3,918,182
Michelin North America, Inc. $ 50,000
Ace America Insurance Company $ 13,000,000
Total $ 21,346,182
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
SCHEDULE 2.01
COMMITMENTS
Revolving Credit Term Loan
Lender Commitment Commitment Total
----------------------------------------- ----------------- --------------- ---------------
JPMorgan Chase Bank, N.A. $ 25,961,538.44 $ 11,538,461.56 $ 37,500,000.00
First Tennessee Bank National Association $ 22,500,000.00 $ 10,000,000.00 $ 32,500,000.00
Regions Bank $ 22,500,000.00 $ 10,000,000.00 $ 32,500,000.00
SunTrust Bank $ 22,500,000.00 $ 10,000,000.00 $ 32,500,000.00
US Bank National Association $ 22,500,000.00 $ 10,000,000.00 $ 32,500,000.00
Bank of America, N.A. $ 15,576,923.08 $ 6,923,076.92 $ 22,500,000.00
BNP Paribas $ 15,576,923.08 $ 6,923,076.92 $ 22,500,000.00
Fifth Third Bank $ 15,576,923.08 $ 6,923,076.92 $ 22,500,000.00
Guaranty Bank $ 15,576,923.08 $ 6,923,076.92 $ 22,500,000.00
Key Bank National Association $ 15,576,923.08 $ 6,923,076.92 $ 22,500,000.00
La Salle National Association $ 15,576,923.08 $ 6,923,076.92 $ 22,500,000.00
National City Bank $ 15,576,923.08 $ 6,923,076.92 $ 22,500,000.00
--------------- --------------- ---------------
Total $225,000,000.00 $100,000,000.00 $325,000,000.00
--------------- --------------- ---------------
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
SCHEDULE 2.02
FORM OF NEW LENDER SUPPLEMENT
NEW LENDER SUPPLEMENT (this "New Lender Supplement"), dated
_________________, to the Credit Agreement, dated as of June 17, 2005 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among TBC Corporation ("Holdings"), TBC Private Brands, Inc. ("TBC
Private Brands") (Holdings and TBC Private Brands, each a "Borrower" and
together the "Borrowers"), the Lenders party thereto, the Syndication Agent and
Documentation Agents named therein, First Tennessee Bank National Association,
as administrative agent (in such capacity, the "Administrative Agent") and
JPMorgan Chase Bank, N.A. as co-administration agent for the Lenders (in such
capacity the "Co-Administrative Agent"). Terms defined in the Credit Agreement
shall have their defined meanings when used herein.
W I T N E S S E T H :
WHEREAS, the Credit Agreement provides in Section 2.02(e) thereof
that any bank, financial institution or other entity may become a party to the
Credit Agreement with the consent of the Borrowers and the Co-Administrative
Agent (which consent shall not be unreasonably withheld) by executing and
delivering to the Borrowers and the Co-Administrative Agent a supplement to the
Credit Agreement in substantially the form of this New Lender Supplement; and
WHEREAS, the undersigned now desires to become a party to the Credit
Agreement;
NOW, THEREFORE, the undersigned hereby agrees as follows:
1. The undersigned agrees to be bound by the provisions of the
Credit Agreement, and agrees that it shall, on the date this New Lender
Supplement is accepted by the Borrowers and the Co-Administrative Agent,
become a Lender for all purposes of the Credit Agreement to the same
extent as if originally a party thereto, with Revolving Loans of
$__________.
2. The undersigned (a) represents and warrants that it is legally
authorized to enter into this New Lender Supplement; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements referred to in Section 3.04 thereof and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this New Lender Supplement; (c)
agrees that it has made and will, independently and without reliance upon
any 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 the Credit Agreement or any
instrument or document furnished pursuant hereto or thereto; (d) appoints
and authorizes the Administrative Agent and the Co-Administrative Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement or any instrument or document
furnished pursuant hereto or thereto as are delegated to the
Administrative Agent and the Co-Administrative Agent by the terms thereof,
together with such powers as are incidental thereto; and (e) agrees that
it will be bound by the provisions of the Credit Agreement and will
perform in accordance with its terms all the obligations which by the
terms of the Credit Agreement are required to be performed by it as a
Lender including, without limitation, if it is organized under the laws of
a jurisdiction outside the United States, its obligation pursuant to
Section 2.16(e) of the Credit Agreement.
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
3. The address of the undersigned for notices for the purposes of
the Credit Agreement is as follows:
4. Terms defined in the Credit Agreement shall have their defined
meanings when used herein.
IN WITNESS WHEREOF, the undersigned has caused this New Lender
Supplement to be executed and delivered by a duly authorized officer on the date
first above written.
[INSERT NAME OF LENDER]
By_______________________
Name:
Title:
Accepted this _____ day of
______________,_______.
TBC CORPORATION
By____________________________
Name:
Title:
Accepted this _____ day of
______________, ____.
TBC PRIVATE BRANDS, INC.
By____________________________
Name:
Title:
Accepted this ____ day of
______________, ____.
JPMORGAN CHASE BANK, N.A.
as Co-Administrative Agent
By____________________________
Name:
Title:
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
SCHEDULE 3.01
BORROWERS AND SUBSIDIARIES AND JURISDICTIONS OF ORGANIZATION
Holdings: TBC Corporation, a Delaware corporation formerly known as TBC Holding
Corp.
TBC Private Brands: TBC Private Brands, Inc., a Delaware corporation formerly
known as TBC Corporation. 100% of Existing Borrower's capital stock is owned by
Holdings.
Subsidiaries Directly Owned by Existing Borrower:
Jurisdiction of Percentage of Stock/
Name Organization Equity Owned by TBC Subsidiaries
---- ------------ ------------------- ------------
Big O Tires, Inc. Nevada 100% See Below
▇▇▇▇▇▇▇'▇, Inc. Georgia 100% None
Northern States Tire, Inc. Delaware 100% None
TBC International Inc. Delaware 100% None
TBC Retail Enterprises, Inc. Delaware 100% See Below
TBC Brands, LLC Delaware 100% None
TBC Capital, LLC Delaware 90%* None
TBC Private Brands of Texas, LLC Delaware 100% None
*5% is owned by each of ▇▇▇▇▇▇▇'▇, Inc. and Tire Kingdom, Inc.
Subsidiaries Directly Owned by Big O Tires, Inc.:
Jurisdiction of Percentage of Stock
Name Incorporation Owned by Big O Subsidiaries
---- ------------- --------------------- ------------
Big O Development, Inc. Colorado 100% None
O Advertising, Inc. Colorado 100% None
Big O Tire of Idaho, Inc. Idaho 100% None
Subsidiaries Directly Owned by TBC Retail Enterprises, Inc.:
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
Jurisdiction of Percentage of Stock
Name Incorporation Owned by Big O Subsidiaries
---- ------------- --------------------- ------------
Big O Retail Enterprises, Inc. Colorado 100% None
Tire Kingdom, Inc. Florida 100% See Below
Subsidiaries Directly Owned By Tire Kingdom, Inc.:
Jurisdiction of Percentage of Stock
Name Incorporation Owned by Big O Subsidiaries
---- ------------- --------------------- ------------
Merchant's, Incorporated Delaware 100% None
NTW Incorporated Delaware 100% None
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
SCHEDULE 6.01
EXISTING INDEBTEDNESS
The Prudential Debt and the Additional Prudential Notes.
Those Guarantees listed on Schedule 6.01(e).
TBC Corporation and/or TBC Private Brands, Inc. has guaranteed a $1,500,000 line
of credit made available to TBC de Mexico and TBC International Inc. by First
Tennessee Bank National Association.
The obligations of TBC Corporation, TBC Private Brands, Inc. Big O Retail
Enterprises, Inc., Tire Kingdom, Inc., Big O Tires, Inc., ▇▇▇▇▇▇▇'▇, Inc.,
Merchant's, Incorporated, and NTW Incorporated, to Michelin North America, Inc.
and its affiliates are subject to various cross-guarantees given by TBC
Corporation and certain of its Subsidiaries.
TBC Corporation and/or TBC Private Brands, Inc. has guaranteed all obligations
of Tire Kingdom, Inc. to Continental General Tire, Inc.
Various Capital Leases relating to 19 retail tire stores operated by NTW
Incorporated (at 5/31/05, aggregate ending principal was $7,648,319 and
aggregate net book value was $5,053,040).
Various Capital Leases relating to eight tire stores operated by Merchant's,
Incorporated (at 5/31/05, aggregate ending principal was $3,791,796 and
aggregate net book value was $3,470,576).
Capital Leases related to four trucks in use by TBC Private Brands of Texas, LLC
(capital lease obligation of $70,686 at 5/31/05).
Capital Lease(s) relating to certain computer equipment and related software
used by Tire Kingdom, Inc. (capital lease obligation of $30,818 at 5/31/05).
Long term liability of $6,389,905 (at 5/31/05) relating to eight sale and
leaseback transactions of Big O Tires, Inc. and its subsidiaries that failed to
meet GAAP's sale and leaseback definitions.
The November 2003 sale and leaseback transaction relating to 86 retail stores
operated by NTW Incorporated (net proceeds totaling approximately $132,000,000).
The September 2003 sale and leaseback transaction relating to 13 retail stores
operated by Merchant's, Incorporated (net proceeds totaling approximately
$9,840,000).
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
SCHEDULE 6.01(e)
GUARANTEE OBLIGATIONS OF BIG O TIRES, INC. AND SUBSIDIARIES
Big O Guarantee Portion at 3/31/05
----------------------------------
GE Capital
Intermountain Realty - Sioux Falls $ 313,174.62
GE Capital
Las Vegas (▇▇▇▇▇ ▇▇▇▇▇) 290,000.00
Las Vegas 318,933.45
Boulder, CO 37,304.35
Fresno Winston Location 45,517.50
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Location 58,095.04
▇▇▇▇▇ & ▇▇▇▇▇▇ 1,093,947.53
OKC, LLC JV 50,000.00
Real Estate Lease Guarantees 663,664.04
-------------
Total Guarantees $2,870,636.53
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
SCHEDULE 6.02
EXISTING LIENS
- Liens arising under the existing Guarantee and Collateral Agreement.
- Numerous UCC financing statements evidencing operating lease transactions
in which TBC Corporation and its Subsidiaries are lessees have been filed
and are still in effect.
- Mortgage on the Memphis, Tennessee real property recorded pursuant to the
Existing Credit Agreement.
UCC Filings and Mortgages Against Big O Tires, Inc. and Its Subsidiaries:
First National Bank of ▇▇▇▇▇▇▇▇▇.
Filing in connection with equipment financing by Big O Tire of
Idaho, Inc.
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
SCHEDULE 6.04(b)
CERTAIN EXISTING INVESTMENTS AND LOANS
- See Schedule 3.01 for a listing of all existing Subsidiaries.
- TBC Private Brands, Inc. owns 20,000 shares of Series A Preferred Stock,
$.01 par value, of ▇▇▇▇▇ Automotive, Corp. and 14.4 shares of Common
Stock, $100 par value, of V.I.P., Inc. (total investment - $5,000,000).
- TBC International Inc. owns approximately 49% of the ownership interests
in TBC de Mexico, S.A. de C.V., a Mexican company.
- Big O Retail Enterprises, Inc. is a 50% shareholder in Tires Industries
Corporation, a Utah corporation.
- Big O Tires, Inc. holds a 50% interest in each of the following joint
ventures:
BORE/MPC, LLC (a Missouri LLC)
OKC, LLC (a Colorado LLC)
Intermountain Development Joint Venture (a Colorado general partnership)
One Stop Undercar Denver, LLC (a Colorado LLC)
- TBC Private Brands, Inc. owns 20 Preferred Shares of World Tire
Corporation (total investment of $750,000).
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT
SCHEDULE 6.07
EXISTING RESTRICTIONS
The documents evidencing the Prudential Debt and the Additional Prudential Debt
contain restrictions and conditions of the type described in Section 6.07.
The sale and leaseback transactions listed on Schedule 6.01 contain restrictions
and conditions of the type described in Section 6.07.
TBC CORPORATION AND TBC PRIVATE BRANDS, INC. CREDIT AGREEMENT