<PAGE>
                                                                     EXHIBIT 4.2


                                 TBC CORPORATION

                   SECOND AMENDED AND RESTATED NOTE AGREEMENT




                                   $19,500,000

                     SERIES A SENIOR NOTES DUE JULY 10, 2003


                                   $11,000,000

                     SERIES B SENIOR NOTES DUE JULY 10, 2005


                                   $16,500,000

                     SERIES C SENIOR NOTES DUE JULY 10, 2008













                            DATED AS OF APRIL 1, 2003

<PAGE>

                                TABLE OF CONTENTS
                             (not part of agreement)

<TABLE>
<CAPTION>
                                                                                                                PAGE
<S>   <C>                                                                                                       <C>
1.    THE NOTES...................................................................................................1

   1.1.  BACKGROUND...............................................................................................1
   1.2.  AUTHORIZATION OF AMENDMENT AND RESTATEMENT...............................................................2
   1.3.  NOTES IN SERIES..........................................................................................3

2.    AUTHORIZATION OF AMENDMENT AND RESTATEMENT..................................................................3


3.    CONDITIONS SUBSEQUENT TO EFFECTIVENESS......................................................................3

   3.1.  CERTAIN DOCUMENTS........................................................................................3
   3.2.  COMPANY REPRESENTATIONS AND WARRANTIES; NO DEFAULT; ETC..................................................4
   3.3.  SUBSIDIARY REPRESENTATIONS AND WARRANTIES; NO DEFAULTS...................................................4
   3.4.  TRANSACTIONS PERMITTED BY APPLICABLE LAWS................................................................5
   3.5.  PAYMENT OF AMENDMENT FEE.................................................................................5
   3.6.  INTERCREDITOR AGREEMENT..................................................................................5
   3.7.  CREDIT AGREEMENT.........................................................................................5
   3.8.  GUARANTEE AND COLLATERAL AGREEMENT.......................................................................5
   3.9.  NEW MORTGAGE.............................................................................................5
   3.10.    EVIDENCE OF FILING AND RECORDING, ETC.................................................................5
   3.11.    TERMINATION OF EXISTING CREDIT AGREEMENT..............................................................6
   3.12.    COPIES OF ENVIRONMENTAL AUDITS........................................................................6
   3.13.    CLEAR LIEN SEARCH REPORT..............................................................................6
   3.14.    RECEIPT BY COLLATERAL AGENT OF PLEDGED STOCK AND NOTES................................................6
   3.15.    CONSUMMATION OF ACQUISITION OF MERCHANT'S, INCORPORATED...............................................6
   3.16.    EXPENSES..............................................................................................6
   3.17.    PROCEEDINGS SATISFACTORY..............................................................................6

4.    PREPAYMENTS.................................................................................................7

   4.1.  REQUIRED PREPAYMENTS OF SERIES B AND SERIES C NOTES......................................................7
   4.2.  OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT........................................................7
   4.3.  NOTICE OF OPTIONAL PREPAYMENT............................................................................7
   4.4.  APPLICATION OF REQUIRED PREPAYMENTS......................................................................8
   4.5.  APPLICATION OF OPTIONAL PREPAYMENTS......................................................................8
   4.6.  NO ACQUISITION OF NOTES..................................................................................8
   4.7.  CHANGE IN CONTROL PREPAYMENT.............................................................................8
   4.8.  PREPAYMENT OF NOTES PURSUANT TO DEBT PREPAYMENT APPLICATION.............................................11

5.    AFFIRMATIVE COVENANTS......................................................................................13

   5.1.  FINANCIAL STATEMENTS; NOTICE OF DEFAULTS................................................................13
   5.2.  NOTICE OF CERTAIN MATERIAL EVENTS.......................................................................15
   5.3.  ERISA NOTICES...........................................................................................15
   5.4.  INFORMATION REQUIRED BY RULE 144A.......................................................................16
   5.5.  BOOKS AND RECORDS; INSPECTION OF PROPERTY...............................................................16
   5.6.  SUBSIDIARY GUARANTEES AND COLLATERAL....................................................................16
   5.7.  ENVIRONMENTAL LAWS......................................................................................17
   5.8.  ADDITIONAL COLLATERAL, ETC..............................................................................18
   5.9.  TITLE INSURANCE, FLOOD INSURANCE, ETC...................................................................19
   5.10.    MAINTENANCE OF INSURANCE.............................................................................20
   5.11.    MAINTENANCE OF PROPERTIES; COMPLIANCE WITH LAWS......................................................20
   5.12.    CORPORATE EXISTENCE, ETC.; BUSINESS..................................................................21
   5.13.    PAYMENT OF TAXES AND CLAIMS..........................................................................21
   5.14.    USE OF PROCEEDS......................................................................................21
</TABLE>
<PAGE>

<TABLE>
<S>   <C>                                                                                                       <C>

   5.15.    INTERCOMPANY LOANS; PAYMENTS.........................................................................21
   5.16.    MAINTENANCE OF MOST FAVORED LENDER STATUS............................................................22

6.    NEGATIVE COVENANTS.........................................................................................22

   6.1.  FINANCIAL COVENANTS.....................................................................................22
   6.2.  LIMITATION ON INDEBTEDNESS..............................................................................24
   6.3.  LIENS...................................................................................................25
   6.4.  FUNDAMENTAL CHANGES.....................................................................................26
   6.5.  INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS...............................................27
   6.6.  HEDGING AGREEMENTS......................................................................................29
   6.7.  TRANSACTIONS WITH AFFILIATES............................................................................29
   6.8.  RESTRICTIVE AGREEMENTS..................................................................................29
   6.9.  DISCLOSURE..............................................................................................30
   6.10.    SALE OF ASSETS.......................................................................................30
   6.11.    RESTRICTED PAYMENTS..................................................................................31

7.    EVENTS OF DEFAULT..........................................................................................31

   7.1.  ACCELERATION............................................................................................31
   7.2.  RESCISSION OF ACCELERATION..............................................................................35
   7.3.  NOTICE OF ACCELERATION OR RESCISSION....................................................................35
   7.4.  OTHER REMEDIES..........................................................................................36

8.    REPRESENTATIONS, COVENANTS AND WARRANTIES..................................................................36

   8.1.  ORGANIZATION............................................................................................36
   8.2.  FINANCIAL STATEMENTS....................................................................................36
   8.3.  ACTIONS PENDING.........................................................................................37
   8.4.  OUTSTANDING INDEBTEDNESS................................................................................37
   8.5.  TITLE TO PROPERTIES.....................................................................................37
   8.6.  TAXES...................................................................................................37
   8.7.  CONFLICTING AGREEMENTS AND OTHER MATTERS................................................................37
   8.8.  MARGIN SECURITIES.......................................................................................38
   8.9.  ERISA...................................................................................................38
   8.10.    GOVERNMENTAL CONSENT.................................................................................38
   8.11.    ENVIRONMENTAL COMPLIANCE.............................................................................39
   8.12.    DISCLOSURE...........................................................................................39
   8.13.    TRADEMARKS; TRADENAMES, ETC..........................................................................39
   8.14.    STATUS UNDER CERTAIN STATUTES........................................................................39
   8.15.    ANTI-TERRORISM ORDER.................................................................................39
   8.16.    EXISTING MORTGAGE....................................................................................40

9.    REPRESENTATIONS OF THE NOTEHOLDER..........................................................................40

   9.1.  SOURCE OF FUNDS.........................................................................................40

10.   DEFINITIONS; ACCOUNTING MATTERS............................................................................42

   10.1.    YIELD-MAINTENANCE TERMS..............................................................................42
   10.2.    OTHER DEFINED TERMS..................................................................................43
   10.3.    ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS......................................................59

11.   MISCELLANEOUS..............................................................................................59

   11.1.    NOTE PAYMENTS........................................................................................59
   11.2.    EXPENSES.............................................................................................59
   11.3.    CONSENT TO AMENDMENTS................................................................................60
   11.4.    FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES.......................................60
   11.5.    PERSONS DEEMED OWNERS; PARTICIPATIONS................................................................61
</TABLE>


                                       ii
<PAGE>

<TABLE>
<S>   <C>                                                                                                       <C>
   11.6.    SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.........................................61
   11.7.    SUCCESSORS AND ASSIGNS...............................................................................61
   11.8.    INDEPENDENCE OF COVENANTS; SEVERABILITY; DESCRIPTIVE HEADINGS........................................62
   11.9.    NOTICES..............................................................................................62
   11.10.   PAYMENTS DUE ON NON-BUSINESS DAYS....................................................................62
   11.11.   MINIMUM INTEREST PAYABLE.............................................................................62
   11.12.   CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES........................................................63
   11.13.   SATISFACTION REQUIREMENT.............................................................................64
   11.14.   GOVERNING LAW........................................................................................64
   11.15.   COUNTERPARTS.........................................................................................64
   11.16.   BINDING AGREEMENT....................................................................................64
</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 8.13   --     Trademarks, Tradenames etc.

Exhibit 1A   --    Form of Series A Note
Exhibit 1B   --    Form of Series B Note
Exhibit 1C   --    Form of Series C Note
Exhibit 3.6  --    Form of Intercreditor Agreement
Exhibit 3.8  --    Form of Guarantee and Collateral Agreement
Exhibit 3.9  --    Form of New Mortgage



                                      iii
<PAGE>

                                 TBC CORPORATION
                             4770 HICKORY HILL ROAD
                            MEMPHIS, TENNESSEE 38141

                  8.30% SERIES A SENIOR NOTES DUE JULY 10, 2003
                  8.62% SERIES B SENIOR NOTES DUE JULY 10, 2005
                  8.81% SERIES C SENIOR NOTES DUE JULY 10, 2008

                                                             As of April 1, 2003


The Prudential Insurance Company
of America ("PRUDENTIAL")

c/o Prudential Capital Group
Two Ravinia Drive, Suite 1400
Atlanta, Georgia  30346

Ladies and Gentlemen:

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

1.       THE NOTES.

         1.1.     BACKGROUND.

         The Company and Prudential are parties to the Amended and Restated Note
Agreement, dated as of January 31, 2001 (the "EXISTING NOTE AGREEMENT")
governing the terms of the following notes issued by the Company to Prudential:
(a) 8.30% Series A Senior Notes, due July 10, 2003 (the "EXISTING SERIES A
NOTES"), (b) 8.62% Series B Senior Notes, due July 10, 2005 (the "EXISTING
SERIES B NOTES") and (c) 8.81% Series C Senior Notes, due July 10, 2008 (the
"EXISTING SERIES C NOTES;" and together with the Existing Series A Notes and the
Existing Series B Notes, the "EXISTING NOTES"). The aggregate principal amount
of the Existing Series A Notes presently outstanding is $3,250,000; the
aggregate principal amount of the Existing Series B Notes presently outstanding
is $11,000,000 and the aggregate principal amount of the Existing Series C Notes
presently outstanding is $16,500,000. The Company has requested that Prudential
agree to amend and restate the Existing Note Agreement and the Existing Notes to
enable the Company to borrow money under the Credit Agreement, dated as of March
31, 2003 (the "CREDIT AGREEMENT") with J.P. Morgan Chase Bank, N.A. and the
other bank lenders party thereto. Prudential has, subject to the satisfaction of
the conditions precedent set forth in Section 3 of this Agreement, consented to
such request in consideration of a certain Amendment Fee, as described in
Section 3.5. The mutual

<PAGE>

agreement of the parties as to such matters is set forth in the amendment and
restatement of the Existing Note Agreement and the Existing Notes provided for
in this Agreement. The representations and warranties made by the Company under
and pursuant to the Existing Note Agreement shall survive the amendment and
restatement thereof under this Agreement.

         1.2.     AUTHORIZATION OF AMENDMENT AND RESTATEMENT.

         The Company hereby authorizes, agrees and consents to the amendment and
restatement in their entirety of the Existing Note Agreement and the Existing
Notes as provided for herein.

                  (a)      THE SERIES A NOTES. On the 2003 Note Closing Date,
         the Existing Series A Notes shall be deemed to be, automatically and
         without any further action, amended and restated in their entirety as
         set forth on Exhibit 1A; except that the date, registration number and
         principal amount set forth in each Existing Series A Note shall remain
         the same (each such Existing Series A Note, as so amended, and as
         hereinafter amended, restated or otherwise modified from time to time,
         shall be referred to herein individually as a "SERIES A NOTE" and,
         collectively, as the "SERIES A NOTES" and such terms shall further
         include any Series A Note issued in substitution or exchange for any
         such Note in accordance with the terms of this Agreement.

                  (b)      THE SERIES B NOTES. On the 2003 Note Closing Date,
         the Existing Series B Notes shall be deemed to be, automatically and
         without any further action, amended and restated in their entirety as
         set forth on Exhibit 1B; except that the date, registration number and
         principal amount set forth in each Existing Series B Note shall remain
         the same (each such Existing Series B Note, as so amended, and as
         hereinafter amended, restated or otherwise modified from time to time,
         shall be referred to herein individually as a "SERIES B NOTE" and,
         collectively, as the "SERIES B NOTES" and such terms shall further
         include any Series B Note issued in substitution or exchange for any
         such Note in accordance with the terms of this Agreement.

                  (c)      THE SERIES C NOTES. On the 2003 Note Closing Date,
         the Existing Series C Notes shall be deemed to be, automatically and
         without any further action, amended and restated in their entirety as
         set forth on Exhibit 1C; except that the date, registration number and
         principal amount set forth in each Existing Series C Note shall remain
         the same (each such Existing Series C Note, as so amended, and as
         hereinafter amended, restated or otherwise modified from time to time,
         shall be referred to herein individually as a "SERIES C NOTE" and,
         collectively, as the "SERIES C NOTES" and such terms shall further
         include any Series C Note issued in substitution or exchange for any
         such Note in accordance with the terms of this Agreement.

                                       2
<PAGE>

         1.3.     NOTES IN SERIES. The Series A Notes, the Series B Notes and
the Series C Notes (each a "SERIES") are herein sometimes collectively referred
to as the "NOTES" and individually referred to as a "NOTE."

2.       AUTHORIZATION OF AMENDMENT AND RESTATEMENT.

         Subject to the satisfaction of the conditions precedent set forth in
Section 3 of this Agreement, Prudential, by its execution of this Agreement,
hereby agrees and consents to the amendment and restatement in its entirety of
the Existing Note Agreement by this Agreement, and, upon the satisfaction of
such conditions precedent, the Existing Note Agreement shall be deemed so
amended and restated. Subject to the satisfaction of the conditions precedent
set forth in Section 3 of this Agreement, Prudential, by its execution of this
Agreement, hereby agrees and consents to the amendment and restatement in their
entirety of the Existing Notes, on the terms set forth in Section 1.2 (such
transactions are hereinafter referred to collectively as the "AMENDMENT AND
RESTATEMENT"). All amounts owing under and evidenced by the Existing Notes as of
the 2003 Note Closing Date shall continue to be outstanding under, and shall
after the 2003 Note Closing Date continue to be evidenced by, the Notes, and
shall be payable in accordance with this Agreement.

3.       CONDITIONS SUBSEQUENT TO EFFECTIVENESS.

         The Amendment and Restatement shall be effective upon the execution and
delivery of this Agreement by the parties hereto; provided, however, that the
effectiveness hereof is subject to the following conditions subsequent which, if
not met on or before the 2003 Note Closing Date, will automatically and
immediately (i) render this Agreement ineffective, and (ii) render the Existing
Note Agreement effective, in each case without any further action on the part of
any Person, as if this Agreement had never existed:

         3.1.     CERTAIN DOCUMENTS. Prudential shall have received the
following:

                  (a)      Certified copies of the resolutions of the Board of
         Directors of the Company authorizing the amendment and restatement of
         the Existing Note Agreement and the Existing Notes, and the execution
         and delivery of this Agreement, the Guarantee and Collateral Agreement
         and the New 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



                                       3
<PAGE>

         Enterprises, Inc., TBC Brands, LLC, TBC Capital, LLC, Merchant's,
         Incorporated and Merban, Inc. (the "ORIGINAL 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 Original
         Subsidiary Obligors certifying the names and true signatures of the
         officers of the Company and each Original 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 Original Subsidiary
         Obligors.

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

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

                  (g)      A good standing certificate for each of the Company
         and the Original 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 Prudential 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
         Prudential.

         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 2003 Note Closing Date.
There shall exist on the 2003 Note Closing Date no Event of Default or Default
(after giving effect to this Agreement); and the Company shall have delivered to
Prudential an Officer's Certificate, dated the 2003 Note Closing Date, 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 2003 Note Closing


                                       4
<PAGE>

Date.

         3.4.     TRANSACTIONS PERMITTED BY APPLICABLE LAWS. On the 2003 Note
Closing Date, the Amendment and Restatement and the execution, delivery and
performance of the Guarantee and Collateral Agreement, all on the terms and
conditions herein and therein provided, shall (i) 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 (ii) not subject Prudential to any tax, penalty, liability or other onerous
condition under or pursuant to any applicable law or regulation. Prudential
shall have received such certificates or other evidence as it may request to
establish compliance with this Section.

         3.5.     PAYMENT OF AMENDMENT FEE. The Company shall have paid to
Prudential, as consideration for Prudential's consent to the Amendment and
Restatement, a fee (the "AMENDMENT FEE") equal to $38,080.49. The Amendment Fee
shall have been paid in immediately available funds to the account of Prudential
as specified in the Purchaser Schedule.

         3.6.     INTERCREDITOR AGREEMENT. Prudential 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 Prudential 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. Prudential 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 Original Subsidiary Obligors, in
the form attached hereto as Exhibit 3.8 (the "GUARANTEE AND COLLATERAL
AGREEMENT").

         3.9.     NEW MORTGAGE. Prudential shall have received a copy of the
originally executed New Mortgage, in the form attached hereto as Exhibit 3.9.

         3.10.    EVIDENCE OF FILING AND RECORDING, ETC. Prudential 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 Prudential and its
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.


                                       5
<PAGE>

         3.11.    TERMINATION OF EXISTING CREDIT AGREEMENT.

         Prudential 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.

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

         3.13.    CLEAR LIEN SEARCH REPORT.

         Prudential's special counsel shall have received, on behalf of the
Prudential, 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 2003 Note Closing Date
pursuant to documentation satisfactory to Prudential.

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

         Prudential shall have received evidence reasonably satisfactory to it
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.    EXPENSES. All fees and disbursements required to be paid
pursuant to Section 11.2 hereof shall have been paid in full.

         3.17.    PROCEEDINGS SATISFACTORY. All proceedings taken in connection
with the Amendment and Restatement and all documents and papers relating thereto
shall be satisfactory to Prudential and its special counsel. Prudential and its


                                       6
<PAGE>

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 Prudential and its special counsel.

4.       PREPAYMENTS.

         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 SERIES B AND SERIES C NOTES.
                  SERIES B NOTES.

                  The Company shall apply to the prepayment of the Series B
         Notes, without Yield-Maintenance Amount, the sum of $2,750,000 on
         January 10, 2004, July 10, 2004 and January 10, 2005, and such
         principal amount of the Series B Notes, together with interest thereon
         to the payment dates, shall become due on such payment dates. The
         remaining unpaid principal amount of the Series B Notes, together with
         interest accrued thereon, shall become due on the maturity date of the
         Series B Notes.

                  (b)      SERIES C NOTES.

                  The Company shall apply to the prepayment of the Series C
         Notes, without Yield-Maintenance Amount, the sum of $2,750,000 on
         January 10 and July 10 in each of the years 2006 and 2007, and on
         January 10, 2008, and such principal amount of the Series C Notes,
         together with interest thereon to such payment dates, shall become due
         on such payment dates. The remaining unpaid principal amount of the
         Series C Notes, together with interest accrued thereon, shall become
         due on the maturity date of the Series C 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


                                       7
<PAGE>

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
Series B Notes or Series C Notes pursuant to Section 4.1, the amount to be
prepaid shall be applied pro rata to all outstanding Series B Notes or Series C
Notes, as the case may be (including, for the purpose of this Section 4.4 only,
all such 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.

         4.5.     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 of all Series (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


                                       8
<PAGE>

         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, 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


                                       9

<PAGE>

                  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 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

                                       10
<PAGE>

         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 (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.



                                       11

<PAGE>

                  (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 portion
         of each Note being offered to be prepaid (determined pursuant to clause
         (c)(i) below), (ii) specifying a date, not less than 10 days and not
         more 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.

                  (c)      PREPAYMENT.

                           (i)      Such Asset Sale Proceeds Notice having been
                  so given, the Company shall prepay the principal of the Notes
                  and the 2003 Notes as to which acceptances (or deemed
                  acceptances) 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.

                                       12
<PAGE>

                                    (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:

                  (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



                                       13
<PAGE>

         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 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.


                                       14

<PAGE>

         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 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

                                       15
<PAGE>

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 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


                                       16
<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 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 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.


                                       17
<PAGE>

                  (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 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



                                       18
<PAGE>

         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 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


                                       19
<PAGE>

         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 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

                                       20
<PAGE>

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 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


                                       21
<PAGE>

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 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:

              ------------------------------------------------------------------
                    FISCAL QUARTER ENDING                              RATIO
              ------------------------------------------------------------------
              June 30, 2003, September 30, 2003,                    1.15 to 1.0
              December 31, 2003, March 31, 2004 and
              June 30, 2004
              ------------------------------------------------------------------
              September 30, 2004, December 31, 2004,                1.25 to 1.0
              March 31, 2005 and June 30, 2005
              ------------------------------------------------------------------
              September 30, 2005 and any                            1.50 to 1.0
              Fiscal Quarter ending thereafter
              ------------------------------------------------------------------

                  "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.



                                       22
<PAGE>

                  (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:

              ------------------------------------------------------------------
                    FISCAL QUARTER ENDING                              RATIO
              ------------------------------------------------------------------
              June 30, 2003, September 30, 2003 and                 3.25 to 1.0
              December 31, 2003

              ------------------------------------------------------------------
              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,          2.50 to 1.0
              2005 and December 31, 2005
              ------------------------------------------------------------------
              March 31, 2006, and any Fiscal Quarter                2.25 to 1.0
              ending thereafter
              ------------------------------------------------------------------

         "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:

              ------------------------------------------------------------------
                    FISCAL QUARTER ENDING                              RATIO
              ------------------------------------------------------------------
              June 30, 2003, September 30, 2003 and                 5.25 to 1.0
              December 31, 2003
              ------------------------------------------------------------------
              March 31, 2004, June 30, 2004, September 30,          5.00 to 1.0
              2004 and December 31, 2004
              ------------------------------------------------------------------
              March 31, 2005 and June 30, 2005                      4.75 to 1.0
              ------------------------------------------------------------------
              September 30, 2005, December 31, 2005,                4.50 to 1.0
              March 31, 2006 and June 30, 2006
              ------------------------------------------------------------------
              September 30, 2006, December 31, 2006,                4.25 to 1.0
              March 31, 2007 and June 30, 2007
              ------------------------------------------------------------------
              September 30, 2007, and any Fiscal                    4.00 to 1.0
              Quarter ending thereafter
              ------------------------------------------------------------------

         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


                                       23

<PAGE>

         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:

                  (a)      (i) Indebtedness created under this Agreement or
         under the 2003 Note Purchase Agreement and Guarantees executed pursuant
         to such agreements (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 under the Credit Agreement 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


                                       24
<PAGE>

         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;

                  (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;

                                       25
<PAGE>

                  (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 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,


                                       26
<PAGE>

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 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;


                                       27

<PAGE>

                  (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;

                  (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


                                       28

<PAGE>

         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 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


                                       29
<PAGE>

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
Prudential 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.

         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 2003 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


                                       30

<PAGE>

                  (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 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



                                       31
<PAGE>

                  (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

                  (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



                                       32

<PAGE>
                  (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 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



                                       33
<PAGE>

         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 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 New
         Mortgage, the Existing 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;



                                       34
<PAGE>

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 Required Holder(s) of the Notes of any
Series 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 of such
Series to be, and all of the Notes such Series 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 of such
Series, 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 of any Series shall have been declared immediately due and payable
pursuant to Section 7.1, the Required Holder(s) of the Notes of such Series 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 of such Series, the principal of and Yield-Maintenance Amount, if any,
payable with respect to any Notes of such Series 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 of such Series, (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 of such Series 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 of each
Series at the time outstanding.

                                       35
<PAGE>

         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 hereof and on the 2003 Note Closing Date:

         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 Prudential
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.


                                       36

<PAGE>

         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.

         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 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 New 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,



                                       37
<PAGE>

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.     MARGIN SECURITIES. None of the transactions contemplated
herein and in the Notes (including, without limitation, the use of the proceeds
from the original sale of the Existing 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.

         8.9.     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 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 made by Prudential in Section 9.1 as to the source of funds used
by it to purchase the Existing Notes.

         8.10.    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 Amendment and Restatement, 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 in
connection with the execution and delivery of this Agreement or any other
Financing




                                       38
<PAGE>

Document, or the fulfillment of or compliance with the terms and provisions
hereof or of the Notes.

         8.11.    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.

         8.12.    DISCLOSURE. Neither this Agreement nor any other Financing
Document nor any other document, certificate or statement furnished to
Prudential 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.

         8.13.    TRADEMARKS; TRADENAMES, ETC. Schedule 8.13 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 2003 Note Closing Date.

         8.14.    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.

         8.15.    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 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


                                       39
<PAGE>

is otherwise associated, with any such Persons or entities.

         8.16.    EXISTING MORTGAGE.

         The Notes are secured by a first priority  perfected  security
interest in favor of the Collateral  Agent (for the benefit of Prudential) in
the real property and improvements described in (and pursuant to) the Existing
Mortgage.

9.       REPRESENTATIONS OF THE NOTEHOLDER.

         Prudential represents as follows:

         9.1.     SOURCE OF FUNDS. Prudential represents that at least one of
the following statements is an accurate representation as to each source of
funds (a "SOURCE") used by it to pay the purchase price of the Notes:

                  (a)      the Source was 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 and did 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
         Prudential's state of domicile; or

                  (b)      the Source was and is a separate account maintained
         solely in connection with Prudential'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 was and 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 Prudential 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 organization beneficially owned more
         than 10% of all assets



                                       40
<PAGE>

         allocated to such pooled separate account or collective investment fund
         at the time of the purchase of the Notes; or

                  (d)      the Source constituted and 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 were 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,
         exceeded 20% of the total client assets managed by such QPAM at the
         time of the purchase of the Notes by Prudential or now exceed such
         level, the conditions of Part I(c) and (g) of the QPAM Exemption were
         satisfied at such time and are now 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) owned a 5% or more
         interest in the Company at such time or now owns such an interest and
         (i) the identity of such QPAM and (ii) the names of all employee
         benefit plans whose assets were included in such investment fund were
         disclosed to the Company in writing pursuant to this clause (d) prior
         to such purchase; or

                  (e)      the Source constituted 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 were satisfied at the time of the purchase of Notes
         by Prudential and are now 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) owned a 5% or more
         interest in the Company at such time or now owns such an interest and
         (i) the identity of such INHAM and (ii) the name(s) of the employee
         benefit plan(s) whose assets constituted the Source were disclosed to
         the Company in writing prior to such purchase pursuant to this clause
         (e); or

                  (f)      the Source was (and remains) a governmental plan; or

                  (g)      the Source was (and remains) one or more employee
         benefit plans, or a separate account or trust fund comprised of one or
         more employee benefit plans, each of which was identified to the
         Company in writing prior to such purchase pursuant to this clause (g);
         or

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



                                       41

<PAGE>

     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.

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)



                                       42
<PAGE>


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.

     "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



                                       43
<PAGE>

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.

     "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.

     "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.

     "AMENDMENT AND RESTATEMENT" shall have the meaning specified in Section 2.

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

     "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).

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

     "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 Prudential. 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 Prudential in good faith believes 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.


                                       44
<PAGE>

     "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 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.

     "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 2003 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



                                       45
<PAGE>

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.

     "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 have the meaning specified in Section 1.1.


                                       46
<PAGE>

     "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 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.


                                       47
<PAGE>

     "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.

     "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.

     "EXISTING MORTGAGE" means that certain Deed of Trust, Assignment of Leases
and Security Agreement, dated as of January 5, 2001, in respect of real property
and improvements in Memphis, Tennessee owned by the Company



                                       48
<PAGE>

securing its obligations to, among other parties, Prudential, in respect of,
among other obligations, the Company's obligations under this Agreement and the
Notes.

     "EXISTING NOTE AGREEMENT" shall have the meaning specified in Section 1.1.

     "EXISTING NOTES" shall have the meaning specified in Section 1.1.

     "EXISTING SERIES A NOTES" shall have the meaning specified in Section 1.1.

     "EXISTING SERIES B NOTES" shall have the meaning specified in Section 1.1.

     "EXISTING SERIES C NOTES" shall have the meaning specified in Section 1.1.

     "FINANCING DOCUMENT(S)" shall mean each of this Agreement, the Notes, the
Guarantee and Collateral Agreement, the New Mortgage, the Existing 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 Prudential 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.



                                       49
<PAGE>

     "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 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".



                                       50
<PAGE>

     "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 9.1(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.

     "INTEREST RATE CHANGE DATE" shall mean the earliest date on or after March
31, 2002 that the Leverage Ratio is greater than 2.75 to 1.0 as of the end of
two consecutive Fiscal Quarters.

     "INTEREST RATE EFFECTIVE DATE" shall mean the first day of the Fiscal
Quarter ending on the Interest Rate Change Date.

     "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.

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


                                       51
<PAGE>

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


                                       52
<PAGE>

     "NAIC ANNUAL STATEMENT" shall have the meaning specified in Section 9.1(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.

     "NEW 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, Prudential, in respect of, among other obligations, the
Company's obligations under this Agreement and the Notes.

     "NOTE(S)" shall have the meaning specified in Section 1.3.

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

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

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

     "PERMITTED ENCUMBRANCES" means:



                                       53
<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, the 2003 Note Purchase 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;


                                       54
<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).


                                       55
<PAGE>


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

     "PRUDENTIAL" shall mean The Prudential Insurance Company of America.

     "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 9.1(a).

     "QPAM EXEMPTION" shall have the meaning specified in Section 9.1(d).

     "REQUIRED HOLDER(S)" shall mean the holder or holders of at least 51% of
the aggregate principal amount of the Notes or a Series of Notes, as the context
may require, 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.

     "SERIES" shall have the meaning specified in Section 1.3.



                                       56
<PAGE>

     "SERIES A NOTE(S)" shall have the meaning specified in Section 1.2(a).

     "SERIES B NOTE(S)" shall have the meaning specified in Section 1.2(b).

     "SERIES C NOTE(S)" shall have the meaning specified in Section 1.2(c).

     "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.

     "SOURCE" shall have the meaning specified in Section 9.1.

     "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 Original 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.



                                       57
<PAGE>

     "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.

     "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.

     "2003 NOTE CLOSING DATE" shall mean the date of the Closing (as such term
is defined in the 2003 Note Purchase Agreement).

     "2003 NOTE PURCHASE AGREEMENT" means the Note Purchase Agreement, of even
date herewith, by and among the Company and the note purchasers party thereto,
as amended, restated, supplemented, replaced or otherwise modified from time to
time.

     "2003 NOTES" means the Series D Variable Rate Senior Notes, due April 16,
2009, issued by the Company on April 16, 2003 under the terms of the 2003 Note
Purchase Agreement.

     "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.


                                       58
<PAGE>

     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.

11.  MISCELLANEOUS.

     11.1. NOTE PAYMENTS. The Company agrees that, so long as Prudential 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 Prudential
specified in the Purchaser Schedule attached hereto or (ii) such other account
or accounts in the United States as Prudential may from time to time designate
in writing, notwithstanding any contrary provision herein or in any Note with
respect to the place of payment. Prudential 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 Prudential
has made in this Section 11.1.

     11.2. EXPENSES. The Company agrees to pay, and save Prudential 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 Prudential 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
Prudential 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
Prudential's 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 Prudential or any Transferee and the
payment of any Note.


                                       59
<PAGE>

     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 of each Series except that, without the written consent of the holders of
all Notes of a particular Series at the time outstanding, the Notes of such
Series 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 of such Series, 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 of such Series, or
the rights of any individual holder of Notes of such Series, required with
respect to any declaration of Notes of such Series 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 of
any Series at the principal office of the Company, the Company shall, at its
expense, execute and deliver one or more new Notes of the same Series, of like
tenor and of a like aggregate principal amount, in the form attached hereto as
Exhibit 1A, Exhibit 1B or Exhibit 1C, as applicable, registered in the name of
such transferee or transferees. At the option of the holder of any Note of any
Series, such Note may be exchanged for other Notes of such Series 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


                                       60
<PAGE>

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 any Series 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 such Series, of like tenor, in lieu of the
lost, stolen, destroyed or mutilated Note.

     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 Prudential 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 Prudential 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 that the Company may not assign or otherwise transfer any of its
rights or


                                       61
<PAGE>

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 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 Prudential, addressed as specified for such
communications in the Purchaser Schedule attached hereto or at such other
address as Prudential 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



                                       62
<PAGE>

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 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



                                       63
<PAGE>

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 Prudential, to any holder of Notes or to the
Required Holder(s), the determination of such satisfaction shall be made by
Prudential, 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 Prudential, it shall become a binding agreement between the
Company and Prudential.


                      [SIGNATURES APPEAR ON THE NEXT PAGE.]



                                       64
<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


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



             [Signature Page to Amended and Restated Note Agreement]

<PAGE>



                               PURCHASER SCHEDULE


--------------------------------------------------------------------------------
PURCHASER NAME                     THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
--------------------------------------------------------------------------------
Name in Which Note is Registered   THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
--------------------------------------------------------------------------------
Note Registration Number;          Series A:  $19,500,000
Principal Amount                   Series B:  $11,000,000
                                   Series C:  $16,500,000
--------------------------------------------------------------------------------
Payment on Account of Note

         Method                    Federal Funds Wire Transfer
         Account Information       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 Issuer: TBC CORPORATION

                                   Description of Security:  Series A Senior
                                   Notes due July 10, 2003

                                   PPN: 872180 B*4

                                   Description of Security: Series B Senior
                                   Notes due July 10, 2005

                                   PPN: 872180 B@2

                                   Description of Security: Series C Senior
                                   Notes due July 10, 2008

                                   PPN: 872180 B#0

                                   Due Date and Application (as among principal,
                                   interest and Yield-Maintenance Amount) of
                                   the payment being made:

--------------------------------------------------------------------------------


<PAGE>
PURCHASER NAME                     THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
--------------------------------------------------------------------------------
Address for Notices Related        The Prudential Insurance Company of America
to Payments                        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      The Prudential Insurance Company of America
(including copies of all           C/o Prudential Capital Group
Notices related to Payments)       1170 Peachtree Street, Suite 500
                                   Atlanta, GA 30309
                                   Attn: Managing Director
                                   Tel: 404-870-3750
                                   Fax: 404-870-2041

--------------------------------------------------------------------------------
Signature Block Format             THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
                                   By:
                                      ------------------------------
                                   Name:
                                   Title:

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

--------------------------------------------------------------------------------
Tax Identification Number          22-1211670
--------------------------------------------------------------------------------


<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
                      ------------------------------------

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
           -----------------------------------------------------------



                                             Big O Guarantee Portion at 12/31/02
                                             -----------------------------------


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



<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.

     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.


<PAGE>

     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>

                                   JURISDICTION OF      PERCENTAGE OF STOCK/
           NAME                     ORGANIZATION        EQUITY OWNED BY TBC         SUBSIDIARIES
           ----                     ------------        -------------------         ------------
<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>
                                   JURISDICTION OF      PERCENTAGE OF STOCK
           NAME                     INCORPORATION         OWNED BY BIG O            SUBSIDIARIES
           ----                    ---------------      -------------------         ------------
<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>
                                   JURISDICTION OF      PERCENTAGE OF STOCK
           NAME                     INCORPORATION       OWNED BY TBC RETAIL         SUBSIDIARIES
           ----                    ---------------      -------------------         ------------
<S>                                    <C>                      <C>                 <C>

Big O Retail Enterprises, Inc.          Colorado                100%                    None
Tire Kingdom, Inc.                      Florida                 100%                  See Below

</TABLE>


<PAGE>


SUBSIDIARIES DIRECTLY OWNED BY TIRE KINGDOM, INC.:
-------------------------------------------------

<TABLE>
<CAPTION>
                                   JURISDICTION OF      PERCENTAGE OF STOCK
           NAME                     INCORPORATION           OWNED BY TKI            SUBSIDIARIES
           ----                    ---------------      -------------------         ------------
<S>                                <C>                  <C>                         <C>

Merchant's, Incorporated              Delaware                  100%                 See Below

</TABLE>

SUBSIDIARIES DIRECTLY OWNED BY MERCHANT'S, INCORPORATED:
-------------------------------------------------------

<TABLE>
<CAPTION>
                                   JURISDICTION OF      PERCENTAGE OF STOCK
           NAME                     INCORPORATION           OWNED BY TKI            SUBSIDIARIES
           ----                    ---------------      -------------------         ------------
<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 8.13

                    TRADEMARKS, TRADENAMES AND SERVICE MARKS
                    ----------------------------------------

<TABLE>
<CAPTION>
                                                            TIRE KINGDOM, INC.

     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>
     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



                                                                BIG O TIRES, INC.

      Trademark Report by Mark                                                                   Printed: 3/28/2003         Page 1
      Status:  ACTIVE
      COUNTRY                                        FILED      APPL#             REGDT        REG#           STATUS        CLASSES

     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

     BIG LIFT
</TABLE>

<PAGE>

<TABLE>
    <S>                                           <C>         <C>               <C>          <C>             <C>           <C>
     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

     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
</TABLE>

<PAGE>

<TABLE>
    <S>                                           <C>         <C>               <C>          <C>             <C>          <C>

     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 COMMERICAL
     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>


<TABLE>
<CAPTION>
                                                  TBC BRANDS, LLC

     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   T 31 825/12 W     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>

    <S>                                           <C>         <C>               <C>          <C>          <C>            <C>
     CORDOVAN BONNEVILLE JET (STYLIZED)
     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

     GRAND PRIX RADIAL G/T (STYLIZED)
</TABLE>

<PAGE>

<TABLE>

    <S>                                           <C>         <C>               <C>          <C>             <C>            <C>
     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

     MULTI-MILE (STYLIZED)
</TABLE>

<PAGE>


<TABLE>

    <S>                                           <C>         <C>               <C>          <C>           <C>            <C>
     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

     * In the name of  TBC CORPORATION

     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
</TABLE>


<PAGE>


<TABLE>

    <S>                                           <C>         <C>               <C>          <C>          <C>            <C>
     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

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

<PAGE>


<TABLE>

    <S>                                           <C>         <C>               <C>          <C>          <C>            <C>
     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
</TABLE>

<PAGE>


<TABLE>

    <S>                                           <C>         <C>               <C>          <C>          <C>            <C>
     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>


                    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
                   ------------------------------------------

Title of Work                            Copyright Reg. No.         Reg. Date
-------------                            -----------------          ---------

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


<PAGE>



                                                                      EXHIBIT 1A


                             [FORM OF SERIES A NOTE]

                                 TBC CORPORATION

                  8.30% SERIES A SENIOR NOTE DUE JULY 10, 2003


No. RA-[__]                                                     January __, 2001
$[________]                                                     PPN: 872180 B* 4

         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 the rate of (i) at all times prior to but excluding the
Interest Rate Effective Date (as defined in the Agreement (as defined below),
8.30% per annum and (ii) at all times from and including the Interest Rate
Effective Date, 10.30%, payable quarterly on the 10th 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 Series A 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 Notes (herein called the
"Notes") issued pursuant to the Second Amended and Restated Note Agreement,
dated as of April 1, 2003 (as amended, restated or otherwise modified from time
to time, the


                                  Exhibit 1A-1


<PAGE>

"Agreement"), between the Company, on the one hand, and The Prudential Insurance
Company of America, 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-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:
                                                --------------------------------
                                             Title:
                                                   -----------------------------


                                  Exhibit 1A-2

<PAGE>



                                                                      EXHIBIT 1B


                             [FORM OF SERIES B NOTE]

                                 TBC CORPORATION

                  8.62% SERIES B SENIOR NOTE DUE JULY 10, 2005


No. RB-[__]                                                     January __, 2001
$[________]                                                     PPN: 872180 B@ 2

         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 the rate of (i) at all times prior to but excluding the
Interest Rate Effective Date (as defined in the Agreement (as defined below),
8.62% per annum and (ii) at all times from and including the Interest Rate
Effective Date, 10.62%, payable quarterly on the 10th 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 Series B 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 Notes (herein called the
"Notes") issued pursuant to the Second Amended and Restated Note Agreement,
dated as of April 1, 2003 (as amended, restated or otherwise modified from time
to time, the


                                  Exhibit 1B-1

<PAGE>

"Agreement"), between the Company, on the one hand, and The Prudential Insurance
Company of America, 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-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:
                                                --------------------------------
                                             Title:
                                                   -----------------------------


                                  Exhibit 1B-2

<PAGE>


                                                                      EXHIBIT 1C


                             [FORM OF SERIES C NOTE]

                                 TBC CORPORATION

                  8.81% SERIES C SENIOR NOTE DUE JULY 10, 2008


No. RC-[__]                                                     January __, 2001
$[________]                                                     PPN: 872180 B# 0

         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 the rate of (i) at all times prior to but excluding the
Interest Rate Effective Date (as defined in the Agreement (as defined below),
8.81% per annum and (ii) at all times from and including the Interest Rate
Effective Date, 10.81%, payable quarterly on the 10th 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 Series C 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 Notes (herein called the
"Notes") issued pursuant to the Second Amended and Restated Note Agreement,
dated as of April 1, 2003 (as amended, restated or otherwise modified from time
to time, the

<PAGE>

"Agreement"), between the Company, on the one hand, and The Prudential Insurance
Company of America, 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-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:
                                                --------------------------------
                                             Title:
                                                   -----------------------------