INTERCREDITOR AGREEMENT

Intercreditor Agreement

You are currently viewing:

This Intercreditor Agreement involves

TBC CORP

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: INTERCREDITOR AGREEMENT
Governing Law: New York Date: 6/23/2005
Industry: Tires Sector: Consumer Cyclical

INTERCREDITOR AGREEMENT, Parties: tbc corp

<PAGE>

EXHIBIT 4.5

EXECUTION COPY

INTERCREDITOR AGREEMENT

INTERCREDITOR AGREEMENT, dated as of June 17, 2005 among The Prudential

Insurance Company of America (together with any transferee, successor or assign

"PICA"), each affiliate, managed account or fund of PICA party hereto (together

with any of their transferees, successors or assigns, the "Prudential

Affiliates"; and, together with PICA and any other holder from time to time of

the Senior Notes, "Prudential"), each bank a party to the Credit Agreement on

the date hereof (collectively, including the Swingline Lender and any Issuing

Bank, and with such other banks that may from time to time be parties to the

Credit Agreement, referred to as the "Banks"), the Administrative Agent and the

Co-Administrative Agent from time to time under the Credit Agreement

(respectively the "Administrative Agent" and the "Co-Administrative Agent") and

JPMorgan Chase Bank, N.A., as Collateral Agent under the Security Documents,

together with its successors in such capacity, the "Collateral Agent").

RECITALS

R1. TBC Corporation (f/k/a TBC Parent Holding Corp.), a Delaware

corporation ("Holdings"), TBC Private Brands, Inc. (f/k/a TBC Corporation), a

Delaware corporation ("TBC Private Brands") (Holdings and TBC Private Brands,

each a "Company" and together the "Companies"), and the Banks have entered into

the Credit Agreement, dated as of the date hereof (as it may be amended,

modified, supplemented, refinanced or replaced from time to time the "Credit

Agreement"), pursuant to which, among other things, the Banks agreed to make

certain loans to the Companies;

R2. TBC Private Brands and PICA entered into a certain Second Amended and

Restated Note Agreement, dated as of April 1, 2003, (as it may hereafter be

amended, modified, supplemented, refinanced or replaced from time to time, the

"Existing Note Agreement"), to govern the terms of the following notes which TBC

Private Brands originally issued and PICA purchased on July 10, 1996: (a) 8.30%

Series A Senior Notes due July 10, 2003, which notes have since been paid in

full, (b) 8.62% Series B Senior Notes due July 10, 2005 (the "Series B Notes"),

together with the Series B Notes, as such notes have been amended to date, and

as further amended, modified, supplemented, refinanced or replaced from time to

time, collectively, the "Existing Senior Notes"). TBC Private Brands and

Prudential entered into a certain Note Purchase Agreement, dated as of April 1,

2003 (as it may hereafter be amended, modified, supplemented, refinanced or

replaced from time to time, the "Additional Note Agreement;" and together with

the Existing Note Agreement, the "Note Agreements") pursuant to which TBC

Private Brands issued its Series D Variable Rate Senior Notes due April 16, 2009

(as amended, modified, supplemented, refinanced or replaced from time to time,

the "Additional Senior Notes", and together with the Existing Senior Notes,

collectively, the "Senior Notes").

R3. Pursuant to that certain Amendment No. 2 to Second Amended and

Restated Note Agreement (with respect to the Existing Note Agreement) and that

certain Amendment No. 2 to

-1-

<PAGE>

Note Purchase Agreement (with respect to the Additional Note Agreement), each

dated as of November 19, 2004, Holdings became a co-obligor with TBC Private

Brands, jointly and severally liable in respect of the obligations under the

Note Agreements and the Senior Notes.

R4. The Bank Obligations and the Note Obligations are guaranteed, to the

extent provided therein, pursuant to the Guarantee and Collateral Agreement

executed by the Companies and all subsidiaries of the Companies, other than

Merchant's, Incorporated ("Merchant's"), including, without limitation,

Carroll's, Inc., Big O Tires, Inc., Big O Development, Inc., Big O Tire of

Idaho, Inc., O Advertising, Inc., Northern States Tire, Inc., TBC International

Inc., TBC Brands, LLC, TBC Capital, LLC, TBC Private Brands of Texas, LLC, TBC

Retail Enterprises, Inc., Big O Retail Enterprises, Inc., Tire Kingdom, Inc.,

and NTW Incorporated (each of such subsidiaries and each of the Companies, a

"Guarantor"; provided that each Company shall only be a Guarantor with respect

to, and guarantee, the Obligations of the other Company), as it may from time to

time by amended, modified, supplemented or replaced (the "Guarantee and

Collateral Agreement").

R5. Each of the Guarantors, Merchant's and the Companies have executed in

favor of the Collateral Agent, as collateral agent for the Secured Parties (as

defined in Recital R6) the Guarantee and Collateral Agreement securing the

Obligations thereunder; and TBC Private Brands has executed in favor of the

Collateral Agent a mortgage securing the Obligations, which mortgage encumbers

real property owned by TBC Private Brands and located in Memphis, Tennessee (the

"Mortgage").

R6. Prudential and the Banks (sometimes collectively referred to herein as

the "Secured Parties", and individually referred to as a "Secured Party") desire

to set forth certain additional provisions regarding the Obligations,

NOW, THEREFORE, the parties hereto agree as follows:

SECTION 1. APPOINTMENT, POWER AND AUTHORITY OF COLLATERAL AGENT.

(a) Each Secured Party hereby appoints and authorizes the Collateral Agent

to act as its agent for the purposes of enforcing such Secured Party's rights

under the Security Documents, including its rights in respect of the Collateral.

(b) The Collateral Agent (i) agrees to make such demands and give such

notices under the Security Documents as may be requested by, and to take such

action to enforce the Security Documents and to foreclose upon, collect and

dispose of the Collateral or any portion thereof (a "Foreclosure Action") as may

be directed by, the Majority Lenders, but not otherwise, and (ii) agrees to make

the requests referred to in Section 5.6, 5.8 and 5.9 of the Note Agreements if

so instructed in writing by the Special Majority Noteholders and not to make any

determination that any documents delivered pursuant to such Sections are

reasonably satisfactory without the written consent of the Special Majority

Noteholders; provided, however, (i) that the Collateral Agent shall not be

required to take any action that is in its opinion contrary to law or to the

terms of this Agreement or the Security Documents or which would in its

reasonable opinion subject it or its officers, employees or directors to

liability, and (ii) the Collateral Agent shall not be required to take any

action under this Agreement or the Security Documents unless

-2-

<PAGE>

and until the Collateral Agent shall receive further assurances (which may

include cash collateral) of the Secured Parties' obligations under Section 5(c)

hereof that it will be indemnified to its satisfaction, in the exercise of its

reasonable judgment, by the Secured Parties against any and all loss, cost,

expense or liability in connection therewith other than any such loss, cost,

expense or liability arising out of the Collateral Agent's gross negligence or

willful misconduct.

the Secured Parties as to any course of action or other matter relating to the

performance of its duties under this Agreement and the Security Documents and

the Secured Parties will promptly comply with any such request. In each instance

in which such written directions are requested, the Collateral Agent shall,

subject to the other provisions of this Agreement, be required to take any such

action or perform any such duties only if so directed by the Majority Lenders

and shall have the right to decline to take such action or to perform such

duties unless so directed.

(d) The Collateral Agent shall have such powers as are specifically

delegated to the Collateral Agent by the terms of this Agreement and of the

Security Documents, together with such other powers as are reasonably incidental

thereto.

SECTION 2. APPLICATION OF PROCEEDS OF COLLATERAL, ETC.

(a) If, upon any Trigger Date, the Prudential Percentage is more than the

Prudential Percentage as of the applicable Determination Date due to any Bank

Paydown, Prudential shall be entitled to a distribution priority under Section

2(d) until the Prudential Percentage (after giving effect to the last such

priority distribution) is equal to the Prudential Percentage as of such

Determination Date, whether by reason of such priority distributions,

participation purchases pursuant to Section 2(b) below or otherwise. If, upon

any Trigger Date, the Bank Percentage is more than the Bank Percentage as of the

applicable Determination Date due to any Prudential Paydown, the Banks shall be

entitled to a distribution priority under Section 2(d) until the Bank Percentage

(after giving effect to the last such priority distribution) is equal to the

Bank Percentage as of such Determination Date, whether by reason of such

priority distributions, participation purchases pursuant to Section 2(b) below

or otherwise. No party claiming a distribution priority under this Section 2(a)

shall be entitled thereto until it notifies the Collateral Agent and each other

party hereto of such claim, including with such notice a reasonably detailed

computation of the amount of such claim and a description of the circumstances

on which it is based.

(b) If, sixty (60) days after a Trigger Date (the "Bank Purchase Date"),

the Prudential Percentage as of such date exceeds the Prudential Percentage

determined as of the applicable Determination Date, the Banks shall be obligated

to purchase a participation in the Note Obligations (ratably as to both the

Existing Senior Notes and the Additional Senior Notes in accordance with the

respective principal amounts of such Senior Notes) in an amount sufficient so

that, after giving effect thereto, the Prudential Percentage, as of the Bank

Purchase Date, and after giving effect to the Banks' purchase, is equal to the

Prudential Percentage as of the applicable Determination Date. If, sixty (60)

days after a Trigger Date (the "Prudential Purchase Date"), the Bank Percentage

exceeds the Bank Percentage determined as of the applicable Determination Date,

Prudential shall be obligated to purchase a participation in the Bank

-3-

<PAGE>

Obligations in an amount sufficient so that, after giving effect thereto, the

Bank Percentage, as of the Prudential Purchase Date and after giving effect to

Prudential's purchase, is equal to the Bank Percentage as of the applicable

Determination Date.

the Bank Obligations hereunder, (A) Prudential shall not be entitled to vote on

any matter arising under the Credit Agreement, and (B) Prudential shall not be

liable in respect of, or required to perform, any obligations of the Banks under

the Credit Agreement (including, without limitation, advancing any funds

pursuant to any request by the Companies to fund a loan) or under any Specified

Hedging Agreement; provided, however, that, with respect to the participation so

purchased, Prudential shall be entitled to share in any payment in respect of

the Bank Obligations pari passu with the Banks.

(ii) Notwithstanding that the Banks shall purchase a participation

in the Note Obligations hereunder, (A) none of the Banks shall be entitled

to vote on any matter arising under the Note Agreements, and (B) none of

the Banks shall be liable in respect of, or required to perform, any of

Prudential's obligations under the Note Agreements; provided, however,

that, with respect to the participation so purchased, the Banks shall be

entitled to share in any payment in respect of the Note Obligations

(without regard to participations in the Bank Obligations) pari passu with

Prudential.

(d) Any Sharing Payment shall be applied and distributed as follows:

(i) First, to the payment of all reasonable out-of-pocket costs and

expenses (including attorneys fees and disbursements) incurred by the

Collateral Agent or by any Secured Party which shall have notified, with

reasonable specificity, the Collateral Agent and the other Secured Parties

of such costs and expenses, including all amounts against or for which the

Collateral Agent is to be indemnified or reimbursed hereunder by the

Secured Parties;

(ii) Second, subject to Section 2(e) below, to Prudential or the

Banks, as applicable, in accordance with Section 2(a);

(iii) Third, subject to Section 2(e), to the Secured Parties pro

rata in proportion to each Secured Party's Percentage Interest (computed

in accordance with the Current Balance Certificates then in effect) in the

Obligations (regardless of whether or not the maturity of any such Secured

Party's Obligations shall have been accelerated) until all amounts owing

in respect of the Note Obligations and the Bank Obligations are paid in

full, provided that any such distribution on account of contingent

obligations in respect of outstanding Letters of Credit shall be held and

invested by the Collateral Agent solely for the benefit of the Secured

Parties entitled thereto and shall thereafter be distributed to such

Secured Parties to the extent that any such contingent obligations shall

become actual (or, to the extent any such contingent obligations are

extinguished prior to becoming actual, such distribution shall then be

redistributed in accordance with this Section 2(d)); and

(iv) Fourth, the balance, if any, to any such Person as shall be

entitled thereto.

-4-

<PAGE>

(e) Non-cash Sharing Payments and Sharing Payments which, due to a

restraining order or otherwise, are not permitted to be applied to the

Obligations, or because the Collateral Agent or the receiving Secured Party

determined it to be impracticable to divide and apply any such non-cash Sharing

Payments to the payment of any of the Obligations owed to the Secured Party

(herein referred to as "Non-available Sharing Payments") shall be held by the

Collateral Agent or, as the case may be, the Secured Party so receiving such

Non-available Sharing Payments, as agent for the Secured Parties. At such time

as such Non-available Sharing Payments are later converted to cash or such

Non-available Sharing Payments are later permitted to be applied, or later

become practical to divide and may otherwise be applied, against any of the

Obligations then such Non-available Sharing Payments shall promptly be divided

and paid at such time in accordance with the terms of this Agreement.

(f) Prior to each distribution of Sharing Payments pursuant to Section

2(d), the Collateral Agent shall request an updated Current Balance Certificate

from each Secured Party. The Collateral Agent shall distribute all Sharing

Payments, other than Non-available Sharing Payments, to the Secured Parties

pursuant to Section 2(d) above as soon as possible after it has in its

possession such a Current Balance Certificate from each Secured Party, setting

forth the amount of such Secured Party's Bank Obligations or Note Obligations,

as the case may be. Prior to making any distribution under Section 2(d), the

Collateral Agent may apply such Sharing Payments pursuant to Section 2(d)(i)

above, with respect to any out-of-pocket costs and expenses of the Collateral

Agent or any Secured Party whose amount is then known, and may retain as a

reserve such portion of such Sharing Payments as it may reasonably determine is

sufficient to cover such costs and expenses incurred by the Collateral Agent

whose amount has not yet been determined. As soon as it determines that any

portion of such Sharing Payments are no longer required to be held in such

reserve, the Collateral Agent shall distribute the same to the Secured Parties

pursuant to Section 2(d) based on then effective Current Balance Certificates

from all Secured Parties. Any costs and expenses payable pursuant to Section

2(d)(i) to any Secured Party, of which the Collateral Agent shall not have been

notified as of the time of any disbursement of Sharing Payments, shall not be

payable from such Sharing Payments. The failure of the Collateral Agent to

deduct from such Sharing Payments costs and expenses payable pursuant to such

Section prior to the disbursement of any such Sharing Payments (i) shall not

affect the right of the Collateral Agent to be reimbursed therefor by the

Companies and to be indemnified with respect thereto pursuant to Section 5(c)

below and (ii) shall not render the Collateral Agent liable to any Secured Party

claiming all or a portion thereof pursuant to Section 2(d) above. At the time of

each disbursement of Sharing Payments or other amounts described herein, the

Collateral Agent shall forward to each Secured Party a statement (x) describing

the total amount of such Sharing Payments or other amounts received, (y) if

applicable, the Percentage Interest of each Secured Party pursuant to which such

Secured Party's share was determined, (z) any distribution priority under

Section 2(a) affecting such distribution, (xx) the amount distributed to each

Secured Party; and (yy) the amount of costs and expenses deducted by the

Collateral Agent, the amount of reserve for such costs and expenses retained by

the Collateral Agent, and the amount of any Secured Party's costs and expenses

to which such Sharing Payments or other amounts were applied.

-5-

<PAGE>

(g) Each Secured Party agrees that any sums and amounts received by such

Secured Party pursuant to this Section shall be applied to the payment of such

Obligations held by such Secured Party as shall be determined by such Secured

Party in its sole discretion, subject to any provisions of any other agreement

affecting such application.

(h) Each Secured Party agrees not to take any action whatsoever to enforce

any term or provision of the Security Documents or to enforce any of its rights

in respect of the Collateral, except through, or pursuant to the direction of,

the Collateral Agent pursuant to this Agreement.

SECTION 3. INFORMATION.

(a) The Collateral Agent shall promptly notify each Secured Party in the

event it shall receive, in its capacity as Collateral Agent, (i) any notice or

declaration of an Event of Default or certificate rescinding a notice or

declaration of an Event of Default or any request by any party hereto for any

consent, waiver or amendment with respect hereto or the Note Documents, the Bank

Agreements or any Security Document or (ii) any Sharing Payments.

(b) Each Secured Party agrees that, in the event the Collateral Agent

notifies such Secured Party that it has received any Sharing Payments or that it

desires or is required to determine either such Secured Party's Percentage

Interest or the Majority Lenders, such Secured Party will promptly notify the

Collateral Agent in writing pursuant to a certificate of a duly authorized

officer of such Secured Party (a "Current Balance Certificate") of the aggregate

amount of the Note Obligations or Bank Obligations, as the case may be, owing to

such Secured Party (or, in the case of Bank Obligations arising under a

Specified Hedging Agreement, any Affiliate of such Secured Party) as of the date

of such certificate, and the amount of any Bank's unused commitment to lend. The

Collateral Agent shall be entitled to rely on the information set forth in the

most recently received Current Balance Certificate of each Secured Party for a

period of 21 days following receipt thereof by the Collateral Agent.

or other action permitted or required by this Agreement to be given or taken by

the Secured Parties may be and, at the request of the Collateral Agent, shall

be, embodied in and evidenced by one or more instruments reasonably satisfactory

in form to the Collateral Agent and signed by or on behalf of such Secured

Parties and, except as otherwise expressly provided in any such instrument, any

such actions shall become effective when such instrument or instruments shall

have been delivered to the Collateral Agent.

(d) The Banks agree to notify the Collateral Agent, which shall promptly

notify Prudential, within 3 business days that a Bank Election Date has

occurred.

SECTION 4. RELEASE OF COLLATERAL; AMENDMENTS TO INTERCREDITOR AGREEMENT;

EXECUTION OF AMENDMENTS, ETC.

(a) Except as may be required or permitted pursuant to the Security

Documents, without the prior written consent of all of the Secured Parties, the

Collateral Agent shall not release any security interest, lien or other

encumbrance on any of the Collateral granted in favor of the Collateral Agent on

behalf of the Secured Parties pursuant to the Security Documents and for which

it has accepted responsibility as Collateral Agent under Section 1(a) hereof;

provided,

-6-

<PAGE>

that the Collateral Agent shall release such Collateral with the prior written

consent of the Majority Lenders as long as all of the Collateral so released

during the term of this Agreement has an aggregate value (using the higher of

book value or market value for each item of Collateral) of less than $5,000,000.

(b) This Agreement may not be amended or modified unless in a writing

signed by the Collateral Agent and each of the Secured Parties.

modifications to this Agreement as all of the Secured Parties may direct and

(ii) to execute and deliver such amendments or modifications to the Security

Documents to which the Collateral Agent is a party as the Majority Lenders may

direct (except releases of Collateral and other actions which require a greater

percentage of Secured Parties); provided, however, that the Collateral Agent

shall not be obligated to execute any such amendment or modification the effect

of which is to increase the liabilities or duties of the Collateral Agent

hereunder or thereunder in any respect.

SECTION 5. DISCLAIMER, ETC.

(a) The Collateral Agent shall have no duties or responsibilities except

those expressly set forth in this Agreement and the Security Documents, and the

Collateral Agent shall not by reason of this Agreement or Security Documents be

a trustee for any Secured Party. The Collateral Agent in such capacity shall not

be responsible to the Secured Parties for any recitals, statements,

representations or warranties contained in this Agreement, any Security

Document, or in any certificate or other document referred to or provided for

therein, or for the value, validity, effectiveness, genuineness, enforceability

or sufficiency of this Agreement, any Security Document, or any other document

referred to or provided for herein or therein, or for any security interest,

lien or encumbrance granted to the Collateral Agent on behalf of the Secured

Parties or the perfection or priority of any such security interest, lien or

encumbrance, or for any failure by the Companies to perform any of their

obligations under any thereof. The Collateral Agent may employ agents and

attorneys-in-fact and shall not be responsible, except as to money or securities

received by it or its authorized agents, for the negligence or misconduct of any

such agents or attorneys-in-fact selected by it with reasonable care. -Neither

the Collateral Agent nor any of its directors, officers, employees or agents

shall be liable or responsible for any action taken or omitted to be taken by it

or any of them hereunder or in connection herewith, except for its or their own

gross negligence or willful misconduct.

(b) The Collateral Agent shall be entitled to rely upon any written

certification, notice or other communication reasonably believed by it to be

genuine and correct and to have been signed or sent by or on behalf of the

proper Person or Persons, and upon advice and statements of legal counsel,

independent accountants and other experts selected by the Collateral Agent with

reasonable care. As to any matters not expressly provided for by this Agreement,

the Collateral Agent shall in all cases be under no duty to act or refrain from

acting unless (i) it receives written instructions signed by the Majority

Lenders (unless otherwise provided herein) as to what actions should be taken or

refrained from being taken, which instructions and action taken or failure to

act pursuant thereto shall be binding on all of the Secured Parties, and the

Collateral Agent shall be protected with respect to actions taken or not taken

in accordance with such instructions, and (ii) it receives such further

assurances (which may include cash col

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates