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EXHIBIT 4.05
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AMENDMENT NO. 4 TO NOTE AGREEMENT
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THIS AGREEMENT, entered into as of December 31, 1994 by and between
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA ("Prudential") and NASHUA
CORPORATION (the "Company").
W I T N E S S E T H:
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WHEREAS, the parties hereto have executed and delivered that certain
Note Agreement, dated as of September 13, 1991 (the "Note Agreement");
WHEREAS, Prudential is the holder of 100% of the Notes issued under
the Note Agreement; and
WHEREAS, the parties hereto wish to amend certain terms of the Note
Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. AMENDMENTS TO THE NOTE AGREEMENT.
1.1 Paragraph 6B of the Note Agreement is hereby amended to read in
its entirety as follows:
"6B. FIXED-CHARGE COVERAGE RATIO. The Company will not
permit (i) sixty-six and two-thirds percent (66-/ /%) of
Consolidated Trailing Adjusted Cash Flow for any period of six
(6) consecutive fiscal quarters of the Company ending on any
date to be less than (ii) (a) one hundred forty percent (140%)
of Consolidated Fixed Charges for the period of four (4)
consecutive fiscal quarters of the Company ending on any such
date through and including March 31, 1995 or (b) two hundred
percent (200%) of Consolidated Fixed Charges for the period of
four (4) consecutive fiscal quarters of the Company ending on
any such date after March 31, 1995."
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1.2 Clause (i) of paragraph 6C of the Note Agreement is hereby amended
to read in its entirety as follows:
"(i) Consolidated Debt to be greater than (a) sixty percent (60%)
of Consolidated Tangible Gross Worth through December 31, 1995,
(b) fifty-five (55%) of Consolidated Tangible Gross Worth for the
period commencing January 1, 1996 through December 31, 1996
and (c) fifty percent (50%) thereafter;"
1.3 A new paragraph 6P is hereby added to the end of paragraph 6 of the
Note Agreement, which shall read in its entirety as follows:
"6P. CONSOLIDATED TANGIBLE NET WORTH. The Company will not
permit Consolidated Tangible Net Worth at any time to be less
than an amount equal to $51,000,000 plus the sum of (i) fifty
percent (50%) of Consolidated Net Income arising after December
31, 1994 and computed on a cumulative basis (without any
deduction, however, for any fiscal quarter for which
Consolidated Net Income is negative) through the end of the
fiscal quarter immediately preceding the date of determination
and (ii) the net proceeds paid to the Company of any offering of
any shares of capital stock of the Company (other than, in the
case of any preferred stock requiring mandatory redemption or
sinking fund payments prior to May 31, 1995, those shares which
are subject to such requirement) from December 31, 1994 and
through the end of the fiscal quarter immediately preceding the
date of determination (including any such proceeds derived from
the issuance of shares of capital stock of the Company (other
than, in the case of any preferred stock requiring mandatory
redemption or sinking fund payments prior to May 31, 1995, those
shares of which that are subject to such requirement) as a
result of the exercise of stock options of the Company or from
the conversion of debt securities of the Company)."
1.4 Clause (xi) of the definition of "Consolidated Net Income" in
paragraph 10B of the Note Agreement is hereby amended to read in its entirety
as follows:
"(xi) a one time charge appearing as a separate line item
on the Company's income statement as 'restructuring and other
charges' of up to $48,500,000 before income taxes of the Company
incurred in the fourth fiscal quarter of fiscal year 1993, a one
time charge appearing as a separate line item on the Company's
income statement as 'restructuring and other charges' of up to
$2,600,000 before income taxes of the Company incurred in the
first fiscal quarter of fiscal year 1994 and a one time charge
of up to $3,700,000 before income taxes of the Company relating
to losses from discontinued operations incurred in the first
fiscal quarter of fiscal year 1994."
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2. EFFECTIVENESS OF AGREEMENT. The terms of Section 1 of this
Agreement and the allonge (the form of which is attached hereto as Exhibit A,
the "Allonge") for the outstanding Note shall be deemed to be effective as of
December 31, 1994 upon the occurrence of (a) Prudential's receipt of a copy
hereof duly authorized, executed and delivered by the Company, (b) Prudential's
receipt of the duly authorirzed, executed and delivered Allonge, (c) the
acquisition by the Company on or before January 31, 1995 of certain assets of
Nexus Ltd. related to the photoprocessing business (the "Acquisition"), and (d)
simultaneously with the completion of the Acquisition, the payment by the
Company to Prudential of a fee, in immediately available funds, of $75,000 by
wire transfer to the following account:
Account No. 050-54-526
Morgan Guaranty Trust Company of New York
23 Wall Street
New York, New York 10015
(ABA No.: 021-000-238)
3. MISCELLANEOUS.
3.1 Capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Note Agreement.
3.2 On and after the date hereof, each reference in the Note Agreement
and the Notes issued thereunder shall mean and be a reference to the Note
Agreement as amended by this Agreement.
3.3 The Note Agreement, as amended by this Agreement, is and shall
continue to be in full force and effect and is hereby in all respects ratified
and confirmed.
3.4 This Agreement 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 Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to set their hands below as of the day and year first above
written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ Kevin Kraska
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Title: Vice President
NASHUA CORPORATION
By: /s/ Daniel M. Junius
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Title: Treasurer
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