AMERICAN TIRE DISTRIBUTORS, INC. SYNDICATION PROCEDURES

Transcription

1 AMERICAN TIRE DISTRIBUTORS, INC. SYNDICATION PROCEDURES 1. This is a notification of the syndication procedures with respect to the opportunity (the Opportunity ) to participate as a lender in a superpriority, secured first in last out (FILO) debtor-in-possession term loan facility of American Tire Distributors, Inc. (the Company ) in the principal amount of up to $250,000,000 (the U.S. Junior FILO Facility ), on the terms set forth in that certain Post-Petition Credit Agreement, dated as of October 9, 2018, by and among the Company, the other Borrowers party thereto, the other Loan Parties party thereto, the lenders party thereto and Bank of America, N.A. (the Agent ) (the DIP Loan Agreement ) Commencing on October 15, 2018, each Eligible Holder (as defined below) that is (i) a Pre-Petition Term Lender under the Pre-Petition Term Loan Agreement and/or (ii) a holder of Subordinated Notes under the Subordinated Notes Indenture (a Pre-Petition Noteholder ), in each case that is not an Initial U.S. Junior FILO Lender under the DIP Loan Agreement, shall have the opportunity to purchase up to its pro rata portion (calculated as described below) of the U.S. Junior FILO Loans, subject in all respects to the terms and conditions of these Syndication Procedures and the applicable subscription documents. 3. For purposes hereof, an Eligible Holder is defined as each entity that is (i) either (A) a qualified institutional buyer, as such term is defined in Rule 144A under the Securities Act of 1933, as amended (the Securities Act ), or (B) an institutional accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act or an entity in which all of the equity investors are such institutional accredited investors, (ii) a Pre- Petition Term Lender and/or Pre-Petition Noteholder as of 5:00 p.m., New York City time, on October 15, 2018 (the Record Date ) 2, (iii) not the Borrower or an Affiliate of the Borrower, and (iv) is an Eligible Assignee as defined in the DIP Loan Agreement. The Company and the Required RSA FILO Lenders (as defined in the DIP Loan Agreement) shall mutually determine whether any entity is an Eligible Holder for purposes of participation in the Opportunity. Natural persons are not eligible to participate in the Opportunity. 1 Capitalized terms used herein and not defined shall have the meanings assigned to them in that certain Interim Order (I) Authorizing the Debtors to (A) Obtain Postpetition Financing and (B) Utilize Cash Collateral, (II) Granting Liens and Superpriority Administrative Expense Claims, (III) Granting Adequate Protection, (IV) Modifying the Automatic Stay, (V) Scheduling a Final Hearing, and (IV) Granting Related Relief [Docket No. 109] (the Interim Order ), filed in the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court ) in connection with the Chapter 11 Cases of ATD Corporation and its affiliated debtor entities, or the DIP Loan Agreement, as applicable. 2 For purposes of determining beneficial ownership of Pre-Petition Term Loans on the Record Date for participation in the Opportunity, such ownership shall be determined on the basis of both settled and unsettled trades, provided that, with respect to any unsettled trade of Pre-Petition Term Loans, the assignee shall provide evidence (such as a trade confirmation) reasonably satisfactory to counsel to the Company and the Required RSA FILO Lenders, which evidence reasonably establishes ownership of such Pre-Petition Term Loans (subject to recordation of assignment by the Agent).

2 4. (a) Eligible Holders who are Pre-Petition Noteholders will have the opportunity to purchase up to their pro rata portion (calculated as described below) of a principal amount of $125,000,0000 of the U.S. Junior FILO Facility (the Pre-Petition Noteholder Allocation ) based on the outstanding principal amount of Subordinated Notes owned by such Eligible Holder and (b) Eligible Holders who are Pre-Petition Term Lenders will have the opportunity to purchase up to their pro rata portion (calculated as described below) of a principal amount of $125,000,000 of the U.S. Junior FILO Facility (the Pre-Petition Term Lender Allocation ) based on the outstanding principal amount of Pre-Petition Term Loans owned by such Eligible Holder. Each Eligible Holder s pro rata portion will be calculated as follows: (i) with respect to Pre-Petition Noteholders, the fraction (expressed as a factor) the numerator of which is the outstanding principal amount of Subordinated Notes owned by such Eligible Holder as of the Record Date and the denominator of which is the aggregate outstanding principal amount of all Subordinated Notes as of the Record Date, which amount is equal to $1,050,000,000; and (ii) with respect to Pre-Petition Term Lenders, the fraction (expressed as a factor) the numerator of which is the outstanding principal amount of Pre-Petition Term Loans owned by such Eligible Holder as of the Record Date and the denominator of which is the aggregate outstanding principal amount of all Pre-Petition Term Loans as of the Record Date, which amount is equal to $694,800, Pursuant to Section 2.12(d)(ii) of the DIP Loan Agreement, so long as of the RSA is in full force and effect, at the option of the Borrower Agent, which option shall be exercised no later than 10 days prior to the confirmation hearing for an Acceptable Plan that constitutes the RSA Plan, the U.S. Junior FILO Facility may be converted into U.S. Junior FILO Exit Facilities substantially on the terms set forth in the summary term sheet set forth in an exhibit to the Notice of Settlement filed with the Bankruptcy Court on October 5, 2018 [Docket No. 128] or on terms otherwise agreed to by the parties to the RSA pursuant to the terms of the RSA. 6. The Debtors will commence the syndication process by (i) posting the relevant subscription documents and these Syndication Procedures on the website maintained by Kurtzman Carson Consultants LLC (the Information Agent ) for the Chapter 11 Cases at (through the link for DIP Syndication Materials ) and (ii) using reasonable efforts to send the relevant subscription documents to as many Eligible Holders as is reasonably practicable under the circumstances. If you are an Eligible Holder interested in participating in the U.S. Junior FILO Facility, you must obtain copies of the relevant subscription documents, if you do not have them already, from the Information Agent. The subscription documents include a subscription form (together with instructions), a signature page to the DIP Loan Agreement, the other documents described under paragraph 8 below and such other documents as the Agent may reasonably require. Copies of the relevant subscription documents may be obtained by contacting the Information Agent, Kurtzman Carson Consultants LLC, at 1290 Avenue of the Americas, 9th Floor, New York, NY 10104; Attn: American Tire Distributors, Inc.; Telephone: (917) ; ATDinfo@kccllc.com. 7. The syndication process will expire at 5:00 p.m., New York City Time, on October 24, 2018, unless extended earlier or terminated (the Expiration Time ), in accordance with 2

3 the applicable subscription documents, and which extension will be made by public announcement by the Debtors in a press release or by posting a notice on the Bankruptcy Court docket for the Chapter 11 Cases. 8. To participate in the Opportunity, Eligible Holders must, on or prior to the Expiration Time: (i) complete and execute the subscription documents provided by the Information Agent, including a Subscription Form, the Master Assignment and Assumption Agreement to the DIP Loan Agreement, an Administrative Questionnaire, all know-your-customer information and other documents required by the Agent and the applicable tax forms, each of which may be obtained by contacting the Information Agent, and such other documents as the Agent may reasonably require, (ii) deliver (or cause the delivery of) such subscription documents to Information Agent and (iii) cause the amount of the subscription funding (as provided in the relevant subscription documents) to be funded by such Eligible Holder to be sent by wire transfer of immediately available federal funds plus a processing fee in the amount of $3,500, to the escrow account established by the Escrow Agent (as defined in the Notice and Instruction Form). 9. If you are a Pre-Petition Noteholder, you must provide the nominee holding your Subordinated Notes with sufficient time to allow your nominee to complete the nominee certification attached to the subscription form on your behalf and deliver it to the Information Agent on or prior to the Expiration Time. Eligible Holders that by the Expiration Time do not return the applicable subscription documents to the Information Agent and send by wire their proposed amount of funding to the escrow account will not be permitted to participate in the Opportunity. 10. The Information Agent shall promptly notify the Escrow Agent and Agent of its receipt of subscription documents, immediately deliver to the Escrow Agent and the Agent any knowyour-customer information and other documents required by the Agent, and shall deliver the final syndication list to the Agent, the Escrow Agent, the Company and the Required RSA FILO Lenders promptly following the Expiration Time. 11. A commitment to participate in the Opportunity may not be withdrawn by any Eligible Holder, unless otherwise mutually determined by the Company and the Required RSA FILO Lenders. 12. All notices and other communications required to be delivered to the Information Agent pursuant to these Syndication Procedures shall be made in writing, or by any telecommunication device capable of creating a written record, and addressed as follows: Kurtzman Carson Consultants 1290 Avenue of the Americas 9th Floor New York, NY Telephone: (917) Attn: American Tire Distributors, Inc. ATDinfo@kccllc.com 3

4 13. Concurrently with the funding of the Delayed Draw U.S. Junior FILO Loans, the U.S. Junior FILO Loans and unused U.S. Junior FILO Commitments shall be reallocated (by assignment or otherwise) (a) to the Initial U.S. Junior FILO Lenders who are Pre-Petition Noteholders with respect to the Senior Subordinated Notes owned by such Initial U.S. Junior FILO Lender (x) based on such Initial U.S. Junior FILO Lenders pro rata portion calculated as follows: the fraction (expressed as a factor) the numerator of which is the outstanding principal amount of Subordinated Notes owned by such Initial U.S. Junior FILO Lender as of the Record Date and the denominator of which is the aggregate outstanding principal amount of all Subordinated Notes as of the Record Date, which amount is equal to $1,050,000,000 and (y) with respect to any amounts of the Pre-Petition Noteholder Allocation which are not elected to be purchased by a Eligible Holder pursuant to these Syndication Procedures, based on such Initial U.S. Junior FILO Lenders pro rata portion calculated as follows: the fraction (expressed as a factor) the numerator of which is the outstanding principal amount of U.S. Junior FILO Loans and unused U.S. Junior FILO Commitments allocated to such Initial U.S. Junior FILO Lender based on the principal amount of Subordinated Notes held by such Initial U.S. Junior FILO Lender as of October 4, 2018 and the denominator of which is the aggregate outstanding principal amount of all outstanding principal amount of U.S. Junior FILO Loans and unused U.S. Junior FILO Commitments allocated to the Initial U.S. Junior FILO Lenders based on the principal amount of Subordinated Notes held by all U.S. Junior FILO Lenders as of October 4, 2018 and (b) to the Initial U.S. Junior FILO Lenders who are Pre-Petition Term Lenders with respect to the Pre-Petition Term Loans owned by such Initial U.S. Junior FILO Lender (x) based on such Initial U.S. Junior FILO Lenders pro rata portion calculated as follows: the fraction (expressed as a factor) the numerator of which is the outstanding principal amount of Pre-Petition Term Loans owned by such Initial U.S. Junior FILO Lender as of the Record Date and the denominator of which is the aggregate outstanding principal amount of all Pre-Petition Term Loans as of the Record Date, which amount is equal to $694,800,000 and (y) with respect to any amounts of the Pre-Petition Term Lender Allocation which are not elected to be purchased by a Eligible Holder pursuant to these Syndication Procedures, based on such Initial U.S. Junior FILO Lenders pro rata portion calculated as follows: the fraction (expressed as a factor) the numerator of which is the outstanding principal amount of U.S. Junior FILO Loans and unused U.S. Junior FILO Commitments allocated to such Initial U.S. Junior FILO Lender based on the principal amount of Pre-Petition Term Loans held by such Initial U.S. Junior FILO Lender as of October 4, 2018 and the denominator of which is the aggregate outstanding principal amount of all outstanding principal amount of U.S. Junior FILO Loans and unused U.S. Junior FILO Commitments allocated to the Initial U.S. Junior FILO Lenders based on the principal amount of Pre-Petition Term Loans held by all U.S. Junior FILO Lenders as of October 4, Upon the entry of the Final DIP Financing Order and satisfaction of any conditions precedent in the DIP Loan Agreement (or waiver in accordance with the terms thereof), the Escrow Agent will disburse the funds in the escrow account to the Agent on behalf of the participating Eligible Holders in accordance with the Subscription Documents. Subject to the reallocation of the U.S. Junior FILO Loans and U.S. Junior FILO Commitments described above, to the extent that the aggregate principal amount of U.S. Junior FILO Loans and U.S. Junior FILO Commitments subscribed to by the Eligible Holders is less 4

5 than $60,000,000, then each Initial U.S. Junior FILO Lenders shall fund such Initial U.S. Junior FILO Lenders U.S. Junior FILO Loans (as reallocated as described above) to the Agent. 15. If the Bankruptcy Court does not enter into the Final Order, the DIP Loan Agreement terminates or the syndication process is terminated for any reason, the subscription documents submitted by participating Eligible Holders will terminate and the Escrow Agent will immediately return by wire funds transferred by such Eligible Holders to the escrow account. For the avoidance of doubt, no interest shall accrue with respect to any amounts funded into escrow on account of this Opportunity unless and until the disbursement of funds to the Agent in accordance to these Subscription Procedures upon the entry of the Final DIP Financing Order and satisfaction of any conditions precedent in the DIP Loan Agreement (or waiver in accordance with the terms thereof). 16. Notwithstanding anything to the contrary herein, the Required RSA FILO Lenders and the Company may amend or modify the terms of the Opportunity, including the Subscription Documents, at any time, by filing a notice of such amendment or modification on the Debtors docket with the Bankruptcy Court related to their Chapter 11 Cases; provided that nothing in these Syndication Procedures (including, without limitation, in this Section 12) shall be construed to supersede the amendment and modification requirements set forth in the DIP Loan Agreement. 17. Each Eligible Holder s participation in the Opportunity is subject to such Eligible Holder providing all know-your-customer information and other documents required by the Agent and the Agent s satisfactory review of such information and documents (as determined in the sole discretion of the Agent). 5