<PAGE>

                                                                     EXHIBIT 4.3


                                 TBC CORPORATION
                             NOTE PURCHASE AGREEMENT




                                   $50,000,000

                   SERIES D VARIABLE RATE SENIOR SECURED NOTES
                               DUE APRIL 16, 2009













                            DATED AS OF APRIL 1, 2003

<PAGE>


                                TABLE OF CONTENTS
                             (not part of agreement)

<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----
<S>                                                                                                             <C>
1.    AUTHORIZATION OF NOTES......................................................................................1


2.    SALE AND PURCHASE OF NOTES..................................................................................1


3.    CONDITIONS OF CLOSING.......................................................................................2

   3.1.  CERTAIN DOCUMENTS........................................................................................2
   3.2.  COMPANY REPRESENTATIONS AND WARRANTIES; NO DEFAULT; ETC..................................................3
   3.3.  SUBSIDIARY REPRESENTATIONS AND WARRANTIES; NO DEFAULTS...................................................3
   3.4.  TRANSACTIONS PERMITTED BY APPLICABLE LAWS................................................................3
   3.5.  PAYMENT OF FEE...........................................................................................3
   3.6.  INTERCREDITOR AGREEMENT..................................................................................4
   3.7.  CREDIT AGREEMENT.........................................................................................4
   3.8.  GUARANTEE AND COLLATERAL AGREEMENT.......................................................................4
   3.9.  TENNESSEE PROPERTY MORTGAGE..............................................................................4
   3.10.    EVIDENCE OF FILING AND RECORDING, ETC.................................................................4
   3.11.    TERMINATION OF EXISTING CREDIT AGREEMENT..............................................................4
   3.12.    COPIES OF ENVIRONMENTAL AUDITS........................................................................4
   3.13.    CLEAR LIEN SEARCH REPORT..............................................................................5
   3.14.    RECEIPT BY COLLATERAL AGENT OF PLEDGED STOCK AND NOTES................................................5
   3.15.    CONSUMMATION OF ACQUISITION OF MERCHANT'S, INCORPORATED...............................................5
   3.16.    PRIVATE PLACEMENT NUMBERS.............................................................................5
   3.17.    EXPENSES..............................................................................................5
   3.18.    PROCEEDINGS SATISFACTORY..............................................................................5

4.    PREPAYMENTS.................................................................................................5

   4.1.  REQUIRED PREPAYMENTS OF NOTES............................................................................6
   4.2.  OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT........................................................6
   4.3.  NOTICE OF OPTIONAL PREPAYMENT............................................................................6
   4.4.  APPLICATION OF REQUIRED PREPAYMENTS......................................................................6
   4.5.  APPLICATION OF OPTIONAL PREPAYMENTS......................................................................7
   4.6.  NO ACQUISITION OF NOTES..................................................................................7
   4.7.  CHANGE IN CONTROL PREPAYMENT.............................................................................7
   4.8.  PREPAYMENT OF NOTES PURSUANT TO DEBT PREPAYMENT APPLICATION.............................................10

5.    AFFIRMATIVE COVENANTS......................................................................................11

   5.1.  FINANCIAL STATEMENTS; NOTICE OF DEFAULTS................................................................11
   5.2.  NOTICE OF CERTAIN MATERIAL EVENTS.......................................................................13
   5.3.  ERISA NOTICES...........................................................................................14
   5.4.  INFORMATION REQUIRED BY RULE 144A.......................................................................14
   5.5.  BOOKS AND RECORDS; INSPECTION OF PROPERTY...............................................................14
   5.6.  SUBSIDIARY GUARANTEES AND COLLATERAL....................................................................15
   5.7.  ENVIRONMENTAL LAWS......................................................................................16
   5.8.  ADDITIONAL COLLATERAL, ETC..............................................................................16
   5.9.  TITLE INSURANCE, FLOOD INSURANCE, ETC...................................................................17
   5.10.    MAINTENANCE OF INSURANCE.............................................................................19
   5.11.    MAINTENANCE OF PROPERTIES; COMPLIANCE WITH LAWS......................................................19
   5.12.    CORPORATE EXISTENCE, ETC.; BUSINESS..................................................................19
   5.13.    PAYMENT OF TAXES AND CLAIMS..........................................................................19
   5.14.    USE OF PROCEEDS......................................................................................20
   5.15.    INTERCOMPANY LOANS; PAYMENTS.........................................................................20
   5.16.    MAINTENANCE OF MOST FAVORED LENDER STATUS............................................................20
</TABLE>

<PAGE>


<TABLE>
<S>                                                                                                              <C>
6.    NEGATIVE COVENANTS.........................................................................................21

   6.1.  FINANCIAL COVENANTS.....................................................................................21
   6.2.  LIMITATION ON INDEBTEDNESS..............................................................................22
   6.3.  LIENS...................................................................................................24
   6.4.  FUNDAMENTAL CHANGES.....................................................................................25
   6.5.  INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS...............................................26
   6.6.  HEDGING AGREEMENTS......................................................................................27
   6.7.  TRANSACTIONS WITH AFFILIATES............................................................................27
   6.8.  RESTRICTIVE AGREEMENTS..................................................................................28
   6.9.  DISCLOSURE..............................................................................................28
   6.10.    SALE OF ASSETS.......................................................................................29
   6.11.    RESTRICTED PAYMENTS..................................................................................29

7.    EVENTS OF DEFAULT..........................................................................................30

   7.1.  ACCELERATION............................................................................................30
   7.2.  RESCISSION OF ACCELERATION..............................................................................34
   7.3.  NOTICE OF ACCELERATION OR RESCISSION....................................................................34
   7.4.  OTHER REMEDIES..........................................................................................34

8.    REPRESENTATIONS, COVENANTS AND WARRANTIES..................................................................34

   8.1.  ORGANIZATION............................................................................................35
   8.2.  FINANCIAL STATEMENTS....................................................................................35
   8.3.  ACTIONS PENDING.........................................................................................35
   8.4.  OUTSTANDING INDEBTEDNESS................................................................................35
   8.5.  TITLE TO PROPERTIES.....................................................................................36
   8.6.  TAXES...................................................................................................36
   8.7.  CONFLICTING AGREEMENTS AND OTHER MATTERS................................................................36
   8.8.  OFFERING OF NOTES.......................................................................................36
   8.9.  MARGIN SECURITIES.......................................................................................37
   8.10.    ERISA................................................................................................37
   8.11.    GOVERNMENTAL CONSENT.................................................................................37
   8.12.    ENVIRONMENTAL COMPLIANCE.............................................................................38
   8.13.    DISCLOSURE...........................................................................................38
   8.14.    TRADEMARKS; TRADENAMES, ETC..........................................................................38
   8.15.    STATUS UNDER CERTAIN STATUTES........................................................................38
   8.16.    ANTI-TERRORISM ORDER.................................................................................38

9.    REPRESENTATIONS OF THE PURCHASERS..........................................................................39

   9.1.  NATURE OF PURCHASE......................................................................................39
   9.2.  SOURCE OF FUNDS.........................................................................................39

10.   DEFINITIONS; ACCOUNTING MATTERS............................................................................41

   10.1.    YIELD-MAINTENANCE TERMS..............................................................................41
   10.2.    OTHER DEFINED TERMS..................................................................................42
   10.3.    ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS......................................................57

11.   MISCELLANEOUS..............................................................................................57

   11.1.    NOTE PAYMENTS........................................................................................58
   11.2.    EXPENSES.............................................................................................58
   11.3.    CONSENT TO AMENDMENTS................................................................................58
   11.4.    FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES.......................................59
   11.5.    PERSONS DEEMED OWNERS; PARTICIPATIONS................................................................60
   11.6.    SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.........................................60
   11.7.    SUCCESSORS AND ASSIGNS...............................................................................60
</TABLE>


                                       ii

<PAGE>

<TABLE>
<S>                                                                                                              <C>
   11.8.    INDEPENDENCE OF COVENANTS; SEVERABILITY; DESCRIPTIVE HEADINGS........................................60
   11.9.    NOTICES..............................................................................................61
   11.10.   PAYMENTS DUE ON NON-BUSINESS DAYS....................................................................61
   11.11.   MINIMUM INTEREST PAYABLE.............................................................................61
   11.12.   CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES........................................................62
   11.13.   SATISFACTION REQUIREMENT.............................................................................62
   11.14.   GOVERNING LAW........................................................................................63
   11.15.   COUNTERPARTS.........................................................................................63
   11.16.   BINDING AGREEMENT....................................................................................63
</TABLE>


Schedules and Exhibits

Purchaser Schedule


SCHEDULE 5.15     --       Intercompany Loans
SCHEDULE 6.2(b)   --       Existing Indebtedness and Guarantees
SCHEDULE 6.2(e)   --       Guarantees of Big O and its Subsidiaries
SCHEDULE 6.3      --       Existing Liens
SCHEDULE 6.5(b)   --       Existing Investments
SCHEDULE 6.8      --       Restrictive Agreements
SCHEDULE 6.10     --       Certain Dispositions of Assets
SCHEDULE 8.7      --       Conflicting Agreements
SCHEDULE 8.14     --       Trademarks, Tradenames, etc.

Exhibit 1         --       Form of Senior Secured Note
Exhibit 3.5       --       Closing Fees
Exhibit 3.6       --       Form of Intercreditor Agreement
Exhibit 3.8       --       Form of Guarantee and Collateral Agreement
Exhibit 3.9       --       Form of Tennessee Property Mortgage


                                      iii

<PAGE>

                                 TBC CORPORATION
                             4770 HICKORY HILL ROAD
                            MEMPHIS, TENNESSEE 38141
         SERIES D VARIABLE RATE SENIOR SECURED NOTES DUE APRIL 16, 2009

                                                             As of April 1, 2003

To the Purchasers listed on the
Attached Schedule A (the "PURCHASERS")

Ladies and Gentlemen:

         The undersigned, TBC CORPORATION (herein called the "COMPANY"), hereby
agrees with you as follows:

1.       AUTHORIZATION OF NOTES.

         The Company will authorize the issue and sale of $50,000,000 aggregate
principal amount of its Series D Variable Rate Senior Secured Notes due April
16, 2009 (the "NOTES", such term to include any such notes issued in
substitution therefor pursuant to Section 11.4 of this Agreement). The Notes
shall be substantially in the form set out in Exhibit l, with such changes
therefrom, if any, as may be approved by the Purchasers and the Company. Certain
capitalized terms used in this Agreement are defined in Section 10; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement; references to Sections are, unless
otherwise specified, references to Sections of this Agreement.

2.       SALE AND PURCHASE OF NOTES.

         Subject to the terms and conditions of this Agreement, the Company will
issue and sell to the Purchasers and the Purchasers will purchase from the
Company, at the Closing provided for in this Section 2, Notes in the principal
amount specified in the Purchaser Schedule attached hereto at the purchase price
of 100% of the principal amount thereof. The sale and purchase of the Notes to
be purchased by the Purchasers shall occur at the offices of Bingham McCutchen
LLP, One State Street, Hartford, Connecticut, USA 06103 at 10:00 a.m., local
time, at a closing (the "CLOSING") on April 16, 2003 or on such other Business
Day thereafter as may be agreed upon by the Company and the Purchasers. At the
Closing, the Company will deliver to each Purchaser the Notes to be purchased by
such Purchaser in the form of a single Note (or such greater number of Notes in
denominations of at least $100,000 as such Purchaser may request), dated the
date of the Closing and registered in such Purchaser's name (or in the name of
such Purchaser's nominee), against payment by such Purchaser to the Company or
its order of immediately available funds in the amount of the purchase price
therefor


<PAGE>

by wire transfer of immediately available funds for the account of the Company
as specified in writing to the Purchasers at least 2 Business Days prior to the
date of the Closing. If at the Closing the Company shall fail to tender such
Notes to the Purchasers as provided above in this Section 2, or any of the
conditions specified in Section 3 shall not have been fulfilled to the
Purchasers' satisfaction, the Purchasers shall, at their election, be relieved
of all further obligations under this Agreement, without thereby waiving any
rights it may have by reason of such failure or such nonfulfillment.

3.       CONDITIONS OF CLOSING.

         The obligation of the Purchasers to purchase and pay for the Notes to
be sold to them at the Closing is subject to the fulfillment to its satisfaction
of the following conditions:

         3.1.     CERTAIN DOCUMENTS. Each Purchaser shall have received the
         following:

                  (a)      Certified copies of the resolutions of the Board of
         Directors of the Company authorizing the execution and delivery of this
         Agreement, the Notes, the Guarantee and Collateral Agreement and the
         Tennessee Property Mortgage and all documents evidencing other
         necessary corporate action and governmental approvals, if any, with
         respect to such agreements and instruments.

                  (b)      Certified copies of the resolutions of the Board of
         Directors or its equivalent of each of Big O, Tire Kingdom, Big O Tire
         of Idaho, Inc., Carroll's, Inc., Big O Development, Inc., Big O Retail
         Enterprises, Inc., Northern States Tire, Inc., O Advertising, Inc., TBC
         International Inc., TBC Retail Enterprises, Inc., TBC Brands, LLC, TBC
         Capital, LLC, Merchant's, Incorporated and Merban, Inc. (the "CLOSING
         DATE SUBSIDIARY OBLIGORS") authorizing the execution and delivery of
         the Guarantee and Collateral Agreement and all documents evidencing
         other necessary action and governmental approvals, if any, with respect
         to such documents.

                  (c)      A certificate of the Secretary or an Assistant
         Secretary and one other officer of each of the Company and the Closing
         Date Subsidiary Obligors certifying the names and true signatures of
         the officers of the Company and each Closing Date Subsidiary Obligor,
         as the case may be, authorized to execute the Financing Documents to
         which it is a party and the other documents to be delivered by it
         hereunder.

                  (d)      Certified copies of the Certificate of Incorporation
         and By-laws of each of the Company and the Closing Date Subsidiary
         Obligors.


                                       2
<PAGE>

                  (e)      A favorable opinion of Thompson Hine LLP, counsel to
         the Company, in form and substance satisfactory to the Purchasers. The
         Company hereby directs such counsel to deliver such opinion and
         understands and agrees that the Purchasers will and are hereby
         authorized to rely on such opinion.

                  (f)      A favorable opinion of Bingham McCutchen LLP, special
         counsel to the Purchasers, in form and substance satisfactory to the
         Purchasers.

                  (g)      A good standing certificate for each of the Company
         and the Closing Date Subsidiary Obligors from the Secretary of State of
         its state of organization dated of a recent date and such other
         evidence of the status of the Company and each Subsidiary Obligor as
         the Purchasers may reasonably request.

                  (h)      Additional documents or certificates with respect to
         legal matters or corporate or other proceedings related to the
         transactions contemplated hereby as may be reasonably requested by the
         Purchasers.

         3.2.     COMPANY REPRESENTATIONS AND WARRANTIES; NO DEFAULT; ETC. The
representations and warranties contained in Section 8 and in the Guarantee and
Collateral Agreement shall be true on and as of the date of the Closing. There
shall exist on the date of the Closing no Event of Default or Default (after
giving effect to this Agreement); and the Company shall have delivered to each
Purchaser an Officer's Certificate, dated the date of the Closing, to both such
effects.

         3.3.     SUBSIDIARY REPRESENTATIONS AND WARRANTIES; NO DEFAULTS. The
representations and warranties in the Guarantee and Collateral Agreement made by
each Subsidiary party thereto shall be true on and as of the date of the
Closing.

         3.4.     TRANSACTIONS PERMITTED BY APPLICABLE LAWS. On the date of the
Closing the purchase of Notes by the Purchasers shall (i) be permitted by the
laws and regulations of each jurisdiction to which any Purchaser is subject,
without recourse to provisions (such as Section 1405(a)(8) of the New York
Insurance Law) permitting limited investments by insurance companies without
restriction as to the character of the particular investment, (ii) not violate
any applicable law or regulation (including, without limitation, Section 5 of
the Securities Act, Regulation T, U or X of the Board of Governors of the
Federal Reserve System) and (iii) not subject the Purchasers to any tax, penalty
or liability under or pursuant to any applicable law or regulation, which law or
regulation was not in effect on the date hereof. Each Purchaser shall have
received such certificates or other evidence as it may request to establish
compliance with this Section.

         3.5.     PAYMENT OF FEE. The Company shall have paid to each Purchaser,
as consideration for the financial accommodations made available by such
Purchaser


                                       3
<PAGE>

pursuant hereto, a fee (the "CLOSING FEE") equal to the amount set forth
opposite the name of such Purchaser in the table set forth on Exhibit 3.5. The
Closing Fee shall have been paid in immediately available funds to the account
of such Purchaser as specified in the Purchaser Schedule.

         3.6.     INTERCREDITOR AGREEMENT. The Purchasers and each lending
institution party to the Credit Agreement shall have executed and delivered (in
each capacity in which it is a party to the Credit Agreement) an intercreditor
agreement (the "INTERCREDITOR AGREEMENT") in the form of Exhibit 3.6 hereto.

         3.7.     CREDIT AGREEMENT. The Credit Agreement shall have been
executed and delivered by all parties thereto, and the Company shall have
delivered to each Purchaser a copy of the executed Credit Agreement, together
with an Officer's Certificate certifying that such copy is true, correct and
complete.

         3.8.     GUARANTEE AND COLLATERAL AGREEMENT. Each Purchaser shall have
received an originally executed counterpart of the Guarantee and Collateral
Agreement, dated as of the date hereof, together with all schedules and exhibits
thereto, entered into by the Company and the Closing Date Subsidiary Obligors,
in the form attached hereto as Exhibit 3.8 (the "GUARANTEE AND COLLATERAL
AGREEMENT").

         3.9.     TENNESSEE PROPERTY MORTGAGE. Each Purchaser shall have
received a copy of the originally executed Tennessee Property Mortgage, in the
form attached hereto as Exhibit 3.9.

         3.10.    EVIDENCE OF FILING AND RECORDING, ETC. Each Purchaser shall
have received evidence satisfactory to it that all UCC-1 Financing Statements
have been properly filed in each jurisdiction or location where such filing or
recording is appropriate in the reasonable judgment of the Purchasers and their
special counsel, and that such filings are sufficient to perfect a valid, first
priority Lien (subject in each case to any Liens permitted by Section 6.3) in
the collateral to which they relate.

         3.11.    TERMINATION OF EXISTING CREDIT AGREEMENT.

         Each Purchaser shall have received evidence satisfactory to it that the
Existing Credit Agreement has been terminated and that the indebtedness incurred
by the Company and its Subsidiaries under and pursuant thereto has been
satisfied in full.

         3.12.    COPIES OF ENVIRONMENTAL AUDITS.

         The Purchasers' special counsel shall have received, on behalf of the
Purchasers, (i) copies of all existing environmental audits with respect to the
real


                                       4
<PAGE>

properties which are part of the Merchant's Acquisition and any other Person the
acquisition of which is to be financed with proceeds from the sale of the Notes
and (ii) any other existing environmental audits requested by the Purchasers.

         3.13.    CLEAR LIEN SEARCH REPORT.

         The Purchasers' special counsel shall have received, on behalf of the
Purchasers, the results of a recent Lien search in each of the jurisdictions
where assets of the Company and each Subsidiary (including Merchant's,
Incorporated and Merban, Inc.) are located, and such search shall reveal no
Liens on any of the assets of the Company or any Subsidiary except for Liens
permitted by Section 6.3 or discharged on or prior to the date of the Closing
pursuant to documentation satisfactory to the Purchasers.

         3.14.    RECEIPT BY COLLATERAL AGENT OF PLEDGED STOCK AND NOTES.

         The Purchasers shall have received evidence reasonably satisfactory to
them that the Collateral Agent has received (i) the certificates representing
the shares of Capital Stock pledged pursuant to the Guarantee and Collateral
Agreement, together with an undated stock power for each such certificate
executed in blank by a duly authorized officer of the pledgor thereof, and (ii)
each promissory note (if any) pledged to the Collateral Agent pursuant to the
Guarantee and Collateral Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank) by the pledgor thereof.

         3.15.    CONSUMMATION OF ACQUISITION OF MERCHANT'S, INCORPORATED.

         The Merchant's Acquisition shall have been consummated on the terms and
conditions set forth in the Merchant's Acquisition Documentation.

         3.16.    PRIVATE PLACEMENT NUMBERS. The Company shall have obtained or
caused to be obtained private placement numbers for the Notes from CUSIP Service
Bureau of Standard & Poor's, a division of McGraw-Hill, Inc., and the Purchasers
shall have been informed of such private placement numbers.

         3.17.    EXPENSES. All fees and disbursements required to be paid
pursuant to Section 11.2 hereof shall have been paid in full.

         3.18.    PROCEEDINGS SATISFACTORY. All proceedings taken in connection
with this Agreement and all documents and papers relating thereto shall be
satisfactory to the Purchasers and their special counsel. The Purchasers and
their special counsel shall have received copies of such documents and papers as
it or they may reasonably request in connection therewith, all in form and
substance satisfactory to the Purchasers and their special counsel.

4.       PREPAYMENTS.


                                       5
<PAGE>

         The Notes shall be subject to required prepayment as and to the extent
provided in Section 4.1. The Notes shall also be subject to prepayment under the
circumstances set forth in Section 4.2, Section 4.7 and Section 4.8; provided,
however, that any such prepayment shall not reduce or otherwise affect the
Company's obligation to make any required prepayment as specified in Section
4.1.

         4.1.     REQUIRED PREPAYMENTS OF NOTES. The Company shall apply to the
prepayment of the Notes, without Yield-Maintenance Amount, the sum of $5,000,000
on April 16, 2007, and the sum of $20,000,000 on April 16, 2008, and such
principal amounts of the Notes, together with interest thereon to the payment
dates, shall become due on such payment dates. The remaining unpaid principal
amount of the Notes, together with interest accrued thereon, shall become due on
the maturity date of the Notes.

         4.2.     OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. The Notes
shall be subject to prepayment, in whole at any time or from time to time in
part (in integral multiples of $100,000 and in a minimum amount of $1,000,000),
at the option of the Company, at 100% of the principal amount so prepaid plus
interest thereon to the prepayment date and the Yield-Maintenance Amount, if
any, with respect to each such Note. Any partial prepayment of the Notes
pursuant to this Section 4.2 shall be applied in satisfaction of required
payments of principal in inverse order of their scheduled due dates.

         4.3.     NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the
holder of each Note to be prepaid pursuant to Section 4.2 irrevocable written
notice of such prepayment not less than 10 Business Days prior to the prepayment
date, specifying such prepayment date, the aggregate principal amount of the
Notes to be prepaid on such date, the principal amount of the Notes held by such
holder to be prepaid on that date and that such prepayment is to be made
pursuant to Section 4.2. Notice of prepayment having been given as aforesaid,
the principal amount of the Notes specified in such notice, together with
interest thereon to the prepayment date and together with the Yield-Maintenance
Amount, if any, herein provided, shall become due and payable on such prepayment
date. The Company shall, on or before the day on which it gives written notice
of any prepayment pursuant to Section 4.2, give telephonic notice of the
principal amount of the Notes to be prepaid and the prepayment date to each
Significant Holder which shall have designated a recipient for such notices in
the Purchaser Schedule attached hereto.

         4.4.     APPLICATION OF REQUIRED PREPAYMENTS. In the case of each
prepayment of less than the entire unpaid principal amount of all outstanding
Notes pursuant to Section 4.1, the amount to be prepaid shall be applied pro
rata to all outstanding Notes (including, for the purpose of this Section 4.4
only, all Notes prepaid or otherwise retired or purchased or otherwise acquired
by the Company or any of its Subsidiaries or Affiliates other than by prepayment
pursuant to Section 4.1 or 4.2) according to the respective unpaid principal
amounts thereof.


                                       6
<PAGE>

         4.5.     APPLICATION OF OPTIONAL PREPAYMENTS. In the case of each
prepayment pursuant to Section 4.2 of less than the entire unpaid principal
amount of all outstanding Notes, the amount to be prepaid shall be applied pro
rata to all outstanding Notes (including, for the purpose of this Section 4.5
only, all Notes prepaid or otherwise retired or purchased or otherwise acquired
by the Company or any of its Subsidiaries or Affiliates other than by prepayment
pursuant to Section 4.1 or 4.2) according to the respective unpaid principal
amounts thereof.

         4.6.     NO ACQUISITION OF NOTES. The Company shall not, and shall not
permit any of its Subsidiaries or Affiliates to, prepay or otherwise retire in
whole or in part prior to their stated final maturity (other than by prepayment
pursuant to Section 4.1 or 4.2 or upon acceleration of such final maturity
pursuant to Section 7.1), or purchase or otherwise acquire, directly or
indirectly, Notes held by any holder.

         4.7.     CHANGE IN CONTROL PREPAYMENT.

                  (A)      NOTICE OF CHANGE IN CONTROL OR CONTROL EVENT. The
         Company will, within three Business Days after any Responsible Officer
         has knowledge of the occurrence of any Change in Control or Control
         Event, give written notice of such Change in Control or Control Event
         (including a description of the terms thereof in sufficient detail to
         enable a holder of Notes to evaluate the merits thereof) to each holder
         of Notes unless notice in respect of such Change in Control (or the
         Change in Control contemplated by such Control Event) shall have been
         given pursuant to Section 4.7(b). If a Change in Control has occurred,
         such notice shall contain and constitute an offer to prepay Notes as
         described in Section 4.7(c) and shall be accompanied by the certificate
         described in Section 4.7(g).

                  (B)      CONDITION TO COMPANY ACTION. The Company will not
         take any action that consummates or finalizes a Change in Control
         unless

                           (i)      at least 30 days prior to such action it
                  shall have given to each holder of Notes written notice
                  (including a description of the terms of such Change in
                  Control in sufficient detail to enable a holder of Notes to
                  evaluate the merits thereof) containing and constituting an
                  offer to prepay Notes as described in Section 4.7(c),
                  accompanied by the certificate described in Section 4.7(g),
                  and

                           (ii)     contemporaneously with consummating or
                  finalizing the Change in Control, it prepays all Notes
                  required to be prepaid in accordance with this Section 4.7.

                  (C)      OFFER TO PREPAY NOTES. The offer to prepay Notes
         contemplated by Section 4.7(a) and Section 4.7(b) shall be an offer to
         prepay,


                                       7
<PAGE>

         in accordance with and subject to this Section 4.7, all, but not less
         than all, the Notes held by each holder (in this case only, "holder" in
         respect of any Note registered in the name of a nominee for a disclosed
         beneficial owner shall mean such beneficial owner) on a date specified
         in such offer (the "PROPOSED PREPAYMENT DATE"). If such Proposed
         Prepayment Date is in connection with an offer contemplated by Section
         4.7(a), such date shall be not less than 30 days and not more than 60
         days after the date of such offer (if the Proposed Prepayment Date
         shall not be specified in such offer, the Proposed Prepayment Date
         shall be the 30th day after the date of such offer).

                  (D)      ACCEPTANCE. A holder of Notes may accept the offer to
         prepay made pursuant to this Section 4.7 by causing a notice of such
         acceptance to be delivered to the Company at least 5 days prior to the
         Proposed Prepayment Date. A failure by a holder of Notes to respond to
         an offer to prepay made pursuant to this Section 4.7 shall be deemed to
         constitute an acceptance of such offer by such holder.

                  (E)      PREPAYMENT.

                           (i)      If no Default or Event of Default exists and
                  is continuing on the date prepayment is made pursuant to this
                  Section 4.7, prepayment of the Notes to be prepaid pursuant to
                  this Section 4.7 shall be at 100% of the principal amount of
                  such Notes, together with interest on such Notes accrued to
                  the date of prepayment.

                           (ii)     If a Default or Event of Default exists and
                  is continuing on the date prepayment is made under this
                  Section 4.7, prepayment of the Notes to be prepaid under this
                  Section 4.7 shall be at 100% of the principal amount of such
                  Notes, plus the Yield-Maintenance Amount determined for the
                  date of prepayment with respect to such principal amount,
                  together with interest on such Notes accrued to the date of
                  prepayment. On the Business Day preceding the date of
                  prepayment in accordance with this Section 4.7(e)(ii), the
                  Company shall deliver to each holder of Notes being prepaid a
                  statement showing the Yield-Maintenance Amount due in
                  connection with such prepayment and setting forth the details
                  of the computation of such amount.

         Prepayment shall be made on the Proposed Prepayment Date except as
         provided in Section 4.7(f).

                  (F)      DEFERRAL OF OBLIGATION TO PURCHASE. The obligation of
         the Company to prepay Notes pursuant to the offers accepted in
         accordance with Section 4.7(d) is subject to the occurrence of the
         Change in Control in respect of which such offers and acceptances shall
         have been made. In the event that such Change in Control does not occur
         on or before the Proposed Prepayment


                                       8
<PAGE>

         Date in respect thereof, the prepayment shall be deferred until and
         shall be made on the date on which such Change in Control occurs. The
         Company shall keep each holder of Notes reasonably and timely informed
         of

                           (i)      any such deferral of the date of prepayment,

                           (ii)     the date on which such Change in Control and
                  the prepayment are expected to occur, and

                           (iii)    any determination by the Company that
                  efforts to effect such Change in Control have ceased or been
                  abandoned (in which case the offers and acceptances made
                  pursuant to this Section 4.7 in respect of such Change in
                  Control shall be deemed rescinded).

Notwithstanding the foregoing, in the event that any Change in Control does not
occur within ninety (90) days of the Proposed Prepayment Date in respect
thereof, any holder of Notes may, upon written notice to the Company, rescind
its acceptance of an offer made pursuant to this Section 4.7 in respect of such
Change in Control.

                  (G)      OFFICER'S CERTIFICATE. Each offer to prepay the Notes
         pursuant to this Section 4.7 shall be accompanied by a certificate,
         executed by a Responsible Officer of the Company and dated the date of
         such offer, specifying:

                           (i)      the Proposed Prepayment Date;

                           (ii)     that such offer is made pursuant to this
                  Section 4.7;

                           (iii)    the principal amount of each Note offered to
                  be prepaid;

                           (iv)     the last date upon which the offer can be
                  accepted or rejected, and setting forth the consequences of
                  failing to provide an acceptance or rejection, as provided in
                  Section 4.7(d);

                           (v)      whether a Default or Event of Default exists
                  and is continuing, or is expected to exist and be continuing
                  on the Proposed Prepayment Date, and the nature and duration
                  of any such existing or projected Default or Event of Default
                  together with calculations (if applicable) in reasonable
                  detail used in determining that such Default or Event of
                  Default exists or is projected to exist;

                           (vi)     if a Default or Event of Default is
                  projected to exist and be continuing on the Proposed
                  Prepayment Date, the estimated Yield-Maintenance Amount, if
                  any, due in connection with such prepayment


                                       9
<PAGE>

                  (calculated as if the date of such notice were the date of the
                  prepayment), setting forth the details of such computation;

                           (vii)    the interest that would be due on each Note
                  offered to be prepaid, accrued to the Proposed Prepayment
                  Date;

                           (viii)   that the conditions of this Section 4.7 have
                  been fulfilled; and

                           (ix)     in reasonable detail, the nature and date or
                  proposed date of the Change in Control.

         The amount of each payment of the principal of the Notes made pursuant
         to this Section 4.7 shall be applied against and reduce each of the
         then remaining principal payments due pursuant to Section 4.7 by a
         percentage equal to the aggregate principal amount of the Notes so paid
         divided by the aggregate principal amount of the Notes outstanding
         immediately prior to such payment.

         4.8.     PREPAYMENT OF NOTES PURSUANT TO DEBT PREPAYMENT APPLICATION.

                  (A)      ASSET SALE PROCEEDS NOTICE. In the event that and on
         each occasion on which any Net Proceeds are received by or on behalf of
         the Company or any Subsidiary in respect of any Prepayment Event, the
         Company shall, within three Business Days after such Net Proceeds are
         received, deliver a written notice (each, an "ASSET SALE PROCEEDS
         NOTICE") to each holder of Notes (i) stating the aggregate amount of
         Net Proceeds received by the Company or such Subsidiary and the ratable
         portion of each Note being offered to be prepaid (determined in
         accordance with clause (c)(i) below), (ii) specifying a date, not less
         than 10 days and not greater than 20 days from the date of such notice
         (the "PROCEEDS DISPOSITION DATE") on which such Net Proceeds are to be
         applied to the payment of Indebtedness, (iii) containing a brief
         description in reasonable detail of the transaction from which such Net
         Proceeds were derived, and (iv) containing an offer to prepay the Notes
         in accordance with clause (c)(ii) below (each, a "PREPAYMENT OFFER").

                  (B)      ACCEPTANCE OF PREPAYMENT OFFER. Each holder of a Note
         shall promptly notify the Company of such holder's acceptance or
         rejection of any Prepayment Offer; provided, however, that any such
         holder shall be deemed to have accepted such Prepayment Offer if it
         fails to so notify the Company prior to the disposition of Net Proceeds
         on the Proceeds Disposition Date in respect of such Prepayment Offer.



                                       10
<PAGE>

                  (C)      PREPAYMENT.

                           (i)      Such Asset Sale Proceeds Notice having been
                  so given, the Company shall prepay the principal of the Notes
                  and the 1996 Notes as to which acceptances (or deemed
                  acceptences) of prepayment offers have been received
                  (collectively, the "ACCEPTED NOTES"), together with the Bank
                  Term Loans, on the Proceeds Disposition Date in an aggregate
                  amount equal to such Net Proceeds (or such portion of such Net
                  Proceeds as shall equal the aggregate principal amount of all
                  Accepted Notes and Bank Term Loans, if the amount of such Net
                  Proceeds is greater than such aggregate principal amount). The
                  amount to be applied to such prepayment shall be applied (x)
                  to each Bank Term Loan and the Accepted Notes, pro rata in the
                  same proportions as the then balance of each Bank Term Loan
                  and Accepted Note bears to the total balance of all Bank Term
                  Loans plus the Accepted Notes and (xx) with respect to each,
                  to the latest maturing installments thereof.

                           (ii)     (A) If no Default or Event of Default exists
                  and is continuing on the date prepayment is made pursuant to
                  this Section 4.8, prepayment of the Notes to be prepaid
                  pursuant to this Section 4.8 shall be at 100% of the principal
                  amount of such Notes, together with interest on such Notes
                  accrued to the date of prepayment.

                                    (B) If a Default or Event of Default exists
                           and is continuing on the date prepayment is made
                           under this Section 4.8, prepayment of the Notes to be
                           prepaid under this Section 4.8 shall be at 100% of
                           the principal amount of such Notes, plus the
                           Yield-Maintenance Amount determined for the date of
                           prepayment with respect to such principal amount,
                           together with interest on such Notes accrued to the
                           date of prepayment. On the Business Day preceding the
                           date of prepayment, the Company shall deliver to each
                           holder of Notes being prepaid a statement showing the
                           Yield-Maintenance Amount due in connection with such
                           prepayment and setting forth the details of the
                           computation of such amount.

5.       AFFIRMATIVE COVENANTS.

         The Company covenants that on and after the date hereof and so long as
any of the Notes shall be outstanding:

         5.1.     FINANCIAL STATEMENTS; NOTICE OF DEFAULTS. The Company
covenants that it will deliver to each holder of any Notes in duplicate:


                                       11
<PAGE>

                  (a)      as soon as practicable and in any event within 45
         days after the end of each Fiscal Quarter (other than the Fiscal
         Quarter ending in December), consolidating and consolidated statements
         of income and cash flows and a consolidated statement of shareholders'
         equity of the Company and its Subsidiaries for the period from the
         beginning of the current Fiscal Year to the end of such Fiscal Quarter,
         and a consolidating and consolidated balance sheet of the Company and
         its Subsidiaries as at the end of such Fiscal Quarter, setting forth in
         each case in comparative form figures for the corresponding period in
         the preceding fiscal year, all in reasonable detail and certified by an
         authorized financial officer of the Company, subject to changes
         resulting from year-end adjustments; provided, however, that delivery
         pursuant to clause (c) below of copies of the Quarterly Report on Form
         10-Q of the Company for such quarterly period filed with the Securities
         and Exchange Commission shall be deemed to satisfy the requirements of
         this clause (a) with respect to consolidated statements;

                  (b)      as soon as practicable and in any event within 90
         days after the end of each Fiscal Year, consolidating and consolidated
         statements of income and cash flows and a consolidated statement of
         shareholders' equity of the Company and its Subsidiaries for such year,
         and a consolidating and consolidated balance sheet of the Company and
         its Subsidiaries as at the end of such year, setting forth in each case
         in comparative form corresponding consolidated figures from the
         preceding annual audit, all in reasonable detail and satisfactory in
         form to the Required Holder(s) and, as to the consolidated statements,
         reported on by independent public accountants of recognized national
         standing selected by the Company whose report shall be without
         limitation as to scope of the audit and satisfactory in substance to
         the Required Holder(s) and, as to the consolidating statements,
         certified by an authorized financial officer of the Company; provided,
         however, that delivery pursuant to clause (c) below of copies of the
         Annual Report on Form 10-K of the Company for such Fiscal Year filed
         with the Securities and Exchange Commission shall be deemed to satisfy
         the requirements of this clause (b) with respect to consolidated
         statements;

                  (c)      promptly upon transmission thereof, copies of all
         such financial statements, proxy statements, notices and reports as it
         shall send to its public stockholders and copies of all registration
         statements (without exhibits) and all reports which it files with the
         Securities and Exchange Commission (or any governmental body or agency
         succeeding to the functions of the Securities and Exchange Commission);

                  (d)      promptly upon receipt thereof, a copy of each other
         report submitted to the Company or any Subsidiary by independent
         accountants in


                                       12
<PAGE>

         connection with any annual, interim or special audit made by them of
         the books of the Company or any Subsidiary; and

                  (e)      with reasonable promptness, such other financial data
         as such holder may reasonably request.

         Together with each delivery of financial statements required by clauses
(a) and (b) above, the Company will deliver to each holder of any Notes an
Officer's Certificate demonstrating (with computations in reasonable detail)
compliance by the Company and its Subsidiaries with the provisions of Sections
6.1(a) through (d) and stating (i) that there exists no Event of Default or
Default, or, if any Event of Default or Default exists, specifying the nature
and period of existence thereof and what action the Company proposes to take
with respect thereto, and (ii) whether any change in GAAP or in the application
thereof has occurred since the date of the audited financial statements referred
to in Section 8.2 and, if any such change has occurred, specifying the effect of
such change on the financial statements accompanying such Officer's Certificate.
Together with each delivery of financial statements required by clause (b)
above, the Company will deliver to each holder of any Notes a certificate of the
accountants referred to in such clause stating that, in making the audit
necessary for their report on such financial statements, they have obtained no
knowledge of any Event of Default or Default, or, if they have obtained
knowledge of any Event of Default or Default, specifying the nature and period
of existence thereof. Such accountants, however, shall not be liable to anyone
by reason of their failure to obtain knowledge of any Event of Default or
Default which would not be disclosed in the course of an audit conducted in
accordance with generally accepted auditing standards.

         5.2.     NOTICE OF CERTAIN MATERIAL EVENTS. The Company will furnish to
each holder of Notes written notice of the following as soon as practicable and
in any event no later than the Business Day immediately following any day on
which any Responsible Officer obtains knowledge thereof:

                  (a)      the existence of any Default or Event of Default;

                  (b)      the filing or commencement of any action, suit or
         proceeding by or before any arbitrator or Governmental Authority
         against or affecting the Company or any Subsidiary or Affiliate thereof
         that, if adversely determined, could reasonably be expected to result
         in a Material Adverse Effect; and

                  (c)      any other development that results in, or could
         reasonably be expected to result in, a Material Adverse Effect.

         Each notice delivered under this Section 5.2 shall be accompanied by an
Officer's Certificate setting forth the nature and period of existence of such
event or development and what action the Company has taken or proposes to take
with


                                       13
<PAGE>

respect thereto.

         5.3.     ERISA NOTICES. In the event it or any Subsidiary has
participated, now participates or will participate in any Plan or Multiemployer
Plan, the Company covenants that it and any such Subsidiary will deliver to each
holder of any Note: (a) promptly and in any event within 10 days after it knows
or has reason to know of the occurrence of a reportable event (as defined in
section 4043(b) of ERISA and the regulations thereunder) with respect to a Plan,
a copy of any materials required to be filed with the PBGC with respect to such
reportable event, together with a statement of the chief financial officer of
the Company setting forth details as to such reportable event and the action
which the Company proposes to take with respect thereto; (b) at least 10 days
prior to the filing by any plan administrator of a Plan which is a defined
benefit plan subject to Title IV of ERISA of a notice of intent to terminate
such Plan, a copy of such notice; (c) promptly upon the reasonable request of a
Significant Holder, and in no event more than 10 days after such request, copies
of each annual report on Form 5500 that is filed with the Internal Revenue
Service, together with certified financial statements for the Plan (if any) as
of the end of such year and actuarial statements on Schedule B to such Form
5500; (d) promptly and in any event within 10 days after it knows or has reason
to know of any event or condition which might constitute grounds under section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, a statement of the chief financial officer of the Company
describing such event or condition; (e) promptly and in no event more than 10
days after its or any ERISA Affiliate's receipt thereof, a copy of any notice
concerning the imposition of any withdrawal liability under section 4202 of
ERISA; and (f) promptly after receipt thereof, a copy of any notice the Company
or any ERISA Affiliate may receive from the PBGC or the Internal Revenue Service
with respect to any Plan or Multiemployer Plan; provided, however, that this
Section 5.3 shall not apply to notices of general application promulgated by the
PBGC or the Internal Revenue Service.

         5.4.     INFORMATION REQUIRED BY RULE 144A. The Company covenants that
it will, upon the request of the holder of any Note, provide such holder, and
any qualified institutional buyer designated by such holder, such financial and
other information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule 144A under
the Securities Act in connection with the resale of Notes, except at such times
as the Company is subject to and in compliance with the reporting requirements
of section 13 or 15(d) of the Exchange Act. For the purpose of this Section 5.4,
the term "QUALIFIED INSTITUTIONAL BUYER" shall have the meaning specified in
Rule 144A under the Securities Act.

         5.5.     BOOKS AND RECORDS; INSPECTION OF PROPERTY. The Company will,
and will cause each of its Subsidiaries to, keep proper books of record and
account in


                                       14
<PAGE>

which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities. The Company covenants that it will
permit any Person designated by any Significant Holder in writing, at such
Significant Holder's expense, to visit and inspect any of the properties of the
Company and its Subsidiaries, to examine the corporate books and financial
records of the Company and its Subsidiaries and make copies thereof or extracts
therefrom and to discuss the affairs, finances and accounts of any of such
corporations with the principal officers of the Company and its independent
public accountants, all at such reasonable times and as often as such
Significant Holder may reasonably request.

         5.6.     SUBSIDIARY GUARANTEES AND COLLATERAL.

                  (a)      With respect to any new Subsidiary (other than an
         Excluded Foreign Subsidiary) created or acquired after the date hereof
         by the Company or any Subsidiary (which, for the purposes of this
         clause (a), shall include any existing Subsidiary that ceases to be an
         Excluded Foreign Subsidiary), the Company will promptly (i) execute and
         deliver (or, if applicable, cause any Subsidiary to execute and
         deliver) to each holder of a Note such amendments to the Guarantee and
         Collateral Agreement as the Collateral Agent deems necessary or
         advisable to grant to the Collateral Agent, for the benefit of the
         holders of all Notes, a perfected first priority security interest in
         the Capital Stock of such new Subsidiary that is owned by the Company
         or any Subsidiary, (ii) deliver to the Collateral Agent the
         certificates representing such Capital Stock, together with undated
         stock powers, in blank, executed and delivered by a duly authorized
         officer of the Company or the relevant Subsidiary, (iii) cause such new
         Subsidiary (A) to become a party to the Guarantee and Collateral
         Agreement and (B) to take such actions as may be necessary or advisable
         to grant to the Collateral Agent for the benefit of the holders of all
         Notes a perfected first priority security interest in the collateral
         described in the Guarantee and Collateral Agreement with respect to
         such new Subsidiary, including the filing of Uniform Commercial Code
         financing statements in such jurisdictions as may be required by the
         Guarantee and Collateral Agreement or by law or as may be requested by
         the Collateral Agent, and (iv) if requested by the Collateral Agent,
         deliver to the holders of Notes legal opinions relating to the matters
         described above, which opinions shall be in form and substance, and
         from counsel, reasonably satisfactory to the Collateral Agent.

                  (b)      With respect to any new Excluded Foreign Subsidiary
         created or acquired after the date hereof by the Company or any
         Subsidiary (other than by any Subsidiary that is an Excluded Foreign
         Subsidiary), the Company will promptly (i) execute and deliver (or, if
         applicable, cause any Subsidiary to execute and deliver) to each holder
         of a Note such amendments to the Guarantee and Collateral Agreement as
         the Collateral Agent deems


                                       15
<PAGE>

         necessary or advisable to grant to the Collateral Agent, for the
         benefit of the holders of all Notes, a perfected first priority
         security interest in the Capital Stock of such new Subsidiary that is
         owned by the Company or such Subsidiary (provided that in no event
         shall more than 66% of the total outstanding voting Capital Stock of
         any such new Subsidiary be required to be so pledged), (ii) deliver to
         the Collateral Agent the certificates representing such Capital Stock,
         together with undated stock powers, in blank, executed and delivered by
         a duly authorized officer of the Company or the relevant Subsidiary,
         and take such other action as may be necessary or, in the opinion of
         the Collateral Agent, desirable to perfect the Collateral Agent's
         security interest therein, and (iii) if requested by the Collateral
         Agent, deliver to the Collateral Agent legal opinions relating to the
         matters described above, which opinions shall be in form and substance,
         and from counsel, reasonably satisfactory to the Collateral Agent.

         5.7.     ENVIRONMENTAL LAWS.

                  (a)      The Company will, and will cause each of its
         Subsidiaries to, comply in all material respects with, and ensure
         compliance in all material respects by all tenants and subtenants, if
         any, with, all applicable Environmental and Safety Laws, and obtain and
         comply in all material respects with and maintain, and ensure that all
         tenants and subtenants obtain and comply in all material respects with
         and maintain, any and all licenses, approvals, notifications,
         registrations or permits required by applicable Environmental and
         Safety Laws, except where the failure to do so, individually or in the
         aggregate, could not reasonably be expected to result in a Material
         Adverse Effect.

                  (b)      The Company will, and will cause each of its
         Subsidiaries to, conduct and complete all investigations, studies,
         sampling and testing, and all remedial, removal and other actions
         required under Environmental and Safety Laws and promptly comply in all
         material respects with all lawful orders and directives of all
         Governmental Authorities regarding Environmental and Safety Laws,
         except where the failure to do so, individually or in the aggregate,
         could not reasonably be expected to result in a Material Adverse
         Effect.

         5.8.     ADDITIONAL COLLATERAL, ETC.

                  (a)      With respect to any fee interest in any real property
         having a value (together with improvements thereof) of at least
         $10,000,000 acquired after the date hereof by the Company or any of its
         Subsidiaries (other than any such real property subject to a Lien
         expressly permitted by Section 6.3(d)), if requested by the Collateral
         Agent, the Company shall, or shall cause its Subsidiary to, promptly
         (i) execute and deliver a first priority


                                       16
<PAGE>

         mortgage, in favor of the Collateral Agent, for the benefit of the
         holders of all Notes, covering such real property, (ii) provide each
         holder of Notes with (x) title and extended coverage insurance covering
         such real property in an amount at least equal to the purchase price of
         such real property (or such other amount as shall be reasonably
         specified by the Collateral Agent) as well as a current ALTA survey
         thereof, together with a surveyor's certificate and (y) any consents or
         estoppels reasonably deemed necessary or advisable by the Collateral
         Agent in connection with such mortgage, each of the foregoing in form
         and substance reasonably satisfactory to the Collateral Agent and (iii)
         deliver to the Collateral Agent legal opinions relating to the matters
         described above, which opinions shall be in form and substance, and
         from counsel, reasonably satisfactory to the Collateral Agent.

                  (b)      With respect to any property acquired after the date
         hereof by any of the Company or its Subsidiaries (other than (x) any
         property described in Section 5.6(a), (y) any property subject to a
         Lien expressly permitted by Section 6.3(d) and (z) property acquired by
         any Excluded Foreign Subsidiary) as to which the Collateral Agent, for
         the benefit of the holders of Notes, does not have a perfected Lien, if
         requested by the Collateral Agent, the Company shall promptly (i)
         execute and deliver to each holder of a Note such amendments to the
         Guarantee and Collateral Agreement or such other documents as the
         Collateral Agent deems necessary or advisable to grant to the
         Collateral Agent, for the benefit of all holders of Notes, a security
         interest in such property and (ii) take all actions necessary or
         advisable to grant to the Collateral Agent, for the benefit of all
         holders of Notes, a perfected first priority security interest in such
         property, including the filing of Uniform Commercial Code financing
         statements in such jurisdictions as may be required by the Guarantee
         and Collateral Agreement or by law or as may be requested by the
         Collateral Agent.

         5.9.     TITLE INSURANCE, FLOOD INSURANCE, ETC.

                  (a)      If requested by the Collateral Agent, the Company
         will provide to the holders of Notes and the title insurance company
         issuing the policy referred to in Section 5.9(b) below (the "TITLE
         INSURANCE COMPANY") maps or plats of an as-built survey of the sites of
         the Additional Mortgaged Properties, and such maps or plats shall be
         certified to such holders and the Title Insurance Company in a manner
         satisfactory to the Collateral Agent, dated a date satisfactory to the
         Collateral Agent and the Title Insurance Company by an independent
         professional licensed land surveyor satisfactory to the Collateral
         Agent and the Title Insurance Company, which maps or plats and the
         surveys on which they are based shall be made in accordance with the
         Minimum Standard Detail Requirements for Land Title Surveys jointly
         established and adopted by the American Land Title Association and


                                       17
<PAGE>

         the American Congress on Surveying and Mapping in 1992, and, without
         limiting the generality of the foregoing, there shall be surveyed and
         shown on such maps, plats or surveys the following: (A) the locations
         on such sites of all the buildings, structures and other improvements
         and the established building setback lines; (B) the lines of streets
         abutting the sites and width thereof; (C) all access and other
         easements appurtenant to the sites; (D) all roadways, paths, driveways,
         easements, encroachments and overhanging projections and similar
         encumbrances affecting the site, whether recorded, apparent from a
         physical inspection of the sites or otherwise known to the surveyor;
         (E) any encroachments on any adjoining property by the building
         structures and improvements on the sites; (F) if the site is described
         as being on a filed map, a legend relating the survey to said map; and
         (G) the flood zone designations, if any, in which any Additional
         Mortgaged Property is located.

                  (b)      If requested by the Collateral Agent, the Company
         will provide to the holders of Notes in respect of each Additional
         Mortgaged Property a mortgagee's title insurance policy (or policies)
         or marked up unconditional binder for such insurance. Each such policy
         shall (A) be in an amount satisfactory to the Collateral Agent; (B) be
         issued at ordinary rates; (C) insure that the mortgage insured thereby
         creates a valid first Lien on such property free and clear of all
         defects and encumbrances, except as disclosed therein; (D) name the
         Collateral Agent for the benefit of all holders of Notes as the insured
         thereunder; (E) be in the form of ALTA Loan Policy - 1970 (Amended
         10/17/70 and 10/17/84) (or equivalent policies); (F) contain such
         endorsements and affirmative coverage as the Collateral Agent may
         reasonably request and (G) be issued by title companies satisfactory to
         the Collateral Agent (including any such title companies acting as
         co-insurers or reinsurers, at the option of the Collateral Agent). The
         Collateral Agent shall have received evidence satisfactory to it that
         all premiums in respect of each such policy, all charges for mortgage
         recording tax, and all related expenses, if any, have been paid.

                  (c)      If requested by the Collateral Agent, the Company
         will provide to the holders of Notes (A) a policy of flood insurance
         that (1) covers any parcel of improved real property that is encumbered
         by any mortgage in favor of the Collateral Agent for the benefit of the
         holders of Notes, (2) is written in an amount not less than the
         outstanding principal amount of the indebtedness secured by any such
         mortgage that is reasonably allocable to such real property or the
         maximum limit of coverage made available with respect to the particular
         type of property under the National Flood Insurance Act of 1968,
         whichever is less, and (3) has a term ending not later than the
         maturity of the Indebtedness secured by such mortgage and (B)
         confirmation that the Company has received the notice required pursuant
         to Section


                                       18
<PAGE>

         208(e)(3) of Regulation H of the Board of Governors of the Federal
         Reserve System of the United States of America.

         5.10.    MAINTENANCE OF INSURANCE. The Company covenants that it and
each of its Subsidiaries will maintain, with responsible insurers, insurance
with respect to its properties and business against such casualties,
liabilities, risks, contingencies and hazards (including, but not limited to,
product liability, public liability and business interruption) and in such
amounts as is customary in the case of similarly situated corporations engaged
in the same or similar businesses and together with each delivery of financial
statements under clause (b) of Section 5.1, it will deliver an Officers'
Certificate specifying the details of such insurance in effect. Insurance
required by this Section 5.10 shall be with insurers rated A or better by A.M.
Best Company (or accorded a similar rating by another nationally or
internationally recognized insurance rating agency of similar standing if A.M.
Best Company is not then in the business of rating insurers or rating foreign
insurers) or such other insurers as may from time to time be reasonably
acceptable to the Required Holders.

         5.11.    MAINTENANCE OF PROPERTIES; COMPLIANCE WITH LAWS. The Company
covenants that it will, and will cause each of its Subsidiaries to, (a) (i)
maintain or cause to be maintained in good repair, working order and condition,
reasonable wear and tear excepted, all properties necessary at that time in its
business, and (ii) from time to time make or cause to be made all appropriate
repairs, renewals and replacements thereof; and (b) comply with all applicable
(i) laws (including Environmental and Safety Laws) rules, regulations, decrees
and orders of all federal, state, local or foreign courts or governmental
agencies, authorities, instrumentalities or regulatory bodies and (ii) rules,
regulations and requirements necessary to maintain its operating and business
licenses, authorizations and permits, noncompliance with which could reasonably
be expected to result in a Material Adverse Effect.

         5.12.    CORPORATE EXISTENCE, ETC.; BUSINESS. The Company covenants
that it will, and will cause each of its Subsidiaries to, preserve and keep in
full force and effect at all times its corporate existence, and the permits,
licenses, franchises and other rights material to its business, provided that
the foregoing shall not prohibit any merger, consolidation, liquidation, or
dissolution permitted under Section 6.4. The Company covenants that it will not,
and will not permit any Subsidiary to, engage to any material extent in any
business not reasonably related to the distribution of tires and other products
in the automotive replacement market, providing financing to the Company and its
Subsidiaries, or owning and licensing intellectual property used by the Company
or its Subsidiaries.

         5.13.    PAYMENT OF TAXES AND CLAIMS. The Company covenants that it
will, and will cause each of its Subsidiaries to, pay (a) all taxes, assessments
and other governmental charges imposed upon it or any of its properties or
assets or in respect


                                       19
<PAGE>

of any of its franchises, business, income or profits before any penalty or
interest accrues thereon, and (b) all claims (including, without limitation,
claims for labor, services, materials and supplies) for sums that have become
due and payable and (i) which by law have or might become a Lien upon any of its
properties or assets or (ii) where the failure to pay could have a Material
Adverse Effect; provided, that with respect to all of the above no such charge
or claim need be paid if subject to a Good Faith Contest.

         5.14.    USE OF PROCEEDS. No part of the proceeds of the sale of the
Notes will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220).

         5.15.    INTERCOMPANY LOANS; PAYMENTS. The Company agrees with each
holder of Notes that (i) any payments made by a Subsidiary Obligor in reduction
of its obligation under the Guarantee and Collateral Agreement, shall reduce
dollar for dollar its total obligation to the Company for repayment of any
Intercompany Loans, (ii) it will require that any payments made by a Subsidiary
Obligor that is a direct Wholly-Owned Subsidiary of another Wholly-Owned
Subsidiary of the Company, in reduction of its obligation under the Guarantee
and Collateral Agreement, shall reduce dollar for dollar its total obligation
for repayment of any Intercompany Loans owed to its sole shareholder, (iii)
except as set forth in Schedule 5.15, it will not demand, enforce or accept any
payments on account of any Intercompany Loans owed to the Company by any
Subsidiary Obligor at a time when such Subsidiary Obligor is insolvent or if
such payments could reasonably be expected to render such Subsidiary Obligor
insolvent, to leave it with unreasonably small capital for the business in which
it is engaged and in which it intends to engage, or to leave it unable to pay
its other Indebtedness as the same matures.

         5.16.    MAINTENANCE OF MOST FAVORED LENDER STATUS. The Company hereby
acknowledges and agrees that if the Company or any Subsidiary shall enter into
any amendment to the Credit Agreement which provides for the benefit of the
lenders thereunder any financial covenants or negative covenants which are more
favorable to such lenders than the covenants provided for in Section 6 hereof
for the benefit of the holders of the Notes then, and in each and any such
event, the covenants in this Agreement shall be and shall be deemed to be,
notwithstanding Section 11.3 and without any further action on the part of the
Company or any other Person being necessary or required, amended to afford the
holders of the Notes the same benefits and rights as such amendments provide
such lenders. The Company will promptly deliver to each holder of Notes a copy
of each such amendment, or any waiver or modification of the Credit Agreement,
entered into


                                       20

<PAGE>

after the date hereof. Notwithstanding the foregoing, the Company agrees to
enter into such documentation as the Required Holders may reasonably request to
evidence the amendments provided for in this Section 5.16.

6.       NEGATIVE COVENANTS.

         The Company covenants that on and after the date hereof and so long as
any of the Notes shall be outstanding:

         6.1.     FINANCIAL COVENANTS. The Company will not at any time permit:

                  (A)      FIXED CHARGE COVERAGE RATIO. The Fixed Charge
         Coverage Ratio as of the last day of any Fiscal Quarter to be less than
         the amount set forth in the table below:

<TABLE>
<CAPTION>
                     FISCAL QUARTER ENDING                  RATIO
                     ---------------------                  -----
         <S>                                              <C>
         June 30, 2003,  September 30, 2003,
         December 31, 2003, March 31, 2004 and
         June 30, 2004                                    1.15 to 1.0

         September  30, 2004,  December 31, 2004,
         March 31, 2005 and June 30, 2005                 1.25 to 1.0


         September 30, 2005 and any Fiscal
         Quarter ending thereafter                        1.50 to 1.0
</TABLE>

                  "FIXED CHARGE COVERAGE RATIO" shall mean, as of the last day
         of any Fiscal Quarter of the Company, the ratio of (a) EBITDA for the
         period of four completed Fiscal Quarters of the Company ending on the
         last day of such Fiscal Quarter to (b) Fixed Charges for such period.

                  (B)      MAXIMUM LEVERAGE RATIO.

                  The Leverage Ratio as of the end of any Fiscal Quarter to be
         greater than the amount set forth in the table below:

<TABLE>
<CAPTION>
                   FISCAL QUARTER ENDING                  RATIO
                   ---------------------                  -----
           <S>                                          <C>
           June 30, 2003, September 30, 2003 and
           December 31, 2003                            3.25 to 1.0

           March 31, 2004 and June 30, 2004             3.00 to 1.0

           September 30, 2004 and December 31,
           2004                                         2.75 to 1.0

           March 31, 2005, June 30, 2005, September
           30, 2005 and December 31, 2005               2.50 to 1.0

           March 31, 2006, and any Fiscal Quarter
           ending thereafter                            2.25 to 1.0
</TABLE>


                                       21
<PAGE>

         "LEVERAGE RATIO" at any time means the ratio of Consolidated Funded
         Indebtedness as of the end of the then most recent Fiscal Quarter to
         the aggregate EBITDA for the period of four Fiscal Quarters most
         recently ended, including any adjustments based on Acceptable
         Acquisitions and dispositions as provided in the definition of EBITDA.

                  (C)      ADJUSTED DEBT TO EBITDAR. The ratio of (i)
         Consolidated Adjusted Debt to (ii) EBITDAR at the end of any Fiscal
         Quarter, to be greater than the amount set forth in the following
         table:

<TABLE>
<CAPTION>
                           FISCAL QUARTER ENDING                           RATIO
                           ---------------------                           -----
                  <S>                                                   <C>
                  June 30, 2003, September 30, 2003 and
                  December 31, 2003                                     5.25 to 1.0

                  March 31, 2004, June 30, 2004, September
                  30, 2004 and December 31, 2004                        5.00 to 1.0

                  March 31, 2005 and June 30, 2005                      4.75 to 1.0

                  September 30, 2005, December 31, 2005,
                  March 31, 2006 and June 30, 2006                      4.50 to 1.0

                  September 30, 2006, December 31, 2006,
                  March 31, 2007 and June 30, 2007                      4.25 to 1.0

                  September 30, 2007, and any Fiscal
                  Quarter ending thereafter                             4.00 to 1.0
</TABLE>

         For purposes of this Section 6.1(c) "CONSOLIDATED ADJUSTED DEBT" shall
         mean, at the end of any Fiscal Quarter, Consolidated Funded
         Indebtedness as of the end of such Fiscal Quarter, plus eight times the
         rental payments made (net of any sublease income) by the Company and
         its Subsidiaries during the period of four completed Fiscal Quarters
         then most recently ended.

                  (D)      ASSET TEST. The ratio of the sum of consolidated
         accounts receivable and inventories subject to a first priority
         perfected security interest in favor of the Collateral Agent pursuant
         to the Guarantee and Collateral Agreement (and, in any event, exclusive
         of any then outstanding amounts secured by a security interest on
         inventory permitted by Section 6.3(f)) to Consolidated Funded
         Indebtedness as at the end of any Fiscal Quarter to be less than 1.35
         to 1.

         6.2.     LIMITATION ON INDEBTEDNESS. The Company will not, nor will it
permit any of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, except:


                                       22
<PAGE>

                  (a)      (i) Indebtedness created hereunder and Guarantees
         executed pursuant to this Agreement (including, without limitation, the
         Guarantee and Collateral Agreement), and (ii) Indebtedness and
         Guarantees under the Credit Agreement in an aggregate principal amount
         not exceeding $208,500,000; provided, however, that the amount of any
         increase in the aggregate revolving commitments thereunder made in
         accordance with Section 2.02(d) thereof that increases the aggregate
         Indebtedness and Guarantees under the Credit Agreement to an amount
         greater than $208,500,000, but less than or equal to $258,500,000,
         shall be permitted;

                  (b)      Indebtedness and Guarantees existing on the date
         hereof and set forth on Schedule 6.2(b) and extensions, renewals and
         replacements of any such Indebtedness that do not increase the
         outstanding principal amount thereof over the amount set forth in
         respect of such Indebtedness on Schedule 6.2(b);

                  (c)      Indebtedness owed to the Company by any of its
         Wholly-Owned Subsidiaries, or owed to any of its Wholly-Owned
         Subsidiaries by any of its other Wholly-Owned Subsidiaries, that in
         each case is permitted under Section 6.5(c), and Indebtedness owed by
         the Company to any of its Wholly-Owed Subsidiaries;

                  (d)      Guarantees and Indebtedness arising in connection
         with (i) any Synthetic Lease, in an aggregate principal amount not
         exceeding $9,000,000 and (ii) the SunTrust Sale and Leaseback, in an
         aggregate principal amount not exceeding $12,000,000;

                  (e)      Guarantee obligations entered into by Big O or its
         Subsidiaries on behalf of its franchisees, other than Guarantees
         related to any Synthetic Lease, and those existing Guarantee
         obligations listed on Schedule 6.2(e), provided that the aggregate
         principal amount of such guaranteed obligations arising after the date
         hereof plus the aggregate principal amount of loans permitted under
         Section 6.5(h) at no time exceeds $20,000,000;

                  (f)      Indebtedness of any Subsidiary which becomes such as
         a result of an Acceptable Acquisition, including such Indebtedness that
         is assumed or becomes the subject of a Guarantee, but not any
         extensions, renewals or replacements thereof; provided, that such
         Indebtedness is not created in contemplation of or in connection with
         such Acceptable Acquisition;

                  (g)      Guarantees by the Company or any of its Wholly-Owned
         Subsidiaries of Indebtedness of any of its other Wholly-Owned
         Subsidiaries, provided such Indebtedness is otherwise permitted
         pursuant to this Section 6.2;


                                       23
<PAGE>

                  (h)      Guarantee obligations entered into by (x) the Company
         or any of its Wholly-Owned Subsidiaries, of obligations of any of its
         other Wholly-Owned Subsidiaries to Persons other than their Affiliates,
         which obligations are incurred by them in the ordinary course of
         business and do not constitute Indebtedness, such as trade accounts
         payable, customer advances, accrued expenses and lease payments that do
         not constitute Indebtedness, and (y) the Company or any of its
         Wholly-Owned Subsidiaries, of obligations of Persons other than
         Subsidiaries and their Affiliates, provided that the aggregate
         principal amount of the guaranteed obligations under clause (y) plus
         the aggregate amount of the investments permitted under Section 6.5(d)
         at no time exceeds $20,000,000;

                  (i)      Indebtedness owed by the Company to the sellers of
         Merchant's, Incorporated and Merban, Inc. evidenced by the promissory
         note pursuant to Section 3.03(a)(i) of the Merchant's Acquisition
         Agreement; provided that such Indebtedness is paid in full at the
         closing of the sale of the 2003 Notes with the proceeds thereof; and

                  (j)      other Indebtedness not otherwise permitted by
         clauses (a) through (i) of this Section 6.2 in an aggregate principal
         amount not to exceed $25,000,000 at any time outstanding.

         6.3.     LIENS. The Company will not, nor will it permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it or any of its
Subsidiaries, or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except:

                  (a)      Permitted Encumbrances;

                  (b)      any Lien on any property or asset of the Company or
         any Subsidiary existing on the date hereof and set forth on Schedule
         6.3; provided that, if such Lien is not released within sixty (60) days
         after the date hereof (i) such Lien shall not apply to any other
         property or asset of the Company or any Subsidiary and (ii) such Lien
         shall secure only those obligations which it secures on the date hereof
         and extensions, renewals and replacements thereof that do not increase
         the outstanding principal amount thereof over the amount set forth on
         Schedule 6.3;

                  (c)      any Lien, other than a Lien securing a Synthetic
         Lease permitted under Section 6.2(d), existing on any property or asset
         prior to the acquisition thereof by the Company or any Subsidiary or
         existing on any property or asset of any Person that becomes a
         Subsidiary after the date hereof prior to the time such Person becomes
         a Subsidiary; provided that (i) such Lien is not created in
         contemplation of or in connection with such


                                       24
<PAGE>

         acquisition or such Person becoming a Subsidiary, as the case may be,
         (ii) such Lien shall not apply to any other property or assets of the
         Company or any Subsidiary, (iii) such Lien secures Indebtedness
         permitted by Section 6.2(j) and (iv) such Lien shall secure only those
         obligations which it secures on the date of such acquisition or the
         date such Person becomes a Subsidiary, as the case may be;

                  (d)      Liens, other than Liens securing any Synthetic Lease
         permitted under Section 6.2(d), on fixed or capital assets acquired by
         the Company or any Subsidiary; provided that (i) such Liens secure
         Indebtedness permitted by Section 6.2(j), (ii) such Liens and the
         Indebtedness secured thereby are incurred prior to such acquisition or
         simultaneously therewith, (iii) the Indebtedness secured thereby does
         not exceed 100% of the cost of acquiring such fixed or capital assets,
         (iv) such security interests shall not apply to any other property or
         assets of the Company or any Subsidiary; and (v) the aggregate
         Indebtedness secured by all such Liens does not exceed $5,000,000;

                  (e)      Liens securing any Synthetic Lease or arising in
         connection with the SunTrust Sale and Leaseback, in each case so long
         as the Indebtedness secured thereby is permitted under Section 6.2(d);
         and

                  (f)      a security interest granted by Tire Kingdom to
         Michelin Tire Corporation, as secured party, with respect to all
         inventory previously and hereafter purchased from Michelin Tire
         Corporation by Tire Kingdom and all proceeds thereof, provided that the
         aggregate amount of obligations secured thereby at no time exceeds
         $30,000,000.

         6.4.     FUNDAMENTAL CHANGES. The Company will not, nor will it permit
any of its Subsidiaries to, merge or consolidate with or into any other Person,
or permit any other Person to merge into or with it or consolidate with it, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a series
of transactions) any of the stock of its Subsidiaries (in each case, whether now
owned or hereafter acquired), or liquidate or dissolve itself or any of its
Subsidiaries, except that, if at the time of any such event and immediately
after giving effect thereto no Default or Event of Default shall have occurred
and be continuing:

                  (a)      any Wholly-Owned Subsidiary may merge or consolidate
         with or into the Company or into another Wholly-Owned Subsidiary;

                  (b)      any Wholly-Owned Subsidiary may sell, transfer, lease
         or otherwise dispose of any portion of its assets to the Company or to
         another Wholly-Owned Subsidiary;

                  (c)      any Wholly-Owned Subsidiary may liquidate or dissolve
         if the Company determines in good faith that such liquidation or
         dissolution is in


                                       25
<PAGE>

         the best interests of the Company and is not materially disadvantageous
         to the holders of the Notes;

                  (d)      Acceptable Acquisitions shall be permitted; and

                  (e)      the disposal of all or any portion of the stock or
         assets of Northern States Tire, Inc., to any Person shall be permitted.

         6.5.     INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS. The
Company will not, nor will it permit any of its Subsidiaries to, purchase, hold
or acquire (including pursuant to any merger with any Person that was not a
Wholly-Owned Subsidiary prior to such merger) any capital stock, evidences of
Indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, or make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit, except:

                  (a)      Permitted Investments;

                  (b)      (i) the Merchant's Acquisition, (ii) capital
         investments by the Company or any Subsidiary in any Subsidiary
         (provided that such latter Subsidiary is in existence on the date
         hereof or becomes a Subsidiary at any time after such date in a manner
         that complies with all other provisions of this Agreement, without
         giving effect to this clause (b)) and (iii) other existing investments
         and loans as otherwise described in Schedule 6.5(b);

                  (c)      loans or advances made by the Company or any
         Wholly-Owned Subsidiary to any of its other Wholly-Owned Subsidiaries;

                  (d)      loans and advances to, purchases of equity interests
         in and contributions to the capital of Joint Ventures and other Persons
         not otherwise permitted by this Section 6.5; provided that the
         aggregate amount of such investments, plus the aggregate amount of the
         obligations guaranteed pursuant to Section 6.2(h)(y), shall not exceed
         $20,000,000 at any one time (it being understood that profits and
         losses of Joint Ventures that are passed through to its equity holders
         shall not be included in the calculation of the aggregate amount of
         such investments);

                  (e)      investments in evidences of Indebtedness representing
         amounts formerly constituting accounts receivable owed to the Company
         or any Subsidiary in the ordinary course of business;

                  (f)      Guarantees permitted under Section 6.2;


                                       26
<PAGE>

                  (g)      Any separate individual Acquisition completed after
         the date of this Agreement which has been either (i) approved by the
         Board of Directors of the corporation, or the comparable or appropriate
         body of any other Person, which is the subject of such Acquisition or
         (ii) recommended by such Board to the shareholders of such corporation,
         or by such other body to the equity holders of such other Person, and
         in each case (A) the Acquisition target is a Person which is engaged in
         the replacement tire industry (B) the aggregate consideration for all
         such Acquisitions completed in any one calendar year does not exceed
         $40,000,000, (C) the aggregate consideration for all such Acquisitions
         completed after the date hereof does not exceed $75,000,000, provided,
         that this amount shall be increased on an annual basis by an amount
         equal to 25% of Consolidated Net Income for each completed Fiscal Year
         commencing with Fiscal Year 2003, and (D) such Acquisition is made
         under circumstances in which no Default or Event of Default either
         exists or will result therefrom, and in which pro forma financial
         statements and projections including the Company, its Subsidiaries and
         the Person and/or assets to be acquired, covering the most recent 12
         month period for which financial statements are available and the
         twelve months following the Acquisition, would show that no Default or
         Event of Default will result from the Acquisition (such an Acquisition
         is referred to herein as an "ACCEPTABLE ACQUISITION");

                  (h)      Intercompany Loans made to the Company or any
         Wholly-Owned Subsidiary by any of its Wholly-Owned Subsidiaries; and

                  (i)      loans by Big O or its Wholly-Owned Subsidiaries to
         Big O franchisees, provided that the aggregate principal amount of such
         loans arising after the date hereof plus the aggregate amount of the
         obligations guaranteed pursuant to Section 6.2(e) at no time exceeds
         $20,000,000. For purposes of this clause (i) investments in evidences
         of Indebtedness permitted under clause (e) of this Section 6.5 and Big
         O franchisee loans that have been sold to third parties shall be
         excluded from the loans and obligations required to be within the
         $20,000,000 limit.

         6.6.     HEDGING AGREEMENTS. The Company will not, nor will it permit
any of its Subsidiaries to, enter into any Hedging Agreement, other than Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which the Company or such Subsidiary is exposed in the conduct of its
business or the management of its liabilities.

         6.7.     TRANSACTIONS WITH AFFILIATES. The Company will not, nor will
it permit any of its Subsidiaries to, enter into any transaction (including,
without limitation, the purchase or sale of any property or service) with or
make any payment or transfer to, any of its Affiliates except in the ordinary
course of business and pursuant to the reasonable requirements of the Company's
or such Subsidiary's


                                       27
<PAGE>

business and upon fair and reasonable terms no less favorable to the Company or
such Subsidiary than the Company or such Subsidiary would obtain in a comparable
arms-length transaction; provided that the foregoing shall not apply to
transactions (i) between the Company and any of its Wholly-Owned Subsidiaries,
as long as such transactions do not violate Section 6.5; or (ii) if such
transactions occur in the ordinary course of business consistent with past
practices of the Company and/or Subsidiary, (A) transactions between the Company
or any Wholly-Owned Subsidiary and TBC de Mexico, a Mexican variable capital
corporation, or TBC Worldwide LLC, a Delaware limited liability company or (B)
transactions between Big O or any of its Subsidiaries and any Joint Venture
established by Big O or any of its Subsidiaries in the ordinary course of
business, the entire investment in which is permitted under Section 6.5(d).

         6.8.     RESTRICTIVE AGREEMENTS. The Company will not, nor will it
permit any of its Subsidiaries to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts, or
imposes any condition upon (a) the ability of the Company or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to the Company or any other Subsidiary or to Guarantee Indebtedness of the
Company or any Subsidiary; provided that (i) the foregoing shall not apply to
the restrictions and conditions imposed by law or by this Agreement, (ii) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.8 (but shall apply to any extension or renewal
of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness and (v) clause (a) of the foregoing shall not
apply to customary provisions in leases restricting the assignment thereof.

         6.9.     DISCLOSURE. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Company to
the Purchasers or any other holder of Notes pursuant to this Agreement or any
other Financing Document will, when so furnished, contain any material
misstatement of fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading; provided that, with respect to projected financial information, such
information may be prepared in good faith based upon assumptions believed to be
reasonable at the time.


                                       28
<PAGE>

         6.10.    SALE OF ASSETS. The Company will not, and will not permit any
of its Subsidiaries to, sell, lease, assign, transfer or otherwise dispose of
any of its or their now owned or hereafter acquired assets (including, without
limitation, shares of stock and indebtedness of such Subsidiaries, receivables
and leasehold interests), other than:

                  (a)      inventory disposed of in the ordinary course of
         business;

                  (b)      transactions with Affiliates permitted under Section
         6.7;

                  (c)      the sale or other disposition of assets that are
         obsolete or no longer used or usable for the conduct of business in the
         ordinary course;

                  (d)      one or more transactions in which fixed or capital
         assets are sold and leased back on terms that do not constitute
         Capitalized Lease Obligations (other than the SunTrust Sale and
         Leaseback and any transaction described in clause (e) below) provided
         that (i) if the aggregate sale price of the assets sold exceeds
         $5,000,000, the Net Proceeds of each such sale are used to prepay
         principal of the Notes, the 1996 Notes and Bank Term Loans, in
         accordance with Section 4.8;

                  (e)      the sale by Big O and its Subsidiaries of (i) Big O
         franchisee loans to third parties, and (ii) Big O stores (including
         real estate, fixtures and equipment) to Big O franchisees and the sale
         and leaseback thereof for subleasing to Big O franchisees, provided
         that, in each case under the foregoing clauses (i) and (ii) the
         transaction is in the ordinary course of business and consistent with
         past practice;

                  (f)      sales described in Schedule 6.10; and

                  (g)      the SunTrust Sale and Leaseback.

         6.11.    RESTRICTED PAYMENTS. The Company will not, and will not permit
any of its Subsidiaries to, declare or make, or agree to pay or make, directly
or indirectly, any Restricted Payment, except (a) the Company may declare and
pay dividends with respect to its capital stock payable solely in additional
shares of its common stock, (b) Subsidiaries may declare and pay dividends
ratably with respect to their Capital Stock, (c) the Company may make Restricted
Payments pursuant to and in accordance with stock option plans or other benefits
for management or employees of the Company and its Subsidiaries and (d) so long
as no Default or Event of Default shall have occurred and be continuing or would
result therefrom, the Company may make payments in an aggregate amount not
exceeding $10,000,000 per calendar year on account of (i) the purchase,
redemption, retirement, acquisition, cancellation or termination of any shares
of capital stock of


                                       29
<PAGE>

the Company or any option, warrant or other right to acquire any such shares and
(ii) the payment of dividends with respect to its preferred stock.

7.       EVENTS OF DEFAULT.

         7.1.     ACCELERATION. If any of the following events shall occur and
be continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):

                  (a)      the Company defaults in the payment of any principal
         of, or Yield- Maintenance Amount payable with respect to, any Note when
         the same shall become due, either by the terms thereof or otherwise as
         herein provided; or

                  (b)      the Company defaults in the payment of any interest
         on any Note or any other amount payable under this Agreement (other
         than amounts referred to in clause (a) above) or any other Financing
         Document for more than three days after the date due; or

                  (c)      any representation or warranty made by the Company
         herein, or by the Company or any of its Subsidiaries in the Guarantee
         and Collateral Agreement, or by the Company or any of its Subsidiaries
         or any of their officers in any writing furnished in connection with or
         pursuant to this Agreement or any other Financing Document or any
         amendment or modification hereof or thereof, or waiver hereunder or
         thereunder, or in any report, certificate, financial statement or other
         document furnished pursuant to or in connection with this Agreement or
         any other Financing Document or any amendment or modification hereof or
         thereof or waiver hereunder or thereunder, shall prove to have been
         materially incorrect when made or deemed made; or

                  (d)      (i) the Company shall fail to observe or perform any
         covenant, condition or agreement contained in Sections 5.2, 5.3,
         5.11(b) or 5.12 (with respect to the Company's existence) or

                           (ii) the Company shall fail to observe or perform any
                  covenant or agreement contained in Section 6 and either (A)
                  such failure is not remedied within two Business Days after
                  any of the Chief Executive Officer of the Company or any
                  Responsible Officer obtains knowledge thereof or (B) within
                  such two Business Day period, any holder of Notes gives the
                  Company notice that such failure constitutes a Default; or


                                       30
<PAGE>

                  (e)      the Company fails to perform or observe any other
         agreement, term or condition contained herein and not specified in
         clauses (a), (b) or (d) above and such failure shall not be remedied
         within 30 days after the earliest to occur of (i) any Responsible
         Officer obtaining actual knowledge thereof or (ii) receipt of written
         notice thereof by the Company from any holder of Notes; or

                  (f)      the Company or any Subsidiary shall fail to make any
         payment (whether of principal or interest and regardless of amount) in
         respect of any Material Indebtedness, when and as the same shall become
         due and payable; or

                  (g)      any event or condition occurs that results in any
         Material Indebtedness becoming due prior to its scheduled maturity or
         that enables or permits (with or without the giving of notice, the
         lapse of time or both) the holder or holders of any Material
         Indebtedness or any trustee or agent on its or their behalf to cause
         any Material Indebtedness to become due, or to require the prepayment,
         repurchase, redemption or defeasance thereof, prior to its scheduled
         maturity; provided that this clause (g) shall not apply to secured
         Indebtedness that becomes due as a result of the voluntary sale or
         transfer of the property or assets securing such Indebtedness; or

                  (h)      the Company or any Subsidiary makes an assignment for
         the benefit of creditors or is generally not paying its debts as such
         debts become due; or

                  (i)      any decree or order for relief in respect of the
         Company or any Subsidiary is entered under any bankruptcy,
         reorganization, compromise, arrangement, insolvency, readjustment of
         debt, dissolution or liquidation or similar law, whether now or
         hereafter in effect (herein called the "BANKRUPTCY LAW"), of any
         jurisdiction; or

                  (j)      the Company or any Subsidiary petitions or applies to
         any tribunal for, or consents to, the appointment of, or taking
         possession by, a trustee, receiver, custodian, liquidator or similar
         official of the Company or any Subsidiary, or of any substantial part
         of the assets of the Company or any Subsidiary, or commences a
         voluntary case under the Bankruptcy Law of the United States or any
         proceedings (other than proceedings for the voluntary liquidation and
         dissolution of a Subsidiary) relating to the Company or any Subsidiary
         under the Bankruptcy Law of any other jurisdiction; or

                  (k)      any such petition or application is filed, or any
         such proceedings are commenced, against the Company or any Subsidiary
         and the Company or such Subsidiary by any act indicates its approval
         thereof, consent thereto


                                       31
<PAGE>

         or acquiescence therein, or an order, judgment or decree is entered
         appointing any such trustee, receiver, custodian, liquidator or similar
         official, or approving the petition in any such proceedings, and such
         order, judgment or decree remains unstayed and in effect for more than
         60 days; or

                  (l)      any order, judgment or decree is entered in any
         proceedings against the Company decreeing the dissolution of the
         Company and such order, judgment or decree remains unstayed and in
         effect for more than 60 days: or

                  (m)      any order, judgment or decree is entered in any
         proceedings against the Company or any Subsidiary decreeing a split-up
         of the Company or such Subsidiary which requires the divestiture of
         assets representing a substantial part, or the divestiture of the stock
         of a Subsidiary whose assets represent a substantial part, of the
         consolidated assets of the Company and its Subsidiaries (determined in
         accordance with generally accepted accounting principles) or which
         requires the divestiture of assets, or stock of a Subsidiary, which
         shall have contributed a substantial part of the consolidated net
         income of the Company and its Subsidiaries (determined in accordance
         with generally accepted accounting principles) for any of the three
         fiscal years then most recently ended, and such order, judgment or
         decree remains unstayed and in effect for more than 60 days; or

                  (n)      one or more final judgments in an aggregate amount in
         excess of $3,000,000 is rendered against any one or more of the Company
         or any Subsidiary and, within 30 days after entry thereof, any such
         judgment is not discharged or execution thereof stayed pending appeal,
         or within 30 days after the expiration of any such stay, such judgment
         is not discharged; or

                  (o)      (i) the Company or any ERISA Affiliate, in its
         capacity as an employer under a Multiemployer Plan, makes a complete or
         partial withdrawal from such Multiemployer Plan resulting in the
         incurrence by such withdrawing employer of a withdrawal liability in an
         amount exceeding $2,000,000; (ii) any Plan shall fail to satisfy the
         minimum funding standards of ERISA or the Code for any plan year or
         part thereof or a waiver of such standards or extension of any
         amortization period is sought or granted under section 412 of the Code;
         (iii) a notice of intent to terminate any Plan shall have been or is
         reasonably expected to be filed with the PBGC or the PBGC shall have
         instituted proceedings under ERISA section 4042 to terminate or appoint
         a trustee to administer any Plan or the PBGC shall have notified the
         Company or any ERISA Affiliate that a Plan may become a subject of such
         proceedings; (iv) the aggregate "amount of unfunded benefit
         liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
         all Plans, determined in accordance with Title IV of ERISA, shall
         exceed $2,000,000; (v) the Company or any ERISA Affiliate shall have
         incurred or is reasonably expected to incur any liability


                                       32
<PAGE>

         pursuant to Title I or IV of ERISA or the penalty or excise tax
         provisions of the Code relating to employee benefit plans; (vi) the
         Company or any ERISA Affiliate withdraws from any Multiemployer Plan;
         or (vii) the Company or any Subsidiary establishes or amends any
         employee welfare benefit plan that provides post-employment welfare
         benefits in a manner that would increase the liability of the Company
         or any Subsidiary thereunder; and any such event or events described in
         clauses (ii) through (vii) above, either individually or together with
         any other such event or events, could reasonably be expected to have a
         Material Adverse Effect; or

                  (p)      the Company or any Subsidiary shall be subject to or
         liable for any Environmental Costs and Liabilities or is the subject of
         any proceeding or investigation pertaining to the release by the
         Company or any Subsidiary, or any other Person of any Hazardous
         Material into the environment, or pertaining to any violation of any
         Environmental and Safety Law, which, in any case, could reasonably be
         expected to have a Material Adverse Effect; or

                  (q)      the Guarantee and Collateral Agreement, the Tennessee
         Property Mortgage or any mortgage in respect of Additional Mortgaged
         Property shall for any reason cease to be an enforceable obligation of
         the Company or the applicable Subsidiary (as the case may be) that
         executed same or if such party or any other Person should contest the
         validity of any such document or agreement or shall seek in any way to
         have such document or agreement declared null and void or to have such
         party's obligations thereunder in any way limited, or if such party
         shall in any respect fail to perform any of its obligations under such
         document or agreement, and such failure shall continue unremedied for a
         period of fifteen (15) days after the earliest to occur of (i) the date
         the Company shall have obtained knowledge thereof or (ii) written
         notice thereof from any holder of Notes or the Collateral Agent to the
         Company;

then (a) if such event is an Event of Default specified in clause (a) or clause
(b) of this Section 7.1, any holder of any Note may at its option during the
continuance of such Event of Default, by notice in writing to the Company,
declare all of the Notes held by such holder to be, and all of the Notes held by
such holder shall thereupon be and become, immediately due and payable at par
together with interest accrued thereon, without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Company, (b) if such
event is an Event of Default specified in clause (i), (j) or (k) of this Section
7.1 with respect to the Company, all of the Notes at the time outstanding shall
automatically become immediately due and payable together with interest accrued
thereon and together with the Yield-Maintenance Amount, if any, with respect to
each Note, without presentment, demand, protest or notice of any kind, all of
which are hereby waived by the Company, and (c) with respect to any event
constituting an Event of Default, the


                                       33
<PAGE>

Required Holder(s) of the Notes may at its or their option during the
continuance of such Event of Default, by notice in writing to the Company,
declare all of the Notes to be, and all of the Notes shall thereupon be and
become, immediately due and payable together with interest accrued thereon and
together with the Yield-Maintenance Amount, if any, with respect to each Note,
without presentment, demand, protest or notice of any kind, all of which are
hereby waived by the Company.

         7.2.     RESCISSION OF ACCELERATION. At any time after any or all of
the Notes shall have been declared immediately due and payable pursuant to
Section 7.1, the Required Holder(s) may, by notice in writing to the Company,
rescind and annul such declaration and its consequences if (a) the Company shall
have paid all overdue interest on the Notes, the principal of and
Yield-Maintenance Amount, if any, payable with respect to any Notes which have
become due otherwise than by reason of such declaration, and interest on such
overdue interest and overdue principal and Yield-Maintenance Amount at the rate
specified in the Notes, (b) the Company shall not have paid any amounts which
have become due solely by reason of such declaration, (c) all Events of Default
and Defaults, other than non-payment of amounts which have become due solely by
reason of such declaration, shall have been cured or waived pursuant to Section
11.3, and (d) no judgment or decree shall have been entered for the payment of
any amounts due pursuant to the Notes or this Agreement. No such rescission or
annulment shall extend to or affect any subsequent Event of Default or Default
or impair any right arising therefrom.

         7.3.     NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall
be declared immediately due and payable pursuant to Section 7.1 or any such
declaration shall be rescinded and annulled pursuant to Section 7.2, the Company
shall forthwith give written notice thereof to the holder of each Note at the
time outstanding.

         7.4.     OTHER REMEDIES. If any Event of Default or Default shall occur
and be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by suit
in equity or by action at law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.

8.       REPRESENTATIONS, COVENANTS AND WARRANTIES.

         The Company represents, covenants and warrants as follows as of the
date


                                       34
<PAGE>

hereof and on the date of the Closing:

         8.1.     ORGANIZATION. The Company is a corporation duly organized and
existing in good standing under the laws of the State of Delaware, each
Subsidiary (including, without limitation, Big O) is duly organized and existing
in good standing under the laws of the jurisdiction in which it is incorporated,
and the Company and each Subsidiary has the corporate power to own its
respective property and to carry on its respective business as now being
conducted.

         8.2.     FINANCIAL STATEMENTS. The Company has furnished the Purchasers
with the following financial statements identified by a principal financial
officer of the Company: (i) consolidating and consolidated balance sheets of the
Company and its Subsidiaries as at December 31, 2001 and December 31, 2002 and
consolidating and consolidated statements of income and cash flows and a
consolidated statement of shareholders' equity of the Company and its
Subsidiaries for the Fiscal Year ended December 31, 2002, all consolidated
annual statements being reported on by PriceWaterhouseCoopers LLP. Such
financial statements (including any related schedules and/or notes) are true and
correct in all material respects (subject, as to interim statements, to changes
resulting from audits and year-end adjustments), have been prepared in
accordance with GAAP consistently applied throughout the periods involved and
show all liabilities, direct and contingent, of the Company and its Subsidiaries
required to be shown in accordance with GAAP. The balance sheets fairly present
the condition of the Company and its Subsidiaries as at the dates thereof, and
the statements of income, stockholders' equity and cash flows fairly present the
results of the operations of the Company and its Subsidiaries and their cash
flows for the periods indicated. There has been no material adverse change in
the business, property or assets, condition (financial or otherwise), operations
or prospects of the Company and its Subsidiaries taken as a whole since the end
of the most recent Fiscal Year for which such audited financial statements have
been furnished.

         8.3.     ACTIONS PENDING. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries, or any properties or rights of the Company
or any of its Subsidiaries, by or before any court, arbitrator or administrative
or governmental body which might result in any material adverse change in the
business, property or assets, condition (financial or otherwise) or operations
of the Company and its Subsidiaries taken as a whole.

         8.4.     OUTSTANDING INDEBTEDNESS. Neither the Company nor any of its
Subsidiaries has outstanding any Indebtedness except as permitted by Section
6.2. There exists no default under the provisions of any instrument evidencing
such Indebtedness or of any agreement relating thereto.


                                       35
<PAGE>

         8.5.     TITLE TO PROPERTIES. The Company and each of its Subsidiaries
has good and indefeasible title to its respective real properties (other than
properties which it leases) and good title to all of its other respective
properties and assets, including the properties and assets reflected in the most
recent audited balance sheet referred to in Section 8.2 (other than properties
and assets disposed of in the ordinary course of business), subject to no Lien
of any kind except Liens permitted by Section 6.3. All leases necessary in any
material respect for the conduct of the respective businesses of the Company and
its Subsidiaries are valid and subsisting and are in full force and effect.

         8.6.     TAXES. The Company and each of its Subsidiaries has filed all
federal, state and other income tax returns which, to the best knowledge of the
officers of the Company and its Subsidiaries, are required to be filed, and each
has paid all taxes as shown on such returns and on all assessments received by
it to the extent that such taxes have become due, except such taxes as are being
contested in good faith by appropriate proceedings for which adequate reserves
have been established in accordance with GAAP.

         8.7.     CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company
nor any of its Subsidiaries is a party to any contract or agreement or subject
to any charter or other corporate restriction which materially and adversely
affects the business, property or assets, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole. Neither the
execution nor the delivery of any Financing Document, nor the offering and
issuance of the Notes, nor fulfillment of nor compliance with the terms and
provisions of the Financing Documents and of the Notes did or will conflict
with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation of any Lien (other than Liens created by the Guarantee and Collateral
Agreement and the Tennessee Property Mortgage) upon any of the properties or
assets of the Company or any of its Subsidiaries pursuant to, the charter or
by-laws of the Company or any of its Subsidiaries, any award of any arbitrator
or any agreement (including any agreement with stockholders), instrument, order,
judgment, decree, statute, law, rule or regulation to which the Company or any
of its Subsidiaries is subject. Neither the Company nor any of its Subsidiaries
is a party to, or otherwise subject to any provision contained in, any
instrument evidencing Indebtedness of the Company or such Subsidiary, any
agreement relating thereto or any other contract or agreement (including its
charter) which limits the amount of, or otherwise imposes restrictions on the
incurring of, Indebtedness of the Company of the type to be evidenced by the
Notes except as set forth in the agreements listed in Schedule 8.7 attached
hereto.

         8.8.     OFFERING OF NOTES. Neither the Company nor any agent acting on
its behalf has, directly or indirectly, offered the Notes or any similar
security of the


                                       36
<PAGE>

Company for sale to, or solicited any offers to buy the Notes or any similar
security of the Company from, or otherwise approached or negotiated with respect
thereto with, any Person other than institutional investors, each of which have
been offered the Notes at a private sale for investment. Neither the Company nor
any agent acting on its behalf has taken, or will take, any action which would
subject the issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act or to the provisions of any securities or Blue
Sky law of any applicable jurisdiction.

         8.9.     MARGIN SECURITIES. None of the transactions contemplated
herein and in the Notes (including, without limitation, the use of the proceeds
from the sale of the Notes) violates, will violate or will result in a violation
of Regulation T, Regulation U or Regulation X or any other regulation of the
Board of Governors of the Federal Reserve System or the Exchange Act, in each
case as in effect now or as the same may hereafter be in effect.

         8.10.    ERISA. No accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not waived, exists
with respect to any Plan (other than a Multiemployer Plan). No liability to the
PBGC has been or is expected by the Company or any ERISA Affiliate to be
incurred with respect to any Plan (other than a Multiemployer Plan) by the
Company, any Subsidiary or any ERISA Affiliate which is or would be materially
adverse to the business, property or assets, condition (financial or otherwise)
or operations of the Company and its Subsidiaries taken as a whole. Neither the
Company, any Subsidiary nor any ERISA Affiliate has incurred or presently
expects to incur any withdrawal liability under Title IV of ERISA with respect
to any Multiemployer Plan which is or would be materially adverse to the
business, property or assets, condition (financial or otherwise) or operations
of the Company and its Subsidiaries taken as a whole. The execution and delivery
of the Financing Documents and the issuance of the Notes will be exempt from or
will not involve any transaction which is subject to the prohibitions of section
406 of ERISA and will not involve any transaction in connection with which a
penalty could be imposed under section 502(i) of ERISA or a tax could be imposed
pursuant to section 4975 of the Code. The representation by the Company in the
preceding sentence is made in reliance upon and subject to the accuracy of the
representation of the Purchasers in Section 9.2 as to the source of funds used
by it to purchase the Notes.

         8.11.    GOVERNMENTAL CONSENT. Neither the nature of the Company or of
any Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offer and issuance of the Notes, is such as
to require any authorization, consent, approval, exemption or any action by or
notice to or filing with any court or administrative or governmental body (other
than routine filings after the date of the Closing for any Notes with the
Securities and


                                       37
<PAGE>

Exchange Commission and/or state Blue Sky authorities) in connection with the
execution and delivery of this Agreement or any other Financing Document, the
offering, issuance or delivery of the Notes or fulfillment of or compliance with
the terms and provisions hereof or of the Notes.

         8.12.    ENVIRONMENTAL COMPLIANCE. (a) The Company and its Subsidiaries
and all of their respective properties and facilities have complied at all times
and in all respects with all foreign, federal, state, local and regional
statutes, laws, ordinances and judicial or administrative orders, judgments,
rulings and regulations relating to protection of the environment except, in any
such case, where failure to comply would not result in a Material Adverse
Effect.

         (b)      The environmental audits regarding the real properties which
are part of the Merchant's Acquisition provided to the co-administrative agent
under the Credit Agreement do not contain any finding that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect.

         8.13.    DISCLOSURE. Neither this Agreement nor any other Financing
Document nor any other document, certificate or statement furnished to the
Purchasers or the Collateral Agent by or on behalf of the Company or any
Subsidiary in connection with any Financing Document contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein not misleading. There
is no fact peculiar to the Company or any of its Subsidiaries which materially
adversely affects or in the future may (so far as the Company can now foresee)
materially adversely affect the business, property or assets, condition
(financial or otherwise) or operations of the Company or any of its Subsidiaries
and which has not been set forth in this Agreement.

         8.14.    TRADEMARKS; TRADENAMES, ETC. Schedule 8.14 accurately
describes the names and registration numbers of all federally registered
trademarks, tradenames and service marks of the Company and its Subsidiaries as
of the date of the Closing.

         8.15.    STATUS UNDER CERTAIN STATUTES.

         Neither the Company nor any Subsidiary is (a) subject to regulation
under the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, or the Federal Power Act, as amended, or (b) in
violation of the USA Patriot Act.

         8.16.    ANTI-TERRORISM ORDER.

         Neither the Company nor any of its Subsidiaries is a Person or entity
described in Section 1 of the Anti-Terrorism Order or described in the
Department


                                       38

<PAGE>

of the Treasury Rule, and, to the best knowledge and belief of the Company,
neither the Company nor any of its Subsidiaries engages in any dealings or
transactions, or is otherwise associated, with any such Persons or entities.

9.       REPRESENTATIONS OF THE PURCHASERS.

         Each Purchaser represents as follows:

         9.1.     NATURE OF PURCHASE. Such Purchaser is not acquiring the Notes
with a view to or for sale in connection with any distribution thereof within
the meaning of the Securities Act, provided that the disposition of such
Purchaser's property shall at all times be and remain within its control.

         9.2.     SOURCE OF FUNDS. Each Purchaser represents that at least one
of the following statements is an accurate representation as to each source of
funds (a "SOURCE") to be used by such Purchaser to pay the purchase price of the
Notes to be purchased by it hereunder:

                  (a)      the Source is an "insurance company general account"
         (as the term is defined in the United States Department of Labor's
         Prohibited Transaction Exemption ("PTE") 95-60) in respect of which the
         reserves and liabilities (as defined by the annual statement for life
         insurance companies approved by the National Association of Insurance
         Commissioners (the "NAIC ANNUAL STATEMENT")) for the general account
         contract(s) held by or on behalf of any employee benefit plan together
         with the amount of the reserves and liabilities for the general account
         contract(s) held by or on behalf of any other employee benefit plans
         maintained by the same employer (or affiliate thereof as defined in PTE
         95-60) or by the same employee organization in the general account do
         not exceed 10% of the total reserves and liabilities of the general
         account (exclusive of separate account liabilities) plus surplus as set
         forth in the NAIC Annual Statement filed with such Purchaser's state of
         domicile; or

                  (b)      the Source is a separate account that is maintained
         solely in connection with such Purchaser's fixed contractual
         obligations under which the amounts payable, or credited, to any
         employee benefit plan (or its related trust) that has any interest in
         such separate account (or to any participant or beneficiary of such
         plan (including any annuitant)) are not affected in any manner by the
         investment performance of the separate account; or

                  (c)      the Source is either (i) an insurance company pooled
         separate account, within the meaning of PTE 90-1 or (ii) a bank
         collective investment fund, within the meaning of the PTE 91-38 and,
         except as disclosed by such Purchaser to the Company in writing
         pursuant to this clause (c), no employee benefit plan or group of plans
         maintained by the same employer or employee


                                       39
<PAGE>

         organization beneficially owns more than 10% of all assets allocated to
         such pooled separate account or collective investment fund; or

                  (d)      the Source constitutes assets of an "investment fund"
         (within the meaning of Part V of PTE 84-14 (the "QPAM EXEMPTION"))
         managed by a "qualified professional asset manager" or "QPAM" (within
         the meaning of Part V of the QPAM Exemption), no employee benefit
         plan's assets that are included in such investment fund, when combined
         with the assets of all other employee benefit plans established or
         maintained by the same employer or by an affiliate (within the meaning
         of Section V(c)(1) of the QPAM Exemption) of such employer or by the
         same employee organization and managed by such QPAM, exceed 20% of the
         total client assets managed by such QPAM, the conditions of Part I(c)
         and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a
         person controlling or controlled by the QPAM (applying the definition
         of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more
         interest in the Company and (i) the identity of such QPAM and (ii) the
         names of all employee benefit plans whose assets are included in such
         investment fund have been disclosed to the Company in writing pursuant
         to this clause (d); or

                  (e)      the Source constitutes assets of a "plan(s)" (within
         the meaning of Section IV of PTE 96-23 (the "INHAM EXEMPTION")) managed
         by an "in-house asset manager" or "INHAM" (within the meaning of Part
         IV of the INHAM exemption), the conditions of Part I(a), (g) and (h) of
         the INHAM Exemption are satisfied, neither the INHAM nor a person
         controlling or controlled by the INHAM (applying the definition of
         "control" in Section IV(h) of the INHAM Exemption) owns a 5% or more
         interest in the Company and (i) the identity of such INHAM and (ii) the
         name(s) of the employee benefit plan(s) whose assets constitute the
         Source have been disclosed to the Company in writing pursuant to this
         clause (e); or

                  (f)      the Source is a governmental plan; or

                  (g)      the Source is one or more employee benefit plans, or
         a separate account or trust fund comprised of one or more employee
         benefit plans, each of which has been identified to the Company in
         writing pursuant to this clause (g); or

                  (h)      the Source does not include assets of any employee
         benefit plan, other than a plan exempt from the coverage of ERISA.

         As used in this Section 6.2, the terms "EMPLOYEE BENEFIT PLAN,"
"GOVERNMENTAL PLAN," and "SEPARATE ACCOUNT" shall have the respective meanings
assigned to such terms in Section 3 of ERISA.


                                       40
<PAGE>

10.      DEFINITIONS; ACCOUNTING MATTERS.

         For the purpose of this Agreement, the terms defined in Sections 10.1
and 10.2 (or within the text of any other Section) shall have the respective
meanings specified therein and all accounting matters shall be subject to
determination as provided in Section 10.3.

         10.1.    YIELD-MAINTENANCE TERMS.

         "CALLED PRINCIPAL" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to Section 4.2, Section 4.7 or
Section 4.8 or is declared to be immediately due and payable pursuant to Section
7.1, as the context requires.

         "DISCOUNTED VALUE" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (as converted to reflect
the periodic basis on which interest on such Note is payable, if payable other
than on a semi-annual basis) equal to the Reinvestment Yield with respect to
such Called Principal.

         "REINVESTMENT YIELD" shall mean, with respect to the Called Principal
of any Note, .50% (50 basis points) over the yield to maturity implied by (i)
the yields reported, as of 10:00 A.M. (New York City local time) on the Business
Day next preceding the Settlement Date with respect to such Called Principal,
for actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date on
the Treasury Yield Monitor page of Standard & Poor's MMS - Treasury Market
Insight (or, if Standard & Poor's shall cease to report such yields in MMS -
Treasury Market Insight or shall cease to be Prudential Capital Group's
customary source of information for calculating make-whole amounts on privately
placed notes, then such source as is then Prudential Capital Group's customary
source of such information), or (ii) if such yields shall not be reported as of
such time or the yields reported as of such time shall not be ascertainable, the
Treasury Constant Maturity Series yields reported, for the latest day for which
such yields shall have been so reported as of the Business Day next preceding
the Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date. Such
implied yield shall be determined, if necessary, by (a) converting U.S. Treasury
bill quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between yields reported for various
maturities. The Reinvestment Yield shall be rounded to that number of decimal
places as appears in the coupon of the applicable Note.


                                       41
<PAGE>

         "REMAINING AVERAGE LIFE" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.

         "REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon at the rate in effect on the Settlement Date that would be due on or
after the Settlement Date with respect to such Called Principal if no payment of
such Called Principal were made prior to its scheduled due date.

         "SETTLEMENT DATE" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
Section 4.2, Section 4.7 or Section 4.8 or is declared to be immediately due and
payable pursuant to Section 7.1, as the context requires.

         "YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Amount shall in no
event be less than zero.

         10.2.    OTHER DEFINED TERMS.

         "ACCEPTABLE ACQUISITION" shall have the meaning specified in Section
6.5(g).

         "ACCEPTED NOTES" shall have the meaning specified in Section 4.8(c)(i).

         "ACQUISITION" shall mean any transaction pursuant to which the Company
or any of its Wholly-Owned Subsidiaries (a) acquires all of the outstanding
equity securities of any Person other than the Company or any Person which is
then a Wholly-Owned Subsidiary of the Company, (b) otherwise makes any Person a
Wholly-Owned Subsidiary of the Company, in any case pursuant to a merger,
purchase of assets or any reorganization, or (c) purchases all or substantially
all of the business or assets of any Person other than a Wholly-Owned Subsidiary
of the Company or of any business unit or line of business of any such Persons.


                                       42
<PAGE>

         "ADDITIONAL MORTGAGED PROPERTY" means any real property of the Company
or any Subsidiary in respect of which the Collateral Agent has been granted a
mortgage under Section 5.8 hereof.

         "ADJUSTED LEVERAGE RATIO" means the ratio set forth in Section 6.1(c).

         "AFFILIATE" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Company,
except a Subsidiary. A Person shall be deemed to control a corporation if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.

         "AGREEMENT, THIS" shall have the meaning specified in Section 11.3.

         "ANTI-TERRORISM ORDER" means United States of America Executive Order
No. 13,224 of September 23, 2001, Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism, 66 Fed. Reg.
49,049 (2001).

         "APPLICABLE MARGIN" means, (a) at any time on prior to March 31, 2004,
zero percent (0.00%) per annum and (b) for the time periods specified below (i)
the interest rate per annum set forth in the table below opposite the Adjusted
Leverage Ratio for each of the two most recently ended Fiscal Quarters at such
time, and (ii) in all other cases, the Applicable Margin then in effect shall
remain unchanged.

<TABLE>
<CAPTION>
                                                            ADJUSTED LEVERAGE
                                                          RATIO FOR EACH OF THE                INTEREST
                                                          TWO MOST RECENT FISCAL               RATE PER
                    TIME PERIOD                                  QUARTERS                        ANNUM
                    -----------                           ----------------------               ---------
           <S>                                         <C>                                     <C>
           on or after March 31, 2004 but                   greater than 4.75:1                  1.00%
            prior to September 30, 2005
                                                       less than or equal to 4.75:1              0.00%

           on or after September 30, 2005                   greater than 4.50:1                  1.00%

                                                       less than or equal to 4.50:1              0.00%
</TABLE>

         "ASSET SALE PROCEEDS NOTICE" shall have the meaning specified in
Section 4.8(a).


                                       43
<PAGE>

         "AUTHORIZED OFFICER" shall mean, with respect to the Company, its chief
executive officer, its chief financial officer or any vice president of the
Company designated as an "Authorized Officer" of the Company for the purpose of
this Agreement in an Officer's Certificate executed by the Company's chief
executive officer or chief financial officer and delivered to the Purchasers.
Any action taken under this Agreement on behalf of the Company by any individual
who on or after the date of this Agreement shall have been an Authorized Officer
of the Company and whom the Purchasers in good faith believe to be an Authorized
Officer of the Company at the time of such action shall be binding on the
Company even though such individual shall have ceased to be an Authorized
Officer of the Company.

         "BANKRUPTCY LAW" shall have the meaning specified in clause (i) of
Section 7.1.

         "BANK TERM LOAN" shall mean a loan made under the Credit Agreement
pursuant to either of Sections 2.01(b) or 2.01(c) of the Credit Agreement.

         "BASE RATE" means 6.25% per annum.

         "BIG O" shall mean Big O Tires, Inc., a Nevada corporation.

         "BUSINESS DAY" shall mean any day other than (i) a Saturday or a
Sunday, and (ii) a day on which commercial banks in New York City are required
or authorized to be closed.

         "CAPITAL EXPENDITURES" mean, for any period, expenditures (including
the aggregate amount of Capitalized Lease Obligations incurred during such
period) made directly or indirectly by the Company or any Subsidiary to acquire
or construct fixed assets, property, plant and equipment (including renewals,
improvements, replacements and substitutions, but excluding repairs) during such
period, computed in accordance with GAAP.

         "CAPITAL STOCK" means any class of capital stock, share capital or
similar equity interest of a Person.

         "CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which
is or will be required to be capitalized on the books of the Company or any
Subsidiary in accordance with GAAP, taken at the amount thereof accounted for as
indebtedness (net of interest expenses) in accordance with such principles.

         "CHANGE IN CONTROL" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any person or group (within the
meaning of the Exchange Act and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof) of shares representing
more than 20% of the aggregate ordinary voting power represented by the issued
and outstanding


                                       44
<PAGE>

capital stock of the Company; (b) occupation of a majority of the seats (other
than vacant seats) on the board of directors of the Company by Persons who were
neither (i) nominated by the board of directors of the Company nor (ii)
appointed by directors so nominated; or (c) the acquisition of direct or
indirect Control of the Company by any Person or group.

         "CLOSING" shall have the meaning specified in Section 2.

         "CLOSING DATE SUBSIDIARY OBLIGORS" shall have the meaning specified in
Section 3.1(b).

         "CLOSING FEE" shall have the meaning specified in Section 3.5.

         "CODE" shall mean the Internal Revenue Code of 1986, as amended.

         "COLLATERAL AGENT" means J.P. Morgan Chase Bank, N.A., in its capacity
as collateral agent on behalf of the holders of Notes, the holders of 1996 Notes
and the bank lenders under the Intercreditor Agreement.

         "COMPANY" shall have the meaning given to such term in the introductory
sentence hereof.

         "CONSOLIDATED ADJUSTED DEBT" shall have the meaning specified in
Section 6.1(c).

         "CONSOLIDATED FUNDED INDEBTEDNESS" means all Funded Indebtedness of the
Company and its Subsidiaries after eliminating inter-company items, including
any Funded Indebtedness outstanding pursuant to and under this Agreement, in
each case determined on a consolidated basis in accordance with GAAP.

         "CONSOLIDATED INTEREST EXPENSE" means, for any period for which such
amount is being determined, the interest expense of the Company and its
Consolidated Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP, including (i) the amortization of debt discounts to the
extent included in interest expense in accordance with GAAP, (ii) the
amortization of all fees (including fees with respect to Hedging Agreements)
payable in connection with the incurrence of Indebtedness to the extent included
in interest expense in accordance with GAAP and (iii) the portion of any rents
payable under Capitalized Lease Obligations allocable to interest expense in
accordance with GAAP.

         "CONSOLIDATED NET INCOME" means, as to any period, the net income of
the Company and its Consolidated Subsidiaries for such period, after taxes and
after extraordinary items as determined on a consolidated basis in accordance
with GAAP.


                                       45
<PAGE>

         "CONSOLIDATED SUBSIDIARIES" means Subsidiaries whose accounts are
consolidated with the accounts of the Company in the Company's consolidated
financial statements prepared in accordance with GAAP.

         "CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.

         "CONTROL EVENT" means:

                  (a)      the execution by the Company or any of its
         Subsidiaries of any agreement or letter of intent with respect to any
         proposed transaction or event or series of transactions or events
         which, individually or in the aggregate, may reasonably be expected to
         result in a Change in Control;

                  (b)      the execution of any written agreement which, when
         fully performed by the parties thereto, would result in a Change in
         Control; or

                  (c)      the commencement (as defined in Regulation 14D of the
         Exchange Act) of a tender offer by any Person or group (as such terms
         are defined in the definition of "Change in Control") to the holders of
         the Voting Stock of the Company, which offer, if accepted by the
         requisite number of holders, would result in a Change in Control.

         "CREDIT AGREEMENT" shall mean the Credit Agreement, dated as of March
31, 2003, to which the Company is a party.

         "DEPARTMENT OF THE TREASURY RULE" means the United States of America
Department of the Treasury rule entitled Blocked Persons, Specially Designated
Nationals, Specifically Designated Terrorists, Foreign Terrorist Organizations,
and Specially Designated Narcotics Traffickers: Additional Designations of
Terrorism-Related Blocked Persons, 66 Fed. Reg. 54,404 (2001) (to be codified at
appendix A to 31 CFR chapter V), as amended.

         "EBITDA" shall mean, as to any period, the sum of (i) Consolidated Net
Income, plus (ii) consolidated depreciation, amortization and all other non-cash
charges plus (iii) income taxes to the extent they reduce Consolidated Net
Income, plus (iv) Consolidated Interest Expense.

         In addition, (a) EBITDA shall include, on a pro forma basis for each
Fiscal Quarter (including any pro forma cost savings to the extent the same
could be reflected in pro forma financial statements contained in filings with
the Securities and Exchange Commission pursuant to its Regulation S-X), the
foregoing information with respect to each Person that was either acquired in an
Acceptable


                                       46
<PAGE>

Acquisition or disposed of as permitted by this Agreement during such Fiscal
Quarter, determined as if the Acquisition or disposition had taken place on the
first day of such Fiscal Quarter; and (b) whenever in this Agreement EBITDA is
determined for a period of four Fiscal Quarters, it shall include, on a pro
forma basis for such period (including any pro forma cost savings referred to in
the parenthetical above), the foregoing information with respect to each Person
that was either acquired in an Acceptable Acquisition or disposed of as
permitted by this Agreement during such period, determined as if the Acquisition
or disposition had taken place on the first day of such four Fiscal Quarter
period.

         "EBITDAR" shall mean the aggregate EBITDA for the period of four
completed Fiscal Quarters then most recently ended plus the aggregate rental
payments made (net of any sublease income) by the Company and its Subsidiaries
during such period.

         "ENVIRONMENTAL AND SAFETY LAWS" shall mean all laws relating to
pollution, the release or other discharge, handling, disposition or treatment of
Hazardous Materials and other substances or the protection of the environment or
of employee health and safety, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
et. seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801
et. seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 7401
et. seq.), the Clean Air Act (42 U.S.C. Section 401 et. seq.), the Toxic
Substances Control Act (15 U.S.C. Section 2601 et. seq.), the Occupational
Safety and Health Act (29 U.S.C. Section 651 et. seq.) and the Emergency
Planning and Community Right-To-Know Act (42 U.S.C. Section 11001 et. seq.),
each as the same may be amended and supplemented.

         "ENVIRONMENTAL COSTS AND LIABILITIES" shall mean, as to any Person, all
liabilities, obligations, responsibilities, remedial actions, losses, damages,
punitive damages, consequential damages, treble damages, contribution, cost
recovery, costs and expenses (including all fees, disbursements and expenses of
counsel, expert and consulting fees, and costs of investigation and feasibility
studies), fines, penalties, sanctions and interest incurred as a result of any
claim or demand, by any Person, whether based in contract, tort, implied or
express warranty, strict liability, criminal or civil statute, permit, order or
agreement with any Federal, state or local governmental authority or other
Person, arising from environmental, health or safety conditions, or the release
or threatened release of a contaminant, pollutant or Hazardous Material into the
environment, resulting from the operations of such Person or its subsidiaries,
or breach of any Environmental and Safety Law or for which such Person or its
subsidiaries is otherwise liable or responsible.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.


                                       47
<PAGE>

         "ERISA AFFILIATE" shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.

         "EVENT OF DEFAULT" shall mean any of the events specified in Section
7.1, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "DEFAULT" shall mean any of such
events, whether or not any such requirement has been satisfied.

         "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.

         "EXCLUDED FOREIGN SUBSIDIARY" means any Foreign Subsidiary in respect
of which either (a) the pledge of all of the Capital Stock of such Subsidiary as
collateral or (b) the guaranteeing by such Subsidiary of the obligations of the
Company to the holders of Notes, would, in the good faith judgment of the
Company, result in adverse tax consequences to the Company.

         "EXISTING CREDIT AGREEMENT" means the Amended and Restated Credit
Agreement dated as of January 5, 2001, among the Company, First Tennessee Bank
National Association, as Administrative Agent, and the lenders party thereto.

         "FINANCING DOCUMENT(S)" shall mean each of this Agreement, the Notes,
the Guarantee and Collateral Agreement, the Tennessee Property Mortgage and any
mortgage in respect of Additional Mortgaged Property granted pursuant to Section
5.8 hereof.

         "FISCAL QUARTER" means each fiscal quarter-year period of the Company,
ending on the last day of each March, June, September and December.

         "FISCAL YEAR" means the fiscal year of the Company, which is the
calendar year.

         "FIXED CHARGE COVERAGE RATIO" shall have the meaning specified in
Section 6.1(a).

         "FIXED CHARGES" shall mean, for any period, the sum of Consolidated
Interest Expense, Scheduled Payments and Capital Expenditures for such period.

         "FOREIGN SUBSIDIARY" means any Subsidiary organized in any jurisdiction
other than the United States of America or any jurisdiction thereof.

         "FUNDED INDEBTEDNESS" means any outstanding Indebtedness of a Person
for borrowed money, including all such Indebtedness of the Person to the


                                       48
<PAGE>

Purchasers and other financial institutions, domestic or foreign, and all
secured and unsecured notes payable, all industrial revenue bonds, all
Capitalized Lease Obligations and other similar debt obligations and the current
maturities thereof, but excluding all Guarantees of Funded Indebtedness. (Checks
that have not been presented for payment shall not constitute Funded
Indebtedness.)

         "GAAP" means generally accepted accounting principles in effect in the
United States of America at the time of application thereof.

         "GOOD FAITH CONTEST" shall mean, with respect to any tax, assessment,
Lien, obligation, claim, liability, judgment, injunction, award, decree, order,
law, regulation, statute or similar item, any challenge or contest thereof by
appropriate proceedings timely initiated in good faith by the Company or any
Subsidiary for which adequate reserves therefor have been taken in accordance
with GAAP.

         "GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

         "GUARANTEE" of or by any Person (the "guarantor") shall mean any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business.

         "GUARANTEE AND COLLATERAL AGREEMENT" shall have the meaning specified
in Section 3.6.

         "HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental and


                                       49
<PAGE>

Safety Law.

         "HEDGING AGREEMENTS" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging agreement.

         "INCLUDING" shall mean, unless the context clearly requires otherwise,
"including without limitation".

         "INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
indebtedness of others secured by (or for which the holder of such indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
indebtedness of others, (h) all Capitalized Lease Obligations of such Person,
(i) all obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit and letters of guaranty, (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances, and
(k) all obligations of such Person related to Synthetic Leases. The indebtedness
of any Person shall include the indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
indebtedness provide that such Person is not liable therefor.

         "INHAM EXEMPTION" shall have the meaning specified in Section 9.2(e).

         "INTERCOMPANY LOAN" means any short term demand loan made by the
Company to any of its Wholly-Owned Subsidiaries, by any such Wholly-Owned
Subsidiary to the Company or by a Wholly-Owned Subsidiary of the Company to
another Wholly-Owned Subsidiary.

         "INTERCREDITOR AGREEMENT" shall have the meaning specified in Section
3.6.

         "JOINT VENTURE" means a joint venture formed to provide distribution
for the products of the Company, Big O or any other Subsidiary, which joint
venture is accounted for under GAAP as an investment and not as a Subsidiary or
as an acquisition or a capital expenditure.


                                       50
<PAGE>

         "LEVERAGE RATIO" shall have the meaning specified in Section 6.1(b).

         "LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.

         "LONG-TERM INDEBTEDNESS" means any Indebtedness that, in accordance
with GAAP constitutes (or, when incurred, constituted) a long-term liability.

         "MATERIAL ADVERSE EFFECT" shall mean (i) a material adverse effect on
the business, assets, operations, prospects or condition, financial or
otherwise, of the Company and its Subsidiaries, taken as a whole or (ii)
material impairment of the validity or enforceability or the rights of, or the
benefits available to, the holders of any of the Notes under this Agreement or
the Notes.

         "MATERIAL INDEBTEDNESS" means Indebtedness (other than the Notes) or
obligations in respect of one or more Hedging Agreements, of any one or more of
the Company and its Subsidiaries in an aggregate principal amount exceeding
$5,000,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of the Company or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Company or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.

         "MERCHANT'S ACQUISITION" means the acquisition of Merchant's,
Incorporated and Merban, Inc. on the terms set forth in the Merchant's
Acquisition Documentation.

         "MERCHANT'S ACQUISITION AGREEMENT" means the Stock Purchase Agreement,
dated March 25, 2003, by and among the Company and the stockholders of
Merchant's, Incorporated.

         "MERCHANT'S ACQUISITION DOCUMENTATION" means, collectively, the
Merchant's Acquisition Agreement and all schedules, exhibits and annexes thereto
and all side letters and agreements affecting the terms thereof or entered into
in connection therewith.

         "MOODY'S" shall mean Moody's Investors Service, Inc. or any successor
thereto.

         "MULTIEMPLOYER PLAN" shall mean any Plan which is a "multiemployer


                                       51
<PAGE>


plan" (as such term is defined in section 4001(a)(3) of ERISA.

         "NAIC ANNUAL STATEMENT" shall have the meaning specified in Section
9.2(a).

         "NET PROCEEDS" shall mean, with respect to any event, (a) the cash
proceeds received in respect of such event, including (i) any cash received in
respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty or other insured damage, insurance proceeds, and (iii) in the
case of a condemnation or similar event, condemnation awards and similar
payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket
expenses paid by the Company and its Subsidiaries to third parties in connection
with such event, (ii) in the case of a sale, transfer or other disposition of an
asset (including pursuant to a sale and leaseback transaction permitted under
Section 6.10(d) or a casualty or a condemnation or similar proceeding), the
amount of all payments required to be made by the Company and its Subsidiaries
as a result of such event to repay Indebtedness (other than obligations under
the Credit Agreement and the Notes) secured by such asset or otherwise subject
to mandatory prepayment as a result of such event (to the extent such repayment
is permitted hereunder), and (iii) the amount of all taxes paid (or reasonably
estimated to be payable) by the Company or any Subsidiary, and the amount of any
reserves established by the Company and its Subsidiaries to fund contingent
liabilities or contingent obligations reasonably estimated to be payable, in
each case during the year that such event occurred or the next succeeding year
and that are directly attributable to such event (as determined reasonably and
in good faith by the chief financial officer of the Company), provided that the
amount of any subsequent reduction of any such reserve (other than in connection
with a payment in respect of any such liability) shall be deemed to be Net
Proceeds of a Prepayment Event occurring on the date of such reduction.

         "1996 NOTES" means the notes originally issued by the Company on July
10, 1996, as amended to date, governed by the terms of the Second Amended and
Restated Note Agreement of even date herewith, as amended, restated,
supplemented, replaced or otherwise modified from time to time.

         "NOTES" shall have the meaning specified in Section 1.

         "OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of
the Company by an Authorized Officer of the Company.

         "PBGC" means the Pension Benefit Guaranty Corporation, or any successor
organization.

         "PERMITTED ENCUMBRANCES" means:


                                       52
<PAGE>

                  (a)      Liens imposed by law for taxes that are not yet due
         or are being contested in compliance with Section 5.13;

                  (b)      carriers', warehousemen's, mechanics', materialmen's,
         repairmen's and other like Liens imposed by law, arising in the
         ordinary course of business and securing obligations that are not
         overdue by more than 30 days or are being contested in compliance with
         Section 5.13;

                  (c)      pledges and deposits made in the ordinary course of
         business in compliance with workers' compensation, unemployment
         insurance and other social security laws or regulations;

                  (d)      deposits to secure the performance of bids, trade
         contracts, leases, statutory obligations, surety and appeal bonds,
         performance bonds and other obligations of a like nature, in each case
         in the ordinary course of business;

                  (e)      judgment liens in respect of judgments that do not
         constitute an Event of Default under Section 7.1(n);

                  (f)      easements, zoning restrictions, rights-of-way and
         similar encumbrances on real property imposed by law or arising in the
         ordinary course of business that do not secure any monetary obligations
         and do not materially detract from the value of the affected property
         or interfere with the ordinary conduct of business of the Company or
         any Subsidiary;

                  (g)      Liens of landlords on fixtures and leasehold
         improvements granted or arising in the ordinary course of business; and

                  (h)      Liens securing Indebtedness of the Company incurred
         under and in respect of this Agreement and the Credit Agreement;

provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness (other than in respect of the Liens described in clause
(h) of this definition).

         "PERMITTED INVESTMENTS" means:

                  (a)      direct obligations of, or obligations the principal
         of and interest on which are unconditionally guaranteed by, the United
         States of America (or by any agency thereof to the extent such
         obligations are backed by the full faith and credit of the United
         States of America), in each case maturing within one year from the date
         of acquisition thereof;


                                       53
<PAGE>


                  (b)      investments in commercial paper maturing within 270
         days from the date of acquisition thereof and having, at such date of
         acquisition, the highest credit rating obtainable from S&P or from
         Moody's;

                  (c)      investments in certificates of deposit, banker's
         acceptances and time deposits maturing within 180 days from the date of
         acquisition thereof issued or guaranteed by or placed with, and money
         market deposit accounts issued or offered by, any domestic office of
         any commercial bank organized under the laws of the United States of
         America or any State thereof which has a combined capital and surplus
         and undivided profits of not less than $500,000,000; and

                  (d)      fully collateralized repurchase agreements with a
         term of not more than 30 days for securities described in clause (a)
         above and entered into with a financial institution satisfying the
         criteria described in clause (c) above.

         "PERSON" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.

         "PLAN" shall mean any employee pension benefit plan (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any ERISA
Affiliate.

         "PREPAYMENT EVENT" shall mean:

                  (a)      any sale and leaseback transaction permitted pursuant
         to Section 6.10(d) of any property or asset of the Company or any
         Subsidiary; or

                  (b)      any casualty or other insured damage to, or any
         taking under power of eminent domain or by condemnation or similar
         proceeding of, any property or asset of the Company or any Subsidiary,
         but only to the extent that the Net Proceeds therefrom have not been
         applied to repair, restore or replace such property or asset or to
         acquire other real property, equipment or other tangible assets to be
         used in the business of the Company or any Subsidiary within one year
         after such event; or

                  (c)      any other "Prepayment Event" as defined in the Credit
         Agreement.

         "PREPAYMENT OFFER" shall have the meaning specified in Section 4.8(a).

         "PROCEEDS DISPOSITION DATE" shall have the meaning specified in Section
4.8(a).


                                       54


<PAGE>


         "PROPOSED PREPAYMENT DATE" shall have the meaning specified in Section
4.7(c).

         "PRUDENTIAL" shall mean Prudential Investment Management, Inc.

         "PRUDENTIAL AFFILIATE" shall mean (a) any corporation or other entity
all of the Voting Stock (or equivalent voting securities or interests) of which
is owned by Prudential either directly or through Prudential Affiliates, and (b)
any investment fund or account which is managed by Prudential or a Prudential
Affiliate described in clause (a) of this definition.

         "PTE" shall have the meaning specified in Section 9.2(a).

         "QPAM EXEMPTION" shall have the meaning specified in Section 9.2(d).

         "REQUIRED HOLDER(S)" shall mean the holder or holders of at least 51%
of the aggregate principal amount of the Notes from time to time outstanding.

         "RESPONSIBLE OFFICER" shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of the
Company, general counsel of the Company or any other officer of the Company
involved principally in its financial administration or its controllership
function.

         "RESTRICTED PAYMENT" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any shares of any class
of capital stock of the Company or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of capital stock of the Company
or any option, warrant or other right to acquire any such shares of capital
stock of the Company.

         "S&P" shall mean Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. or any successor thereto.

         "SCHEDULED PAYMENTS" means, for any period, the sum (without
duplication) of the aggregate amount of scheduled principal payments made during
such period in respect of Long-Term Indebtedness of the Company and its
Subsidiaries (other than payments made by the Company or any Subsidiary to the
Company or a Subsidiary), including scheduled prepayments of the Notes pursuant
to Section 4.1 for such period.

         "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

         "SIGNIFICANT HOLDER" shall mean (i) Prudential, so long as Prudential
or any Prudential Affiliate shall hold any Note, or (ii) any other holder of at
least 5% of the aggregate principal amount of the Notes of any Series from time
to time outstanding.


                                       55
<PAGE>


         "SOURCE" shall have the meaning specified in Section 9.2.

         "SUBSIDIARY" shall mean, with respect to any Person (the "parent") at
any date, any corporation, limited liability company, partnership, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power, or in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent and one or more subsidiaries of the parent
or by the parent and one or more subsidiaries of the parent, except that no
Joint Venture in which the entire amount invested by the Company and its
subsidiaries complies with Section 6.5(d) shall be deemed to be a subsidiary.

         "SUBSIDIARY" means any subsidiary of the Company; provided, however,
that in no event shall TBC de Mexico be considered to be a Subsidiary for
purposes hereof (but, to the extent required by GAAP, shall be consolidated in
the consolidated financial statements of the Company and as such included in the
calculation of the covenants in Sections 6.1(a), 6.1(b) and 6.1(c)) until such
time, if any, as the Company's interest in TBC de Mexico exceeds 60%, the
Company is required by GAAP to consolidate TBC de Mexico into the Company's
consolidated financial statements, and the Company's equity investment in TBC de
Mexico exceeds $2,500.000.

         "SUBSIDIARY OBLIGOR" shall mean each of the Closing Date Subsidiary
Obligors and any Subsidiary which delivers to each of the holders of Notes an
amendment to the Guarantee and Collateral Agreement in compliance with Section
5.6 hereof.

         "SUNTRUST SALE AND LEASEBACK" means the sale for a price not to exceed
$12,000,000 and the leasing back of up to fourteen retail stores currently owned
by Merchant's, Incorporated.

         "SYNTHETIC LEASE" means any lease entered into by Big O or Big O
Development, Inc. (each a "Lessee") pursuant to the existing $15,000,000 lease
program with SunTrust Capital Markets, Inc. ("SunTrust") contemplated by that
certain Master Agreement, dated as of December 2, 1998, among the Lessees,
SunTrust, the Company, and the Atlantic Financial Group, Ltd., as from time to
time amended.

                                       56


<PAGE>

         "TENNESSEE PROPERTY MORTGAGE" means that certain Deed of Trust,
Assignment of Leases and Security Agreement, dated as of March 31, 2003, in
respect of real property and improvements in Memphis, Tennessee owned by the
Company securing its obligations to, among other parties, the Purchasers, in
respect of, among other obligations, the Company's obligations under this
Agreement and the Notes.

         "TIRE KINGDOM" means Tire Kingdom, Inc., a Florida corporation.

         "TITLE INSURANCE COMPANY" shall have the meaning specified in Section
5.9(a).

         "TRANSFEREE" shall mean any direct or indirect transferee of all or any
part of any Note.

         "USA PATRIOT ACT" means the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT ACT) Act of 2001 of the United States of America.

         "VOTING STOCK" shall mean, with respect to any corporation, any shares
of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).

         "WHOLLY-OWNED SUBSIDIARY" shall mean, as to any Person, (a) any
Subsidiary all of whose outstanding Voting Stock is at the time owned directly
by such Person (including any Subsidiary all of whose outstanding Voting Stock
is at the time owned directly or indirectly by one of such Person's Wholly-Owned
Subsidiaries) or (b) any partnership, limited liability company, association,
joint venture or similar business organization of which 100% of the ownership
interests having ordinary voting power are at the time so owned.

         10.3. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all unaudited financial statements and certificates and reports as to financial
matters required to be furnished hereunder shall be prepared, in accordance with
GAAP applied on a basis consistent with the most recent audited financial
statements delivered pursuant to clause (b) of Section 5.1 or, if no such
statements have been so delivered, the most recent audited financial statements
referred to in clause (i) of Section 8.2.


                                       57
<PAGE>

11.      MISCELLANEOUS.

         11.1. NOTE PAYMENTS. The Company agrees that, so long as any Purchaser
shall hold any Note, it will make payments of principal of, interest on, and any
Yield-Maintenance Amount payable with respect to, such Note, by wire transfer of
immediately available funds for credit (not later than 12:00 noon, New York City
local time, on the date due) to (i) the account or accounts of such Purchaser
specified in the Purchaser Schedule attached hereto or (ii) such other account
or accounts in the United States as such Purchaser may from time to time
designate in writing, notwithstanding any contrary provision herein or in any
Note with respect to the place of payment. Each Purchaser agrees that, before
disposing of any Note, it will make a notation thereon (or on a schedule
attached thereto) of all principal payments previously made thereon and of the
date to which interest thereon has been paid. The Company agrees to afford the
benefits of this Section 11.1 to any Transferee which shall have made the same
agreement as the transferring Purchaser has made in this Section 11.1.

         11.2. EXPENSES. The Company agrees to pay, and save the Purchasers and
any Transferee harmless against liability for the payment of (i) all document
production and duplication charges and the fees and expenses of any special
counsel engaged by the Purchasers or any Transferee in connection with any
subsequent proposed modification of, or proposed consent under, this Agreement,
whether or not such proposed modification shall be effected or proposed consent
granted, and (ii) the costs and expenses, including attorneys' fees, incurred by
the Purchasers or any Transferee in enforcing (or determining whether or how to
enforce) any rights under this Agreement or the Notes or in responding to any
subpoena or other legal process or informal investigative demand involving the
Company, any Subsidiary or any Affiliate of any thereof issued in connection
with this Agreement or the transactions contemplated hereby or by reason of the
Purchasers' or any Transferee's having acquired any Note, including without
limitation costs and expenses incurred in any bankruptcy case involving the
Company, any Subsidiary or any Affiliate of any thereof. The obligations of the
Company under this Section 11.2 shall survive the transfer of any Note or
portion thereof or interest therein by the Purchasers or any Transferee and the
payment of any Note.

         11.3. CONSENT TO AMENDMENTS. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holder(s) of the
Notes except that, without the written consent of the holders of all Notes at
the time outstanding, the Notes may not be amended or the provisions thereof
waived to change the maturity thereof, to change or affect the principal
thereof, or to change or affect the rate or time of payment of interest on or
any Yield-Maintenance Amount payable with respect to the Notes, or to change or
affect the provisions of Section 7.1 or this Section 11.3 insofar as such
provisions relate to proportions of the principal amount of the Notes, or the
rights of any individual holder of Notes,


                                       58

<PAGE>

required with respect to any declaration of Notes to be due and payable or with
respect to any consent, amendment, waiver or declaration. Each holder of any
Note at the time or thereafter outstanding shall be bound by any consent
authorized by this Section 11.3, whether or not such Note shall have been marked
to indicate such consent, but any Notes issued thereafter may bear a notation
referring to any such consent. No course of dealing between the Company and the
holder of any Note nor any delay in exercising any rights hereunder or under any
Note shall operate as a waiver of any rights of any holder of such Note. As used
herein and in the Notes, the term "THIS AGREEMENT" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.

         11.4. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES.
The Notes are issuable as registered notes without coupons in denominations of
at least $1,000,000, except as may be necessary to reflect any principal amount
not evenly divisible by $1,000,000. The Company shall keep at its principal
office a register in which the Company shall provide for the registration of
Notes and of transfers of Notes. Upon surrender for registration of transfer of
any Note at the principal office of the Company, the Company shall, at its
expense, execute and deliver one or more new Notes of like tenor and of a like
aggregate principal amount, registered in the name of such transferee or
transferees. At the option of the holder of any Note, such Note may be exchanged
for other Notes of like tenor and of any authorized denominations, of a like
aggregate principal amount, upon surrender of the Note to be exchanged at the
principal office of the Company. Whenever any Notes are so surrendered for
exchange, the Company shall, at its expense, execute and deliver the Notes which
the holder making the exchange is entitled to receive. Each installment of
principal payable on each installment date upon each new Note issued upon any
such transfer or exchange shall be in the same proportion to the unpaid
principal amount of such new Note as the installment of principal payable on
such date on the Note surrendered for registration of transfer or exchange bore
to the unpaid principal amount of such Note. No reference need be made in any
such new Note to any installment or installments of principal previously due and
paid upon the Note surrendered for registration of transfer or exchange. Every
Note surrendered for registration of transfer or exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer duly executed,
by the holder of such Note or such holder's attorney duly authorized in writing.
Any Note or Notes issued in exchange for any Note or upon transfer thereof shall
carry the rights to unpaid interest and interest to accrue which were carried by
the Note so exchanged or transferred, so that neither gain nor loss of interest
shall result from any such transfer or exchange. Upon receipt of written notice
from the holder of any Note of the loss, theft, destruction or mutilation of
such Note and, in the case of any such loss, theft or destruction, upon receipt
of such holder's unsecured indemnity agreement, or in the case of any such
mutilation upon surrender and cancellation of such Note, the Company will make
and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Note.


                                       59
<PAGE>


         11.5. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment
for registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of and interest on, and any Yield-Maintenance
Amount payable with respect to, such Note and for all other purposes whatsoever,
whether or not such Note shall be overdue, and the Company shall not be affected
by notice to the contrary. Subject to the preceding sentence, the holder of any
Note may from time to time grant participations in all or any part of such Note
to any Person on such terms and conditions as may be determined by such holder
in its sole and absolute discretion.

         11.6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee, regardless of any investigation made at any
time by or on behalf of such Purchaser or any Transferee. Subject to the
preceding sentence, this Agreement and the Notes embody the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to such
subject matter.

         11.7. SUCCESSORS AND ASSIGNS. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not; except the Company may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of each holder of
Notes (and any attempted assignment or transfer by the Company without such
consent shall be null and void). Each Transferee, by virtue of having become a
holder of a Note (and with no other action required of any Person), shall also
become a party to the Intercreditor Agreement, with all of the rights and
obligations of a Secured Party (as defined in the Intercreditor Agreement).

         11.8. INDEPENDENCE OF COVENANTS; SEVERABILITY; DESCRIPTIVE HEADINGS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is prohibited by any one of such covenants, the
fact that it would be permitted by an exception to, or otherwise be in
compliance with the limitations of, another covenant shall not avoid the
occurrence of a Default or Event of Default if such action is taken or such
condition exists. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or


                                       60


<PAGE>

unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. The descriptive headings
of the several Sections of this Agreement are inserted for convenience only and
do not constitute a part of this Agreement.

         11.9. NOTICES. All written communications provided for hereunder shall
be sent by first class mail or nationwide overnight delivery service (with
charges prepaid) and (i) if to the Purchasers, addressed as specified for such
communications in the Purchaser Schedule attached hereto or at such other
address as the Purchasers shall have specified to the Company in writing, (ii)
if to any other holder of any Note, addressed to it at such address as it shall
have specified in writing to the Company or, if any such holder shall not have
so specified an address, then addressed to such holder in care of the last
holder of such Note which shall have so specified an address to the Company and
(iii) if to the Company, addressed to it at 4770 Hickory Hill Road, Memphis,
Tennessee 38141, Attention: Executive Vice President and Treasurer, provided,
however, that any such communication to the Company may also, at the option of
the Person sending such communication, be delivered by any other means either to
the Company at its address specified above or to any Authorized Officer of the
Company.

         11.10. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or
the Notes to the contrary notwithstanding, any payment of principal of or
interest on, or Yield-Maintenance Amount payable with respect to, any Note that
is due on a date other than a Business Day shall be made on the next succeeding
Business Day, without including the additional days elapsed in the computation
of the interest payable on such next succeeding Business Day.

         11.11. MINIMUM INTEREST PAYABLE. The Company and all holders of the
Notes specifically intend and agree to limit contractually the amount of
interest payable under this Agreement, the Notes and all other instruments and
agreements related hereto and thereto to the maximum amount of interest lawfully
permitted to be charged under applicable law. Therefore, none of the terms of
this Agreement, the Notes or any instrument pertaining to or relating to this
Agreement or the Notes shall ever be construed to create a contract to pay
interest at a rate in excess of the maximum rate permitted to be charged under
applicable law, and neither the Company, any guarantor nor any other party
liable or to become liable hereunder, under the Notes, any guaranty or under any
other instruments and agreements related hereto and thereto shall ever be liable
for interest in excess of the amount determined at such maximum rate, and the
provisions of this Section 11.11 shall control over all other provisions of the
Agreement, any Notes, the Guarantee and Collateral Agreement or any other
guaranty or any other instrument pertaining to or relating to the transactions
herein contemplated. If any amount of interest taken or received by any holder
of a Note shall be in excess of said maximum amount of interest which, under
applicable law, could lawfully have been collected by such


                                       61
<PAGE>

holder incident to such transactions, then such excess shall be deemed to have
been the result of a mathematical error by all parties hereto and shall be
refunded promptly by the Person receiving such amount to the party paying such
amount, or, at the option of the recipient, credited ratably against the unpaid
principal amount of the Note or Notes held by such holder. All amounts paid or
agreed to be paid in connection with such transactions which would under
applicable law be deemed "interest" shall, to the extent permitted by such
applicable law, be amortized, prorated, allocated and spread throughout the
stated term of this Agreement and the Notes. "APPLICABLE LAW" as used in this
Section means that law in effect from time to time which permits the charging
and collection of the highest permissible lawful, nonusurious rate of interest
on the transactions herein contemplated including laws of the State of Tennessee
and of the United States of America, and "MAXIMUM RATE" as used in this Section
means, with respect to each of the Notes, the maximum lawful, nonusurious rates
of interest (if any) which under applicable law may be charged to the Company
from time to time with respect to such Notes.


         11.12. CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES. The Company
hereby irrevocably submits to the jurisdiction of any New York state or federal
court sitting in New York in any action or proceeding arising out of or relating
to this Agreement, and the Company hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in New York
state or federal court. The Company hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. The Company agrees and irrevocably
consents to the service of any and all process in any such action or proceeding
by the mailing, by registered or certified U.S. mail, or by any other means or
mail that requires a signed receipt, of copies of such process to CT Corporation
System at 111 Eighth Avenue, 13th Floor, New York, New York, 10011. The Company
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 Section 11.12 shall affect
the right of any holder of Notes to serve legal process in any other manner
permitted by law or affect the right of any such holder to bring any action or
proceeding against the Company or its property in the courts of any other
jurisdiction. To the extent that the Company has or hereafter may acquire
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Company hereby irrevocably waives such immunity in respect of its obligations
under this agreement.

         11.13. SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to the Purchasers, to any holder of Notes or to the
Required Holder(s), the determination of such satisfaction shall be made by the


                                       62
<PAGE>

Purchasers, such holder or the Required Holder(s), as the case may be, in the
sole and exclusive judgment (exercised in good faith) of the Person or Persons
making such determination.

         11.14. GOVERNING LAW. IN ACCORDANCE WITH THE PROVISIONS OF SS.5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW, THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE INTERNAL LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY OF ITS CONFLICTS
OF LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A DIFFERENT
JURISDICTION.

         11.15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.


         11.16. BINDING AGREEMENT. When this Agreement is executed and delivered
by the Company and the Purchasers, it shall become a binding agreement among the
Company and the Purchasers.


                      [SIGNATURES BEGIN ON THE NEXT PAGE.]



                                       63


<PAGE>


         If this Agreement is satisfactory to you, please so indicate by signing
the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding among
us in accordance with its terms.

                                    Very truly yours,


                                    TBC CORPORATION



                                    By: /s/ Lawrence C. Day
                                        ----------------------------------------
                                    Name:  Lawrence C. Day
                                    Title: President and Chief Executive Officer



<PAGE>


The foregoing Agreement is
hereby accepted as of the
date first above written.


THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA


By: /s/ Robert R. Derrick
-------------------------------------------
Name: Robert R. Derrick
Title:   Vice President



PRUCO LIFE INSURANCE COMPANY


By: /s/ Robert R. Derrick
-------------------------------------------
Name: Robert R. Derrick
Title:   Vice President


RGA REINSURANCE COMPANY
By:      Prudential Private Placement Investors, L.P.,
         as Investment Advisor
By:      Prudential Private Placement Investors,
         Inc., General Partner


         By: /s/ Robert R. Derrick
            -----------------------------------------
         Name: Robert R. Derrick
         Title:   Vice President


<PAGE>


BAYSTATE INVESTMENTS, LLC

By:      Prudential Private Placement Investors, L.P.,
         as Investment Advisor
By:      Prudential Private Placement Investors,
         Inc., General Partner


         By: /s/ Robert R. Derrick
            ------------------------------------
         Name:  Robert R. Derrick
         Title: Vice President


UNITED OF OMAHA LIFE INSURANCE COMPANY

By:      Prudential Private Placement Investors, L.P.,
         as Investment Advisor
By:      Prudential Private Placement Investors,
         Inc., General Partner



         By: /s/ Robert R. Derrick
            -------------------------------------
         Name:   Robert R. Derrick
         Title:  Vice President


<PAGE>



                               PURCHASER SCHEDULE



<TABLE>
<CAPTION>
PURCHASER NAME                              THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
<S>                                         <C>
Name in Which Note is Registered            THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Note Registration Number;
Principal Amount                            R-1; $22,721,000

Payment on Account of Note
         Method
         Account Information                Federal Funds Wire Transfer
                                            The Bank of New York
                                            New York, NY
                                            ABA#: 021-000-018
                                            Account No.: 890-0304-391
                                            Ref:  See "Accompanying Information" below

Accompanying Information                    Name of Company:             TBC Corporation
                                            Description of Security:     Variable Rate Series D Senior
                                                                         Secured Notes Due April 16, 2009
                                            PPN:                         872180 C* 3
                                            Due date and application (as among principal, make whole,
                                            and interest) of the payment being made

Address for Notices Related to Payments     The Prudential Insurance Company of America
                                            C/o Investment Operations Group
                                            Gateway Center Two, 10th Floor
                                            100 Mulberry Street
                                            Newark, NJ  07102-4077
                                            Attn:  Manager, Billings and Collections
                                            Fax:   973-802-8764

                                            For Prepayment Notices:
                                            Manager, Trade Management Group
                                            Tel:  973-802-8107
                                            Fax:  973-802-9425

Address for All other Notices (including    The Prudential Insurance Company of America
copies of all Notices related to Payments)  C/o Prudential Capital Group
                                            1170 Peachtree Street, Suite 500
                                            Atlanta, GA  30309
                                            Attn:  Managing Director
                                            Tel:   404-870-3750
                                            Fax:   404-870-2041
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
PURCHASER NAME                              THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
<S>                                         <C>
Signature Block Format                      THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
                                            By:
                                               ----------------------------------------
                                            Name:
                                            Title:

Instructions re Delivery of Notes           The Prudential Insurance Company of America
                                            1114 Avenue of the Americas
                                            30th Floor
                                            New York, NY  10036
                                            Attn:  Philip Corsello, Esq.

Tax Identification Number                   22-1211670
</TABLE>


<PAGE>



<TABLE>
<CAPTION>
PURCHASER NAME                              THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
<S>                                         <C>
Name in Which Note is Registered            THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Note Registration Number;
Principal Amount                            R-2; $6,400,000

Payment on Account of Note
         Method
         Account Information                Federal Funds Wire Transfer
                                            The Bank of New York
                                            New York, NY
                                            ABA#: 021-000-018
                                            Account No.: 890-0304-944
                                            Ref:  See "Accompanying Information" below

Accompanying Information                    Name of Company:           TBC Corporation
                                            Description of Security:   Variable Rate Series D Senior
                                                                       Secured Notes Due April 16, 2009
                                            PPN:                       872180 C* 3
                                            Due date and application (as among principal, make whole,
                                            and interest) of the payment being made

Address for Notices Related to Payments     The Prudential Insurance Company of America
                                            C/o Investment Operations Group
                                            Gateway Center Two, 10th Floor
                                            100 Mulberry Street
                                            Newark, NJ  07102-4077
                                            Attn:  Manager, Billings and Collections
                                            Fax:   973-802-8764

                                            For Prepayment Notices:
                                            Manager, Trade Management Group
                                            Tel:  973-802-8107
                                            Fax:  973-802-9425

Address for All other Notices (including    The Prudential Insurance Company of America
copies of all Notices related to Payments)  C/o Prudential Capital Group
                                            1170 Peachtree Street, Suite 500
                                            Atlanta, GA  30309
                                            Attn:  Managing Director
                                            Tel:   404-870-3750
                                            Fax:   404-870-2041
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
PURCHASER NAME                              THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
<S>                                         <C>
Signature Block Format                      THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
                                            By:
                                               -----------------------------------------
                                            Name:
                                            Title:

Instructions re Delivery of Notes           The Prudential Insurance Company of America
                                            1114 Avenue of the Americas
                                            30th Floor
                                            New York, NY  10036
                                            Attn:  Philip Corsello, Esq.

Tax Identification Number                   22-1211670
</TABLE>

<PAGE>



<TABLE>
<CAPTION>
PURCHASER NAME                              PRUCO LIFE INSURANCE COMPANY
<S>                                         <C>
Name in Which Note is Registered            PRUCO LIFE INSURANCE COMPANY

Note Registration Number;
Principal Amount                            R-3; $2,279,000

Payment on Account of Note
         Method
         Account Information                Federal Funds Wire Transfer
                                            The Bank of New York
                                            New York, NY
                                            ABA#: 021-000-018
                                            Account No.: 890-0304-421
                                            Ref:  See "Accompanying Information" below

Accompanying Information                    Name of Company:            TBC Corporation
                                            Description of Security:    Variable Rate Series D Senior
                                                                        Secured Notes Due April 16, 2009
                                            PPN:                        872180 C* 3
                                            Due date and application (as among principal, make whole,
                                            and interest) of the payment being made

Address for Notices Related to Payments     Pruco Life Insurance Company
                                            C/o The Prudential Insurance Company of America
                                            Investment Operations Group
                                            Gateway Center Two, 10th Floor
                                            100 Mulberry Street
                                            Newark, NJ  07102-4077
                                            Attn:  Manager, Billings and Collections
                                            Fax:   973-802-8764

                                            For Prepayment Notices:
                                            Manager, Trade Management Group
                                            Tel:  973-802-8107
                                            Fax:  973-802-9425

Address for All other Notices (including    Pruco Life Insurance Company
copies of all Notices related to Payments)  C/o Prudential Capital Group
                                            1170 Peachtree Street, Suite 500
                                            Atlanta, GA  30309
                                            Attn:  Managing Director
                                            Tel:   404-870-3750
                                            Fax:   404-870-2041

Signature Block Format                      PRUCO LIFE INSURANCE COMPANY
                                            By:
                                               --------------------------
                                            Name:
                                            Title:
</TABLE>



<PAGE>

<TABLE>
<CAPTION>
PURCHASER NAME                              PRUCO LIFE INSURANCE COMPANY
<S>                                         <C>
Instructions re Delivery of Notes           The Prudential Insurance Company of America
                                            1114 Avenue of the Americas
                                            30th Floor
                                            New York, NY  10036
                                            Attn:  Philip Corsello, Esq.

Tax Identification Number                   22-1944557
</TABLE>



<PAGE>

<TABLE>
<CAPTION>
PURCHASER NAME                              RGA REINSURANCE COMPANY
<S>                                         <C>
Name in Which Note is Registered            HARE & CO.

Note Registration Number; Principal Amount  R-4; $5,000,000

Payment on Account of Note
         Method
         Account Information                Federal Funds Wire Transfer
                                            The Bank of New York
                                            New York, NY
                                            ABA#: 021-000-018
                                            Account No.: 128863 RGA Private Placement Account
                                            Ref:  See "Accompanying Information" below

Accompanying Information                    Name of Company:             TBC Corporation
                                            Description of Security:     Variable Rate Series D Senior
                                                                         Secured Notes Due April 16, 2009
                                            PPN:                         872180 C* 3
                                            Due date and application (as among principal, make whole,
                                            and interest) of the payment being made

Address for Notices Related to Payments     RGA Reinsurance Company
                                            1370 Timberlake Manor Parkway
                                            Chesterfield, MO  63017-6039
                                            Attn:  Banking Dept.

Address for All other Notices (including    Prudential Private Placement Investors, L.P.
copies of all Notices related to Payments)  4 Gateway Center
                                            100 Mulberry Street
                                            Newark, NJ  07102
                                            Attn:  Mr. Albert Trank, Sr. Vice President
                                            Tel:   973-802-8608
                                            Fax:   973-624-6432

Signature Block Format                      RGA REINSURANCE COMPANY
                                            By:      Prudential Private Placement Investors, L.P.,
                                                     as Investment Advisor
                                            By:      Prudential Private Placement Investors,
                                                     Inc., General Partner

                                                     By:
                                                        ------------------------------------
                                                     Name:
                                                     Title:
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
PURCHASER NAME                              RGA REINSURANCE COMPANY
<S>                                         <C>

Instructions re Delivery of Notes           The Prudential Insurance Company of America
                                            1114 Avenue of the Americas
                                            30th Floor
                                            New York, NY  10036
                                            Attn:  Philip Corsello, Esq.

Tax Identification Number                   43-1235868
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
PURCHASER NAME                              BAYSTATE INVESTMENTS, LLC
<S>                                         <C>
Name in Which Note is Registered            BAYSTATE INVESTMENTS, LLC

Note Registration Number;
Principal Amount                            R-5; $7,550,000

Payment on Account of Note
         Method
         Account Information                Federal Funds Wire Transfer
                                            Fleet Bank
                                            ABA#: 011-000-138
                                            Account No.: 9429114060
                                            Ref:  See "Accompanying Information" below

Accompanying Information                    Name of Company:            TBC Corporation
                                            Description of Security:    Variable Rate Series D Senior
                                                                        Secured Notes Due April 16, 2009
                                            PPN:                        872180 C* 3
                                            Due date and application (as among principal, make whole,
                                            and interest) of the payment being made

Address for Notices Related to Payments     Baystate Investments, LLC
                                            200 Berkeley Street, Floor B-3
                                            Mail Stop B-03-01
                                            Boston, MA  02116
                                            Attn:  Bank Relations

                                            For Prepayment Notices:
                                            Manager, Trade Management Group
                                            Tel:  973-802-8107
                                            Fax:  973-802-9425

Address for All other Notices (including    Prudential Private Placement Investors, L.P.
copies of all Notices related to Payments)  4 Gateway Center
                                            100 Mulberry Street
                                            Newark, NJ  07102
                                            Attn:  Mr. Albert Trank, Sr. Vice President
                                            Tel:   973-802-8608
                                            Fax:   973-624-6432
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
PURCHASER NAME                              BAYSTATE INVESTMENTS, LLC
<S>                                         <C>
Signature Block Format                      BAYSTATE INVESTMENTS, LLC
                                            By:      Prudential Private Placement Investors, L.P.,
                                                     as Investment Advisor
                                            By:      Prudential Private Placement Investors,
                                                     Inc., General Partner

                                                     By:
                                                        ------------------------------------
                                                     Name:
                                                     Title:

Instructions re Delivery of Notes           The Prudential Insurance Company of America
                                            1114 Avenue of the Americas
                                            30th Floor
                                            New York, NY  10036
                                            Attn:  Philip Corsello, Esq.

Tax Identification Number                   04-1414660
</TABLE>

<TABLE>
<CAPTION>
PURCHASER NAME                              UNITED OF OMAHA LIFE INSURANCE COMPANY
<S>                                         <C>
Name in Which Note is Registered            UNITED OF OMAHA LIFE INSURANCE COMPANY

Note Registration Number;
Principal Amount                            R-6; $6,050,000

Payment on Account of Note
         Method
         Account Information                Federal Funds Wire Transfer
                                            JPMorgan Chase Bank
                                            ABA#: 021000021
                                            Private Income Processing
                                            For further credit to:
                                            United of Omaha Life Insurance Company
                                            Account No.:900-9000200
                                            A/c: G09588
                                            Ref:  See "Accompanying Information" below

Accompanying Information                    Name of Company:           TBC Corporation
                                            Description of Security:   Variable Rate Series D Senior
                                                                       Secured Notes Due April 16, 2009
                                            PPN:                       872180 C* 3
                                            Due date and application (as among principal, make whole,
                                            and interest) of the payment being made

Address for Notices Related to Payments     JPMorgan Chase Bank
                                            14201 Dallas Parkway, 13th Floor
                                            Dallas, TX  75254-2917
                                            Attn:  Income Processing, G. Ruiz
                                            A/c:  G09588
</TABLE>



<PAGE>


<TABLE>
<CAPTION>
PURCHASER NAME                              UNITED OF OMAHA LIFE INSURANCE COMPANY
<S>                                         <C>
Address for All other Notices (including    Prudential Private Placement Investors, L.P.
copies of all Notices related to Payments)  4 Gateway Center
                                            100 Mulberry Street
                                            Newark, NJ  07102
                                            Attn:  Mr. Albert Trank, Sr. Vice President
                                            Tel:   973-802-8608
                                            Fax:   973-624-6432

Signature Block Format                      UNITED OF OMAHA LIFE INSURANCE COMPANY
                                            By:      Prudential Private Placement Investors, L.P.,
                                                     as Investment Advisor
                                            By:      Prudential Private Placement Investors,
                                                     Inc., General Partner

                                                     By:
                                                        -------------------------------------
                                                     Name:
                                                     Title:

Instructions re Delivery of Notes           The Prudential Insurance Company of America
                                            1114 Avenue of the Americas
                                            30th Floor
                                            New York, NY  10036
                                            Attn:  Philip Corsello, Esq.

Tax Identification Number                   47-0322111
</TABLE>



<PAGE>


                                                                   SCHEDULE 5.15


                           CERTAIN INTERCOMPANY LOANS

Provided that no Event of Default has occurred and is continuing, payments on
Intercompany Loans owed to the Company by the following Subsidiaries may be made
without regard to the financial condition or solvency of the Subsidiary:

                           Northern States Tire, Inc.
                             Big O Development, Inc.


<PAGE>


                                                                 SCHEDULE 6.2(b)

                      EXISTING INDEBTEDNESS AND GUARANTEES

Indebtedness and Guarantees under or relating to the 1996 Notes.

Those Guarantees listed on Schedule 6.2(e).

TBC Corporation has guaranteed a $1,500,000 line of credit made available to TBC
de Mexico and TBC International Inc. by First Tennessee Bank National
Association.

TBC Corporation has guaranteed all obligations of Big O Retail Enterprises,
Inc., Tire Kingdom, Inc., Big O Tires, Inc., and Carroll's, Inc., and expects to
guarantee all obligations of Merchant's Incorporated, to Michelin North America,
Inc. and its affiliates.

TBC Corporation has guaranteed all obligations of Tire Kingdom, Inc. to
Continental General Tire, Inc.

Capital Lease relating to the Salt Lake City Warehouse of Big O Tires, Inc.
(book value as of 2/28/03 is $1,162,666).


<PAGE>


                                                                 SCHEDULE 6.2(e)

           GUARANTEE OBLIGATIONS OF BIG O TIRES, INC. AND SUBSIDIARIES



<TABLE>
<CAPTION>
                                                                                 Big O Guarantee
                                                                               Portion at 12/31/02
                                                                               -------------------
<S>                                                                            <C>
The CIT Group
         Intermountain Realty - Colorado Springs                                $   411,995.64
         Intermountain Realty - Sioux Falls                                         380,757.97

Merrill Lynch
         Loan portfolio (sold 6/30/97,9/30/97,12/31/98)                              92,956.28

GE Capital
         Las Vegas                                                                2,787,922.87
         Las Vegas                                                                  394,156.28
         82nd St. Oregon                                                            247,277.12
         Boulder, CO                                                                 48,917.50

OKC, LLC JV                                                                         150,000.00

Real Estate Lease Guarantees                                                      1,315,240.18

Synthetic Lease                                                                   8,757,896.38
                                                                                --------------

Total Guarantees                                                                $14,587,120.22
</TABLE>


<PAGE>


                                                                    SCHEDULE 6.3


                                 EXISTING LIENS


  Liens arising under the Guarantee and Collateral Agreement.

  Numerous UCC financing statements evidencing operating lease transactions
  in which TBC Corporation and its Subsidiaries are lessees have been filed
  and are still in effect.

UCC Filings and Mortgages Against Big O Tires, Inc. and Its Subsidiaries:

         The Bank of Cherry Creek, N.A., as Indenture Trustee.
         Security interests and mortgages granted in connection with 8.71%
         Senior Secured Notes in the aggregate original principal amount of
         $8,000,000 issued by Big O Tires, Inc. in 1994. Notes were paid in full
         in 1999, and Big O Tires, Inc. has tried on numerous occasions, without
         success, to obtain termination statements for various UCC filings
         relating thereto.

         The CIT Group/Equipment Financing, Inc.
         Filings in connection with sales of franchisee notes receivable.

         SunTrust Bank, as Agent.
         Filings in connection with Synthetic Leases.

         First National Bank of Dieterich.
         Filing in connection with equipment financing by Big O Tire of Idaho,
         Inc.

         Steve W. Mead
         Filing to evidence consigned Interstate Battery System of America
         inventory.

UCC Filings Against Tire Kingdom, Inc.:

         Michelin North America, Inc. and related entities.
         Purchase money security interest filing against all inventory purchased
         from secured party by Tire Kingdom and all proceeds therefrom.


UCC Filings Against Merchant's, Incorporated or Merban, Inc.:

         Bridgestone/Firestone, Inc.
         Consigned inventory of the secured party.

<PAGE>

         Kimco Select Investments
         Blanket security interest filed by secured party; debt has been
         discharged and secured party to release Liens promptly after the
         closing of the Merchant's Acquisition.

         CIT Group/Business Credit, Inc.
         Mortgages and blanket security interest filed by secured party; debt
         has been discharged and secured party to release mortgages and Liens
         promptly after the closing of the Merchant's Acquisition.

         Michelin North America, Inc. and related entities
         Mortgages and security interests filed by secured party, who has agreed
         to release the same promptly after the closing of the Merchant's
         Acquisition.

         SunTrust Bank
         Blanket security interest filed by secured party; debt has been
         discharged and secured party to release Liens promptly after the
         closing of the Merchant's Acquisition.

         Bandag, Incorporated
         Liens relating to Bandag equipment and related collateral used in the
         retreading operations of Merban.



<PAGE>


                                                                 SCHEDULE 6.5(b)


                     CERTAIN EXISTING INVESTMENTS AND LOANS

-     See Exhibit A to this Schedule 6.5(b) for a listing of all existing
      Subsidiaries.

-     TBC Corporation owns 40% of STI Acquisition LLC, a Nevada limited
      liability company.

-     TBC Corporation owns 20,000 shares of Series A Preferred Stock, $.01 par
      value, of Quirk Automotive, Corp. and 14.4 shares of Common Stock, $100
      par value, of V.I.P., Inc. (total investment - $5,000,000).

-     TBC International Inc. owns approximately 49% of the ownership interests
      in TBC de Mexico, S.A. de C.V., a Mexican company.

-     Big O Retail Enterprises, Inc. is a 50% shareholder in Tires Industries
      Corporation, a Utah corporation.

-     Big O Development, Inc. loaned Betsy Paulsen Tufts $297,000 on October 10,
      1994. At 12/31/02, the balance on the promissory note relating thereto was
      $122,483.

-     Carroll's, Inc. owns 50 shares of stock of The Hercules Tire & Rubber
      Company.

-     Carroll's Inc. owns 360 shares of stock of Carmerica, Inc.

-     Big O Tires, Inc. holds a 50% interest in each of the following joint
      ventures:

         BORE/MPC, LLC (a Missouri LLC).
         Big O/Stephenson Joint Venture LLC (a Nevada LLC).
         OKC, LLC (a Colorado LLC).
         Intermountain Development Joint Venture (a Colorado general
         partnership).
         One Stop Undercar Denver, LLC (a Colorado LLC)


<PAGE>


                                                                    EXHIBIT A TO
                                                                 SCHEDULE 6.5(b)

           COMPANY AND SUBSIDIARIES AND JURISDICTIONS OF ORGANIZATION

Company: TBC Corporation, a Delaware corporation ("TBC")

Subsidiaries Directly Owned by TBC:


<TABLE>
<CAPTION>
                 Name                      Jurisdiction of       Percentage of Stock/ Equity        Subsidiaries
                                             Organization               Owned by TBC
<S>                                        <C>                   <C>                                <C>
Big O Tires, Inc.                               Nevada                       100%                    See Below
Carroll's, Inc.                                Georgia                       100%                       None
Northern States Tire, Inc.                     Delaware                      100%                       None
TBC International Inc.                         Delaware                      100%                       None
TBC Retail Enterprises, Inc.                   Delaware                      100%                    See Below
TBC Brands, LLC                                Delaware                      100%                       None
TBC Capital, LLC                               Delaware                      90%*                       None
</TABLE>


         *5% is owned by each of Carroll's, Inc. and Tire Kingdom, Inc.

Subsidiaries Directly Owned by Big O Tires, Inc.:


<TABLE>
<CAPTION>
                 Name                      Jurisdiction of      Percentage of Stock Owned by       Subsidiaries
                                            Incorporation                   Big O
<S>                                        <C>                  <C>                                <C>
Big O Development, Inc.                        Colorado                     100%                       None
O Advertising, Inc.                            Colorado                     100%                       None
Big O Tire of Idaho, Inc.                       Idaho                       100%                       None
</TABLE>


Subsidiaries Directly Owned by TBC Retail Enterprises, Inc.:

<TABLE>
<CAPTION>
                Name                      Jurisdiction of        Percentage of Stock                Subsidiaries
                                           Incorporation         Owned by TBC Retail

<S>                                       <C>                    <C>                                <C>
  Big O Retail Enterprises,                  Colorado                       100%                         None
    Inc.

  Tire Kingdom, Inc.                         Florida                        100%                        See Below
</TABLE>

<PAGE>

Subsidiaries Directly Owned By Tire Kingdom, Inc.:

<TABLE>
<CAPTION>
               Name                       Jurisdiction of         Percentage of Stock              Subsidiaries
                                          Incorporation              Owned by TKI

<S>                                       <C>                     <C>                              <C>
Merchant's, Incorporated                     Delaware                100%                            See Below
</TABLE>


Subsidiaries Directly Owned By Merchant's, Incorporated:

<TABLE>
<CAPTION>
               Name                       Jurisdiction of          Percentage of Stock            Subsidiaries
                                           Incorporation           Owned by Merchant's

<S>                                       <C>                      <C>                            <C>
Merban, Inc.                                 Virginia                      100%                       None
</TABLE>


<PAGE>


                                                                    SCHEDULE 6.8


                              EXISTING RESTRICTIONS


The documents evidencing the Credit Agreement contain restrictions and
conditions of the type described in Section 6.8.

The Synthetic Leases contain restrictions and conditions of the type described
in Section 6.8.

It is expected that the documents evidencing the SunTrust Sale and Leaseback
will contain restrictions and conditions of the type described in Section 6.8.


<PAGE>


                                                                   SCHEDULE 6.10


                         CERTAIN DISPOSITIONS OF ASSETS


                                      NONE.


<PAGE>


                                                                    SCHEDULE 8.7


                             CONFLICTING AGREEMENTS


         See Schedule 6.8.



<PAGE>


                                                                   SCHEDULE 8.14


                    TRADEMARKS, TRADENAMES AND SERVICE MARKS



                               TIRE KINGDOM, INC.

<TABLE>
<CAPTION>
Trademark Report by Mark                                                                       Printed: 3/28/2003         Page     1
Status:  ACTIVE
COUNTRY                               FILED           APPL#            REGDT        REG#               STATUS             CLASSES
<S>                                  <C>             <C>             <C>  <C>     <C>          <C>                        <C>
MISCELLANEOUS [CROWN] DESIGN

UNITED STATES                          9/1/1999      75/791,760      6/27/2000    2,363,324          REGISTERED             35

TIRE KINGDOM

UNITED STATES                          2/5/2003      76/487,769                                      PENDING                35

UNITED STATES                        12/10/1992      74/338,671      5/31/1994    1,838,215          REGISTERED             42

TIRE KINGDOM & DESIGN

UNITED STATES                          2/5/2003      76/487,604                                      PENDING                35

                                                       END OF                                  TOTAL ITEMS SELECTED =        4
</TABLE>


                                BIG O TIRES, INC.

<TABLE>
<CAPTION>
Trademark Report by Mark                                                                       Printed: 3/28/2003         Page     1
Status:  ACTIVE
COUNTRY                               FILED           APPL#            REGDT        REG#               STATUS             CLASSES
<S>                                  <C>             <C>             <C>  <C>     <C>          <C>                        <C>

A REPUTATION YOU CAN RIDE ON
UNITED STATES                         2/22/1993      74/360,838      7/19/1994    1,845,544          REGISTERED           37,42

ASPEN
UNITED STATES                         3/25/1988      73/718,614     10/11/1988    1,508,041          REGISTERED              12

BIG FOOT
CANADA                                3/15/1988          602897      3/13/1992       395398          REGISTERED               A

MEXICO                                5/15/1998          332727     10/20/2000       674604          REGISTERED              12

UNITED STATES                          5/7/1993      74/389,931      7/11/1995    1,904,955          REGISTERED              12

BIG FOOT 60
UNITED STATES                          9/6/1974      73/031,264      9/12/1978    1,102,058          REGISTERED              12

BIG FOOT 70
UNITED STATES                         9/16/1974      73/031,311      9/12/1978    1,102,059          REGISTERED              12

BIG HAUL
UNITED STATES                         10/3/1974      73/033,736      8/26/1975    1,018,800          REGISTERED              12
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Trademark Report by Mark                                                                       Printed: 3/28/2003         Page     1
Status:  ACTIVE
COUNTRY                               FILED           APPL#            REGDT        REG#               STATUS             CLASSES
<S>                                  <C>             <C>           <C>            <C>          <C>                     <C>
BIG LIFT
CANADA                                 3/9/1998          871625                                      ALLOWED                 37

UNITED STATES                         9/17/1997      75/358,399     12/18/2001    2,520,443          REGISTERED           35,37

BIG O
MEXICO                                5/15/1998          332726     10/20/2000       674603          REGISTERED              12

TEXAS                                  9/2/1982             N/A       9/2/1982        40704          REGISTERED              12

TEXAS                                 11/1/1982           40967      11/1/1982        40967          REGISTERED              42

UNITED STATES                         1/14/1974      73/010,921      9/24/1974      993,415          REGISTERED              12

UNITED STATES                         9/10/1973      73/000,572      10/1/1974      994,466          REGISTERED              42

BIG O TIRES
CANADA                                6/18/1987          586384     10/27/1989       361490          REGISTERED             N/A

CANADA                                 5/5/1999       1,014,484      2/21/2002    TMA558285          REGISTERED        12,35,37

MEXICO                                5/15/1998          332728     10/20/2000       674605          REGISTERED              42

UNITED STATES                         4/12/1999      75/679,597     12/12/2000    2,411,926          REGISTERED        12,35,37

BIG O TIRES & DESIGN
CANADA                                                               6/12/1981      259,938          REGISTERED             N/A

CANADA                                3/27/1991          682687     11/12/1993    TMA419439          REGISTERED             N/A

BIG O TIRES AND DESIGN
UNITED STATES                         12/4/1989      74/007,344      8/28/1990    1,611,160          REGISTERED           12,42

COST U LESS & DESIGN
CANADA                                 8/5/1994          761237     10/28/1997    TMA484761          REGISTERED            A,Aa

MEXICO                                 8/9/1994          207912     10/11/1994       476693          REGISTERED            37,A

MEXICO                                 8/9/1994          207911      10/5/1994       476099          REGISTERED              42

COSTULESS & DESIGN
UNITED STATES                         7/12/1994      74/548,947      1/30/1996    1,952,457          REGISTERED        12,37,42

DARE TO COMPARE
UNITED STATES                         4/20/2000      76/030,453      9/25/2001    2,492,236          REGISTERED             035

DESIGN OF BIG FOOT
CANADA                                 5/5/1999       1,014,482      3/15/2001   TMA542,415          REGISTERED        12,35,37

UNITED STATES                         4/12/1999      75/680,850       2/1/2000    2,314,775          REGISTERED        12,35,37

EURO TOUR
CANADA                                1/15/2003         1164833                                      PENDING                 12

MEXICO                                 2/3/2003          586480                                      PENDING                 12

UNITED STATES                         11/8/2002      76/468,502                                      PENDING                 12
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Trademark Report by Mark                                                                       Printed: 3/28/2003         Page     1
Status:  ACTIVE
COUNTRY                               FILED           APPL#            REGDT        REG#               STATUS             CLASSES
<S>                                  <C>             <C>             <C>  <C>     <C>          <C>                        <C>

EXTRA CARE & DESIGN
UNITED STATES                         3/24/1986         589,583     11/18/1986    1,417,730          REGISTERED              37

UNITED STATES                         3/24/1986      73/589,583     11/18/1986    1,417,730          REGISTERED              37

HYDRO-TRAC
MEXICO                                1/14/1994          188025       5/4/1994       459327          REGISTERED              12

LEGACY
CANADA                                3/15/1988          602896      3/13/1992       395397          REGISTERED             N/A

COLORADO                             10/28/1985             N/A     10/28/1985       T29645          REGISTERED              35

COLORADO                                                             4/22/1976       T30670          REGISTERED

MEXICO                                1/14/1994          188026       5/4/1994       459328          REGISTERED              12

UNITED STATES                        10/31/1985      73/566,064      5/20/1986    1,393,967          REGISTERED              12

LIGHTENING
MEXICO                                1/14/1994          188027      12/6/1994       481629          REGISTERED           12,35

PATHMAX
UNITED STATES                          8/3/1998      75/529,550      9/28/1999    2,281,419          REGISTERED              12

PROCOMP
MEXICO                                1/14/1994          188028       5/4/1994       459329          REGISTERED           12,35

PROCOMP HIGH PERFORMANCE
UNITED STATES                         7/27/1992      74/298,320       7/5/1994    1,842,854          REGISTERED              12

SASQUATCH [BIG FOOT] DESIGN
CANADA                                 5/5/1999       1,014,483      1/16/2003    tma573769          REGISTERED        12,35,37

SONIC COMMERCIAL
UNITED STATES                         12/2/1964      72/207,339      3/15/1966      805,578          REGISTERED              12

SUN VALLEY
UNITED STATES                        10/31/1968      72/310,988      6/17/1969      871,318          REGISTERED              35

VENGEANCE
CANADA                                 1/2/2003             N/A                                      PENDING

MEXICO                                 1/7/2003          582675                                      PENDING

UNITED STATES                        10/18/2002      76/460,700                                      PENDING                 12

WWW.BIGOTIRES.COM & DESIGN
CANADA                                3/20/2001         1096649                                      PENDING

MEXICO                                3/29/2001          478565      8/30/2001       713395          REGISTERED              37

MEXICO                                3/29/2001          478566                                      PENDING                 42

UNITED STATES                         12/1/2000      76/174,243      12/4/2001    2,514,975          REGISTERED           35,37
                                                       END OF                                 TOTAL ITEMS SELECTED =         63
</TABLE>

<PAGE>

                                 TBC BRANDS, LLC

<TABLE>
<CAPTION>
Trademark Report by Mark                                                                       Printed: 3/28/2003         Page     1
Status:  ACTIVE
COUNTRY                               FILED          APPL#            REGDT        REG#               STATUS             CLASSES
<S>                                  <C>            <C>             <C>          <C>          <C>                        <C>

AQUA FLOW
CANADA                                 3/9/1993         724,287      7/15/1994       430478          REGISTERED             N/A

JAPAN                                 8/25/1993        87543/93      7/31/1996      3183343          REGISTERED              12

MEXICO                                3/24/1993          163889       8/3/1993       438707          REGISTERED              12

UNITED STATES                        11/24/1992      74/334,184       1/4/1994    1,815,411          REGISTERED              12

AQUA FLOW III
CANADA                                 2/5/2001         1091561                                      ALLOWED

MEXICO                                3/13/2001          475492      5/24/2001       699369          REGISTERED

UNITED STATES                         9/13/2000      76/128,049       4/2/2002    2,557,298          REGISTERED              12

BROADWAY CLASSIC

UNITED STATES                         12/4/2002      76/472,568                                      PENDING                 12

CENTRED
CANADA                                2/19/1999         1006129     10/18/2000   TMA535,038          REGISTERED              12

MEXICO                                4/23/1999          372561      2/29/2000       644642          REGISTERED              12

UNITED STATES                         1/15/1999      75/621,314      3/20/2001    2,437,511          REGISTERED              12

CENTRON
UNITED STATES                         3/12/1985      73/526,552       9/3/1985    1,357,941          REGISTERED              12

CENTURY
CANADA                                9/10/1999       1,028,617     11/22/2002    TMA571137          REGISTERED             N/A

UNITED STATES                         7/30/1999      75/764,830      7/17/2001    2,470,426          REGISTERED              12

CORDOVAN
CANADA                                 3/8/1990         652,673       4/5/1991       382741          REGISTERED              12

CHINA                                 6/28/2002         3225736                                      PENDING                 12

EUROPEAN UNION                       12/30/1997          719351       4/7/1999    000719351          REGISTERED            9,12

FRANCE                                4/25/1991          282653      4/25/1991      1657817          REGISTERED            9,12

GERMANY                               4/30/1991      T31825/12W      7/14/1992      2017105          REGISTERED            9,12

MEXICO                               12/19/1997          318673      2/27/1998       571618          REGISTERED              12

SOUTH KOREA                           6/28/2002      2002-30152                                      PENDING                 12

UNITED KINGDOM                        4/24/1991         1462329      4/24/1991      1462329          REGISTERED              12

UNITED KINGDOM                        5/21/1991         1464865      5/21/1991      1464865          REGISTERED               9

UNITED STATES                         9/27/1985      73/560,572      12/2/1986    1,419,104          REGISTERED           12,17

UNITED STATES                         6/15/1945      72/159,045      8/27/1963      755,493          REGISTERED              35
</TABLE>

<PAGE>


<TABLE>
CORDOVAN BONNEVILLE JET (STYLIZED)
<S>                                  <C>             <C>            <C>           <C>                <C>                   <C>
UNITED STATES                         5/19/1964      72/193,756       2/9/1965      784,838          REGISTERED              35

CORDOVAN RADIAL G/T
UNITED STATES                        11/29/1976      73/108,055      9/19/1978    1,102,631          REGISTERED              12

CORDOVAN WIDE 600
UNITED STATES                         8/30/1967      72/279,376       8/6/1968      854,177          REGISTERED              35

CRITERION
UNITED STATES                         2/29/1980      73/252,026      9/15/1981    1,169,191          REGISTERED              12

EPIC
CANADA                                6/13/2000       1,063,059       8/7/2002    TMA565594          REGISTERED             N/A

MEXICO                                 1/4/1995          220948      3/28/1995       486515          REGISTERED              12

UNITED STATES                         9/10/1985      73/559,173       4/8/1986    1,388,996          REGISTERED              12

EXCEL
CANADA                                9/10/1999       1,028,616                                      ALLOWED                N/A

UNITED STATES    T30505US0            7/30/1999      75/764,829      7/17/2001    2,470,425          REGISTERED              12

FRONT LINE & DESIGN
UNITED STATES                          5/7/1985      73/536,361      11/5/1985    1,368,849          REGISTERED              12

FRONTLINE
MEXICO                               10/21/1994          216047      8/30/1995       502347          REGISTERED              12

GRAN ESPRIT
EUROPEAN UNION                        9/19/1996          385617      8/28/1998       385617          REGISTERED              12

UNITED STATES                         5/20/1996      75/107,105      4/14/1998    2,151,303          REGISTERED              12

GRAND AM
CANADA                               12/29/1994         772,065      6/14/1996       459411          REGISTERED              12

MEXICO                               10/13/1994          215380     11/22/1994       480234          REGISTERED              12

GRAND PRIX
CANADA                               10/26/1993          739674      3/16/1999   TMA509,415          REGISTERED             N/A

MEXICO                                11/8/1993          182542                                      PENDING                 12

MEXICO                                8/30/1994          210274     11/18/1994       479812          REGISTERED               7

UNITED STATES                          5/5/1980      73/260,923     12/29/1981    1,183,571          REGISTERED              11

UNITED STATES                        10/26/1982      73/400,864     11/22/1983    1,258,438          REGISTERED               9

UNITED STATES                        12/12/1975      73/071,592     10/25/1977    1,075,901          REGISTERED              12

UNITED STATES                         8/24/1987      73/680,289      8/27/1991    1,655,035          REGISTERED              37

GRAND PRIX & DESIGN
UNITED STATES                         3/17/1982      73/355,136      1/18/1983    1,224,147          REGISTERED              12

UNITED STATES                         3/25/1959      72/070,188     12/22/1959      690,249          REGISTERED              35
</TABLE>

<PAGE>

<TABLE>
<S>                                   <C>            <C>            <C>         <C>                  <C>                     <C>
GRAND PRIX RADIAL G/T (STYLIZED)
UNITED STATES                          5/5/1980      73/260,924      8/11/1981    1,164,594          REGISTERED              12

GRAND SPIRIT
MEXICO                                7/24/1995          238249                                      PENDING                 12

UNITED STATES                         1/24/1994      74/481,579      2/27/1996    1,958,273          REGISTERED              12

GRAND SPIRIT TOURING LS

UNITED STATES                         12/4/2002      76/472,572                                      PENDING                 12

GRAND SPORT
CANADA                                4/12/1990         654,898       3/6/1992  TMA 395,089          REGISTERED              12

MEXICO                                 1/4/1995          220944      4/23/1997       546167          REGISTERED              12

UNITED STATES                         5/13/1986      73/598,547     12/23/1986    1,421,825          REGISTERED              12

HARVEST KING
CANADA                               12/29/1994         772,070      1/19/1996    TMA452894          REGISTERED              12

CHINA                                 1/30/2002         3084124                                      ALLOWED                 12

MEXICO                               10/13/1994          215383      7/21/1995       497846          REGISTERED              12

SOUTH KOREA                           6/28/2002      2002-31154                                      PENDING

UNITED STATES                         6/19/1989      73/807,530       5/8/1990    1,595,216          REGISTERED              12

HIGHWAY SCOUT RADIAL HTP
UNITED STATES                         3/17/2000      76/004,068       4/9/2002    2,559,952          REGISTERED              12

LIVE ONE (STYLIZED)
UNITED STATES                         8/10/1976      73/096,101     12/13/1977    1,079,273          REGISTERED               9

MATRIX
BRAZIL                               10/25/1999       822129833                                      PENDING

UNITED STATES                         3/13/1985      73/562,619       3/1/1988    1,478,574          REGISTERED              12

MILEAGE MASTER
UNITED STATES                         3/12/2003      76/497,354                                      PENDING

MULTI-MILE
CANADA                                2/29/2000       654903(1)      4/12/1991    TMA383056          REGISTERED              12
CHINA                                 6/28/2002         3225735                                      PENDING                 12

EUROPEAN UNION                       12/30/1997          719260       4/7/1999    000719260          REGISTERED            9,12

FRANCE                                4/24/1991          282446       4/2/1991      1657653          REGISTERED            9,12

MEXICO                                3/24/1993          163887       7/3/1993       438706          REGISTERED              12

MEXICO                               10/21/1994          216045      3/22/1995       485680          REGISTERED               9

SOUTH KOREA                           6/28/2002      2002-30153                                      PENDING

UNITED KINGDOM                        4/23/1991         1462051      4/23/1991     B1462051          REGISTERED              12

UNITED KINGDOM                        5/21/1991         1464866      5/21/1991     B1464866          REGISTERED               9

UNITED STATES                         8/23/1982      73/381,561     11/29/1983    1,259,363          REGISTERED              12

UNITED STATES                         5/15/1998      75/485,588       8/3/1999    2,266,907          REGISTERED              12
</TABLE>

<PAGE>

<TABLE>
<S>                                  <C>             <C>            <C>         <C>                  <C>                     <C>
MULTI-MILE (STYLIZED)
UNITED STATES                         5/11/1950      71/597,256      6/24/1952      560,428          REGISTERED              12

MULTI-MILE RADIAL G/T (STYLIZED)
UNITED STATES                        11/29/1976      73/108,056      9/18/1979    1,125,174          REGISTERED              12

MULTI-MILE WIDE `600'
UNITED STATES                         8/30/1967      72/279,377       8/6/1968      854,178          REGISTERED              35

MULTI-TRAC
MEXICO                               10/13/1994          215381      7/19/1995       497555          REGISTERED              12

UNITED STATES                         3/22/1973      72/452,297      3/26/1974      981,104          REGISTERED              35

POWER KING
CANADA                                4/12/1990         654,907       4/5/1991       382759          REGISTERED              12

CHINA                                 1/30/2002         3084106                                      ALLOWED                 12

MEXICO                                6/11/1998          336096                                      PENDING                 12

SOUTH KOREA                           6/28/2002      2002-30155                                      PENDING                 12

UNITED STATES                          4/5/1979      73/210,451      7/29/1980    1,138,319          REGISTERED              12

POWER KING (STYLIZED)
UNITED STATES                          2/7/1983      73/412,703       4/3/1984    1,272,524          REGISTERED               9

POWER KING IMT
UNITED STATES                         6/21/2002      76/424,630                                      PENDING                 12

PR812

UNITED STATES                         11/8/2002      76/468,503                                      PENDING                 12

PRESTIGE
CANADA                                5/27/1959          251153     12/11/1959       116209          REGISTERED             N/A

UNITED STATES                          9/1/1954      71/672,582       6/7/1955      607,037          REGISTERED              35

REGENT
CANADA                                 8/3/2000       1,069,844                                      PENDING

MEXICO                               11/21/2000          459062      8/16/2002       758958          REGISTERED              12

UNITED STATES                        12/17/1999      75/874,916      6/26/2001    2,464,646          REGISTERED              12

SCEPTOR
UNITED STATES                         5/13/1986      73/598,549     12/23/1986    1,421,827          REGISTERED              12

SHADOW
CANADA                                 8/3/2000       1,069,845                                      PENDING

MEXICO                                9/11/2002          565576                                      PENDING

UNITED STATES*                       12/17/1999      75/874,915                                      PENDING                 12
</TABLE>

* In the name of  TBC CORPORATION

<PAGE>

<TABLE>
<S>                                  <C>          <C>               <C>           <C>                <C>                    <C>
SIGMA
CANADA                                4/12/1990         654,894       4/5/1991       382758          REGISTERED              12

CHINA                                 6/28/2002         3225734                                      PENDING                 12

GERMANY                               6/10/1991   T 32 059/12 W      7/14/1992      2017108          REGISTERED              12

MEXICO                                5/29/1995             N/A      7/27/1995       499136          REGISTERED              12

MEXICO                                5/29/1995             N/A      7/27/1995       499136          REGISTERED              12

SOUTH KOREA                           6/28/2002      2002-30151                                      PENDING

UNITED KINGDOM                         6/6/1991         1466536       6/6/1991      1466536          REGISTERED              12

UNITED STATES                         5/15/1998      75/485,561      7/20/1999    2,262,889          REGISTERED              12

SIGMA & DESIGN
UNITED STATES                        12/28/1973      73/009,844     11/19/1974      998,427          REGISTERED              12

SIGMA SUPREME HP
CANADA                                 8/3/2000       1,069,847                                      ALLOWED

MEXICO                               11/21/2000          459065     12/14/2001       728573          REGISTERED

UNITED STATES                         7/26/2000      76/096,412       6/4/2002    2,575,403          REGISTERED              12

SIGMA SUPREME TR
CANADA                                 8/3/2000       1,069,848                                      ALLOWED

MEXICO                               11/21/2000          459064     12/14/2001       728572          REGISTERED              12

UNITED STATES                        12/17/1999       75/874,912     3/26/2002    2,553,584          REGISTERED              12

SOVRAN
UNITED STATES                         7/27/1989      73/815,288      6/12/1990    1,600,677          REGISTERED              12

STAMPEDE
CANADA                               12/29/1994         772,066      11/3/1995    TMA449689          REGISTERED              12

MEXICO                                 1/4/1995          220945      3/28/1995       486513          REGISTERED              12

UNITED STATES                         9/18/1984      73/499,961      5/28/1985    1,337,798          REGISTERED              12

SUSSEX
UNITED STATES                         5/13/1986      73/598,548     12/23/1986    1,421,826          REGISTERED              12

TALON
CANADA                               12/29/1994         772,067      11/3/1995    TMA449690          REGISTERED              12

MEXICO                                 1/4/1995          220943      3/28/1995       486512          REGISTERED              12

UNITED STATES                         9/10/1985      73/559,172       4/8/1986    1,388,995          REGISTERED              12

TBC
MEXICO                                 8/6/1999          385997                                      PENDING                 12

UNITED STATES                        10/26/1983      73/449,847       7/2/1985    1,345,491          REGISTERED            9,12

UNITED STATES                         6/13/1978      73/174,209      2/20/1979    1,113,549          REGISTERED              12

UNITED STATES                          6/8/1995      74/685,983     11/25/1997    2,114,992          REGISTERED        35,36,42

TBC BRANDS
UNITED STATES                         2/12/2002      76/369,496                                      ALLOWED            9,12,16


TBC ONLINE
CANADA                                4/16/1998          875566      6/29/2000    TMA529893          REGISTERED               9

MEXICO                               12/16/1998          340767                                      PENDING                  9
</TABLE>

<PAGE>

<TABLE>
<S>                                  <C>          <C>               <C>           <C>                <C>                    <C>
UNITED STATES                         1/23/1998      75/423,437      1/25/2000    2,312,424          REGISTERED               9

TBC PRIVATE BRANDS & DESIGN
UNITED STATES                         2/12/2002      76/369,492                                      ALLOWED                 35

TEMPEST
CANADA                                 8/3/2000       1,069,846                                      ALLOWED

MEXICO                               11/21/2000          459063     12/14/2001       728571          REGISTERED              12

UNITED STATES                        12/17/1999      75/874,914      6/19/2001    2,462,822          REGISTERED              12

TODAY
UNITED STATES                         2/25/1994      74/494,330      1/21/1997    2,032,519          REGISTERED              12

TRAIL GUIDE RADIAL ATP
UNITED STATES                         3/17/2000      76/004,067       4/2/2002    2,557,059          REGISTERED              12

TRAIL GUIDE RT
CANADA                                3/12/2003             N/A                                      PENDING

UNITED STATES                         12/4/2002      76/472,525                                      PENDING                 12

TRAIL SCOUT
MEXICO                                7/30/1999          385267      9/22/1999       624142          REGISTERED              12

UNITED STATES                         4/12/1999      75/679,588       7/3/2001    2,466,356          REGISTERED              12

TRAILER KING
UNITED STATES                         3/12/2003      76/497,369                                      PENDING

TURBO-TECH
UNITED STATES                         7/18/1989      73/813,331      10/2/1990    1,615,599          REGISTERED              12

ULTRA CELL
UNITED STATES                         11/1/1984      73/506,662      6/11/1985    1,340,421          REGISTERED              9

ULTRA LIFE
UNITED STATES                         11/5/1984      73/507,226     11/19/1985    1,371,051          REGISTERED               9

ULTREX
UNITED STATES                         3/16/1994      74/500,719      4/16/1996    1,968,838          REGISTERED              12

VANDERBILT
UNITED STATES                         10/6/1961      72/129,434      6/11/1963      750,869          REGISTERED              12

VANDERBILT TOURING

UNITED STATES                         12/4/2002      76/472,570                                      PENDING                 12

WILD COUNTRY
CANADA                               12/29/1994         772,071      1/19/1996    TMA452895          REGISTERED              12

MEXICO                                 1/4/1995          220947      3/28/1995       486514          REGISTERED              12

UNITED STATES                         6/30/1992      74/289,945       3/2/1993    1,755,187          REGISTERED              12

WILD SPIRIT RADIAL GTX
UNITED STATES                         12/1/1992      74/335,812      2/15/1994    1,822,004          REGISTERED              12

WILD SPIRIT TOURING LS

UNITED STATES                         12/4/2002      76/472,571                                      PENDING                 12

WILD TRAC
CANADA                               12/29/1994         772,069       5/9/1997    TMA475995          REGISTERED              12

MEXICO                                 1/4/1995          220937      3/28/1995       486510          REGISTERED              12

UNITED STATES                          7/3/1978      73/177,148      7/17/1979    1,122,304          REGISTERED              12
</TABLE>

<PAGE>

                   MERCHANT'S, INCORPORATED AND MERBAN, INC.

<TABLE>
<CAPTION>
                                                              Registration No.          Registration Date
                                                              ----------------          -----------------
<S>                                                           <C>                       <C>
         TEAM MERCHANT'S PERFORMANCE
         SPECIALISTS

         United States                                        2,248,803                 09/17/2000

         29 MINUTES OR LESS, TIRE EXPRESS

         United States                                        2,077,075                 07/18/1997

         NO ONE CARES FOR YOUR CAR
         LIKE MERCHANT'S

         United States                                        2,389,988                 09/26/2000

         READY TO ROLL TIRE PRICING

         United States                                        75/564,275                Subject to pending opposition
                                                                                        filing

         MERCHANT'S MAINTENANCE ALERT

         United States                                        2,078,719                 07/15/1997

         MERCHANT'S TIRE & AUTO CENTER

         United States                                        1,420,446                 11/14/87
                                                                                        11/30/92
                                                                                        04/05/93

         SERVICE THAT YOU TRUST - GUARANTEED

         United States                                        1,743,581                 12/29/1992

         MERCHANT'S

         United States                                        1,907,199                 07/28/1995
</TABLE>

<PAGE>

                   COPYRIGHT REGISTRATIONS HELD BY TBC BRANDS

<TABLE>
<CAPTION>
         Title of Work                             Copyright Reg. No.                   Reg. Date
         -------------                             -----------------                    ---------
         <S>                                       <C>                                  <C>
         TBC Corporation                             TX-2-920-912                       09/21/90
         Electronic Ordering System

         Info-Net User's Guide                       TX-4-135-989                       11/13/95
         (Info-Net Online; Direct
         Connection Info-Net)

         Info-Net Online, Release 4.1                TX-4-168-625                       12/07/95
         (Info-Net Online; Direct
         Connection Info-Net)

         Electronic Ordering System                  TX-4-212-078                       12/07/95
         Release 1.0
</TABLE>


<PAGE>


                                                                       EXHIBIT 1


                          [FORM OF SENIOR SECURED NOTE]


                                 TBC CORPORATION


                   VARIABLE RATE SERIES D SENIOR SECURED NOTE
                               DUE APRIL 16, 2009


No. RD-[__]                                                               [Date]
$[________]                                                     PPN: 872180 C* 3


         FOR VALUE RECEIVED, the undersigned, TBC CORPORATION (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to , or registered assigns, the principal sum
of DOLLARS on __________________, with interest (computed on the basis of a 360
day year and 30 day months) (a) on the unpaid balance thereof at a rate equal to
the sum of (i) the Base Rate plus (ii) the Applicable Margin, payable quarterly
on the 16th day of January, April, July and October in each year, commencing
with the January, April, July or October next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) on any overdue
payment (including any overdue prepayment) of principal, any overdue payment of
Yield-Maintenance Amount and any overdue payment of interest, payable quarterly
as aforesaid (or, at the option of the registered holder hereof, on demand), at
a rate per annum from time to time equal to the greater of (i) the interest rate
then in effect under this Note plus 2% per annum or (ii) 2% per annum over the
rate of interest publicly announced by the Bank of New York from time to time in
New York City as its Prime Rate.

         Payments of principal, Yield-Maintenance Amount, if any, and interest
are to be made at the main office of the Bank of New York in New York City or at
such other place as the holder hereof shall designate to the Company in writing,
in lawful money of the United States of America.

         This Note is one of a series of Senior Secured Notes (herein called the
"Notes") issued pursuant to the Note Purchase Agreement, dated as of April 1,
2003 (as amended, restated or otherwise modified from time to time, the
"Agreement"), between the Company, on the one hand, and the Purchasers, on the
other hand, and is entitled to the benefits thereof. As provided in the
Agreement, this Note is subject to prepayment, in whole or from time to time in
part, in certain cases with a Yield-


<PAGE>

Maintenance Amount and in certain cases without a Yield-Maintenance Amount, all
as further specified in the Agreement.

         This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for the then outstanding principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to the contrary.

         The Company agrees to make prepayments of principal of this Note on the
dates and in the amounts specified in the Agreement.

         In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.

         Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.

         This Note is intended to be performed in the State of New York and
shall be construed and enforced in accordance with the internal law of such
State without regard to any of its conflicts of laws principles that would
direct or permit the application of the laws of another jurisdiction.


                                          TBC CORPORATION



                                          By:
                                             -----------------------------------
                                          Name:
                                          Title:




<PAGE>

                                                                     EXHIBIT 3.5

                              Closing Fee Schedule


<TABLE>
<CAPTION>
                         Purchaser                                                 Closing Fee
                         ---------                                                 -----------
<S>                                                                         <C>
        The Prudential Insurance Company of America                                $36,063.66

               Pruco Life Insurance Company                                        $ 2,822.33

                  RGA Reinsurance Company                                          $ 6,191.18

                 Baystate Investments, LLC                                         $ 9,349.98

          United of Omaha Life Insurance Company
                                                                                   $ 7,492.36


                                                                            Total: $61,919.51
                                                                                   ----------
</TABLE>