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$245,000,000
THIRD AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Dated as of March 19, 2004
Among
AMERICAN TIRE DISTRIBUTORS, INC.
THE SPEED MERCHANT, INC.
T.O. XXXX HOLDING CO., INC.
T.O. XXXX TIRE COMPANY, INC.
(the Borrowers)
and
THE FINANCIAL INSTITUTIONS PARTY
HERETO FROM TIME TO TIME
(the Lenders)
and
FLEET CAPITAL CORPORATION
(the Administrative Agent)
and
WACHOVIA BANK, NATIONAL ASSOCIATION
(the Syndication Agent)
and
THE CIT GROUP/BUSINESS CREDIT, INC.
(the Documentation Agent)
FLEET SECURITIES, INC.
(the Arranger)
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TABLE OF CONTENTS(1)
Page
ARTICLE 1 DEFINITIONS..................................................................................... 2
SECTION 1.1 Definitions............................................................................ 2
SECTION 1.2 General Interpretive Rules............................................................. 32
SECTION 1.3 Exhibits and Schedules................................................................. 34
ARTICLE 2 REVOLVING CREDIT FACILITY....................................................................... 35
SECTION 2.1 Revolving Credit Loans................................................................. 35
SECTION 2.2 Manner of Borrowing.................................................................... 35
SECTION 2.3 Repayment.............................................................................. 37
SECTION 2.4 Notes.................................................................................. 37
SECTION 2.5 Notice of Adjustments to Eligibility Criteria, Imposition of Additional Reserves
Against Borrowing Base, Etc.................................... 37
SECTION 2.6 Valuation of Inventory................................................................. 38
ARTICLE 2A SWINGLINE FACILITY............................................................................. 39
SECTION 2A.1 Swingline Loans........................................................................ 39
SECTION 2A.2 Making Swingline Loans................................................................. 39
SECTION 2A.3 Repayment of Swingline Loans........................................................... 39
SECTION 2A.4 Prepayment............................................................................. 39
SECTION 2A.5 Swingline Note......................................................................... 39
SECTION 2A.6 Settlement with Other Lenders.......................................................... 40
ARTICLE 3 LETTER OF CREDIT GUARANTEES..................................................................... 41
SECTION 3.1 Agreement to Issue..................................................................... 41
SECTION 3.2 Amounts................................................................................ 41
SECTION 3.3 Conditions............................................................................. 41
SECTION 3.4 Issuance of Letter of Credit Guarantees................................................ 41
SECTION 3.5 Duties of FCC.......................................................................... 42
SECTION 3.6 Payment of Reimbursement Obligations................................................... 42
SECTION 3.7 Participations......................................................................... 43
SECTION 3.8 Indemnification, Exoneration........................................................... 44
SECTION 3.9 Supporting Letter of Credit; Cash Collateral Account................................... 45
ARTICLE 4 GENERAL LOAN PROVISIONS......................................................................... 47
SECTION 4.1 Interest............................................................................... 47
SECTION 4.2 Certain Fees........................................................................... 48
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(1) This Table of Contents is included for reference purposes only and does
not constitute part of the Third Amended and Restated Loan and Security
Agreement.
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SECTION 4.3 Manner of Payment...................................................................... 49
SECTION 4.4 General................................................................................ 49
SECTION 4.5 Loan Accounts; Statements of Account................................................... 49
SECTION 4.6 Reduction of Commitments; Termination of Agreement..................................... 50
SECTION 4.7 Making of Loans........................................................................ 51
SECTION 4.8 Settlement Among Lenders............................................................... 52
SECTION 4.9 Mandatory Prepayments.................................................................. 55
SECTION 4.10 Payments Not at End of Interest Period; Failure to Borrow.............................. 55
SECTION 4.11 Notice of Conversion or Continuation................................................... 55
SECTION 4.12 Conversion or Continuation............................................................. 55
SECTION 4.13 Duration of Interest Periods; Maximum Number of Eurodollar Rate Loans; Minimum
Increments............................................................................. 56
SECTION 4.14 Changed Circumstances.................................................................. 56
SECTION 4.15 Cash Collateral Account; Investment Accounts........................................... 57
SECTION 4.16 Allocation of Payments from Borrowers.................................................. 58
SECTION 4.17 Borrowers' Representative.............................................................. 59
SECTION 4.18 Joint and Several Liability............................................................ 59
SECTION 4.19 Obligations Absolute................................................................... 59
SECTION 4.20 Waiver of Suretyship Defenses.......................................................... 60
ARTICLE 5 CONDITIONS PRECEDENT............................................................................ 61
SECTION 5.1 Conditions Precedent to Effectiveness of Agreement..................................... 61
SECTION 5.2 All Loans; Letters of Credit........................................................... 63
SECTION 5.3 Conditions as Covenants................................................................ 64
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BORROWERS..................................................... 65
SECTION 6.1 Representations and Warranties......................................................... 65
SECTION 6.2 Survival of Representations and Warranties, Etc........................................ 72
ARTICLE 7 SECURITY INTEREST............................................................................... 73
SECTION 7.1 Security Interest...................................................................... 73
SECTION 7.2 Continued Priority of Security Interest................................................ 74
ARTICLE 8 COLLATERAL COVENANTS............................................................................ 75
SECTION 8.1 Collection of Receivables.............................................................. 75
SECTION 8.2 Verification and Notification.......................................................... 76
SECTION 8.3 Disputes, Returns and Adjustments...................................................... 76
SECTION 8.4 Invoices............................................................................... 77
SECTION 8.5 Delivery of Instruments................................................................ 77
SECTION 8.6 Sales of Inventory..................................................................... 77
SECTION 8.7 Ownership and Defense of Title......................................................... 77
SECTION 8.8 Insurance.............................................................................. 78
SECTION 8.9 Location of Offices and Collateral..................................................... 78
SECTION 8.10 Records Relating to Collateral......................................................... 79
SECTION 8.11 Inspection............................................................................. 79
SECTION 8.12 Information and Reports................................................................ 80
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SECTION 8.13 Power of Attorney...................................................................... 80
ARTICLE 9 AFFIRMATIVE COVENANTS........................................................................... 82
SECTION 9.1 Preservation of Corporate Existence and Similar Matters................................ 82
SECTION 9.2 Compliance with Applicable Law......................................................... 82
SECTION 9.3 Maintenance of Property................................................................ 82
SECTION 9.4 Conduct of Business.................................................................... 82
SECTION 9.5 Insurance.............................................................................. 82
SECTION 9.6 Payment of Taxes and Claims............................................................ 82
SECTION 9.7 Accounting Methods and Financial Records............................................... 83
SECTION 9.8 Use of Proceeds........................................................................ 83
SECTION 9.9 Hazardous Waste and Substances; Environmental Requirements............................. 83
SECTION 9.10 Additional Borrowers................................................................... 83
SECTION 9.11 Compliance with Senior Note Indenture.................................................. 84
ARTICLE 10 INFORMATION.................................................................................... 85
SECTION 10.1 Financial Statements................................................................... 85
SECTION 10.2 Accountants' Certificate............................................................... 85
SECTION 10.3 Officers' Certificates................................................................. 86
SECTION 10.4 Copies of Other Reports................................................................ 86
SECTION 10.5 Notice of Litigation and Other Matters................................................. 87
SECTION 10.6 ERISA.................................................................................. 87
ARTICLE 11 NEGATIVE COVENANTS............................................................................. 88
SECTION 11.1 Minimum Fixed Charge Coverage.......................................................... 88
SECTION 11.2 Debt................................................................................... 88
SECTION 11.3 Guarantees............................................................................. 89
SECTION 11.4 Investments and Acquisitions........................................................... 89
SECTION 11.5 Capital Expenditures................................................................... 90
SECTION 11.6 Restricted Distributions and Payments, Etc............................................. 90
SECTION 11.7 Merger, Consolidation and Sale of Assets............................................... 92
SECTION 11.8 Transactions with Affiliates........................................................... 92
SECTION 11.9 Liens.................................................................................. 92
SECTION 11.10 Amendments of Other Agreements......................................................... 93
SECTION 11.11 Commingling............................................................................ 93
SECTION 11.12 Anti-Terrorism Laws.................................................................... 93
ARTICLE 12 DEFAULT........................................................................................ 94
SECTION 12.1 Events of Default...................................................................... 94
SECTION 12.2 Remedies............................................................................... 96
SECTION 12.3 Application of Proceeds................................................................ 98
SECTION 12.4 Power of Attorney...................................................................... 99
SECTION 12.5 Miscellaneous Provisions Concerning Remedies........................................... 99
SECTION 12.6 Trademark License...................................................................... 100
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ARTICLE 13 ASSIGNMENTS.................................................................................... 101
SECTION 13.1 Successors and Assigns; Participations................................................. 101
SECTION 13.2 Representation of Lenders.............................................................. 103
ARTICLE 14 AGENT.......................................................................................... 104
SECTION 14.1 Appointment of Administrative Agent.................................................... 104
SECTION 14.2 Delegation of Duties................................................................... 104
SECTION 14.3 Exculpatory Provisions................................................................. 104
SECTION 14.4 Reliance by Administrative Agent....................................................... 104
SECTION 14.5 Notice of Default...................................................................... 105
SECTION 14.6 Non-Reliance on Administrative Agent and Other Lenders................................. 105
SECTION 14.7 Indemnification........................................................................ 106
SECTION 14.8 Administrative Agent in Its Individual Capacity........................................ 107
SECTION 14.9 Successor Administrative Agent......................................................... 107
SECTION 14.10 Notices from Administrative Agent to Lenders........................................... 108
SECTION 14.11 Declaring Events of Default............................................................ 108
SECTION 14.12 Syndication Agent and Documentation Agent.............................................. 108
SECTION 14.13 No Reliance on Administrative Agent's Customer Identification Program.................. 108
SECTION 14.14 USA Patriot Act........................................................................ 109
ARTICLE 15 MISCELLANEOUS.................................................................................. 110
SECTION 15.1 Notices................................................................................ 110
SECTION 15.2 Expenses............................................................................... 111
SECTION 15.3 Stamp and Other Taxes.................................................................. 112
SECTION 15.4 Setoff................................................................................. 112
SECTION 15.5 Consent to Advertising and Publicity................................................... 113
SECTION 15.6 Reversal of Payments................................................................... 113
SECTION 15.7 Injunctive Relief...................................................................... 113
SECTION 15.8 Accounting Matters..................................................................... 113
SECTION 15.9 Amendments............................................................................. 113
SECTION 15.10 Assignment............................................................................. 115
SECTION 15.11 Performance of Borrowers' Duties....................................................... 115
SECTION 15.12 Indemnification........................................................................ 116
SECTION 15.13 All Powers Coupled with Interest....................................................... 116
SECTION 15.14 Survival............................................................................... 116
SECTION 15.15 Titles and Captions.................................................................... 116
SECTION 15.16 Severability of Provisions............................................................. 116
SECTION 15.17 Governing Law; Waiver of Jury Trial.................................................... 117
SECTION 15.18 Counterparts........................................................................... 117
SECTION 15.19 Reproduction of Documents.............................................................. 117
SECTION 15.20 Term of Agreement...................................................................... 118
SECTION 15.21 Increased Capital...................................................................... 118
SECTION 15.22 Pro-Rata Participation................................................................. 118
SECTION 15.23 Net Payments........................................................................... 119
SECTION 15.24 Effect of Effectiveness of this Agreement.............................................. 121
SECTION 15.25 Confidentiality........................................................................ 121
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ANNEX A COMMITMENTS
ANNEX B PRICING MATRIX
EXHIBIT A-1 FORM OF THIRD AMENDED AND RESTATED PROMISSORY NOTE
EXHIBIT A-2 FORM OF SWINGLINE NOTE
EXHIBIT B FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT D FORM OF COMPLIANCE CERTIFICATE
EXHIBIT E FORM OF JOINDER AGREEMENT
EXHIBIT F FORM OF VENDOR LIEN SUBORDINATION AGREEMENT
Schedule 1.1A Permitted Investments
Schedule 1.1B Clearing Banks
Schedule 1.1C Excluded Property
Schedule 6.1(a) Jurisdictions in Which Borrowers are Qualified as Foreign
Corporations
Schedule 6.1(b) Capitalization
Schedule 6.1(c) Subsidiaries; Ownership of Stock
Schedule 6.1(f) Business of Borrowers
Schedule 6.1(g) Governmental Approvals
Schedule 6.1(h) Title to Properties
Schedule 6.1(i) Liens
Schedule 6.1(j) Debt and Guarantees
Schedule 6.1(k) Litigation
Schedule 6.1(l) Tax Matters
Schedule 6.1(m) Burdensome Provisions
Schedule 6.1(p) ERISA
Schedule 6.1(t) Location of Offices and Receivables
Schedule 6.1(u) Location of Inventory
Schedule 6.1(v) Corporate and Fictitious Names
Schedule 6.1(y) Employee Relations
Schedule 6.1(aa) Trade Names
Schedule 6.1(bb) Bank Accounts
Schedule 6.1(dd) Real Property
Schedule 11.8 Affiliate Transactions
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THIRD AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made as
of March 19, 2004, by and among AMERICAN TIRE DISTRIBUTORS, INC., a Delaware
corporation ("American Tire"), THE SPEED MERCHANT, INC., a California
corporation ("Speed Merchant"), T.O. XXXX HOLDING CO., INC., a Nebraska
corporation ("Xxxx Holding"), T.O. XXXX TIRE COMPANY, INC., a Nebraska
corporation ("Xxxx Tire"; American Tire, Speed Merchant, Xxxx Holding and Xxxx
Tire are collectively referred to herein as "Borrowers" and individually as a
"Borrower"), the financial institutions party to this Agreement from time to
time as the Lenders ("Lenders"), WACHOVIA BANK, NATIONAL ASSOCIATION, as
syndication agent (together with its successors in such capacity, "Syndication
Agent"), The CIT Group/Business Credit, Inc., as documentation agent (together
with its successors in such capacity, "Documentation Agent"), and FLEET CAPITAL
CORPORATION, as administrative and collateral agent for the Lenders (together
with its successors and assigns in such capacity, "Administrative Agent").
PRELIMINARY STATEMENT
Fleet Capital Corporation, Wachovia Bank, National Association,
Transamerica Business Capital Corporation, Standard Federal Bank National
Association (formerly known as Michigan National Bank, as successor in interest
to Mellon Bank, N.A.), and The CIT Group/Business Credit, Inc. (the "Existing
Lenders"), American Tire and Speed Merchant are parties to a certain Second
Amended and Restated Loan and Security Agreement dated as of March 6, 2000 (as
amended to date, the "Existing Loan Agreement").
At the request of American Tire and Speed Merchant, the parties to the
Existing Loan Agreement have agreed to increase the amount available to be
borrowed on a revolving credit basis, add Xxxx Holding and Xxxx Tire as
co-Borrowers hereunder, modify certain covenants and make certain other changes
to the Existing Loan Agreement or under any of the other Loan Documents.
For the convenience of the parties and in order to effect such
increase, additions, modifications and other changes, the parties hereto have
agreed to amend and restate the Existing Loan Agreement in its entirety as
hereinafter set forth, upon and subject to all of the terms, conditions and
provisions hereof. This amendment and restatement is not intended to be, and
shall not be deemed or construed as, a repayment or novation of the Debt
outstanding under the Existing Loan Agreement.
Accordingly, in consideration of the Existing Loan Agreement, the
financial accommodations outstanding thereunder, the mutual promises hereinafter
set forth and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. For the purposes of this Agreement:
"ACH Transfer" means and refers to the transfer of funds
within or between financial institutions using electronic credits and debits in
accordance with banking procedures promulgated by the National Automated
Clearing House Association or any related regional association.
"Account" shall have the meaning ascribed to such term in the
UCC.
"Account Debtor" means a Person who is obligated on a
Receivable.
"Acquire" or "Acquisition", as applied to any Business Unit or
Investment, means the acquisition of such Business Unit or Investment by
purchase, exchange, issuance of stock or other securities, or by merger,
reorganization or any other method.
"Acquired Debt" means Debt of a Person that becomes a
Consolidated Subsidiary after the Effective Date or is otherwise Acquired by a
Borrower after the Effective Date and Debt secured by property included in a
Business Unit Acquired by a Borrower after the Effective Date, which Debt is not
revolving credit Debt and which was outstanding immediately prior to such
Acquisition but was not incurred or created in contemplation of such
Acquisition.
"Additional Reserves" means reserves (other than the Letter of
Credit Reserve, the Rent Reserve or the Dilution Reserve) against the Borrowing
Base established by the Administrative Agent from time to time in the exercise
of its reasonable credit judgment.
"Administrative Agent" means FCC and any successor agent
appointed pursuant to SECTION 14.9 hereof.
"Administrative Agent's Office" means the office of the
Administrative Agent specified in or determined in accordance with the
provisions of SECTION 15.1.
"Affiliate" (and with corollary meaning, "Affiliated") means,
with respect to a Person, (a) any partner, officer, shareholder (if holding more
than ten percent (10%) of the outstanding shares of capital stock of such
Person), member, director, manager or managing agent of such Person, (b) any
spouse, parents, siblings, children or grandchildren of such Person, and (c) any
other Person (other than a Subsidiary) that, (i) directly or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, such given Person, (ii) directly or indirectly beneficially owns
or holds ten percent (10%) or more of any class of voting stock or partnership
or other voting interest of such Person or any Subsidiary of such Person, or
(iii) ten percent (10%) or more of the voting stock or partnership or other
voting interest of which is directly or indirectly beneficially owned or held by
such Person or a Subsidiary of such Person. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities or partnership or other voting interest, by contract or
otherwise. So long as it is not a holder, beneficially or of record, of issued
and outstanding shares of common stock of American Tire or otherwise in control
of American Tire, The 1818 Mezzanine Fund, L.P. will not be deemed to be an
Affiliate of American Tire by reason of its holding the Warrant.
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"Agency Account" means an account of a Borrower maintained by
it with a Clearing Bank pursuant to an Agency Account Agreement.
"Agency Account Agreement" means an agreement among a
Borrower, the Administrative Agent and a Clearing Bank, in form and substance
satisfactory to the Administrative Agent, concerning the collection and transfer
of payments which represent the proceeds of Receivables or of any other
Collateral.
"Agents" means each of the Administrative Agent, the
Syndication Agent and the Documentation Agent.
"Agreement" means and includes this Third Amended and Restated
Loan and Security Agreement, including all Schedules, Exhibits and other
attachments hereto, and all amendments, modifications and supplements hereto and
thereto and restatements hereof and thereof.
"Agreement Date" means the date as of which this Agreement is
dated.
"American Tire" has the meaning specified in the introductory
paragraph of this Agreement.
"American Tire Pledge Agreement" means the Stock Pledge
Agreement dated on or about the Effective Date between American Tire and the
Administrative Agent, pursuant to which American Tire pledges to the
Administrative Agent all of the issued and outstanding capital stock of Speed
Merchant and Xxxx Holding as security for its obligations under this Agreement
and the other Loan Documents.
"Anti-Terrorism Laws" means any laws relating to terrorism or
money laundering, including Executive Order No. 13224 and the USA Patriot Act.
"Applicable Law" means all applicable provisions of
constitutions, statutes, rules, regulations and orders of all governmental
bodies and of all orders and decrees of all courts and arbitrators, including
Environmental Laws.
"Applicable Margin" means as to each Type of Loan, the Tier
III percentage rate per annum set forth under the appropriate caption on the
pricing matrix attached hereto as ANNEX B, subject to quarterly adjustment as
follows: On each Margin Adjustment Date occurring after the end of the third
Fiscal Quarter of Fiscal Year 2004, such percentages will be adjusted to the
percentages that correspond to the Leverage Ratio reflected in the financial
statements and related compliance certificate most recently delivered, PROVIDED
that no Default or Event of Default has occurred and is continuing. For purposes
hereof, "Margin Adjustment Date" means the first day of a calendar month that is
at least 10 days after the date on which (i) monthly financial statements for
American Tire and its Consolidated Subsidiaries and the related compliance
certificate are delivered for each of the first three Fiscal Quarters of each
Fiscal Year in accordance with the provisions of SECTIONS 10.1(B) and 10.3, and
(ii) annual financial statements for American Tire and its Consolidated
Subsidiaries and the related compliance certificate are delivered for each
Fiscal Year in accordance with the provisions of SECTIONS 10.1(A) and 10.3.
"Assignment and Acceptance" means an assignment and acceptance
agreement in the form attached hereto as EXHIBIT C assigning all or a portion of
a Lender's interests, rights and obligations under this Agreement pursuant to
SECTION 13.1.
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"B/F Subordination Agreement" means the Amended and Restated
Subordination Agreement dated November 6, 2002, among Bridgestone/Firestone, the
Administrative Agent and the Borrowers, which amended and restated in its
entirety that certain Subordination Agreement dated August 14, 2001.
"B/F Transaction Documents" means, collectively, the Note
Issuance and Security Agreement dated as of March 1, 2002, between
Bridgestone/Firestone and American Tire, and the Note, Security Agreement, and
Warrant referred to therein, the B/F Subordination Agreement and any
certificates, instruments, opinions and other documents delivered in connection
with the consummation of the transactions contemplated by said Note Issuance and
Security Agreement, in each case as amended, supplemented or modified in
accordance with SECTION 11.10 of this Agreement.
"Bank" means Fleet National Bank, a national banking
association, and its successors and assigns.
"Banking Relationship Debt" means Debt or other obligations of
a Borrower to Bank or and any Lender (or any Affiliate of Bank or any Lender)
arising out of or relating to (i) demand deposit and operating account
relationships between such Borrower and Bank or any Lender (or any Affiliate of
Bank or any Lender) or any cash management services provided to such Borrower
or any of its Subsidiaries, including any obligations under Cash Management
Agreements (but excluding any assets or investment property of American Tire
Distributors, Inc. Deferred Compensation Program), and (ii) Interest Rate
Protection Agreements or other Hedging Agreements with Bank or any Lender (or
any Affiliate of Bank or any Lender).
"Base Rate" means at any time a fluctuating interest rate per
annum equal to the greater of (i) the rate of interest announced or quoted from
time to time by the Bank as its prime rate for commercial loans, which rate
might not be the lowest rate charged by the Bank, and, if such prime rate for
commercial loans is discontinued by the Bank as a standard, a comparable
reference rate designated by the Bank as a substitute therefor shall be the Base
Rate, and (ii) the Federal Funds Rate plus 1/2 of 1% per annum.
"Base Rate Loan" means each Borrowing of Loans bearing
interest determined with reference to the Base Rate on the same day and a
specified principal amount of such Loans outstanding and any Non-Ratable Loan.
"Base Rate Revolving Credit Loan" means each Base Rate Loan
outstanding under the Revolving Credit Facility.
"Benefit Plan" means an "employee pension benefit plan" as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan) in respect of
which a Borrower or any Related Company is, or within the immediately preceding
six years was, an "employer" as defined in Section 3(5) of ERISA, including such
plans as may be established after the Agreement Date.
"Blocked Person" has the meaning set forth in SECTION 6.1(EE).
"Borrower" and "Borrowers" have the meanings specified in the
introductory paragraph of this Agreement.
"Borrowing" means Loans of the same Type hereunder made (or
continued or converted) by the Lenders Ratably on the same date, and, in the
case of Eurodollar Rate Loans, for the same Interest Period.
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"Borrowing Base" means at any time an amount equal to the
lesser of:
(a) the aggregate Commitments, MINUS the sum of
(i) the Letter of Credit Reserve, PLUS
(ii) the Rent Reserve, PLUS
(iii) any Additional Reserves, and
(b) an amount equal to
(i) 85% of the face value of Eligible
Receivables due and owing at such time, PLUS
(ii) the lesser of:
(A) the sum of (1) the lesser of (x)
65% of the Value of Eligible Inventory (other than
Eligible Subordinated Vendor Inventory) consisting of
tires at such time, and (y) the NOLV Percentage of
the Value of Eligible Inventory (other than Eligible
Subordinated Vendor Inventory) consisting of tires at
such time, PLUS (2) the least of (x) 65% of the Value
of Eligible Subordinated Vendor Inventory consisting
of tires at such time, (y) the NOLV Percentage of the
Value of Eligible Subordinated Vendor Inventory
consisting of tires at such time, and (z)
$25,000,000, and
(B) $120,000,000, PLUS
(iii) the lesser of:
(A) the lesser of (1) 50% of the Value
of Eligible Inventory other than tires at such time,
and (2) the NOLV Percentage of the Value of Eligible
Inventory other than tires at such time, and
(B) $25,000,000, MINUS
(iv) the sum of
(A) the Letter of Credit Reserve, PLUS
(B) the Rent Reserve, PLUS
(C) the Dilution Reserve, PLUS
(D) any Additional Reserves.
"Borrowing Base Certificate" means a certificate in the form
attached hereto as EXHIBIT B or in such other form as the Borrowers and the
Administrative Agent may agree.
"Bridgestone/Firestone" means Bridgestone/Firestone North
American Tire, LLC, a Delaware limited liability company and successor by merger
to Bridgestone/Firestone, Inc., an Ohio corporation.
-5-
"Business Day" means any day other than a Saturday, Sunday or
other day on which banks in Atlanta, Georgia, Charlotte, North Carolina, Boston,
Massachusetts or Glastonbury, Connecticut are authorized to close and, when used
with respect to Eurodollar Rate Loans, means any such day on which dealings in
Dollar deposits are carried on in the London interbank market.
"Business Unit" means assets constituting a business, whether
all of the assets of any Person or the assets of a division or operating unit of
any Person.
"Capital Expenditures" means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of assets (other
than Inventory or assets that constitute a Business Unit) which are not, in
accordance with GAAP, treated as expense items for such Person in the year made
or incurred or as a prepaid expense applicable to a future year or years.
"Capitalized Lease" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means Indebtedness represented
by obligations under a Capitalized Lease, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Cash Collateral" means collateral consisting of cash or, if
acceptable to the Administrative Agent, Cash Equivalents, in each case on which
the Administrative Agent, for the benefit of itself as Administrative Agent and
the other Secured Parties, has a first priority Lien.
"Cash Collateral Account" means a special interest-bearing
deposit account consisting of cash maintained by the Administrative Agent in the
name of American Tire but under the sole dominion and control of the
Administrative Agent, for the benefit of itself as Administrative Agent and for
the benefit of the other Secured Parties, established pursuant to the provisions
of SECTION 4.15(A) for purposes set forth therein.
"Cash Equivalents" means
(a) marketable direct obligations issued or unconditionally
guaranteed by the United States Government or issued by any agency thereof and
backed by the full faith and credit of the United States, in each case maturing
within one year from the date of acquisition thereof;
(b) commercial paper maturing no more than one year from the
date issued and, at the time of acquisition thereof, rated at least A-1 by S&P
or at least P-1 by Xxxxx'x;
(c) certificates of deposit or bankers' acceptances issued in
Dollar denominations and maturing within one year from the date of issuance
thereof issued by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia having
combined capital and surplus of not less than $100,000,000 and, unless issued by
a Lender, not subject to set-off or offset rights in favor of such bank arising
from any banking relationship with such bank;
(d) units or other interests in funds invested solely in
instruments described in CLAUSES (A), (B) and (C); and
(e) repurchase agreements in form and substance and for
amounts satisfactory to the Administrative Agent.
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"Cash Management Agreement" means any agreement entered into
from time to time between any Borrower or any of its Subsidiaries, on the one
hand, and Bank or any Lender or any of their Affiliates on the other, in
connection with cash management services for collections and for operating,
payroll and trust accounts of such Borrower or its Subsidiaries provided by Bank
or any Lender or any of their Affiliates, including ACH Transfer services,
controlled disbursement services, electronic funds transfer services,
information reporting services, lockbox services, stop payment services and wire
transfer services.
"Change of Control" means the first to occur of any of the
following:
(A) American Tire shall cease to own, directly or indirectly,
100% of the issued and outstanding stock of each other Borrower (except
to the extent permitted by Section 11.7(c));
(B) the sale (including by merger, consolidation or sale of
stock of subsidiaries or any other method) of all or substantially all
of the assets of American Tire and its Consolidated Subsidiaries (taken
as a whole) to any Person not directly or indirectly controlled by the
holders of at least 50% of the Combined Voting Power of the then
outstanding shares of capital stock of American Tire(excluding shares
owned by employees of American Tire as of the date of determination);
(C) at any time prior to the consummation of an initial public
offering of Class A Common Stock of American Tire or other common stock
of American Tire having the voting power to elect directors, a
transaction (except pursuant to such initial public offering) resulting
in the Principal Shareholders owning, collectively, less than 50% of
the Combined Voting Power of the then outstanding shares of capital
stock of American Tire (excluding shares owned by employees of American
Tire as of the date of determination);
(D) at any time after the consummation of an initial public
offering of Class A Common Stock of American Tire or other common stock
of American Tire having the voting power to elect directors, the
acquisition (except pursuant to such initial public offering) by any
Person (other than the Principal Shareholders) not directly or
indirectly controlled by American Tire's stockholders of more than 30%
of the Combined Voting Power of the then outstanding shares of capital
stock of American Tire (excluding shares owned by employees of American
Tire as of the date of determination);
(E) individuals serving as directors of American Tire on the
date hereof and who were nominated or selected to serve as directors by
one or more Principal Shareholders (together with any new directors
whose election was approved by a vote of (x) such individuals or
directors whose election was previously so approved or (y) Principal
Shareholders holding a majority of the aggregate voting power of the
capital stock of American Tire held by all Principal Shareholders)
cease for any reason to constitute a majority of the Board of Directors
of American Tire;
(F) the adoption of a plan relating to the liquidation or
dissolution of American Tire in connection with an equity investment or
sale or a business combination transaction; or
(G) any other event or transaction that the Board of Directors
of American Tire deems to be a Change in Control.
"Chattel Paper" has the meaning ascribed to such term in the
UCC.
-7-
"CIP Regulations" has the meaning set forth in SECTION 14.13.
"CIT" means The CIT Group/Business Credit, Inc., a New York
corporation, and its successors and assigns.
"Clearing Bank" means each bank listed on SCHEDULE 1.1B -
CLEARING BANKS and any other banking institution with which an Agency Account
has been established pursuant to an Agency Account Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means and includes all of each Borrower's right,
title and interest in and to each of the following, wherever located and whether
now or hereafter existing or now owned or hereafter acquired or arising:
(a) all Accounts;
(b) all Chattel Paper (including Electronic Chattel Paper
and Tangible Chattel Paper);
(c) all Documents;
(d) all Inventory including (i) all goods intended for
sale or lease or for display or demonstration, (ii) all work in process, and
(iii) all raw materials and other materials and supplies of every nature and
description used or which might be used in connection with the manufacture,
packing, shipping, advertising, selling, leasing or furnishing of goods or
services or otherwise used or consumed in the conduct of business;
(e) all Instruments;
(f) all Supporting Obligations;
(g) all Letter of Credit Rights;
(h) all Commercial Tort Claims relating to the
Collateral;
(i) all General Intangibles related to any of the
Collateral (including Intellectual Property but excluding tax refunds and
insurance proceeds that are not proceeds of any of the Collateral);
(j) all Deposit Accounts;
(k) all Investment Property;
(l) all cash or other property deposited with the
Administrative Agent or any Lender or any Affiliate of the Administrative Agent
or any Lender or which the Administrative Agent, for its benefit and for the
benefit of the other Secured Parties, or any Lender or such Affiliate is
entitled to retain or otherwise possess as collateral pursuant to the provisions
of this Agreement or any of the Loan Documents or any agreement relating to any
Letter of Credit, including amounts on deposit in the Cash Collateral Account;
(m) all files, correspondence, computer programs, tapes,
disks and related data processing software which contain information identifying
or pertaining to any
-8-
of the Collateral or any Account Debtor or showing the amounts thereof or
payments thereon or otherwise necessary or helpful in the realization thereon or
the collection thereof; and
(n) any and all products and cash and non-cash proceeds
of the foregoing (including any claims to any items referred to in this
definition and any claims against third parties for loss of, damage to or
destruction of any or all of the Collateral or for proceeds payable under or
unearned premiums with respect to policies of insurance) in whatever form,
including cash, negotiable instruments and other instruments for the payment of
money, Chattel Paper, security agreements and other documents, PROVIDED,
HOWEVER, that notwithstanding anything to the contrary contained herein, the
following property of each Borrower shall not constitute "Collateral" hereunder
(hereinafter, the "Excluded Property"): (i) Real Estate; (ii) Equipment; (iii)
Fixtures; (iv) the property described on SCHEDULE 1.1C to this Agreement; and
(v) any proceeds arising from the sale, lease, assignment or disposition of any
of the foregoing Excluded Property, including proceeds consisting of Accounts,
General Intangibles, Documents, Instruments, Chattel Paper, Supporting
Obligations or Letter of Credit Rights that arise from such sale, lease,
assignment or disposition of such Excluded Property.
"Combined Voting Power" with respect to capital stock of
American Tire, means the number of votes such stock is normally entitled
(without regard to the occurrence of any contingency) to vote in an election of
directors of American Tire.
"Commercial Tort Claim" has the meaning ascribed to such term
in the UCC.
"Commitment" means, as to each Lender, the amount set forth
opposite such Lender's name on ANNEX A hereto or, from and after the date
hereof, as set forth in the Register, representing such Lender's obligation,
upon and subject to the terms and conditions of this Agreement (including the
applicable provisions of SECTION 13.1), to make its Proportionate Share of Loans
(including to repay Swingline Loans) and to purchase participations in Letter of
Credit Guarantees.
"Commitment Percentage" means, as to any Lender at the time of
determination, the percentage obtained by dividing such Lender's Commitment at
such time by the aggregate amount of the Commitments at such time.
"Consolidated Subsidiary" means each Subsidiary of American
Tire the financial results of which, at the time in question, are consolidated
with those of American Tire in accordance with GAAP.
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, or any constituent of any such substance or waste.
"Controlled Disbursement Account" means one or more accounts
maintained by and in the name of the Borrowers (or any of them) with a
Disbursing Bank for the purposes of disbursing Loan proceeds and amounts
deposited thereto.
"Currency Agreement" means any forward contract, future
contract, foreign exchange contract, currency swap contract or similar agreement
or arrangement between any Person and a financial institution designed to
protect such Person against fluctuations in foreign exchange rates.
"Debt" means, without duplication,
(a) Indebtedness for money borrowed,
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(b) Indebtedness, whether or not in any such case the
same was for money borrowed,
(i) represented by notes payable (including the
Vendor Notes), drafts accepted and reimbursement obligations
under letters of credit, including Reimbursement Obligations,
and similar instruments that represent extensions of credit,
(ii) constituting obligations evidenced by bonds,
debentures, notes or similar instruments,
(iii) any amounts required to be included in the
Purchase Price of any Acquisition and not paid in cash at the
closing of such Acquisition,
(iv) upon which interest charges are customarily
paid or that was issued or assumed as full or partial payment
for property (other than trade credit that is incurred in the
ordinary course of business),
(c) Capitalized Lease Obligations, and
(d) Indebtedness that is such by virtue of CLAUSE (C) of
the definition thereof, but only to the extent that the obligations Guaranteed
are Debt.
The KS Preferred is not Debt for purposes of this Agreement or
the other Loan Documents.
"Default" means any of the events specified in SECTION 12.1
which with the passage of time or giving of notice or both would constitute an
Event of Default.
"Default Rate" means on any date, a rate per annum that is
equal to (i) in the case of each Loan outstanding on such date, 2% PLUS the rate
otherwise applicable to such Loan on such date, (ii) in the case of each Letter
of Credit outstanding on such date, 2% PLUS the fee otherwise applicable to such
Letter of Credit on such date, and (iii) in the case of any of the other Secured
Obligations outstanding on such date, 2% PLUS the highest Applicable Margin for
Base Rate Loans PLUS the Base Rate in effect on such date.
"Deposit Account" has the meaning ascribed to such term in the
UCC.
"Dilution Reserve" means an amount equal to the EXCESS of (i)
non-cash reductions to the Borrowers' Receivables (on a combined basis) during a
12-month period prior to the date of determination as established by the
Borrowers' records or by a field examination conducted by the Administrative
Agent's employees or representatives, expressed as a percentage of the
Borrowers' Receivables (on a combined basis) outstanding during the same period,
as the same may be adjusted by the Administrative Agent in the exercise of its
reasonable credit judgment, OVER (ii) 5%, MULTIPLIED by an amount equal to
Eligible Receivables as of the date of determination.
"Disbursing Bank" means any commercial bank with which a
Controlled Disbursement Account is maintained after the Effective Date.
"Document" has the meaning ascribed to such term in the UCC.
"Documentation Agent" has the meaning specified in the
introductory paragraph of this Agreement.
-10-
"Dollar" and "$" means freely transferable United States
dollars.
"EBITDA" for any specified accounting period for a specified
Person, means Net Income of such Person for such period before provision for
income taxes for such period, PLUS interest expense, depreciation expense and
amortization expense, in each case to the extent deducted in computing Net
Income for such period.
"Effective Date" means the later of:
(a) the Agreement Date, and
(b) the first date on which all of the conditions set
forth in ARTICLE 5 shall have been fulfilled.
"Effective Interest Rate" means each rate of interest per
annum on Revolving Credit Loans and Swingline Loans in effect from time to time
pursuant to the provisions of SECTIONS 4.1(A) and (C).
"Electronic Chattel Paper" has the meaning ascribed to such
term in the UCC.
"Eligible Assignee" means (i) a commercial bank organized
under the laws of the United States, or any State thereof, having total assets
in excess of $10,000,000,000; (ii) any commercial finance or asset based lending
company organized under the laws of the United States, any State thereof or the
District of Columbia, having total assets in excess of $10,000,000,000; and
(iii) any Lender listed on the signature page of this Agreement; PROVIDED that
the representation contained in SECTION 13.2 hereof shall be applicable with
respect to any such Person.
"Eligible Inventory" means items of Inventory of a Borrower
held for sale in the ordinary course of the business of such Borrower (but not
including packaging or shipping materials or maintenance supplies) that meet all
of the following requirements: (a) such Inventory is owned by a Borrower, is
subject to the Security Interest, which is perfected as to such Inventory, and
is not subject to any other Lien whatsoever other than a Permitted Lien; (b)
such Inventory consists of raw materials or finished goods and does not consist
of work-in-process, supplies or consigned goods; (c) such Inventory is in good
condition and meets in all material respects all material standards applicable
to such goods, their use or sale imposed by any governmental agency, or
department or division thereof, having regulatory authority over such matters;
(d) such Inventory is currently either usable or saleable, at prices
approximating at least the cost thereof, in the normal course of the applicable
Borrower's business; (e) such Inventory is not obsolete or returned or
repossessed or used goods taken in trade; (f) such Inventory is either located
within the United States at one of the Permitted Inventory Locations or is in
transit within the United States from one Permitted Inventory Location to
another Permitted Inventory Location for not more than seven consecutive days;
(g) such Inventory is in the possession and control of a Borrower and not any
third party and if located in a warehouse or other facility leased by a
Borrower, the lessor has delivered to the Administrative Agent a waiver and
consent in form and substance satisfactory to the Administrative Agent or such
facility is reflected in the Rent Reserve; and (h) such Inventory is not
determined by the Administrative Agent, in the exercise of its reasonable credit
judgment, to be ineligible for any reason.
"Eligible Receivable" means the unpaid portion of a Receivable
payable in Dollars to a Borrower net of any returns, discounts, credits, or
other allowances or deductions agreed to by a Borrower and net of any amounts
owed by a Borrower to the Account Debtor on such Receivable, which Receivable
meets all of the following requirements: (a) such Receivable is owned by a
Borrower and
-11-
represents a complete bona fide transaction which requires no further act under
any circumstances on the part of any Borrower to make such Receivable payable by
the Account Debtor; (b) such Receivable is not past due more than 60 days after
its due date, which due date shall not be later than 90 days after the invoice
date; (c) such Receivable does not arise out of any transaction with any
Subsidiary, Affiliate, creditor, lessor or supplier of a Borrower; (d) such
Receivable is not owing by an Account Debtor more than 15% of whose
then-existing accounts owing to the Borrowers do not meet the requirements set
forth in CLAUSE (B) above; (e) if the Account Debtor with respect thereto is
located outside of the United States of America, Canada or Puerto Rico, the
goods which gave rise to such Receivable were shipped after receipt by the
applicable Borrower from the Account Debtor of an irrevocable letter of credit
that has been confirmed by a financial institution acceptable to the
Administrative Agent and is in form and substance acceptable to the
Administrative Agent, payable in the full face amount of the face value of the
Receivable in Dollars at a place of payment located within the United States and
has been duly assigned to the Administrative Agent, except that up to $1,000,000
of such Receivables outstanding at any time that are otherwise Eligible
Receivables, may be included in Eligible Receivables without such letter of
credit support; (f) the Account Debtor with respect to such Receivable is not
located in a state which imposes conditions on the enforceability of Receivables
with which the applicable Borrower has not complied in all material respects;
(g) such Receivable is not subject to the Assignment of Claims Act of 1940, as
amended from time to time, or any other applicable law now or hereafter existing
similar in effect thereto, as determined in the sole discretion of the
Administrative Agent, unless the applicable Borrower has assigned its right to
payments of such Receivable so as to comply with the Assignment of Claims Act of
1940, as amended, or any such other applicable law, or to any contractual
provision accepted in writing by such Borrower prohibiting its assignment or
requiring notice of or consent to such assignment which notice or consent has
not been made or obtained; (h) the Borrower that is the obligee thereof is not
in breach of any express or implied representation or warranty with respect to
the goods the sale of which gave rise to such Receivable; (i) the Account Debtor
with respect to such Receivable is not insolvent or the subject of any
bankruptcy or insolvency proceedings of any kind or of any other proceeding or
action, threatened or pending, which might, in the Administrative Agent's
reasonable credit judgment, have a materially adverse effect on such Account
Debtor; (j) the goods the sale of which gave rise to such Receivable were
shipped or delivered to the Account Debtor on an absolute sale basis and not on
a xxxx and hold sale basis, a consignment sale basis, a guaranteed sale basis, a
sale or return basis or on the basis of any other similar understanding, and
such goods have not been returned or rejected; (k) such Receivable is not owing
by an Account Debtor or a group of affiliated Account Debtors whose
then-existing accounts owing to the Borrowers exceed in face amount 20% of the
face value of the Borrowers' total Eligible Receivables, but such Receivable
shall be ineligible only to the extent of such excess; (l) such Receivable is
evidenced by an invoice or other documentation (in form reasonably acceptable to
the Administrative Agent and in a form consistent with past practices of such
Borrower) containing only terms normally offered by the applicable Borrower, and
dated no later than the date of shipment; (m) such Receivable is a valid,
legally enforceable obligation of the Account Debtor with respect thereto and is
not subject to any present or contingent (and no facts exist which are the basis
for any future), offset, deduction or counterclaim, dispute or other defense on
the part of such Account Debtor, except that any Receivable that is subject to
any offset, deduction or counterclaim shall be ineligible only to the extent of
such offset, deduction or counterclaim; (n) such Receivable is not evidenced by
Chattel Paper or an Instrument of any kind; (o) such Receivable does not arise
from the performance of services, including services under or related to any
warranty obligation of a Borrower or out of service charges by a Borrower or
other fees for the time value of money; (p) such Receivable is subject to the
Security Interest, which is perfected as to such Receivable, and is subject to
no other Lien whatsoever other than a Permitted Lien and the goods giving rise
to such Receivable were not, at the time of the sale thereof, subject to any
Lien other than a Permitted Lien; and (q) such Receivable is not determined by
the Administrative Agent, in the exercise of its reasonable credit judgment, to
be ineligible for any reason.
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"Eligible Subordinated Vendor Inventory" means Eligible
Inventory that is subject to a Subordinated Vendor Lien (in accordance with
clause (iii) of the definition thereof) in favor of a vendor other than
Bridgestone/Firestone or Goodyear Tire & Rubber Company or a division or
Subsidiary thereof.
"Environmental Laws" means all federal, state, local and
foreign laws now or hereafter in effect relating to pollution or protection of
the environment, including laws relating to emissions, discharges, Releases or
threatened Releases of Contaminants, chemicals, or industrial wastes into the
environment (including ambient air, surface water, ground water, or land), or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, removal, transport, or handling of Contaminants, chemicals,
or industrial wastes, and any and all regulations, notices or demand letters
issued, entered, promulgated or approved thereunder; such laws and regulations
include the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
seq., as amended; the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq., as amended; the Toxic Substances
Control Act, 15 U.S.C. Section 2601 et seq., as amended; the Clean Air Act, 46
U.S.C. Section 7401 et seq., as amended; and state and federal lien and
environmental cleanup programs.
"Equipment" has the meaning ascribed to such term in the UCC.
"ERISA" means the Employee Retirement Income Security Act of
1974, as in effect from time to time.
"ERISA Event" means (a) a "Reportable Event" as defined in
Section 4043(c) of ERISA, but excluding any such event as to which the provision
for 30 days' notice to the PBGC is waived under applicable regulations, (b) the
filing of a notice of intent to terminate a Benefit Plan subject to Title IV of
ERISA under a distress termination under Section 4041(c) of ERISA or the
treatment of an amendment to such a Benefit Plan as a termination under Section
4041(c) of ERISA, (c) the institution of proceedings by the PBGC to terminate a
Benefit Plan subject to Title IV of ERISA or the appointment of a trustee to
administer any such Benefit Plan or an event or condition that might reasonably
be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan
subject to Section 4042, (d) the filing of an application for a minimum funding
waiver under Section 412 of the Code, (e) a withdrawal by a Borrower or any
Related Company from a Benefit Plan subject to Section 4063 of ERISA during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA), (f) a Benefit Plan intending to qualify under Section
401(a) of the Code losing such qualified status (other than because of a
Remediable Defect), (g) the failure to make a material required contribution to
a Benefit Plan, (h) a Borrower or any Related Company being in "default" (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan because of its complete or partial withdrawal (as described
in Section 4203 or 4205 of ERISA) from such Multiemployer or Plan, or (i) a
Borrower's engagement in a material non-exempt prohibited transaction within the
meaning of Section 4975 of the Code or Section 406 of ERISA with respect to any
Benefit Plan that is not cured within 60 days after a Borrower has knowledge
thereof.
"Eurodollar Rate" means, with respect to any Eurodollar Rate
Loan for the Interest Period applicable thereto, a simple per annum interest
rate determined pursuant to the following formula:
Interbank Offered Rate
Eurodollar Rate = -----------------------------
1 - Eurodollar Reserve Percentage
The Eurodollar Rate shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
-13-
"Eurodollar Rate Loan" means any Loan (or Loans made (or
converted or continued) by the Lenders Ratably on the same date for the same
Interest Period), bearing interest determined with reference to the Eurodollar
Rate.
"Eurodollar Rate Revolving Credit Loan" means each Eurodollar
Rate Loan outstanding under the Revolving Credit Facility.
"Eurodollar Reserve Percentage" means that percentage
(expressed as a decimal) which is in effect from time to time under Regulation D
of the Board of Governors of the Federal Reserve System, as such regulation may
be amended from time to time, or any successor regulation, as the maximum
reserve requirement (including any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to Eurocurrency liabilities as that
term is defined in Regulation D (or against any other category of liabilities
that includes deposits by reference to which the interest rate of Eurodollar
Rate Loans is determined), whether or not any Lender or any Affiliate of a
Lender has any Eurocurrency liabilities subject to such reserve requirement at
that time. Eurodollar Rate Loans shall be deemed to constitute Eurocurrency
liabilities and as such shall be deemed subject to reserve requirements without
benefits of credits for proration, exceptions or offsets that may be available
from time to time to any Lender.
"Event of Default" means any of the events specified in
SECTION 12.1, PROVIDED that any requirement for notice or lapse of time or any
other condition has been satisfied.
"Executive Order No. 13224" means Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001.
"Existing Lender" has the meaning specified in the Preliminary
Statement.
"Existing Loan Agreement" has the meaning specified in the
Preliminary Statement.
"FCC" means Fleet Capital Corporation, a Rhode Island
corporation, and its successors and assigns.
"FSI" means Fleet Securities, Inc., a New York corporation.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve system arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by Bank from three federal funds brokers of
recognized standing selected by Bank.
"Fee Letter" means that certain Fee Letter dated March 19,
2004, among the Borrowers, FCC and FSI.
"Financed Capex" means Capital Expenditures funded with the
proceeds of Debt (excluding Loans) or represented by Capitalized Lease
Obligations.
-14-
"Financial Officer" means the principal financial officer,
chief financial officer, treasurer or controller of American Tire.
"Financing Statements" means any and all UCC financing
statements, in form and substance satisfactory to the Administrative Agent,
executed and delivered by a Borrower to the Administrative Agent or assigned to
the Administrative Agent by any Person, naming the Administrative Agent, for the
benefit of the Secured Parties, as secured party or assignee and the applicable
Borrower as debtor, in connection with this Agreement or otherwise.
"Fiscal Month" means each of the 12 consecutive four- or
five-week periods beginning on the first day of the Fiscal Year, in the pattern
4,4,5 within a Fiscal Quarter (or in the pattern 5,5,4 or 4,5,5 or 5,4,5 within
any one Fiscal Quarter of any 53-week Fiscal Year).
"Fiscal Quarter" means each of the four consecutive periods of
13 weeks (or 14 weeks in any one Fiscal Quarter of any 53-week Fiscal Year),
beginning on the first day of the Fiscal Year.
"Fiscal Year" means the period of 52 or 53 consecutive weeks
beginning on the Sunday after the Saturday nearest December 31 in one calendar
year and ending on the Saturday nearest December 31 of the following calendar
year (or, in the case of any period of 53 consecutive weeks, of the second
calendar year ending thereafter) and when followed or preceded by the
designation of a calendar year, means such period ending on the Saturday nearest
December 31 of such designated calendar year.
"Fixed Charge Coverage Ratio" means, for any specified period,
the ratio of (i) EBITDA of American Tire and its Consolidated Subsidiaries for
such period MINUS cash taxes paid and Capital Expenditures (other than Financed
Capex) made by American Tire and its Consolidated Subsidiaries determined on a
consolidated basis during such period, PLUS, to the extent deducted in the
computation of Net Income of American Tire and its Consolidated Subsidiaries for
such period, the amount of any non-cash charges taken by American Tire and its
Consolidated Subsidiaries during such period relating solely to unamortized
financing costs incurred by them in connection with the Existing Loan Agreement
to (ii) the sum of interest expense (excluding any adjustment to interest
expense related to a change in fair value of any interest rate swap or similar
derivative instrument), PLUS scheduled and (without duplication) actual
principal payments on Debt (other than the Loans), PLUS (without duplication)
Restricted Payments of the type described in CLAUSE (A), (B) or (C) of the
definition of such term, PLUS (without duplication) Restricted Distributions of
the type described in CLAUSE (A) or (B) of such term, in each case of American
Tire and its Consolidated Subsidiaries determined on a consolidated basis for
the same period.
"Fixtures" has the meaning ascribed to such term in the UCC.
"Foreign Lender" means any Lender organized under the laws of
a jurisdiction outside of the United States.
"GAAP" means United States generally accepted accounting
principles consistently applied and maintained throughout the period indicated
and, when used with reference to a Borrower or any Subsidiary, consistent with
the prior financial practice of American Tire, as reflected on the financial
statements referred to in SECTION 6.1(N); PROVIDED, HOWEVER, that, in the event
that changes shall be mandated by the Financial Accounting Standards Board or
any similar accounting authority of comparable standing, or shall be recommended
by American Tire's independent public accountants, such changes shall be
included in GAAP as applicable to American Tire and its Consolidated
Subsidiaries only from and after such date as the Borrowers, the Required
Lenders and the Administrative Agent shall have amended this Agreement to the
extent necessary to reflect any such changes in the financial covenants set
forth in ARTICLE 11.
"General Intangible" has the meaning ascribed to such term in
the UCC.
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"Goodyear Transaction Documents" means, collectively, the Note
Issuance and Security Agreement dated as of February 11, 2002, between Goodyear
Tire & Rubber Company and American Tire, the Note, Intercreditor Agreement, and
Warrant referred to therein, and any certificates, instruments, opinions and
other documents delivered in connection with the consummation of the
transactions contemplated by said Note Issuance and Security Agreement, in each
case as amended, supplemented or modified in accordance with SECTION 11.10 of
this Agreement.
"Government Acts" has the meaning set forth in SECTION
3.8(A)(II).
"Governmental Approvals" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with, and
reports to, all governmental bodies, whether federal, state, local or foreign
national or provincial and all agencies thereof.
"Guaranty", "Guaranteed" or to "Guarantee" as applied to any
obligation of another Person shall mean and include
(a) guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), directly or
indirectly, in any manner, of any part or all of such obligation of such other
Person, and
(b) an agreement, direct or indirect, contingent or
otherwise, and whether or not constituting a guaranty, the practical effect of
which is to assure the payment or performance (or payment of damages in the
event of nonperformance) of any part or all of such obligation of such other
Person whether by
(i) the purchase of securities or obligations,
(ii) the purchase, sale or lease (as lessee or
lessor) of property or the purchase or sale of services
primarily for the purpose of enabling the obligor with respect
to such obligation to make any payment or performance (or
payment of damages in the event of nonperformance) of or on
account of any part or all of such obligation, or to assure
the owner of such obligation against loss,
(iii) the supplying of funds to or in any other
manner investing in the obligor with respect to such
obligation,
(iv) repayment of amounts drawn down by
beneficiaries of letters of credit, or
(v) the supplying of funds to or investing in a
Person on account of all or any part of such Person's
obligation under a Guaranty of any obligation or indemnifying
or holding harmless, in any way, such Person against any part
or all of such obligation.
"Xxxx Holding" has the meaning specified in the introductory
paragraph of this Agreement.
"Xxxx Holding Pledge Agreement" means the Stock Pledge
Agreement dated on or about the Effective Date between Xxxx Holding and the
Administrative Agent, pursuant to which Xxxx Holding pledges to the
Administrative Agent all of the issued and outstanding capital stock of Xxxx
Tire as security for its obligations under this Agreement and the other Loan
Documents.
"Xxxx Tire" has the meaning specified in the introductory
paragraph of this Agreement.
-16-
"Hedging Agreement" means any Interest Rate Protection
Agreement, Currency Agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, all
Liabilities of such Person, and to the extent not otherwise included in
Liabilities, the following:
(a) all obligations for money borrowed or for the
deferred purchase price of property or services or in respect of drafts accepted
or similar instruments or reimbursement obligations under letters of credit,
(b) all obligations (including during the noncancellable
term of any lease in the nature of a title retention agreement, all future
payment obligations under such lease discounted to their present value in
accordance with GAAP) secured by any Lien to which any property or asset owned
or held by such Person is subject, whether or not the obligation secured thereby
shall have been assumed by such Person,
(c) all obligations of other Persons which such Person
has Guaranteed, including all obligations of such Person consisting of recourse
liability with respect to accounts receivable sold or otherwise disposed of by
such Person,
(d) all obligations of such Person in respect of Hedging
Agreements, and
(e) in the case of the Borrowers (without duplication)
all obligations under the Loans and the Reimbursement Obligations.
"Initial Closing Date" means March 6, 2000.
"Initial Notice of Borrowing" means the Notice of Borrowing
given by the Borrowers with respect to the Loans to be made on the Effective
Date which shall also specify the method of disbursement.
"Instrument" has the meaning ascribed to such term in the UCC.
"Intellectual Property" means, as to any Borrower, all
intellectual and similar property of every kind and nature now owned or
hereafter acquired by such Borrower, including patents, copyrights, trademarks,
trade names and all related documentation and registrations and all additions,
improvements or accessions to any of the foregoing (but specifically excluding
the service marks known as "AUTOEDGE," "HEAFNET," and XPRESS PERFORMANCE and the
trademark known as "WHEEL WIZARD").
"Interbank Offered Rate" for an Interest Period means the rate
per annum (rounded upwards, if necessary to the nearest 1/100 of 1%) appearing
on Telerate Page 3750 (or any successor page) as the London interbank offered
rate for deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Interbank Offered Rate" shall mean, for any Eurodollar Rate
Loan for any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on the Reuters Screen LIBO Page
as the London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; PROVIDED,
-17-
HOWEVER, that if more than one rate is specified on the Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates.
"Interest Payment Date" means the first day of each calendar
month commencing the first day of the first calendar month following the
Agreement Date.
"Interest Period" means with respect to each Eurodollar Rate
Loan, the period commencing on the date of the making or continuation of or
conversion to such Eurodollar Rate Loan and ending one, two, three, six or, if
available in the Administrative Agent's reasonable judgment to all Lenders,
twelve months thereafter, as the Borrowers may elect in the applicable Notice of
Borrowing or Notice of Conversion or Continuation; PROVIDED, that:
(i) any Interest Period that would otherwise end
on a day that is not a Business Day shall, subject to the
provisions of CLAUSE (III) below, be extended to the next
succeeding Business Day unless such Business Day falls in the
next calendar month, in which case such Interest Period shall
end on the immediately preceding Business Day;
(ii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to CLAUSE
(III) below, end on the last Business Day of a calendar month;
(iii) any Interest Period that would otherwise end
after the Termination Date shall end on the Termination Date;
and
(iv) notwithstanding CLAUSE (III) above, no
Interest Period shall have a duration of less than one month
and if any applicable Interest Period would be for a shorter
period, such Interest Period shall not be available hereunder.
"Interest Rate Protection Agreement" means any interest rate
swap, cap or collar agreement or similar arrangement between any Person and a
financial institution providing for the transfer or mitigation of interest rate
risks either generally or under specific contingencies.
"Inventory" has the meaning ascribed to such term in the UCC.
"Investment" means, with respect to any Person:
(a) the acquisition or ownership by such Person of any
share of capital stock, evidence of Indebtedness or other security issued by any
other Person,
(b) any loan, advance or extension of credit to, or
contribution to the capital of, any other Person, excluding advances to
employees in the ordinary course of business for business expenses,
(c) any Guaranty of the obligations of any other Person,
(d) any other investment (other than the Acquisition of a
Business Unit) in any other Person, and
(e) any commitment or option to make any of the
investments listed in CLAUSES (A) through (D) above if, in the case of an
option, the consideration therefor exceeds $100.
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"Investment Account" means any investment account maintained
by or on behalf of a Borrower with the Administrative Agent or any Lender or any
Affiliate of the Administrative Agent or any Lender.
"Investment Property" has the meaning ascribed to such term in
the UCC.
"IRS" means the Internal Revenue Service.
"Joinder Agreement" means an agreement in the form attached
hereto as EXHIBIT E executed after the Effective Date whereby a Wholly Owned
Subsidiary of American Tire becomes a party to this Agreement as a "Borrower."
"KS Preferred" means up to 7,000 shares of Series A Cumulative
Redeemable Preferred Stock and up to 4,500 shares of Series B Cumulative
Redeemable Preferred Stock of American Tire issued by American Tire and sold to
The Kelly-Springfield Tire Company, a division of The Goodyear Tire and Rubber
Company, pursuant to the KS Preferred Stock Purchase Agreement.
"KS Preferred Stock Purchase Agreement" means the Securities
Purchase Agreement dated May 7, 1997, between American Tire and The
Kelly-Springfield Tire Company, a division of The Goodyear Tire and Rubber
Company, as amended and in effect on the Effective Date and modified after the
Effective Date in accordance with the terms of this Agreement.
"Lender" means at any time any financial institution party to
this Agreement as a "Lender" at such time, including any such Person becoming a
party hereto pursuant to the provisions of ARTICLE 13.
"Letter of Credit" means each documentary or standby letter of
credit (i) issued by the Bank for the account of a Borrower or any Subsidiary
under the Existing Loan Agreement and outstanding on the Effective Date or (ii)
issued by the Bank for the account of a Borrower and Guaranteed by FCC pursuant
to ARTICLE 3.
"Letter of Credit Amount" means, at any time with respect to
any Letter of Credit Guarantee, the aggregate maximum amount at any time
available for drawing under the Guaranteed Letter of Credit at such time
(assuming all conditions to drawing are satisfied).
"Letter of Credit Availability" means, as of the date of
determination, the aggregate face amount of Letter of Credit Obligations
available to be incurred hereunder at the time of determination in accordance
with SECTION 3.2, which shall be an amount equal to the lesser of (i) the Letter
of Credit Guarantee Facility MINUS the Letter of Credit Obligations and (ii) the
Loan Availability, on such date.
"Letter of Credit Guarantee" means any Guarantee pursuant to
which FCC or any of its Affiliates Guarantees to the Bank, the payment or
performance by a Borrower of its Reimbursement Obligations under any Letter of
Credit, including by FCC's (or such Affiliate's) joining in the Reimbursement
Agreement for such Letter of Credit as a co-applicant or otherwise as acceptable
to the Bank.
"Letter of Credit Guarantee Facility" means a subfacility of
the Revolving Credit Facility providing for the issuance of Letters of Credit
and Letter of Credit Guarantees as described in ARTICLE 3 in an aggregate amount
of Letter of Credit Obligations at any one time outstanding not to exceed
$20,000,000.
-19-
"Letter of Credit Obligations" means, at any time, the sum of
(a) the Reimbursement Obligations at such time, PLUS (b) the aggregate Letter of
Credit Amount of Letter of Credit Guarantees outstanding at such time, PLUS (c)
the aggregate Letter of Credit Amount of Letter of Credit Guarantees the
issuance of which has at such time been authorized by the Administrative Agent
and FCC pursuant to SECTION 3.4(B) but that have not yet been issued, in each
case as determined by the Administrative Agent.
"Letter of Credit Reserve" means, at any time, the aggregate
Letter of Credit Obligations at such time, other than Letter of Credit
Obligations that are fully secured by Cash Collateral.
"Letter of Credit Right" has the meaning ascribed to such term
in the UCC.
"Leverage Ratio" means as of any specified date, the ratio of
(a) the sum of (i) total Debt of American Tire and its Consolidated Subsidiaries
on a consolidated basis as of such date, including, without duplication, the
aggregate outstanding principal amount of the Vendor Notes, PLUS (ii) without
duplication, any liability under Interest Rate Protection Agreements which in
accordance with GAAP would be recorded on the balance sheet of American Tire and
its Consolidated Subsidiaries on a consolidated basis, PLUS (iii) without
duplication, the Letter of Credit Obligations, to (b) EBITDA of American Tire
and its Consolidated Subsidiaries on a consolidated basis for the period of four
consecutive Fiscal Quarters ended on or most recently before such date.
"Liabilities" of any Person means all items (except for items
of capital stock, including specifically as to American Tire the KS Preferred,
additional paid-in capital or retained earnings, or of general contingency or
deferred tax reserves) which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of such Person as at the date as of which Liabilities are to be determined.
"Lien" as applied to the property of any Person means:
(a) any mortgage, deed to secure debt, deed of trust,
lien, pledge, charge, lease constituting a Capitalized Lease Obligation,
conditional sale or other title retention agreement, or other security interest,
security title or encumbrance of any kind in respect of any property of such
Person, or upon the income or profits therefrom,
(b) any arrangement, express or implied, under which any
property of such Person is transferred, sequestered or otherwise identified for
the purpose of subjecting the same to the payment of Indebtedness or performance
of any other obligation in priority to the payment of the general, unsecured
creditors of such Person,
(c) any Indebtedness which is unpaid more than 30 days
after the same shall have become due and payable and which if unpaid might by
law (including bankruptcy and insolvency laws), or otherwise, be given any
priority whatsoever over the claims of general unsecured creditors of such
Person, except to the extent being disputed or contested by such Person by
appropriate proceedings and in respect of which any reserve required by GAAP has
been appropriately established and maintained,
(d) the filing of, or any agreement to give, any
financing statement under the UCC or its equivalent in any jurisdiction
(excluding informational financing statements relating to property leased by a
Borrower or any Subsidiary), and
(e) in the case of Real Estate, reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances.
-20-
"Loan" means any Revolving Credit Loan or Swingline Loan, as
well as all such loans collectively, as the context requires.
"Loan Account" and "Loan Accounts" have the meanings specified
in SECTION 4.5.
"Loan Availability" means, as of the date of determination,
the aggregate principal amount of Revolving Credit Loans available to be
borrowed by the Borrowers hereunder at the time in accordance with SECTION 2.1,
which shall be an amount equal to the remainder derived by subtracting the
aggregate principal amount of Revolving Credit Loans and Swingline Loans
outstanding on such date from the Borrowing Base on such date; PROVIDED,
HOWEVER, that (a) to the extent it shall be necessary for purposes of SECTION
11.4 or SECTION 11.6 to compute Loan Availability for any Business Day during
any ninety (90) day period, for purposes of determining Loan Availability,
Borrowers may omit from such computation the two (2) Business Days with the
lowest Loan Availability during such period and (b) to the extent it shall be
deemed necessary for purposes of SECTION 11.4 and SECTION 11.6 to compute Loan
Availability for any Business Day prior to the Effective Date, then for the sole
purpose of computing Loan Availability for such Business Day, Loan Availability
shall have the meaning specified in the Existing Loan Agreement as in effect
immediately prior to the Effective Date, EXCEPT that (i) the Minimum
Availability Reserve and the Eligible B/F Inventory sublimit included in the
Borrowing Base (as such terms are defined in the Existing Loan Agreement as in
effect immediately prior to the Effective Date) shall be disregarded in the
computation of Loan Availability for such Business Day, (ii) the advance rates
applied to all Inventory deemed eligible for inclusion in the computation of
Loan Availability for such Business Day shall be the advance rates against such
Eligible Inventory in effect hereunder on the Effective Date, (iii) the
aggregate principal amount of the Revolver Commitments shall be deemed to be the
aggregate amount of Revolver Commitments on the Effective Date and (iv) for
purposes of determining Loan Availability, Borrowers may omit from such
computation Loan Availability for the period January 23, 2004 through and
including February 6, 2004.
"Loan Documents" means collectively this Agreement, the Notes,
the Security Documents, the Fee Letter and each other instrument, agreement or
document executed by a Borrower or any Affiliate or Subsidiary of a Borrower in
connection with this Agreement whether prior to, on or after the Effective Date
and each other instrument, agreement or document referred to herein or
contemplated hereby.
"Loan Year" means a period commencing each calendar year on
the same month and day as the Agreement Date and ending on the same month and
day in the immediately succeeding calendar year, with the first such period
(i.e., the first Loan Year) to commence on the Agreement Date.
"Lockbox" means each U. S. Post Office Box specified in a
Lockbox Agreement.
"Lockbox Agreement" means each agreement between a Borrower
and a Clearing Bank concerning the establishment of a Lockbox for the collection
of Receivables.
"Margin Adjustment Date" has the meaning specified in the
definition "Applicable Margin".
"Margin Stock" means margin stock as defined in Section
221.1(h) of Regulation U.
"Material Contract" means an agreement to which a Borrower is
a party (other than the Loan Documents) (i) which is deemed to be a material
contract as provided in Regulation S-K promulgated by the SEC under the
Securities Act of 1933 or (ii) for which breach, termination, cancellation,
nonperformance or failure to renew could reasonably be expected to have a
Materially Adverse Effect.
-21-
"Material Subsidiary" means, on any date of determination, any
Subsidiary whose assets constitute more than 5% of the total assets of American
Tire and its Consolidated Subsidiaries on such date, determined on a
consolidated basis.
"Materially Adverse Effect" means any act, omission,
situation, circumstance, event or undertaking which would, singly or in any
combination with one or more other acts, omissions, situations, circumstances,
events or undertakings, have, or would reasonably be expected to have, a
materially adverse effect upon (a) the business, assets, properties,
liabilities, condition (financial or otherwise), results of operations or
business prospects of American Tire and its Consolidated Subsidiaries taken as a
whole, (b) the value of the whole or any material part of the Collateral, (c)
the Security Interest or the priority of the Security Interest, (d) the ability
of American Tire and its Consolidated Subsidiaries taken as a whole to perform
any material obligation under this Agreement or any other Loan Document, or (e)
other than solely and directly by reason of any release given or other action
taken by the Administrative Agent or any Lender, the legality, validity, binding
effect, enforceability or admissibility into evidence of any Loan Document or
the ability of the Administrative Agent or the Lenders to enforce in any
material respect any rights or remedies under or in connection with any Loan
Document.
"Minimum Commitment" means $10,000,000.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which a Borrower or a Related Company is
required to contribute or has contributed within the immediately preceding six
years.
"Net Amount" means, with respect to any Investments made by
any Person, the gross amount of all such Investments MINUS the aggregate amount
of all cash received and the fair value, at the time of receipt by such Person,
of all property received as payments of principal or premiums, returns of
capital, liquidating dividends or distributions, proceeds of sale or other
dispositions with respect to such Investments.
"Net Income" or "Net Loss" means, as applied to any Person for
any accounting period, the net income or net loss, as the case may be, of such
Person for the period in question after giving effect to deduction of or
provision for all operating expenses, all taxes and reserves (including reserves
for deferred taxes) and all other proper deductions, all determined in
accordance with GAAP, PROVIDED that there shall be excluded:
(a) the net income or net loss of any Person accrued
prior to the date it becomes a Subsidiary of, or is merged into or consolidated
with, the Person whose Net Income is being determined or a Subsidiary of such
Person,
(b) the net income or net loss of any Person in which the
Person whose Net Income is being determined or any Subsidiary of such Person has
an ownership interest, except, in the case of net income, to the extent that any
such income has actually been received by such Person or such Subsidiary in the
form of cash dividends or similar distributions,
(c) any restoration of any contingency reserve, except to
the extent that provision for such reserve was made out of income during any
period,
-22-
(d) any net gains or losses on the sale or other
disposition, not in the ordinary course of business, of Investments, Business
Units and other capital assets, PROVIDED that there shall also be excluded any
related charges for taxes thereon,
(e) any net gain arising from the collection of the
proceeds of any insurance policy,
(f) any write-up of any asset, and
(g) any other extraordinary item.
"Net Outstandings" of any Lender means, at any time, the sum
of (a) all amounts paid by such Lender (other than pursuant to SECTION 14.7) to
the Administrative Agent in respect of Revolving Credit Loans made by such
Lender, MINUS (b) all amounts received by the Administrative Agent and paid by
the Administrative Agent to such Lender for application, pursuant to this
Agreement, to reduction of the outstanding principal balance of the outstanding
Revolving Credit Loans of such Lender.
"NOLV Percentage" means on any date, a fraction equal to the
product of (i) 85% times (ii) a fraction, the numerator of which is the orderly
liquidation value of Borrowers' Inventory, net of liquidation expenses, as most
recently determined and reported on by a qualified independent appraiser
selected by the Administrative Agent or, at the Administrative Agent's election,
by professional appraisers employed by the Administrative Agent, and the
denominator of which is the lesser of cost determined on a FIFO (or
first-in-first-out) accounting basis and fair market value of Borrowers'
Inventory, as of the date of the most recent appraisal.
"Non-Consenting Lender" shall have the meaning ascribed to
such term in SECTION 15.9(E).
"Non-Ratable Loan" means a Base Rate Loan made by FCC in
accordance with the provisions of SECTION 4.8(B).
"Note" means any of the Revolving Credit Notes and the
Swingline Note and "Notes" means more than one such Note.
"Notice of Borrowing" means a written notice (including by
electronic mail), or telephonic notice followed by a confirming same-day written
notice, requesting a Borrowing of, respectively, (i) Base Rate Revolving Credit
Loans or Eurodollar Rate Revolving Credit Loans or (ii) a Swingline Loan which
is given by telex or facsimile transmission in accordance with the applicable
provisions of SECTION 2.2 or SECTION 2A.2, as the case may be, and which
specifies (i) the amount of the requested Borrowing, (ii) the date of the
requested Borrowing, and (iii) if the requested Borrowing is of Eurodollar Rate
Loans, the duration of the applicable Interest Period.
"Notice of Conversion or Continuation" has the meaning
specified in SECTION 4.11.
"Overadvance" means at any time the amount by which the
aggregate outstanding principal amount of Loans exceeds the Borrowing Base.
"Overadvance Condition" means and is deemed to exist any time
the aggregate outstanding principal amount of Loans exceeds the Borrowing Base.
"Overadvance Loan" means a Base Rate Loan made at a time an
Overadvance Condition exists or which results in an Overadvance Condition.
-23-
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor agency.
"Permitted Acquisition" means an Acquisition by American Tire
or another Borrower that is permitted under SECTION 11.4.
"Permitted Inventory Locations" means each location listed on
SCHEDULE 6.1(U) and from time to time each other location within the United
States which American Tire has notified the Administrative Agent is a location
at which Inventory of a Borrower is maintained.
"Permitted Investments" means Investments of American Tire and
its Consolidated Subsidiaries in:
(a) cash and Cash Equivalents in an aggregate
amount not greater than $7,500,000,
(b) sales of inventory on credit in the ordinary
course of business,
(c) shares of capital stock, evidence of Debt or
other security acquired in consideration for or as evidence of
past-due or restructured Receivables in an aggregate face
amount of such Receivables as to American Tire and its
Subsidiaries at any time not to exceed $2,500,000,
(d) any Borrower, and
(e) those items described on SCHEDULE 1.1A -
PERMITTED INVESTMENTS.
"Permitted Liens" means:
(a) Liens securing taxes, assessments and other
governmental charges or levies (excluding any Lien imposed pursuant to any of
the provisions of ERISA) or the claims of materialmen, mechanics, carriers,
warehousemen or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, but (i) in all cases only if payment shall not
at the time be required to be made in accordance with SECTION 9.6, and (ii) in
the case of warehousemen or landlords, only if such liens are junior to the
Security Interest in any of the Collateral or the relevant premises are
reflected in the Rent Reserve,
(b) Liens consisting of deposits or pledges made in the
ordinary course of business in connection with, or to secure payment of,
obligations under workers' compensation, unemployment insurance or similar
legislation or under payment or performance bonds,
(c) Liens constituting encumbrances in the nature of
zoning restrictions, easements, and rights or restrictions of record on the use
of real property, which do not materially detract from the value of such
property or impair the use thereof in the business of the applicable Borrower,
(d) Liens of the Administrative Agent, for the benefit of
the Secured Parties, arising under this Agreement and the other Loan Documents,
(e) Liens on Margin Stock,
-24-
(f) the Lien of Wachovia as Trustee under the Senior Note
Indenture pursuant to Section 7.07 thereof on certain property in its possession
as security for payment of fees and other amounts owing to it in its capacity as
such Trustee, and
(g) Subordinated Vendor Liens.
"Permitted Senior Notes Repurchase" shall have the meaning
ascribed to such term in SECTION 11.6.
"Permitted Vendor Notes Payment" shall have the meaning
ascribed to such term in SECTION 11.6.
"Person" means an individual, corporation, limited liability
company, partnership, association, trust or unincorporated organization, or a
government or any agency or political subdivision thereof.
"Pledge Agreements" means the American Tire Pledge Agreement
and the Xxxx Holding Pledge Agreement.
"Principal Shareholders" means (i) Charlesbank Equity Fund IV,
Limited Partnership and the investors in such fund, (ii) Charlesbank Equity Fund
IV G.P. Limited Partnership, (iii) Charlesbank Capital Partners, LLC (and any
other fund managed by Charlesbank Capital Partners, LLC), and (iv) any
corporation, partnership, limited liability company or other entity a majority
of the capital stock or other ownership interests of which are directly or
indirectly owned by any of the foregoing.
"Projections" means the forecasted (a) balance sheets, (b)
income statements, (c) cash flow statements, (d) Loan Availability and (e)
calculation of the financial covenant compliance of the Borrowers for each
Fiscal Year, prepared annually by the Borrowers on a consolidated monthly basis,
together with a statement of underlying assumptions, in each case in such format
and detail as the Administrative Agent may reasonably specify.
"Properly Contested" means, for purposes of SECTION
11.9(G)(A), that (i) the relevant judgment, writ, order or decree is being
properly contested in good faith by appropriate proceedings promptly instituted
and diligently conducted; (ii) such Borrower has established appropriate
reserves in respect thereof as shall be required in conformity with GAAP; (iii)
the failure to pay such judgment and discharge any related Lien will not have a
Materially Adverse Effect or result in a forfeiture of any Collateral; (iv) the
relevant Lien is at all times junior and subordinate in priority to the Liens in
favor of Administrative Agent (except only with respect to property taxes that
have priority as a matter of applicable state law) and enforcement of such Lien
is stayed during the period prior to the final resolution or disposition of such
dispute; (v) such judgment, writ, order or decree is stayed pending a timely
appeal or other judicial review; and (vi) if such contest is abandoned, settled
or determined adversely (in whole or in part) to such Borrower, such Borrower
forthwith pays or discharges in full such judgment, writ, order or decree and
all penalties, interest and other amounts due in connection therewith.
"Proportionate Share" or "Ratable Share" or "Ratable" (and
with corollary meaning, "Ratably") means, as to a Lender, such Lender's share of
an amount in Dollars or of other property at the time of determination equal to
(i) the Commitment Percentage of such Lender, or (ii) if the Commitments are
terminated, the percentage obtained by dividing the principal amount of the
Loans then owing to such Lender by the total principal amount of all Loans then
owing to all Lenders, or (iii) if no Loans are outstanding, the percentage
obtained by dividing such Lender's participation in the total Letter of Credit
Obligations then outstanding by the total Letter of Credit Obligations then
outstanding.
-25-
"Proprietary Rights" means as to any Person, such Person's
rights, title and interest in and to intellectual property and all other rights
(including rights as a licensee thereof) under any patents, trademarks, trade
names, tradestyles, copyrights and all extensions, renewals, reissues,
divisions, continuations, and continuations-in-part of any of the foregoing, and
all rights to xxx for past, present and future infringement of any of the
foregoing.
"Purchase Money Lien" means any Lien securing Debt created to
finance the payment of all or any part of the purchase price (not in excess of
the fair market value thereof) of any tangible personal property (other than
Inventory) and incurred at the time of or within 10 days prior to or after the
acquisition of such tangible asset, but only if such Lien shall at all times be
confined solely to the property (other than Inventory) the purchase price of
which was financed through the incurrence of such Debt.
"Purchase Price" means, with respect to any Acquisition, an
amount equal to the total consideration paid for such Acquisition, including all
cash payments (whether classified as purchase price, noncompete payments,
consulting payments, "earn out" or otherwise and without regard to whether such
amount is paid in whole or in part at the closing of such Acquisition or over
time thereafter, but excluding any finance charges attributable to deferred
payments and excluding any salary or other employment compensation paid to a
seller for the purpose of retaining such seller's services as an active employee
of a Borrower or a Subsidiary), the principal amount of all Acquired Debt and of
any Subordinated Debt owing to the seller, and the value (as determined by the
board of directors of American Tire, including pursuant to the applicable
purchase agreement between the relevant Borrower and the seller, in the case of
any property, the fair value of which is not readily ascertainable) of all other
property, other than capital stock of American Tire, transferred by American
Tire to the seller.
"Real Estate" means all real property now or hereafter owned
or leased by American Tire, or any Subsidiary, including all fees, leaseholds
and future interests.
"Receivables" means "Accounts" as defined in the UCC.
"Register" has the meaning specified in SECTION 13.1(D).
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System (or any successor).
"Reimbursement Agreement" means, with respect to a Letter of
Credit, such form of application therefor and form of reimbursement agreement
therefor (whether in a single document or several documents) as the Bank may
employ in the ordinary course of business for its own account, in such form as
may be acceptable to FCC in its reasonable judgment and with such modifications
thereto as may be agreed upon by the Bank, FCC and the Borrowers, PROVIDED that
such application and agreement and any modifications thereto are not
inconsistent with the terms of this Agreement.
"Reimbursement Obligations" means the unsatisfied
reimbursement or repayment obligations of the Borrowers to FCC pursuant to
SECTION 3.6 or (but without duplication) to the Bank pursuant to a Reimbursement
Agreement with respect to amounts that have been drawn under Letters of Credit
Guaranteed by FCC.
"Related Company" means any (i) corporation which is a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the Code) as American Tire; (ii) partnership or other trade or
business (whether or not incorporated) under common control (within the meaning
of Section 414(c) of the Code) with American Tire; or (iii) member of the same
affiliated service
-26-
group (within the meaning of Section 414(m) of the Code) as American Tire, any
corporation described in CLAUSE (I) above or any partnership, trade or business
described in CLAUSE (II) above.
"Release" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any property, including the
movement of Contaminants through or in the air, soil, surface water or
groundwater.
"Remediable Defect" means an operational defect or violation
that could disqualify a Benefit Plan intended to qualify under Section 401(a)
(and, if applicable, Section 401(k)) of the Code) and that can be remedied under
the IRS's Audit CAP, Voluntary Correction Program, or the Self-Correction
Program, without in any case a payment to any governmental authority with
respect to such Benefit Plan and any other Benefit Plan of more than $250,000 in
any calendar year.
"Rent Reserve" means an amount approximately equal to the
aggregate monthly rental payable by the Borrowers on all leased Real Estate in
respect of which landlord's or warehouseman's waivers, in form and substance
acceptable to the Administrative Agent, are not in effect or such greater amount
as the Administrative Agent may, in its reasonable credit judgment, determine to
be appropriate after notice to the Borrowers.
"Required Lenders" means, at any time, any combination of
three or more Lenders whose Commitment Percentages at such time aggregate in
excess of 50%.
"Restricted Distribution" by any Person means (a) its
retirement, redemption, purchase, or other acquisition or retirement for value
of any capital stock or other equity securities (except equity securities
acquired on the conversion or exercise thereof into other equity securities of
such Person) or partnership interests issued by such Person, (b) the declaration
or payment of any dividend or distribution in cash or property on or with
respect to any such securities (other than dividends payable solely in shares of
its capital stock) or partnership interests, EXCLUDING, HOWEVER, any such
dividend, distribution or payment to a Borrower by any of its Subsidiaries, (c)
any Investment (other than a Permitted Investment) by such Person in the holder
of any of such securities or partnership interests, and (d) any other payment by
such Person in respect of such securities or partnership interests.
"Restricted Payment" means (a) any redemption or prepayment or
other retirement, prior to the stated maturity thereof or prior to the due date
of any regularly scheduled installment or amortization payment with respect
thereto, of any Debt (other than the Loans) or of any Indebtedness that is
junior and subordinate to the Secured Obligations, (b) any payment on or with
respect to any Subordinated Debt other than in accordance with the subordination
provisions thereof, (c) the payment by any Person of the principal amount of or
interest on any Indebtedness (other than trade accounts payable and employee
compensation in the ordinary course of business, consistent with past practices)
owing to an Affiliate of such Person or to any Affiliate of any such Affiliate
and (d) the payment of any management, consulting or similar fee by any Person
to any Affiliate of such Person.
"Revolving Credit Facility" means the credit facility
providing for Revolving Credit Loans based upon the Borrowing Base and described
in SECTION 2.1 up to an aggregate principal amount at any one time outstanding
not to exceed $245,000,000.
"Revolving Credit Loans" means (i) the Loans under and as
defined in the Existing Loan Agreement outstanding on the Effective Date and
(ii) the Loans made to the Borrowers pursuant to SECTION 2.1., including any
Non-Ratable Loan.
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"Revolving Credit Note" means each Third Amended and Restated
Promissory Note made by the Borrowers payable to the order of a Lender
evidencing the joint and several obligation of the Borrowers to pay the
aggregate unpaid principal amount of the Loans made to them by such Lender under
the Revolving Credit Facility (and any promissory note or notes that may be
issued from time to time in substitution, renewal, extension, replacement or
exchange therefor whether payable to such Lender or to a different Lender in
connection with a Person becoming a Lender after the Effective Date or
otherwise) substantially in the form of EXHIBIT A-1 hereto, with all blanks
properly completed, either as originally executed or as the same may from time
to time be supplemented, modified, amended, renewed, extended or refinanced.
"S&P" means Standard & Poor's Ratings Service, a division of
The XxXxxx-Xxxx Companies.
"Schedule of Inventory" means a schedule delivered by the
Borrowers to the Administrative Agent pursuant to the provisions of SECTION
8.12(B).
"Schedule of Receivables" means a schedule delivered by the
Borrowers to the Administrative Agent pursuant to the provisions of SECTION
8.12(A).
"SEC" means the Securities and Exchange Commission or any
successor commission.
"Secured Obligations" means, in each case whether now in
existence or hereafter arising,
(a) the principal of and interest on the Loans,
(b) the Reimbursement Obligations and all other
obligations of the Borrowers to FCC, any Lender or any Affiliate of a Lender
arising in connection with the issuance of Letter of Credit Guarantees,
(c) all Banking Relationship Debt, and
(d) all indebtedness, liabilities, obligations, covenants
and duties of the Borrowers or any Subsidiary to the Administrative Agent, the
Bank or to the Lenders or to any Affiliate of the Administrative Agent, the Bank
or any Lender of every kind, nature and description arising under or in respect
of this Agreement, the Notes or any of the other Loan Documents, whether direct
or indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note, and
whether or not for the payment of money, including without limitation, fees
required to be paid pursuant to ARTICLE 4 and expenses required to be paid or
reimbursed pursuant to SECTION 15.2.
"Secured Parties" means each Agent, each Lender, the Bank and
any Affiliate of the Bank or a Lender that is the obligee under any Banking
Relationship Debt.
"Security Documents" means the Financing Statements, the
Pledge Agreements and each other writing executed and delivered by a Borrower or
any other Person securing the Secured Obligations or assuring rights of the
Administrative Agent or the other Secured Parties in respect of the Collateral.
"Security Interest" means the Liens of the Administrative
Agent, for the benefit of itself as the Administrative Agent and the other
Secured Parties, on and in the Collateral effected hereby or by any of the
Security Documents or pursuant to the terms hereof or thereof.
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"Senior Note Indenture" means collectively (i) the Indenture
dated as of May 15, 1998, as amended and supplemented by the Supplemental
Indenture, dated as of February 22, 1999, the Second Supplemental Indenture,
dated as of May 14, 1999, the Third Supplemental Indenture, dated as of May 25,
2000, and the Fourth Supplemental Indenture, dated as of March 27, 2002, each
between American Tire and First Union National Bank (now known as Wachovia Bank,
National Association), Trustee, and (ii) the Indenture, dated as of December 1,
1998, as amended and supplemented by the Supplemental Indenture, dated as of
February 22, 1999, the Second Supplemental Indenture, dated as of May 14, 1999,
the Third Supplemental Indenture, dated as of May 25, 2000, and the Fourth
Supplemental Indenture, dated as of March 27, 2002, each between American Tire
and First Union National Bank (now known as Wachovia Bank, National
Association), Trustee.
"Senior Notes" means American Tire's 10% Senior Notes due 2008
in the original principal amount of $150,000,000, issued pursuant to the Senior
Note Indenture, including any "Exchange Securities" and "Private Exchange
Securities" issued (and as defined) thereunder, of which $28,600,000 in
aggregate principal amount is outstanding on the Agreement Date.
"Series C Preferred Stock Purchase Agreement" means the Share
Purchase Agreement dated as of March 30, 2001, among American Tire, Charlesbank
Equity Fund IV, Limited Partnership, and The 1818 Mezzanine Fund, L.P., as in
effect on such date and as amended thereafter in accordance with the terms of
this Agreement.
"Series D Preferred Stock Purchase Agreement" means the Share
Purchase Agreement dated as of March 27, 2002, among American Tire, Charlesbank
Equity Fund IV, Limited Partnership, and The 1818 Mezzanine Fund, L.P., as in
effect on such date and as amended thereafter in accordance with the terms of
this Agreement.
"Settlement Date" means each Business Day after the Effective
Date selected by the Administrative Agent in its sole discretion subject to and
in accordance with the provisions of SECTION 4.8(B)(I) as of which a Settlement
Report is delivered by the Administrative Agent and on which settlement is to be
made among the Lenders in accordance with the provisions of SECTION 4.8.
"Settlement Report" means each report substantially in the
form employed by the Administrative Agent from time to time or as the
Administrative Agent and the Lenders may otherwise agree, prepared by the
Administrative Agent and delivered to each Lender and setting forth, among other
things, as of the Settlement Date indicated thereon and as of the next preceding
Settlement Date, the aggregate principal balance of all Revolving Credit Loans
outstanding, each Lender's Proportionate Share thereof, each Lender's Net
Outstandings and all payments of principal and interest in respect of Revolving
Credit Loans and of fees received by the Administrative Agent from the Borrowers
during the period beginning on such next preceding Settlement Date and ending on
such Settlement Date.
"Speed Merchant" has the meaning specified in the introductory
paragraph of this Agreement.
"Subordinated Debt" means the Vendor Notes and any other Debt
of American Tire or any Subsidiary that is subordinated to the Secured
Obligations on terms and conditions acceptable to the Administrative Agent and
the Required Lenders in their sole discretion.
"Subordinated Vendor Inventory Eligibility Conditions" shall
mean each of the following conditions precedent, the satisfaction of each of
which, as determined by the Administrative Agent in its sole discretion, shall
be a condition to the inclusion in the Borrowing Base of any Eligible
Subordinated Vendor Inventory:
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(i) the Borrowers shall have given the
Administrative Agent at least ten (10) Business Days prior
written notice of their intent to include Inventory subject to
a Vendor Lien in the Borrowing Base;
(ii) the Borrowers shall have given the
Administrative Agent copies of the security agreement and all
related documentation delivered by or on behalf of the
applicable vendor and the Borrowers at least ten (10) Business
Days prior to the proposed date of inclusion of such Inventory
in the Borrowing Base;
(iii) the Borrowers and the applicable vendor
shall have executed and delivered to the Administrative Agent
a duly executed and completed Vendor Lien Subordination
Agreement at least ten (10) Business Days prior to the
proposed date of inclusion of such Inventory in the Borrowing
Base;
(iv) the Administrative Agent shall have reviewed
and found acceptable in all respects the documentation
delivered under CLAUSES (II) and (III) above between the
vendor and the Borrowers and shall have confirmed that the
Lien of such vendor is a Subordinated Vendor Lien; and
(v) no Default or Event of Default shall exist.
Notwithstanding the terms contained in SECTION 15.9 hereof, if the
Vendor Lien Subordination Agreement that is delivered pursuant to CLAUSE (III)
above is not in identical form to that attached as EXHIBIT F hereto, then the
consent of Administrative Agent and Required Lenders shall be required for any
modifications. Eligible Subordinated Vendor Inventory shall be included in the
Borrowing Base on the 5th Business Day after the Administrative Agent's
determination that each of the foregoing conditions have been satisfied. If at
any time any of the foregoing conditions ceases to be satisfied, the Eligible
Subordinated Vendor Inventory shall be deemed ineligible and excluded from the
Borrowing Base.
"Subordinated Vendor Lien" means a Vendor Lien which has been
subordinated to the Security Interest (i) in the case of Bridgestone/Firestone,
to the extent and in the manner provided in the B/F Subordination Agreement,
(ii) in the case of Goodyear Tire & Rubber Company, to the extent and in the
manner provided in the Goodyear Transaction Documents, and (iii) in the case of
each other vendor, to the extent and in the manner provided in the Vendor Lien
Subordination Agreement executed by such vendor and with respect to this CLAUSE
(III), subject to the satisfaction of each of the Subordinated Vendor Inventory
Eligibility Conditions, as determined by the Administrative Agent in its sole
discretion.
"Subsidiary" (a) when used to determine the relationship of a
Person to another Person, means a Person of which an aggregate of 50% or more of
the stock of any class or classes or 50% or more of other ownership interests is
owned of record or beneficially by such other Person, or by one or more
Subsidiaries of such other Person, or by such other Person and one or more
Subsidiaries of such Person,
(i) if the holders of such stock, or other
ownership interests, (A) are ordinarily, in the absence of
contingencies, entitled to vote for the election of a majority
of the directors (or other individuals performing similar
functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency, or
(B) are entitled, as such holders, to vote for the election of
a majority of the directors (or individuals performing similar
functions) of such Person, whether or not the right so to vote
exists by reason of the happening of a contingency, or
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(ii) in the case of such other ownership
interests, if such ownership interests constitute a majority
voting interest and
(b) when used without other designation of ownership,
means a Subsidiary of American Tire.
"Supporting Letter of Credit" has the meaning set forth in
SECTION 3.9.
"Supporting Obligation" has the meaning ascribed to such term
in the UCC.
"Swingline Facility" means an amount equal to $7,500,000.
"Swingline Lender" means FCC.
"Swingline Loan" means each advance by the Swingline Lender to
the Borrowers pursuant to SECTION 2A.1.
"Swingline Loan Request" has the meaning set forth in SECTION
2A.2.
"Swingline Note" means the Swingline Note made by the
Borrowers payable to the order of the Swingline Lender evidencing the joint and
several obligation of the Borrowers to pay the aggregate unpaid principal amount
of the Swingline Loans made to them by the Swingline Lender under the Swingline
Facility (and any promissory note that may be issued from time to time in
substitution, renewal, extension, replacement or exchange therefor)
substantially in the form of EXHIBIT A-2 hereto, with all blanks properly
completed, either as originally executed or as the same may from time to time be
supplemented, modified, amended, renewed, extended or refinanced.
"Syndication Agent" has the meaning specified in the
introductory paragraph of this Agreement.
"Tangible Chattel Paper" has the meaning ascribed to such term
in the UCC.
"Termination Date" means February 15, 2008, such earlier date
as all Secured Obligations shall have been irrevocably paid in full and the
Commitments shall have been terminated.
"Type" when used in respect of any Loan or Borrowing, shall
refer to the rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined.
"UCC" means the Uniform Commercial Code (or any successor
statute) as adopted and in force in the State of New York or, when the laws of
any other state govern the method or manner of the perfection or enforcement of
any security interest in any of the Collateral, the Uniform Commercial Code (or
any successor statute) of such state.
"Unfunded Vested Accrued Benefits" means at any time, with
respect to any Benefit Plan that is a pension plan within the meaning of Section
3(2) of ERISA that is subject to Title IV of ERISA, the amount (if any) by which
(a) the present value of all vested nonforfeitable benefits under such Benefit
Plan exceeds (b) the fair market value of all such Benefit Plan assets allocable
to such benefits, as determined using the valuation date and such reasonable
actuarial assumptions and methods as are specified in the Schedule B (Actuarial
Information) to the most recent Annual Report (Form 5500) filed with respect to
such Benefit Plan.
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"Unsubordinated Vendor Lien" means a Vendor Lien which is not
a Subordinated Vendor Lien and which secures only open account or trade accounts
payable obligations of a Borrower to the vendor in whose favor such Lien is
created.
"Unused Commitments" has the meaning specified in SECTION
4.2(B).
"USA Patriot Act" means the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).
"Value" with reference to the value of Eligible Inventory,
means value determined on the basis of the lower of cost or market of such
Eligible Inventory, with the cost thereof calculated on a first-in, first-out
basis as determined in accordance with GAAP.
"Vendor Lien" means a Lien created in favor of a vendor of
tires to a Borrower, that encumbers exclusively all or any of such vendor's
branded tire inventory and does not encumber any proceeds thereof or any other
Collateral.
"Vendor Lien Subordination Agreement" means an agreement in
the form attached hereto as EXHIBIT F whereby, among other things, a vendor of
tires subordinates its Lien in the branded inventory sold by such vendor to a
Borrower to the Security Interest.
"Vendor Notes" means, collectively, the "Notes" as defined and
included in the B/F Transaction Documents and the Goodyear Transaction
Documents.
"Vendor Transaction Documents" means, collectively, the B/F
Transaction Documents, the Goodyear Transaction Documents and all certificates,
instruments, loan agreements, security agreements, financing statements,
opinions and other documents delivered in connection with the consummation of
any financing transaction between any Borrower and a vendor thereto.
"Wachovia" means Wachovia Bank, National Association, a
national banking association, and its successors and assigns.
"Warrant" means the Amended and Restated Warrant No. 2 to
purchase common stock of American Tire issued to The 1818 Mezzanine Fund II,
L.P., as amended and in effect on the Effective Date and as thereafter amended
in accordance with the provisions of this Agreement.
"Wholly Owned Subsidiary" when used to determine the
relationship of a Subsidiary to a Person means a Subsidiary all of the issued
and outstanding shares (other than directors' qualifying shares) of the capital
stock of which shall at the time be owned by such Person or one or more of such
Person's Wholly Owned Subsidiaries or by such Person and one or more of such
Person's Wholly Owned Subsidiaries.
SECTION 1.2 General Interpretive Rules.
(a) All terms of an accounting nature not specifically
defined herein shall have the meanings ascribed thereto by GAAP.
(b) The terms accounts, chattel paper, contract rights,
documents, equipment, instruments, general intangibles, inventory and proceeds,
as and when used in this Agreement or the Security Documents (without being
capitalized), shall have the meanings given those terms in the UCC.
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(c) Unless otherwise specified, the words "hereof,"
"herein," "hereunder" and words of similar import, when used in this Agreement,
refer to this Agreement as a whole and not to any particular provision, section
or subsection of this Agreement.
(d) Wherever from the context it appears appropriate,
each term stated in either the singular or plural shall include the singular and
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, the feminine and the neuter. Words denoting individuals
include corporations and vice versa.
(e) References to any legislation or statute or code, or
to any provisions of any legislation or statute or code, shall include any
modification or reenactment of, or any legislative, statutory or code provision
substituted for, such legislation, statute or code or provision thereof.
(f) References to any document or agreement (including
this Agreement) shall include references to such document or agreement as
amended, novated, supplemented, modified or replaced from time to time, so long
as and to the extent that such amendment, novation, supplement, modification or
replacement is not prohibited by the terms of this Agreement or is consented to,
if such consent is required, in accordance with the applicable provisions of
this Agreement.
(g) Except where specifically restricted in a Loan
Document, references to any Person include its successors and substitutes and
assigns permitted or not prohibited under such Loan Document.
(h) References to the time of day are to the time of day
in the city in which the Administrative Agent's Office is located.
(i) The terms "payment", "prepayment", "distribution" and
similar terms used in the definitions of "Restricted Distribution" and
"Restricted Payment" and in SECTION 11.6, shall include payment by means of the
transfer of funds or of property and, in the event of a transfer of property,
the payment shall be deemed to be in an amount equal to the greater of the fair
market value and the book value of the property at the time of the transfer.
(j) Titles of Articles and Sections in this Agreement are
for convenience only, do not constitute part of this Agreement and neither limit
nor amplify the provisions of this Agreement, and all references in this
Agreement to Articles, Sections, subsections, paragraphs, clauses, subclauses,
Schedules or Exhibits shall refer to the corresponding Article, Section,
subsection, paragraph, clause or subclause of, or Schedule or Exhibit attached
to, this Agreement, unless specific reference is made to the articles, sections
or other subdivisions or divisions of, or to schedules or exhibits to, another
document or instrument.
(k) Whenever from the context it appears appropriate, the
term "Loan", including such terms as used as part of a defined term including
the term "Loan", shall mean and include a Loan made by all Lenders to the
Borrowers as well as a Lender's Proportionate Share of any Loan.
(l) Whenever the phrase "to the knowledge of the
Borrower" or words of similar import relating to the knowledge of the Borrowers
(or any of them) are used herein, such phrase shall mean and refer to the actual
knowledge of the president, the chief executive officer or the principal
financial officer of, or the in-house legal counsel to, American Tire.
(m) Unless otherwise specified herein, any Lien created
or purported to be created hereby or by or pursuant to any Loan Documents in
favor of the Administrative Agent and each payment
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made to the Administrative Agent, is and shall be deemed to have been created in
favor of the Administrative Agent, for its benefit as the Administrative Agent
and for the Ratable benefit of the Lenders, or made to and received by the
Administrative Agent for the Ratable benefit of the Lenders, as the case may be.
(n) Whenever in this Agreement or any other Loan Document
the word "stock" or "capital stock" or other similar word or phrase is used in
connection with a Borrower or any Subsidiary of a Borrower referring to equity
ownership interests in such Borrower or such Subsidiary, such word or phrase
shall also be deemed to include a reference to member interests, each reference
to "corporation" with reference to a Borrower or any Subsidiary of a Borrower
shall also be deemed to include a reference to limited liability companies and
each reference to "certificate of incorporation" or "articles of incorporation"
or "bylaws" with reference to a Borrower or any Subsidiary of a Borrower shall
also be deemed to include a reference to "certificate of formation" and
"operating agreement" or other constituent documents of a limited liability
company.
(o) Whenever in this Agreement reference is made to
"including," or "include," such reference shall be understood to mean
"including, without limitation" (and, for purposes of this Agreement and the
other Loan Documents, the parties agree that the rule of ejusdem generis shall
not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters to matters similar to the
matters specifically mentioned).
SECTION 1.3 Exhibits and Schedules. All Exhibits and Schedules attached
hereto are by reference made a part hereof.
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ARTICLE 2
REVOLVING CREDIT FACILITY
SECTION 2.1 Revolving Credit Loans. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement, each Lender agrees, severally, but not jointly, to make
Revolving Credit Loans to the Borrowers from time to time from the Effective
Date to but not including the Termination Date, as requested or deemed requested
by the Borrowers in accordance with the terms of SECTION 2.2, in amounts equal
to such Lender's Proportionate Share of each Revolving Credit Loan requested or
deemed requested hereunder up to an aggregate amount at any one time outstanding
equal to such Lender's Proportionate Share of the Borrowing Base; PROVIDED,
HOWEVER, that no Borrowing shall exceed the Loan Availability at the time and
the aggregate principal amount of all outstanding Loans (after giving effect to
the Revolving Credit Loans requested or deemed requested) shall not exceed the
Borrowing Base. It is expressly understood and agreed that the Lenders may and
at present intend to use the Borrowing Base as a maximum ceiling on Loans made
to the Borrowers; PROVIDED, HOWEVER, that it is agreed that should the aggregate
outstanding amount of such Loans exceed the ceiling so determined or any other
limitation set forth in this Agreement, such Loans shall nevertheless constitute
Secured Obligations and, as such, shall be entitled to all benefits thereof and
security therefor. The principal amount of any Revolving Credit Loan which is
repaid may be reborrowed by the Borrowers, subject to the terms and conditions
of this Agreement, in accordance with the terms of this SECTION 2.1. The
Administrative Agent's and each Lender's books and records reflecting the date
and the amount of each Revolving Credit Loan and each repayment of principal
thereof shall constitute prima facie evidence of the accuracy of the information
contained therein, subject to the provisions of SECTION 4.5.
SECTION 2.2 Manner of Borrowing. Borrowings shall be made as follows:
(a) Requests for Borrowing.
(i) Base Rate Revolving Credit Loans. A request
for the Borrowing of Base Rate Revolving Credit Loans shall be
made, or shall be deemed to be made, in the following manner:
(A) with respect to any Loans to be
made on the Effective Date, which shall be Base Rate
Loans, the Borrowers' representative shall give the
Administrative Agent the Initial Notice of Borrowing
at least two Business Days prior to the proposed date
of the Borrowing, and, with respect to each
subsequent Borrowing, the Borrowers may request a
Base Rate Revolving Credit Loan by giving the
Administrative Agent a Notice of Borrowing, before
12:00 noon on the proposed date of the Borrowing,
PROVIDED that if such notice is received after 12:00
noon on the proposed date of Borrowing, the proposed
Borrowing may be postponed by the Administrative
Agent to the next Business Day;
(B) whenever a check or other item is
presented to a Disbursing Bank for payment against a
Controlled Disbursement Account in an amount greater
than the then available balance in such account, such
Disbursing Bank shall, and is hereby irrevocably
authorized by the Borrowers to, give the
Administrative Agent notice thereof, which notice
shall be deemed to be a
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request for a Base Rate Revolving Credit Loan on the
date of such notice in an amount equal to the excess
of such check or other item over such available
balance, and such request shall be irrevocable;
(C) unless payment is otherwise made by
the Borrowers, the becoming due of any amount
required to be paid under this Agreement or any of
the Notes as interest shall be deemed to be a request
for a Base Rate Revolving Credit Loan on the due date
in the amount required to pay such interest, and such
request shall be irrevocable;
(D) unless payment is otherwise made by
the Borrowers, a becoming due of any other Secured
Obligation shall be deemed to be a request for a Base
Rate Revolving Credit Loan on the due date in the
amount then so due, and such request shall be
irrevocable; and
(E) the receipt by the Administrative
Agent of notification from FCC to the effect that a
payment has been made under a Letter of Credit or
Letter of Credit Guarantee and that the Borrowers
have failed to reimburse FCC therefor in accordance
with the terms of ARTICLE 3, shall be deemed to be a
request for a Base Rate Revolving Credit Loan on the
date such notification is received in the amount of
such payment which is so unreimbursed.
(ii) Eurodollar Rate Revolving Credit Loans. At
any time after the Effective Date, and so long as no Default
or Event of Default has occurred and is continuing, the
Borrowers may request a Eurodollar Rate Revolving Credit Loan
by giving the Administrative Agent a Notice of Borrowing
(which notice shall be irrevocable) not later than 11:30 a.m.
on the date three Business Days before the day on which the
requested Eurodollar Rate Revolving Credit Loan is to be made.
The Borrowers may direct the Administrative Agent to apply the
proceeds of a Eurodollar Rate Revolving Credit Loan to Secured
Obligations as described in SECTIONS 2.2(A)(I)(B), (C), (D)
and (E) and the Administrative Agent shall comply with such
direction to the extent that proceeds of a Borrowing of
Eurodollar Rate Revolving Credit Loans are available to be so
applied and in such case, no duplicative Borrowing of Base
Rate Revolving Credit Loans will be deemed to have been
requested.
(iii) Notification of Lenders. In the case of each
Eurodollar Rate Revolving Credit Loan and, unless the
Administrative Agent has elected to make a Swingline Loan to
the Borrowers pursuant to SECTION 2A.2, in the case of each
Base Rate Loan, the Administrative Agent shall promptly notify
the Lenders of any Notice of Borrowing given or deemed given
pursuant to this SECTION 2.2(A) by 12:00 noon on the proposed
Borrowing date (in the case of Base Rate Loans) or by 3:00
p.m. three Business Days before the proposed Borrowing date
(in the case of Eurodollar Rate Loans). If the Administrative
Agent does so notify the Lenders, then not later than 1:30
p.m. on the proposed Borrowing date, each Lender will make
available to the Administrative Agent, for the account of the
Borrowers, at the Administrative Agent's Office in funds
immediately available to the Administrative Agent, such
Lender's Proportionate Share of the Base Rate Loan or
Eurodollar Rate Loan, as the case may be.
(b) Disbursement of Loans. The Borrowers hereby
irrevocably authorize the Administrative Agent to disburse the proceeds of each
Borrowing requested, or deemed to be requested, pursuant to SECTION 2.2(A) as
follows:
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(i) the proceeds of each Borrowing requested
under SECTIONS 2.2(A)(I)(A) (other than the Borrowing of any
Loans made on the Effective Date) or (B) or 2.2(A)(II) shall
be disbursed by the Administrative Agent in Dollars in
immediately available funds by wire transfer to a Controlled
Disbursement Account or, in the absence of a Controlled
Disbursement Account, by wire transfer to such other account
as may be agreed upon by the Borrowers and the Administrative
Agent from time to time, and the proceeds of the Loans to be
made on the Effective Date under SECTION 2.2(A)(I)(A) shall be
disbursed in accordance with the Initial Notice of Borrowing,
(ii) the proceeds of each Borrowing deemed
requested under SECTION 2.2(A)(I)(C) or (D) shall be disbursed
by the Administrative Agent by way of direct payment of the
relevant Secured Obligation, and
(iii) the proceeds of each Borrowing deemed
requested under SECTION 2.2(A)(I)(E) shall be disbursed by the
Administrative Agent directly to FCC on behalf of the
Borrowers for application to the Reimbursement Obligations.
SECTION 2.3 Repayment. The Revolving Credit Loans will be repaid as
follows:
(a) The outstanding principal amount of all Revolving
Credit Loans is due and payable, and shall be repaid by the Borrowers, as their
joint and several obligation, in full, not later than the Termination Date and
the outstanding principal amount of any Revolving Credit Loan may be repaid by
the Borrowers at any time and from time to time prior to the Termination Date;
(b) If at any time the aggregate outstanding unpaid
principal amount of the Revolving Credit Loans exceeds the Borrowing Base in
effect at such time, but subject to the provisions of SECTION 4.7(D), the
Borrowers shall repay the Revolving Credit Loans in an amount sufficient to
reduce the aggregate unpaid principal amount of the Revolving Credit Loans by an
amount equal to such excess, together with accrued and unpaid interest on the
amount so repaid to the date of repayment; and
(c) The Borrowers hereby instruct the Administrative
Agent to repay the Revolving Credit Loans outstanding on any day in an amount
equal to the amount received by the Administrative Agent on such day pursuant to
SECTION 8.1(C); PROVIDED that payments received in excess of outstanding
Revolving Credit Loans or payments received (when no Default or Event of Default
exists) on account of Eurodollar Rate Revolving Credit Loans which would
otherwise result in prepayment of such Eurodollar Rate Revolving Credit Loans
prior to the end of the Interest Period applicable thereto may, upon the
instruction of the Borrowers to the Administrative Agent not later than 1:00
p.m. on any Business Day, be applied to the Cash Collateral Account or any
Investment Account.
Repayments pursuant to SECTION 2.3(B) or (C) shall be applied first to the Base
Rate Revolving Credit Loans and then to Eurodollar Rate Revolving Credit Loans.
SECTION 2.4 Notes. Each Lender's Revolving Credit Loans and the joint
and several obligation of the Borrowers to repay such Revolving Credit Loans
shall also be evidenced by a Revolving Credit Note payable to the order of such
Lender. Each such Note shall be dated the Effective Date (or later "effective
date" under any Assignment and Acceptance) and be duly and validly executed and
delivered by the Borrowers.
SECTION 2.5 Notice of Adjustments to Eligibility Criteria, Imposition
of Additional Reserves Against Borrowing Base, Etc. The Administrative Agent
shall give the Borrowers written notice of any adjustment by the Administrative
Agent to the eligibility criteria for Eligible Receivables or Eligible
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Inventory, the exclusion from the Borrowing Base of any Inventory pursuant to
CLAUSE (h) of the definition "Eligible Inventory," the exclusion from the
Borrowing Base of any Receivables pursuant to CLAUSE (Q) of the definition
"Eligible Receivables," any adjustment affecting the Dilution Reserve pursuant
to CLAUSE (I) of the definition of such term or of the imposition by the
Administrative Agent of any Additional Reserves, and, in each case, shall use
reasonable efforts to give such notice to the Borrowers prior to or concurrently
with the effectiveness of any such adjustment, exclusion or imposition.
SECTION 2.6 Valuation of Inventory. For purposes of determining the
NOLV Percentage, the net orderly liquidation value of Borrowers' Inventory shall
be determined and reported on not less frequently than annually by a qualified
independent appraiser selected by the Administrative Agent or, at the
Administrative Agent's election, by professional appraisers employed by the
Administrative Agent.
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ARTICLE 2A
SWINGLINE FACILITY
SECTION 2A.1 Swingline Loans. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement, the Swingline Lender shall make Swingline Loans to the
Borrowers from time to time, from and after the Effective Date to but not
including the Termination Date, as requested or deemed requested by the
Borrowers in accordance with the terms of SECTION 2A.2, up to an aggregate
principal amount of Swingline Loans at any time outstanding not to exceed the
lesser of (i) the Swingline Facility and (ii) the Borrowing Base MINUS the
aggregate principal amount of outstanding Revolving Credit Loans. The Swingline
Loans will be deemed to be usage of the Revolving Credit Facility for the
purpose of calculating Loan Availability pursuant to SECTION 2.1, but will not
reduce the Swingline Lender's obligation to lend its Proportionate Share of the
remaining unused Revolving Credit Facility. The principal amount of any
Swingline Loan which is repaid may be reborrowed by the Borrowers, subject to
the terms and conditions of this Agreement, in accordance with the terms of this
SECTION 2A.1.
SECTION 2A.2 Making Swingline Loans. Requests for Swingline Loans,
which shall be Base Rate Loans and shall not be entitled to be converted into
Eurodollar Rate Loans, shall be made not later than 1:00 p.m. on the Business
Day of the proposed Swingline Loan by delivery by electronic mail, telex,
telegraph, telecopy or telephone of a request therefor by American Tire to the
Administrative Agent and the Swingline Lender and shall be deemed to be made on
each Settlement Date. Each such notice (a "Swingline Loan Request") shall
specify (i) the proposed borrowing date and (ii) the amount of Swingline Loan
requested (which, in the case of deemed Settlement Date requests shall be,
respectively, the Settlement Date and the excess, if any, of the Swingline
Facility over the outstanding principal amount of Swingline Loans on the
Settlement Date). Not later than 3:00 p.m. on the date specified for any
Swingline Loan, the Swingline Lender shall make available such Swingline Loan in
immediately available funds to the Administrative Agent. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in ARTICLE 5, the Administrative Agent will, and
the Borrowers hereby irrevocably authorize the Administrative Agent to, disburse
the proceeds of each Swingline Loan by making such funds available to the
Borrowers by wire transfer to such account of a Borrower as American Tire and
the Administrative Agent may agree from time to time.
SECTION 2A.3 Repayment of Swingline Loans. The outstanding principal
amount of all Swingline Loans is due and payable, and shall be repaid by the
Borrowers, as their joint and several obligation, in full, not later than the
Termination Date, together with accrued and unpaid interest thereon to such
date.
SECTION 2A.4 Prepayment. If at any time the aggregate unpaid principal
amount of Swingline Loans outstanding to the Borrowers from the Swingline Lender
exceeds the amount set forth in the first sentence of SECTION 2A.1, the
Borrowers shall pay to the Administrative Agent for the account of the Swingline
Lender on demand by the Administrative Agent, an amount equal to such excess,
together with accrued and unpaid interest on the principal amount prepaid to the
date of prepayment. For the avoidance of doubt, notwithstanding the foregoing,
no such prepayment shall be required if the Borrowers shall have made an
appropriate prepayment in accordance with the provisions of SECTION 2.3(B).
SECTION 2A.5 Swingline Note. The Swingline Loans made by the Swingline
Lender and the obligation of the Borrowers to repay such Swingline Loans shall
be evidenced by, and be repayable in accordance with the terms of, a single
Swingline Note, made by the Borrowers payable to the order of the
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Swingline Lender. The Swingline Note shall be dated the Effective Date and be
duly and validly executed and delivered by the Borrowers.
SECTION 2A.6 Settlement with Other Lenders. All payments of principal,
interest and any other amount with respect to such Swingline Loan shall be
payable to and received by the Administrative Agent for the account of the
Swingline Lender. Upon demand by the Swingline Lender, with notice thereof to
the Administrative Agent, and notwithstanding the occurrence and continuation at
the time of such demand of any Default or Event of Default, each Lender shall
make a Base Rate Revolving Credit Loan in the amount of its Commitment
Percentage of the outstanding Swingline Loans for the account of the Borrowers
or purchase a participation of such amount in each outstanding Swingline Loan,
the proceeds of which shall be paid over to the Swingline Lender and applied to
the repayment of such Swingline Loans. Any payments received by the
Administrative Agent prior to such repayment by the Lenders which in accordance
with the terms of this Agreement are to be applied to the reduction of the
outstanding principal balance of Swingline Loans shall be paid over to the
Swingline Lender and so applied.
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ARTICLE 3
LETTER OF CREDIT GUARANTEES
SECTION 3.1 Agreement to Issue. Upon the terms and subject to the
conditions of, and in reliance upon the representations and warranties made
under, this Agreement, FCC agrees to issue or cause the issuance of, including
by issuance of Letter of Credit Guarantees, for the account of any Borrower one
or more Letters of Credit in accordance with this ARTICLE 3, from time to time
during the period commencing on the Effective Date and ending on the Termination
Date.
SECTION 3.2 Amounts. FCC shall not have any obligation to issue or
cause the issuance of any Letter of Credit at any time:
(a) if, after giving effect to the issuance of the
requested Letter of Credit, (i) the aggregate Letter of Credit Obligations of
the Borrowers would exceed the Letter of Credit Guarantee Facility then in
effect or (ii) the aggregate principal amount of Loans outstanding would exceed
the Borrowing Base (after reduction for the Letter of Credit Reserve in respect
of such Letter of Credit) or (iii) if no Loans are outstanding, the aggregate
Letter of Credit Obligations would exceed the Borrowing Base; or
(b) which has a term longer than one calendar year or an
expiration date after the last Business Day that is more than 30 days prior to
the Termination Date.
SECTION 3.3 Conditions. The obligation of FCC to issue any Letter of
Credit Guarantee is subject to the satisfaction of (a) the applicable conditions
precedent contained in ARTICLE 5 and (b) the following additional conditions
precedent in a manner satisfactory to the Administrative Agent and FCC:
(i) the Borrowers shall have delivered to FCC
and the Administrative Agent at such times and in such manner
as FCC or the Administrative Agent may prescribe, a
Reimbursement Agreement and such other documents as may be
required pursuant to the terms thereof, and the form of the
proposed Letter of Credit, all of which shall be satisfactory
in form and substance, as completed, to the Bank, FCC and the
Administrative Agent; and
(ii) as of the date of issuance, no law, rule or
regulation, or order of any court, arbitrator or governmental
authority having jurisdiction or authority over FCC shall
purport by its terms to enjoin or restrain FCC or commercial
financing entities, generally, from issuing guarantees,
including guarantees of letter of credit obligations, of the
type and in the amount of the proposed Letter of Credit
Guarantee or the proposed Letter of Credit Guarantee
specifically.
SECTION 3.4 Issuance of Letter of Credit Guarantees.
(a) Request for Issuance. A Borrower shall give the Bank,
FCC and the Administrative Agent written notice of such Borrower's request for
the issuance of a Letter of Credit no later than six Business Days prior to the
proposed date of issuance. Such notice shall be irrevocable and shall be
accompanied by a completed form of letter of credit application in a form
acceptable to the Bank specifying the name of the Borrower which will appear as
the account party on the face of such Letter of Credit, the original face amount
of the Letter of Credit requested, the effective date (which date shall be a
Business Day) of issuance of such requested Letter of Credit, whether the Letter
of Credit may be drawn
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in a single or in multiple draws, the date on which such requested Letter of
Credit is to expire (which date shall be a Business Day earlier than the 30th
day prior to the Termination Date), the purpose for which the Letter of Credit
is to be issued and the beneficiary of the Letter of Credit. Such Borrower shall
attach to such notice the form of the Letter of Credit that such Borrower
requests be issued.
(b) Responsibilities of the Administrative Agent;
Issuance. The Administrative Agent shall determine, as of the Business Day
immediately preceding the requested effective date of issuance of a Letter of
Credit set forth in the notice from the Borrowers pursuant to SECTION 3.4(A),
the amount of Letter of Credit Availability. If (i) the form of requested Letter
of Credit delivered by the Borrowers to the Administrative Agent is acceptable
to FCC, the Bank and the Administrative Agent in their sole, reasonable
discretion, (ii) the amount of the Letter of Credit Guarantee necessary to
procure the issuance by the Bank of such Letter of Credit is less than or equal
to the Letter of Credit Availability and (iii) the Administrative Agent has
received a certificate from the Borrowers stating that the applicable conditions
set forth in ARTICLE 5 have been satisfied, then FCC will join in the
application for such Letter of Credit or otherwise cause the Bank to issue the
requested Letter of Credit.
(c) Notice of Issuance. Promptly after the issuance of
any Letter of Credit supported by a Letter of Credit Guarantee, FCC or the Bank
shall give the Administrative Agent written or facsimile notice, or telephonic
notice confirmed promptly thereafter in writing, of the issuance of such Letter
of Credit, and the Administrative Agent, at the request of any Lender, shall
give such Lender a written report of each such Letter of Credit outstanding as
of the date thereof, the amount available to be drawn thereunder and the
expiration date thereof.
(d) No Extension or Amendment. FCC shall not cause any
Letter of Credit to be extended or amended unless the requirements of this
SECTION 3.4 are met as though a new Letter of Credit were being requested and
issued.
SECTION 3.5 Duties of FCC. The rights and obligations of the Bank in
connection with any Letter of Credit shall be governed by the Reimbursement
Agreement for such Letter of Credit and in no event shall the Administrative
Agent or any Lender have any liability or obligation to any Borrower or its
Subsidiaries for any failure or refusal or delay by the Bank to issue, or error
in issuing, any Letter of Credit. Any action taken or omitted to be taken by FCC
under or in connection with any Letter of Credit Guarantee, if taken or omitted
in the absence of gross negligence or willful misconduct, shall not result in
any liability of FCC to any Lender or relieve any Lender of its obligations
hereunder to FCC. In determining whether to pay under any Letter of Credit
Guarantee, FCC shall have no obligation to confirm that the Bank acted properly
in honoring any drawing under the related Letter of Credit and shall be entitled
to rely on the Bank's demand for payment as sufficient evidence of the Bank's
entitlement thereto.
SECTION 3.6 Payment of Reimbursement Obligations.
(a) Payment to Bank, FCC. Notwithstanding any provisions
to the contrary in any Reimbursement Agreement, the Borrowers agree, jointly and
severally, for the benefit of FCC and the other Lenders, to reimburse the Bank
for any drawings (whether partial or full) under each Letter of Credit on demand
and agree to pay to the Bank the amount of all other Reimbursement Obligations
and other amounts payable to the Bank under or in connection with such Letter of
Credit in accordance with the Reimbursement Agreement. If FCC shall pay any
amount under any Letter of Credit Guarantee, the Borrowers shall, jointly and
severally, unless the Borrowers shall have already paid the amount in respect of
which payment was made under such Letter of Credit Guarantee to the Bank in
accordance with a Reimbursement Agreement, pay to FCC on the first Business Day
following such payment, an amount equal to the amount of the payment made by FCC
under such Letter of Credit Guarantee, together with
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interest on such amount for the period from FCC's payment under the applicable
Letter of Credit Guarantee, until repayment in full of such amount, at the
interest rate then applicable to Base Rate Revolving Credit Loans. So long as
FCC remains unpaid, it shall be subrogated to all rights and remedies of (i) the
Bank under the related Reimbursement Agreement and (ii) any beneficiary of such
Letter of Credit whose claims against the account party on such Letter of Credit
have been satisfied with proceeds of drawing under such Letter of Credit.
(b) Recovery or Avoidance of Payments. In the event any
payment by or on behalf of the Borrowers with respect to any Letter of Credit
(or any Reimbursement Obligation relating thereto) or any Letter of Credit
Guarantee received by FCC, the Bank or by the Administrative Agent and
distributed by the Administrative Agent to the Lenders on account of their
respective participations therein, is thereafter set aside, avoided or recovered
from FCC, the Bank or the Administrative Agent in connection with any
receivership, liquidation or bankruptcy proceeding, the Lenders shall, upon
demand by the Administrative Agent, pay to the Administrative Agent, for the
account of the Administrative Agent, FCC or the Bank, as the case may be, their
respective Proportionate Shares of such amount set aside, avoided or recovered
together with interest at the rate required to be paid by the Administrative
Agent, FCC or the Bank upon the amount required to be repaid by it.
SECTION 3.7 Participations.
(a) Purchase of Participations. Immediately upon the
Effective Date as to Letters of Credit outstanding on the Effective Date and
immediately upon issuance by the Bank of any other Letter of Credit, each Lender
shall be deemed to have irrevocably and unconditionally purchased and received
without recourse or warranty, an undivided interest and participation in the
Letter of Credit Obligations thereunder, equal to such Lender's Proportionate
Share thereof (including all obligations of the Borrowers with respect thereto,
other than amounts owing to FCC or for the account of the Bank under SECTION
4.2(E), and any security therefor or guaranty pertaining thereto).
(b) Sharing of Letter of Credit Payments. In the event
that FCC makes a payment under any Letter of Credit Guarantee and shall not have
been repaid such amount pursuant to SECTION 3.6, then the Borrowers shall be
deemed to have requested a Base Rate Revolving Credit Loan in the amount of such
payment and, notwithstanding the occurrence or continuance of a Default or Event
of Default at the time of such payment, each Lender shall be absolutely
obligated to make its Proportionate Share of such Loan available to the
Administrative Agent for disbursement as provided by SECTION 2.2(B) or to
purchase a participation in the payment made by FCC under any such Letter of
Credit Guarantee.
(c) Sharing of Reimbursement Obligation Payments.
Whenever FCC receives a payment from or on behalf of the Borrowers or the Bank
on account of a Reimbursement Obligation as to which the Administrative Agent
has previously received for the account of FCC payment from a Lender pursuant to
this SECTION 3.7, FCC shall promptly pay to the Administrative Agent, for the
benefit of such Lender, such Lender's Proportionate Share of the amount of such
payment from the Borrowers or the Bank in Dollars. Each such payment shall be
made by FCC on the Business Day on which FCC receives immediately available
funds from the Borrowers or the Bank pursuant to the immediately preceding
sentence, if received prior to 11:00 a.m. on such Business Day, and otherwise on
the next succeeding Business Day.
(d) Documentation. Upon the request of any Lender, the
Administrative Agent shall furnish to such Lender copies of any Letter of
Credit, Reimbursement Agreement, Letter of Credit Guarantee or application for
any Letter of Credit and such other documentation as to Letters of Credit as may
reasonably be requested by such Lender.
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(e) Obligations Irrevocable. The obligations of each
Lender to make payments to the Administrative Agent with respect to any Letter
of Credit or Letter of Credit Guarantee in respect thereof and its participation
therein pursuant to the provisions of this SECTION 3.7 or otherwise and the
obligations of the Borrowers to make payments to FCC, the Bank or to the
Administrative Agent, for the account of Lenders, shall be irrevocable, shall
not be subject to any qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement (assuming, in the
case of the obligations of the Lenders to make such payments, that the Letter of
Credit has been issued in accordance with SECTION 3.4), including any of the
following circumstances:
(i) Any lack of validity or enforceability of
this Agreement or any of the other Loan Documents;
(ii) The existence of any claim, set-off, defense
or other right which the Borrowers (or any of them) may have
at any time against a beneficiary named in a Letter of Credit
or any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), any Lender, FCC, the
Bank or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying
transactions between the Borrowers or any other Person and the
beneficiary named in any Letter of Credit);
(iii) Any draft, certificate or any other document
presented under the Letter of Credit upon which payment has
been made in good faith and according to its terms proving to
be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any
respect;
(iv) The surrender or impairment of any
Collateral or any other security for the Secured Obligations
or the performance or observance of any of the terms of any of
the Loan Documents;
(v) The occurrence of any Default or Event of
Default; or
(vi) FCC's, the Bank's or the Administrative
Agent's failure to deliver the notice provided for in SECTION
3.4(C).
SECTION 3.8 Indemnification, Exoneration.
(a) Indemnification. In addition to amounts payable as
elsewhere provided in this ARTICLE 3, the Borrowers, jointly and severally,
agree to protect, indemnify, defend, pay and save harmless the Lenders, FCC, the
Bank and the Administrative Agent from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) which any Lender, FCC, the Bank or the Administrative Agent may
incur or be subject to as a consequence, directly or indirectly, of:
(i) the issuance of any Letter of Credit, other
than as a result of its gross negligence or willful
misconduct, as determined by a court of competent
jurisdiction, or
(ii) the failure of the Bank to honor a drawing
under any Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure
or de facto governmental authority (all such acts or omissions
being hereinafter referred to collectively as "Government
Acts").
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(b) Assumption of Risk by the Borrowers. As among the
Borrowers, the Lenders, FCC, the Bank and the Administrative Agent, the
Borrowers assume all risks of the acts and omissions of, or misuse of any of the
Letters of Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, subject to the provisions of
the applications for the issuance of Letters of Credit, the Lenders, FCC, the
Bank and the Administrative Agent shall not be responsible for:
(i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any
Person in connection with the application for and issuance of
and presentation of drafts with respect to any of the Letters
of Credit, even if it should prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or
forged;
(ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer
or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason;
(iii) the failure of the beneficiary of any Letter
of Credit to comply duly with conditions required in order to
draw upon such Letter of Credit;
(iv) errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in
cipher;
(v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof;
(vii) the misapplication by the beneficiary of any
Letter of Credit of the proceeds of any drawing under such
Letter of Credit; or
(viii) any consequences arising from causes beyond
the control of the Lenders, FCC, the Bank or the
Administrative Agent, including any Government Acts.
None of the foregoing shall affect, impair or prevent the vesting of any of the
Administrative Agent's rights or powers under this SECTION 3.8.
(c) Exoneration. In furtherance and extension, and not in
limitation, of the specific provisions set forth above, any action taken or
omitted by the Administrative Agent, FCC, the Bank or any Lender under or in
connection with any of the Letters of Credit or any related certificates, if
taken or omitted in good faith, shall not result in any liability of any Lender,
FCC, the Bank or the Administrative Agent to the Borrowers or relieve any
Borrower of any of its obligations hereunder to any such Person.
SECTION 3.9 Supporting Letter of Credit; Cash Collateral Account. Upon
the occurrence of an Event of Default or, if, notwithstanding the provisions of
SECTION 3.2(B), any Letter of Credit is outstanding on the Termination Date,
then on or prior to the Termination Date, the Borrowers shall, as their joint
and several obligation, promptly on demand by the Administrative Agent, deposit
with the Administrative Agent, for the ratable benefit of the Lenders, with
respect to each Letter of Credit then outstanding, as the Administrative Agent
shall specify, either (a) a standby letter of credit (a "Supporting
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Letter of Credit") in form and substance satisfactory to the Administrative
Agent, issued by an issuer satisfactory to the Administrative Agent in its sole
and absolute judgment in an amount equal to 105% of the greatest amount for
which such Letter of Credit may be drawn, under which Supporting Letter of
Credit the Administrative Agent shall be entitled to draw amounts necessary to
reimburse the Lenders for payments made by the Lenders under the related Letter
of Credit Guarantee or under any reimbursement or guaranty agreement with
respect thereto, or (b) Cash Collateral in an amount necessary to reimburse the
Administrative Agent and the Lenders for payments made by the Administrative
Agent and the Lenders under the related Letter of Credit Guarantee or under any
reimbursement or guaranty agreement with respect thereto. Such Supporting Letter
of Credit or Cash Collateral shall be held by the Administrative Agent for the
benefit of the Lenders, as security for, and to provide for the payment of, the
Reimbursement Obligations. In addition, the Administrative Agent may at any time
after such Event of Default or the Termination Date apply any or all of such
Cash Collateral to the payment of any or all of the Secured Obligations then due
and payable. The Cash Collateral shall be deposited in the Cash Collateral
Account or an Investment Account and shall be administered in accordance with
the provisions of SECTION 4.15.
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ARTICLE 4
GENERAL LOAN PROVISIONS
SECTION 4.1 Interest.
(a)(i) Base Rate Revolving Credit Loans. Subject to the
provisions of SECTION 4.1(C), the Borrowers will pay interest on the unpaid
principal amount of each Base Rate Revolving Credit Loan, for each day from the
day such Loan is made (or is converted to a Base Rate Loan) until such Loan is
paid (whether at maturity, by reason of acceleration, or otherwise) or is
converted to a Loan of a different Type, at a rate per annum equal to the sum of
(i) the Applicable Margin and (ii) the Base Rate, payable monthly in arrears as
it accrues on each Interest Payment Date. The Base Rate on the date hereof is
four percent (4%) and therefore, the interest rate applicable hereunder to Base
Rate Loans on the date hereof, expressed in simple interest terms, is four and
three quarters percent (4.75%).
(ii) Eurodollar Rate Revolving Credit Loans. Subject to
the provisions of SECTION 4.1(C), the Borrowers will pay interest on the unpaid
principal amount of each Eurodollar Rate Revolving Credit Loan for the
applicable Interest Period at a rate per annum equal to the sum of (i) the
Applicable Margin and (ii) the Eurodollar Rate, payable on the last day of such
Interest Period and, if such Interest Period is longer than three months, at
three-month intervals during such Interest Period.
(iii) Swingline Loans. Subject to the provisions of SECTION
4.1(C), the Borrowers will pay interest on the unpaid principal amount of each
Swingline Loan for each day from the day such Loan is made until such Loan is
paid (whether at maturity, by reason of acceleration or otherwise) at a rate per
annum equal to the sum of (i) the Applicable Margin and (ii) the Base Rate,
payable monthly in arrears as it accrues on each Interest Payment Date.
(b) Other Secured Obligations. The Borrowers will, to the
extent permitted by Applicable Law, pay interest on the unpaid principal amount
of any Secured Obligation that is due and payable other than the Loans in
accordance with SECTIONS 4.1(A) or (C), as applicable, as if such Secured
Obligation were a Base Rate Loan.
(c) Default Rate. If an Event of Default shall occur and
be continuing, at the election of the Administrative Agent and the Required
Lenders, the unpaid principal amount of the Loans and other Secured Obligations
shall no longer bear interest in accordance with the terms of SUBSECTION 4.1(A)
or (B), as applicable, but shall bear interest for each day from the date of
such Event of Default until such Event of Default shall have been cured or
waived at a rate per annum equal to the applicable Default Rate, payable on
DEMAND. The interest rate provided for in the preceding sentence shall, to the
extent permitted by Applicable Law, apply to and accrue on the amount of any
judgment entered with respect to any Secured Obligation and shall continue to
accrue at such rate during any proceeding described in SECTION 12.1(G) or (H).
(d) Calculation of Interest. The interest rates provided
for in SECTIONS 4.1(A), (B) and (C) shall be computed on the basis of a year of
360 days and the actual number of days elapsed. Each interest rate determined
with reference to the Base Rate shall be adjusted automatically as of the
opening of business on the effective date of each change in the Base Rate.
(e) Maximum Rate. It is not intended by the Lenders, and
nothing contained in this Agreement or the Notes shall be deemed, to establish
or require the payment of a rate of interest in excess of the maximum rate
permitted by Applicable Law (the "Maximum Rate"). If, in any month, the
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Effective Interest Rate, absent such limitation, would have exceeded the Maximum
Rate, then the Effective Interest Rate for that month shall be the Maximum Rate,
and, if in future months, the Effective Interest Rate would otherwise be less
than the Maximum Rate, then the Effective Interest Rate shall remain at the
Maximum Rate until such time as the amount of interest paid hereunder equals the
amount of interest which would have been paid if the same had not been limited
by the Maximum Rate. In the event that, upon payment in full of the Secured
Obligations, the total amount of interest paid or accrued under the terms of
this Agreement is less than the total amount of interest which would have been
paid or accrued if the Effective Interest Rate (without regard to any limitation
hereunder) had at all times been in effect, then the Borrowers shall, to the
extent permitted by Applicable Law, pay to the Lenders an amount equal to the
excess, if any, of (i) the lesser of (A) the amount of interest which would have
been charged if the Maximum Rate had, at all times, been in effect and (B) the
amount of interest which would have accrued had the Effective Interest Rate
(without reference to any limitation hereunder), at all times, been in effect
and (ii) the amount of interest actually paid or accrued under this Agreement.
In the event the Lenders receive, collect or apply as interest any sum in excess
of the Maximum Rate, such excess amount shall be applied to the reduction of the
principal balance of the Secured Obligations, and if no such principal is then
outstanding, such excess or part thereof remaining, shall be paid to the
Borrowers. For the purposes of computing the Maximum Rate, to the extent
permitted by Applicable Law, all interest and charges, discounts, amounts,
premiums or fees deemed to constitute interest under Applicable Law, shall be
amortized, prorated, allocated and spread in substantially equal parts
throughout the full term of this Agreement. The provisions of this SECTION
4.1(E) shall be deemed to be incorporated into every Loan Document (whether or
not any provision of this SECTION 4.1(E) is specifically referred to therein).
SECTION 4.2 Certain Fees.
(a) Administrative Agent Fee. For administration and
other services performed by the Administrative Agent in connection with its
continuing administration of this Agreement, the Borrowers, jointly and
severally, shall pay to the Administrative Agent, for its own account, and not
for the account of the Lenders, an annual fee in accordance with the provisions
of the Fee Letter.
(b) Unused Commitment Fee. In connection with and as
consideration for the holding available for the use of the Borrowers hereunder
the full amount of the Commitments, the Borrowers, jointly and severally, will
pay a fee to the Administrative Agent, for the Ratable benefit of the Lenders,
for each day from the Effective Date until the Termination Date, in an amount
equal to 0.375% per annum of the Unused Commitments for such day, SUBJECT,
HOWEVER to quarterly adjustment in accordance with the pricing matrix attached
hereto as ANNEX B, on the dates specified for adjustments to the Applicable
Margin. "Unused Commitments" means an amount equal to the aggregate Commitments,
LESS the aggregate outstanding principal amount of Loans, other than any
Swingline Loan, LESS the total amount of Letter of Credit Obligations, in each
case on the date of determination. Such fee shall be payable monthly in arrears
on each Interest Payment Date and on the date of any permanent reduction in the
aggregate Commitments.
(c) Arrangement Fee. As compensation for structuring and
arranging the credit facilities available hereunder, on the Effective Date the
Borrowers, jointly and severally, shall pay to FCC and FSI, for their own
account, an arrangement fee in accordance with the provisions of the Fee Letter.
(d) Closing Fee. As compensation for restructuring and
approving the credit facilities available hereunder, on the Effective Date the
Borrowers, jointly and severally, shall pay to the Administrative Agent for the
Ratable benefit of the Lenders a closing fee agreed to among the Borrowers, the
Administrative Agent and each Lender on or prior to the Agreement Date.
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(e) Letter of Credit Fees. The Borrowers, jointly and
severally, agree to pay to the Administrative Agent through its Treasury and
International Services Group:
(i) for the Ratable benefit of the Lenders,
Letter of Credit fees on each Letter of Credit or Letter of
Credit Guarantee equal to the Applicable Margin per annum (or,
in the case of commercial or documentary Letters of Credit or
related Letter of Credit Guarantees, such Applicable Margin
MINUS 0.50%) applicable from time to time to Eurodollar Rate
Loans payable quarterly in arrears on the first day of each
January, April, July and October on the average daily Letter
of Credit Amount of such Letters of Credit outstanding during
the preceding calendar quarter, PROVIDED that if an Event of
Default shall occur and be continuing, at the election of the
Administrative Agent and the Required Lenders, each Letter of
Credit shall no longer accrue fees in accordance with the
terms of this CLAUSE (I), but shall accrue fees for each day
from the date of such Event of Default until such Event of
Default shall have been cured or waived at a rate per annum
equal to the applicable Default Rate, payable on DEMAND;
(ii) for the account of the Bank, the standard
fees and charges of the Bank for issuing, administering,
amending, renewing, paying and canceling and otherwise
administering letters of credit, as and when assessed as to
any Letters of Credit; and
(iii) for the account of FCC, an additional
fronting fee at a rate of 0.125% per annum of the Letter of
Credit Amount of each Letter of Credit, payable quarterly in
arrears on the first day of each January, April, July and
October, on the average daily Letter of Credit Amounts of all
Letters of Credit from time to time outstanding from the Bank
during the preceding calendar quarter.
(f) General. All fees provided for in this SECTION 4.2
and otherwise in this Agreement or any other Loan Document, shall be fully
earned when due and payable and, except as otherwise set forth herein or
required by Applicable Law, shall not be subject to refund or rebate. All such
fees are for compensation for services and are not, and shall not be deemed to
be, interest or a charge for the use of money. Fees payable pursuant to the
foregoing SUBSECTIONS (B) and (E) shall be calculated based on a year of 360
days and the actual number of days elapsed.
SECTION 4.3 Manner of Payment. Except as otherwise expressly provided
in SECTION 8.1(C), each payment (including prepayments) by the Borrowers on
account of the principal of or interest on the Loans or of any other amounts
payable to the Administrative Agent or the Lenders under this Agreement or any
Note or other Loan Document shall be made not later than 12:00 noon on the date
specified for payment under this Agreement to the Administrative Agent, at the
Administrative Agent's Office, in Dollars, in immediately available funds and
shall be made without any setoff, counterclaim or deduction whatsoever. Any
payment received after such time but before 2:00 p.m. on such day shall be
deemed a payment on such date for the purposes of SECTION 12.1, but for all
other purposes shall be deemed to have been made on the next succeeding Business
Day.
SECTION 4.4 General. If any payment under this Agreement or any Note
shall be specified to be made on a day which is not a Business Day, it shall be
made on the next succeeding day which is a Business Day and such extension of
time shall in such case be included in computing interest, if any, in connection
with such payment.
SECTION 4.5 Loan Accounts; Statements of Account.
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(a) Each Lender shall open and maintain on its books a
loan account in American Tire's name (each, a "Loan Account" and collectively,
the "Loan Accounts"). Each such Loan Account shall show as debits thereto each
Loan made under this Agreement by such Lender to the Borrowers and as credits
thereto all payments received by such Lender and applied to principal of such
Loans, so that the balance of the Loan Account at all times reflects the
principal amount due such Lender from the Borrowers.
(b) The Administrative Agent shall maintain on its books
a control account for the Borrowers in which shall be recorded (i) the amount of
each disbursement made hereunder, (ii) the amount of any principal or interest
due or to become due from the Borrowers hereunder, and (iii) the amount of any
sum received by the Administrative Agent hereunder from or on behalf of the
Borrowers and each Lender's share therein.
(c) The entries made in the accounts pursuant to
SUBSECTIONS (A) and (B) shall be prima facie evidence, in the absence of
manifest error, of the existence and amounts of the obligations of the Borrowers
therein recorded and in case of discrepancy between such accounts, in the
absence of manifest error, the accounts maintained pursuant to SUBSECTION (B)
shall be controlling.
(d) The Administrative Agent will account separately to
the Borrowers monthly with a statement of Loans, charges and payments made to
and by the Borrowers pursuant to this Agreement, and such accounts rendered by
the Administrative Agent shall be deemed final, binding and conclusive, save for
manifest error, unless the Administrative Agent is notified by the Borrowers in
writing to the contrary within 30 days of the date the account to the Borrowers
was so rendered. Such notice by the Borrowers shall be deemed an objection to
only those items specifically objected to therein. Failure of the Administrative
Agent to render such account shall in no way affect the rights of the
Administrative Agent or of the Lenders hereunder.
SECTION 4.6 Reduction of Commitments; Termination of Agreement.
(a) Reduction of Commitments.
(i) The Borrowers shall have the right, at any
time and from time to time, upon at least seven days' prior
irrevocable, written notice to the Administrative Agent, to
reduce permanently and Ratably in part the Commitments;
PROVIDED, HOWEVER, that any such partial reduction shall be in
an amount equal to $5,000,000 or any larger integral, multiple
of $1,000,000 and shall not reduce the aggregate Commitments
below an amount equal to the sum of the Letter of Credit
Reserve PLUS the Rent Reserve PLUS any Additional Reserves. As
of the date of reduction set forth in such notice, the
Commitments shall be permanently reduced to the amount stated
in the Borrowers' notice (and each Lender's Commitment shall
be reduced Ratably) for all purposes herein, and the Borrowers
shall pay the amount necessary to reduce the amount of the
outstanding Loans to any amount that does not exceed the
Borrowing Base (as reduced), together with accrued interest on
any amounts so prepaid and an early termination fee in an
amount equal to 0.50% of the amount of such reduction if such
reduction is effected prior to the first anniversary of the
Effective Date.
(ii) The aggregate Commitments shall be
automatically reduced to zero on the Termination Date.
(iii) The aggregate Commitments shall be reduced
as provided in SECTION 4.9.
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(iv) The Commitments or any portion thereof
terminated or reduced pursuant to this SECTION 4.6 may not be
reinstated.
(b) Termination of Agreement. The Borrowers shall have
the right, at any time, to terminate this Agreement upon not less than 10
Business Days' prior written notice, which notice shall specify the effective
date of such termination. Upon receipt of such notice, the Administrative Agent
shall promptly notify each Lender thereof. On the date specified in such notice,
such termination shall be effected, PROVIDED, that the Borrowers shall, on or
prior to such date, pay to the Administrative Agent, for its account and the
account of the Lenders, in same day funds, an amount equal to all Secured
Obligations (other than with respect to Letter of Credit Obligations)
outstanding on such date, including all (i) accrued interest thereon, (ii) all
accrued fees provided for hereunder, (iii) any amounts payable to the
Administrative Agent or the Lenders pursuant to SECTIONS 4.10, 4.15, 15.2, 15.3,
15.14 and 15.23, and, in addition thereto, shall deliver to the Administrative
Agent, in respect of each outstanding Letter of Credit, either a Supporting
Letter of Credit or Cash Collateral as provided in SECTION 3.9, and (iv) if such
termination occurs prior to the first anniversary of the Effective Date, an
early termination fee in an amount equal to 0.50% of the amount of the
Commitments so terminated, PROVIDED, that such fee shall not be payable if
contemporaneously with such termination, (x) the Borrowers (or any of them)
issue additional Debt in a private placement or a public offering, issue equity
securities in an initial public offering or consummate a sale (directly or
indirectly, including by sale, merger, consolidation or any other means) of all
or substantially all of the Borrowers' assets or equity securities to a Person
other than an Affiliate of the Borrowers (or any of them) and (y) the net cash
proceeds received by the Borrowers (or any of them) from one or more of the
foregoing transactions are in an aggregate amount sufficient to repay in full,
and are applied to the repayment in full of, the amounts required to be paid by
the Borrowers in connection with such termination pursuant to this SECTION
4.6(B), and PROVIDED FURTHER, that if Loan Availability has been reduced by 10%
or more during the six-month period preceding such termination as a result of
the Administrative Agent's having, without the agreement of American Tire, taken
any action of the type described in SECTION 2.5, then such early termination fee
will not be payable. Additionally, the Borrowers shall provide the
Administrative Agent and the Lenders with indemnification in form and substance
satisfactory to the Administrative Agent in its reasonable judgment with respect
to such customary matters as the Administrative Agent and the Lenders shall
reasonably require. Following a notice of termination as provided for in this
SECTION 4.6(B) and upon payment in full of the amounts specified in this SECTION
4.6(B), and execution and delivery of any required indemnification, this
Agreement shall be terminated and the Administrative Agent, the Lenders and the
Borrowers shall have no further obligations to any other party hereto, except
for the obligations to the Administrative Agent and the Lenders pursuant to
SECTION 15.12 hereof, which shall survive any termination of this Agreement.
SECTION 4.7 Making of Loans.
(a) Nature of Obligations of Lenders to Make Loans. The
obligations of the Lenders under this Agreement to make the Loans are several
and are not joint or joint and several.
(b) Assumption by Administrative Agent. Subject to the
provisions of SECTION 4.8 and notwithstanding the occurrence or continuance of a
Default or Event of Default or other failure of any condition to the making of
Loans hereunder subsequent to the Loans to be made on the Effective Date, unless
the Administrative Agent shall have received notice from a Lender prior to a
proposed Borrowing date that such Lender will not make available to the
Administrative Agent such Lender's Proportionate Share of the Loan to be
borrowed on such date, the Administrative Agent may assume that such Lender will
make such Proportionate Share available to the Administrative Agent in
accordance with SECTION 2.2(a), and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrowers on such date a
corresponding amount. If and to the extent a Lender shall not make its
Proportionate Share of any Loan available to the Administrative Agent, and the
Administrative Agent has
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made a corresponding amount available to the Borrowers, such Lender, on the one
hand, and the Borrowers, jointly and severally on the other hand, severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount (the "Make-Whole Amount"), together with interest thereon
for each day from the date such amount is made available to the Borrowers until
the date such amount is repaid to the Administrative Agent at (i) the Federal
Funds Rate if repaid by the Lender or (ii) the Effective Interest Rate or, if
lower, subject to SECTION 4.1(E), the Maximum Rate, if repaid by the Borrowers.
If such Lender shall repay to the Administrative Agent such corresponding
amount, the amount so repaid shall constitute such Lender's Proportionate Share
of the Loan made on such Borrowing date for purposes of this Agreement. The
Administrative Agent shall not be required to make any Loan as to which it shall
have received notice by a Lender of such Lender's intention not to make its
Ratable Share of such Loan available to the Administrative Agent. The failure of
any Lender to make its Proportionate Share of any Loan available shall not
(without regard to whether the Borrowers shall have returned the amount thereof
to the Administrative Agent in accordance with this SECTION 4.7) relieve it or
any other Lender of its obligation, if any, hereunder to make its Proportionate
Share of the Loan available on such Borrowing date, but no Lender shall be
responsible for the failure of any other Lender to make its Proportionate Share
of a Loan available on the Borrowing date.
(c) Delegation of Authority to Administrative Agent.
Without limiting the generality of SECTION 14.1, each Lender expressly
authorizes the Administrative Agent to determine on behalf of such Lender (i)
the creation or elimination of Additional Reserves and (ii) whether or not
Inventory or Receivables shall be deemed to constitute Eligible Inventory or
Eligible Receivables. Any withdrawal of authorization under this SECTION 4.7(C)
shall not affect the validity of any Loans made prior to the effectiveness
thereof.
(d) Overadvances. Notwithstanding anything to the
contrary contained elsewhere in this SECTION 4.7 or this Agreement or the other
Loan Documents and whether or not a Default or Event of Default exists at the
time, the Administrative Agent may in its discretion require all Lenders to
honor requests or deemed requests by the Borrowers for Loans at a time that an
Overadvance Condition exists or which would result in an Overadvance Condition
and each Lender shall be obligated to continue to make its Proportionate Share
of any such Overadvance Loan up to a maximum amount outstanding equal to its
Commitment, so long as such Overadvance is not known by the Administrative Agent
to exceed the lesser of (i) $10,000,000 and (ii) 5% of the Borrowing Base at
such time or to exist for more than 30 consecutive Business Days or more than 45
Business Days in any calendar year.
SECTION 4.8 Settlement Among Lenders.
(a) Revolving Credit Loans. It is agreed that each
Lender's Net Outstandings are intended by the Lenders to be equal at all times
to such Lender's Ratable Share of the aggregate principal amount of all
Revolving Credit Loans outstanding. Notwithstanding such agreement, the several
and not joint obligation of each Lender to make its Ratable Share of Loans in
accordance with the terms of this Agreement and each Lender's right to receive
its Ratable Share of principal payments on Revolving Credit Loans, the Lenders
agree that, in order to facilitate the administration of this Agreement and the
Loan Documents, settlement among them may take place on a periodic basis in
accordance with the provisions of this SECTION 4.8.
(b) Settlement Procedures. To the extent and in the
manner hereinafter provided in this SECTION 4.8, settlement among the Lenders as
to Base Rate Revolving Credit Loans may occur periodically on Settlement Dates
determined from time to time by the Administrative Agent, which may occur before
or after the occurrence or during the continuance of a Default or Event of
Default and whether or not all of the conditions set forth in SECTION 5.2 have
been met. On each Settlement Date payments shall be made by or to FCC and the
other Lenders in the manner provided in this SECTION 4.8 in accordance with the
Settlement Report delivered by the Administrative Agent pursuant to the
provisions of this SECTION 4.8 in
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respect of such Settlement Date, so that as of each Settlement Date, and after
giving effect to the transactions to take place on such Settlement Date, each
Lender's Net Outstandings shall equal such Lender's Ratable Share of the
Revolving Credit Loans.
(i) Selection of Settlement Dates. If the
Administrative Agent elects, in its discretion, but subject to
the consent of FCC, to settle accounts among the Lenders with
respect to principal amounts of Base Rate Revolving Credit
Loans less frequently than each Business Day, then the
Administrative Agent shall designate periodic Settlement Dates
which may occur on any Business Day after the Effective Date;
PROVIDED, that (A) the Administrative Agent shall designate as
a Settlement Date any Business Day which is an Interest
Payment Date, (B) a Settlement Date shall occur not less often
than every five Business Days, and (C) settlements with
respect to each Eurodollar Rate Revolving Credit Loan shall
take place on the Borrowing date for such Loan, on the last
day of the Interest Period applicable thereto and on any other
date during such Interest Period on which interest is payable
thereon. The Administrative Agent shall designate a Settlement
Date by delivering to each Lender a Settlement Report not
later than 12:00 noon on the proposed Settlement Date, which
Settlement Report shall be with respect to the period
beginning on the next preceding Settlement Date and ending on
such designated Settlement Date.
(ii) Non-Ratable Loans and Payments. Between
Settlement Dates, the Administrative Agent shall request and
FCC may (but shall not be obligated to) advance to the
Borrowers out of FCC's own funds, the entire principal amount
of any Base Rate Loan requested or deemed requested pursuant
to SECTION 2.2(a) (any such Base Rate Loan being referred to
as a "Non-Ratable Loan"). The making of each Non-Ratable Loan
by FCC shall be deemed to be a purchase by FCC of a 100%
participation in each other Lender's Proportionate Share of
such Non-Ratable Loan. All payments of principal, interest and
any other amount with respect to such Non-Ratable Loan shall
be payable to and received by the Administrative Agent for the
account of FCC. Upon demand by FCC, with notice thereof to the
Administrative Agent, each other Lender shall pay to FCC, as
the repurchase of such participation, an amount equal to 100%
of such Lender's Proportionate Share of the principal amount
of such Non-Ratable Loan. Notwithstanding the provisions of
SECTION 4.16, any payments received by the Administrative
Agent between Settlement Dates which in accordance with the
terms of this Agreement are to be applied to the reduction of
the outstanding principal balance of the Revolving Credit
Loans, shall be paid over to and retained by FCC for such
application, and such payment to and retention by FCC shall be
deemed, to the extent of each other Lender's Proportionate
Share of such payment, to be a purchase by each such other
Lender of a participation in the Revolving Credit Loans
(including the repurchase of participations in Non-Ratable
Loans) held by FCC. Upon demand by another Lender, with notice
thereof to the Administrative Agent, FCC shall pay to the
Administrative Agent, for the account of such other Lender, as
a repurchase of such participation, an amount equal to such
other Lender's Proportionate Share of any such amounts (after
application thereof to the repurchase of any participations of
FCC in such other Lender's Proportionate Share of any
Non-Ratable Loans) paid only to FCC by the Administrative
Agent.
(iii) Settlement. On each Settlement Date each
Lender shall transfer to the Administrative Agent and the
Administrative Agent shall transfer to each Lender such
amounts as are necessary to insure that, after giving effect
to all such transfers, each
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Lender's Net Outstandings are equal to such Lender's
Proportionate Share of the aggregate principal amount of all
Revolving Credit Loans then outstanding.
(iv) Return of Payments. If any amounts received
by FCC in respect of the Secured Obligations are later
required to be returned or repaid by FCC to the Borrowers or
any other obligor or their respective representatives or
successors in interest, whether by court order, settlement or
otherwise, in excess of the FCC's Proportionate Share of all
such amounts required to be returned by all Lenders, each
other Lender shall, upon demand by FCC with notice to the
Administrative Agent, pay to the Administrative Agent for the
account of FCC, an amount equal to the excess of such Lender's
Proportionate Share of all such amounts required to be
returned by all Lenders over the amount, if any, returned
directly by such Lender.
(v) Payments to Administrative Agent, Lenders.
(A) Payment by any Lender to the
Administrative Agent pursuant to this SECTION 4.8
shall be made not later than 1:00 p.m. on the
Business Day such payment is due, PROVIDED that if
such payment is due on demand by another Lender, such
demand is made on the paying Lender not later than
10:00 a.m. on such Business Day. Payment by the
Administrative Agent to any Lender shall be made by
wire transfer, promptly following the Administrative
Agent's receipt of funds for the account of such
Lender and in the type of funds received by the
Administrative Agent, PROVIDED that if the
Administrative Agent receives such funds (A) at or
prior to 1:00 p.m., the Administrative Agent shall
pay such funds to such Lender by 2:00 p.m. on such
Business Day or (B) after 1:00 p.m., the
Administrative Agent shall pay such funds to such
Lender prior to 2:00 p.m. on the following Business
Day. If a demand for payment is made after the
applicable time set forth above, the payment due
shall be made by 2:00 p.m. on the first Business Day
following the date of such demand.
(B) If a Lender shall, at any time,
fail to make any payment to the Administrative Agent
required hereunder, the Administrative Agent may, but
shall not be required to, retain payments that would
otherwise be made to such Lender hereunder and apply
such payments to such Lender's defaulted obligations
hereunder, at such time, and in such order, as the
Administrative Agent may elect in its sole
discretion.
(C) With respect to the payment of any
funds under this SECTION 4.8(B), whether from the
Administrative Agent to a Lender or from a Lender to
the Administrative Agent, the party failing to make
full payment when due pursuant to the terms hereof
shall, upon demand by the other party, pay such
amount together with interest on such amount at the
Federal Funds Rate.
(c) Settlement of Other Secured Obligations. All other
amounts received by the Administrative Agent on account of, or applied by the
Administrative Agent to the payment of, any Secured Obligation owed to the
Lenders (including fees payable to the Lenders pursuant to SECTIONS 4.2(B) and
(E) and proceeds from the sale of, or other realization upon, all or any part of
the Collateral following an Event of Default) that are received by the
Administrative Agent at or prior to 1:00 p.m. on a Business Day will be paid by
the Administrative Agent to each Lender on the same Business Day, and any such
amounts that are received by the Administrative Agent after 1:00 p.m. will be
paid by the Administrative Agent to each Lender on the following Business Day.
Unless otherwise stated herein, the
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Administrative Agent shall distribute to each Lender such Lender's Proportionate
Share of fees payable to the Lenders pursuant to SECTIONS 4.2(b) and (e) and
shall distribute to each Lender such Lender's Proportionate Share (or if
different, such Lender's share based upon the amount of the Secured Obligations
then owing to each Lender) of the proceeds from the sale of, or other
realization upon, all or any part of the Collateral following an Event of
Default.
SECTION 4.9 Mandatory Prepayments. The Borrowers shall permanently
reduce the Commitments (Ratably) by an amount equal to any amount that would
otherwise constitute "Net Available Cash" as defined in the Senior Note
Indenture and be required by the terms thereof to be applied to the prepayment
of the Senior Notes, on the date required to be so applied. To the extent
necessary to comply with the provisions of SECTION 2.3(B) after giving effect to
such reduction, the Borrowers also shall prepay the Loans. Any such prepayment
pursuant to this SECTION 4.9 shall be applied first to Base Rate Loans to the
extent thereof and then to Eurodollar Rate Loans. If any payments are received
which result in prepayment of Eurodollar Rate Loans prior to the end of the
applicable Interest Period, the Borrowers also shall pay any amounts due
pursuant to SECTION 4.10.
SECTION 4.10 Payments Not at End of Interest Period; Failure to Borrow.
If for any reason any payment of principal with respect to any Eurodollar Rate
Loan is made on any day prior to the last day of the Interest Period applicable
to such Eurodollar Rate Loan or, after having given a Notice of Borrowing with
respect to any Eurodollar Rate Loan or a Notice of Conversion or Continuation
with respect to any Loan to be continued as or converted into a Eurodollar Rate
Loan, such Loan is not made or is not continued as or converted into a
Eurodollar Rate Loan due to the Borrowers' failure to borrow or to fulfill the
applicable conditions set forth in ARTICLE 5, the Borrowers shall pay to each
Lender, an amount equal to such Lender's costs and expenses incurred as a result
of such failure, including in connection with obtaining deposits to fund its
Ratable Share of such new (or continued or converted) Loan and redeploying such
deposits. The Borrowers shall pay such amount upon presentation by the
Administrative Agent of a statement setting forth the amount and the applicable
Lender's calculation thereof in reasonable detail, which statement shall be
deemed true and correct absent manifest error.
SECTION 4.11 Notice of Conversion or Continuation. Whenever the
Borrowers desire, subject to the provisions of SECTIONS 4.12 and 4.13, to
convert an outstanding Loan into a Loan or Loans of a different Type or to
continue all or a portion of an outstanding Eurodollar Rate Loan for a
subsequent Interest Period, the Borrowers shall notify the Administrative Agent
in writing (which notice shall be irrevocable) by telecopy or electronic mail
not later than 11:30 a.m. on the date two Business Days before the day on which
such proposed conversion or continuation is to be effective (and such effective
date of any continuation shall be the last day of the Interest Period for the
Eurodollar Rate Loan). Each such notice (a "Notice of Conversion or
Continuation") shall (i) identify the Loan to be converted or continued, the
aggregate outstanding principal balance thereof and, if a Eurodollar Rate Loan,
the last day of the Interest Period applicable to such Loan, (ii) specify the
effective date of such conversion or continuation, (iii) specify the principal
amount of such Loan to be converted or continued and, if converted, the Type or
Types into which the same is to be converted, and (iv) the Interest Period to be
applicable to the Eurodollar Rate Loan as converted or continued, and shall be
immediately followed by a written confirmation thereof by the Borrowers in a
form acceptable to the Administrative Agent, PROVIDED that if such written
confirmation differs in any respect from the action taken by the Lenders, the
records of the Administrative Agent shall control absent manifest error.
SECTION 4.12 Conversion or Continuation. Provided that no Default or
Event of Default shall have occurred and be continuing (but subject to the
provisions of SECTIONS 4.11 and 4.13), the Borrowers may request that all or any
part of any outstanding Loan be converted into a Loan or Loans of a different
Type or be continued as a Loan or Loans of the same Type, in the same aggregate
principal amount, on any Business Day (which, in the case of continuation of a
Eurodollar Rate Loan, shall be the last day of
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the Interest Period applicable to such Loan), upon notice (which notice shall be
irrevocable) given in accordance with SECTION 4.11.
SECTION 4.13 Duration of Interest Periods; Maximum Number of Eurodollar
Rate Loans; Minimum Increments.
(a) Subject to the provisions of the definition "Interest
Period," the duration of each Interest Period applicable to a Eurodollar Rate
Loan shall be as specified in the applicable Notice of Borrowing or Notice of
Conversion or Continuation. The Borrowers may elect a subsequent Interest Period
to be applicable to any Eurodollar Rate Loan by giving a Notice of Conversion or
Continuation with respect to such Loan in accordance with SECTION 4.11.
(b) If the Administrative Agent does not receive a notice
of election in accordance with SECTION 4.11 with respect to the continuation of
Eurodollar Rate Loan within the applicable time limits specified in said SECTION
4.11, or if, when such notice must be given, a Default or Event of Default
exists or such Type of Loan is not available, the Borrowers shall be deemed to
have elected to convert such Eurodollar Rate Loan in whole into a Base Rate Loan
on the last day of the Interest Period therefor.
(c) Notwithstanding the foregoing, the Borrowers may not
select an Interest Period that would end, but for the provisions of the
definition "Interest Period," after the Termination Date.
(d) In no event shall there be more than six Eurodollar
Rate Loans outstanding hereunder at any time. For the purpose of this SUBSECTION
(D), each Loan having a distinct Interest Period shall be deemed to be a
separate Loan hereunder.
(e) Each Eurodollar Rate Loan shall be in a minimum
amount of $1,000,000 or an integral multiple of $250,000 in excess thereof.
SECTION 4.14 Changed Circumstances.
(a) If the introduction of or any change in or in the
interpretation of (in each case, after the date hereof) any law or regulation
makes it unlawful, or any Governmental Authority asserts, after the date hereof,
that it is unlawful, for any Lender to perform its obligations hereunder to make
Eurodollar Rate Loans or to fund or maintain Eurodollar Rate Loans hereunder,
such Lender shall notify the Administrative Agent of such event and the
Administrative Agent shall notify the Borrowers of such event, and the right of
the Borrowers to select Eurodollar Rate Loans for any subsequent Interest Period
or in connection with any subsequent conversion of any Loan shall be suspended
until the Administrative Agent shall notify the Borrowers that the circumstances
causing such suspension no longer exist, and the Borrowers shall forthwith
prepay in full all Eurodollar Rate Loans then outstanding and shall pay all
interest accrued thereon through the date of such prepayment or conversion,
unless the Borrowers, within three Business Days after such notice from the
Administrative Agent, request the conversion of all Eurodollar Rate Loans then
outstanding into Base Rate Loans; PROVIDED, that if the date of such repayment
or proposed conversion is not the last day of the Interest Period applicable to
such Eurodollar Rate Loans, the Borrowers shall also pay any amount due pursuant
to SECTION 4.10.
(b) If the Administrative Agent shall, at least one
Business Day before the date of any requested Borrowing or the effective date of
any conversion or continuation of an existing Loan to be made or continued as or
converted into a Eurodollar Rate Loan (each such requested Borrowing made and
Loan to be converted or continued, a "Pending Loan"), notify the Borrowers that
the Eurodollar Rate will not adequately reflect the cost to the Lenders of
making or funding such Pending Loan as a Eurodollar Rate Loan or that the
Interbank Offered Rate is not determinable from any interest rate reporting
service
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of recognized standing, then the right of the Borrowers to select Eurodollar
Rate Loan for such Pending Loan, any subsequent Loan or in connection with any
subsequent conversion or continuation of any Loan shall be suspended until the
Administrative Agent shall notify the Borrowers that the circumstances causing
such suspension no longer exist, and each Pending Loan and each such subsequent
Loan requested to be made, continued or converted shall be made or continued as
or converted into a Base Rate Loan.
SECTION 4.15 Cash Collateral Account; Investment Accounts.
(a) Cash Collateral Account. The Borrowers shall
establish a Cash Collateral Account in which to deposit Cash Collateral from
time to time:
(i) representing payments received pursuant to
SECTION 2.3(C) in excess of then outstanding Loans or on
account of Eurodollar Rate Loans which would otherwise result
in repayment of such Loans prior to the end of the Interest
Period applicable thereto (; provided, however, that if an
Event of Default exists, such amounts may be applied by the
Administrative Agent to the repayment of the Loans and the
other Secured Obligations prior to the end of any Interest
Period),
(ii) with respect to Letter of Credit Obligations
(x) at the request of the Administrative Agent upon the
occurrence of an Event of Default, or (y) for the purposes set
forth in SECTION 4.6 in the event of termination of this
Agreement, or
(iii) for any other purpose as may be agreed
between the Administrative Agent and the Borrowers to provide
security for the Secured Obligations.
On the last day of the applicable Interest Period as to any amounts deposited to
the Cash Collateral Account pursuant to CLAUSE (I) above or if a drawing under a
Letter of Credit occurs with respect to any amounts deposited to the Cash
Collateral Account pursuant to CLAUSE (II) above or if an Event of Default
exists, the Borrowers hereby authorize the Administrative Agent to use the
monies deposited in the Cash Collateral Account to make payment to the payee
with respect to such Loan or drawing. The Cash Collateral Account shall be in
the name of the Administrative Agent and the Administrative Agent shall have
sole dominion and control over, and sole access to, the Cash Collateral Account.
Neither any Borrower nor any Person claiming on behalf of or through any
Borrower shall have any right to withdraw any of the funds held in the Cash
Collateral Account. The Borrowers agree that they will not at any time (x) sell
or otherwise dispose of any interest in the Cash Collateral Account or any funds
held therein or (y) create or permit to exist any Lien upon or with respect to
the Cash Collateral Account or any funds held therein, except as provided in or
contemplated by this Agreement. The Administrative Agent shall exercise
reasonable care in the custody and preservation of any funds held in the Cash
Collateral Account and shall be deemed to have exercised such care if such funds
are accorded treatment substantially equivalent to that which the Administrative
Agent accords other funds deposited with the Administrative Agent, it being
understood that the Administrative Agent shall not have any responsibility for
taking any necessary steps to preserve rights against any parties with respect
to any funds held in the Cash Collateral Account. Subject to the right of the
Administrative Agent to withdraw funds from the Cash Collateral Account as
provided herein, the Administrative Agent will, so long as no Default or Event
of Default shall have occurred and be continuing, from time to time invest funds
on deposit in the Cash Collateral Account, reinvest proceeds of any such
investments which may mature or be sold, and invest interest or other income
received from any such investments, in each case, in Cash Equivalents, as the
Borrowers may direct prior to the occurrence of a Default or Event of Default
and as the Administrative Agent may select after the occurrence and during the
continuance of a Default or Event of Default. Such proceeds, interest and income
which are not so invested or reinvested in Cash Equivalents shall be deposited
and
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held by the Administrative Agent in the Cash Collateral Account. The
Administrative Agent makes no representation or warranty as to, and shall not be
responsible for, the rate of return, if any, earned in any Cash Collateral. Any
earnings on Cash Collateral shall be held as additional Cash Collateral on the
terms set forth in this SECTION 4.15.
(b) Investment Accounts. The Borrowers may from time to
time establish one or more Investment Accounts with the Administrative Agent,
any Lender or any Affiliate of a Lender, for the purpose of investing in Cash
Equivalents any Cash Collateral representing payments received pursuant to
SECTION 2.3(C) in excess of then outstanding Loans or on account of Eurodollar
Rate Loans which would otherwise result in repayment of such Loans prior to the
end of the Interest Period applicable thereto. On the last day of the applicable
Interest Period as to any such amounts deposited to an Investment Account or at
any time an Event of Default exists, the Borrowers hereby authorize the
Administrative Agent to use the monies deposited in the Investment Accounts to
make payment to the Loans and the other Secured Obligations. The Borrowers
hereby acknowledge and agree that each such Investment Account shall constitute
Collateral hereunder and shall be maintained with the Administrative Agent, a
Lender or Affiliate of a Lender as security for the Secured Obligations.
Notwithstanding the foregoing, until such time as the Administrative Agent shall
otherwise instruct the Lender or the Affiliate of a Lender maintaining such
account, the Borrowers shall be entitled to direct the investment of the funds
deposited therein. The Borrowers agree that they will not at any time (x) sell
or otherwise dispose of any interest in any Investment Account or any funds held
therein other than by application thereof to any Secured Obligation, or (y)
create or permit to exist any Lien upon or with respect to any Investment
Account or any funds held therein, except as provided in or contemplated by this
Agreement. The Borrowers agree that at any time, and from time to time, at the
expense of the Borrowers, the Borrowers will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Administrative Agent or any Lender may
request, in order to perfect and protect any security interest in any Investment
Account granted or purported to be granted hereby or to enable the Borrowers,
for their respective benefit and the benefit of the Lenders, to exercise and
enforce its rights and remedies hereunder with respect to such Investment
Account.
SECTION 4.16 Allocation of Payments from Borrowers. All monies to be
applied to the Secured Obligations, whether such monies represent voluntary
payments by the Borrowers or are received pursuant to demand for payment or
realized from any disposition of Collateral, shall be allocated among the
Administrative Agent and such of the Lenders and other holders of the Secured
Obligations as are entitled thereto (and, with respect to monies allocated to
the Lenders, on a Ratable basis unless otherwise provided in this SECTION 4.16):
(i) first, to the Swingline Lender (or to any Lender to the extent such Lender
has previously repaid such Loan) to pay principal and accrued interest on any
portion of any Swingline Loan; (ii) second, to the Administrative Agent to pay
the amount of expenses that have not been reimbursed to the Administrative Agent
by the Borrowers or the Lenders, together with interest accrued thereon; (iii)
third, to the Administrative Agent to pay any indemnified amount that has not
been paid to the Administrative Agent by the Borrowers or the Lenders, together
with interest accrued thereon; (iv) fourth, to the Administrative Agent to pay
any fees due and payable to the Administrative Agent under this Agreement; (v)
fifth, to the Lenders for any indemnified amount that they have paid to the
Administrative Agent and for any expenses that they have reimbursed to the
Administrative Agent; (vi) sixth, to the Lenders to pay any fees due and payable
to the Lenders under this Agreement; (vii) seventh, in payment of the unpaid
principal and accrued interest in respect of the Loans and any other Secured
Obligations (including Secured Obligations arising under Hedging Agreements but
excluding any other Banking Relationship Debt) then outstanding and held by any
Lender to be shared among the Lenders on a Ratable basis, or on such other basis
as may be agreed upon in writing by all of the Lenders (which agreement or
agreements may be entered into without notice to or the consent or approval of
the Borrowers); and (viii) eighth, to any Banking Relationship Debt (other than
Secured Obligations arising under Hedging Agreements) on a pro rata basis. The
allocations set forth in this
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SECTION 4.16 are solely to determine the rights and priorities of the
Administrative Agent and the Lenders as among themselves and may be changed by
the Administrative Agent and the Lenders without notice to or the consent or
approval of the Borrowers or any other Person. Whenever allocation is made
pursuant to this SECTION 4.16 to the holder of Secured Obligations in which
another Lender acquires a participation, the monies received by such holder
shall be shared as between such holder and such participants on a Ratable basis.
SECTION 4.17 Borrowers' Representative. American Tire shall act under
this Agreement as the representative of all Borrowers, and each other Borrower
hereby appoints American Tire as its representative, hereunder, for all
purposes, including requesting borrowings and receiving account statements and
other notices and communications to the Borrowers (or any of them) from the
Administrative Agent or any Lender. The Administrative Agent and the Lenders may
rely, and shall be fully protected in relying, on any request for borrowing,
disbursement instruction, report, information or any other notice or
communication made or given by American Tire, whether in its own name, on behalf
of any other Borrower or on behalf of "the Borrowers," and neither the
Administrative Agent nor any Lender shall have any obligation to make any
inquiry or request any confirmation from or on behalf of any other Borrower as
to the binding effect on it of any such request, instruction, report,
information, notice or communication, nor shall the joint and several character
of the Borrowers' liability for the Secured Obligations be affected. The
Administrative Agent and each Lender intend to maintain a single Loan Account in
the name of "American Tire Distributors, Inc." hereunder and each Borrower
expressly agrees to such arrangement and confirms that such arrangement shall
have no effect on the joint and several character of its liability for the
Secured Obligations.
SECTION 4.18 Joint and Several Liability.
(a) Joint and Several Liability. The Secured Obligations
shall constitute one joint and several direct and general obligation of all of
the Borrowers. Notwithstanding anything to the contrary contained herein, each
of the Borrowers shall be jointly and severally, with each other Borrower,
directly and unconditionally liable to the Administrative Agent and the Lenders
for all Secured Obligations and shall have the obligations of co-maker with
respect to the Loans, the Notes, and the Secured Obligations, it being agreed
that the advances to each Borrower inure to the benefit of all Borrowers, and
that the Administrative Agent and the Lenders are relying on the joint and
several liability of the Borrowers as co-makers in extending the Loans
hereunder. Each Borrower hereby unconditionally and irrevocably agrees that upon
default in the payment when due (whether at stated maturity, by acceleration or
otherwise) of any principal of, or interest on, any Loan or other Secured
Obligation payable to the Administrative Agent or any Lender, it will forthwith
pay the same, without notice or demand.
(b) No Modification or Release of Obligations. No payment
or payments made by any of the Borrowers or any other Person or received or
collected by the Administrative Agent or any Lender from any of the Borrowers or
any other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Secured Obligations shall be deemed (except to the extent
Secured Obligations are satisfied) to modify, release or otherwise affect the
liability of each Borrower under this Agreement, which shall remain liable for
the Secured Obligations until the Secured Obligations are paid in full and the
Commitments are terminated.
SECTION 4.19 Obligations Absolute. Each Borrower agrees that the
Secured Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Administrative Agent or any Lender with respect thereto. All Secured Obligations
shall be conclusively
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presumed to have been created in reliance hereon. The liabilities under this
Agreement shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any Loan
Documents or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payments
of, or in any other term of, all or any part of the Secured Obligations, or any
other amendment or waiver thereof or any consent to departure therefrom,
including any increase in the Secured Obligations resulting from the extension
of additional credit to any Borrower or otherwise;
(c) any taking, exchange, release or non-perfection of
any collateral, or any release or amendment or waiver of or consent to departure
from any guaranty for all or any of the Secured Obligations;
(d) any change, restructuring or termination of the
corporate structure or existence of any Borrower; or
(e) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, any Borrower or a
guarantor.
This Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the Secured
Obligations is rescinded or must otherwise be returned by the Administrative
Agent or any Lender upon the insolvency, bankruptcy or reorganization of any
Borrower or otherwise, all as though such payment had not been made.
SECTION 4.20 Waiver of Suretyship Defenses. Each Borrower agrees that
the joint and several liability of the Borrowers provided for in SECTION 4.18
shall not be impaired or affected by any modification, supplement, extension or
amendment or any contract or agreement to which the other Borrowers may
hereafter agree (other than an agreement signed by the Administrative Agent and
the Lenders specifically releasing such liability), nor by any delay, extension
of time, renewal, compromise or other indulgence granted by the Administrative
Agent or any Lender with respect to any of the Secured Obligations, nor by any
other agreements or arrangements whatever with the other Borrowers or with
anyone else, each Borrower hereby waiving all notice of such delay, extension,
release, substitution, renewal, compromise or other indulgence, and hereby
consenting to be bound thereby as fully and effectually as if it had expressly
agreed thereto in advance. The liability of each Borrower is direct and
unconditional as to all of the Secured Obligations, and may be enforced without
requiring the Administrative Agent or any Lender first to resort to any other
right, remedy or security. Each Borrower hereby expressly waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Secured Obligations, the Notes, this Agreement or any other Loan Document (other
than notices expressly required in this Agreement or by any of the Loan
Documents) and any requirement that the Administrative Agent or any Lender
protect, secure, perfect or insure any Lien or any property subject thereto or
exhaust any right or take any action against any Borrower or any other Person or
any collateral, including any rights any Borrower may otherwise have under the
New York General Obligations Law.
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ARTICLE 5
CONDITIONS PRECEDENT
SECTION 5.1 Conditions Precedent to Effectiveness of Agreement.
Notwithstanding any other provision of this Agreement, this Agreement shall not
become effective nor shall the Lenders or FCC have any obligation to make any
Loans or to cause the issuance of any Letter of Credit, respectively, on the
Effective Date unless and until the following conditions precedent are
satisfied:
(a) Documents. The Administrative Agent shall have
received on or before the Effective Date the following, each in form and
substance satisfactory to the Administrative Agent, its special counsel and the
Lenders and (except for the Notes) in sufficient copies for each Lender:
(1) Agreement. This Agreement, duly executed and
delivered by the Borrowers and the other Lenders;
(2) Notes. The Notes, each dated the Effective
Date and duly executed and delivered by the Borrowers;
(3) Articles, Bylaws and Resolutions. A
certificate, dated the Effective Date, of the Secretary or an
Assistant Secretary of each Borrower, as to and having
attached thereto copies of the articles of incorporation and
by-laws and shareholder agreements of such Borrower as in
effect on the Effective Date and all corporate action,
including shareholder approval, if necessary, taken by such
Borrower and/or its shareholders to authorize the execution,
delivery and performance of this Agreement and the other Loan
Documents to which such Borrower is a party and, in the case
of each Borrower, the Borrowings under this Agreement;
(4) Incumbency Certificates. A certificate,
dated the Effective Date, of the Secretary or an Assistant
Secretary of each Borrower, as to the incumbency and specimen
signatures of each of the officers of such Borrower who is
authorized to execute and deliver this Agreement or any other
Loan Document on behalf of such Borrower or any document,
certificate or instrument to be delivered in connection with
this Agreement or the other Loan Documents to which such
Borrower is a party and, in the case of each Borrower, to
request Borrowings under this Agreement;
(5) Good Standing Certificates. A certificate as
of a recent date evidencing the good standing of each Borrower
in the jurisdiction of its incorporation and in each other
jurisdiction in which it is qualified as a foreign corporation
to transact business and conducts business;
(6) Landlord's Waiver. Landlord's waiver and
consent agreements duly executed on behalf of each landlord of
real property on which any Collateral is located, except to
the extent that the Rent Reserve appropriately reflects the
absence of such a waiver;
(7) Schedules of Inventory and Receivables. A
Schedule of Inventory and a Schedule of Receivables, each
prepared as of a recent date;
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(8) Insurance Coverage. Certificates or binders
of insurance relating to each of the policies of insurance
covering any of the Collateral together with loss payable
clauses which comply with the terms of SECTION 8.8(B);
(9) Borrowing Base Certificate. A Borrowing Base
Certificate prepared as of March 12, 2004 or a later date,
duly executed and delivered by the Financial Officer
demonstrating Loan Availability of not less than $25,000,000,
after giving effect to the Loans to be made on the Effective
Date, the Borrowers' payment (or provision for the payment) of
all costs and expenses incurred by Borrowers in connection
with this Agreement, and any transactions contemplated by this
Agreement to occur on or before the Effective Date;
(10) Notice of Borrowing. The Initial Notice of
Borrowing dated the Effective Date from the Borrowers to the
Administrative Agent requesting the Loans to be made on the
Effective Date and specifying the method of disbursement;
(11) Financial Statements. Copies of all the
financial statements referred to in SECTION 6.1(N) and meeting
the requirements thereof;
(12) Officer's Certificate. A certificate of the
President or a Vice President of American Tire stating that,
to the best of his knowledge and based on an examination
sufficient to enable him to make an informed statement, (a)
all of the representations and warranties made or deemed to be
made under this Agreement are true and correct as of the
Effective Date, both with and without giving effect to the
Loans to be made on the Effective Date and the application of
the proceeds thereof, and (b) as of the Effective Date, no
Default or Event of Default exists;
(13) Other Loan Documents. Copies of each of the
other Loan Documents dated the Effective Date, duly executed
by the parties thereto with evidence satisfactory to the
Administrative Agent and its counsel of the due authorization,
binding effect and enforceability of each such Loan Document
on each such party and such other documents and instruments as
the Administrative Agent may reasonably request;
(14) Legal Opinions. An opinion dated the
Effective Date of each of Xxxxxxxxx & Xxxxxxx, counsel for the
Borrowers, and of such local counsel as the Administrative
Agent shall deem necessary or desirable, opining as to such
matters in connection with this Agreement as the
Administrative Agent or its counsel may reasonably request;
(15) Pledge Agreements. Each Pledge Agreement
duly executed and delivered by the Borrowers party thereto,
together with all original stock certificates and stock
powers, undated and in blank, constituting Pledged Collateral
(as defined therein) and required to be delivered by the
pledgor thereunder to the Administrative Agent in connection
with the execution and delivery of the Pledge Agreements;
(16) Financing Statements. Written evidence that
the Financing Statements and any amendments thereto have been
filed in each jurisdiction where such filing may be necessary
or appropriate to perfect the Security Interest.
(17) Fees. The Administrative Agent shall have
received from the Borrowers all of the fees payable on the
Effective Date referred to herein and in the Fee Letter; and
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(18) Priority. The Administrative Agent shall
have received satisfactory evidence that the Administrative
Agent (for the benefit of the Secured Parties) has a valid and
perfected first priority security interest as of such date in
all of the Collateral and which Collateral shall be subject to
no Liens other than Liens permitted by SECTIONS 11.9(A), (B),
(E) and (F).
(b) Litigation. The Administrative Agent shall have
received evidence satisfactory to it that no action, proceeding, investigation,
regulation or legislation, shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain or
prohibit, or to obtain substantial damages in respect of, or which is related to
or arises out of, this Agreement, or the consummation of the transactions
contemplated hereby, or which may otherwise have a Materially Adverse Effect.
(c) No Material Adverse Change. There shall not have
occurred any event or series of events or circumstances or group of
circumstances which individually or in the aggregate, in the sole judgment of
the Administrative Agent, would have a Materially Adverse Effect.
(d) Receipt of Funds. The Administrative Agent shall have
received and disbursed such amounts from and to each Existing Lender (and each
such Lender shall be deemed to have purchased from or sold to each other such
Lender such interest in such Lender's Revolving Credit Loans outstanding
immediately prior to the Effective Date) as would result in each such Lender's
having Revolving Credit Loans outstanding on the Effective Date equal to its
Proportionate Share (based upon the Commitments set forth on ANNEX A hereto) of
the outstanding principal amount of such Revolving Credit Loans.
(e) ISDA Amendment. The Administrative Agent shall have
received, for the benefit of, and in form and substance satisfactory to, the
Bank, an amendment to the Borrowers' ISDA Master Agreement with Bank, duly
executed and delivered by the Borrowers.
SECTION 5.2 All Loans; Letters of Credit. The obligation of the Lenders
to make (but not to continue or convert any outstanding Loan, which shall be
subject to the provisions of SECTION 4.12) any Loan hereunder, including any
Loans to be made on the Effective Date and all subsequent Loans, and of FCC to
cause the issuance of any Letter of Credit are further subject to the following:
(a) at such time, both with and without giving effect to
the Loans to be made at such time and the application of the proceeds thereof or
the Letter of Credit Guarantee to be issued, (i) no Default or Event of Default
shall exist, and (ii) the representations and warranties of the Borrowers set
forth herein and in the other Loan Documents (insofar as they relate to the
transactions provided for herein, the ability of the Borrowers to repay the
Secured Obligations, or any of the Collateral) shall be true and correct in all
material respects, except (A) to the extent any such representation or warranty
is made exclusively with reference to an earlier date or (B) as a result of
changes in the nature of a Borrower's or, if applicable, any of its
Subsidiaries' business or operations that may occur after the date hereof in the
ordinary course of business of such Borrower or Subsidiary so long as the
Administrative Agent has (or, if otherwise required by the terms of this
Agreement, the Required Lenders or all the Lenders have) consented to such
changes or such changes are not violative of any provision of this Agreement,
and
(b) the corporate actions of the Borrowers referred to in
SECTION 5.1(A)(3) shall remain in full force and effect and the incumbency of
officers shall be as stated in the certificates of incumbency delivered pursuant
to SECTION 5.1(a)(4) or as subsequently modified and reflected in a certificate
of incumbency delivered to the Administrative Agent.
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Each request or deemed request for any Borrowing or other advance or submission
of any request for any Letter of Credit hereunder shall be deemed to be a
certification by the Borrowers to the Administrative Agent and the Lenders as to
the matters set forth in SECTIONS 5.2(a) and (B) and the Administrative Agent
and the Lenders may, without waiving either condition, consider the conditions
specified in SECTIONS 5.2(A) and (B) fulfilled and a representation by the
Borrowers to such effect made, if no written notice to the contrary is received
by the Administrative Agent prior to the making of the Loan then to be made or
the issuance of the Letter of Credit so requested.
SECTION 5.3 Conditions as Covenants. In the event that the Lenders
permit this Agreement to become effective and make any Loans on the Effective
Date or permit FCC to issue a Letter of Credit Guarantee prior to the
satisfaction of all conditions precedent set forth in SECTION 5.1, and such
conditions are not waived in writing by the Administrative Agent, the Borrowers
shall nevertheless cause such condition or conditions to be satisfied within 30
days after the making of such Loans or the issuance of such Letter of Credit
Guarantee.
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BORROWERS
SECTION 6.1 Representations and Warranties. The Borrowers represent and
warrant to the Administrative Agent and to the Lenders as follows:
(a) Organization; Power; Qualification. Each Borrower and
each of its Subsidiaries is a corporation, duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation, having the
power and authority to own its properties and to carry on its business as now
being and hereafter proposed to be conducted and is duly qualified and
authorized to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification or
authorization. The jurisdictions in which each of the Borrowers and each of
their respective Subsidiaries is qualified to do business as a foreign
corporation on the Effective Date are listed on SCHEDULE 6.1(A).
(b) Capitalization; Shareholder Agreements. The
outstanding capital stock of the Borrowers has been duly and validly issued and
is fully paid and nonassessable, and the number and owners of such shares of
capital stock of the Borrowers are set forth on SCHEDULE 6.1(B). The issuance
and sale of the Borrowers' capital stock have been registered or qualified under
applicable federal and state securities laws or are exempt therefrom. Except as
set forth in American Tire's SEC filings, there are no Material Contracts with
respect to the capital stock of a Borrower.
(c) Subsidiaries. SCHEDULE 6.1(C) correctly sets forth
the name of each Subsidiary of any Borrower, its jurisdiction of incorporation,
the name of its immediate parent or parents, and the percentage of its issued
and outstanding securities owned by the Borrowers or any other Subsidiary of any
Borrower. Except as set forth on SCHEDULE 6.1(C) or in the compliance
certificate most recently delivered pursuant to SECTION 10.3,
(i) no Subsidiary has issued any securities
convertible into shares of such Subsidiary's capital stock or
any options, warrants or other rights to acquire any shares or
securities convertible into such shares,
(ii) the outstanding stock and securities of each
Subsidiary are owned by a Borrower or a Wholly Owned
Subsidiary of a Borrower, or by a Borrower and one or more of
its Wholly Owned Subsidiaries, free and clear of all Liens,
warrants, options and rights of others of any kind whatsoever,
and
(iii) no Borrower has any Subsidiaries.
The outstanding capital stock of each Subsidiary has been duly and validly
issued and is fully paid and nonassessable by the issuer, and the number and
owners of the shares of such capital stock are set forth on SCHEDULE 6.1(c).
(d) Authorization of Agreement, Notes, Loan Documents and
Borrowing. Each Borrower has the right and power, and has taken all necessary
action to authorize it, to execute, deliver and perform this Agreement and each
of the Loan Documents to which it is a party in accordance with their respective
terms. This Agreement and each of the Loan Documents have been duly executed and
delivered by the duly authorized officers of each Borrower and each is, or when
executed and delivered in
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accordance with this Agreement will be, a legal, valid and binding obligation of
each such Borrower, enforceable in accordance with its terms.
(e) Compliance of Agreement, Notes, Loan Documents and
Borrowing with Laws, Etc. The execution, delivery and performance of this
Agreement and each of the Loan Documents in accordance with their respective
terms and the borrowings hereunder do not and will not, by the passage of time,
the giving of notice or otherwise,
(i) require any material Governmental Approval
or violate in any material respect any Applicable Law relating
to a Borrower or any of its Subsidiaries,
(ii) conflict with, result in a breach of or
constitute a default under the articles or certificate of
incorporation, by-laws or any shareholders' agreement of a
Borrower or any of its Subsidiaries,
(iii) conflict with, result in a breach of or
constitute a default under any material provisions of any
indenture, agreement or other instrument to which a Borrower
or any of its Subsidiaries is a party or by which a Borrower,
any of its Subsidiaries or any of any Borrower's or such
Subsidiaries' property may be bound or any material
Governmental Approval relating to a Borrower or any of its
Subsidiaries, or
(iv) result in or require the creation or
imposition of any Lien upon or with respect to any property
now owned or hereafter acquired by any Borrower other than the
Security Interest.
(f) Business. Each Borrower and each Subsidiary is
engaged in the business described on SCHEDULE 6.1(F).
(g) Compliance with Law; Governmental Approvals. Each
Borrower and each of its Subsidiaries
(i) has all Governmental Approvals, including
permits relating to Environmental Laws and federal, state and
local ordinances and regulations, required by any Applicable
Law for it to conduct its business, each of which is in full
force and effect, is final and not subject to review on appeal
and is not the subject of any pending or, to the knowledge of
any Borrower, threatened attack by direct or collateral
proceeding, except for such Governmental Approvals the failure
to obtain or maintain which would not have a Materially
Adverse Effect, and
(ii) is in compliance with each Governmental
Approval applicable to it and in compliance with all other
Applicable Laws relating to it, including all Environmental
Laws and all occupational health and safety laws applicable to
any Borrower, any of its Subsidiaries or their respective
properties, except for instances of noncompliance which would
not, singly or in the aggregate, cause a Default or Event of
Default or have a Materially Adverse Effect,
(h) Title to Properties. Except as set forth in SCHEDULE
6.1(H), each Borrower and each of the Subsidiaries has valid and legal title to
or leasehold interest in all of the Collateral and all other material personal
property, Real Estate and other assets used in its business.
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(i) Liens. Except as set forth in SCHEDULE 6.1(i), none
of the properties and assets of any Borrower or any Subsidiary is subject to any
Lien, except Liens otherwise permitted by SECTION 11.9. Other than the Financing
Statements, no financing statement under the UCC of any State or other
instrument evidencing a Lien on the Collateral which names a Borrower or any
Subsidiary as debtor has been filed (and has not been terminated) in any State
or other jurisdiction, and neither any Borrower nor any Subsidiary has signed
any such financing statement or other instrument (which financing statement or
other instrument has not been terminated) or any security agreement (which
security agreement has not been terminated) authorizing any secured party
thereunder to file any such financing statement or instrument.
(j) Debt and Guarantees. SCHEDULE 6.1(j) is a complete
and correct listing as of the Effective Date and as of the date of the
compliance certificate most recently delivered pursuant to SECTION 10.3 of all
(i) Debt and (ii) Guarantees of each Borrower and each of its Subsidiaries
(other than Guarantees by a Borrower of obligations of another Borrower). Each
Borrower and each of its Subsidiaries has performed and is in compliance in all
material respects with all of the terms of such Debt and Guarantees and all
instruments and agreements relating thereto, and no default or event of default,
or event or condition which with notice or lapse of time, or both, would
constitute such a default or event of default, exists with respect to any such
Debt or Guaranty.
(k) Litigation. Except as set forth on SCHEDULE 6.1(K),
as of the Effective Date there are no actions, suits or proceedings pending
(nor, to the knowledge of any Borrower, are there any actions, suits or
proceedings threatened, or any reasonable basis therefor) against or in any
other way relating to or affecting a Borrower or its Subsidiaries or any of
their respective properties in any court or before any arbitrator of any kind or
before or by any governmental body, EXCEPT actions, suits or proceedings of the
character normally incident to the kind of business conducted by the Borrowers
and their Subsidiaries which, would not singly or in the aggregate have a
Materially Adverse Effect, and there are no strikes or walkouts in progress,
pending or contemplated relating to any labor contracts to which a Borrower or
any of its Subsidiaries is a party, relating to any labor contracts being
negotiated, or otherwise.
(l) Tax Returns and Payments. Except as set forth on
SCHEDULE 6.1(L), all United States federal, state and local as well as foreign
national, provincial and local and other tax returns of each Borrower and each
of its Subsidiaries required by Applicable Law to be filed have been duly filed,
and all United States federal, state and local and foreign national, provincial
and local and other taxes, assessments and other governmental charges or levies
upon a Borrower or any of its Subsidiaries or their respective property, income,
profits and assets which are due and payable have been paid, except any such
nonpayment which is at the time permitted under SECTION 9.6. The charges,
accruals and reserves on the books of the Borrowers and each Subsidiary as of
the Effective Date in respect of United States federal, state and local and
foreign national, provincial and local taxes for all fiscal years and portions
thereof since December 27, 2003 are in the judgment of the Borrowers adequate,
and as of the Effective Date the Borrowers know of no reason to anticipate any
additional assessments for any of such years which, singly or in the aggregate,
might have a Materially Adverse Effect.
(m) Burdensome Provisions. Except as set forth on
American Tire's SEC filings, neither Borrower nor any Subsidiary is a party to
any Material Contract or subject to any charter or corporate restriction,
Governmental Approval or Applicable Law compliance with the terms of which is
reasonably likely to have a Materially Adverse Effect.
(n) Financial Statements. The Borrowers have furnished to
the Administrative Agent and the Lenders copies of American Tire's (A) audited
consolidated balance sheet as at December 28, 2002 and the related audited
consolidated statements of income, cash flow and shareholders equity for
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the Fiscal Year then ended and (B) an unaudited preliminary consolidated balance
sheet as at December 27, 2003 and the related consolidated income statement and
statement of cash flow for the one- and the twelve-Fiscal Month periods then
ended, which financial statements present fairly and in all material respects in
accordance with GAAP the financial positions of American Tire and its
Consolidated Subsidiaries as at their respective dates, and the results of
operations of American Tire and its Consolidated Subsidiaries for the periods
then ended (except, in the case of the unaudited preliminary statements, for the
omission of notes and subject to normal year-end audit adjustments).
(o) Adverse Change. Since the date of the audited
financial statements of American Tire and its Consolidated Subsidiaries most
recently delivered to the Administrative Agent and the Lenders,
(i) no material adverse change has occurred in
the business, assets, liabilities, financial condition,
results of operations or business prospects of American Tire,
the other Borrowers and their respective Subsidiaries taken as
a whole, and
(ii) no event has occurred or failed to occur
which has had, or could reasonably be expected to have, singly
or in the aggregate, a Materially Adverse Effect.
(p) ERISA. Neither any Borrower nor any Related Company
maintains or contributes to any Benefit Plan or Multiemployer Plan other than
those listed on SCHEDULE 6.1(p). Except as set forth on SCHEDULE 6.1(P), and
subject to correction of possible Remediable Defects, each Benefit Plan is in
substantial compliance with ERISA and the Code, including those provisions
thereof relating to reporting and disclosure, and neither any Borrower nor any
Related Company has received any notice from a governmental agency asserting
that a Benefit Plan is not in compliance with ERISA. No material liability to
the PBGC or to a Multiemployer Plan has been, or is expected to be, incurred by
any Borrower or any Related Company. Except as set forth on SCHEDULE 6.1(P), and
subject to correction of possible Remediable Defects, each Benefit Plan intended
to qualify under Section 401(a) of the Code so qualifies and any related trust
is exempt from federal income tax under Section 501(a) of the Code. A favorable
determination letter from the IRS has been issued or applied for with respect to
each such plan and trust and nothing that is not a Remediable Defect has
occurred since the date of such determination letter that would adversely affect
such qualification or tax-exempt status. No Benefit Plan subject to the minimum
funding standards of the Code has failed to meet such standards. Neither any
Borrower nor any Related Company has transferred any pension plan liability in a
transaction that could be subject to Sections 4069 or 4212(c) of ERISA. Except
as set forth on SCHEDULE 6.1(P), neither any Borrower nor any Related Company
has any liability, actual or contingent, with respect to any Benefit Plan other
than to make payments to the Benefit Plan in accordance with its terms, and
there are no pending or threatened claims against a Benefit Plan except those of
the character normally incident to the kind of business conducted by the
Borrowers and their Subsidiaries which, would not singly or in the aggregate
have a Materially Adverse Effect. No non-exempt prohibited transaction with the
meaning of Section 4975 of the Code or Section 406 of ERISA has occurred with
respect to a Benefit Plan as of the Effective Date. Except under plans listed on
SCHEDULE 6.1(P), no employee or former employee of any Borrower or any Related
Company is or may become entitled to any benefit under a "welfare plan" within
the meaning of Section 3(1) of ERISA and is sponsored, maintained, contributed
to or required to be contributed to by any Borrower, other than disability
benefits under an insured welfare plan, following such employee's termination of
employment. Except as set forth on SCHEDULE 6.1(P), each such welfare plan that
is a group health plan has been operated in compliance with the provision of
Section 4980B of the Code and Sections 601-609 of ERISA and any applicable
provisions of state law that are similar except to the extent that
non-compliance could not be reasonably expected to result in any material
liability under Section 4980B of the Code and Sections 601-609 of ERISA or any
applicable provisions of state law that are similar.
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(q) Absence of Defaults. No Borrower nor any Subsidiary is in
default under its articles or certificate of incorporation or by-laws and no
event has occurred, which has not been remedied, cured or waived,
(i) which constitutes a Default or an Event of
Default, or
(ii) which constitutes, or which with the passage
of time or giving of notice, or both, would constitute, a
default or event of default by a Borrower or any of its
Subsidiaries under any Material Contract or judgment, decree
or order to which such Borrower or any of its Subsidiaries is
a party or by which such Borrower, any of its Subsidiaries or
any of such Borrower's or any of its Subsidiaries' properties
may be bound or which would require a Borrower or any
Subsidiary to make any payment under any thereof prior to the
scheduled maturity date therefor, except, in the case only of
any such Material Contract, for alleged defaults which are
being contested in good faith by appropriate proceedings or
which would not have a Materially Adverse Effect.
(r) Accuracy and Completeness of Information.
(i) No fact is known to the Borrowers which has
had a Materially Adverse Effect which has not been set forth
in the financial statements or disclosure delivered to the
Administrative Agent and the Lenders. No document furnished or
written statement made to the Administrative Agent or any
Lender by the Borrowers (or any of them) in connection with
the negotiation, preparation or execution of this Agreement or
any of the Loan Documents contained, except to the extent
corrected or superseded, any untrue statement of a fact
material to the creditworthiness of a Borrower or omitted to
state a material fact necessary in order to make the
statements contained therein not misleading.
(ii) The Borrowers have no reason to believe that
any document furnished or written statement made to the
Administrative Agent or any Lender by any Person other than
the Borrowers in connection with the negotiation, preparation
or execution of this Agreement or any of the Loan Documents
contained any incorrect statement of a material fact or
omitted to state a material fact necessary in order to make
the statements made, in light of the circumstances under which
they were made, not misleading, that has not been corrected or
superseded.
(s) Solvency. In each case after giving effect to the
Debt represented by the Loans outstanding and to be incurred and the
transactions contemplated by this Agreement, each Borrower and each of its
Subsidiaries is solvent, having assets of a fair salable value which exceeds the
amount required to pay its debts as they become absolute and matured (including
contingent, subordinated, unmatured and unliquidated liabilities), and each
Borrower and each of its Subsidiaries is able to and anticipates that it will be
able to meet its debts as they mature and has adequate capital to conduct the
business in which it is or proposes to be engaged.
(t) Receivables.
(i) Status.
(1) Each Receivable reflected in the
computations included in any Borrowing Base
Certificate meets the criteria enumerated in CLAUSES
(a) through (P) of the definition "Eligible
Receivables," except as disclosed in such
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Borrowing Base Certificate or as disclosed in a
timely manner in a subsequent Borrowing Base
Certificate or otherwise in writing to the
Administrative Agent.
(2) No Borrower has any knowledge of
any fact or circumstance not disclosed to the
Administrative Agent in a Borrowing Base Certificate
or otherwise in writing which would impair the
validity or collectibility of any Receivable of
$500,000 or more or of Receivables which (regardless
of the individual amount thereof) aggregate $750,000
or more.
(ii) Chief Executive Office. The chief executive
office of each Borrower and the books and records relating to
the Receivables are located at the address or addresses set
forth on SCHEDULE 6.1(T).
(u) Inventory.
(i) Schedule of Inventory. All Inventory
included in any Schedule of Inventory or Borrowing Base
Certificate delivered to the Administrative Agent meets the
criteria enumerated in CLAUSES (A) through (G) of the
definition "Eligible Inventory," except as disclosed in such
Schedule of Inventory or Borrowing Base Certificate.
(ii) Condition. All Inventory is in good
condition, meets all material standards imposed by any
governmental agency, or department or division thereof, having
regulatory authority over such goods, their use or sale, and
is currently either usable or salable in the normal course of
the applicable Borrower's business, except to the extent
reserved against in the financial statements referred to in
SECTION 6.1(N) or a Borrowing Base Certificate delivered
pursuant to SECTION 5.1.
(iii) Location. All Inventory is located at a
Permitted Inventory Location or is in transit to a Permitted
Inventory Location.
(v) Corporate and Fictitious Names. Except as otherwise
disclosed on SCHEDULE 6.1(V), during the five-year period preceding the
Agreement Date, neither any Borrower nor any predecessor thereof has been known
as or used any corporate or fictitious name other than the corporate name of
such Borrower on the Effective Date.
(w) Federal Reserve Regulations. Neither any Borrower nor
any of its Subsidiaries is engaged, principally or as one of its important
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" (as each of the quoted terms is defined or used
in Regulation U of the Board of Governors of the Federal Reserve System).
(x) Not a Regulated Entity. No Borrower is (i) an
"investment company" or a company "controlled" by an "investment company" (as
each of the quoted terms is defined or used in the Investment Company Act of
1940, as amended), or (ii) a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935.
(y) Employee Relations. The Borrowers and each Subsidiary
have stable work forces in place and none of them is, except as set forth on
SCHEDULE 6.1(Y), party to any collective bargaining agreement nor has any labor
union been recognized as the representative of a Borrower's or any of its
Subsidiaries' employees, and the Borrowers know of no pending, threatened or
contemplated strikes, work stoppage or other labor disputes involving a
Borrower's or any Subsidiary's employees.
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(z) Proprietary Rights. Each Borrower owns or has the
right to use all Proprietary Rights necessary or desirable in the conduct of its
business. To the best of the Borrowers' knowledge, none of such Proprietary
Rights related to any of the Collateral infringes on or conflicts with any other
Person's property, and no other Person's property infringes on or conflicts with
the Proprietary Rights related to any of the Collateral.
(aa) Trade Names. All trade names or styles under which
any Borrower sells Inventory or creates Receivables, or to which instruments in
payment of Receivables are made payable, are listed on SCHEDULE 6.1(AA).
(bb) Bank Accounts. Attached hereto as SCHEDULE 6.1(BB) is
a complete and correct list of all checking accounts, depository accounts,
special deposit accounts and other accounts maintained by any Borrower or
Subsidiary with any commercial bank or savings bank and each such account
(except any account indicated by an asterisk (*)) is either (i) subject to an
Agency Account Agreement or (ii) subject to directions from the account holder
to the institution maintaining such account, in form and substance approved by
the Administrative Agent, to transfer all collected funds therein daily to the
Administrative Agent.
(cc) Equipment. All machinery, equipment, fixtures and
other tangible property (other than Inventory) of each Borrower and their
respective Subsidiaries, other than obsolete equipment no longer used or useful
in the business of the Borrowers and their Subsidiaries, is in good order and
repair, ordinary wear and tear excepted.
(dd) Real Property. No Borrower nor any Subsidiary owns
any Real Estate nor leases any Real Estate other than that described on SCHEDULE
6.1(DD) and other than Real Estate acquired or leased after the Effective Date.
(ee) Anti-Terrorism Laws.
(i) General. No Borrower, nor any Subsidiary of
such Borrower nor to the best of such Borrower's knowledge,
any Affiliate of such Borrower or such Subsidiary, is in
violation in any material respect of any Anti-Terrorism Law or
engages in or conspires to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding,
or attempts to violate, any of the prohibitions set forth in
any Anti-Terrorism Law.
(ii) Executive Order No. 13224. No Borrower nor
any Subsidiary of such Borrower, and to the best of such
Borrower's or such Subsidiary's knowledge, no Affiliate of
such Borrower is any of the following (each a "Blocked
Person"):
(A) a Person that is listed in the
annex to, or is otherwise subject to the provisions
of, Executive Order No. 13224;
(B) a Person owned or controlled by, or
acting for or on behalf of, any Person that is listed
in the annex to, or is otherwise subject to the
provisions of, Executive Order No. 13224;
(C) a Person or entity with which any
bank or other financial institution is prohibited
from dealing or otherwise engaging in any transaction
by any Anti-Terrorism Law;
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(D) a Person or entity that commits,
threatens or conspires to commit or supports
"terrorism" as defined in Executive Order No. 13224;
(E) a Person or entity that is named as
a "specially designated national" on the most current
list published by the U.S. Treasury Department Office
of Foreign Asset Control at its official website or
any replacement website or other replacement official
publication of such list; or
(F) a Person or entity who is
affiliated with a Person or entity listed above.
No Borrower nor any Subsidiary of such Borrower nor to the
best of such Borrower's knowledge, any Affiliate of such
Borrower (i) conducts any business or engages in making or
receiving any contribution of funds, goods or services to or
for the benefit of any Blocked Person or (ii) deals in, or
otherwise engages in any transaction relating to, any property
or interests in property blocked pursuant to Executive Order
No. 13224.
SECTION 6.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this ARTICLE 6 and all statements
contained in any certificate, financial statement, or other instrument,
delivered by or on behalf of the Borrowers pursuant to or in connection with
this Agreement or any of the Loan Documents (including any such representation,
warranty or statement made in or in connection with any amendment thereto) shall
constitute representations and warranties made under this Agreement. Except for
representations and warranties which, by their terms, are applicable only to a
specific date, all representations and warranties made under this Agreement
shall be made or deemed to be made at and as of the Agreement Date, at and as of
the Effective Date and, to the extent provided in SECTION 5.2, at and as of the
date each Loan is made and each Letter of Credit is issued. All representations
and warranties made or deemed to be made under this Agreement shall survive and
not be waived by the execution and delivery of this Agreement, any investigation
made by or on behalf of the Administrative Agent or any Lender or any borrowing
hereunder.
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ARTICLE 7
SECURITY INTEREST
SECTION 7.1 Security Interest.
(a) American Tire, Speed Merchant, Xxxx Holding and Xxxx
Tire each hereby confirms the mortgage, pledge and assignment to the
Administrative Agent, for the benefit of itself as Administrative Agent and the
other Secured Parties, under the Existing Loan Agreement and the other Loan
Documents of the Collateral and the creation in favor of the Administrative
Agent, for the benefit of itself as Administrative Agent and the other Secured
Parties, under the Existing Loan Agreement and the other Loan Documents of a
continuing security interest in the Collateral, all as security for the Secured
Obligations, and each Borrower hereby mortgages, pledges and assigns all of the
Collateral to the Administrative Agent, for the benefit of itself as
Administrative Agent and the other Secured Parties, and grants to the
Administrative Agent, for the benefit of itself as Administrative Agent and the
other Secured Parties, a continuing security interest in, and a continuing Lien
upon, all of the Collateral as security for the payment, observance and
performance of the Secured Obligations.
(b) As additional security for all of the Secured
Obligations, the Borrowers grant to the Administrative Agent, for the benefit of
itself as Administrative Agent and the other Secured Parties, a security
interest in, and assigns to the Administrative Agent, for the benefit of itself
as Administrative Agent and the other Secured Parties, all of the Borrowers'
right, title and interest in and to, any deposits or other sums at any time
credited by or due from each Lender and each Affiliate of a Lender to a
Borrower, or credited by or due from any participant of any Lender to a
Borrower, with the same rights therein as if the deposits or other sums were
credited by or due from such Lender. Each Borrower hereby authorizes each Lender
and each Affiliate of such Lender and each participant to pay or deliver to the
Administrative Agent, for the account of the Lenders, without any necessity on
the Administrative Agent's or any Lender's part to resort to other security or
sources of reimbursement for the Secured Obligations, at any time during the
continuation of any Event of Default or in the event that the Administrative
Agent, on behalf of the Lenders, should make demand for payment hereunder in
accordance with the terms hereof, then and without further notice to any
Borrower (such notice being expressly waived), any of the aforesaid deposits
(general or special, time or demand, provisional or final) or other sums for
application to any Secured Obligation, irrespective of whether any demand has
been made or whether such Secured Obligation is mature, and the rights given the
Administrative Agent, the Lenders, their Affiliates and participants hereunder
are cumulative with such Person's other rights and remedies, including other
rights of set-off. The Administrative Agent will promptly notify the Borrowers
of its receipt of any such funds for application to the Secured Obligations, but
failure to do so will not affect the validity or enforceability thereof. The
Administrative Agent may give notice of the above grant of a security interest
in and assignment of the aforesaid deposits and other sums, and authorization,
to, and make any suitable arrangements with, any Lender, any such Affiliate of
any Lender or participant for effectuation thereof, and each Borrower hereby
irrevocably appoints the Administrative Agent as its attorney to collect any and
all such deposits or other sums to the extent any such payment is not made to
the Administrative Agent or any Lender by such Lender, Affiliate or participant.
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SECTION 7.2 Continued Priority of Security Interest.
(a) The Security Interest granted by the Borrowers shall
at all times be valid, perfected and enforceable against each Borrower and all
third parties in accordance with the terms of this Agreement, as security for
the Secured Obligations, and the Collateral (i) shall not at any time be subject
to any Liens that are prior to the Security Interest and (ii) except as
permitted by SECTIONS 11.9(A), (B), (E), (F) and (G), shall not at any time be
subject to any other Liens.
(b) The Borrowers shall, at their sole cost and expense,
take all action that may be necessary or desirable, or that the Administrative
Agent may reasonably request, so as at all times to maintain the validity,
perfection, enforceability and rank of the Security Interest in the Collateral
in conformity with the requirements of SECTION 7.2(A), or to enable the
Administrative Agent and the Lenders to exercise or enforce their rights
hereunder, including:
(i) paying all taxes, assessments and other
claims lawfully levied or assessed on any of the Collateral,
except to the extent that such taxes, assessments and other
claims constitute Permitted Liens,
(ii) obtaining, after the Agreement Date,
landlords', mortgagees', bailees', warehousemen's or
processors' releases, subordinations or waivers (except as to
premises reflected in the Rent Reserve), and using all
reasonable efforts to obtain mechanics' releases,
subordinations or waivers,
(iii) delivering to the Administrative Agent, for
the benefit of the Secured Parties, endorsed or accompanied by
such instruments of assignment as the Administrative Agent may
specify, and stamping or marking, in such manner as the
Administrative Agent may specify, any and all Chattel Paper,
Instruments, letters and advices of guaranty and Documents
evidencing or forming a part of the Collateral, and
(iv) executing and delivering financing
statements, pledges, designations, hypothecations, notices and
assignments in each case in form and substance satisfactory to
the Administrative Agent relating to the creation, validity,
perfection, maintenance or continuation of the Security
Interest under the UCC or other Applicable Law.
(c) The Administrative Agent is hereby authorized to file
one or more financing or continuation statements or amendments thereto in the
name of a Borrower for any purpose described in SECTION 7.2(B). The
Administrative Agent will give the Borrowers notice of the filing of any such
statements or amendments, which notice shall specify the locations where such
statements or amendments were filed. A carbon, photographic, xerographic or
other reproduction of this Agreement or of any of the Security Documents or of
any financing statement filed in connection with this Agreement is sufficient as
a financing statement.
(d) Each Borrower shall xxxx its books and records as
directed by the Administrative Agent and as may be necessary or appropriate to
evidence, protect and perfect the Security Interest and shall cause its
financial statements to reflect the Security Interest.
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ARTICLE 8
COLLATERAL COVENANTS
Each Borrower covenants and agrees that until the Commitments have been
terminated and all the Secured Obligations have been paid in full, unless the
Lenders shall otherwise consent in the manner provided in SECTION 15.9:
SECTION 8.1 Collection of Receivables.
(a) The Borrowers will and will cause each other Borrower
to cause all monies, checks, notes, drafts and other payments relating to or
constituting proceeds of trade accounts receivable, other Receivables and other
Collateral to be deposited in (i) an Agency Account in accordance with the
procedures set out in the corresponding Agency Account Agreement or (ii) an
account subject to instructions from the account holder, in form and substance
satisfactory to the Administrative Agent, requiring the transfer of collected
balances in such account to the Administrative Agent not less often than each
Business Day. In particular, each Borrower will and will cause each other
Borrower to advise each Account Debtor that makes payment to such Borrower or
other Borrower by wire transfer, ACH Transfer or similar means to make payment
directly to an Agency Account or, if the applicable Borrower or other Borrower
is not party to an Agency Account Agreement, then to an account subject to such
instructions.
(b) If average Loan Availability is less than $20,000,000
for any period of 10 Business Days or is at any time less than $15,000,000,
without limiting the ability of the Administrative Agent and the Lenders to
exercise other rights and remedies hereunder, the Required Lenders may require
that any or all of the Borrowers establish Lockboxes to which monies, checks,
notes, drafts and other payments relating to or constituting proceeds of
Collateral shall be sent and if such requirement is imposed, each Borrower will
and will cause each other Borrower to:
(i) advise each Account Debtor on trade accounts
receivable that does not make payments directly to an Agency
Account to address all remittances with respect to amounts
payable on account thereof to a specified Lockbox, and
(ii) stamp all invoices relating to trade
accounts receivable with a legend satisfactory to the
Administrative Agent indicating that payment is to be made to
such Borrower or other Borrower via a specified Lockbox.
(c) The Borrowers and the Administrative Agent shall
cause all collected balances in each Agency Account and the Borrowers shall, and
shall cause each other Borrower to, cause all collected balances in each other
bank account subject to transfer instructions approved by the Administrative
Agent, to be transmitted daily by wire transfer, ACH Transfer, depository
transfer check or other means in accordance with the procedures set forth in the
corresponding Agency Account Agreement or such instructions, to the
Administrative Agent at the Administrative Agent's Office:
(i) for application, on account of the Secured
Obligations, as provided in SECTIONS 2.3(c), 4.16, 12.2, and
12.3, such credits to be entered as of the Business Day they
are received if they are received prior to 1:30 p.m. and to be
conditioned upon final payment in cash or solvent credits of
the items giving rise to them (PROVIDED that a collection fee
shall be payable by the Borrowers with respect to any such
credit received in other than immediately available funds,
equal to one day's interest, at the rate applicable to Base
Rate Loans, on such amount), and
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(ii) with respect to the balance, so long as no
Default or Event of Default has occurred and is continuing,
for transfer by wire transfer, ACH Transfer or depository
transfer check to a Controlled Disbursement Account.
(d) Any monies, checks, notes, drafts or other payments
referred to in SUBSECTION (A) or (B) of this SECTION 8.1 which, notwithstanding
the terms of such subsection, are received by or on behalf of the applicable
Borrower will be held in trust for the Administrative Agent and will be
delivered to the Administrative Agent or a Clearing Bank or a bank with which an
account subject to satisfactory transfer instructions is maintained, as promptly
as possible, in the exact form received, together with any necessary
endorsements for application by the Administrative Agent directly to the Secured
Obligations or, as applicable, for deposit in the Agency Account maintained with
such Clearing Bank and processing in accordance with the terms of the
corresponding Agency Account Agreement or for deposit in such account and
processing and transfer in accordance with such instructions.
SECTION 8.2 Verification and Notification. The Administrative Agent
shall have the right at any time and from time to time,
(a) in the name of the Administrative Agent, the Lenders
or in the name of a Borrower, to verify the validity, amount or any other matter
relating to any Receivables by mail, telephone, telegraph or otherwise,
(b) to review, audit and make extracts from all records
and files related to any of the Receivables, and
(c) if a Default or Event of Default has occurred and is
continuing, to notify the Account Debtors or obligors under any Receivables of
the assignment of such Receivables to the Administrative Agent, for the benefit
of the Secured Parties, and to direct such Account Debtor or obligors to make
payment of all amounts due or to become due thereunder directly to the
Administrative Agent, for the account of the Secured Parties, and, upon such
notification and at the expense of the Borrowers, to enforce collection of any
such Receivables and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as the applicable Borrower
might have done.
SECTION 8.3 Disputes, Returns and Adjustments.
(a) Except to the extent reflected in the Borrowing Base
Certificate most recently delivered to the Administrative Agent, in the event
any amounts due and owing under any Receivable for an amount in excess of
$500,000 are in dispute between the Account Debtor and the applicable Borrower,
the Borrowers shall provide the Administrative Agent with prompt written notice
thereof.
(b) Except to the extent reflected in the Borrowing Base
Certificate most recently delivered to the Administrative Agent, the Borrowers
shall notify the Administrative Agent promptly of all returns and credits in
excess of $500,000 in respect of any Receivable, which notice shall specify the
Receivable affected.
(c) The Borrowers may, in the ordinary course of business
unless a Default or an Event of Default has occurred and is continuing, grant
any extension of time for payment of any Receivable or compromise, compound or
settle the same for less than the full amount thereof, or release wholly or
partly any Person liable for the payment thereof, or allow any credit or
discount whatsoever therein; PROVIDED that (i) no such action results in the
reduction of more than $500,000 in the amount payable with respect to any
Receivable or of more than $1,500,000 with respect to all Receivables in any
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Fiscal Year (in each case, excluding the allowance of credits or discounts
generally available to Account Debtors in the ordinary course of the applicable
Borrower's business), and (ii) the Administrative Agent is promptly notified of
the amount of such adjustments and the Receivable(s) affected thereby (by
reflecting such reduction in an appropriate Borrowing Base Certificate or
Schedule of Receivables).
SECTION 8.4 Invoices.
(a) No Borrower will issue invoices other than in its own
name or in a trade name of which the Administrative Agent has received prior
written notice, accompanied by such evidence as the Administrative Agent may
reasonably require that all actions required pursuant to ARTICLE 7 with respect
to Receivables or other Collateral created or held in such name have been taken.
(b) The Borrowers will not use any invoices other than
invoices in the forms delivered to the Administrative Agent prior to the
Agreement Date without giving the Administrative Agent prior notice of the
intended use of a different form of invoice together with a copy of such
different form and such evidence as the Administrative Agent may reasonably
require that any actions required pursuant to ARTICLE 7 with respect to any (i)
name, (ii) address or (iii) remittance instructions appearing on such invoice
have been taken.
(c) Upon the request of the Administrative Agent, the
Borrowers shall deliver to the Administrative Agent, at the Borrowers' expense,
copies of customers' invoices or the equivalent, original shipping and delivery
receipts or other proof of delivery, customers' statements, customer address
lists, the original copy of all documents, including repayment histories and
present status reports, relating to Receivables and such other documents and
information relating to the Receivables as the Administrative Agent shall
specify.
SECTION 8.5 Delivery of Instruments. In the event any Receivable is at
any time evidenced by a promissory note, trade acceptance or any other
instrument for the payment of money, the Borrowers will, promptly upon request
by the Administrative Agent, deliver such instrument to the Administrative
Agent, appropriately endorsed to the Administrative Agent, for the benefit of
the Lenders.
SECTION 8.6 Sales of Inventory. All sales of Inventory will be made in
compliance in all material respects with requirements of Applicable Law.
SECTION 8.7 Ownership and Defense of Title.
(a) The Borrowers shall be or shall cause another
Borrower to be at all times the sole owners or lessees of each and every item of
Collateral and, except for Liens permitted by SECTIONS 11.9(A), (B), (E), (F)
and (G), shall not create nor permit any other Borrower to create any Lien on,
or sell, lease, exchange, assign, transfer, pledge, hypothecate, grant a
security interest or security title in or otherwise dispose of, any of the
Collateral or any interest therein, except for sales of Inventory in the
ordinary course of business, for cash or on open account or on terms of payment
ordinarily extended to its customers, and except for dispositions that are
otherwise expressly permitted under this Agreement.
(b) Each Borrower shall defend and cause each other
Borrower to defend its title or leasehold interest in and to, and the Security
Interest in, the Collateral against the claims and demands of all Persons.
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SECTION 8.8 Insurance.
(a) The Borrowers shall at all times maintain and cause
the other Borrowers to maintain insurance on the Collateral and their other
property against loss or damage by fire, theft (excluding theft by employees),
burglary, pilferage, loss in transit and such other hazards as would be
customarily maintained by comparable companies, but in any event acceptable to
the Administrative Agent, in amounts not to exceed those obtainable at
commercially reasonable rates and under policies issued by insurers acceptable
to the Administrative Agent in the exercise of its reasonable judgment. All
premiums on such insurance shall be paid by the Borrowers and copies of the
policies delivered to the Administrative Agent. The Borrowers will not use or
permit the Inventory or its other property to be used in violation in any
material respect of Applicable Law or in any manner which could reasonably be
expected to render inapplicable any insurance coverage.
(b) All insurance policies required under SECTION 8.8(A)
relating to Collateral shall name the Administrative Agent as an additional
insured and shall contain loss payable clauses in the form submitted to the
Borrowers by the Administrative Agent, or otherwise in form and substance
satisfactory to the Required Lenders, naming the Administrative Agent, as
lender's loss payee, as its interests may appear, and providing that
(i) all proceeds thereunder shall be payable to
the Administrative Agent,
(ii) no such insurance shall be affected by any
act or neglect of the insurer or owner of the property
described in such policy, and
(iii) such policy and loss payable clauses may be
canceled, amended or terminated only upon at least 10 days'
prior written notice given to the Administrative Agent.
(c) Any proceeds of insurance referred to in this SECTION
8.8 which are paid to the Administrative Agent shall be, at the option of the
Required Lenders in their sole discretion, either (i) applied to replace the
damaged or destroyed property, or (ii) applied to the payment or prepayment of
the Secured Obligations, PROVIDED that in the event that the proceeds from any
single casualty do not exceed $250,000, then, upon the Borrowers' written
request to the Administrative Agent, provided that no Default or Event of
Default shall have occurred and be continuing, such proceeds shall be disbursed
by the Administrative Agent to the Borrowers pursuant to such procedures as the
Administrative Agent shall reasonably establish for application to the
replacement of the damaged or destroyed property.
SECTION 8.9 Location of Offices and Collateral.
(a) No Borrower will change its name, the location of its
chief executive office or the place where it keeps its books and records
relating to the Collateral from the address set forth for it on SCHEDULE 6.1(T)
without giving the Administrative Agent 30 days' prior written notice thereof
(and, in the case of any proposed name change, unless the Administrative Agent
has confirmed, in writing, receipt of the Borrowers' notice of such proposed
name change), accompanied by such evidence as the Administrative Agent may
reasonably require that all actions required to be taken pursuant to ARTICLE 7
have been taken.
(b) All Inventory, other than Inventory in transit to any
such location, will at all times be kept by the applicable Borrower at one or
more Permitted Inventory Locations and shall not, without the prior written
consent of the Administrative Agent, be kept elsewhere (except as a result of
sales of Inventory permitted under SECTION 8.7(a)).
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(c) If any Inventory is in the possession or control of
any of a Borrower's agents or processors, the Borrowers shall notify such agents
or processors of the Security Interest (and shall promptly provide copies of any
such notice to the Administrative Agent and the Lenders) and, upon the
occurrence of an Event of Default, shall instruct them (and cause them to
acknowledge such instruction) to hold all such Inventory for the account of the
Lenders, subject to the instructions of the Administrative Agent.
SECTION 8.10 Records Relating to Collateral.
(a) The Borrowers will and will cause their Subsidiaries
to at all times
(i) keep complete and accurate records of
Inventory on a basis consistent with past practices of
American Tire so as to permit comparison of Inventory records
relating to different time periods, itemizing and describing
the kind, type and quantity of Inventory and the applicable
Borrower's or Subsidiary's cost thereof and a current price
list for such Inventory, and
(ii) keep complete and accurate records of all
other Collateral.
(b) The Borrowers will prepare a physical listing of all
Inventory, wherever located, at least annually.
SECTION 8.11 Inspection. The Administrative Agent and each Lender (by
any of their officers, employees or agents) shall have the right, to the extent
that the exercise of such right shall be within the control of a Borrower, at
any time or times to
(a) visit the properties of the Borrowers and the
Subsidiaries, inspect the Collateral and the other assets of the Borrowers and
the Subsidiaries and inspect and make extracts from the books and records of the
Borrowers and the Subsidiaries, including management letters prepared by
independent accountants, all during customary business hours at such premises;
(b) discuss the Borrowers' and the Subsidiaries'
business, assets, liabilities, financial condition, results of operations and
business prospects, insofar as the same are reasonably related to the rights of
the Administrative Agent or the Lenders hereunder or under any of the Loan
Documents, with the Borrowers' and the Subsidiaries' (i) principal officers,
(ii) independent accountants, and (iii) any other Person (except that any such
discussion with any third parties shall be conducted only in accordance with the
Administrative Agent's or such Lender's standard operating procedures relating
to the maintenance of the confidentiality of confidential information of
borrowers); and
(c) verify the amount, quantity, value and condition of,
or any other matter relating to, any of the Collateral and in this connection to
review, audit and make extracts from all records and files related to any of the
Collateral.
The Borrowers will deliver to the Administrative Agent, upon the Administrative
Agent's request, any instrument necessary for it to obtain records from any
service bureau maintaining records on behalf of the Borrowers or any Subsidiary.
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SECTION 8.12 Information and Reports.
(a) Schedule of Receivables. The Borrowers shall deliver to
the Administrative Agent on or before the Effective Date and not later than the
20th day of each calendar month thereafter a Schedule of Receivables which
(i) shall be as of the last Business Day of the
immediately preceding Fiscal Month,
(ii) shall be reconciled to the Borrowing Base
Certificate as of such last Business Day, and
(iii) shall set forth a detailed aged trial
balance of all of the Borrowers' then existing Receivables,
specifying the names, balance due and, if a Default or Event
of Default then exists, the addresses, for each Account Debtor
obligated on a Receivable so listed.
(b) Schedule of Inventory. The Borrowers shall deliver to
the Administrative Agent on or before the Effective Date and not later than the
20th day of each calendar month thereafter a Schedule of Inventory as of the
last Business Day of the immediately preceding Fiscal Month of the Borrowers,
itemizing and describing the kind, type and quantity of Inventory, the
applicable Borrower's cost thereof and the location thereof.
(c) Cash and Collateral Reporting. The Borrowers shall
deliver to the Administrative Agent (i) upon the request of the Administrative
Agent, not less frequently than weekly, the forecasted cash receipts and
disbursements, in form and substance satisfactory to the Administrative Agent,
of American Tire and its Subsidiaries, on a consolidated basis, for the
succeeding 13 weeks, (ii) not later than Wednesday of each week, a Borrowing
Base Certificate prepared as of the close of business on the last Business Day
of the immediately preceding week, (iii) upon the request of the Administrative
Agent, not less frequently than weekly, a summary accounts payable aging, and
(iv) on the 20th day of each calendar month, a Borrowing Base Certificate
prepared as of the last Business Day of the preceding Fiscal Month.
(d) Notice of Diminution of Value. The Borrowers shall
give prompt notice to the Administrative Agent of any matter or event which has
resulted in, or may result in, the diminution in excess of $1,000,000 in the
value of any of its Collateral, except for any such diminution in the value of
any Receivables or Inventory in the ordinary course of business which has been
reflected in the most recent Borrowing Base Certificate delivered to the
Administrative Agent or appropriately reserved against, as reflected in
financial statements previously delivered to the Administrative Agent and the
Lenders pursuant to ARTICLE 10.
(e) Additional Information. The Administrative Agent may
in its reasonable discretion from time to time request that the Borrowers
deliver the schedules and certificates described in SECTIONS 8.12(A), (B), (C)
and (D) more or less often and on different schedules than specified in such
Sections and the Borrowers will comply with such requests. The Borrowers will
also furnish to the Administrative Agent and each Lender such other information
with respect to the Collateral as the Administrative Agent or any Lender may
from time to time reasonably request.
SECTION 8.13 Power of Attorney. Each Borrower hereby appoints the
Administrative Agent as its attorney, with power
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(a) to endorse the name of such Borrower on any checks,
notes, acceptances, money orders, drafts or other forms of payment or security
that may come into the Administrative Agent's or any Lender's possession, and
(b) if a Default or Event of Default exists, to sign the
name of such Borrower on any invoice or xxxx of lading relating to any
Receivable, Inventory or other Collateral, on any drafts against customers
related to letters of credit, on schedules and assignments of Receivables
furnished to the Administrative Agent or any Lender by such Borrower, on notices
of assignment, financing statements and other public records relating to the
perfection or priority of the Security Interest, verifications of account and
notices to or from customers.
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ARTICLE 9
AFFIRMATIVE COVENANTS
The Borrowers covenant and agree that the Borrowers will, as their
joint and several obligation, duly and punctually pay the principal of, and
interest on, and all other amounts payable with respect to, the Loans and all
other Secured Obligations in accordance with the terms of the Loan Documents and
that until the Commitments have been terminated and all the Secured Obligations
have been paid in full, unless the Lenders shall otherwise consent in the manner
provided for in SECTION 15.9, each of the Borrowers will, and will cause each of
the Subsidiaries to:
SECTION 9.1 Preservation of Corporate Existence and Similar Matters.
Preserve and maintain its corporate existence, rights, franchises, licenses and
privileges in the jurisdiction of its incorporation and qualify and remain
qualified as a foreign corporation and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization (except where any failure
so to qualify could not reasonably be expected to have a Materially Adverse
Effect), PROVIDED that this SECTION 9.1 shall not prohibit any transaction
permitted under SECTION 11.7.
SECTION 9.2 Compliance with Applicable Law. Comply with all Applicable
Law relating to the Borrowers or such Subsidiary except to the extent being
contested in good faith by appropriate proceedings or to the extent
noncompliance could not reasonably be expected to have a Materially Adverse
Effect.
SECTION 9.3 Maintenance of Property. In addition to, and not in
derogation of, the requirements of SECTION 8.7 and of the Security Documents,
(a) protect and preserve all properties material to its
business, including copyrights, patents, trade names and trademarks, and
maintain in good repair, working order and condition in all material respects,
with reasonable allowance for wear and tear, all tangible properties material to
its business, and
(b) from time to time make or cause to be made all needed
and appropriate repairs, renewals, replacements and additions to such properties
necessary for the conduct of its business, so that the business carried on in
connection therewith in the ordinary course and in a manner consistent with past
practices of American Tire.
SECTION 9.4 Conduct of Business. At all times conduct its business in
accordance with sound business practices and engage only in the business(es)
described in SCHEDULE 6.1(F) or businesses substantially related to any of the
businesses of Borrowers.
SECTION 9.5 Insurance. Maintain, in addition to the coverage required
by SECTION 8.8 and the Security Documents, insurance with responsible insurance
companies against such risks and in such amounts as is customarily maintained by
similar businesses or as may be required by Applicable Law, and from time to
time deliver to the Administrative Agent or any Lender upon its request a
detailed list of the insurance then in effect, stating the names of the
insurance companies, the amounts and rates of the insurance, the dates of the
expiration thereof and the properties and risks covered thereby.
SECTION 9.6 Payment of Taxes and Claims. Pay or discharge when due
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(a) all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or upon any properties
belonging to it, except that real property ad valorem taxes shall be deemed to
have been so paid or discharged if the same are paid before they become
delinquent, and
(b) all lawful claims of materialmen, mechanics,
carriers, warehousemen and landlords for labor, materials, supplies and rentals
which, if unpaid, might become a Lien on any properties of any Borrower;
except that this SECTION 9.6 shall not require the payment or discharge of any
such tax, assessment, charge, levy or claim which is being contested in good
faith by appropriate proceedings and for which reserves in respect of reasonably
anticipated liability have been established in accordance with GAAP.
SECTION 9.7 Accounting Methods and Financial Records. Maintain a system
of accounting, and keep such books, records and accounts (which shall be true
and complete), as may be required or as may be necessary to permit the
preparation of financial statements in accordance with GAAP and notify the
Administrative Agent promptly, and in any event within five days after any such
account is opened, of the existence, location, number and title of any bank
account of a Borrower not listed on SCHEDULE 6.1(BB).
SECTION 9.8 Use of Proceeds.
(a) Use the proceeds of the Loans only for working
capital and general business purposes to the extent not prohibited by the terms
of this Agreement, including payment of interest on the Senior Notes, payment of
dividends and distributions on or with respect to, and redemptions of, the KS
Preferred, Permitted Senior Note Repurchases, Permitted Vendor Note Payments and
Permitted Acquisitions, in each case in accordance with the provisions of this
Agreement, and
(b) not use any part of such proceeds to purchase or, to
carry or reduce or retire or refinance any credit incurred to purchase or carry,
any Margin Stock or, in any event, for any purpose which would involve a
violation of Regulation U or of Regulation T or X of the Board of Governors of
the Federal Reserve System, or for any purpose prohibited by law or by the terms
and conditions of this Agreement.
SECTION 9.9 Hazardous Waste and Substances; Environmental Requirements.
In addition to, and not in derogation of, the requirements of SECTION 9.2 and of
the Security Documents, comply in all material respects with all Environmental
Laws and all Applicable Laws relating to occupational health and safety (except
for instances of noncompliance that are being contested in good faith by
appropriate proceedings if reserves in respect of any Borrower's or such
Subsidiary's reasonably anticipated liability therefor have been appropriately
established), promptly notify the Administrative Agent of its receipt of any
notice of a violation of any such Environmental Laws or other such Applicable
Laws and indemnify and hold harmless the Administrative Agent and the Lenders
from all loss, cost, damage, liability, claim and expense incurred by or imposed
upon the Administrative Agent or any Lender on account of a Borrower's failure
to perform its obligations under this SECTION 9.9.
SECTION 9.10 Additional Borrowers. Cause each Person that becomes a
domestic Subsidiary of American Tire after the Effective Date, promptly upon
request by the Administrative Agent, to execute and deliver a Joinder Agreement
and such other documents as may reasonably be determined by the Administrative
Agent to be necessary or desirable to add such Subsidiary as an additional
"Borrower" hereunder, in each case together with such allonges to the Notes,
restated promissory notes, Financing Statements, legal opinions and other
certificates, instruments and documents as the Administrative Agent
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may reasonably request. If requested by the Administrative Agent, the Borrowers
also shall cause each Person that becomes a domestic Subsidiary after the
Effective Date to become a party to any Hedging Agreement to which the Borrowers
(or any of them) are then parties.
SECTION 9.11 Compliance with Senior Note Indenture. Comply in all
material respects with the terms and provisions of the Senior Note Indenture and
the Senior Notes and cause each Guarantor of American Tire's obligations under
the Senior Notes to comply with the terms of the Guaranty applicable to it.
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ARTICLE 10
INFORMATION
Until the Commitments have been terminated and all the Secured
Obligations have been paid in full, unless the Lenders shall otherwise consent
in the manner set forth in SECTION 15.9, the Borrowers will furnish to the
Administrative Agent and to each Lender at its offices then designated for
notices pursuant to SECTION 15.1, the statements, reports, certificates, and
other information provided for in this ARTICLE 10. All written information,
reports, statements and other papers and data furnished to the Administrative
Agent or any Lender by or at the request of the Borrowers, whether pursuant to
this ARTICLE 10 or any other provision of this Agreement or of any other Loan
Document, shall be, at the time the same is so furnished, complete and correct
in all material respects to the extent necessary to give the Administrative
Agent and the Lenders true and accurate knowledge of the subject matter.
Specifically, the Borrowers will so furnish:
SECTION 10.1 Financial Statements.
(a) Audited Year-End Statements. As soon as available,
but in any event within 90 days after the end of each Fiscal Year, copies of the
consolidated balance sheet of American Tire and its Consolidated Subsidiaries as
at the end of such Fiscal Year and the related consolidated statement of income,
shareholders' equity and cash flows of American Tire and its Consolidated
Subsidiaries for such Fiscal Year, in each case setting forth in comparative
form the figures for the previous Fiscal Year and reported on, without
qualification, by PricewaterhouseCoopers LLP or other independent certified
public accountants of nationally recognized standing;
(b) Monthly Financial Statements. As soon as available
after the end of each Fiscal Month, but in any event within 30 days after the
end of each Fiscal Month (or 45 days after the end of any such Fiscal Month that
is the last Fiscal Month of a Fiscal Quarter), copies of the unaudited
consolidated balance sheet of American Tire and its Consolidated Subsidiaries as
at the end of such Fiscal Month and the related unaudited consolidated statement
of income and the related consolidated statement of cash flows for American Tire
and its Consolidated Subsidiaries for such Fiscal Month and for the portion of
the Fiscal Year through such Fiscal Month, certified by a Financial Officer as
presenting fairly the financial condition and results of operations of the
Borrowers (subject to normal year-end audit adjustments) for the applicable
period(s);
all such financial statements (i) to be complete and correct in all material
respects and prepared in accordance with GAAP (except, with respect to interim
financial statements, for the omission of notes and for the effect of normal
year-end audit adjustments) applied consistently throughout the periods
reflected therein and (ii) to be accompanied by a management discussion in form
consistent with discussions provided to Lenders prior to the Effective Date and
a monthly and year-to-date comparison to the Borrowers' prior Fiscal Year's
performance and to the Projections delivered pursuant to SECTION 10.1(C) hereof
(provided, that for purposes of SECTION 10.1(A), so long as the Borrowers are
subject to SEC reporting requirements, the 10K of the Borrowers for such period
shall satisfy the requirement with respect to the audited financial statements);
and
(c) Projections. As soon as available, but in any event
not later than 30 days after the first day of each Fiscal Year beginning after
the Effective Date, Projections for such Fiscal Year.
SECTION 10.2 Accountants' Certificate. Together with the financial
statements referred to in SECTION 10.1(a), a certificate of such accountants
addressed to the Administrative Agent
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(a) stating that in making the examination necessary for
the certification of such financial statements, nothing has come to their
attention to lead them to believe that any Default or Event of Default exists
and, in particular, they have no knowledge of any Default or Event of Default
or, if such is not the case, specifying such Default or Event of Default and its
nature, and
(b) having attached the calculations, prepared by the
Borrowers and reviewed by such accountants, required to establish whether or not
the Borrowers are in compliance with the covenants contained in SECTIONS 11.1,
11.2, 11.4, 11.5 and 11.6 as at the date of such financial statements.
SECTION 10.3 Officers' Certificates. At the time that the Borrowers
furnish the financial statements pursuant to SECTION 10.1(b), a certificate of
the President of American Tire or of a Financial Officer, in substantially the
form attached hereto as EXHIBIT D,
(a) setting forth as of the end of each Fiscal Quarter or
Fiscal Year, as the case may be, the calculations required to establish whether
or not the Borrowers were in compliance with the requirements of SECTIONS 11.1,
11.2, 11.4, 11.5 and 11.6 as at the end of each respective period and the
calculations necessary to determine the Leverage Ratio as at the end of each
respective period,
(b) stating that the information on the schedules to this
Agreement (insofar as it relates to the transactions provided for herein, the
ability of the Borrower to repay the Secured Obligations, or any of the
Collateral) is true and correct in all material respects as of the date of such
certificate, except (A) to the extent such information is made exclusively with
reference to an earlier date or (B) any modifications to the information on such
schedules are as a result of changes in the nature of a Borrower's or, if
applicable, any of its Subsidiaries' business or operations that may occur after
the date hereof in the ordinary course of business of such Borrower or
Subsidiary so long as the Administrative Agent has (or, if otherwise required by
the terms of this Agreement, the Required Lenders or all the Lenders have)
consented to such changes or such changes are not violative of any provision of
this Agreement, and
(c) stating that, based on a reasonably diligent
examination, no Default or Event of Default exists, or, if such is not the case,
specifying such Default or Event of Default and its nature, when it occurred,
whether it is continuing and the steps being taken by the Borrowers with respect
to such Default or Event of Default.
SECTION 10.4 Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all reports,
if any, submitted to the Borrowers or the Board of Directors of American Tire by
the Borrowers' independent public accountants, including any management report.
(b) As soon as practicable, copies of all financial
statements and reports that American Tire sends to its shareholders generally in
their capacity as such and of all registration statements and all regular or
periodic reports which any Borrower shall file with the SEC.
(c) From time to time and as soon as reasonably
practicable following each request, such data, certificates, reports,
statements, opinions of counsel, documents or further information regarding the
business, assets, liabilities, financial condition, results of operations or
business prospects of a Borrower or any Subsidiary as the Administrative Agent
or any Lender may reasonably request and that a Borrower has or (except in the
case of customary legal opinions relating to the perfection or priority of the
Security Interest) without unreasonable expense can obtain; PROVIDED, HOWEVER,
that the Lenders shall, to the extent reasonably practicable, coordinate
examinations of the Borrowers' records by their
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respective internal examiners. The rights of the Administrative Agent and the
Lenders under this SECTION 10.4 are in addition to and not in derogation of
their rights under any other provision of this Agreement or of any other Loan
Document.
(d) If requested by the Administrative Agent or any
Lender, statements in conformity with the requirements of Federal Reserve Form
G-3 or U-1 referred to in Regulation U.
SECTION 10.5 Notice of Litigation and Other Matters. Prompt notice of:
(a) the commencement, to the extent a Borrower is aware
of the same, of all proceedings and investigations by or before any governmental
or nongovernmental body and all actions and proceedings in any court or before
any arbitrator against or in any other way relating to or affecting any
Borrower, any of its Subsidiaries or any of a Borrower's or any of its
Subsidiaries' properties, assets or businesses, which is reasonably likely to,
singly or together with other pending proceedings or investigations, result in
the occurrence of a Default or an Event of Default, or have a Materially Adverse
Effect,
(b) any amendment of the articles of incorporation or
by-laws of a Borrower or any of its Subsidiaries,
(c) any change in the business, assets, liabilities,
financial condition, results of operations or business prospects of a Borrower
or any of its Subsidiaries which has had or is reasonably likely to have, singly
or in the aggregate, a Materially Adverse Effect and any change in the executive
officers of a Borrower,
(d) the receipt of any notice from or giving of any
notice to the trustee under the Senior Note Indenture, together with a copy of
such notice, and
(e) any Default or Event of Default or any event which
constitutes or which with the passage of time or giving of notice or both would
constitute a default or event of default by a Borrower or any of its
Subsidiaries under any material agreement (other than this Agreement) to which
such Borrower or any of its Subsidiaries is a party or by which any Borrower,
any of its Subsidiaries or any Borrower's or any Subsidiary's properties may be
bound.
SECTION 10.6 ERISA. As soon as possible and in any event within 30 days
after a Borrower knows, or has reason to know, that:
(a) any ERISA Event with respect to a Benefit Plan has
occurred or will occur, or
(b) the aggregate present value of the Unfunded Vested
Accrued Benefits under all Benefit Plans is equal to an amount in excess of
$250,000, or
(c) a Borrower or any Subsidiary is in "default" (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan required by reason of a Borrower's or such Subsidiary's
complete or partial withdrawal (as described in Section 4203 or 4205 of ERISA)
from such Multiemployer Plan,
to the Administrative Agent a certificate of the President of American Tire or a
Financial Officer setting forth the details of such event and the action which
is proposed to be taken with respect thereto, together with any notice or filing
which may be required by the PBGC or other agency of the United States
government with respect to such event.
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ARTICLE 11
NEGATIVE COVENANTS
Until the Commitments have been terminated and all the Secured
Obligations have been paid in full, unless the Lenders shall otherwise consent
in the manner set forth in SECTION 15.9, the Borrowers will not directly or
indirectly and, in the case of SECTIONS 11.2 through 11.12, will not permit any
Subsidiaries to:
SECTION 11.1 Minimum Fixed Charge Coverage. Permit the Fixed Charge
Coverage Ratio for any period of four consecutive Fiscal Quarters ending on or
after the last Fiscal Quarter of Fiscal Year 2003 to be less than 1.20 to 1;
PROVIDED, HOWEVER, that if the Leverage Ratio as of the last day of the second,
third or fourth Fiscal Quarter of Fiscal Year 2004 is less than 4.25 to 1 (as
reflected, in the case of the second or the third Fiscal Quarter for Fiscal Year
2004, in the monthly financial statements and related compliance certificate
delivered for the last month of such Fiscal Quarter in accordance with the
provisions of SECTIONS 10.1(B) and 10.3 and, in the case of the fourth Fiscal
Quarter of Fiscal Year 2004, in the annual financial statements and related
compliance certificate delivered for Fiscal Year 2004 in accordance with the
provisions of SECTIONS 10.1(A) and 10.3), then the Borrowers will not permit the
Fixed Charge Coverage Ratio for the period of four consecutive Fiscal Quarters
ending on the last day of such Fiscal Quarter to be less than (x) in the case of
the second or the third Fiscal Quarter of Fiscal Year 2004, 1.15 to 1, and (y)
in the case of the fourth Fiscal Quarter of Fiscal Year 2004, 1.10 to 1.
SECTION 11.2 Debt. Create, assume, or otherwise become or remain
obligated in respect of, or permit or suffer to exist or to be created, assumed
or incurred or to be outstanding any Debt, except that this SECTION 11.2 shall
not apply to (without duplication):
(a) Debt of the Borrowers represented by the Loan
Documents,
(b) Debt of the Borrowers represented by the Vendor
Notes;
(c) Subordinated Debt,
(d) Debt of the Borrowers represented by the Senior
Notes,
(e) Capitalized Lease Obligations arising exclusively
from the W.P. Xxxxx & Co. LLC sale-leaseback transaction and outstanding on the
Effective Date (or any replacement thereof on similar terms acceptable to
Administrative Agent) and Capitalized Lease Obligations incurred after the
Effective Date in an aggregate amount outstanding at any time not to exceed
$10,000,000,
(f) Acquired Debt in an aggregate principal amount
outstanding at any time not to exceed $25,000,000,
(g) Debt (including mortgage Debt and other purchase
money Debt) incurred to finance the acquisition, construction or improvement of,
or repairs or additions to, any fixed or capital assets in an aggregate
principal amount outstanding at any time not to exceed $15,000,000, PROVIDED
that such Debt is incurred prior to or within 120 days after the later of such
acquisition or the completion of such construction, improvement, repairs or
additions,
(h) unsecured vendor loans, advances and similar
financings in an aggregate principal amount outstanding at any time not to
exceed $10,000,000, and
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(i) other unsecured Debt in an aggregate principal amount
outstanding at any time not to exceed $15,000,000.
SECTION 11.3 Guarantees. Become or remain liable with respect to any
Guaranty of any obligation of any other Persons, except as listed on SCHEDULE
6.1(J) or pursuant to a Guaranty by a Borrower of Debt permitted in accordance
with SECTION 11.2 or of any other obligation of another Borrower (including
specifically the other Borrowers' Guarantees of American Tire's obligations in
respect of the Senior Notes).
SECTION 11.4 Investments and Acquisitions. (a) Acquire, after the
Effective Date, any Business Unit or Investment or, after the Effective Date,
maintain any Investment other than Permitted Investments, EXCEPT that this
SECTION 11.4 shall not apply to any Acquisition by American Tire or another
Borrower after the Effective Date of (A) Investments in the capital stock of any
other Person organized under the laws of the United States of America or any
state thereof which thereupon becomes a Wholly Owned Subsidiary or (B) Business
Units located in the United States, PROVIDED that:
(i) the Purchase Price of such Acquisition does not
exceed $25,000,000 and Loan Availability for each Business Day during
the 90-day period immediately preceding such Acquisition and on the
closing date of such Acquisition, in each case after giving pro forma
effect to such Acquisition, is at least $25,000,000,
(ii) the aggregate Purchase Price of all such Acquisitions
does not exceed (x) $35,000,000 in any Loan Year or (y) $75,000,000
during the term of this Agreement,
(iii) American Tire or the applicable Borrower has made
available to the Administrative Agent, not later than 10 Business Days
prior to the proposed date of such Acquisition, the results of any
investigation of the target performed by or on behalf of such Borrower
(including copies of lien search results) and copies of the Acquisition
documents (including a copy of the purchase and sale agreement with all
schedules and exhibits thereto) and other due diligence information
obtained or prepared by Borrowers and consistent with Borrowers' past
practice in connection with prior acquisitions,
(iv) the Administrative Agent shall have received a
certificate of the President of American Tire or of a Financial Officer
stating that no Default or Event of Default exists, or would exist
after giving pro forma effect to such transaction, and setting forth
the calculations required to establish whether or not the Borrowers
will be in compliance with the provisions of this Agreement and the
other Loan Documents, including the provisions of SECTIONS 9.4, 9.11
and 11.1, on a pro forma basis after giving effect to such Acquisition,
(v) to the extent the Purchase Price of such Acquisition
is financed with Debt other than Acquired Debt or Loans, such Debt
shall be payable to the seller exclusively, shall be subordinated to
the prior payment of the Secured Obligations on terms and conditions
satisfactory to the Administrative Agent and the Required Lenders and
shall not be secured by any Lien; PROVIDED, HOWEVER, that the payment
of all or any portion of such Debt may be supported by a Letter of
Credit or an unsecured letter of credit to the extent the issuance
thereof is otherwise permitted under this Agreement,
(vi) the Administrative Agent shall have received a
certificate of the President of American Tire or of a Financial Officer
stating that, and setting forth the calculations required to establish
that, EBITDA of the target for the period of 12 consecutive fiscal
months ended on the
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last day (which day shall not be more than 90 days prior to the
Acquisition date) of the most recently completed fiscal period for
which financials are available is at least $1.00,
(vii) at the time of the proposed Acquisition, the target
shall be primarily engaged in a business which is substantially related
to any of the businesses of the Borrowers,
(viii) the Administrative Agent shall have received evidence
satisfactory to it that both before and after giving pro forma effect
to such Acquisition, American Tire or such other Borrower is solvent,
having assets of a fair salable value which exceeds the amount required
to pay its debts as they become absolute and matured (including
contingent, subordinated, unmatured and unliquidated liabilities), and
American Tire or such other Borrower is able to and anticipates that it
will be able to meet its debts as they mature and has adequate capital
to conduct the business in which it is or proposes to be engaged, and
(ix) as requested by the Administrative Agent, the
Borrowers and any new Subsidiary shall have executed and delivered a
Joinder Agreement and such other documents as may reasonably be
determined by the Administrative Agent to be necessary or desirable to
add such Subsidiary as an additional "Borrower" hereunder and to grant
to the Administrative Agent, for the benefit of itself as
Administrative Agent and the other Secured Parties, the Lenders and
Affiliates of the Lenders, a continuing security interest in, and a
continuing Lien upon, all of the Collateral of such Person as security
for the payment, observance and performance of the Secured Obligations,
which Collateral shall be subject to no Liens other than Liens
permitted by SECTIONS 11.9(A), (B), (E), (F) and (G), in each case
together with such allonges to the Notes, restated promissory notes,
pledge agreements, Financing Statements, legal opinions and other
certificates, instruments and documents as the Administrative Agent may
reasonably request. If requested by the Administrative Agent, the
Borrowers also shall cause any new Subsidiary to become a party to any
Hedging Agreement to which the Borrowers (or any of them) are then
parties.
(b) Notwithstanding any provision of this Agreement to
the contrary, in connection with any merger (or other distribution of the
assets) of a Subsidiary that is not a Borrower with and into (or to) a Borrower,
or any Acquisition of a Business Unit, whether by purchase of stock, merger, or
purchase of assets and whether in a single transaction or series of related
transactions, by a Borrower, the Administrative Agent shall have the right to
determine in its reasonable credit judgment whether any Inventory or Receivables
so acquired shall be included in the Borrowing Base (subject to the provisions
of the definitions "Borrowing Base," "Eligible Inventory" and "Eligible
Receivables" and any other provisions of this Agreement and the other Loan
Documents applicable to the computation and reporting of the Borrowing Base). In
connection with such determination, the Administrative Agent may obtain, at the
Borrowers' expense, such appraisals, commercial finance exams and other
assessments of such Receivables and Inventory as it may deem desirable.
SECTION 11.5 Capital Expenditures. Make or incur any Capital
Expenditures (excluding Financed Capex) in the aggregate in excess of (i) in
each of Fiscal Year 2004 and Fiscal Year 2005, $4,000,000, and (ii) in any
Fiscal Year thereafter, $3,000,000, PROVIDED that any amount of such allowance
not used in a Fiscal Year may be carried forward, but only to the succeeding
Fiscal Year.
SECTION 11.6 Restricted Distributions and Payments, Etc. Declare or
make any Restricted Distribution or Restricted Payment; except that this SECTION
11.6 shall not apply to:
(a) any non-compete, bonus or "earn-out" payments payable
to former stockholders of Speed Merchant pursuant to agreements in
effect on the Initial Closing Date;
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(b) the acquisition by American Tire of Senior Notes and the
payment by American Tire of related fees, commissions and expenses and of
accrued and unpaid interest and premium, if any, on any Senior Notes so acquired
in accordance with the following terms and conditions (any such acquisition and
payments, collectively, a "Permitted Senior Notes Repurchase"):
(i) Any Permitted Senior Notes Repurchase shall
be made on not less than 10 Business Days prior written notice
to the Administrative Agent,
(ii) Simultaneous with any Permitted Senior Notes
Repurchase, the acquired Senior Notes shall
be canceled,
(iii) Both before and after giving pro forma
effect to any Permitted Senior Notes Repurchase, each Borrower
and each of its Subsidiaries is solvent, having assets of a
fair salable value which exceeds the amount required to pay
its debts as they become absolute and matured (including
contingent, subordinated, unmatured and unliquidated
liabilities), and each Borrower and each of its Subsidiaries
is able to and anticipates that it will be able to meet its
debts as they mature and has adequate capital to conduct the
business in which it is or proposes to be engaged,
(iv) Both before and after giving pro forma
effect to any Permitted Senior Notes Repurchase, no Default or
Event of Default shall exist,
(v) Loan Availability for each Business Day
during the 90-day period immediately preceding any Permitted
Senior Notes Repurchase and on the date of such Permitted
Senior Notes Repurchase, in each case after giving pro forma
effect to such Permitted Senior Notes Repurchase shall be at
least $25,000,000, and
(vi) On or immediately before the closing date of
any Permitted Senior Notes Repurchase, American Tire shall
have furnished to the Administrative Agent and the Lenders a
certificate setting forth, in reasonable detail, its
calculation of the amounts to be paid in cash in respect of
principal of Senior Notes to be repurchased and the accrued
and unpaid interest, premium, fees, expenses and commissions
payable in connection with closing such Permitted Senior Notes
Repurchase.
(c) the repayment by American Tire of principal of, and
the payment by American Tire of accrued and unpaid interest on, the Vendor Notes
in accordance with the following terms and conditions (any such repayment or
payment, a "Permitted Vendor Notes Payment"):
(i) Any Permitted Vendor Notes Payment shall be
made on not less than 10 Business Days prior written notice to
the Administrative Agent,
(ii) Any Permitted Vendor Notes Payment shall not
violate the subordination provisions of any Vendor Note (after
giving effect to this SECTION 11.6(C)),
(iii) Both before and after giving pro forma
effect to any Permitted Vendor Notes Payment, each Borrower
and each of its Subsidiaries is solvent, having assets of a
fair salable value which exceeds the amount required to pay
its debts as they become absolute and matured (including
contingent, subordinated, unmatured and unliquidated
liabilities), and each Borrower and each of its Subsidiaries
is able to and anticipates that it will be able to meet its
debts as they mature and has adequate capital to conduct the
business in which it is or proposes to be engaged,
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(iv) Both before and after giving pro forma
effect to any Permitted Vendor Notes Payment, no Default or
Event of Default shall exist,
(v) Loan Availability for each Business Day
during the 90-day period immediately preceding any Permitted
Vendor Notes Payment and on the date of such Permitted Vendor
Notes Payment, in each case after giving pro forma effect to
such Permitted Vendor Notes Payment, shall be at least
$25,000,000, and
(vi) On or immediately before the making of any
Permitted Vendor Note Payment, American Tire shall have
furnished to the Administrative Agent and the Lenders a
certificate specifying, in reasonable detail, the amount of
principal of and interest on the Vendor Notes to be paid in
connection with such Permitted Vendor Note Payment.
(d) any dividend, distribution or redemption with respect
to the KS Preferred, PROVIDED, HOWEVER, that at no time shall any such
dividends, distributions or redemptions exceed $1,700,000 in the aggregate in
any Fiscal Year; and
(e) the payment of any management, consulting or similar
fee by one or more Borrowers to Charlesbank Equity Fund IV, Limited Partnership,
Charlesbank Equity Fund IV, GP, Limited Partnership, Charlesbank Capital
Partners, LLC or any Affiliate of any of the foregoing, PROVIDED, HOWEVER, that
at no time shall any such fees exceed, in the aggregate, in any Fiscal Year
$200,000 (provided, that Lenders acknowledge that such fees for Fiscal Year 2003
in an aggregate amount not to exceed $200,000 in addition may be paid in Fiscal
Year 2004).
SECTION 11.7 Merger, Consolidation and Sale of Assets. Merge or
consolidate with any other Person or sell, lease or transfer or otherwise
dispose of any Collateral or all or a substantial portion of its other assets to
any Person other than sales of Inventory in the ordinary course of business,
EXCEPT that (a) any Borrower may merge with and into another Borrower (provided
that American Tire shall be the surviving corporation of any merger to which it
is a party), (b) subject to the provisions of SECTION 11.4(B), any Subsidiary
may merge into a Borrower with such Borrower as the surviving corporation, and
(c) any Borrower may sell all, but not less than all, of the capital stock of
any Subsidiary that is not a Material Subsidiary, PROVIDED that (i) both before
and after giving pro forma effect to any proposed sale, no Default or Event of
Default exists, and (ii) Loan Availability for each Business Day during the
90-day period immediately preceding any proposed sale and on the date of such
proposed sale, in each case after giving pro forma effect to such proposed sale,
shall be at least $25,000,000.
SECTION 11.8 Transactions with Affiliates. Except as described on
SCHEDULE 11.8, effect any transaction with any Affiliate other than in the
ordinary course of business of Borrowers and upon fair and reasonable terms
which are not less favorable to Borrowers than would be obtained in a comparable
arm's length transaction with a Person not an Affiliate of a Borrower.
SECTION 11.9 Liens. Create, assume or permit or suffer to exist or to
be created or assumed any Lien on any of the Collateral or its other assets,
other than (a) Permitted Liens, (b) Liens shown on SCHEDULE 6.1(I), (c) Liens
securing Acquired Debt, which Liens affect solely capital or fixed assets (and
do not extend to any Collateral) of the Business Unit or Person Acquired,
existing on the date of the related Acquisition and not created in contemplation
thereof, (d) Liens securing Debt permitted pursuant to SECTION 11.2(G), which
Liens affect solely capital or fixed assets (and do not extend to any
Collateral), (e) Purchase Money Liens securing Debt (including Capitalized Lease
Obligations) otherwise permitted pursuant to SECTION 11.2, (f) Unsubordinated
Vendor Liens, and (g) Liens arising by virtue of the rendition, entry or
issuance against a Borrower or any
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Subsidiary, or any property of a Borrower or any Subsidiary, of any judgment,
writ, order, or decree for so long as each such Lien (a) is in existence for
less than 20 consecutive days after it first arises or is being Properly
Contested and (b) is at all times junior in priority to any Liens in favor of
Administrative Agent.
SECTION 11.10 Amendments of Other Agreements.
(a) Amend the interest rate or principal amount or
schedule of payments of principal and interest with respect to any Debt (other
than the Secured Obligations) or any dividend rate or redemption schedule
applicable to any preferred stock of a Borrower, other than to reduce the
interest or dividend rate or to extend any such schedule of payments or
redemption schedule; PROVIDED that the foregoing shall not apply to the Debt
evidenced by the Vendor Notes, amendments to which shall be governed by
SUBSECTION (C),
(b) Amend or cause or permit to be amended in any
material respect or in any respect that may be adverse to the interests of the
Administrative Agent or the Lenders, (i) the KS Preferred Stock Purchase
Agreement, (ii) the Senior Note Indenture, (iii) the Series C Preferred Stock
Purchase Agreement, (iv) the Series D Preferred Stock Purchase Agreement or (v)
the articles or certificate of incorporation of any Borrower, or
(c) Amend or cause or permit to be amended in any
respect, the Vendor Notes or any other Vendor Transaction Documents, other than
to (i) extend the maturity date of any Vendor Note, (ii) reduce the rate of
interest applicable to any Vendor Note, or (iii) amend the schedule of payments
of principal with respect to any Vendor Note (other than to increase the
principal amount due at maturity), PROVIDED that any amendment under CLAUSE
(III) shall be subject to the satisfaction of each of the following conditions:
(A) the Administrative Agent shall have received a certificate of the President
of American Tire or of a Financial Officer stating that (1) at the time of any
such amendment and after giving pro forma effect thereto, no Default or Event of
Default has occurred and is continuing, and (2) after giving pro forma effect to
any such amendment, the aggregate amount of principal payments scheduled to be
made by the Borrowers (or any of them) on the Vendor Notes in any Fiscal Year
(excluding any principal payable at the maturity of the Vendor Notes) does not
exceed $2,000,000, and (B) prior to the effectiveness of any such amendment, the
Administrative Agent shall have received, reviewed and approved a final draft
thereof.
SECTION 11.11 Commingling. Commingle or permit the commingling of
Collateral or proceeds of Collateral with other property of or under the control
of any of American Tire or any of its Subsidiaries that is not Collateral or
proceeds thereof.
SECTION 11.12 Anti-Terrorism Laws. Conduct, deal in or engage in, or
permit any Affiliate or agent of any Borrower or any Subsidiary to conduct, deal
in or engage in of the following: (i) conduct any business or engage in any
transaction or dealing with any Blocked Person, including the making or
receiving any contribution of funds, goods or services to or for the benefit of
any Blocked Person; (ii) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to Executive
Order No. 13224; or (iii) engage in or conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in Executive Order No. 13224 or the
USA Patriot Act. Each Borrower shall deliver to Administrative Agent and Lenders
any certification or other evidence requested from time to time by
Administrative Agent or any Lender, in its sole discretion, confirming such
Borrower's compliance with this SECTION 11.13.
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ARTICLE 12
DEFAULT
SECTION 12.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or nongovernmental body:
(a) Default in Payment. The Borrowers shall default in
any payment of principal of or interest on any Loan or any Note when and as due
(whether at maturity, by reason of acceleration or otherwise).
(b) Other Payment Default. The Borrowers shall default in
the payment, as and when due, of principal of or interest on, any other Secured
Obligation, and such default shall continue for a period of 10 days after
written notice thereof has been given to the Borrowers by the Administrative
Agent.
(c) Misrepresentation. Any representation or warranty
made or deemed to be made by the Borrowers under this Agreement or any Loan
Document, or any amendment hereto or thereto, shall at any time prove to have
been incorrect or misleading in any material respect when made.
(d) Default in Performance. The Borrowers shall default
in the performance or observance of any term, covenant, condition or agreement
to be performed by the Borrowers, contained in
(i) ARTICLES 8 (other than SECTIONS 8.3 and
8.7(B)) or 11, or SECTIONS 9.1 (insofar as it requires the
preservation of the corporate existence of the Borrowers),
9.8, 10.1, 10.2 or 10.3, and the Administrative Agent shall
have delivered to the Borrowers written notice of such
default, or
(ii) this Agreement (other than as specifically
provided for otherwise in this SECTION 12.1) and such default
shall continue for a period of 30 days after written notice
thereof has been given to the Borrowers by the Administrative
Agent.
(e) Debt Cross-Default.
(i) A Borrower or any Subsidiary shall fail to
pay when due and payable (and within any applicable cure or
grace period) the principal of or interest on any Debt (other
than the Loans) in an amount in excess of $7,500,000, or
(ii) the maturity of any such Debt outstanding in
a principal amount greater than $7,500,000 shall have (A) been
accelerated in accordance with the provisions of any
indenture, contract or instrument providing for the creation
of or concerning such Indebtedness, or (B) been required to be
prepaid prior to the stated maturity thereof, including upon a
"Change of Control" under and as defined in the Senior Note
Indenture, or
(iii) any event shall have occurred and be
continuing which would permit any holder or holders of such
Debt outstanding in an amount in excess of $7,500,000, any
trustee or agent acting on behalf of such holder or holders or
any other Person so to
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accelerate such maturity, and the Borrowers shall have failed
to cure such default prior to the expiration of any applicable
cure or grace period.
(f) Other Cross-Defaults; Mandatory Redemption. A
Borrower or any Subsidiary shall default in the payment when due, or in the
performance or observance, of any obligation or condition of any agreement,
contract or lease (other than this Agreement, the Security Documents or any such
agreement, contract or lease relating to Debt), if the existence of any such
defaults, singly or in the aggregate, could reasonably be expected to have a
Materially Adverse Effect, PROVIDED, that for the purposes of this provision,
where such a default could result only in a monetary loss, a Materially Adverse
Effect shall not be deemed to have occurred unless the aggregate of such losses
would exceed $7,500,000, or any event shall occur or circumstances exist that
would result in or permit the holder thereof to require the redemption of the KS
Preferred.
(g) Voluntary Bankruptcy Proceeding. A Borrower or any
Subsidiary shall
(i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect),
(ii) file a petition seeking to take advantage of
any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or composition for
adjustment of debts,
(iii) consent to or fail to contest in a timely
and appropriate manner any petition filed against it in an
involuntary case under such bankruptcy laws or other laws,
(iv) apply for or consent to, or fail to contest
in a timely and appropriate manner, the appointment of, or the
taking of possession by, a receiver, custodian, trustee, or
liquidator of itself or of a substantial part of its property,
domestic or foreign,
(v) admit in writing its inability to pay its
debts as they become due,
(vi) make a general assignment for the benefit of
creditors, or
(vii) take any corporate action for the purpose of
authorizing any of the foregoing.
(h) Involuntary Bankruptcy Proceeding. A case or other
proceeding shall be commenced against a Borrower or any Subsidiary in any court
of competent jurisdiction seeking
(i) relief under the federal bankruptcy laws (as
now or hereafter in effect) or under any other laws, domestic
or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts,
(ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of a Borrower, any
Subsidiary or of all or any substantial part of the assets,
domestic or foreign, of a Borrower or any Subsidiary,
and such case or proceeding shall continue undismissed or unstayed for a period
of 60 consecutive calendar days, or an order granting the relief requested in
such case or proceeding against such Borrower or Subsidiary (including an order
for relief under such federal bankruptcy laws) shall be entered.
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(i) Loan Documents. Any "Event of Default" under any Loan
Document (other than this Agreement) shall occur or a Borrower shall default in
the performance or observance of any material term, covenant, condition or
agreement contained in, or the payment of any other sum covenanted to be paid by
the Borrowers under, any Loan Document (other than this Agreement) that does not
expressly provide for "Events of Default," or any provision thereof (in each
case, after giving effect to any applicable grace or cure period as provided
herein), other than any nonmaterial provision rendered unenforceable by
operation of law, shall cease to be valid and binding.
(j) Failure of Agreements. A Borrower shall challenge the
validity and binding effect of any provision of any Loan Document after delivery
thereof hereunder or shall state in writing its intention to make such a
challenge, or any Security Document, after delivery thereof hereunder, shall for
any reason (except to the extent permitted by the terms thereof) cease to create
a valid and perfected first priority Lien (except for Permitted Liens) on, or
security interest in, any of the Collateral purported to be covered thereby.
(k) Judgment. A final, unappealable judgment or order for
the payment of money in an amount that exceeds the uncontested insurance
available therefor by $2,500,000 or more shall be entered against a Borrower by
any court and such judgment or order shall continue undischarged or unstayed for
20 days.
(l) Attachment. A warrant or writ of attachment or
execution or similar process which exceeds $2,500,000 in value shall be issued
against any property of a Borrower and such warrant or process shall continue
undischarged or unstayed for 20 days.
(m) ERISA. Any ERISA Event with respect to a Benefit Plan
shall occur.
(n) Qualified Audits. The independent certified public
accountants retained by American Tire shall refuse to deliver an opinion in
accordance with SECTION 10.1(A) with respect to the annual consolidated
financial statements of American Tire and its Consolidated Subsidiaries.
(o) Change of Control. A Change of Control shall occur.
SECTION 12.2 Remedies.
(a) Automatic Acceleration and Termination of Facilities.
Upon the occurrence of an Event of Default specified in SECTION 12.1(G) or (H),
(i) the principal of and the interest on the Loans and any Note at the time
outstanding, and all other amounts owed to the Administrative Agent or the
Lenders under this Agreement or any of the other Loan Documents and all other
Secured Obligations, shall thereupon become due and payable without presentment,
demand, protest, or other notice of any kind, all of which are expressly waived,
anything in this Agreement or any of the Loan Documents to the contrary
notwithstanding, and (ii) the Commitments and the right of the Borrowers to
request Borrowings under this Agreement shall immediately terminate.
(b) Other Remedies. If any Event of Default shall have
occurred, and during the continuance of any Event of Default, the Administrative
Agent may, and at the direction of the Required Lenders in their sole and
absolute discretion shall, do any of the following:
(i) declare the principal of and interest on the
Loans and any Note at the time outstanding, and all other
amounts owed to the Administrative Agent or the Lenders under
this Agreement or any of the other Loan Documents and all
other Secured Obligations, to be forthwith due and payable,
whereupon the same shall immediately
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become due and payable without presentment, demand, protest or
other notice of any kind, all of which are expressly waived,
anything in this Agreement or the Loan Documents to the
contrary notwithstanding;
(ii) terminate the Commitments and any other
right of the Borrowers to request borrowings hereunder;
(iii) notify, or request the Borrowers to notify,
in writing or otherwise, any Account Debtor or obligor with
respect to any one or more of the Receivables to make payment
to the Administrative Agent, for the benefit of the Secured
Parties, or any agent or designee of the Administrative Agent,
at such address as may be specified by the Administrative
Agent and if, notwithstanding the giving of any notice, any
Account Debtor or other such obligor shall make payments to
the Borrowers, the Borrowers shall hold all such payments
received in trust for the Administrative Agent, for the
account of the Secured Parties, without commingling the same
with other funds or property of, or held by, the Borrowers,
and shall deliver the same to the Administrative Agent or any
such agent or designee of the Administrative Agent immediately
upon receipt by the Borrowers in the identical form received,
together with any necessary endorsements;
(iv) settle or adjust disputes and claims
directly with Account Debtors and other obligors on
Receivables for amounts and on terms which the Administrative
Agent considers advisable and in all such cases only the net
amounts received by the Administrative Agent, for the account
of the Secured Parties, in payment of such amounts, after
deductions of costs and attorneys' fees, shall constitute
Collateral and the Borrowers shall have no further right to
make any such settlements or adjustments or to accept any
returns of merchandise;
(v) enter upon any premises in which Inventory
may be located and, without resistance or interference by the
Borrowers, take physical possession of any or all thereof and
maintain such possession on such premises or move the same or
any part thereof to such other place or places as the
Administrative Agent shall choose, without being liable to the
Borrowers on account of any loss, damage or depreciation that
may occur as a result thereof, so long as the Administrative
Agent shall act reasonably and in good faith;
(vi) require the Borrowers to and the Borrowers
shall, without charge to the Administrative Agent or any
Lender, assemble the Inventory and maintain or deliver it into
the possession of the Administrative Agent or any agent or
representative of the Administrative Agent at such place or
places as the Administrative Agent may designate and as are
reasonably convenient to both the Administrative Agent and the
applicable Borrower;
(vii) at the expense of the Borrowers, cause any
of the Inventory to be placed in a public or field warehouse,
and the Administrative Agent shall not be liable to the
Borrowers on account of any loss, damage or depreciation that
may occur as a result thereof, so long as the Administrative
Agent shall act reasonably and in good faith;
(viii) without notice, demand or other process, and
without payment of any rent or any other charge, enter any of
the Borrowers' premises and, without breach of the peace,
until the Administrative Agent, on behalf of the Secured
Parties, completes the enforcement of its rights in the
Collateral, take possession of such premises or place
custodians in exclusive control thereof, remain on such
premises and use the same and
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any of the Borrowers' equipment, for the purpose of (A)
completing any work in process, preparing any Inventory for
disposition and disposing thereof, and (B) collecting any
Receivable, and the Administrative Agent for the benefit of
the Secured Parties is hereby granted a license or sublicense
and all other rights as may be necessary, appropriate or
desirable to use the Proprietary Rights in connection with the
foregoing, and the rights of the Borrowers under all licenses,
sublicenses and franchise agreements shall inure to the
Administrative Agent for the benefit of the Secured Parties
(PROVIDED, HOWEVER, that any use of any federally registered
trademarks as to any goods shall be subject to the control as
to the quality of such goods of the owner of such trademarks
and the goodwill of the business symbolized thereby);
(ix) exercise any and all of its rights under any
and all of the Security Documents;
(x) apply any Collateral consisting of cash to
the payment of the Secured Obligations in any order in which
the Administrative Agent, on behalf of the Secured Parties,
may elect or use such cash in connection with the exercise of
any of its other rights hereunder or under any of the Security
Documents;
(xi) establish or cause to be established one or
more Lockboxes or other arrangement for the deposit of
proceeds of Receivables, and, in such case, the Borrowers
shall cause to be forwarded to the Administrative Agent at the
Administrative Agent's Office, on a daily basis, copies of all
checks and other items of payment and deposit slips related
thereto deposited in such Lockboxes, together with collection
reports in form and substance satisfactory to the
Administrative Agent; and
(xii) exercise all of the rights and remedies of a
secured party under the UCC and under any other Applicable
Law, including the right, without notice except as specified
below and with or without taking possession thereof, to sell
the Collateral or any part thereof in one or more parcels at
public or private sale, at any location chosen by the
Administrative Agent, for cash, on credit or for future
delivery, and at such price or prices and upon such other
terms as the Administrative Agent may deem commercially
reasonable. Each Borrower agrees that, to the extent notice of
sale shall be required by law, at least 10 days' notice to the
Borrowers of the time and place of any public sale or the time
after which any private sale is to be made shall constitute
reasonable notification, but notice given in any other
reasonable manner or at any other reasonable time shall
constitute reasonable notification. The Administrative Agent
shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made
at the time and place to which it was so adjourned.
SECTION 12.3 Application of Proceeds. All proceeds from each sale of,
or other realization upon, all or any part of the Collateral following an Event
of Default shall be applied or paid over in accordance with the provisions of
SECTION 4.16.
THE BORROWERS SHALL REMAIN LIABLE AND WILL PAY, ON DEMAND, ANY DEFICIENCY
REMAINING IN RESPECT OF THE SECURED OBLIGATIONS, TOGETHER WITH INTEREST THEREON
AT A RATE PER ANNUM EQUAL TO THE HIGHEST RATE THEN PAYABLE HEREUNDER ON SUCH
SECURED OBLIGATIONS, WHICH INTEREST SHALL CONSTITUTE PART OF THE SECURED
OBLIGATIONS.
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SECTION 12.4 Power of Attorney. In addition to the authorizations
granted to the Administrative Agent under SECTION 8.13 or under any other
provision of this Agreement or of any other Loan Document, during the
continuance of an Event of Default, each Borrower hereby irrevocably designates,
makes, constitutes and appoints the Administrative Agent (and all Persons
designated by the Administrative Agent from time to time) as the Borrower's true
and lawful attorney, and agent in fact, and the Administrative Agent, or any
agent of the Administrative Agent, may, without notice to the Borrowers, and at
such time or times as the Administrative Agent or any such agent in its sole
discretion may determine, in the name of a Borrower, the Administrative Agent or
the other Secured Parties:
(a) demand payment of the Receivables,
(b) enforce payment of the Receivables by legal proceedings or
otherwise,
(c) exercise all of any Borrower's rights and remedies
with respect to the collection of Receivables,
(d) settle, adjust, compromise, extend or renew any or
all of the Receivables,
(e) settle, adjust or compromise any legal proceedings
brought to collect the Receivables,
(f) discharge and release the Receivables or any of them,
(g) prepare, file and sign the name of a Borrower on any
proof of claim in bankruptcy or any similar document against any Account Debtor,
(h) prepare, file and sign the name of a Borrower on any
notice of Lien, assignment or satisfaction of Lien, or similar document in
connection with any of the Collateral,
(i) endorse the name of a Borrower upon any Chattel
Paper, Document, Instrument, notice, freight xxxx, xxxx of lading or similar
document or agreement relating to the Receivables, the Inventory or any other
Collateral,
(j) use the stationery of the Borrowers and sign the
names of the Borrowers to verifications of the Receivables and on any notice to
the Account Debtors,
(k) open the Borrowers' mail,
(l) notify the post office authorities to change the
address for delivery of the Borrowers' mail to an address designated by the
Administrative Agent, and
(m) use the information recorded on or contained in any
data processing equipment and computer hardware and software relating to the
Receivables, Inventory or other Collateral to which any Borrower has access.
SECTION 12.5 Miscellaneous Provisions Concerning Remedies.
(a) Rights Cumulative. The rights and remedies of the
Administrative Agent and the Lenders under this Agreement, the Notes and each of
the Loan Documents shall be cumulative and not exclusive of any rights or
remedies which it or they would otherwise have. In exercising such rights and
remedies the Administrative Agent and the Lenders may be selective and no
failure or delay by the
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Administrative Agent or any Lender in exercising any right shall operate as a
waiver of it, nor shall any single or partial exercise of any power or right
preclude its other or further exercise or the exercise of any other power or
right.
(b) Waiver of Marshalling. Each Borrower hereby waives
any right to require any marshalling of assets and any similar right.
(c) Limitation of Liability. Nothing contained in this
ARTICLE 12 or elsewhere in this Agreement or in any of the Loan Documents shall
be construed as requiring or obligating the Administrative Agent, any Lender or
any agent or designee of the Administrative Agent or any Lender to make any
demand, or to make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim or notice or take any action,
with respect to any Receivable or any other Collateral or the monies due or to
become due thereunder or in connection therewith, or to take any steps necessary
to preserve any rights against prior parties, and the Administrative Agent, the
Lenders and their agents or designees shall have no liability to the Borrowers
for actions taken pursuant to this ARTICLE 12, any other provision of this
Agreement or any of the Loan Documents so long as the Administrative Agent or
such Lender shall act in good faith and in a commercially reasonable manner.
(d) Appointment of Receiver. In any action under this
ARTICLE 12, the Administrative Agent shall be entitled during the continuance of
an Event of Default, to the fullest extent permitted by Applicable Law, to the
appointment of a receiver, without notice of any kind whatsoever, to take
possession of all or any portion of the Collateral and to exercise such power as
the court shall confer upon such receiver.
SECTION 12.6 Trademark License. Each Borrower hereby grants to the
Administrative Agent for its benefit as Administrative Agent and for the benefit
of the other Secured Parties, the nonexclusive right and license to use its
trademarks for the purposes set forth in SECTION 12.2(B)(VIII) and for the
purpose of enabling the Administrative Agent to realize on the Collateral and to
permit any purchaser of any portion of the Collateral through a foreclosure sale
or any other exercise of the Administrative Agent's rights and remedies under
this Agreement and the other Security Documents to use, sell or otherwise
dispose of the Collateral bearing any such trademark. Such right and license is
granted free of charge, without the requirement that any monetary payment
whatsoever be made to the Borrowers or any other Person by the Lenders or the
Administrative Agent or any purchaser or purchasers of the Collateral. The
Borrowers hereby represent, warrant, covenant and agree that they presently
have, and shall continue to have, the right, without the approval or consent of
others, to grant the license set forth in this SECTION 12.6.
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ARTICLE 13
ASSIGNMENTS
SECTION 13.1 Successors and Assigns; Participations.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrowers, the Lenders, the Administrative Agent, all future
holders of the Notes, and their respective successors and assigns, except that
the Borrowers may not assign or transfer any of their rights or obligations
under this Agreement without the prior written consent of each Lender.
(b) Each Lender may with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld) and, so
long as no Default or Event of Default has occurred and is continuing, American
Tire (which consent shall not be unreasonably withheld) assign to one or more
Eligible Assignees all or a portion of its interests, rights and obligations
under this Agreement (including all or a portion of the Loans at the time owing
to it and the Notes held by it) (PROVIDED that no consent shall be required with
respect to any assignment to an Eligible Assignee as part of the assigning
Lender's transfer of all or substantially all of its assets of a similar type in
connection with any acquisition or divestiture or otherwise, and no consent
shall be required with respect to any assignment by FCC in connection with any
merger, consolidation or acquisition of FCC and the Bank by or with Bank of
America, N.A.); PROVIDED, HOWEVER, that (i) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Lender's rights and
obligations under this Agreement, (ii) the amount of the Commitment of the
assigning Lender that is 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 in no event be less than the Minimum
Commitment (or the assigning Lender's entire remaining Commitment, if less)
(except that a Lender may assign less than the Minimum Commitment to its
Affiliate), (iii) in the case of a partial assignment, the amount of the
Commitment that is retained by the assigning Lender (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered to
the Administrative Agent) shall in no event be less than the Minimum Commitment,
(iv) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register an
Assignment and Acceptance, together with any Note or Notes subject to such
assignment and an assignment fee in the amount of $3,500, (v) such assignment
shall not, without the consent of the Borrowers, require the Borrowers to file a
registration statement with the SEC or apply to or qualify the Loans or the
Notes under the blue sky laws of any state, and (vi) the representation
contained in SECTION 13.2 hereof shall be true with respect to any such proposed
assignee. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the execution thereof,
(A) the assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder, and (B) the Lender assignor thereunder shall, to the extent provided
in such assignment, be released from its obligations under this Agreement.
(c) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i) other
than the representation and warranty that it is the legal and beneficial owner
of the interest being assigned thereby free and clear of any adverse claim, such
Lender assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto; (ii) such Lender
assignor makes no representation or warranty and assumes no
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responsibility with respect to the financial condition of the Borrowers or the
performance or observance by the Borrowers of any of their obligations under
this Agreement or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in SECTION 6.1(N)
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon the
Administrative Agent, such Lender assignor or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Administrative Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain 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 Commitment and
Proportionate Share of, and principal amount of the Loans and owing to, each
Lender from time to time (the "Register"). The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrowers, the
Administrative Agent and the Lenders may treat each person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Eligible Assignee together with any Note
or Notes and evidence satisfactory to the Administrative Agent of the Borrowers'
consent thereto (if applicable), subject to such assignment, the Administrative
Agent shall, if such Assignment and Acceptance has been completed and is in the
form of EXHIBIT C, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, (iii) give prompt notice thereof
to the Lenders and the Borrowers, and (vi) promptly deliver a copy of such
Acceptance and Assignment to the Borrowers. Within five Business Days after
receipt of notice, the Borrowers shall execute and deliver to the Administrative
Agent in exchange for the surrendered Note or Notes a new Note or Notes to the
order of such Eligible Assignee in amounts equal to the Commitment assumed by
such Eligible Assignee pursuant to such Assignment and Acceptance and a new Note
or Notes to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of the assigned
Notes. Each surrendered Note or Notes shall be canceled and returned to the
Borrowers.
(f) Each Lender may sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment hereunder and the
Loans owing to it and the Notes held by it); PROVIDED, HOWEVER, that (i) each
such participation (other than to a Lender's own Affiliate) shall be in an
amount not less than the Minimum Commitment, (ii) such Lender's obligations
under this Agreement (including its Commitment hereunder) shall remain
unchanged, (iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iv) such Lender shall
remain the holder of the Notes held by it for all purposes of this Agreement,
(v) the Borrowers, the Administrative Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement; PROVIDED, that such Lender may
agree with any participant that such Lender will not, without such participant's
consent, agree to or approve any waivers or
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amendments which would reduce the principal of or the interest rate on any
Loans, extend the term or increase the amount of the commitments of such
participant, reduce the amount of any fees to which such participant is
entitled, extend any scheduled payment date for principal or release Collateral
securing the Loans (other than Collateral disposed of pursuant to SECTION 8.7
hereof or otherwise in accordance with the terms of this Agreement or the
Security Documents), and (vi) any such disposition shall not, without the
consent of the Borrowers, require any Borrower to file a registration statement
with the SEC to apply to qualify the Loans or the Notes under the blue sky law
of any state. The Lender selling a participation to any bank or other entity
that is not an Affiliate of such Lender shall give prompt notice thereof to the
Administrative Agent, the other Lenders and the Borrowers.
(g) Any Lender may, in connection with any assignment,
proposed assignment, participation or proposed participation pursuant to this
SECTION 13.1, disclose to the assignee, participant, proposed assignee or
proposed participant, any information relating to the Borrowers furnished to
such Lender by or on behalf of the Borrowers, PROVIDED that, prior to any such
disclosure, each such assignee, proposed assignee, participant or proposed
participant shall agree with the Borrowers or such Lender (which in the case of
an agreement with only such Lender, the Borrowers shall be recognized as third
party beneficiaries thereof) to preserve the confidentiality of any confidential
information relating to the Borrowers received from such Lender.
SECTION 13.2 Representation of Lenders. Each Lender hereby represents
that it will make each Loan hereunder as a commercial loan for its own account
in the ordinary course of its business; PROVIDED, HOWEVER, that subject to
SECTION 13.1 hereof, the disposition of the Notes or other evidence of the
Secured Obligations held by any Lender shall at all times be within its
exclusive control.
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ARTICLE 14
AGENT
SECTION 14.1 Appointment of Administrative Agent. Each Lender hereby
irrevocably designates and appoints (1) FCC as the Administrative Agent of such
Lender and (2) Wachovia as the Syndication Agent and CIT as the Documentation
Agent under this Agreement and the other Loan Documents, and each Lender
irrevocably authorizes the Administrative Agent, as the Administrative Agent for
such Lender, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of this Agreement and such other Loan Documents, including to make
determinations as to the eligibility of Inventory and Receivables and to
establish Additional Reserves, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement or the other Loan Documents, the Administrative Agent shall not
have any duties or responsibilities except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or the other Loan Documents or otherwise exist
against the Administrative Agent.
SECTION 14.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care. The Administrative Agent
hereby appoints, authorizes and directs each Lender to act as collateral
sub-agent for the Administrative Agent for the purposes of perfecting security
interests and Liens in Collateral held by such Lender.
SECTION 14.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its trustees, officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (i) liable to any Lender (or any
Lender's participants) for any action lawfully taken or omitted to be taken by
it or such Person under or in connection with this Agreement or the other Loan
Documents (except for its or such Person's, as the case may be, own gross
negligence or willful misconduct), or (ii) responsible in any manner to any
Lender (or any Lender's participants) for any recitals, statements,
representations or warranties made by the Borrowers or any of its Subsidiaries,
any Affiliate thereof or any other Person or any officer thereof contained in
this Agreement or the other Loan Documents or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or the other
Loan Documents or for the existence, value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the other Loan
Documents or any Collateral or the Security Interest or other Lien or other
interest therein or for any failure of the Borrowers, or any Subsidiary of the
Borrower or any Affiliate of the Borrowers to perform its obligations hereunder
or thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrowers.
SECTION 14.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including counsel to the Borrowers),
independent accountants and other experts selected by the Administrative Agent.
The
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Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless such Note shall have been transferred in
accordance with SECTION 13.1. The Administrative Agent shall be fully justified
in failing or refusing to take any action under this Agreement and the other
Loan Documents unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate and shall be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the Notes in accordance with a
request of the Required Lenders (or all Lenders if such action or inaction would
have the effect of amending or waiving a breach of any provision of this
Agreement that only all the Lenders may amend or waive in accordance with the
provisions of SECTION 15.9(B)), and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Lenders and all future
holders of the Notes.
SECTION 14.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrowers referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall promptly give notice thereof to the Lenders. The Administrative
Agent shall take such action with respect to such Default or Event of Default as
shall be directed by the Required Lenders; PROVIDED that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) continue making Loans to the Borrowers
on behalf of the Lenders in reliance on the provisions of SECTION 4.7 and take
such other action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable and in the best interests
of the Lenders.
SECTION 14.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that none of the Administrative Agent, the
Syndication Agent nor the Documentation Agent nor any of their respective
officers, directors, counsel, employees, agents, attorneys-in-fact or Affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent, the Syndication Agent or the Documentation Agent hereafter
taken, including any review of the affairs of the Borrowers, any Subsidiary or
any Affiliate of the Borrowers, shall be deemed to constitute any representation
or warranty by the Administrative Agent, the Syndication Agent or the
Documentation Agent to any Lender. Each Lender represents to the Administrative
Agent, the Syndication Agent and the Documentation Agent that it has,
independently and without reliance upon the Administrative Agent, the
Syndication Agent or the Documentation Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial (and other) condition and creditworthiness of the Borrowers and the
Subsidiaries, and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial (and other) condition and creditworthiness of
the Borrowers and the Subsidiaries. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or under the other Loan Documents none of the
Administrative Agent, the Syndication Agent nor the Documentation Agent shall
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, financial (and other)
condition or creditworthiness of the Borrowers or the Subsidiaries or the
Affiliates of the Borrowers which may come into the possession of the
Administrative Agent, the Syndication Agent or the Documentation Agent or any of
their respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
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SECTION 14.7 Indemnification.
(a) The Lenders agree to indemnify the Administrative
Agent in its capacity as such (to the extent not reimbursed by the Borrowers and
without limiting the obligation of the Borrowers or any other Person to do so),
Ratably according to their respective Commitment Percentages, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, attorneys' fees, costs, expenses or disbursements of any kind
whatsoever which may at any time (including at any time following the payment of
the Notes) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of this Agreement or the other Loan
Documents, or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent under or in connection with any of the foregoing;
PROVIDED that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
attorneys' fees, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or willful misconduct or resulting
solely from transactions or occurrences that occur at a time after such Lender
has assigned all of its interests, rights and obligations under this Agreement
pursuant to SECTION 13.1 or, in the case of a Lender to which an assignment is
made hereunder pursuant to SECTION 13.1, at a time before such assignment. The
agreements in this SECTION 14.7 shall survive the payment of the Notes, the
Secured Obligations and all other amounts payable hereunder and the termination
of this Agreement.
(b) Without limiting the generality of the foregoing
provisions of this SECTION 14.7, if the Administrative Agent should be sued by
any receiver, trustee in bankruptcy, debtor-in-possession or other Person on
account of any alleged preference or fraudulent transfer received or alleged to
have been received from the Borrowers, any Subsidiary or any other Person as the
result of any transaction under the Loan Documents, then any monies paid by the
Administrative Agent in settlement or satisfaction of such suit, together with
all costs and expenses (including attorneys' fees and expenses) incurred by
Administrative Agent in the defense of same, shall be promptly reimbursed to the
Administrative Agent by the Lenders to the extent of each Lender's Proportionate
Share.
(c) Further, without limiting the generality of the
foregoing provisions of this SECTION 14.7, if at any time (whether prior to or
after the Termination Date) any action or proceeding shall be brought against
the Administrative Agent by the Borrowers, any Subsidiary, or by any other
Person claiming by, through or under the Borrowers or any Subsidiary, to recover
damages for any action taken or omitted by the Administrative Agent under any of
the Loan Documents or in the performance of any rights, powers or remedies of
the Administrative Agent against the Borrowers, any Account Debtor, any
Subsidiary, the Collateral or with respect to any Loans, or to obtain any other
relief of any kind on account of any transaction between the Administrative
Agent and the Borrowers, any Subsidiary or any other Person under or in relation
to any of the Loan Documents, the Lenders agree to indemnify and hold the
Administrative Agent harmless with respect thereto and to pay to Administrative
Agent their respective Proportionate Shares of such amount as the Administrative
Agent shall be required to pay by reason of a judgment, decree or other order
entered in such action or proceeding or by reason of any compromise or
settlement agreed to by the Administrative Agent, including all interest and
costs assessed against the Administrative Agent in defending or compromising
such action, together with attorneys' fees and other legal expenses paid or
incurred by the Administrative Agent in connection therewith; PROVIDED, HOWEVER,
that no Lender shall be liable to the Administrative Agent for any of the
foregoing to the extent that they arise from the willful misconduct or gross
negligence of the Administrative Agent. In the Administrative Agent's
discretion, the Administrative Agent may also reserve for or satisfy any such
judgment, decree or order from proceeds of Collateral prior to any distributions
therefrom to or for the account of Lenders.
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SECTION 14.8 Administrative Agent in Its Individual Capacity. The
institution at the time acting as the Administrative Agent and its Affiliates
may make loans to, issue or cause to be issued letters of credit to or for the
account of, accept deposits from and generally engage in any kind of business
with the Borrowers, any Subsidiary or any Affiliate of the Borrowers as if it
were not the Administrative Agent hereunder. With respect to its Commitment, the
Loans made or renewed by it and any Note issued to it and any Letter of Credit
or Letter of Credit Guarantee issued by it, such institution shall have and may
exercise the same rights and powers under this Agreement and the other Loan
Documents and shall be subject to the same obligations and liabilities as and to
the extent set forth herein and in the other Loan Documents for any other
Lender. The terms "Lenders" and "Required Lenders" or any other term shall,
unless the context clearly otherwise indicates, include such institution in its
individual capacity as a Lender or one of the Required Lenders.
SECTION 14.9 Successor Administrative Agent.
(a) The Administrative Agent may resign as Administrative
Agent upon 30 days' notice to the Lenders and the Borrowers; PROVIDED, HOWEVER
that such resignation shall not take effect until a successor agent has been
appointed. If the Administrative Agent shall resign as Administrative Agent
under this Agreement, then the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders and, so long as no Event of Default
has occurred and is continuing, subject to approval by American Tire (which
approval shall not be unreasonably withheld), whereupon such successor agent
shall succeed to the rights, powers and duties of the Administrative Agent, and
the term "Administrative Agent" shall mean such successor agent effective upon
its appointment, and the former Administrative Agent's rights, powers and duties
as Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Notes (PROVIDED, that if FCC shall assign
all of its interests, rights and obligations under this Agreement to any Person
in connection with any merger, consolidation or acquisition of FCC and the Bank
by or with Bank of America, N.A., then such Person shall, effective upon the
consummation of such assignment, be deemed to have been appointed by the
Required Lenders as the successor to FCC in its capacity as the Administrative
Agent hereunder without the requirement of any approval by American Tire). If
the Required Lenders have failed to appoint a successor Administrative Agent
within 30 days of the resignation notice given by the Administrative Agent as
provided above, then the Administrative Agent shall be entitled to appoint a
successor agent from among the Lenders, subject, so long as no Event of Default
has occurred and is continuing, to approval by American Tire (which approval
shall not be unreasonably withheld). After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of SECTION 14.7
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
(b) It is intended that there shall be no violation of
any Applicable Law denying or restricting the right of financial institutions to
transact business as agent in any jurisdiction. It is recognized that, in case
of litigation under any of the Loan Documents, or in case the Administrative
Agent deems that by reason of present or future laws of any jurisdiction the
Administrative Agent might be prohibited from or restricted in exercising any of
the powers, rights or remedies granted to the Administrative Agent or the
Lenders hereunder or under any of the Loan Documents or from holding title to or
a Lien upon any Collateral or from taking any other action which may be
necessary or desirable hereunder or under any of the Loan Documents, the
Administrative Agent may appoint an additional individual or institution as a
separate collateral agent or co-collateral agent which is not so prohibited from
or restricted in taking any of such actions or exercising any of such powers,
rights or remedies. If the Administrative Agent shall appoint an additional
individual or institution as a separate collateral agent or co-collateral agent
as provided above, each and every remedy, power, right, claim, demand or cause
of action intended by any of the Loan Documents to be exercised by or vested in
or conveyed to the
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Administrative Agent with respect thereto shall be exercisable by and vested in
such separate collateral agent or co-collateral agent, but only to the extent
necessary to enable such separate collateral agent or co-collateral agent to
exercise such powers, rights and remedies, and every covenant and obligation
necessary to the exercise thereof by such separate collateral agent or
co-collateral agent shall run to and be enforceable by either of them. Should
any instrument from the Lenders be required by the separate collateral agent or
co-collateral agent so appointed by Administrative Agent in order more fully and
certainly to vest in and confirm to him or it such rights, powers, duties and
obligations, including without limitation indemnification of such collateral
agent or co-collateral agent, any and all of such instruments shall, on request,
be executed, acknowledged and delivered by the Lenders. In case any separate
collateral agent or co-collateral agent, or a successor to either, shall die,
become incapable of acting, resign or be removed, all the estates, properties,
rights, powers, duties and obligations of such separate collateral agent or
co-collateral agent, so far as permitted by Applicable Law, shall vest in and be
exercised by the Administrative Agent until the appointment of a new collateral
agent or successor to such separate collateral agent or co-collateral agent.
SECTION 14.10 Notices from Administrative Agent to Lenders. The
Administrative Agent shall promptly, upon receipt thereof, forward to each
Lender copies of any updated Schedules and of any written notices, reports or
other information supplied to it by the Borrowers or any Subsidiary (but which
such Person is not required to supply directly to the Lenders). Except to the
extent expressly provided in this Agreement or in the other Loan Documents, the
Administrative Agent shall not be obligated to deliver or disclose to any Lender
any of the Administrative Agent's internal reports, analysis or investigation or
any records or other information in its possession relating to the Borrowers or
any of the Subsidiaries or the Affiliates of the Borrowers.
SECTION 14.11 Declaring Events of Default. Upon the occurrence of a
Default, the Administrative Agent may, and at the direction of the Required
Lenders shall, give such notice or take such other action as may be required
hereunder to declare an Event of Default.
SECTION 14.12 Syndication Agent and Documentation Agent. For avoidance
of doubt, it is expressly acknowledged and agreed by the Administrative Agent
and each Lender for the benefit of each of the Syndication Agent and the
Documentation Agent that, other than any rights or obligations explicitly
reserved to or imposed upon the Syndication Agent and the Documentation Agent
under this Agreement, neither the Syndication Agent nor the Documentation Agent,
in such capacity, has any rights or obligations hereunder nor shall the
Syndication Agent or the Documentation Agent, in such capacity, be responsible
or accountable to any other party hereto for any action or failure to act
hereunder, other than in connection with such explicitly reserved rights or such
obligations and then only for claims, damages, losses (other than consequential
losses) and other liabilities arising out of such Person's own gross negligence
or willful misconduct.
SECTION 14.13 No Reliance on Administrative Agent's Customer
Identification Program. Each Lender acknowledges and agrees that neither such
Lender, nor any of its Affiliates, participants, transferees or assignees, may
rely on Administrative Agent to carry out such Lender's, Affiliate's,
participant's, transferee's or assignee's customer identification program, or
other obligations required or imposed under or pursuant to the USA Patriot Act
or the regulations thereunder, including the regulations contained in 31 CFR
103.121 (as hereafter amended or replaced, the "CIP Regulations"), or any other
Anti-Terrorism Law, including any programs involving any of the following items
relating to or in connection with any Borrower, its Affiliates or its agents,
the Loan Documents or the transactions hereunder: (i) any identity verification
procedures, (ii) any recordkeeping, (iii) any comparisons with government lists,
(iv) any customer notices or (v) any other procedures required under the CIP
Regulations or such other laws.
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SECTION 14.14 USA Patriot Act. Each Lender or transferee, participant
or assignee of a Lender that is not incorporated under the laws of the United
States of America or a state thereof (and is not excepted from the certification
requirement contained in Section 313 of the USA Patriot Act and the applicable
regulations because it is both (i) an affiliate of a depository institution or
foreign bank that maintains a physical presence in the United States or foreign
country, and (ii) subject to supervision by a banking authority regulating such
affiliated depository institution or foreign bank) shall deliver to the
Administrative Agent the certification, or, if applicable, recertification,
certifying that such Lender is not a "shell" and certifying to other matters as
required by Section 313 of the USA Patriot Act and the applicable regulations:
(i) within 10 days after the Effective Date and (2) at such other times as are
required under the USA Patriot Act.
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ARTICLE 15
MISCELLANEOUS
SECTION 15.1 Notices.
(a) Method of Communication. Except as specifically
provided in this Agreement or in any of the Loan Documents, all notices and the
communications hereunder and thereunder shall be in writing or by telephone
subsequently confirmed in writing. Notices in writing shall be delivered
personally or sent by certified or registered mail, postage pre-paid, or by
overnight courier, telex or facsimile transmission and shall be deemed received
in the case of personal delivery, when delivered, in the case of mailing, when
receipted for, in the case of overnight delivery, on the next Business Day after
delivery to the courier, and in the case of telex and facsimile transmission,
upon transmittal, provided that in the case of notices to the Administrative
Agent, notice shall be deemed to have been given only when such notice is
actually received by the Administrative Agent. A telephonic notice to the
Administrative Agent, as understood by the Administrative Agent, will be deemed
to be the controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be
sent to it at the following addresses, or any other address of which all the
other parties are notified in writing by such first party:
If to the Borrowers: American Tire Distributors, Inc.
00000 Xxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
With a copy to: J. Xxxxxxx Xxxxxxx, Esq.
00000 Xxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
If to the
Administrative Agent: Fleet Capital Corporation
000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Loan Administration Manager
Facsimile No.: (000) 000-0000
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With a copy to: Parker, Hudson, Rainer & Xxxxx LLP
1500 Marquis Two Tower
000 Xxxxxxxxx Xxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attn: C. Xxxxxx Xxxxx, Esq.
Facsimile No.: (000) 000-0000
If to a Lender: At the address of such Lender set
forth on the signature pages hereof.
(c) Administrative Agent's Office. The Administrative
Agent hereby designates its office located at 000 Xxxxxxxx Xxxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000, or any subsequent office which shall have been specified
for such purpose by written notice to the Borrowers, as the office to which
payments due are to be made.
SECTION 15.2 Expenses. The Borrowers agree, jointly and severally, to
pay or reimburse on demand all costs and expenses reasonably (other than
pursuant to SUBSECTION (B) below as to which such requirement shall not apply)
incurred
(a) by or on behalf of the Administrative Agent,
including the reasonable fees and disbursements of counsel, in connection with
(i) the negotiation, preparation, execution,
delivery, administration, enforcement and termination of this
Agreement and each of the other Loan Documents, whenever the
same shall be executed and delivered, including
(A) reasonable out-of-pocket costs and
expenses incurred in connection with the
administration and interpretation of this Agreement
and the other Loan Documents;
(B) reasonable costs and expenses of
appraisals of the Collateral;
(C) the costs and expenses of lien
searches; and
(D) taxes, fees and other charges for
filing the Financing Statements and continuations and
the costs and expenses of taking other actions to
perfect, protect, and continue the Security
Interests;
(ii) the preparation, execution and delivery of
any waiver, amendment, supplement or consent by the
Administrative Agent and the Lenders relating to this
Agreement or any of the Loan Documents;
(iii) sums paid or incurred to pay any amount or
take any action required of the Borrowers under the Loan
Documents that the Borrowers fail to pay or take;
(iv) costs of inspections and verifications of
the Collateral, including standard per diem fees charged by
the Administrative Agent or the Lenders, travel, lodging, and
meals for inspections of the Collateral and the Borrowers'
operations and books and records by the Administrative Agent's
and/or the Lenders' agents up to three times per year and
whenever an Event of Default exists;
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(v) costs and expenses of forwarding loan proceeds,
collecting checks and other items of payment, and establishing
and maintaining each Controlled Disbursement Account, Agency
Account and Lockbox; and
(vi) costs and expenses of preserving and
protecting the Collateral; and
(b) by or on behalf of the Administrative Agent or any
Lender in connection with
(i) consulting, after the occurrence of a
Default, with one or more Persons, including appraisers,
accountants and lawyers, concerning the value of any
Collateral for the Secured Obligations or related to the
nature, scope or value of any right or remedy of the
Administrative Agent or any Lender hereunder or under any of
the Loan Documents, including any review of factual matters in
connection therewith, which expenses shall include the fees
and disbursements of such Persons; and
(ii) costs and expenses paid or incurred to
obtain payment of the Secured Obligations, enforce the
Security Interests, sell or otherwise realize upon the
Collateral, and otherwise enforce the provisions of the Loan
Documents, or to prosecute or defend any claim in any way
arising out of, related to or connected with, this Agreement
or any of the Loan Documents, which expenses shall include the
reasonable fees and disbursements of counsel and of experts
and other consultants retained by the Administrative Agent or
any Lender.
The foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by the Borrowers. The
Borrowers hereby authorize the Administrative Agent and the Lenders to debit the
Borrowers' Loan Accounts (by increasing the principal amount of the Loans) in
the amount of any such costs and expenses owed by the Borrowers when due.
SECTION 15.3 Stamp and Other Taxes. The Borrowers will pay any and all
stamp, registration, recordation and similar taxes, fees or charges and shall
indemnify and defend the Administrative Agent and the Lenders against any and
all liabilities with respect to or resulting from any delay in the payment or
omission to pay any such taxes, fees or charges, which may be payable or
determined to be payable in connection with the execution, delivery, performance
or enforcement of this Agreement and any of the Loan Documents or the perfection
of any rights or security interest thereunder, including the Security Interest.
SECTION 15.4 Setoff. In addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, during the
continuance of any Event of Default, each Lender, any participant with such
Lender in the Loans and each Affiliate of each Lender are hereby authorized by
the Borrowers at any time or from time to time, without notice to the Borrowers
or to any other Person, any such notice being hereby expressly waived, to set
off and to appropriate and to apply any and all deposits (general or special,
including indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender or any participant to or for the credit or the
account of the Borrowers against and on account of the Secured Obligations
irrespective or whether or not
(a) the Administrative Agent or such Lender shall have
made any demand under this Agreement or any of the Loan Documents, or
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(b) the Administrative Agent or such Lender shall have
declared any or all of the Secured Obligations to be due and payable as
permitted by SECTION 12.2 and although such Secured Obligations shall be
contingent or unmatured.
SECTION 15.5 Consent to Advertising and Publicity. With the prior
written consent of the Borrowers, which consent shall not be unreasonably
withheld, the Administrative Agent, on behalf of the Lenders, may issue and
disseminate to the public information describing the credit accommodations
entered into pursuant to this Agreement, including the name and address of the
Borrowers, the amount, interest rate, maturity, collateral for and a general
description of the credit facilities provided hereunder and of the Borrowers'
business.
SECTION 15.6 Reversal of Payments. The Administrative Agent and each
Lender shall have the continuing and exclusive right to apply, reverse and
re-apply any and all payments to any portion of the Secured Obligations in a
manner consistent with the terms of this Agreement. To the extent the Borrowers
make a payment or payments to the Administrative Agent, for the account of the
Lenders, or any Lender receives any payment or proceeds of the Collateral for
the Borrowers' benefit, which payment(s) or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the Secured Obligations or part
thereof intended to be satisfied shall be revived and continued in full force
and effect, as if such payment or proceeds had not been received by the
Administrative Agent or such Lender.
SECTION 15.7 Injunctive Relief. The Borrowers recognize that, in the
event the Borrowers fail to perform, observe or discharge any of their
obligations or liabilities under this Agreement, any remedy at law may prove to
be inadequate relief to the Administrative Agent and the Lenders; therefore, the
Borrowers agree that if any Event of Default shall have occurred and be
continuing, the Administrative Agent and the Lenders, if the Administrative
Agent or any Lender so requests, shall be entitled to temporary and permanent
injunctive relief without the necessity of proving actual damages.
SECTION 15.8 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including all computations utilized by the Borrowers to
determine whether they are in compliance with any covenant contained herein,
shall, unless this Agreement otherwise provides or unless Required Lenders shall
otherwise consent in writing, be performed in accordance with GAAP.
SECTION 15.9 Amendments.
(a) Except as set forth in SUBSECTION (B) below, any
term, covenant, agreement or condition of this Agreement or any of the other
Loan Documents may be amended or waived, and any departure therefrom may be
consented to by the Required Lenders, if, but only if, such amendment, waiver or
consent is in writing signed by the Required Lenders and, in the case of an
amendment (other than an amendment described in SECTION 15.9(D)), by the
Borrowers, PROVIDED that no such amendment, unless consented to by the
Administrative Agent, shall alter or affect the rights or responsibilities of
the Administrative Agent, and in any such event, the failure to observe, perform
or discharge any such term, covenant, agreement or condition (whether such
amendment is executed or such waiver or consent is given before or after such
failure) shall not be construed as a breach of such term, covenant, agreement or
condition or as a Default or an Event of Default. Unless otherwise specified in
such waiver or consent, a waiver or consent given hereunder shall be effective
only in the specific instance and for the specific purpose for which given. In
the event that any such waiver or amendment is requested by the Borrowers, the
Administrative Agent and the Lenders may require and charge a fee in connection
therewith and
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consideration thereof in such amount as shall be determined by the
Administrative Agent and the Required Lenders in their discretion.
(b) Without the prior unanimous written consent of the
Lenders,
(i) no amendment, consent or waiver shall (A)
affect the amount or extend the time of any Lender's
obligation to make Loans or (B) extend the originally
scheduled time or times of payment of the principal of any
Loan or (C) alter the time or times of payment of interest on
any Loan or of any fees payable for the account of the Lenders
or (D) alter the amount of the principal of any Loan or the
rate of interest thereon (except with respect to application
of the Default Rate under SECTION 4.1(C)) or (E) alter the
amount of any commitment fee or other fee payable hereunder
for the account of the Lenders or (F) permit any subordination
of the principal of or interest on any Loan or (G) permit the
subordination of the Security Interests in any Collateral,
(ii) no Collateral having an aggregate value
greater than $2,000,000 shall be released by the
Administrative Agent in any 12-month period other than in
connection with the sale by a Borrower of the capital stock of
a Subsidiary in a transaction permitted under SECTION 11.7 or
as specifically permitted in this Agreement or the Security
Documents nor shall any Collateral be released at a time when
the Administrative Agent is entitled to exercise remedies
hereunder upon default, nor shall any Borrower or material
Guarantor be released from its liability for the Secured
Obligations,
(iii) except to the extent expressly provided in
SECTIONS 4.7 and 14.1, no amendment shall be made to the
definition of any of the following terms, "Applicable Margin",
"Borrowing Base" (except as otherwise expressly contemplated
hereunder) and the defined terms used in such definition
(including "NOLV Percentage", "Eligible Inventory", "Eligible
Receivable", and "Eligible Subordinated Vendor Inventory"),
"Eligible Assignee", "Proportionate Share", "Ratable",
"Ratable Share", "Commitment Percentage", "Secured
Obligations", or "Commitment";
(iv) none of the provisions of this SECTION 15.9,
the definitions "Lenders" or "Required Lenders", or the
provisions of ARTICLE 12 shall be amended,
(v) neither the Administrative Agent nor any
Lender shall consent to any amendment to or waiver of the
amortization, deferral or subordination provisions of any
instrument or agreement evidencing or relating to obligations
(whether or not Debt) of the Borrowers that are expressly
subordinate to any of the Secured Obligations if such
amendment or waiver would be adverse to the Lenders in their
capacities as Lenders hereunder;
(vi) no amendment shall be made to any provision
in ARTICLE 14,
(vii) no extension of the Termination Date shall
be effected; and
(viii) no adjustment to the advance rates contained
in the definition of "Borrowing Base" (other than adjustments
to the NOLV Percentages as provided in this Agreement) may be
effected.
PROVIDED, HOWEVER, that anything herein to the contrary notwithstanding, the
Required Lenders shall have the right to waive any Default or Event of Default
and the consequences hereunder of such Default
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or Event of Default provided only that such Default or Event of Default does not
arise under SECTION 12.1(G) OR (H) or out of a breach of or failure to perform
or observe any term, covenant or condition of this Agreement or any other Loan
Document (other than the provisions of ARTICLE 12 of this Agreement) the
amendment of which requires the unanimous consent of the Lenders. The Required
Lenders shall have the right, with respect to any Default or Event of Default
that may be waived by them, to enter into an agreement with the Borrowers
providing for the forbearance from the exercise of any remedies provided
hereunder or under the other Loan Documents without thereby waiving any such
Default or Event of Default.
(c) The making of Loans hereunder by the Lenders during
the existence of a Default or Event of Default shall not be deemed to constitute
a waiver of such Default or Event of Default.
(d) Notwithstanding any provision of this Agreement or
the other Loan Documents to the contrary, no consent, written or otherwise, of
the Borrowers shall be necessary or required in connection with any amendment to
ARTICLE 14 or SECTIONS 4.8 OR 4.16, and any amendment to such provisions may be
effected solely by and among the Administrative Agent and the Lenders, PROVIDED
that no such amendment shall impose any obligation on the Borrowers or limit or
reduce any right granted hereunder or thereunder to the Borrowers.
(e) If, in connection with any proposed amendment,
consent or waiver requiring the unanimous written consent of the Lenders, the
consent of the Required Lenders is obtained, but the consent of one or more
Lenders is not obtained (any such Lender whose consent is not obtained being
referred to as a "Non-Consenting Lender"), then, so long as the Administrative
Agent is not a Non-Consenting Lender, at the Borrowers' request, the
Administrative Agent or an Eligible Assignee shall have the right (but not the
obligation) with the Administrative Agent's approval, to purchase from any
Non-Consenting Lender, and each Non-Consenting Lender agrees that it shall sell,
all of such Non-Consenting Lender's Commitment for an amount equal to the
outstanding principal balance of such Non-Consenting Lender's Revolving Credit
Loans and all accrued interest and fees with respect thereto through the date of
sale pursuant to an Assignment and Acceptance, without premium or discount.
SECTION 15.10 Assignment. All the provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrowers may not assign or transfer any
of their rights under this Agreement.
SECTION 15.11 Performance of Borrowers' Duties.
(a) The Borrowers' obligations under this Agreement and
each of the Loan Documents shall be performed by the Borrowers at their sole
cost and expense.
(b) If the Borrowers shall fail to do any act or thing
which they have covenanted to do under this Agreement or any of the Loan
Documents, and either a Default or Event of Default exists or may result
therefrom or the Administrative Agent determines in its discretion that such
failure may adversely affect the Collateral or the ability of Borrowers to repay
the Secured Obligations, then the Administrative Agent, on behalf of the
Lenders, may (but shall not be obligated to) do the same or cause it to be done
either in the name of the Administrative Agent or the Lenders or in the name and
on behalf of the Borrowers, and each Borrower hereby irrevocably authorizes the
Administrative Agent so to act. The Administrative Agent agrees to use
reasonable efforts to notify American Tire of such action but the failure by the
Administrative Agent to so notify American Tire shall not result in any
liability to the Administrative Agent.
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SECTION 15.12 Indemnification. The Borrowers agree to reimburse the
Administrative Agent and the Lenders for all costs and expenses, including
reasonable counsel fees and disbursements, incurred, and to indemnify, defend
and hold harmless the Administrative Agent and the Lenders from and against all
losses suffered by, the Administrative Agent or any Lender in connection with
(a) the exercise by the Administrative Agent or any
Lender of any right or remedy granted to it under this Agreement or any of the
Loan Documents,
(b) any claim, and the prosecution or defense thereof,
arising out of or in any way connected with this Agreement or any of the Loan
Documents, and
(c) the collection or enforcement of the Secured
Obligations or any of them,
other than such costs, expenses and liabilities arising out of
the Administrative Agent's or any Lender's gross negligence or willful
misconduct.
SECTION 15.13 All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Administrative Agent and the Lenders and
any Persons designated by the Administrative Agent or the Lenders pursuant to
any provisions of this Agreement or any of the Loan Documents shall be deemed
coupled with an interest and shall be irrevocable so long as any of the Secured
Obligations remain unpaid or unsatisfied.
SECTION 15.14 Survival. Notwithstanding any termination of this
Agreement,
(a) until all Secured Obligations have been irrevocably
paid in full or otherwise satisfied, the Administrative Agent, for the benefit
of the Secured Parties, shall retain its Security Interest and shall retain all
rights under this Agreement and each of the Security Documents with respect to
such Collateral as fully as though this Agreement had not been terminated,
(b) the indemnities to which the Administrative Agent and
the Lenders are entitled under the provisions of this ARTICLE 15 and any other
provision of this Agreement and the Loan Documents shall continue in full force
and effect and shall protect the Administrative Agent and the Lenders against
events arising after such termination as well as before, and
(c) in connection with the termination of this Agreement
and the release and termination of the Security Interests, the Administrative
Agent, on behalf of itself as agent and the other Secured Parties, may require
such assurances and indemnities as it shall reasonably deem necessary or
appropriate to protect the Administrative Agent and the other Secured Parties
against loss on account of such release and termination, including with respect
to credits previously applied to the Secured Obligations that may subsequently
be reversed or revoked.
SECTION 15.15 Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.
SECTION 15.16 Severability of Provisions. Any provision of this
Agreement or any Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
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SECTION 15.17 Governing Law; Waiver of Jury Trial.
(a) This Agreement and the Notes shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the conflict of laws principles thereof, other than Section 5-1401 of
the New York General Obligations Law.
(b) Each Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court for the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, 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 court 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, any Bank, FCC as issuer of any Letter of
Credit Guarantee or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents 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 or the other
Loan Documents 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 15.1. Nothing
in this Agreement will affect the right of any party to this Agreement to
service of process in any other manner permitted by law.
(e) Each Borrower, the Administrative Agent and each
Lender hereby knowingly, intentionally and voluntarily waive trial by jury in
any action or proceeding of any kind or nature in any court in which an action
may be commenced by or against a Borrower, the Administrative Agent or such
Lender arising out of this Agreement, the Collateral or any assignment thereof
or by reason of any other cause or dispute whatsoever between the Borrowers and
the Administrative Agent or any Lender of any kind or nature.
SECTION 15.18 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.
SECTION 15.19 Reproduction of Documents. This Agreement, each of the
Loan Documents and all documents relating thereto, including (a) consents,
waivers and modifications that may hereafter be executed, (b) documents received
by the Administrative Agent or any Lender, and (c) financial statements,
certificates and other information previously or hereafter furnished to the
Administrative Agent or any Lender, may be reproduced by the Administrative
Agent or such Lender by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and such Person may destroy any
original document so produced. Each party hereto stipulates that, to the extent
permitted by Applicable Law, any such reproduction shall be as admissible in
evidence as the original
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itself in any judicial or administrative proceeding (whether or not the original
shall be in existence and whether or not such reproduction was made by the
Administrative Agent or such Lender in the regular course of business), and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION 15.20 Term of Agreement. This Agreement shall remain in effect
from the Agreement Date through the Termination Date and thereafter until all
Secured Obligations shall have been irrevocably paid and satisfied in full. No
termination of this Agreement shall affect the rights and obligations of the
parties hereto arising prior to such termination.
SECTION 15.21 Increased Capital. If any Lender shall have determined
that the adoption of any Applicable Law, rule, regulation, guideline, directive
or request (whether or not having force of law) regarding capital requirements
for banks or bank holding companies, or any change therein or in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, in each case after the Agreement Date, or compliance by such Lender
with any of the foregoing, imposes or increases a requirement by such Lender to
allocate capital resources to such Lender's Commitment to make Loans hereunder
which has or would have the effect of reducing the return on such Lender's
capital to a level below that which such Lender could have achieved (taking into
consideration such Lender's then existing policies with respect to capital
adequacy and assuming full utilization of such Lender's capital) but for such
adoption, change or compliance by any amount deemed by such Lender to be
material: (i) such Lender shall promptly after its determination of such
occurrence give notice thereof to the Borrowers; and (ii) the Borrowers shall
pay to such Lender as an additional fee from time to time on demand such amount
as such Lender certifies to be the amount that will compensate it for such
reduction. A certificate of such Lender claiming compensation under this SECTION
15.21 shall be conclusive in the absence of manifest error. Such certificate
shall set forth the nature of the occurrence giving rise to such compensation,
the additional amount or amounts to be paid to it hereunder and the method by
which such amounts were determined. In determining such amount, such Lender may
use any reasonable averaging and attribution methods.
SECTION 15.22 Pro-Rata Participation.
(a) Each Lender agrees that if, as a result of the
exercise of a right of setoff, banker's lien or counterclaim or other similar
right or the receipt of a secured claim it receives any payment in respect of
the Secured Obligations, it shall promptly notify the Administrative Agent
thereof (and the Administrative Agent shall promptly notify the other Lenders).
If, as a result of such payment, such Lender receives a greater percentage of
the Secured Obligations owed to it under this Agreement than the percentage
received by any other Lender, such Lender shall purchase a participation (which
it shall be deemed to have purchased simultaneously upon the receipt of such
payment) in the Secured Obligations then held by such other Lenders so that all
such recoveries of principal and interest with respect to all Secured
Obligations owed to each Lender shall be pro rata on the basis of its respective
amount of the Secured Obligations owed to all Lenders, PROVIDED that if all or
part of such proportionately greater payment received by such purchasing Lender
is thereafter recovered by or on behalf of the Borrower from such Lender, such
purchase shall be rescinded and the purchase price paid for such participation
shall be returned to such Lender to the extent of such recovery, together with
interest thereon at the rate, if any, required to be paid on the amount
recovered from such purchasing Lender.
(b) Each Lender which receives such a secured claim
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Lenders entitled under this
SECTION 15.22 to share in the benefits of any recovery on such secured claim.
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(c) Each Lender shall include in any arrangement or
agreement it enters into with any participant in such Lender's interests
hereunder, an undertaking by such participant substantially similar to the
foregoing SUBSECTIONS (A) and (B).
(d) The Borrowers expressly consent to the foregoing
arrangements and agree that any holder of a participation in any Secured
Obligation so purchased or otherwise acquired of which such Borrower has
received notice may exercise any and all rights of banker's lien, set-off or
counterclaim with respect to any and all monies owing by such Borrower to such
holder as fully as if such holder were a holder of such Secured Obligation in
the amount of the participation held by such holder.
SECTION 15.23 Net Payments.
(a) No Reduction for Taxes. All payments by the Borrowers
hereunder to or for the benefit of any Lender or the Administrative Agent shall
be made without setoff, counterclaim or other defense. Except as required by law
or as provided in SECTION 15.23(B), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments, or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (excluding any
franchise tax or any tax imposed on or measured by the net income or profits of
such Lender or the Administrative Agent, as the case may be, pursuant to the
laws of the jurisdiction in which it is organized or in which its principal
offices or the office from which the Loans are administered may be located or to
which payments on the Loans are otherwise deemed connected for tax purposes)
together with all interest, penalties or similar liabilities with respect
thereto (collectively, "Covered Taxes"). Except as provided in SECTION 15.23(B),
if the Borrowers shall be required by law to deduct or withhold any Covered
Taxes from any sum payable hereunder to any Lender or the Administrative Agent,
(A) the sum payable shall be increased as may be necessary so that after making
all required deductions or withholdings of Covered Taxes (including deductions
or withholdings of Covered Taxes applicable to additional sums payable under
this SECTION 15.23(A)) such Lender or the Administrative Agent, as the case may
be, receives an amount equal to the sum it would have received had such
deductions or withholdings not been made, (B) the Borrowers shall make such
deductions or withholdings, and (C) the Borrowers shall pay the full amount so
deducted or withheld to the relevant taxing authority or other authority in
accordance with Applicable Law. The Borrowers shall furnish to the
Administrative Agent within 45 days after the date on which the payment of any
Covered Taxes is due certified copies of tax receipts evidencing such payment by
the Borrowers. Except as provided in SECTION 15.23(B), the Borrowers agree to
indemnify, defend and hold harmless the Lenders and the Administrative Agent and
reimburse each of them, as the case may be, for the amount of any Covered Taxes
that are levied against or imposed on the Lenders or the Administrative Agent
and that are paid by the Lenders or the Administrative Agent, as the case may
be.
(b) Foreign Lenders. (i) Each Foreign Lender shall deliver to
the Administrative Agent and the Borrowers (A) two valid, duly completed copies
of IRS Form W-8BEN or W-8ECI or applicable successor form, as the case may be,
and any other required form, certifying in each case that such Foreign Lender is
entitled to receive payments under this Agreement or the Note(s) payable to it
without deduction or withholding of any United States federal income taxes and
(B) two valid, duly completed copies of IRS Form W-9 or applicable successor
form, as the case may be, to establish an exemption from United States backup
withholding tax. Each such Foreign Lender shall also deliver to the
Administrative Agent and the Borrowers two further copies of said IRS Form
W-8BEN or W-8ECI and W-8, or applicable successor forms, or other manner of
required certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or otherwise is required to be resubmitted as a
condition to obtaining an exemption from a required withholding of United States
federal income tax or after the occurrence of any event requiring a change in
the most recent form previously delivered by it
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to the Borrowers and the Administrative Agent, and such extensions or renewals
thereof as may reasonably be requested by the Borrowers and the Administrative
Agent.
(ii) If the forms provided by a Foreign Lender
under SECTION 15.23(B)(I) at the time such Foreign Lender
first becomes a party to this Agreement indicate that such
Foreign Lender is subject to a rate of United States
withholding tax in excess of zero, then withholding tax at
such rate shall be considered excluded from Covered Taxes
unless and until such Foreign Lender provides the appropriate
forms certifying that a lesser rate of withholding applies,
whereupon withholding tax at such lesser rate only shall be
excluded from Covered Taxes for period governed by such forms.
(iii) For any period with respect to which a
Foreign Lender has failed to provide the Borrowers with the
appropriate forms described in Section 15.23(B)(I), such
Foreign Lender shall not be entitled to indemnification under
SECTION 15.23(A) with respect to Covered Taxes imposed by the
United States by reason of such failure.
(c) Affected Lenders. If the Borrowers are obligated to
pay to any Lender any amount under this SECTION 15.23, the Borrowers may, if no
Default or Event of Default then exists, replace such Lender with another lender
acceptable to the Administrative Agent, and such Lender hereby agrees to be so
replaced subject to the following:
(i) The obligations of the Borrowers hereunder
to the Lender to be replaced (including such increased or
additional costs incurred from the date of notice to the
Borrowers of such increase or additional costs through the
date such Lender is replaced hereunder) shall be paid in full
to such Lender concurrently with such replacement;
(ii) The replacement Lender shall be a bank or
other financial institution that is not subject to such
increased costs which caused the Borrowers' election to
replace any Lender hereunder, and each such replacement Lender
shall execute and deliver to the Administrative Agent such
documentation satisfactory to the Administrative Agent
pursuant to which such replacement Lender is to become a party
hereto, conforming to the provisions of SECTION 13.1 hereof,
with a Commitment equal to that of the Lender being replaced
and shall make Revolving Credit Loans in the aggregate
principal amount equal to the aggregate outstanding principal
amount of the Revolving Credit Loans of the Lender being
replaced;
(iii) Upon such execution of such documents
referred to in CLAUSE (II) and repayment of the amounts
referred to in CLAUSE (I), the replacement Lender shall be a
"Lender" with a Commitment as specified hereinabove and the
Lender being replaced shall cease to be a "Lender" hereunder,
except with respect to indemnification provisions under this
Agreement, which shall survive as to such replaced Lender;
(iv) The Administrative Agent shall reasonably
cooperate in effectuating the replacement of any Lender under
this SECTION 15.23, but at no time shall the Administrative
Agent be obligated to initiate any such replacement;
(v) Any Lender replaced under this SECTION 15.23
shall be replaced at the Borrowers' sole cost and expense and
at no cost or expense to the Administrative Agent or any of
the Lenders; and
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(vi) If the Borrowers propose to replace any
Lender pursuant to this SECTION 15.23 because the Lender seeks
reimbursement hereunder, then the Borrowers must also replace
any other Lender who seeks similar levels of reimbursement (as
a percentage of such Lender's Commitment) under such Sections.
SECTION 15.24 Effect of Effectiveness of this Agreement. From and after
the Effective Date, all references in this Agreement or in any other Loan
Document (whether delivered pursuant to this Agreement or pursuant to the
Existing Loan Agreement) to this Agreement or the "Loan Agreement," and the
words "herein," "hereof" and words of like import referring to the Existing Loan
Agreement, shall mean and be references to the Existing Loan Agreement as
amended and restated in its entirety by this Agreement and all references in
this Agreement, in any other Loan Documents (whether delivered pursuant to this
Agreement or pursuant to the Existing Loan Agreement) or in any Note to a
"Revolving Credit Note" and the words "hereof," "herein" and words of like
import referring to any such Note, shall mean and be references to the Third
Amended and Restated Promissory Notes in the form attached to this Agreement as
EXHIBIT A-1, appropriately completed and duly executed and delivered by the
Borrowers. This Agreement amends and restates the Existing Loan Agreement in its
entirety and it is the intent of the parties hereto that nothing contained
herein shall constitute a novation or an accord and satisfaction.
SECTION 15.25 Confidentiality. The Administrative Agent and the Lenders
each agrees to exercise reasonable efforts (and, in any event, with at least the
same degree of care as it ordinarily exercises with respect to confidential
information of its other customers) to keep any confidential information that is
delivered or made available by any Borrower to it, including information made
available to the Administrative Agent or any Lender in connection with a visit
or investigation by any Person contemplated in SECTION 8.11, confidential from
any Person other than their respective Affiliates and individuals employed or
retained by the Administrative Agent or such Lender who are or are expected to
become engaged in evaluating, approving, structuring, administering or otherwise
giving professional advice with respect to any of the Loans or Collateral,
including any of their respective legal counsel, auditors or other professional
advisors; PROVIDED, HOWEVER, that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing such confidential information
(i) to any party to this Agreement from time to time or any participant of a
Lender, (ii) pursuant to the order of any court or administrative agency, (iii)
upon the request or demand of any regulatory agency or authority having
jurisdiction over the Administrative Agent or such Lender, (iv) which has been
publicly disclosed other than by an act or omission of the Administrative Agent
or any Lender except as permitted herein, which becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrowers, which has been independently acquired or developed by
the Administrative Agent or any Lender without violating this SECTION 15.25, (v)
to the extent reasonably required in connection with any litigation (with
respect to any of the Loan Documents or any of the transactions contemplated
thereby) to which the Administrative Agent, any Lender or their respective
Affiliates may be a party, (vi) to the extent reasonably required in connection
with the exercise of any remedies hereunder, (vii) to any attorneys,
accountants, appraisers, business valuation experts, environmental engineers or
consultants, turnaround consultants and other professionals or experts retained
by the Administrative Agent or any Lender's legal counsel or auditors, (viii) to
any actual or proposed participant, assignee, counterparty or advisors to any
swap or derivative transactions relating to the Borrowers and the Secured
Obligations, or any other transferee of all or part of a Lender's rights
hereunder so long as such Person has agreed in writing to be bound by the
provisions of this Section, (viii) to the National Association of Insurance
Commissioners or any similar organization or to any nationally recognized rating
agency that requires access to information about a Lender's portfolio in
connection with ratings issued with respect to such Lender, (ix) to the extent
reasonably required by Applicable Law or (x) with the consent of a Borrower.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers in several counterparts all as of the
day and year first written above.
BORROWERS:
AMERICAN TIRE DISTRIBUTORS, INC.
Attest:
/s/ J. Xxxxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
---------------------- ----------------------
J. Xxxxxxx Xxxxxxx Xxxxx X. Xxxxxxxxx
Secretary Title: Senior Vice President Finance and
[CORPORATE SEAL] Administration and Treasurer
THE SPEED MERCHANT, INC.
Attest:
/s/ J. Xxxxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
---------------------- ----------------------
J. Xxxxxxx Xxxxxxx Xxxxx X. Xxxxxxxxx
Secretary Title: Vice President and Treasurer
[CORPORATE SEAL]
T.O. XXXX HOLDING CO., INC.
Attest:
/s/ J. Xxxxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
---------------------- ----------------------
J. Xxxxxxx Xxxxxxx Xxxxx X. Xxxxxxxxx
Secretary Title: Vice President and Treasurer
[CORPORATE SEAL]
T.O. XXXX TIRE COMPANY, INC.
Attest:
/s/ J. Xxxxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
---------------------- ----------------------
J. Xxxxxxx Xxxxxxx Xxxxx X. Xxxxxxxxx
Secretary Title: Vice President and Treasurer
[CORPORATE SEAL]
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FLEET CAPITAL CORPORATION, as
Administrative Agent and as a Lender
By: /s/ Xxxxxxx X. XxXxxxx
------------------------------------------
Name: Xxxxxxx X. XxXxxxx
-----------------------------------------
Title: Senior Vice President
-----------------------------------------
Address:
Fleet Capital Corporation
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Loan Administration Manager
Facsimile No.: (000) 000-0000
WACHOVIA BANK, NATIONAL
ASSOCIATION, as Syndication Agent and as a
Lender
By: /s/ Xxxx X. Trainer
------------------------------------------
Name: Xxxx X. Trainer
-----------------------------------------
Title: Director
-----------------------------------------
Address:
Wachovia Bank, National Association
000 Xxxxx Xxxxxxx Xxxxxx
XX 0479, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxx Xxxxxxx and Xxxxxx Xxxx
Facsimile No.: (000) 000-0000
THE CIT GROUP/BUSINESS CREDIT, INC., as
Documentation Agent and as a Lender
By: /s/ Xxxx Xxxxxx
------------------------------------------
Name: Xxxx Xxxxxx
----------------------------------------
Title: AVP, Account Executive
-----------------------------------------
Address:
The CIT Group/Business Credit, Inc.
1211 Avenue of the Americas
Mail Code 1211/22
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx
Facsimile No.: (000) 000-0000
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STANDARD FEDERAL BANK NATIONAL ASSOCIATION,
formerly known as Michigan
National Bank, as successor in interest to
Mellon Bank, N.A., as a Lender
By: LASALLE BUSINESS CREDIT, LLC, its agent
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
------------------------------------
Title: VP
------------------------------------
Address:
c/o LaSalle Business Credit, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxx
Facsimile No.: (000) 000-0000
TRANSAMERICA BUSINESS CAPITAL
CORPORATION, as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
------------------------------------
Title: Duly Authorized Signatory
------------------------------------
Address:
c/o GE Capital Commercial Finance, Inc.
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
ANNEX A
COMMITMENTS
COMMITMENT
LENDER PERCENTAGE COMMITMENT
------------------------------------------ ---------- ------------
Fleet Capital Corporation 28.57143% $70,000,000
Wachovia Bank, National Association 20.40816% $50,000,000
The CIT Group/Business Credit, Inc. 18.36735% $45,000,000
Transamerica Business Capital Corporation 18.36735% $45,000,000
Standard Federal Bank National Association 14.28571% $35,000,000
TOTAL 100.00000% $245,000,000
ANNEX B
PRICING MATRIX
LEVERAGE EURODOLLAR RATE BASE RATE UNUSED
TIER RATIO LOANS LOANS COMMITMENT FEE
------- -------- --------------- ---------- --------------
Tier I > 5.00 to 1 2.75% 1.25% 0.500%
-
Tier II > 4.50 to 1 and 2.50% 1.00% 0.500%
-
< 5.00 to 1
Tier III > 4.00 to 1 and 2.25% 0.75% 0.375%
-
< 4.50 to 1
Tier IV > 3.50 to 1 and 2.00% 0.50% 0.375%
-
< 4.00 to 1
Tier V < 3.50 to 1 1.75% 0.25% 0.375%
EXHIBIT A-1
FORM OF THIRD AMENDED AND RESTATED PROMISSORY NOTE
$______________ Atlanta, Georgia
March __, 2004
FOR VALUE RECEIVED, the undersigned, AMERICAN TIRE DISTRIBUTORS, INC.,
a Delaware corporation, THE SPEED MERCHANT, INC., a California corporation, T.O.
XXXX HOLDING CO., INC., a Nebraska corporation, and T.O. XXXX TIRE COMPANY,
INC., a Nebraska corporation (collectively, the "Borrowers"), hereby jointly and
severally unconditionally promise to pay to the order of
_________________________ (the "Lender") at the offices of FLEET CAPITAL
CORPORATION, a Rhode Island corporation, as administrative and collateral agent
for the Lenders (together with its successor agents, the "Administrative Agent")
located at 000 Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, or at such
other place within the United States as shall be designated from time to time by
the Administrative Agent, on the Termination Date, the principal amount of
____________________________________________ AND NO/100 DOLLARS
($_____________.00), or such lesser principal amount as may then constitute the
aggregate unpaid balance of all Revolving Credit Loans made by the Lender to the
Borrowers pursuant to the Loan Agreement (as hereinafter defined), in lawful
money of the United States of America in federal or other immediately available
funds.
The Borrowers also jointly and severally unconditionally promise to pay
interest on the unpaid principal amount of this Note outstanding from time to
time for each day from the date hereof until such principal amount is paid in
full (whether upon maturity, by reason of acceleration or otherwise) at the
rates per annum and on the dates specified in the Loan Agreement applicable from
time to time in accordance with the provisions thereof. Nothing contained in
this Note or in this Loan Agreement shall be deemed to establish or require the
payment of a rate of interest in excess of the maximum rate permitted by any
Applicable Law. In the event that any rate of interest required to be paid
hereunder exceeds the maximum rate permitted by Applicable Law, the provisions
of the Loan Agreement relating to the payment of interest under such
circumstances shall control.
This Third Amended and Restated Promissory Note is one of the Revolving
Credit Notes referred to in the Third Amended and Restated Loan and Security
Agreement dated as of March 19, 2004 (as amended, modified, supplemented or
restated from time to time, the "Loan Agreement"; terms defined in the Loan
Agreement being used herein as therein defined), among the Borrowers, the
Lender, the other financial institutions party thereto from time to time as
"Lenders," and the Administrative Agent, is subject to, and entitled to, all
provisions and benefits of the Loan Documents, is secured by the Collateral and
other property as provided in the Loan Documents, is subject to optional and
mandatory prepayment in whole or in part and is subject to acceleration prior to
maturity upon the occurrence of one or more Events of Default, all as provided
in the Loan Documents.
This Third Amended and Restated Promissory Note is made by the
Borrowers in favor of the Lender in substitution and exchange for the Second
Amended and Restated Revolving Credit Note dated March 6, 2000, payable to the
order of the Lender in the original aggregate principal amount of $____________,
but not in extinguishment or as a novation of the Debt evidenced by such Note.
Presentment for payment, demand, protest and notice of demand, notice
of dishonor, notice of non-payment and all the other notices are hereby waived
by the Borrowers, except to the extent expressly
provided in the Loan Agreement. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof shall operate
as a waiver of such rights.
The Borrowers hereby jointly and severally agree to pay on demand all
costs and expenses incurred in collecting the Secured Obligations hereunder or
in enforcing or attempting to enforce any of the Lender's rights hereunder,
including, but not limited to, reasonable attorneys' fees and expenses actually
incurred if collected by or through an attorney, whether or not suit is filed.
THE PROVISIONS OF SECTION 15.17 OF THE LOAN AGREEMENT ARE HEREBY
EXPRESSLY INCORPORATED HEREIN.
THE THIRD AMENDED AND RESTATED PROMISSORY NOTE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF, OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
-2-
IN WITNESS WHEREOF, the undersigned have executed this Third Amended
and Restated Promissory Note as of the day and year first above written.
BORROWERS:
AMERICAN TIRE DISTRIBUTORS, INC.
Attest:
By:_________________________ By:_________________________
Name:____________________ Name:____________________
Title:_____________________ Title:_____________________
[Corporate Seal]
THE SPEED MERCHANT, INC.
Attest:
By:_________________________ By:_________________________
Name:____________________ Name:____________________
Title:_____________________ Title:_____________________
[Corporate Seal]
By:_________________________
Name:____________________
Title:_____________________
T.O. XXXX HOLDING CO., INC.
Attest:
By:_________________________ By:_________________________
Name:____________________ Name:____________________
Title:_____________________ Title:_____________________
[Corporate Seal]
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T.O. XXXX TIRE COMPANY, INC.
Attest:
By:_________________________ By:_________________________
Name:____________________ Name:____________________
Title:_____________________ Title:_____________________
[Corporate Seal]
-4-
EXHIBIT A-2
FORM OF SWINGLINE NOTE
$7,500,000.00 Atlanta, Georgia
March __, 2004
FOR VALUE RECEIVED, the undersigned, AMERICAN TIRE DISTRIBUTORS, INC.,
a Delaware corporation, THE SPEED MERCHANT, INC., a California corporation, T.O.
XXXX HOLDING CO., INC., a Nebraska corporation, and T.O. XXXX TIRE COMPANY,
INC., a Nebraska corporation (collectively, the "Borrowers"), hereby jointly and
severally unconditionally promise to pay to the order of
_________________________ (the "Swingline Lender") at the offices of FLEET
CAPITAL CORPORATION, a Rhode Island corporation, as administrative and
collateral agent for the Lenders (together with its successor agents, the
"Administrative Agent") located at 000 Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxx 00000, or at such other place within the United States as shall be
designated from time to time by the Administrative Agent, on the Termination
Date, the principal amount of SEVEN MILLION FIVE HUNDRED THOUSAND AND NO/100
DOLLARS ($7,500,000), or such lesser principal amount as may then constitute the
aggregate unpaid balance of all Swingline Loans made by the Swingline Lender to
the Borrowers pursuant to the Loan Agreement (as hereinafter defined), in lawful
money of the United States of America in federal or other immediately available
funds.
The Borrowers also jointly and severally unconditionally promise to pay
interest on the unpaid principal amount of this Note outstanding from time to
time for each day from the date hereof until such principal amount is paid in
full (whether upon maturity, by reason of acceleration or otherwise) at the
rates per annum and on the dates specified in the Loan Agreement applicable from
time to time in accordance with the provisions thereof. Nothing contained in
this Note or in the Loan Agreement shall be deemed to establish or requires the
payment of a rate of interest in excess of the maximum rate permitted by any
Applicable Law. In the event that any rate of interest required to be paid
hereunder exceeds the maximum rate permitted by Applicable Law, the provisions
of the Loan Agreement relating to the payment of interest under such
circumstances shall control.
This Note is the Swingline Note referred to in the Third Amended and
Restated Loan and Security Agreement dated as of March 19, 2004 (as amended,
modified, supplemented or restated from time to time, the "Loan Agreement";
unless otherwise defined herein, terms defined therein being used in this Note
as therein defined), by and among the Borrowers, the Swingline Lender, the other
financial institutions party thereto from time to time as "Lenders," and the
Administrative Agent, is subject to, and entitled to, all provisions and
benefits of the Loan Documents, is secured by the Collateral and other property
as provided in the Loan Documents, is subject to optional and mandatory
prepayment in whole or in part and is subject to acceleration prior to maturity
upon the occurrence of one or more Events of Default, all as provided in the
Loan Documents.
Presentment for payment, demand, protest and notice of demand, notice
of dishonor, notice of non-payment and all other notices are hereby waived by
the Borrowers, except to the extent expressly provided in the Loan Agreement. No
failure to exercise, and no delay in exercising, any rights hereunder on the
part of the holder hereof shall operate as a waiver of such rights.
The Borrowers herby jointly and severally agree to pay on demand all
costs and expenses incurred in collecting the Secured Obligations hereunder or
in enforcing or attempting to enforce any of the Swingline Lender's rights
hereunder, including, but not limited to, reasonable attorneys' fees and
expenses actually incurred if collected by or through an attorney, whether or
not suit is filed.
THE PROVISIONS OF SECTION 15.17 OF THE LOAN AGREEMENT ARE HEREBY
EXPRESSLY INCORPORATED HEREIN.
THIS SWINGLINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAWS PRINCIPLES THEREOF, OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
-2-
IN WITNESS WHEREOF, the undersigned have executed this Swingline Note
as of the day and year first above written.
BORROWERS:
AMERICAN TIRE DISTRIBUTORS, INC.
Attest:
By:_________________________ By:_________________________
Name:____________________ Name:____________________
Title:_____________________ Title:_____________________
[Corporate Seal]
THE SPEED MERCHANT, INC.
Attest:
By:_________________________ By:_________________________
Name:____________________ Name:____________________
Title:_____________________ Title:_____________________
[Corporate Seal]
By:_________________________
Name:____________________
Title:_____________________
T.O. XXXX HOLDING CO., INC.
Attest:
By:_________________________ By:_________________________
Name:____________________ Name:____________________
Title:_____________________ Title:_____________________
[Corporate Seal]
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T.O. XXXX TIRE COMPANY, INC.
Attest:
By:_________________________ By:_________________________
Name:____________________ Name:____________________
Title:_____________________ Title:_____________________
[Corporate Seal]
-4-
EXHIBIT B
FORM OF BORROWING BASE CERTIFICATE
Reference is made to the Third Amended and Restated Loan and Security
Agreement dated as of March 19, 2004 (as amended, modified, supplemented or
restated, the "Loan Agreement"), by and among American Tire Distributors, Inc.,
a Delaware corporation, The Speed Merchant, Inc., a California corporation, T.O.
Xxxx Holding Co., Inc., a Nebraska corporation, and T.O. Xxxx Tire Company,
Inc., a Nebraska corporation (collectively, the "Borrowers"), the financial
institutions party thereto from time to time (the "Lenders"), the Documentation
Agent, the Syndication Agent, and Fleet Capital Corporation, a Rhode Island
corporation, as administrative and collateral agent for the Lenders (together
with its successor agents, the "Administrative Agent"). Terms used herein that
are defined in the Loan Agreement are used with the meanings therein ascribed to
them.
This certificate is furnished to the Administrative Agent by the
Borrowers, in accordance with their obligations, under Section 5.1(a)(9) or
Section 8.12(c) of the Loan Agreement. The Borrowers certify that (a) the
computation of the Borrowing Base attached hereto complies with all the
applicable provisions of the Loan Agreement, and (b) the data has been prepared
from the books of account and records of the Borrowers in accordance with GAAP
(or other applicable accounting principles contemplated by the Loan Agreement)
and presents fairly and accurately the status of the Borrowers' accounts as at
___________ ____, 200__.
Date:_________________
AMERICAN TIRE DISTRIBUTORS, INC.,
for itself and on behalf of the other Borrowers
By:_________________________
Name:____________________
Title:_____________________
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Third Amended and Restated Loan and Security
Agreement dated as of March 19, 2004 (as amended, modified, supplemented or
restated, the "Loan Agreement"), by and among American Tire Distributors, Inc.,
a Delaware corporation, The Speed Merchant, Inc., a California corporation, T.O.
Xxxx Holding Co., Inc., a Nebraska corporation, and T.O. Xxxx Tire Company,
Inc., a Nebraska corporation (collectively, the "Borrowers"), the financial
institutions party thereto from time to time (the "Lenders"), the Documentation
Agent, the Syndication Agent, and Fleet Capital Corporation, a Rhode Island
corporation, as administrative and collateral agent for the Lenders (together
with its successor agents, the "Administrative Agent"). Unless otherwise defined
herein, capitalized terms used herein that are defined in the Loan Agreement are
used with the meanings therein ascribed to them.
_____________________________________________________________
("Assignor") and _________________________________________ ("Assignee") agree as
follows:
1. Assignor hereby sells and assigns to Assignee, the Assignee
hereby purchases and assumes from Assignor, an interest in and to such of
Assignor's rights and obligations as a Lender under the Loan Agreement as of the
Effective Date (as hereinafter defined) as represents a _____% interest in and
to the outstanding rights and obligations of Assignor thereunder (before giving
effect to any other assignment by Assignor that is not yet effective) and a
_____% interest in and to all of the outstanding rights and obligations of the
Lenders thereunder as of the Effective Date (including, without limitation, such
percentage interest in the Revolving Credit Loans and Letter of Credit
Obligations owing to the Assignor outstanding on the Effective Date, together
with such percentage interest in all unpaid interest and such percentage
interest in the Notes held by the Assignor). Assignee shall have no interest in
any interest that is payable with respect to a period prior to the Effective
Date.
2. Assignor (i) represents that as of the date hereof, its
Commitment under the Loan Agreement is $_____________, the outstanding balance
of its Revolving Credit Loans is $___________ and the aggregate amount of its
interest in Letter of Credit Obligations is $_____________ (in each case
unreduced by any assignments thereof which have not yet become effective); (ii)
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Loan Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Agreement or any other instrument
or document furnished pursuant thereto, other than that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim, lien or encumbrance; and (iii)
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrowers or any other Person or the
performance or observance by the Borrowers or any other Person of any of its
obligations under the Loan Agreement or any other Loan Documents.
3. Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms that it
has received a copy of the Loan Agreement together with copies of the most
recent financial statements delivered pursuant to SECTION 10.1 thereof and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance; (iii)
agrees that it will, independently and without reliance upon the Administrative
Agent, the Syndication Agent, the Documentation Agent, Assignor 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 Loan Agreement; (iv) confirms that it is an Eligible Assignee;
(v) appoints and authorizes the Administrative Agent to take such action as
administrative and collateral agent on its behalf and to exercise such powers
under the
Loan Agreement as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (vi)
agrees that it will be bound by the provisions of the Loan Agreement and that it
will perform in accordance with their terms all the obligations which by the
terms of the Loan Agreement are required to be performed by it as a Lender;
(vii) specifies as its address for notices the office set forth beneath its name
on the signature pages hereof; (viii) agrees that it will keep confidential all
information with respect to the Borrowers furnished to it by or on behalf of the
Borrowers or Assignor, except where required or requested by governmental or
regulatory authorities (other that information generally available to the public
or otherwise available to Assignee on a nonconfidential basis); (ix) agrees and
covenants that the lesser of (A) the Minimum Commitment and (B) the aggregate
outstanding principal amount of the Revolving Credit Loans and Letter of Credit
Obligations assigned to Assignee hereby shall not be assigned, participated or
otherwise transferred by Assignee to any other assignee; and (x) represents and
warrants that it is organized under the laws of a jurisdiction in the United
States of America.
4. The effective date for this Assignment and Acceptance shall be
___________ ___, _____ (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent.
5. Upon such acceptance and recording, from and after the
Effective Date, (i) Assignee shall be a party of the Loan Agreement and, to the
extent provided in this Assignment and Acceptance, shall have the rights and
obligations of a Lender thereunder, and (ii) Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Agreement.
6. Upon such acceptance and recording, from and after the
Effective Date, the Administrative Agent shall make all payments in respect of
the interest assigned hereby (including payments of principal, interest, fees
and other amounts) to Assignee. Assignor and Assignee shall make all appropriate
adjustments in payments for periods prior to the Effective Date or with respect
to the making of this Assignment and Acceptance directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York, without
reference to any provision which would render such choice of law invalid.
-2-
ASSIGNOR: ____________________________
By:_________________________
Name:____________________
Title:_____________________
ASSIGNOR: ____________________________
By:_________________________
Name:____________________
Title:_____________________
Accepted this ____ day of
______________, _____
Fleet Capital Corporation, as Administrative
Agent
By:_________________________
Name:____________________
Title:_____________________
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EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
The undersigned, ___________________________, the
______________________ of American Tire Distributors, Inc., a Delaware
corporation (the "Corporation"), hereby certifies to the Administrative Agent
under and as defined in the Third Amended and Restated Loan and Security
Agreement dated as of March 19, 2004 (as amended and in effect from time to
time, the "Loan Agreement"), in accordance with the provisions of SECTION 10.3
of the Loan Agreement, that:
1. As of _____________ [date of last day of Fiscal Quarter or
Fiscal Year], the Borrowers were/were not in compliance with the covenants set
forth in SECTIONS 11.1, 11.2, 11.4, 11.5 and 11.6 of the Loan Agreement, as
detailed on the worksheet attached hereto as EXHIBIT A.
2. All Schedules to the Loan Agreement are correct and accurate
as of the date hereof after taking into account the revised and/or supplemental
information reflected on the Schedules attached hereto as EXHIBIT B.
3. Based on an examination sufficient to enable me to make an
informed statement, no Default or Event of Default exists as of the date hereof
[other than:1].
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of ___________, 200__.
______________________________
Title:________________________
-----------------------
(1) Specify such Default or Event of Default and its nature, when it occurred,
whether it is continuing and the steps being taken by the Borrowers with respect
to such Default or Event of Default.
EXHIBIT E
FORM OF JOINDER AGREEMENT
AND SUPPLEMENT TO LOAN AGREEMENT
This JOINDER AGREEMENT AND SUPPLEMENT TO LOAN AGREEMENT ("Joinder
Agreement"), dated as of ______________, 20__, is Supplement No. ___ to that
certain Third Amended and Restated Loan and Security Agreement dated as of March
19, 2004 (as at any time amended, the "Loan Agreement") among AMERICAN TIRE
DISTRIBUTORS, INC., a Delaware corporation ("American Tire"), THE SPEED
MERCHANT, INC., a California corporation ("Speed Merchant"), T.O. XXXX HOLDING
CO., INC., a Nebraska corporation ("Xxxx Holding"), and T.O. XXXX TIRE COMPANY,
INC., a Nebraska corporation ("Xxxx Tire"; American Tire, Speed Merchant, Xxxx
Holding and Xxxx Tire are referred to hereinafter individually as an "Existing
Borrower" and collectively as the "Existing Borrowers"); the various financial
institutions listed on the signature pages thereof and their respective
successors and permitted assigns which become "the Lenders" as provided therein
(the "Lenders"); and FLEET CAPITAL CORPORATION, a Rhode Island corporation, in
its capacity as collateral and administrative agent for the Lenders (together
with its successors in such capacity, the "Administrative Agent"). Capitalized
terms used herein, unless otherwise defined herein, shall have the meanings
ascribed to them in the Loan Agreement. The terms "herein," "hereof" and
"hereunder" and other words of similar import refer to this Joinder Agreement as
a whole and not to any particular section, paragraph or subdivision. All
references to any Person shall mean and include the successors and permitted
assigns of such Person. All references to any of the Loan Documents shall
include any and all amendments or modifications thereto and any and all
restatements, extensions or renewals thereof. Wherever the word "including"
shall appear in this Joinder Agreement, such word shall be understood to mean
"including, without limitation."
The Lenders have been making Revolving Credit Loans and other
extensions of credit to the Existing Borrowers pursuant to the terms of the Loan
Agreement and the other Loan Documents. Pursuant to the Loan Agreement, each
Subsidiary of a Borrower that was not in existence on the Effective Date is
required, if so requested by the Administrative Agent, to become a party to and
be bound by all of the terms of the Loan Agreement and the other Loan Documents
as if on the Effective Date such Subsidiary had been an original signatory and
party to the Loan Agreement and other Loan Documents to which Existing Borrowers
are parties. The undersigned, __________________________, a ___________________
(the "New Borrower"), is a Wholly Owned Subsidiary of American Tire and is
executing this Joinder Agreement, at the Administrative Agent's request and with
the Administrative Agent's consent, in accordance with the requirements of the
Loan Agreement, in order to induce the Administrative Agent and the Lenders to
continue extending credit to or for the benefit of the Existing Borrowers as
well as the New Borrower based upon not only the Eligible Receivables and
Eligible Inventory of the Existing Borrowers but also the Eligible Receivables
and Eligible Inventory of the New Borrower.
NOW, THEREFORE, for Ten Dollars ($10.00) in hand paid and other good
and valuable consideration, receipt whereof is severally acknowledged, the
parties hereto, intending to be legally bound hereby, agree as follows:
1. By its signature below, the New Borrower hereby agrees that it
is a "Borrower" under, bound by and subject to all of the provisions of the Loan
Agreement and other Loan Documents to which the Existing Borrowers are a party,
with the same force and effect as if the New Borrower were an original signatory
thereto on the Effective Date, and the New Borrower hereby agrees to abide by
and perform all of its obligations as a "Borrower" under the Loan Agreement and
the other Loan Documents. Each reference to "Borrower" in the Loan Agreement and
the other Loan Documents shall be understood
to mean and include the New Borrower as well as the Existing Borrowers. The
terms of the Loan Agreement are hereby incorporated into this Joinder Agreement
by reference.
2. The New Borrower acknowledges and agrees that it is and shall
be jointly and severally liable with the Existing Borrowers for all Revolving
Credit Loans and all other Secured Obligations outstanding on the date hereof
and shall be jointly and severally liable with the Existing Borrowers (together
with each other Person who becomes a Borrower on or after the date hereof) for
all Revolving Credit Loans and all other Secured Obligations at any time or
times outstanding hereafter. The New Borrower hereby appoints and designates
American Tire as its representative for all purposes under the Loan Agreement,
including the making of requests for Revolving Credit Loans and other extensions
of credit pursuant to the terms of the Loan Agreement and receiving notices and
other communications to the Borrowers (or any of them) from the Administrative
Agent or any Lender.
3. To secure the prompt payment and performance to the
Administrative Agent and the Lenders of all of the Secured Obligations, the New
Borrower hereby grants to the Administrative Agent, for the benefit of itself as
Administrative Agent and the other Secured Parties, a continuing security
interest in and Lien upon all of New Borrower's right, title and interest in and
to each of the following property, wherever located and whether now or hereafter
existing or now owned or hereafter acquired or arising (collectively, the
"Collateral"):
(a) all Accounts;
(b) all Chattel Paper (including Electronic Chattel Paper
and Tangible Chattel Paper);
(c) all Documents;
(d) all Inventory including (i) all goods intended for
sale or lease or for display or demonstration, (ii) all work in process, and
(iii) all raw materials and other materials and supplies of every nature and
description used or which might be used in connection with the manufacture,
packing, shipping, advertising, selling, leasing or furnishing of goods or
services or otherwise used or consumed in the conduct of business;
(e) all Instruments;
(f) all Supporting Obligations;
(g) all Letter of Credit Rights;
(h) all Commercial Tort Claims relating to the
Collateral;
(i) all General Intangibles related to any of the
Collateral (including Intellectual Property but excluding tax refunds and
insurance proceeds that are not proceeds of any of the Collateral);
(j) all Deposit Accounts;
(k) all Investment Property;
(l) all cash or other property deposited with the
Administrative Agent or any Lender or any Affiliate of the Administrative Agent
or any Lender or which the Administrative Agent, for its benefit and for the
benefit of the other Secured Parties, or any Lender or such Affiliate is
entitled to retain
-2-
or otherwise possess as collateral pursuant to the provisions of this Agreement
or any of the Loan Documents or any agreement relating to any Letter of Credit,
including amounts on deposit in the Cash Collateral Account;
(m) all files, correspondence, computer programs, tapes,
disks and related data processing software which contain information identifying
or pertaining to any of the Collateral or any Account Debtor or showing the
amounts thereof or payments thereon or otherwise necessary or helpful in the
realization thereon or the collection thereof; and
(n) any and all products and cash and non-cash proceeds
of the foregoing (including any claims to any items referred to in this
definition and any claims against third parties for loss of, damage to or
destruction of any or all of the Collateral or for proceeds payable under or
unearned premiums with respect to policies of insurance) in whatever form,
including cash, negotiable instruments and other instruments for the payment of
money, Chattel Paper, security agreements and other documents.
provided, however, that notwithstanding anything to the
contrary contained herein, the following property of New Borrower shall not
constitute "Collateral" hereunder (hereinafter, the "Excluded Property"): (i)
Real Estate; (ii) Equipment; (iii) Fixtures; (iv) the property described on
Schedule 1.1C to the Loan Agreement; and (v) any proceeds arising from the sale,
lease, assignment or disposition of any of the foregoing Excluded Property,
including proceeds consisting of Accounts, General Intangibles, Documents,
Instruments, Chattel Paper, Supporting Obligations or Letter of Credit Rights
that arise from such sale, lease, assignment or disposition of such Excluded
Property.
4. The New Borrower represents and warrants to the Administrative
Agent and the Lenders that the New Borrower is a Wholly Owned Subsidiary of
American Tire and is primarily engaged in a business which is substantially
related to any of the businesses of the Existing Borrowers and operates with the
Existing Borrowers in a joint and common enterprise; this Joinder Agreement has
been duly authorized, executed and delivered by the New Borrower and constitutes
a legal, valid and binding obligation of the New Borrower enforceable against it
in accordance with its terms, except as enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a proceeding at law
or in equity); that the Schedules annexed hereto contain true, accurate and
complete information with respect to the New Borrower and the matters covered by
the provisions of Section 6 of the Loan Agreement and such Schedules shall be
deemed to supplement and become a part of the Schedules annexed to the Loan
Agreement.
5. Except as otherwise expressly provided in this Joinder
Agreement, nothing herein shall be deemed to amend or modify any provision of
any of the Loan Documents, each of which shall remain in full force and effect.
This Joinder Agreement is not intended to be, nor shall it be construed to
create, a novation or accord and satisfaction. If any provision in or obligation
under this Joinder Agreement shall be invalid, illegal or otherwise
unenforceable in any jurisdiction, then the validity, legality and
enforceability of the remaining provisions or obligations shall not in any way
be affected or impaired thereby.
6. The New Borrower, jointly and severally with the Existing
Borrowers, agrees to reimburse the Administrative Agent and the Lenders for
their respective out-of-pocket expenses in connection with the preparation,
execution and delivery of this Joinder Agreement, including reasonable fees,
disbursements and other charges of counsel for the Administrative Agent and the
Lenders.
7. This Joinder Agreement, together with the Loan Documents and
all other instruments, agreements and certificates executed by the parties in
connection therewith or with reference thereto,
-3-
embody the entire understanding and agreement among the parties with respect to
the subject matter thereof. Each of the Schedules as attached hereto is
incorporated into this Joinder Agreement and by this reference made a part
hereof and a part of the Loan Agreement.
8. This Joinder Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all of
such counterparts shall constitute but one and the same instrument.
9. This Joinder Agreement shall be effective when accepted by the
Administrative Agent (the New Borrower hereby waiving notice of such acceptance)
and thereupon shall be deemed to be a contract governed by and construed and
enforced in accordance with the laws of the State of New York without giving
effect to the conflict of laws principles thereof, other than Section 5-1401 of
the New York General Obligations Law.
10. The parties hereto each hereby knowingly, intentionally and
voluntarily waive trial by jury in any action or proceeding of any kind or
nature in any court in which an action may be commenced by or against a
Borrower, the Administrative Agent or any Lender arising out of this Joinder
Agreement or by reason of any other cause or dispute whatsoever between the
Borrowers and the Administrative Agent or any Lender of any kind or nature.
-4-
IN WITNESS WHEREOF, the New Borrower and the Administrative Agent have duly
executed this Joinder Agreement, under seal as of the day and year first written
above.
NEW BORROWER:
ATTEST: ___________________________________
_______________________________ By:_________________________________
_______________________, Secretary
[Corporate Seal] Title:_________________________
ADMINISTRATIVE AGENT:
FLEET CAPITAL CORPORATION, AS THE
ADMINISTRATIVE AGENT
By:_________________________________
Title:_________________________
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EXHIBIT F
FORM OF VENDOR LIEN SUBORDINATION AGREEMENT
THIS VENDOR LIEN SUBORDINATION AGREEMENT is made on __________, 200_,
between FLEET CAPITAL CORPORATION, a Rhode Island corporation, in its capacity
as administrative agent (together with its successors in such capacity, "Agent")
for Lenders (as hereinafter defined), and _____________, a _____________________
("Trade Creditor").
RECITALS:
American Tire Distributors, Inc., a Delaware corporation ("ATD"), The
Speed Merchant, Inc., a California corporation, T.O. Xxxx Holding Co., Inc., a
Nebraska corporation ("Xxxx Holding"), and T.O. Xxxx Tire Company, Inc., a
Nebraska corporation ("Xxxx Tire"; ATD, Speed Merchant, Xxxx Holding, Xxxx Tire
and each other Person that hereafter becomes a "Borrower" under and as defined
in the Loan Agreement are collectively referred to herein as "Borrowers") are
parties to a Third Amended and Restated Loan and Security Agreement dated as of
March 19, 2004 (as amended to date and as the same may be further amended,
restated, modified or supplemented from time to time, the "Loan Agreement") with
the financial institutions party thereto from time to time ("Lenders") and
Agent.
Pursuant to the terms of the Loan Agreement, Lenders have heretofore
made and may from time to time hereafter make loans and other extensions of
credit to Borrowers, which loans and extensions of credit directly and
indirectly benefit all Borrowers. As security for the repayment by Borrowers of
such loans and other extensions of credit, each Borrower has granted or will
hereafter grant to Agent, for its benefit and the benefit of Lenders, a security
interest in substantially all of such Borrower's personal property, including
all of such Borrower's Inventory (as hereinafter defined) and all proceeds
thereof.
Pursuant to the terms of [Name and date of Trade Creditor's Security
Agreement] (as amended to date and as the same may be further amended, restated,
modified or supplemented from time to time, the "Trade Security Agreement"),
each Borrower has granted or may hereafter grant to Trade Creditor a security
interest in all Inventory (as hereinafter defined) consisting of tires sold to
such Borrower by Trade Creditor and bearing any brand name or trademark used by
Trade Creditor now or in the future (such Inventory is referred to herein as
"Branded Inventory").
Borrowers have requested that Lenders extend credit to or for the
benefit of Borrowers based, in part, on the value of Branded Inventory, which
extensions of credit will directly and indirectly benefit Trade Creditor. As an
inducement to Lenders to so extend credit, Borrowers and Trade Creditor have
agreed to enter into this Agreement with Agent for the purpose of establishing
the priorities of Trade Creditor's and Agent's respective liens in the Branded
Inventory and to set forth certain other agreements between Trade Creditor and
Agent.
Accordingly, in consideration of the foregoing premises, the mutual
covenants and conditions herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby expressly
acknowledged, the parties hereto, intending to be bound hereby, agree as
follows:
1. DEFINITIONS; RULES OF CONSTRUCTION.
(a) In addition to the terms defined in the recitals
hereto, as used in this Agreement, the following terms shall have the following
meanings for the purposes of this Agreement:
"Account" shall have the meaning given to the term
"account" in the UCC.
"Bankruptcy Case" shall mean any case hereafter
commenced by or against any Borrower under any chapter of the
Bankruptcy Code.
"Bankruptcy Code" shall mean title 11 of the United
States Code.
"Branded Inventory" shall have the meaning ascribed
to it in the Recitals.
"Business Day" shall mean any day other than a
Saturday, Sunday or day on which banks are authorized or required to be
closed under the laws of the State of Georgia.
"Chattel Paper" shall have the meaning given to the
term "chattel paper" in the UCC.
"Collateral" shall mean and collectively include all
of the following property of each Borrower, whether now existing or
hereafter created or acquired (and whether acquired prior to or during
the pendency of any Bankruptcy Case), wherever located: all Accounts,
Inventory (including all Branded Inventory), General Intangibles,
Documents, Instruments and Chattel Paper, and the proceeds and products
of all of the foregoing.
"Document" shall have the meaning given to the term
"document" in the UCC.
"Enforcement Action" shall mean and include any
remedy available to Lenders under any of the Senior Creditor Documents
or applicable law to enforce collection of any of the Senior
Obligations following the occurrence of any Event of Default, and any
remedy available to Trade Creditor under any of the Trade Creditor
Documents or applicable law to enforce collection of any the Trade
Obligations following the occurrence of an Event of Default, including,
in each case, (a) the commencement of any action, suit or other
proceeding against a Borrower to enforce payment of any of the Senior
Obligations or Trade Obligations; (b) the repossession, foreclosure
upon or other act to realize upon any of the Collateral; (c) any
notification by a party to any account debtor on any Account to remit
payments with respect to such Account to the notifying party; and (d)
any involuntary petition for relief against a Borrower under the
Bankruptcy Code or a petition or suit for the appointment of a receiver
or other custodian for a Borrower or any of a Borrower's assets.
"Event of Default" shall mean an event or condition
that constitutes a default or an event of default under the Senior
Credit Documents or the Trade Creditor Documents.
"General Intangibles" shall have the meaning given to
the term "general intangibles" in the UCC and shall include all tax
refund claims, patents, patent applications, copyrights, trademarks,
tradenames, trade secrets, service marks and choses in action.
"Instrument" shall have the meaning given to the term
"instrument" in the UCC.
"Inventory" shall have the meaning given to the term
"inventory" in the UCC.
"Lien" shall mean any security interest, statutory
lien, judgment lien, common law lien, equitable lien or other interest
in any of the Collateral.
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"Person" shall mean any natural person, sole
proprietorship, corporation, partnership, limited liability company,
joint venture, business trust, other business entity, or any
governmental unit, agency, bureau or political subdivision.
"Senior Creditor Documents" shall mean and include
the Loan Agreement and all other instruments or agreements now or
hereafter evidencing or securing the payment of the whole or any part
of the Senior Obligations, executed by a Borrower in favor of Agent,
for its benefit and the benefit of Lenders and their affiliates.
"Senior Obligations" shall mean and include all
liabilities and obligations of Borrowers to Agent, and Lenders and
their affiliates, whether now or hereafter created, incurred or
arising, and whether direct or indirect, absolute or contingent,
primary or secondary, due or to become due, joint or several, or
incurred during the pendency of a Bankruptcy Case or thereafter,
including all liabilities now or at any time or times hereafter owing
to Agent, Lenders and their affiliates under any of the Senior Creditor
Documents.
"Trade Creditor Documents" shall mean and include the
Trade Security Agreement and all other instruments or agreements now or
hereafter evidencing or securing the payment of the whole or any part
of the Trade Obligations.
"Trade Debt" shall mean, at any time, the outstanding
trade debt then owing to Trade Creditor by Borrowers arising out of
Borrowers' purchases of Branded Inventory on open account.
"Trade Obligations" shall mean and include the Trade
Debt and all other liabilities and obligations of Borrowers to Trade
Creditor, whether now or hereafter created, incurred or arising,
including all liabilities now or at any time hereafter owing to Trade
Creditor under any of the Trade Creditor Documents.
"UCC" shall mean the Uniform Commercial Code (or any
successor statute) as adopted and in force in the State of New York or,
when the laws of any other state govern the method or manner of the
creation or perfection of any security interest in any of the
Collateral, the Uniform Commercial Code (or any successor statute) of
such state.
(b) All references to any instrument or agreement,
including any of the Trade Creditor Documents or the Senior Creditor Documents,
shall mean and include all amendments and modifications thereto and renewals and
restatements thereof; all references to any statute shall mean and include all
amendments thereto and all regulations issued pursuant thereto; and the words
"including" and "include" shall mean "including, without limitation" and
"include, without limitation."
2. CONSENTS TO LIENS. Trade Creditor's security interest
in Branded Inventory as security for the Trade Obligations is a permitted Lien
under the Loan Agreement; the existence of such security interest does not
constitute an Event of Default under any of the Senior Creditor Documents. Trade
Creditor shall not request, accept or receive any Lien or other interest in any
of the Collateral except for Branded Inventory and to the extent that Trade
Creditor currently has a Lien on other Collateral, Trade Creditor is hereby
deemed to have released such Lien and agrees to execute any and all
documentation requested by Agent to evidence such release. Without limiting the
generality of the foregoing, Creditor acknowledges and agrees that it shall not
have a lien on or security interest in any proceeds of Branded Inventory. Trade
Creditor hereby consents to each Borrower's grant of Liens in all of the
Collateral to Agent, for its benefit, the Lenders and their affiliates, as
security for
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the Senior Creditor Obligations and agrees that the existence of any such Liens
shall not constitute an Event of Default under any of the Trade Creditor
Documents.
3. PRIORITY OF LIENS.
(a) Trade Creditor and Agent agree at all times, whether
before, after or during the pendency of any bankruptcy, reorganization or other
insolvency proceeding and notwithstanding the priorities which would ordinarily
result from the order of granting or perfection of any Liens, the order of
filing or recording of any financing statements, or the priorities that would
otherwise apply under applicable law, that (i) Agent's Liens in the Collateral
constitute first priority Liens in such property to secure the Senior
Obligations and shall be superior to any Lien or other interest of Trade
Creditor in the same property arising pursuant to the Trade Creditor Documents,
by operation of law or otherwise; and (ii) any Lien or other interest at any
time acquired by Trade Creditor in any of the Collateral shall be subordinate to
the Liens of Agent therein.
(b) For purposes of the foregoing priorities, any claim
of a right of setoff by Trade Creditor shall be treated in all respects as a
Lien and no claim to right of setoff by Trade Creditor shall be asserted to
defeat or diminish the rights or priorities provided for herein in favor of
Agent.
(c) If for any reason any Lien granted or conveyed by a
Borrower to Agent pursuant to the Senior Creditor Documents or otherwise is set
aside or otherwise declared ineffective, in whole or in part, by any court of
competent jurisdiction, and if as a consequence thereof Trade Creditor becomes
entitled to receive any proceeds from any of the Collateral or on account of
Trade Creditor's Lien in any of the Collateral, then any such payments or
proceeds received by Trade Creditor shall be used by it to purchase a junior
participation in the Senior Obligations pursuant to a junior participation
agreement in form and content satisfactory to Agent but in all events providing
that Lenders' retained interest in the Senior Obligations (including both
principal and interest) and all costs and expenses incurred by Agent and Lenders
(including attorneys' fees) in attempting to collect the Senior Obligations or
to realize upon any of the Collateral shall be paid in full before Trade
Creditor shall be entitled to any payment on account of its junior participation
and Trade Creditor's junior participation will be without recourse of any kind
to Agent or any Lender except for Agent's or any Lender's gross negligence or
willful misconduct after the date of Trade Creditor's purchase of such junior
participation.
(d) In no event shall Trade Creditor institute, or join
as a party in the institution of, or directly or indirectly assist in the
prosecution of, any action, suit or proceeding seeking a determination that the
Lien of Agent in any of the Collateral is invalid, unperfected or avoidable, or
is or should be subordinated to the interests of any other Person. In no event
shall Agent or any Lender institute, or join as a party in the institution of,
or directly or indirectly assist in the prosecution of, any action, suit or
proceeding seeking a determination that the Lien of Trade Creditor in any of the
Collateral is invalid, unperfected or avoidable, or is or should be subordinated
to the interests of any Person other than Agent under the terms hereof.
(e) If at any time Agent shall subordinate, in whole or
in part, its Lien upon any of the Collateral to or in favor of any other Person,
the priority of Agent's Lien in the Collateral vis-a-vis Trade Creditor shall
not be affected thereby and Agent's Lien shall continue to be superior to Trade
Creditor's Lien in the Collateral as provided in paragraph 3(a) of this
Agreement.
4. STANDBY AS TO CERTAIN ACTIONS. Trade Creditor agrees
that it will not ask for, demand, xxx for, collect, take, receive, or repossess
any of the Branded Inventory or other Collateral from any Borrower by setoff or
in any other manner, or otherwise take any Enforcement Action with respect to
the whole or any part of the Collateral, whether by judicial action or under
power of sale, by self-help
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repossession or otherwise, unless and until all of the Senior Obligations have
been paid finally and in full and Lenders' commitments to extend further credit
to or for the benefit of Borrowers have been terminated. If Trade Creditor in
violation of the terms hereof, initiates any Enforcement Action against a
Borrower or any of the Collateral, Agent may interpose this Agreement and demand
specific performance of the terms hereof.
5. AGENT'S RIGHTS EXCLUSIVE. Agent, on behalf of
Lenders, shall have the exclusive right to collect, foreclose upon, sell,
transfer, liquidate or otherwise dispose of any or all of the Collateral as
provided in the Senior Creditor Documents or by applicable law, in the manner
deemed appropriate by Agent and Lenders, without regard to any Liens of Trade
Creditor therein, and Trade Creditor will not hinder Agent's actions in
enforcing its remedies or taking any Enforcement Action with respect to the
Collateral; PROVIDED, HOWEVER, that after payment in full of all Senior
Obligations and the termination of Lenders' commitments to extend further credit
to or for the benefit of Borrowers, Agent shall deliver to Trade Creditor
(unless otherwise restricted by applicable law or by any order issued by a court
in the proper exercise of its jurisdiction and subject in all events to Agent's
receipt of an indemnification from Trade Creditor of all liabilities arising
from such delivery) for application to the Trade Obligations any proceeds
remaining from the sale or other disposition of the Collateral. To the fullest
extent permitted by applicable law, Trade Creditor waives any requirement on the
part of Agent or any Lender to conduct any sale or other disposition of any of
the Collateral in a commercially reasonable manner, and Agent shall be fully
authorized to sell or otherwise dispose of any or all of the Collateral in the
manner deemed appropriate by Agent and Lenders, including by the exercise of any
right Agent may have to accept any or all of the Collateral in total or partial
satisfaction of any of the Senior Obligations in accordance with the UCC or
otherwise.
6. RECEIPT OF MONIES BY TRADE CREDITOR. Trade Creditor
agrees that should it receive any money from the sale, liquidation, casualty or
other disposition of, or as a result of its Lien in any of the Collateral, it
will (unless otherwise restricted by law) hold the same in trust for Agent and
Lenders and promptly pay over the same to Agent for application to the Senior
Obligations (unless otherwise restricted by law or by any order issued by a
court in the proper exercise of its jurisdiction).
7. AGREEMENT ON CERTAIN BANKRUPTCY MATTERS.
(a) Without impairing, abrogating or in any way affecting
Agent's or any Lender's rights hereunder, including the relative priorities
established by paragraph 3 hereof, Agent may during any Bankruptcy Case give or
withhold its consent to any Borrower's or any bankruptcy trustee's use or
consumption of any Collateral (including cash proceeds of any Accounts or other
Collateral), or may provide financing or otherwise extend credit to any Borrower
or any bankruptcy trustee secured by a first priority Lien upon any or all of
the Collateral, whether acquired by such Borrower prior to or after the
commencement of such Bankruptcy Case, and by its execution of this Agreement,
Trade Creditor shall be deemed to have consented to such Borrower's or any
bankruptcy trustee's use of Collateral if and to the extent consented to by
Agent and the applicable Lenders and to any financing proposed to be provided by
Lenders (or any of them) to a Borrower or any bankruptcy trustee that is secured
by a Lien upon any or all of the Collateral during the pendency of any such
Bankruptcy Case. Any Lien at any time acquired by Trade Creditor in any of the
Collateral, whether such Collateral is created, acquired or arises at any time
prior to or after any such Bankruptcy Case, shall be subject to all of the terms
of this Agreement and shall be subordinate in priority to all Liens at any time
granted to or obtained by Agent with respect to any such Collateral, including
Liens granted to or conferred upon Agent to secure financing in any Bankruptcy
Case.
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(b) If the applicable Lenders consent to the sale of any
of the Collateral during any Bankruptcy Case (whether such sale is to be made
pursuant to 11 U.S.C. Section 363, pursuant to a plan of reorganization or
otherwise), then Trade Creditor shall be deemed to have consented to any such
sale and shall, if requested to do so by Agent in connection with any such sale,
promptly execute and deliver to Agent a release of Trade Creditor's Liens with
respect to the Collateral to be sold.
(c) If Agent or any Lender shall be required in any
Bankruptcy Case to return, refund or repay to a Borrower or any trustee or
committee appointed in the Bankruptcy Case any payment or proceeds of any
Collateral in connection with any action, suit or proceeding alleging that Agent
or such Lender's receipt of such payments or proceeds was a transfer voidable
under state or federal law (including the Bankruptcy Code), then Agent or such
Lender shall not be deemed ever to have received such proceeds for purposes of
this Agreement in determining whether and when all of the Senior Obligations
have been paid in full.
8. AGREEMENT TO RELEASE LIENS. Trade Creditor agrees
that it will (if requested to do so by Agent after and during the continuance of
an Event of Default under the Senior Creditor Documents) release its Liens in
any Collateral in connection with and in order to facilitate any orderly
liquidation sale of such Collateral by any Borrower or any bankruptcy trustee or
receiver for such Borrower, and promptly upon the request of Agent, it will
execute and deliver such documents, instruments and agreements as are necessary
to effectuate such release and to evidence such release in the appropriate
public records, provided that the net proceeds from any such sale or other
disposition are to be applied in reduction of the Senior Obligations (with any
excess after the Senior Obligations have been paid in full to be turned over to
Trade Creditor, to the extent not otherwise prohibited by applicable law).
9. WAIVER OF MARSHALLING; APPLICATION OF PAYMENTS AND
PROCEEDS. Trade Creditor hereby waives any right to require Agent to xxxxxxxx
any security or collateral or otherwise to compel Agent or any Lender to seek
recourse against or satisfaction of the indebtedness to it from one source
before seeking recourse or satisfaction from another source. Agent shall be
authorized to apply any and all payments, collections and proceeds of Collateral
received by it to such portion of the Senior Obligations as Agent may lawfully
elect consistent with the provisions of the Senior Creditor Documents.
10. PROVISIONS CONCERNING INSURANCE. Proceeds of the
Collateral include insurance proceeds, and therefore the priorities set forth in
paragraph 3 hereof govern the ultimate disposition of casualty insurance
proceeds. Agent shall have the sole and exclusive right, as against Trade
Creditor, to adjust settlement of insurance claims in the event of any covered
loss, theft or destruction of the Collateral. All proceeds of such insurance
shall inure to Agent to the extent of the Senior Obligations, and Trade Creditor
shall cooperate (if necessary), at Agent's expense, in a reasonable manner in
effecting the payment of insurance proceeds to Agent. Agent shall have the right
(as between the parties hereto) to determine whether such proceeds will be
applied to its claim or used to rebuild, replace or repair the affected
Collateral. If such proceeds are applied to Senior Obligations, any proceeds
remaining after payment in full of Senior Obligations and expenses of
collection, provided that Lenders' commitments to extend further credit to or
for the benefit of Borrowers shall have been terminated, shall be promptly
remitted to Trade Creditor for application to the Trade Obligations or to
Borrowers, as applicable.
11. NOTICES. All notices, requests and demands to or upon
a party hereto shall be in writing and shall be delivered by hand, sent by
certified or registered mail, return receipt requested or by telecopier and
shall be deemed to have been validly served, given or delivered when delivered
against receipt or four (4) Business Days after deposit in the United States
mail, certified, return receipt requested, postage prepaid, or, in the case of
telecopy notice, when received at the office of the noticed party, in each case
addressed as follows:
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(a) if to Agent: Fleet Capital Corporation
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Loan
Administration Manager
Telecopier No.:(000) 000-0000
(b) if to Trade Creditor: ________________________
________________________
________________________
________________________
Attention:______________
Telecopier No.: (____) _______
or to such other address as each party may designate for itself by like notice
given in accordance with this paragraph. Any written notice that is not sent in
conformity with the provisions hereof shall nevertheless be effective on the
date that such notice is actually received by the noticed party. Trade Creditor
hereby agrees that any requirement for the giving of notice by Agent under the
UCC or otherwise in connection with any exercise by Agent of any of its and
Lenders' rights or remedies with respect to the Collateral shall be satisfied by
the giving of written notice at least five (5) days prior to the date on which
such rights or remedies are to be exercised by Agent, provided that nothing
herein shall be deemed to require the giving of any such notice when such notice
is not required by applicable law.
12. NO DUTIES IMPOSED UPON AGENT OR ANY LENDER. The
rights granted to Agent in this Agreement are solely for its protection and
nothing herein contained imposes on Agent or any Lender any duties with respect
to any of the Collateral. None of Agent or any Lender has any duty to preserve
rights against prior parties on any instrument or chattel paper received from
any Borrower as collateral security for any of the Senior Obligations.
13. RELATIONSHIP OF PARTIES. This Agreement is entered
into solely for the purposes set forth above, and neither party assumes any
responsibility to the other party to advise such other party of information
known to such party regarding the financial condition of any Borrower or
regarding the Collateral, or of any other circumstances bearing upon the risk of
nonpayment of the obligations of such Borrower, under the Trade Creditor
Documents, or the Senior Creditor Documents. Each party shall be responsible for
managing its relationship with Borrowers and neither party shall be deemed the
agent of the other for any purpose. Trade Creditor, on one hand, and Agent and
Lenders, on the other hand, each may alter, amend, supplement, release,
discharge or otherwise modify any terms of the Trade Creditor Documents or of
the Senior Creditor Documents, respectively, without notice to or the consent of
the other.
14. NO DEBT SUBORDINATION. Nothing in this Agreement
shall be construed to be or operate as a subordination of any of the Senior
Obligations to the Trade Obligations, or vice versa.
15. ADDITIONAL CREDIT EXTENSIONS; AMENDMENTS TO SENIOR
CREDITOR DOCUMENTS; AMENDMENTS TO TRADE CREDITOR DOCUMENTS. Trade Creditor
acknowledges, understands and agrees that Lenders may make loans to or for the
benefit of Borrowers from time to time, pursuant to the Senior Creditor
Documents or otherwise, and all such loans shall constitute part of the Senior
Obligations and shall be secured by all of the Collateral, and nothing herein
shall restrict in any manner or in any way the right of Borrowers to obtain
additional credit from Lenders or the right of Lenders to make available such
additional credit to Borrowers as Lenders in their sole discretion may elect.
Agent, Lenders and Borrowers may amend, modify, supplement or waive any of the
provisions of the Senior Creditor Documents without notice to or the consent of
Trade Creditor and without in any manner affecting this
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Agreement or any of Agent's or any Lender's rights hereunder. Without the prior
written consent of the Lenders, neither Trade Creditor nor any of the Borrowers
may amend or otherwise modify the terms of any Trade Creditor Document in any
material respect or in any respect that could reasonably be expected to be
adverse to the interests of the Agent and the Lenders.
16. INDEMNITY. Trade Creditor agrees to indemnify, defend
and hold Agent and each Lender harmless from and against any loss, damage, cost,
claim or expense, including court costs and attorneys' fees, incurred or
sustained by Agent and such Lender in connection with any remittances of
proceeds of any Collateral made pursuant to the terms hereof from Agent to Trade
Creditor, to the extent that such remittance of proceeds subsequently is
determined by a court of competent jurisdiction to have been prohibited by
applicable law, avoidable under any insolvency law (including the Bankruptcy
Code), or in violation of the rights of any other creditor of any Borrower when
made. The foregoing indemnity shall survive any termination of this Agreement.
17. INDEPENDENT CREDIT INVESTIGATIONS. None of the
parties hereto nor any of their respective directors, officers, agents,
employees, successors or assigns shall be responsible to the others or to any
other Person for any Borrower's solvency, financial condition or ability to
repay any of the Trade Obligations or any of the Senior Obligations, or for
statements of any Borrower, oral or written, or for the validity, sufficiency or
enforceability of any of the Trade Creditor Documents or any of the Senior
Creditor Documents, or the validity or priority of any liens or security
interests granted by any Borrower to either party in connection with any of the
Trade Creditor Documents or any of the Senior Creditor Documents. Each party
hereto has entered into its agreements with Borrowers based upon its own
independent investigation, and makes no warranty or representation to the other
party nor does it rely upon any representation of the other party with respect
to matters identified or referred to in this paragraph.
18. NO RIGHTS CONFERRED UPON BORROWERS. Nothing herein
shall be construed to confer any rights upon Borrowers. Without limiting the
generality of the foregoing, if any party hereto shall enforce its rights or
remedies in violation of this Agreement, Borrowers shall not be authorized to
use such violation as a defense to any right or remedy exercised by such party,
nor assert such violation as a counterclaim or basis of setoff or recoupment
against such party, unless the other party hereto consents in writing and itself
asserts that the exercise of right or remedy is in violation of this Agreement.
19. GOVERNING LAW. This Agreement shall be interpreted,
and the rights and obligations of the parties hereto determined, in accordance
with the internal laws of the State of New York without giving effect to the
conflict of laws principles thereof, other than SECTION 5-1401 of the New York
General Obligations Law.
20. NO THIRD PARTY BENEFICIARIES. Nothing contained in
this Agreement shall be deemed to indicate that this Agreement has been entered
into for the benefit of any Person other than the parties hereto.
21. CONFLICT WITH DOCUMENTS. The provisions of this
Agreement are intended by the parties to control any conflicting provisions in
the Senior Creditor Documents or the Trade Creditor Documents, including any
covenants prohibiting further borrowing or encumbrances of Collateral.
22. COUNTERPARTS; TELECOPIED SIGNATURES. This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which counterparts taken together shall
constitute but one and the same instrument. Any signature delivered by a party
by facsimile transmission shall be deemed to be an original signature hereto.
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23. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. In no event, however, shall either party
hereto transfer or assign any Lien that it may have in any of the Collateral to
any Person unless the transferee or assignee thereof shall first agree in
writing to be bound by the terms of this Agreement the same as if an original
signatory hereto. Notwithstanding the immediately preceding sentence, any Person
whose loans or advances to Borrowers (or either of them) hereafter are used to
refinance and pay in full the Senior Obligations shall be deemed for all
purposes hereof to be the successor to Agent, and from and after the date of any
such refinancing in satisfaction in full of the Senior Obligations such Person
shall be deemed a party hereto in the place and stead of Agent as if such Person
had been the original signatory hereto, and all loans, advances, liabilities,
debit balances, covenants and duties at any time or times owed by Borrowers to
such successor to Agent, whether direct or indirect, absolute or contingent,
secured or unsecured, due or to become due, then existing or thereafter arising,
including any renewals, extensions, modifications, or replacements of any of the
foregoing, shall be deemed for all purposes hereunder to constitute and be
Senior Obligations.
24. FURTHER ASSURANCES. Each of the parties hereto agrees
to execute such amendments to financing statements and other documents as may be
necessary to reflect of record the existence of this Agreement and the relative
priorities established pursuant to paragraph 3 hereof. Without limiting the
generality of the foregoing, Trade Creditor agrees that any UCC-1 financing
statement or other document filed of record to evidence or perfect Trade
Creditor's security interest in any of the Branded Inventory shall conspicuously
state that the security interest perfected thereby is subordinate in priority to
all Liens at any time granted to or conferred upon Agent with respect to the
Trade Credit Collateral and all other Collateral.
25. SEVERABILITY. Wherever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
26. ENTIRE AGREEMENT; AMENDMENTS. This Agreement
expresses the entire understanding and agreement of the parties hereto with
respect to the subject matter hereof and supersedes all prior understandings and
agreements of the parties regarding the same subject matter. This Agreement may
not be amended or modified except by a writing signed by the parties hereto.
27. JURY TRIAL WAIVER. TRADE CREDITOR AND AGENT EACH
HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN CONNECTION WITH ANY ACTION, SUIT
OR OTHER PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
-9-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
FLEET CAPITAL CORPORATION, as Agent
("Agent")
By:________________________________
Title:_____________________________
___________________________________
("Trade Creditor")
By:________________________________
Title:_____________________________
-10-
ACKNOWLEDGMENT AND AGREEMENT
Each of the undersigned hereby accepts and acknowledges receipt of a
copy of the foregoing Vendor Lien Subordination Agreement and consents to and
agrees to be bound by all provisions thereof, including, without limitation, the
agreements between Agent, on behalf of Lenders, and Trade Creditor with respect
to the payment by each to the other of certain proceeds derived from the
liquidation of the Collateral.
Each of the undersigned further acknowledges and agrees that the Vendor
Lien Subordination Agreement may be modified or amended at any time or times
without notice to or the consent of any of the undersigned.
Each of the undersigned agrees to indemnify, defend and hold Agent and
each Lender harmless from and against any loss, damage, cost, claim or expense,
including court costs and attorneys' fees, incurred or sustained by Agent and
such Lender in connection with any remittances of proceeds of any Collateral
made pursuant to the terms of the Vendor Lien Subordination Agreement from Agent
to Trade Creditor, to the extent that such remittance of proceeds subsequently
is determined by a court of competent jurisdiction to have been prohibited by
applicable law, avoidable under any insolvency law (including the Bankruptcy
Code), or in violation of the rights of any other creditor of any of the
undersigned when made. The foregoing indemnity shall survive any termination of
the Vendor Lien Subordination Agreement.
Capitalized terms used in this Acknowledgment and Agreement without
definition have the meaning specified in the foregoing Vendor Lien Subordination
Agreement unless the context otherwise requires.
As of_______________, 200__.
AMERICAN TIRE DISTRIBUTORS, INC.
ATTEST:
___________________________ By:________________________________
[CORPORATE SEAL] Title:__________________________
THE SPEED MERCHANT, INC.
ATTEST:
___________________________ By:__________________________________
[CORPORATE SEAL] Title:__________________________
[Signatures will continue on following page]
-11-
ATTEST: T.O. XXXX HOLDING CO., INC.
___________________________ By:________________________________
[CORPORATE SEAL] Title:__________________________
ATTEST: T.O. XXXX TIRE COMPANY,INC.
___________________________ By:________________________________
[CORPORATE SEAL] Title:__________________________
2
SCHEDULE 1.1A
PERMITTED INVESTMENTS
1. Temporary investments in real property made by American Tire
Distributors, Inc. pursuant to its Employee Relocation Program not to
exceed $1,000,000.00 at any time.
2. Investments in Del-Nat Tire Corporation Debentures aggregate principal
amount of approximately $91,124.87 as of September 15, 2003, plus
accrued interest.
3. All payments made by American Tire Distributors, Inc. into the
Defeasance Trust (as defined in the Senior Note Indenture).
4. Investments in shares of capital stock of Subsidiaries identified on
Schedule 6.1(c) and in shares of capital stock, membership or
partnership interests or other equity interests in Subsidiaries
acquired by American Tire Distributors, Inc. or any other Loan Party
after the Effective Date in an Acquisition permitted under Section
11.4.
5. Guaranties given by the Borrowers pursuant to the Senior Notes as in
effect on the date hereof.
SCHEDULE 1.1B
CLEARING BANKS
ABA ACCOUNT
ACCOUNT NAME BANK NAME & ADDRESS NUMBER NUMBER
---------------------- ------------------------ --------- ------------
13 Knoxville AmSouth 064000017 90001127
0000 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
correspondence:
Xxx Xxxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000-
0310
000-000-0000
24 Mobile AmSouth Bank 000000000 03524078
Xxxxxxx'x Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Xxxx Xxx
000-000-0000
c/s-334-694-1515
54 Jackson AmSouth 064000017 0000000000
000 Xxxx Xxxxxxx
Xxxxxxx, XX 00000
Xxx Xxxxxx
000-000-0000
000-000-0000
Chargebacks
55 Texarkana Commercial National 082901046 42 562 1
Bank
X.X. Xxx 0000
Xxxxxxxxx, XX 00000
Xxx Xxxxx
000-000-0000
00 Xxxxxxxxxx Xxxxxxxx Xxxx Xxxx 000000000 3686809
0000 Xxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Xxxxx Xxxx
000-000-0000
85 Rural Hall BB & T 053101121 5117080848
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxx-Xxxxx XX 00000
000-000-0000
121 - Rome, GA Suntrust Bank 000000000 2000134425
000 X 0xx Xxx
Xxxx, XX 00000
Xxxx Xxxxxxx
000-000-0000
132 - Johnson City, TN BB & T 064208165 0110490240
0000 Xxxxxxx 00X
Xxxxx Xxxxx, XX 00000
X.X. Xxx
000-000-0000
140 - Cullman, AL Southtrust Bank 000000000 68882379
141 - Montgomery, AL 000 0xx Xxxxxx XX
Xxxxxxx, XX 00000
Xxxxxx Xxxxxx
000-000-0000
000 Xxxxxx, XX Fleet Capital 011900571 9428436025
000 Xxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Xxxxx Xxxxxx
000-000-0000
000 Xxxxxxx, XX HSBC 022000020 746813414
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Xxxx Xxxx
000-000-0000
212 Versailles PNC Bank 00000000 1011286037
000 Xxxxxxx Xxxxxxx
X. Xxxxxxxxxx, XX 00000
Xxxx Xxxxxx
412-823-4930
User ID: 560754594
Password: 2237
Business Id:
Americantire
219 Poca Rock Branch Community 051502489 4004156
Bank
0000 Xxxxx Xxxxxx
Xxxxx, XX 00000
Xxxxxx Xxxxxx
000-000-0000
2
501 - Lincoln, NE US Bank 000000000 105969200044
Mail Code: EPMNH04B
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, XX
00000-0000
Xxxx Xxxxxxx 612-303-
3027
0-000-000-0000
502 - Sioux Falls, SD US Bank 000000000 175080033418
Mail Code: EPMNH04B
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, XX
00000-0000
Xxxx Xxxxxxx 612-303-
3027
0-000-000-0000
3
08 - Nashville, TN Bank of America 000000000 000511146003
12 - Asheville, NC 000 X Xxxxx Xxxxxx Wire: 000511146003
00 - Xxxxxxxx, XX Xxxxxxxxx, XX 00000-0000 026009593
15 - Fayetteville, NC 000-000-0000
16 - Raleigh, NC Xxxxx Xxxxxxx
17 - Richmond, VA
18 - Augusta, GA
51 - Atlanta, GA
53 - Pensacola, FL
56 - Memphis, TN
58 - Tallahassee, FL
59 - Little Rock, AR
60 - Mauldin, SC
63 - Springfield, MO
70 - Charlotte, NC
75 - Roanoke, VA
80 - Burlington, NC
90 - Norfolk, VA
95 - Orlando, FL
000 - Xxxxxx, XX
000 - Xxxxxxxxxx, XX
107 - Landover, MD
000 - Xxxxxxxxx, XX
000 - Xxxxxx, XX
113 - Jacksonville, FL
114 - Ft. Xxxxx, FL
115 - Harrisonburg, VA
000 - Xxxxxxxxxx, XX
000 - Xxxxx, XX
000 - X. Xxxx Xxxxx, XX
000 - Xxxxxxxx, XX
000 - Xxxxx, XX
000 - Xxxxxxxxxx, XX
206 - Halethorpe, MD
000 - Xxx Xxxx, XX
000 - Xxxxxxxxxx, XX
303 - Fresno, CA
000 - Xxxxxxxx, XX
000 - Xxxxxx, XX
000 - Xxxxxx, XX
000 - Xxxxxxx, XX
000 - Xxxxx Xxxxx, XX
000 - Xxx Xxxxxx, XX
10 House ROA's
30106 San Francisco Lockbox
0000 Xx. Xxxxx Xxxxxxx
000000 Xxxxxxx Lockbox
4
SCHEDULE 1.1C
EXCLUDED PROPERTY
The following property of each Borrower shall constitute
"Excluded Property" under this Agreement:
(i) Any Deposit Account or Investment Property owned, maintained or
acquired in the ordinary course of business of a Borrower that is
established by such Borrower solely for payroll and benefit plan
disbursement activities of such Borrower or deferred compensation
arrangements of such Borrower, including any deferred compensation
investment accounts, ERISA disbursement accounts and payroll
disbursement accounts;
(ii) Any Deposit Account or Investment Property as to which a Borrower is
acting as a trustee or fiduciary for the benefit of current or former
employees of such Borrower;
(iii) Any deposits or prepayments made to suppliers or lessors of property
(other than Inventory) or providers of services;
(iv) Any deposits or prepayments received by a Borrower from lessees or
sublessees of Real Estate;
(v) Any 40l(k) plan assets;
(vi) Any Deposit Account or Investment Property maintained by a Borrower
solely in connection with the Voluntary Employee Benefits Association
for California vacation benefits of such Borrower's employees;
(vii) Investments in Del-Nat Corporation Debentures in the aggregate
principal amount of approximately $91,124.87 as of September 15, 2003
plus accrued interest;
(viii) Any Deposit Account or Investment Property maintained by a Borrower
solely in connection with the American Tire Distributors, Inc. Deferred
Compensation Plan.
(ix) Any Deposit Account marked with an asterisk (*) on Schedule 6.1(bb).
SCHEDULE 6.1(a)
JURISDICTIONS IN WHICH BORROWERS ARE
QUALIFIED AS FOREIGN CORPORATIONS
AMERICAN TIRE DISTRIBUTORS, INC., A DELAWARE CORPORATION
Alabama* Maine Oklahoma
Arizona* Maryland* Oregon
Arkansas* Massachusetts Pennsylvania*
California* Michigan Rhode Island
Colorado Minnesota South Carolina*
Connecticut Mississippi* South Dakota*
District of Columbia Missouri* Tennessee*
Florida* Montana Texas (Xxxxxxx Tire Group)
Georgia* Nebraska* Utah
Idaho Nevada Vermont
Illinois New Jersey Virginia*
Indiana New Mexico Washington
Iowa* New York* West Virginia*
Kansas* North Carolina* Wisconsin
Kentucky North Dakota Wyoming
Louisiana Ohio
THE SPEED MERCHANT, INC., A CALIFORNIA CORPORATION*
Arizona**
Nevada**
T.O. XXXX HOLDING CO., INC., A NEBRASKA CORPORATION
T.O. XXXX TIRE COMPANY, A NEBRASKA CORPORATION*
Colorado** Minnesota** Oklahoma**
Iowa** Missouri** South Dakota**
Kansas** North Dakota** Wyoming**
*denotes jurisdiction in which borrower conducts business
** to be withdrawn as soon as practical after Effective Date
SCHEDULE 6.1(b)
CAPITALIZATION
A. AMERICAN TIRE DISTRIBUTORS, INC.
Authorized 50,000,000 shares of Class A Common Stock, par value $0.01 per share
and 10,982,426 shares of Preferred Stock, par value $0.01 per share, issued and
outstanding or reserved for issuance as follows (as of December 31, 2003).
Shares
Name Type Issued Shares Reserved
-------------------------------------------- ------------------- ---------- ---------------
Charlesbank Equity Fund IV, Limited Class A Common 4,846,179 0
Partnership
Charlesbank Coinvestment Partners, LLC Class A Common 4,444 0
Squam Lake Investors III, L.P. Class A Common 92,222 0
Sunapee Securities, Inc. Class A Common 18,889 0
The 1818 Mezzanine Fund, L.P. Warrants to acquire 0 1,034,000
Class A Common
The Goodyear Tire & Rubber Company Warrants to acquire 0 204,795
Class A Common
Bridgestone/Firestone Warrants to acquire 0 102,398
Class A Common
W.P. Xxxxx Warrants to acquire 0 153,597
Class A Common
Management (as a group) Class A Common 125,183 0
Management (as a group) Options to acquire 0 3,759,639
Class A Common
Outside Directors Options to acquire 40,000
Class A Common
TOTALS: 5,086,917 5,294,429
---------- ---------------
1818 Mezzanine Fund, L.P. Series C Preferred 500,001
Stock
Charlesbank Equity Fund, IV, L.P. Series C Preferred 3,500,001
Stock
The 1818 Mezzanine Fund, L.P. Series D Preferred 1,532,377
Stock
Charlesbank Equity Fund IV, L.P. Series D Preferred 8,097,520
Stock
Charlesbank Equity Parallel Fund IV Series D Preferred 2,695
Stock
Charlesbank Coinvestment Partners, LLC Series D Preferred 5,000
Stock
TOTALS: 13,637,594
----------
Kelly-Springfield Tire Company Series A Preferred 6,000
Stock
Kelly-Springfield Tire Company Series B Preferred 4,500
Stock
TOTALS: 10,500
----------
B. THE SPEED MERCHANT, INC.
Authorized no shares of preferred stock and 1,000,000 shares of common stock,
par value $.01, of which 14,118 are issued and outstanding and held by American
Tire Distributors, Inc.
C. T.O. XXXX HOLDING CO., INC.
Authorized no shares of preferred stock and 5,000,000 shares of common stock,
$0.01 par value, of which 126,789 are issued and outstanding and held by
American Tire Distributors, Inc.
D. T.O. XXXX TIRE COMPANY, INC.
Authorized 500 shares of common stock, $100.00 par value, of which 486 are
issued and outstanding and held by T.O. Xxxx Holding Co., Inc.
343122.17
SCHEDULE 6.1(c)
SUBSIDIARIES; OWNERSHIP OF STOCK
JURISDICTION OF
NAME INCORPORATION IMMEDIATE PARENT
---------------------------- --------------- --------------------------------
The Speed Merchant, Inc. California American Tire Distributors, Inc.
T.O. Xxxx Holding Co., Inc. Nebraska American Tire Distributors, Inc.
T.O. Xxxx Tire Company, Inc. Nebraska T.O. Xxxx Holding Co., Inc.
Each subsidiary is 100% owned by its immediate parent.
SCHEDULE 6.1(f)
BUSINESS OF BORROWERS
American Tire Distributors, Inc., The Speed Wholesale distribution of tires, wheels, mechanical
Merchant, Inc., T.O. Xxxx Holding Company, Inc., service equipment and automotive parts and
T.O. Xxxx Tire Company, Inc. accessories. Development, sale and marketing of
computer technology related to the sale of tires,
wheels, and other related businesses
Other: Sale of tires, wheels, automotive parts and
accessories through the Internet, and other e-
commerce ventures related to the business described
above
Xxxxxxx Worldwide Sale of tires, wheels, mechanical service equipment
and automotive parts and accessories outside of the
United States either on a direct export basis or
through a domestic exporter.
SCHEDULE 6.1(g)
GOVERNMENTAL APPROVALS
NONE
SCHEDULE 6.1(h)
TITLE TO PROPERTIES
NONE
SCHEDULE 6.1(i)
LIENS
Lease Agreement dated March 26, 2002 by and between HEF (NC-SC) QRS, 14-86,
Inc., a Delaware corporation as Landlord and Xxxxxxx Tire Group, Inc., a
Delaware corporation as Tenant which evidences a landlord lien which relates to
rights of landlord in and to these said properties but for which the Company has
a landlord lien waiver.
- 0000 Xxxxxx Xxxx Xxxx, Xxxxxxxxxx, XX 00000
- 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx, XX 00000
- 000 Xxxxx Xxxx Xxxxxx, Xxxxxxx, XX 00000
SCHEDULE 6.1(j)
DEBT AND GUARANTEES
A. Vendor Financing
1. Indebtedness to The Goodyear Tire and Rubber Company pursuant
to promissory note dated February 11, 2002 of American Tire
Distributors, Inc. in the original principal amount of
$10,000,000. (approximately $9,000,000 outstanding as of March
10, 2004)
2. Indebtedness to Bridgestone/Firestone North American Tire, LLC
pursuant to promissory note dated March 1, 2002 of American
Tire Distributors, Inc. in the original principal amount of
$5,000,000. (outstanding balance is same)
B. Mortgages
NONE
C. Capitalized Lease Obligations
1. Fleet Capital Leasing, Lease No. 34389-31 dated December 30,
1999 with a remaining balance on March 10, 2004 of $379,185;
Lease No. 35119 dated October 1, 2000 with a remaining balance
on March 10, 2004 of $148,567.
2. Lease Agreement dated March 26, 2002 by and between HEF
(NC-SC) QRS, 14-86, Inc., a Delaware corporation as Landlord
and Xxxxxxx Tire Group, Inc., a Delaware corporation as Tenant
representing a liability as expressed on the Company's balance
sheet of $14,084,964.20.
D. Reimbursement Obligations
1. Reimbursement Obligations under Letter of Credit in favor of
LaSalle Bank National Association dated March 21, 2002 to
assure lease payments under Lease Agreement dated March 26,
2002 by and between HEF (NC-SC) QRS, 14-86, Inc., as Landlord
and Xxxxxxx Tire Group, Inc., as Tenant in the aggregate
amount $1,644,500.
2. Reimbursement Obligations under Letter of Credit in favor of
Argonaut Insurance Company dated November 20, 2002 to assure
payment of workers' compensation claims for policy year
October 1, 2002 to September 30, 2003 in the aggregate amount
of $1,960,000.
3. Reimbursement Obligations under Letter of Credit in favor of
Argonaut Insurance Company dated October 8, 2003 to assure
payment of workers' compensation claims for policy year
October 1, 2003 to September 30, 2004 in the aggregate amount
of $1,900,000.
4. Reimbursement Obligations under $325,000 Letter of Credit in
favor Liberty Property Limited Partnership to assure lease
payments by ITCO under sale and leaseback of Orlando, Florida
warehouse facility (face amount declines to zero over a period
of three years provided certain balance sheet tests are met).
E. Other Debt and Guaranties
1. Debt and Guaranties from time to time arising under the Loan
Documents
2. Guaranties given by the Borrowers pursuant to the Senior Notes
as in effect on the date hereof.
3. Promissory Note dated August 1, 2001 of Xxxxxxx Tire Group,
Inc. in favor of Property Developers and Consultants, LLC in
the original principal amount of $26,580.00 for financing the
Cullman, AL distribution center leasehold improvements. The
remaining balance is $16,300.
4. Promissory Noted dated April 30, 2001 of Xxxxxxx Tire Group,
Inc. in favor of GE Polymerland in the original principal
amount of $489,653 for financing the Huntersville, NC Support
Center furniture. The remaining balance is $259,347.
5. Promissory Note dated August 17, 2001 of Xxxxxxx Tire Group,
Inc. in favor of Xxxxx Associates in the original principal
amount of $99,500 for financing the Medley, FL distribution
center leasehold improvements. The remaining balance is
$78,577.
6. Promissory Note dated May 6, 2003 of American Tire
Distributors, Inc. in favor of Hitachi Credit America
Corporation in the original principal amount of $765,824. The
remaining balance is $478,640.
7. Promissory Note dated March 1, 2004 of American Tire
Distributors, Inc. in favor of Oracle Credit Corporation in
the original principal amount of $1,520,611.
8. Indebtedness outstanding in respect of Interest Rate Swap
Agreement entered into by American Tire Distributors, Inc. and
The Speed Merchant, Inc. with Fleet National Bank from time to
time to manage exposure to fluctuations in interest rates. As
of March 10, 2004, American Tire Distributors, Inc. had an
Interest Rate Swap Agreement in place covering a notional
amount of $50,000,000 of indebtedness expiring on June 30,
2006 at an interest rate of 2.14%.
2
SCHEDULE 6.1(k)
LITIGATION
AMERICAN TIRE DISTRIBUTORS, INC. V. PERFORMANCE MANAGEMENT, INC. AND XXXXXXX
XXXXXX XXXXXX; UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF
LOUISIANA, CIVIL ACTION NO. CV 03-0683 On April 13, 2003, the Company sued
Performance Management, Inc. ("Performance") and Xxxxxx Xxxxxx for their failure
to timely make payment under a promissory note and a guaranty, respectively.
After Performance answered the Company, the Company moved for judgment on the
pleadings. The Court granted the motion on November 4, 2003, holding Performance
liable for the $2.8 million in principal under the note, prejudgment interest,
and attorney's fees in the amount of 15% of all monies due and owing as of April
13, 2003. Xxxxxx Xxxxxx was not served with Complaint until October 17, 2003. In
his answer, Xxxxxx Xxxxxx admitted the terms of the promissory note and personal
guaranty, but asserted several affirmative defenses, including unclean hands,
estoppel and impossibility. The Company moved for judgment on the pleadings as
to Xxxxxx Xxxxxx on December 16, 2003, which was denied by the Court on January
28, 2004. In light of this ruling, the Company is moving forward with discovery
and will continue to prosecute this matter vigorously.
TIRES INCORPORATED OF BROWARD V. AMERICAN TIRE DISTRIBUTORS, INC., ET AL.; U.S.
DISTRICT COURT, SOUTHERN DISTRICT OF FLORIDA, CASE NO. 02-60444-CIV-XXXXX
Plaintiff brought this suit against the Company and other co-defendants for
violations of the Xxxxxxxx-Xxxxxx Act. The Company was successful on its Motion
to Dismiss the Amended Company; however, the Court gave the Plaintiff an
opportunity to amend its Complaint. The Plaintiff filed a second amended
complaint. A Motion to Dismiss the Second Amended Complaint and a Reply Brief
has been filed and the Company is awaiting a ruling from the Court.
SCHEDULE 6.1(l)
TAX MATTERS
From time to time in the ordinary course of business, the Borrowers fail to file
sales, use and franchise tax returns and/or fail to pay amounts due in respect
of sales, use and franchise taxes in various jurisdictions in which the
Borrowers do business, which failures to file or pay could not be reasonably
expected to have a Materially Adverse Effect and in no event greater than
$250,000.
T.O. Xxxx Tire Company, Inc. is currently involved in a sales and use tax audit
by the State of Nebraska for the period from December 1998 to October 2001. The
State of Nebraska has issued a Notice of Deficiency and we along with Xxxxx Xxxx
(the seller of T.O. Xxxx Tire Company, Inc. to American Tire Distributors, Inc.)
are contesting the deficiency through appropriate channels. Based on the date of
acquisition, American Tire Distributors, Inc. will be liable for approximately
50% of any deficiency that is levied, not to exceed $150,000 in the aggregate.
SCHEDULE 6.1(m)
BURDENSOME PROVISIONS
NONE
SCHEDULE 6.1(p)
ERISA
American Tire Distributors, Inc. Deferred Compensation Program
American Tire Distributors, Inc Employee Welfare Benefit Plan
American Tire Distributors, Inc. Vacation and Sick Leave Plan for Western
Division Employees
American Tire Distributors, Inc. Retirement Plan
SCHEDULE 6.1(t)
LOCATION OF OFFICES AND RECEIVABLES
American Tire Distributors, Inc.
00000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000
X.X. Xxx 0000
Xxxxxxxxxxxx, XX 00000-0000
The Speed Merchant, Inc.
0000 Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
as of April 2004: 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000
T.O. Xxxx Tire Company
0000 XX 00xx Xxxxxx, Xxxxx X
X.X. Xxx 00000
Xxxxxxx, XX 00000
SCHEDULE 6.1(u)
LOCATION OF INVENTORY
LOCATION ADDRESS SQ FT
-------------------- ---------------------------------------------------------- -------
Asheville, NC* 00 Xxxxxxx Xxxx, Xxxxxxxxx, XX 00000 26,250
Atlanta, GA 0000 Xxxxxxxx Xxxxxxxxxx Xxxx., Xxxxxx, XX 00000 105,000
Auburn, NY 00 Xxxx Xxxxxx, Xxxxxx, XX 00000 71,120
Augusta, GA 0000 Xxxxx Xxxxxx Xx., Xxxxxxx, XX 00000 15,600
Baltimore, MD 0000 Xxxxxxx Xxxxx Xxxx, Xxxxxxxxxx, XX 00000 150,403
Buffalo, NY 000 Xxxxxxx Xxxxxx, Xxxxxxx, XX 00000 48,000
Burlington, NC 0000 Xxxxxx Xxxxxx Xxxxxxxxx, Xxxxxxxxxx, XX 00000 80,000
Byron, GA 000 Xxxxxx Xx., Xxxxx, XX 00000 50,000
Carson, CA 00000 X. Xxxxxx Xxxxxx, Xxxxxx, XX 00000 94,984
Charleston, SC 0000 Xxxxxxx Xxxx., Xxxxxxxxxx, XX 00000 50,500
Charlotte, NC 0000 Xxxxxxxxx Xxxx., Xxxxxxxxx, XX 00000 120,200
Chula Vista, CA 0000 Xxxx Xxxxxx, Xxxxx Xxxxx, XX 00000 81,330
Columbia, SC 000 Xxxxxxxx Xx., Xxxxxxxx, XX 00000 88,858
Cullman, AL 000 Xxxxxxxxxx Xxxx Xxxx, Xxxxxxx, XX 00000 100,000
Des Moines, IA 0000 Xxxxxxxx Xxxxxx, Xxxxx #0, Xxx Xxxxxx, Xxxx 76,530
Fayetteville, NC 0000 Xxxxxxxx Xx., Xxxxxxxxxxxx, XX 00000 80,000
Florence, SC 0000 Xxxxxxxx Xxxxx, Xxxxxxxx, XX 00000 32,400
Fresno, CA 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000 14,784
Ft. Xxxxx, FL 00000 Xxxx Xxxxxx XX, Xx. Xxxxx, XX 00000 30,000
Harrisonburg, VA 000 Xxxxx Xxxxx, Xxxxxxxxxxxx, XX 00000 90,000
Jackson, MS 000 X-00, Xxxxxxx, XX 00000 30,000
Jacksonville, FL 000 X. Xxxx Xxx., Xxxxxxxxxxxx, XX 00000 85,600
Johnson City, TN 000 Xxxxxxx Xx., Xxxxx Xxxxx, XX 00000 50,000
Knoxville, TN 000 Xxxxxxxx Xxxxx, Xxxxxxxxx, XX 00000 75,000
Landover, MD 0000X Xxx Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000 106,500
Lincoln, NE 0000 Xxxxxxxx, Xxxxxxx, XX 00000 222,000
Lincoln, NE 0000 XX 00xx Xxxxxx, Xxxxxxx, XX 00000 27,500
Lincolnton, NC 0000 Xxxxxx Xxxx Xxxx, Xxxxxxxxxx, XX 00000 170,000
Little Rock, AR 0000 Xxxxx Xxxxx Xxxx., Xxx. 000, X. Xxxxxx Xxxx, XX 00000 39,204
Louisville, KY 0000 Xxxxxxxx Xxxxxxxx, Xxxxxxxxxx, XX 00000 61,875
Mauldin, SC 000 X. Xxxx Xxxxxx, Xxxxxxx, XX 00000 84,700
Memphis, TN 0000 Xxxxxxxxxx Xxxx, Xxxxxxx, XX 00000 62,447
Miami, FL 00000 XX 00xx Xxxxxx, Xxxxxxx, XX 00000 00,050
Mobile, AL 0000 Xxxxxx Xxxx, Xxxxxxxx, XX 00000 60,000
Montgomery, AL 0000 Xxx Xx., Xxxxxxxxxx, XX 00000 60,000
Moorpark, CA 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000 76,130
N. Versailles, PA 000 X. Xxxxxxxxxx/XxXxxxxxxx Xxxx., X. Xxxxxxxxx, XX 00000 30,000
Nashville, TN 000 Xxxxxxx Xxxxxxxxxx Xxxxx, Xxxxxxxxx, XX 00000 100,000
Norfolk, VA 0000 Xxxxxxxx Xx., Xxxxxxx, XX 00000 79,565
Orlando, FL 0000 Xxxxxxxxx Xxx, Xxxxxxx, XX 00000 115,848
Pensacola, FL 0000 Xxxxx Xxxx., Xxxxxxxxx, XX 00000 40,500
Phoenix, AZ 0000 Xxxxx 00xx Xxxxxx, Xxxxxxx, XX 00000 125,643
Poca, WV 0 Xxxxx Xxxxxx, Xxxx, XX 00000 47,900
* denotes facilities owned by American Tire Distributors
Raleigh, NC 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, XX 00000 51,802
Rancho Cucamonga, CA 00000 Xxxxxx Xxxxx, Xxxxxx Xxxxxxxxx, XX 00000 143,468
Richmond, VA 0000 Xxxxxxxxx Xxxxx Xxxxxxx, Xxxxxxxx, XX 00000 61,000
Roanoke , VA 0000 Xxxxxx Xxxxx XX, Xxxxxxx, XX 00000-0000 48,000
Rome, GA* 000 Xxxx Xxxx, XX, Xxxx, XX 00000 84,700
Rural Hall, NC 000 Xxxxxxxxx Xxxxx, Xxxxx Xxxx, XX 00000 100,000
Sacramento, CA 0000 Xxxxx Xxxxxxxxx, Xxxxxxxxxx, XX 00000 133,380
Salisbury, MD* 000 Xxxxxx Xxxx, Xxxxxxxxx, XX 00000 26,300
San Jose, CA 0000 Xxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 135,123
000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000 (April 2004) 103,350
Savannah, GA 0000 Xxxxx X Xxxx Xxxx., Xxxxxxxx, XX 00000 60,500
Sioux Falls, SD 000 Xxxxx Xxxx Xxxxxx, Xxxxx Xxxxx, XX 00000 84,000
Springfield, MO 0000 X. Xxx Xxxxx, Xxxxxxxxxxx, XX 00000 60,000
Tallahassee, FL* 0000 Xxxxxxxxxx Xxxx, Xxxxxxxxxxx, XX 00000 15,000
Tampa, FL 0000-0 Xxx Xxxxxxxx Xx., Xxxxx, XX 00000 69,647
Texarkana, AR 0000 Xxxx 00xx Xxxxxx, Xxxxxxxxx, XX 00000 49,500
West Palm Beach, FL 0000 Xxxxxxxxxxx Xxx, X. Xxxx Xxxxx, XX 00000 50,000
Wilmington, NC 0000 Xxxxxxxxxxxx Xxx., Xxxxxxxxxx, XX 00000 38,700
Wilson, NC 0000 Xxxxxxxx Xxxx, Xxxxxx, XX 00000 84,000
Wytheville, VA 000 Xxxxxxxx Xxxxxxxx Xx., Xxxxxxxxxx, XX 00000 36,550
2
SCHEDULE 6.1(v)
CORPORATE AND FICTITIOUS NAMES
AMERICAN TIRE DISTRIBUTORS, INC. (INCLUDING PREDECESSOR ENTITIES)
Xxxxxxx Tire Group, Inc.
The X.X. Xxxxxxx Company, Inc.
Xxxxxxx-Itco
Xxxxxxx-Itco Tires & Products
Xxxxxxx Tire & Products
Xxxxxxx Worldwide
ITCO Logistics Corporation
ITCO Holding Company, Inc.
ITCO Tire Company
ITCO Tire Company of Georgia, Inc.
L&N Leasing Corporation
Xxxx Xxxxxx, Inc.
Interstate Tire Company
Interstate Tire & Battery
Radial Tire Stores, Inc/
Town & County Tire Service, Inc.
XxxxXxxx
Xxxxxxx Tire Company
Xxxxxx & Winston, Inc.
Winston Tire
Winston Tires
California Tire Company
Cal Tire
California Tire Company LLC
California Tire Acquisition Company
Xxxxxxx Worldwide
Heafnet
Xpress Performance
THE SPEED MERCHANT, INC.
CPW
Competition Parts Warehouse
American Tire Distributors
Phoenix Racing, Inc.
The Speed Merchant of San Xxxx
Xxxxxx Enterprises, Inc.
Main Auto
Wheel King
Economy Imports
Performance Leasing
Tire Outlet
Tires One
Xxxxxxxx Xxxxx
Wheel Wizard
T.O. XXXX HOLDING CO., INC.
T.O. Xxxx Tire Xxxx Tire
T.O. XXXX TIRE COMPANY, INC.
T.O. Xxxx Tire Xxxx Tire
SCHEDULE 6.1(y)
EMPLOYEE RELATIONS
NONE
SCHEDULE 6.1(aa)
TRADE NAMES
Schedule 6.1(v) is incorporated by reference.
SCHEDULE 6.1(bb)
BANK ACCOUNTS
ACCOUNT NAME BANK NAME ACCOUNT # ABA # TYPE OF ACCOUNT
--------------------------------- ----------------------------- ------------ --------- --------------------------------
American Tire Distributors, Inc. Fleet 55013019 011000138 Operating account (funding
000 Xxxxxxxx Xxxxxxx account)
Xxxxxxx, XX 00000
Xxxxx Xxxxxx
(000) 000-0000
American Tire Distributors, Inc. Fleet Maine N.A. 0080033151 011201539 A/P control disbursement account
000 Xxxxxxxx Xxxxxxx - XXX
Xxxxxxx, XX 00000
Xxxxx Xxxxxx
(000) 000-0000
American Tire Distributors, Inc.* Fleet Maine N.A. 0080033207 011201539 Payroll control disbursement
000 Xxxxxxxx Xxxxxxx xxxxxxx - XXX
Xxxxxxx, XX 00000
Xxxxx Xxxxxx
(000) 000-0000
American Tire Distributors, Inc. Fleet National Bank 9427759965 000000000 Cash concentration account
000 Xxxxxxxx Xxxxxxx (blocked deposit account)
Xxxxxxx, XX 00000
Xxxxx Xxxxxx
(000) 000-0000
The X X Xxxxxxx Company Inc AmSouth Bank 90001127 000000000 DC deposit account - balance is
dba Xxxxxxx Tires and Products 0000 Xxxxxx Xx sent to Fleet via ACH
#13 Xxxxxxxxx, XX 00000
Correspondence:
Xxx Xxxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
American Tire Distributors, Inc. AmSouth Bank 03524078 000000000 DC deposit account - balance is
Tilman's Corner Office sent to Fleet via ACH
X.X. Xxx 0000
Xxxxxx, XX 00000
Xxxx Xxx (000) 000-0000
The X X Xxxxxxx Company Inc AmSouth Bank 0000000000 000000000 DC deposit account - balance is
dba Xxxxxxx Tires and Products 210 East Capital sent to Fleet via ACH
#54 Xxxxxxx, XX 00000
Xxx Xxxxxx (000)000-0000
* denotes Excluded Property as defined on Schedule 1.1C
American Tire Distributors, Inc. Commercial National Bank 42-562-1 000000000 DC deposit account - balance is
X.X. Xxx 0000 sent to Fleet via ACH
Xxxxxxxxx, XX 00000
Xxx Xxxxx (000)000-0000
American Tire Distributors, Inc. National City Bank 0000000 000000000 DC deposit account - balance is
0000 Xxxxx Xxxxxxx sent to Fleet via ACH
Xxxxxxxxxx, XX 00000
Xxxxx Xxxx
(000) 000-0000
Xxxxxxx Tire Group Inc. BB&T 5117080848 053101121 DC deposit account - balance is
0000 Xxxxxxxxxx Xxxxxxx sent to Fleet via ACH
Xxxxxxx-Xxxxx, XX 00000
(000) 000-0000
Xxxxxxx Tire Group #121 SunTrust 2000134425 061100790 DC deposit account - balance is
000 X 0xx Xxx Xxxx, XX sent to Fleet via ACH
30162
Xxxx Xxxxxxx
Xxxxxxx Tire Group Inc. BB&T 0110490240 064208165 DC deposit account - balance is
Store #132 5928 Highway 11E sent to Fleet via ACH
Xxxxx Xxxxx, XX 00000
X.X. Xxx (000) 000-0000
American Tire Distributors, Inc. SouthTrust Bank 00-000-000 000000000 DC deposit account - balance is
000 0xx Xxxxxx XX sent to Fleet via ACH
Xxxxxxx, XX 00000
Xxxxxx Xxxxxx
(000) 000-0000
American Tire Distributors, Inc. Fleet 9428436025 011900571 DC deposit account - balance is
000 Xxxxxxxx Xxxxxxx sent to Fleet via ACH
Xxxxxxx, XX 00000
Xxxxx Xxxxxx
(000) 000-0000
American Tire Distributors, Inc. HSBC 746813414 022000020 DC deposit account - balance is
000 Xxxxxxxx Xx sent to Fleet via ACH
Xxxxxxx, XX 00000
Xxxx Xxxx (000) 000-0000
American Tire Distributors, Inc. PNC Bank 1011286037 000000000 DC deposit account - balance is
000 Xxxxxxx Xxxxxxx X. sent to Fleet via ACH
Xxxxxxxxxx, XX 00000
Xxxx Xxxxxx
(000) 000-0000
* denotes Excluded Property as defined on Schedule 1.1C
American Tire Distributors, Inc. Rock Branch Community Bank 0004004156 000000000 DC deposit account - balance is
0000 Xxxxx Xxxxxx Xxxxx, XX sent to Fleet xxx XXX
00000
Xxxxxx Xxxxxx
(000) 000-0000
T O Xxxx Tire Company Inc. US Bank 105969200044 000000000 DC deposit account - balance is
Mail Code: EPMN04B 800 sent to Fleet via ACH
Nicollet Xxxx
Xxxxxxxxxxx, XX 00000-0000
Xxxx Xxxxxxx
(000) 000-0000
T O Xxxx Tire Company Inc. US Bank 175080033418 000000000 DC deposit account - balance is
Mail Code: EPMN04B 800 sent to Fleet via ACH
Nicollet Xxxx
Xxxxxxxxxxx, XX 00000-0000
Xxxx Xxxxxxx
(000) 000-0000
American Tire Distributors, Inc. Bank of America 000511146003 000000000 Lockbox/DC deposit account -
000 X Xxxxx Xxxxxx Xxxxxxxxx, available balance is sent to
NC 28255-0001 Fleet via sweep
Xxxxx Xxxxxxx
(000) 000-0000
Speed Merchant, Inc. Xxxxx Fargo 4123649741 121000248 Payroll control disbursement
dba Competition Parts Warehouse P.O. Box 63020 San Francisco, account - only for manual checks
Payroll Xxxx* XX 00000
American Tire Distributors Xxxxx Fargo 4945083186 121000248 Checking - for West coast
Vacation Trust Agreement* X.X. Xxx 00000 Xxx Xxxxxxxxx, vacation checks only
XX 00000
Xxxxxxx Tire Group, Inc. Bank of America 511236200 000000000 Checking - VEBA for self insured
Employee Welfare Benefit Plan P.O. Box 1091 medical claims (every division
Trust* Xxxxxxxxx, XX 00000-0000 except CPW)
* denotes Excluded Property as defined on Schedule 1.1C
SCHEDULE 6.1(dd)
REAL PROPERTY
Schedule 6.1(u) is incorporated by reference.
SCHEDULE 11.8
AFFILIATE TRANSACTIONS
Lease between October 1, 1992, as amended between Xxxxxxxx X. XxXxxxx and The
X.X. Xxxxxxx Company, Inc. dba Xxxxxxx Tire Company (0000 Xxxxxxxxxxx Xxxx,
Xxxxxxx, XX 30906)
