EXHIBIT 4.6
LETTER AMENDMENT NO. 2
TO NOTE PURCHASE AND PRIVATE SHELF AGREEMENT
October 28, 1998
The Prudential Insurance Company
of America
c/o Prudential Capital Group
0000 Xxxx Xxxxxx, Xxxxx 0000X
Xxxxxx, Xxxxx 00000
Ladies and Gentlemen:
We refer to the Note Purchase and Private Shelf Agreement dated as of July
10, 1996, as amended by Amendment No. 1 dated as of September 20, 1996 (as
amended, the "Agreement"), among the undersigned, TBC Corporation (the
"Company"), and you. Unless otherwise defined herein, the terms defined in
the Agreement shall be used herein as therein defined.
The Company requests that you agree to modify certain provisions of the
Agreement. In connection with the Company's request for modification, the
Company represents and warrants that, as of the date hereof, no Default or
Event of Default exists under the Agreement. You have indicated your
willingness to modify the Agreement. Accordingly, it is hereby agreed by you
and the Company as follows:
(a) Paragraph 6A(2). Paragraph 6A(2) of the Agreement is amended in
full to read as follows:
6A(2). Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio (measured at the end of each fiscal quarter for the then-most
recently ended four fiscal quarters) to be less than 2.0 to 1.0 at
any time.
(b) Paragraph 6B(1)(ix). Paragraph 6B(1)(ix) of the Agreement is
amended by adding the phrase "arise under or in connection with Synthetic
Leases or that" after the word "that" in the second line thereof.
(c) Paragraph 6B(2)(iii). Paragraph 6B(2)(iii) of the Agreement is
amended in full to read as follows:
(iii) other Funded Debt of the Company (other than Debt to any
Subsidiary) and Subsidiaries, provided that
(A) the aggregate principal amount of all Funded Debt of
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the Company (including the Notes) and Subsidiaries on a
consolidated basis shall not exceed 55% of Consolidated
Capitalization at any time;
(B) the aggregate principal amount of all Adjusted
Funded Debt of the Company (including the Notes) and
Subsidiaries on a consolidated basis shall not exceed 45% of
Adjusted Consolidated Capitalization at any time;
(C) [Intentionally Omitted];
(D) the aggregate principal amount of all Total Priority
Debt shall not exceed 15% of Consolidated Tangible Assets at
any time; and
(E) [Intentionally Omitted];
provided that, with respect to each calculation under this
clause (iii), in the event that the Company guarantees any
Funded Debt of a Subsidiary or any Subsidiary guarantees any
Funded Debt of the Company or another Subsidiary, the
Indebtedness in respect of all such Guarantees (other than
Permitted Subsidiary Guarantees and the Permitted Company
Guarantee) shall be included as separate and additional items
of Indebtedness to that of both (a) the underlying Debt of the
primary obligor guaranteed thereby and (b) any other Guarantee
thereof by the Company or another Subsidiary, as the case may
be.
(d) Paragraph 6B(2). Paragraph 6B(2) of the Agreement is amended
by adding "; and" in place of the "." at the end of subparagraph (iv)
thereof and by adding to the end thereof a new subsection (v), to read
as follows:
"(v) Guarantees arising in connection with Synthetic Leases."
(e) Paragraph 6B(3)(vi). Paragraph 6B(3)(vi) of the Agreement is
amended by deleting the figure "$3,000,000" therein and substituting for
such figure the figure "$8,000,000."
(f) Paragraph 6B(3). Paragraph 6B(3) of the Agreement is amended
by adding "; and" in place of the "." at the end of subparagraph (viii)
thereof and by adding to the end thereof a new subsection (ix), to read
as follows:
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(ix) Investments in one or more joint ventures organized for
the specific purpose of developing retail stores; provided
that (a) such joint ventures(s) constitute an extension of
current tire operations, and (b) if such joint venture does
not involve a Big O retail store, either (i) a minimum of 50%
of the equity interest in the joint venture is owned by the
Company, or (ii) provided no other Person, together with such
Person's affiliates, owns a larger equity interest than the
Company, a minimum of 30% of the equity interest in the joint
venture is owned by the Company.
(g) Paragraph 6B(6)(iii). Paragraph 6B(6)(iii) of the Agreement
is amended in full to read as follows:
(iii) the Company may (a) sell as an entirety 100% of the
stock or substantially all of the assets of Battery
Associates, Inc., or (b) sell all or any portion of the stock
or assets of Northern States Tire, Inc., to any Person for a
purchase price approved in each case by the Board of Directors
of the Company; provided, however, that Board of Director
approval shall not be required for sales of Northern States
Tire, Inc. stock or assets made in the ordinary course of
business,
(h) Paragraph 10B. Paragraph 10B of the Agreement is amended by
adding the following definitions in alphabetical order:
"Fixed Charge Coverage Ratio" shall mean, as of the last day of any
fiscal quarter of the Company, the ratio of (a) EBITDA plus rental
payments for the period of four fiscal quarters ending on the last day
of such fiscal quarter to (b) Fixed Charges.
"Fixed Charges" shall mean, for the Company and its Subsidiaries on
a consolidated basis, for the period of four fiscal quarters ending on
the last day of such fiscal quarter, the sum of (i) Interest Expense for
such period, (ii) all scheduled payments of the principal amount of any
Indebtedness (including imputed principal payments with respect to any
Capitalized Lease Obligation), including, without limitation, scheduled
prepayments of the Notes pursuant to paragraphs 4A(1), 4A(2) and 4A(3)
for such period, and (iii) rental payments.
"Synthetic Lease(s)" shall mean any lease entered into by the
Company pursuant to the lease program with Suntrust Capital Markets,
Inc., and any future lease that evidences a transaction that satisfies
the requirements of the Statement of Financial Accounting Standards No.
13 (SFAS 13)
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promulgated by the Financial Accounting Standards Board and the Emerging
Issues Task Force of the Financial Accounting Standards Board (1990)
(EITF 90-15) that is classified as a lease for financial accounting
purposes and as a loan for tax purposes; provided that the combined
total amount of the loan obligations incurred in connection with such
leases shall not exceed $15 million.
(i) Paragraph 10B. The definition of "Guarantee" in Paragraph 10B
of the Agreement is amended by adding the following sentence immediately
after the first sentence of such definition:
"The term "Guarantee" shall include any recourse deficiency
amount or guaranteed residual portion under any Synthetic
Lease."
(j) Paragraph 10B. Subclause (vii) of the definition of
"Indebtedness" in Paragraph 10B of the Agreement is amended to read as
follows:
"(vii) all its Guarantees with respect to liabilities of a
type described in any of clauses (i) through (iv) and all
Guarantees arising under Synthetic Leases;"
(k) Xxxxxxxxx 00X. The definition of "Total Priority Debt" in
Paragraph 10B of the Agreement is amended by adding the following
sentence thereto:
"Notwithstanding the foregoing, `Total Priority Debt' shall
not include Contingent Obligations of the Company arising in
connection with Synthetic Leases."
On and after the effective date of this letter amendment, each
reference in the Agreement to "this Agreement", "hereunder", "hereof", or
words of like import referring to the Agreement, and each reference in the
Notes to "the Agreement", "thereunder", "thereof", or words of like import
referring to the Agreement, shall mean the Agreement as amended by this
letter amendment. The Agreement, as amended by this letter amendment, is and
shall continue to be in full force and effect and is hereby in all respects
ratified and confirmed. The execution, delivery and effectiveness of this
letter amendment shall not operate as a waiver of any right, power or remedy
under the Agreement nor constitute a waiver of any provision of the
Agreement.
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This letter amendment may be executed in any number of counterparts
and by any combination of the parties hereto in separate counterparts, each
of which counterparts shall be an original and all of which taken together
shall constitute one and the same letter amendment.
If you agree to the terms and provisions hereof, please evidence
your agreement by executing and returning at least a counterpart of this
letter amendment to TBC Corporation, 0000 Xxxxxxx Xxxx Xxxx, Xxxxxxx,
Xxxxxxxxx 00000, Attention of Xxxxx X. Xxxxxx. This letter amendment shall
become effective as of the date first above written when and if counterparts
of this letter amendment shall have been executed by us and you and the
consents attached hereto shall have been executed by each Guarantor. This
letter amendment is subject to the provisions of paragraph 11C of the
Agreement.
Very truly yours,
TBC CORPORATION
By: /s/ Xxxxxx X. XxXxxxxxxx
Title: Executive Vice President
& Chief Financial Officer
Agreed as of the date first above written:
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ Xxxxxx Xxxxxxx
Vice President
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CONSENT
The undersigned, as Guarantor under the Continuing Guaranty dated
September 20, 1996 (the "Guaranty") in favor of the Purchasers party to the
Agreement referred to in the foregoing letter amendment, hereby consents to
said letter amendment and hereby confirms and agrees that the Guaranty is,
and shall continue to be, in full force and effect and is hereby confirmed
and ratified in all respects except that, upon the effectiveness of, and on
and after the date of, said letter amendment, all references in the Guaranty
to the Agreement, "thereunder", "thereof", or words of like import referring
to the Agreement shall mean the Agreement as amended by said letter
amendment.
TBC INTERNATIONAL, INC.
By: /s/ Xxxxx X. XxXxxxxx
Title: President & CEO
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CONSENT
The undersigned, as Guarantor under the Continuing Guaranty dated September
20, 1996 (the "Guaranty") in favor of the Purchasers party to the Agreement
referred to in the foregoing letter amendment, hereby consents to said letter
amendment and hereby confirms and agrees that the Guaranty is, and shall
continue to be, in full force and effect and is hereby confirmed and ratified
in all respects except that, upon the effectiveness of, and on and after the
date of, said letter amendment, all references in the Guaranty to the
Agreement, "thereunder", "thereof", or words of like import referring to the
Agreement shall mean the Agreement as amended by said letter amendment.
BIG O TIRES, INC.
By: /s/ Xxxxx X. XxXxxxxx
Title: President & CEO
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