EXHIBIT 4l
LETTER AMENDMENT NO. 3
to
Note Agreement
and
Master Shelf Agreement
September 30, 1997
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 Agreement dated as of September 9,
1993 (as amended, the "Note Agreement") and the Master Shelf
Agreement dated as of October 17, 1995 (as amended, the "Shelf
Agreement"), as such agreements have been amended by a Letter
Amendment dated January 24, 1996 and Letter Amendment No. 2 dated
February 27, 1997 (as amended, the "Agreements"), among the
undersigned and you. Unless otherwise defined herein, the terms
defined in the Agreement shall be used herein as therein defined.
I. Amendments to Agreements. The Agreements are,
effective the date first above written, hereby amended as
follows:
a. Paragraph 4(a). Scheduled Prepayments. (i)
Shelf Agreement. Paragraph 4A of the Shelf Agreement is amended
by adding at the end thereof a new sentence to read as follows:
"Any partial prepayment of the Notes of any Series
pursuant to paragraph 4B or purchase of the Notes of
such Series permitted by paragraph 4E shall reduce the
principal amount of each required prepayment of the
Notes of such Series coming due under this paragraph 4A
on and after the date of such prepayment or purchase in
the same proportion as the aggregate unpaid principal
amount of the Note of such Series is reduced as a
result of such prepayment or purchase."
i) Note Agreement. Paragraph 4A of the Note
Agreement is amended by adding at the end thereof a new sentence
to read as follows:
"Any partial prepayment of the Notes pursuant to
paragraph 4B or purchase of the Notes permitted by
paragraph 4E shall reduce the principal amount of each
required prepayment of the Notes coming due under this
paragraph 4A on and after the date of such prepayment
or purchase in the same proportion as the aggregate
unpaid principal amount of the Note is reduced as a
result of such prepayment or purchase."
a. Paragraph 4B. Optional Prepayment with
Yield-Maintenance Amount.
(i) Shelf Agreement. Paragraph 4B of each of the
Shelf Agreement is amended by deleting the last sentence thereof
and substituting therefor the following:
"Any partial prepayment of Notes pursuant to this
paragraph 4B shall be allocated among all the Notes at
the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts
thereof not theretofor called for prepayment."
(ii) Note Agreement. Paragraph 4B of each of the
Shelf Agreement is amended by deleting the last sentence thereof
and substituting therefor the following:
"Any partial prepayment of a Series of Notes pursuant to
this paragraph 4B shall be allocated among all the Notes
of such Series at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid
principal amounts thereof not theretofor called for
prepayment."
(c) Xxxxxxxxx 0X. Fixed Charge Coverage. Paragraph 6F
of each of the Agreements is amended in full to read as follows:
"6F. Fixed Charge Coverage. The Company covenants that
it will not suffer to permit, as of the end of any fiscal
quarter of the Company, Consolidated Net Income Available for
Fixed Charges for its four most recent consecutive fiscal
quarters (taken as a whole) for each such period indicated
below to be less than the percent of the aggregate amount of
the Fixed Charges for such period of four fiscal quarters
(taken as a whole) indicated opposite such period:
Period ending Percentage
March 31, 1997 45%
June 30, 1997 75%
September 30, 1997 60%
December 31, 1997 95%
March 31, 1998 and thereafter 200%;
provided, however, that for the purposes of this paragraph 6F,
any risk premium fee paid pursuant to paragraph 5I that is
deducted in determining Consolidated Net Income shall be added
back to Consolidated Net Income Available for Fixed Charges."
a. Paragraph 6L. Restricted Payments. Paragraph 6L
of each of the Agreements is amended in full to read as follows:
"6L. Restricted Payments. The Company covenants that it
will not, and will not permit any of its Subsidiaries to,
directly or indirectly, during any fiscal year, (i) declare
or pay any dividend or make any other distribution, in cash
or otherwise, on any shares of any class of capital stock of
the Company or any of its Subsidiaries (other than dividends
payable to the Company, and other than a dividend or
distribution payable in shares of capital stock of the
Company or, as permitted by paragraph 6H, in shares of
capital stock of any such Subsidiary) or (ii) purchase,
redeem, retire by the making of any payment, or otherwise
acquire any such shares (other than treasury stock held by
the Company or any such Subsidiary as of September 9, 1993)
or any warrants, options or other rights to acquire any such
shares of stock, unless, immediately after giving effect to
such action, the sum of
(i) the aggregate amount of all such dividends and
distributions declared, paid or made subsequent to September
30, 1997, and
(ii) the aggregate amount of all such purchases,
redemptions, retirements, and acquisitions made subsequent
to September 30, 1997,
shall not exceed the sum of
(i) fifty percent (50%) (or minus one hundred percent
(100%) in the case of a deficit) of cumulative Consolidated
Net Income earned subsequent to December 31, 1997, and
(ii) the aggregate amount received by the Company (other
than from its Subsidiaries) as the net cash proceeds of
sales of capital stock of the Company (including treasury
stock and debt securities subsequently converted into or
exchanged for capital stock) subsequent to December 31,
1997.
Notwithstanding the foregoing, the Company covenants that it
will not, and will not permit any of its Subsidiaries to,
directly or indirectly, during any fiscal year, (i) declare
or pay any dividend or make any other distribution, in cash
or otherwise, on any shares of any class of capital stock of
the Company or any of its Subsidiaries (other than dividends
payable to the Company, and other than a dividend or
distribution payable in shares of common stock of the
Company) at any time that the ratio of Consolidated Net
Income Available for Fixed Charges for its four most recent
consecutive fiscal quarters (taken as a whole) is less than
200% of the aggregate amount of the Fixed Charges for such
period of four fiscal quarters (taken as a whole)."
I. Amendment to the Notes.
(a) Amendment to the 6.75% Senior Notes due September
9, 2008. The 6.75% Notes due September 9, 2008 (the "6.75%
Notes") are amended such that the interest rate on the 6.75%
Notes shall increase by 0.15% (for a total interest rate of 6.90%
per annum) effective as of December 9, 1997 and shall continue
until the March 9, June 9, September 9, or December 9 that is the
end of the fiscal quarter of the Company that is the fourth
consecutive fiscal quarter that the Company's Fixed Charge
Coverage Ratio has exceeded 200% on which date the interest rate
on the 6.75% Notes shall decrease by 0.05% (for a total interest
rate of 6.85% per annum until paid in full).
a. Amendment to the 7.09% Senior Notes due October
17, 2010. The 7.09% Notes due October 17, 2010 (the "7.09%
Notes") are amended such that the interest rate on the 7.09%
Notes shall increase by 0.15% (for a total interest rate of 7.24%
per annum) effective as of October 17, 1997 and shall continue
until the January 17, April 17, July 17, or October 17 that is
the end of the fiscal quarter of the Company that is the fourth
consecutive fiscal quarter that the Company's Fixed Charge
Coverage Ratio has exceeded 200%, on which date the interest rate
on the 7.09% Notes shall decrease by 0.05% (for a total interest
rate of 7.19% per annum until paid in full).
(c) The Company will, at the request of a holder of
Notes, place a legend on the Notes held by such holder to reflect
these amendments.
III. Representations and Warranties. The Company
hereby represents and warrants that as of the date of this letter
amendment, it was in compliance with paragraph 6L. Restrictive
Payments. prior to the amendment contemplated by this letter
amendment.
On and after the effective date of this letter
amendment, each reference in the Agreements to "this Agreement",
"hereunder", "hereof", or words of like import referring to such
Agreement, and each reference in the Notes to "the Agreement",
"thereunder", "thereof", or words of like import referring to
such Agreement, shall mean such Agreement as amended by this
letter amendment and each reference in the Note to "this Note",
"hereof", "herein" or words of like import, and each reference in
the Agreements to the Notes shall mean and be a reference to the
Notes as amended hereby. 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, except as expressly provided herein, operate as a
waiver of any right, power or remedy under the Agreements nor
constitute a waiver of any provision of the Agreements.
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 a counterpart
of this letter amendment to my attention at 0000 Xxxxxxxxx Xx.,
XxXxxx, XX 00000. 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.
Very truly yours,
SEALRIGHT CO., INC.
By: /s/ Xxxx X. Xxxxxx
Title:Senior Vice President/
Chief Financial Officer
Agreed as of the date
first above written:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ Xxx X. Xxxxxxx
Vice President
