EXHIBIT 4.5
VARCO INTERNATIONAL, INC.
WAIVER AND THIRD AMENDMENT
TO
NOTE AGREEMENT
DATED AS OF MARCH 8, 1995
To Each of the Institutions Named
in the Attached Schedule I (the "Holders")
Ladies and Gentlemen:
Reference is made to the Note Agreement dated as of July 1, 1992 (as
heretofore amended, modified or supplemented by amendment or waiver, the "Note
Agreement") between Varco International, Inc., a California corporation (the
"Company"), and each of the Purchasers named in Schedule 1 thereto pursuant to
which the Company issued $50,000,000 aggregate principal amount of its 8.95%
Senior Notes due June 30, 1999 (the "Notes"). This Waiver and Third Amendment to
Note Agreement is hereinafter referred to as this "Waiver." Capitalized terms
used and not otherwise defined herein shall have the meanings ascribed to such
terms in the Note Agreement.
The Company intends to repurchase shares of its outstanding Common Stock
for a purchase price of approximately $40,000,000 in a self-tender offer. It is
likely that the Company would use a "Dutch Auction" type tender offer in which
the number of shares is specified and the purchase price per share is expressed
as a range. Whether the self-tender is a "Dutch Auction" type or a tender for a
fixed number of shares at a fixed price, the maximum aggregate purchase price
for all shares purchased will not exceed $45,000,000. The self-tender described
in this paragraph is hereinafter referred to as the "Self-Tender."
The Company has requested an amendment of Sections 7.1, 7.3 and 7.4(d) of
the Note Agreement and certain waivers to avoid violating Section 7.8 of the
Note Agreement, and the Holders are willing to agree to such amendments and
grant such waivers on the terms and conditions hereinafter set forth.
In consideration of the premises and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Company and the Holders agree as follows:
(S)1 AMENDMENT OF THE NOTE AGREEMENT
1.1 AMENDMENT OF SECTION 7.1. Section 7.1 of the Note Agreement is
amended to read in its entirety as follows:
"7.1 Consolidated Tangible Net Worth. The Company will not permit,
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at any time, its Consolidated Tangible Net Worth to be less than the
lesser of (a) $72,000,000 plus the cumulative sum of 50% of Consolidated
Net Income (without reduction for any losses) subsequent to December 31,
1994, or (b) $135,000,000."
1.2 AMENDMENT OF SECTION 7.3. Section 7.3 of the Note Agreement is
amended to read in its entirety as follows:
"7.3 Current Ratio. The Company will not permit, at any time, the
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ratio of Consolidated Current Assets to Consolidated Current Liabilities
to be less than 2.2 to 1.0."
1.3 AMENDMENT OF SECTION 7.4(d). Section 7.4(d) of the Note Agreement is
amended to read in its entirety as follows:
"(d) Additional Indebtedness of the Company or a Restricted
Subsidiary, provided that at the time of incurring such additional
Indebtedness and after giving effect thereto and to the application of the
proceeds therefrom, (i) Consolidated Indebtedness then to be outstanding
shall not exceed 60% of Consolidated Net Tangible Assets if such
additional Indebtedness is incurred on or before December 31, 1995, or 50%
of Consolidated Net Tangible Assets if such additional Indebtedness is
incurred after December 31, 1995 and (ii) the pro forma ratio of
Consolidated Income Available for Fixed Charges to Fixed Charges for the
four consecutive fiscal quarters immediately preceding such date shall not
be less than 2.5 to 1.0; and"
(S)2 CONSENT, WAIVER AND AGREEMENT. The Holders hereby (i) consent to the
Self-Tender and waive any violation of Section 7.8 of the Note Agreement
resulting therefrom, (ii) agree that the amount expended by the Company in
connection with the Self-Tender shall not constitute a "Restricted Payment", as
such term is defined in the Note Agreement and, accordingly, shall not be
included in any calculation of aggregate Restricted Payments for the purposes of
Section 7.8 of the Note Agreement and (iii) agree that neither the sale of short
term investments by the Company to fund the Self-Tender nor the amount expended
by the Company in the Self-Tender shall constitute a "Disposition" as such term
is defined in Section 7.11 of the Note Agreement.
2.
(S)3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
As an inducement to the Holders to enter into this Waiver, the Company
represents and warrants that:
3.1 EVENT OF DEFAULT. Upon the effectiveness of this Waiver, there will
exist no Default or Event of Default under the Note Agreement, as amended
hereby.
3.2 AUTHORIZATION. The execution and delivery by the Company of this
Waiver have been duly authorized by proper corporate proceedings, and this
Waiver and the Note Agreement, as amended hereby, constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms.
3.3 NO CONFLICT. Neither the execution and delivery by the Company of
this Waiver, nor compliance with the provisions hereof or with the Note
Agreement as amended hereby, will violate any law, rule, regulation, order,
writ, judgment, injunction, decree or award binding on the Company or the
articles of incorporation or by-laws of the Company or the provisions of any
indenture, instrument or agreement to which the Company is a party or is
subject, or by which it or its property is bound, or conflict with or constitute
a default thereunder.
3.4 REPRESENTATIONS AND WARRANTIES. The representations and warranties
set forth in Section 3.1 of the Note Agreement are true and correct, in all
material respects, as of the date of this Waiver.
(S)4. EFFECTIVE DATE OF WAIVER. This Waiver shall be effective as of the date
set forth above upon the execution and delivery of this Waiver by the Holders of
at least 66-2/3% in aggregate principal amount of the Notes outstanding.
(S)5. MISCELLANEOUS.
5.1 RATIFICATION. The Note Agreement, as amended hereby, shall remain in
full force and effect and is ratified, approved and confirmed in all respects.
5.2 REFERENCE TO NOTE AGREEMENT. From and after the effective date of
this Waiver, each reference in the Note Agreement to "this Agreement," "hereof,"
or "hereunder" or words of like import, and all references to the Note Agreement
in any and all agreements, instrument, documents, notes, certificates and other
writings of every kind and nature shall be deemed to mean the Note Agreement, as
modified and amended by this Waiver.
3.
5.3 CHOICE OF LAW. This Waiver shall be governed by and construed in
accordance with the laws of the State of Illinois.
5.4 EXECUTION IN COUNTERPARTS. This Waiver may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the Company and the Holders have caused this Waiver to
be executed and delivered by their respective officer or officers thereunto duly
authorized.
VARCO INTERNATIONAL, INC.
By:
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Title:
By:
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Title:
By:
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Title:
FEDERAL XXXXXX LIFE ASSURANCE
COMPANY
By:
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Title:
By:
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Title:
FIDELITY LIFE ASSOCIATION
By:
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Title:
By:
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Title:
4.
AMERICAN MANUFACTURERS MUTUAL
INSURANCE COMPANY
By:
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Title:
By:
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Title:
XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
By:
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Title:
XXXX XXXXXXX VARIABLE LIFE
INSURANCE COMPANY
By:
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Title:
XXXX XXXXXXX LIFE INSURANCE
COMPANY OF AMERICA
By:
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Title:
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By:
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Title:
CENTRAL LIFE ASSURANCE COMPANY
By:
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Title:
5.
SCHEDULE I
LIST OF HOLDERS
Xxxxxx Investors Life Insurance Company*
Federal Xxxxxx Life Assurance Company*
Fidelity Life Association*
American Manufacturers Mutual Insurance Company*
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Variable Life Insurance Company
Xxxx Xxxxxxx Life Insurance Company of America
Massachusetts Mutual Life Insurance Company
Central Life Assurance Company**
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* Note registered in the name of KEMCO & CO, as nominee.
** Note registered in the name of Xxxxxxx & Co., as nominee for Bankers Trust
Company, as custodian.
