EXHIBIT 4.L
================================================================================
BW/IP INTERNATIONAL, INC.
NOTE AGREEMENT
Dated as of November 15, 1996
Re: $30,000,000 7.14% Senior Notes, Series A,
Due November 15, 2006
and
$20,000,000 7.17% Senior Notes, Series B,
Due March 31, 2007
================================================================================
TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT................................................. 1
Section 1.1. Description of Notes............................................................. 1
Section 1.2. Commitment, Closing Dates........................................................ 2
Section 1.3. Other Agreements................................................................. 2
SECTION 2. PREPAYMENT OF NOTES................................................................. 3
Section 2.1. Required Prepayments............................................................. 3
Section 2.2. Optional Prepayment with Premium................................................. 3
Section 2.3. Optional Prepayment with Premium on Failure of Holders to Grant Certain Consents. 3
Section 2.4. Notice of Optional Prepayments................................................... 4
Section 2.5. Application of Prepayments....................................................... 5
Section 2.6. Direct Payment................................................................... 5
SECTION 3. REPRESENTATIONS..................................................................... 5
Section 3.1. Representations of the Company................................................... 5
Section 3.2. Representations of the Purchaser................................................. 5
SECTION 4. CLOSING CONDITIONS.................................................................. 6
Section 4.1. Conditions....................................................................... 6
Section 4.2. Waiver of Conditions............................................................. 7
SECTION 5. COMPANY COVENANTS................................................................... 7
Section 5.1. Corporate Existence, Etc......................................................... 7
Section 5.2. Access and Visitation Rights..................................................... 7
Section 5.3. Payment of Taxes, Etc............................................................ 8
Section 5.4. Maintenance of Properties, Etc................................................... 8
Section 5.5. Compliance with Laws, Etc........................................................ 8
Section 5.6. Arm's-Length Transactions........................................................ 8
Section 5.7. Maintenance of Insurance......................................................... 9
Section 5.8. Further Assurances............................................................... 9
Section 5.9. Employment of Technology, Disposal of Hazardous Waste, Etc....................... 9
Section 5.10. Nature of Business............................................................... 10
Section 5.11. Limitations on Current Debt and Funded Debt...................................... 10
Section 5.12. Limitation on Liens.............................................................. 11
Section 5.13. Restricted Payments.............................................................. 13
Section 5.14. Investments...................................................................... 13
-i-
Section 5.15. Mergers, Consolidations and Sales of Assets...................................... 16
Section 5.16. Guaranties....................................................................... 17
Section 5.17. Repurchase of Notes.............................................................. 17
Section 5.18. Accounting Changes............................................................... 17
Section 5.19. Plan Terminations................................................................ 17
Section 5.20. Employee Benefit Costs and Liabilities........................................... 18
Section 5.21. Charter and Bylaws............................................................... 18
Section 5.22. Reports and Rights of Inspection................................................. 18
Section 5.23. Changes in Status of Subsidiaries................................................ 21
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR............................................. 22
Section 6.1. Events of Default................................................................ 22
Section 6.2. Notice to Holders................................................................ 23
Section 6.3. Acceleration of Maturities....................................................... 23
Section 6.4. Rescission of Acceleration....................................................... 24
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.................................................... 24
Section 7.1. Consent Required................................................................. 24
Section 7.2. Solicitation of Holders.......................................................... 24
Section 7.3. Effect of Amendment or Waiver.................................................... 25
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS............................................ 25
Section 8.1. Definitions...................................................................... 25
Section 8.2. Accounting Principles............................................................ 34
Section 8.3. Directly or Indirectly........................................................... 34
SECTION 9. MISCELLANEOUS....................................................................... 34
Section 9.1. Registered Notes................................................................. 34
Section 9.2. Exchange of Notes................................................................ 34
Section 9.3. Loss, Theft, Etc. of Notes....................................................... 35
Section 9.4. Expenses, Stamp Tax Indemnity.................................................... 35
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative................................ 35
Section 9.6. Notices.......................................................................... 36
Section 9.7. Successors and Assigns........................................................... 36
Section 9.8. Survival of Covenants and Representations........................................ 36
Section 9.9. Severability..................................................................... 36
Section 9.10. Confidentiality.................................................................. 36
Section 9.11. Governing Law.................................................................... 37
Section 9.12. Captions......................................................................... 37
Signature ................................................................................. 38
-ii-
ATTACHMENTS TO NOTE AGREEMENT:
Schedule I - Names and Addresses of Note Purchasers and Amounts of Commitments
Schedule II - Investments Existing as of the Closing Date
Exhibit A-1 - Form of 7.14% Senior Note due November 15, 2006
Exhibit A-2 - Form of 7.17% Senior Note, Series B, due March 31, 2007
Exhibit B - Representations and Warranties of the Company
Exhibit C - Description of Special Counsel's Closing Opinion
Exhibit D - Description of Closing Opinion of Principal Counsel to the Company
iii
BW/IP INTERNATIONAL, INC.
000 XXXXXXXXX XXXXXXXXX, XXXXX 000
XXXX XXXXX, XXXXXXXXXX 00000
NOTE AGREEMENT
Re: $30,000,000 7.14% Senior Notes, Series A,
Due November 15, 2006
and
$20,000,000 7.17% Senior Notes, Series B,
Due March 31, 2007
Dated as of
November 15, 1996
To the Purchaser named in Schedule I
hereto which is a signatory of this
Agreement
Gentlemen:
The undersigned, BW/IP INTERNATIONAL, INC., a Delaware corporation (the
"Company"), agrees with you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
Section 1.1. Description of Notes. The Company will authorize
the issue and sale of:
(a) $30,000,000 aggregate principal amount of its 7.14% Senior
Notes, Series A (the "Series A Notes"), to be dated the date of issue, to
bear interest from such date at the rate of 7.14% per annum, payable
semiannually on the fifteenth day of each May and November in each year
(commencing May 15, 1997) and at maturity and to bear interest on overdue
principal (including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally enforceable) on
any overdue installment of interest at the Overdue Rate after the date due,
whether by acceleration or otherwise, until paid, to be expressed to mature
on November 15, 2006, and to be substantially in the form attached hereto
as Exhibit A-1; and
(b) $20,000,000 aggregate principal amount of its 7.17% Senior
Notes, Series B (the "Series B Notes"), to be dated the date of issue, to
bear interest from such date at the rate of 7.17% per annum, payable
semiannually on the fifteenth day of each May and November in each year
(commencing May 15, 1997) and at maturity
BW/IP International, Inc. Note Agreement
and to bear interest on overdue principal (including any overdue required
or optional prepayment of principal) and premium, if any, and (to the
extent legally enforceable) on any overdue installment of interest at the
Overdue Rate after the date due, whether by acceleration or otherwise,
until paid, to be expressed to mature on March 31, 2007, and to be
substantially in the form attached hereto as Exhibit A-2.
Interest on the Notes shall be computed on the basis of a 360-day year of
twelve 30-day months. The Notes are not subject to prepayment or redemption at
the option of the Company prior to their expressed maturity dates except on the
terms and conditions and in the amounts and with the premium, if any, set forth
in (S)2 of this Agreement. The term "Notes" as used herein shall include each
Note initially delivered pursuant to this Agreement and the separate agreements
with the other purchasers named in Schedule I hereto and all Notes issued in
substitution or exchange therefor. You and the other purchasers named in
Schedule I hereto are hereinafter sometimes referred to as the "Purchasers".
Certain capitalized terms used in this Agreement are defined in (S)8.1.
Section 1.2. Commitment, Closing Dates. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to you, and you
agree to purchase from the Company, Notes of the series and in the principal
amount set forth opposite your name on Schedule I hereto at a price of 100% of
the principal amount thereof on the applicable Closing Date hereafter mentioned.
Delivery of the Notes will be made on each Closing Date at the offices of
Xxxxxxx and Xxxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, against
payment therefor in Federal Reserve or other funds current and immediately
available at the principal office of Citibank, N.A., 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, ABA #000000000 (for the account of BW/IP International, Inc.,
Account No. 4050-2881) in the amount of the purchase price at 11:00 A.M.,
Eastern Standard time. The first closing date on which the Series A Notes are
to be sold shall occur on November 26, 1996 and the second closing date on which
the Series B Notes are to be sold shall occur on March 31, 1997 or such earlier
date as shall be mutually agreed upon by the Company and the Purchaser scheduled
to purchase Series B Notes on such date (each such closing date is hereinafter
referred to as a "Closing Date"). The Notes delivered to you on the applicable
Closing Date will be delivered to you in the form of a single registered Note of
the series to be purchased by you in the form attached hereto as Exhibit A-1 or
Exhibit A-2, as the case may be, for the full amount of your purchase (unless
different denominations are specified by you), registered in your name or in the
name of your nominee, all as you may specify at any time prior to the date fixed
for delivery.
Section 1.3. Other Agreements. Simultaneously with the execution
and delivery of this Agreement, the Company is entering into similar agreements
with the other Purchasers under which such other Purchasers agree to purchase
from the Company the principal amount of Notes of the series set opposite such
Purchasers' names in Schedule I hereto, and your obligation and the obligations
of the Company hereunder are subject to the execution and delivery of the
similar agreements by the other Purchasers. This Agreement and said
-2-
BW/IP International, Inc. Note Agreement
similar agreements with the other Purchasers are herein collectively referred to
as the "Agreements". The obligations of each Purchaser shall be several and not
joint and no Purchaser shall be liable or responsible for the acts of any other
Purchaser.
SECTION 2. PREPAYMENT OF NOTES.
Section 2.1. Required Prepayments. (a) The Company agrees that
on November 15 in each year, commencing November 15, 2002 and ending November
15, 2005, both inclusive, it will prepay and apply and there shall become due
and payable on the principal indebtedness evidenced by the Series A Notes an
amount equal to the lesser of (i) $6,000,000 or (ii) the principal amount of the
Series A Notes then outstanding. The entire remaining principal amount of the
Series A Notes shall become due and payable on November 15, 2006. No premium
shall be payable in connection with any required prepayment made pursuant to
this (S)2.1(a). For purposes of this (S)2.1(a), any prepayment of less than all
of the outstanding Series A Notes pursuant to (S)2.2 shall be deemed to be
applied first, to the amount of principal scheduled to remain unpaid on November
15, 2006, and then to the remaining scheduled principal payments in inverse
chronological order.
(b) The Company agrees that on November 15 in each year, commencing
November 15, 2003 and ending November 15, 2006, both inclusive, it will prepay
and apply and there shall become due and payable on the principal indebtedness
evidenced by the Series B Notes an amount equal to the lesser of (i) $4,000,000
or (ii) the principal amount of the Notes then outstanding. The entire
remaining principal amount of the Notes shall become due and payable on March
31, 2007. No premium shall be payable in connection with any required
prepayment made pursuant to this (S)2.1(b). For purposes of this (S)2.1(b), any
prepayment of less than all of the outstanding Series B Notes pursuant to (S)2.2
shall be deemed to be applied first, to the amount of principal scheduled to
remain unpaid on March 31, 2007, and then to the remaining scheduled principal
payments in inverse chronological order.
Section 2.2. Optional Prepayment with Premium. In addition to the
payments required by (S)2.1, upon compliance with (S)2.4 the Company shall have
the privilege, at any time and from time to time, of prepaying the outstanding
Notes, either in whole or in part (but if in part then in a minimum aggregate
principal amount of $100,000) by payment of the principal amount of the Notes,
or portion thereof to be prepaid, and accrued interest thereon to the date of
such prepayment, together with a premium equal to the Make-Whole Amount,
determined as of five business days prior to the date of such prepayment
pursuant to this (S)2.2.
Section 2.3. Optional Prepayment with Premium on Failure of
Holders to Grant Certain Consents. In the event that:
(i) the Company shall determine that, in its best business judgment,
it is necessary in connection with the acquisition of any business entity
or all or a substantial part (as such term is defined in (S)5.15(b)) of
the assets thereof to (y) incur
-3-
BW/IP International, Inc. Note Agreement
Current Debt or Funded Debt not otherwise permitted under (S)5.11 or
(z) make any Restricted Investments not otherwise permitted under (S)5.14;
and
(ii) the Company shall, by a written request (the "Company
Request"), request the holders of the Notes to consent to an amendment or
waiver of any covenant set forth in (S)5.11 or (S)5.14 and shall not have
received such consent or waiver from the holder or holders of at least 66-
2/3% of the aggregate outstanding principal amount of the Notes within 30
days after the date of the Company Request;
then the Company shall have the privilege, at any time within 60 days after the
expiration of such 30-day period and upon written notice as provided in (S)2.4,
of prepaying all, but not less than all, outstanding Notes held by each holder
which has failed or refused to execute and deliver such requested consent or
waiver (a "Non-Consenting Holder") by payment of the principal amount of such
Notes and accrued interest thereon to the date of such prepayment, together with
a premium equal to the Make-Whole Amount, determined as of five business days
prior to the date of such prepayment pursuant to this (S)2.3. Any Company
Request made pursuant to this (S)2.3 shall (i) set forth such financial and
other information with respect to the requested consent or waiver as is, in the
best judgment of the Company, necessary for each holder to make an informed
decision with respect thereto, including, without limitation, a reasonably
detailed description of the amount and terms applicable to the Current Debt or
Funded Debt then proposed to be issued or the Restricted Investment then
proposed to be made, (ii) contain a certification by the president or a vice
president of the Company that such request is being made for a valid business
reason and not for the purpose of effecting the prepayment of the Notes and
(iii) refer to this (S)2.3 and the Company's right granted hereunder to prepay
the Notes of a Non-Consenting Holder.
In the case of any prepayment of less than all of the outstanding Notes of
any series pursuant to this (S)2.3, each scheduled prepayment of Notes of such
series pursuant to the provisions of (S)2.1 shall thereafter be reduced by an
amount which bears the same relationship to such payment as the aggregate amount
of Notes of such series being so prepaid pursuant to this (S)2.3 bears to the
unpaid principal amount of the Notes of such series outstanding immediately
prior to such application, so that the amounts of the scheduled payments on each
Note of such series remaining outstanding after such application shall be
unchanged by such application.
Section 2.4. Notice of Optional Prepayments. The Company will give
notice of any prepayment of the Notes pursuant to (S)2.2, to each holder thereof
not less than 30 days nor more than 60 days before the date fixed for such
optional prepayment and will give notice of any prepayment of Notes pursuant to
(S)2.3 to each holder whose Notes are to be prepaid not less than 10 nor more
than 45 days before the date fixed for such optional prepayment. Any such
notice shall specify (i) such date, (ii) the principal amount of the holder's
Notes to be prepaid on such date, (iii) that a premium may be payable, (iv) the
date when such premium will be calculated, (v) the estimated premium, (vi) the
accrued interest applicable to the prepayment, and (vii) a reasonably detailed
computation of the estimated Make-Whole Amount. Notice of prepayment having
been so given, the aggregate principal amount of the Notes specified in such
notice, together with accrued interest thereon and the premium, if
-4-
BW/IP International, Inc. Note Agreement
any, payable with respect thereto shall become due and payable on the prepayment
date specified in said notice. Not later than two business days prior to the
prepayment date specified in such notice, the Company shall provide each holder
of a Note written notice of the premium, if any, payable in connection with such
prepayment and, whether or not any premium is payable, a reasonably detailed
computation of the Make-Whole Amount.
Section 2.5. Application of Prepayments. Except as provided in
(S)2.3, all partial prepayments shall be applied on all outstanding Notes
ratably in accordance with the unpaid principal amounts thereof.
Section 2.6. Direct Payment. Notwithstanding anything to the
contrary contained in this Agreement or the Notes, in the case of any Note owned
by you or your nominee or owned by any subsequent Institutional Holder which has
given written notice to the Company requesting that the provisions of this
(S)2.6 shall apply, the Company will punctually pay when due the principal
thereof, interest thereon and premium, if any, due with respect to said
principal, without any presentment thereof, directly to you, to your nominee or
to such subsequent Institutional Holder at your address or your nominee's
address set forth in Schedule I hereto or such other address as you, your
nominee or such subsequent Institutional Holder may from time to time designate
in writing to the Company or, if a bank account with a United States bank is
designated for you or your nominee on Schedule I hereto or in any written notice
to the Company from you, from your nominee or from any such subsequent
Institutional Holder, the Company will make such payments in immediately
available funds to such bank account, marked for attention as indicated, or to
such other account in any United States bank as you, your nominee or any such
subsequent Institutional Holder may from time to time direct in writing;
provided that any Note paid or prepaid in full shall be surrendered to the
Company at its principal office. The holder of any Notes to which this (S)2.6
applies agrees that in the event it shall sell or transfer any such Notes: it
will, prior to the delivery of such Notes (unless it has already done so), make
a notation thereon of all principal, if any, prepaid on such Notes and will also
note thereon the date to which interest has been paid on such Notes. With
respect to Notes to which this (S)2.6 applies, the Company shall be entitled to
presume conclusively that the original holder or such subsequent Institutional
Holder as shall have requested the provisions hereof to apply to its Notes
remains the holder of such Notes until (i) the Company shall have received
notice of the transfer of such Notes, and of the name and address of the
transferee Institutional Holder, or (ii) such Notes shall have been presented to
the Company as evidence of the transfer.
SECTION 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. The Company
represents and warrants that all representations and warranties of the Company
set forth in Exhibit B hereto are true and correct as of the date hereof and are
incorporated herein by reference with the same force and effect as though herein
set forth in full.
Section 3.2. Representations of the Purchaser. You represent, and in
entering into this Agreement the Company understands, that you are acquiring the
Notes for the purpose
-5-
BW/IP International, Inc. Note Agreement
of investment and not with a view to the distribution thereof, and that you have
no present intention of selling, negotiating or otherwise disposing of the
Notes; it being understood, however, that the disposition of your property shall
at all times be and remain within your control. You understand that the Notes
have not been registered under the Securities Act of 1933, as amended, and may
be resold (which resale is not now contemplated) only if registered pursuant to
the provisions of such Act or if an exemption from registration is available.
You further represent that at least one of the following statements is an
accurate representation as to the source of funds to be used by you to pay the
purchase price of the Notes:
(a) the source of funds to be used to pay such purchase price is an
"insurance company general account" within the meaning of Department of
Labor Prohibited Transaction Exemption 95-60 ("PTE") (issued July 12, 1995)
and the purchase of the Notes is eligible for and satisfies the
requirements of PTE 95-60; or
(b) to the extent that any part of such funds will be from the
assets of any "investment fund" (as defined in Part V of Prohibited
Transaction Class Exemption 84-14 issued by the United States Department of
Labor ("Part V")), such investment fund is managed by a "qualified
professional asset manager" or "QPAM" (as defined in Part V), and at least
three days prior to the Closing Date, you have disclosed to the Company in
writing the identity of such QPAM.
SECTION 4. CLOSING CONDITIONS.
Section 4.1. Conditions. Your obligation to purchase the Notes on
the applicable Closing Date shall be subject to the performance by the Company
of its agreements hereunder which by the terms hereof are to be performed at or
prior to the time of delivery of the Notes on such Closing Date and to the
following further conditions precedent:
(a) Closing Certificate. You shall have received a certificate
dated the applicable Closing Date, signed by a Vice President or the
Treasurer of the Company, the truth and accuracy of which shall be a
condition to your obligation to purchase the Notes proposed to be sold to
you and to the effect that (i) the representations and warranties of the
Company set forth in Exhibit B hereto are true and correct on and with
respect to such Closing Date, (ii) the Company has performed all of its
obligations hereunder which are to be performed on or prior to such Closing
Date, and (iii) no Default or Event of Default has occurred and is
continuing.
(b) Legal Opinions. You shall have received from Xxxxxxx and
Xxxxxx, who are acting as your special counsel in this transaction and from
Xxxx X. Xxxxx, Esq., Principal Counsel of the Company, their respective
opinions dated the applicable Closing Date, in form and substance
satisfactory to you, and covering the matters set forth in Exhibits C and
D, respectively, hereto.
(c) Related Transactions. The Company shall have consummated the
sale of at least 75% of the aggregate principal amount of the Notes
scheduled to be sold on
-6-
BW/IP International, Inc. Note Agreement
the applicable Closing Date pursuant to this Agreement and the other
Agreements referred to in (S)1.3.
(d) Satisfactory Proceedings. All proceedings taken in connection
with the transactions contemplated by this Agreement, and all documents
necessary to the consummation thereof, shall be satisfactory in form and
substance to you and your special counsel, and you shall have received a
copy (executed or certified as may be appropriate) of all such documents or
proceedings taken in connection with the consummation of said transactions.
Section 4.2. Waiver of Conditions. If on the applicable Closing
Date the Company fails to tender to you the Notes of the applicable series to be
issued to you on such date or if the conditions specified in (S)4.1 have not
been fulfilled, you may thereupon elect to be relieved of all further
obligations under this Agreement. Without limiting the foregoing, if the
conditions specified in (S)4.1 have not been fulfilled, you may waive compliance
by the Company with any such condition to such extent as you may in your sole
discretion determine. Nothing in this (S)4.2 shall operate to relieve the
Company of any of its obligations hereunder or to waive any of your rights
against the Company.
SECTION 5. COMPANY COVENANTS.
From and after the first Closing Date and continuing so long as any amount
remains unpaid on any Note:
Section 5.1. Corporate Existence, Etc. The Company will, and will
cause each of its Restricted Subsidiaries to, at all times preserve and keep in
full force and effect its corporate existence (except as permitted under
(S)5.15) and all rights, franchises and licenses necessary or desirable in the
normal conduct of its business; provided, however, that the Company shall not be
required to maintain any such rights, franchises or licenses or the corporate
existence of any Restricted Subsidiary if the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
Section 5.2. Access and Visitation Rights. The Company will and will
cause each of its Subsidiaries to, upon reasonable advance notice and at any
reasonable time during normal business hours and from time to time, permit any
of the Purchasers or any agents or representatives thereof to examine and make
copies of and abstracts from the records and books of account of, and visit and
inspect, under the Company's guidance, the properties of, the Company and any of
its Subsidiaries, and to discuss the affairs, finances and accounts of the
Company and any of its Subsidiaries with any of their officers, directors and
independent public accountants (and by this provision the Company authorizes
said accountants to discuss with you the finances and affairs of the Company and
its Subsidiaries), provided that the Company shall have the right to have a
representative of the Company present at any such discussion with such officers,
directors and independent public accountants. The Company shall not be required
to pay or reimburse you or any Institutional Holder for expenses which you or
any such Institutional
-7-
BW/IP International, Inc. Note Agreement
Holder may incur in connection with any such visitation or inspection unless
such visitation or inspection is made by you or any such Institutional Holder in
respect to an actual or imminent Default or Event of Default in which case the
Company shall pay all of your reasonable out-of-pocket expenses.
Section 5.3. Payment of Taxes, Etc. (a) The Company will and will
cause each of its Restricted Subsidiaries to pay and discharge, before the same
shall become delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
(including, without limitation, all trade accounts payable in accordance with
usual and customary business terms, and all claims for work, labor or materials)
which, if unpaid, might by law become a Lien upon their property, provided,
however, that neither the Company nor any such Restricted Subsidiary shall be
required to pay or discharge any such tax, assessment, charge or claim (A) that
is being contested in good faith and by proper proceedings and for which
appropriate reserves are being maintained or (B) the failure to pay or discharge
which would not have a Material Adverse Effect.
(b) The Company will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of a consolidated or combined income tax return
with any Person (other than the Company or any of its Subsidiaries or Holding,
provided that if the Company and its Subsidiaries file a consolidated income tax
return with Holding, the Company and its Subsidiaries shall not be required to
pay a greater amount than they would have had to pay if they had not filed with
Holding).
Section 5.4. Maintenance of Properties, Etc. The Company will and
will cause each of its Restricted Subsidiaries to maintain, preserve and keep in
good repair and working order, all of its properties with respect to which
failure to so maintain, preserve and keep would have a Material Adverse Effect.
Section 5.5. Compliance with Laws, Etc. The Company will, and will
cause each of its Restricted Subsidiaries to, perform and promptly comply with
the requirements of all applicable laws, rules, regulations and orders of any
governmental authority other than those with which the failure to comply would
not have a Material Adverse Effect.
Section 5.6. Arms-Length Transactions. The Company will and will
cause each of its Subsidiaries to conduct, all transactions otherwise permitted
under this Agreement with any of its Affiliates on terms that are fair and
reasonable and (i) for transactions between the Company and any Affiliate
thereof, no less favorable to the Company than the Company would obtain in a
comparable arms-length transaction with a Person not an Affiliate of the
Company, and (ii) for transactions between a Subsidiary of the Company and
another Affiliate of the Company, no less favorable to such Subsidiary than it
would obtain in a comparable arms-length transaction with a Person not an
Affiliate of the Company; provided that the Company and its Subsidiaries may:
(a) provide reasonable compensation and related fringe benefits
(including amounts under any benefit, incentive, bonus, health or other plan
or arrangement) to any of their respective officers and employees including,
without limitation, relocation
-8-
BW/IP International, Inc. Note Agreement
allowances, whether in the form of loans, guarantees of loans, reimbursement
of expenses or otherwise;
(b) pay reasonable directors fees and reasonable out-of-pocket
expenses to directors who are not employees of the Company or any of its
Subsidiaries;
(c) indemnify directors, officers, employees and agents of the Company
or any Affiliates of the Company under applicable law;
(d) enter into any transactions between the Company and any, or among
any, of its Subsidiaries; provided that such transactions between the
Company and any Subsidiary shall be in the ordinary course of business
(consistent with internal and industry practices) and shall not be material
to the Company; and
(e) reimburse officers and employees of the Company or any of its
Subsidiaries for reasonable out-of-pocket expenses incurred in the
performance of their duties, including travel and entertainment expenses.
Section 5.7. Maintenance of Insurance. The Company will and
will cause each of its Restricted Subsidiaries to maintain insurance with
responsible and reputable insurance companies or associations in such amounts
and covering such risks (i) as are usually insured by companies of established
reputation engaged in similar businesses and owning similar properties in the
same general areas in which the Company or such Restricted Subsidiary operates,
and (ii) with financially sound and reputable insurers accorded a rating by A.M.
Best Company, Inc. of (A) A-: X or higher for coverage limits greater than
$7,000,000 and (B) of A-: VII or higher for coverage limits up to $7,000,000.
Section 5.8. Further Assurances. The Company will and will
cause each of its Restricted Subsidiaries to promptly, upon request by any
Purchaser, correct, any defect or error that may be discovered in the Agreements
or the Notes or in the execution thereof. Promptly upon request by any
Purchaser, the Company also will, and will cause each Restricted Subsidiary to,
do, execute, acknowledge, deliver and record, and will cause any such Restricted
Subsidiary to promptly do, execute, acknowledge, deliver and record any and all
such further acts, termination statements, certificates, assurances and other
instruments as any Purchaser may reasonably require from time to time in order
(i) to carry out more effectively the purposes of this Agreement, and (ii) to
better assure, convey, grant, assign, transfer, preserve, protect and confirm
unto the Purchasers the rights granted or now or hereafter intended to be
granted to the Purchasers under the Agreements or the Notes or under any other
instrument executed in connection therewith to which the Company or any
Restricted Subsidiary is or may become a party.
Section 5.9. Employment of Technology, Disposal of Hazardous Waste, Etc;.
The Company will and will cause each of its Restricted Subsidiaries to (i)
employ in connection with its use of its property appropriate technology
(including, without limitation, appropriate secondary containment) to maintain
compliance with any applicable Environmental Law, (ii) take all actions
identified as necessary to comply with
-9-
BW/IP International, Inc. Note Agreement
Environmental Law, (iii) dispose of any and all "hazardous waste" generated at
any of its properties only at facilities and with carriers maintaining valid
permits under the Resource Conservation and Recovery Act of 1980, as amended (42
U.S.C. Section 9601 et seq.) (1976), and the regulations thereunder, 40 C.F.R.
Part 261 and any applicable state and local Environmental Law, and (iv) use best
efforts to obtain certificates of disposal from all contractors employed by the
Company in connection with the transport or disposal of any "hazardous waste"
generated at any of its properties except, with respect to each of the foregoing
clauses (i) through (iv) where the failure to perform or comply with any of the
foregoing would not have a Material Adverse Effect.
Section 5.10. Nature of Business. Neither the Company nor any
Restricted Subsidiary will engage in any business if, as a result, the general
nature of the business, taken on a consolidated basis, which would then be
engaged in by the Company and its Restricted Subsidiaries would be substantially
changed from the general nature of the business engaged in by the Company and
its Restricted Subsidiaries during the fiscal year ended December 31, 1995;
provided, however, that the Investments permitted by the provisions of (S)5.14
and the activities permitted by the provisions of (S)5.15 shall not be
prohibited by the limitations contained in this (S)5.10.
Section 5.11. Limitations on Current Debt and Funded Debt. (a) The
Company will not, and will not permit any Restricted Subsidiary to, create,
assume or incur or in any manner be or become liable in respect of any Current
Debt or Funded Debt, except:
(1) Funded Debt evidenced by the Notes;
(2) Funded Debt of the Company and its Restricted Subsidiaries
outstanding as of the date of this Agreement and reflected on the
consolidated balance sheet of the Company and its Restricted Subsidiaries as
at December 31, 1995;
(3) other Funded Debt of the Company and its Restricted Subsidiaries,
provided that, at the time of issuance thereof and after giving effect
thereto and to the application of the proceeds thereof, Consolidated Funded
Debt shall not exceed an amount equal to 55% of Consolidated Total
Capitalization;
(4) Funded Debt of any Restricted Subsidiary in addition to that
specified in (S)5.11(a)(2), (3), (5) and (6), provided that, at the time of
issuance thereof and after giving effect thereto and to the application of
the proceeds thereof, the sum of the aggregate Funded Debt of all Restricted
Subsidiaries plus the aggregate amount of Indebtedness secured by Liens
permitted by (S)5.12(i) does not exceed an amount equal to 20% of
Consolidated Net Worth;
(5) Current Debt or Funded Debt of a Restricted Subsidiary to the
Company or to a Wholly-owned Restricted Subsidiary;
(6) any renewal, extension, substitution, refinancing or replacement
of any Funded Debt then outstanding, provided that the principal amount of
Funded Debt
-10-
BW/IP International, Inc. Note Agreement
resulting from such renewal, extension, substitution, refinancing or
replacement does not exceed the principal amount of Funded Debt so
refinanced or such excess is permitted within the limitations of the
foregoing provisions of this (S)5.11; and
(7) other Current Debt of the Company and its Restricted Subsidiaries,
provided that during the 12-month period immediately preceding the date of
any determination hereunder, there shall have been a period of 45
consecutive days during which all Current Debt from time to time
outstanding during such 45-day period could have been incurred as Funded
Debt of the same principal amount within the limitations of the foregoing
provisions of this (S)5.11, and provided further that the unpaid principal
amount of such Current Debt which is outstanding on the last day of such
45-day period shall thereafter be included in all computations of Funded
Debt under the foregoing provisions of this (S)5.11, so long as such
Current Debt remains outstanding.
(b) Any corporation which becomes a Restricted Subsidiary after the
date hereof shall for all purposes of this (S)5.11 be deemed to have created,
assumed or incurred at the time it becomes a Restricted Subsidiary all Funded
Debt of such corporation existing immediately after it becomes a Restricted
Subsidiary.
Section 5.12. Limitation on Liens. The Company will not, and
will not permit any Restricted Subsidiary to, create or incur, or suffer to be
incurred or to exist, any Lien on its or their property or assets, whether now
owned or hereafter acquired, or upon any income or profits therefrom, or
transfer any property for the purpose of subjecting the same to the payment of
obligations in priority to the payment of its or their general creditors, or
acquire or agree to acquire, or permit any Restricted Subsidiary to acquire, any
property or assets upon conditional sales agreements or other title retention
devices, except:
(a) Liens for property taxes and assessments or governmental charges
or levies and Liens securing claims or demands of mechanics and
materialmen, provided payment thereof is not at the time required by
(S)5.3;
(b) Liens of or resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in
respect of which the Company or a Restricted Subsidiary shall at any time
in good faith be prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or proceeding for
review shall have been secured;
(c) Liens incidental to the conduct of business or the ownership of
properties and assets (including Liens in connection with workers
compensation, unemployment insurance and other like laws, old-age pensions
or other social security, materialmens, carriers, warehousemens and
attorneys liens and statutory landlords liens) and Liens to secure the
payment of taxes or the cost of improvements, the performance of bids,
tenders or trade contracts, or to secure statutory obligations, surety,
return-of-money or appeal bonds or other Liens of like general nature
incurred in the ordinary course of business and not in connection with the
borrowing
-11-
BW/IP International, Inc. Note Agreement
of money; provided in each case, the obligation secured is not overdue or, if
overdue, is being contested in good faith by appropriate actions or proceedings;
(d) survey exceptions or encumbrances, easements or reservations, or
rights of others for rights-of-way, utilities and other similar purposes, or
zoning or other restrictions as to the use of real properties, which do not have
a Material Adverse Effect;
(e) Liens securing Indebtedness of a Restricted Subsidiary to the
Company or to another Restricted Subsidiary;
(f) Liens existing on the Closing Date which (i) either individually
or in the aggregate do not have a Material Adverse Effect or (ii) do not secure
Funded Debt of the Company or any Restricted Subsidiary (other than Funded Debt
consisting of purchase money debt or Capitalized Leases permitted by the
provisions of (S)5.11(a)(4)) and Liens arising in accordance with the terms (as
in existence on the Closing Date) of the Dutch Facility;
(g) Liens incurred after the Closing Date given to secure the payment
of the purchase price incurred in connection with the acquisition, improvement
or lease of fixed assets useful and intended to be used in carrying on the
business of the Company or a Restricted Subsidiary, including Liens existing on
such fixed assets at the time of acquisition, improvement or lease thereof or at
the time of acquisition by the Company or a Restricted Subsidiary of any
business entity then owning or leasing such fixed assets, whether or not such
existing Liens were given to secure the payment of the purchase price of the
fixed assets to which they attach so long as they were not incurred, extended or
renewed in contemplation of such acquisition, improvement or lease, provided
that (i) the Lien shall attach solely to the fixed assets acquired, improved or
leased, (ii) at the time of acquisition, improvement or lease of such fixed
assets, the aggregate amount remaining unpaid on all Indebtedness secured by
Liens on such fixed assets whether or not assumed by the Company or a Restricted
Subsidiary shall not exceed an amount equal to 80% (or 100% in the case of
Capitalized Leases) of the lesser of (y) the total purchase price of or cost of
improvement to, or (z) the fair market value at the time of acquisition,
improvement or lease of, such fixed assets (as determined in good faith by the
Board of Directors of the Company), (iii) such Liens shall have been created
within 12 months after the date of such acquisition or completion of such
improvement, and (iv) all such Indebtedness shall have been incurred within the
applicable limitations provided in (S)5.11;
(h) rights of set-off and bankers liens granted or confirmed to the
holders of Indebtedness of the Company or a Restricted Subsidiary not prohibited
by (S)5.11;
(i) Liens (in addition to those set forth in the preceding paragraphs
(a) through (h) of this (S)5.12) securing Funded Debt of the Company or any
Restricted Subsidiary, provided that (i) the sum of (x) all Indebtedness secured
by such Liens plus (y) all Funded Debt of Restricted Subsidiaries incurred under
-00-
XX/XX Xxxxxxxxxxxxx, Inc. Note Agreement
(S)5.11(a)(4) does not exceed an amount equal to 20% of Consolidated Net
Worth and (ii) the Company would be permitted to incur at least $1 of
additional Funded Debt under the provisions of (S)5.11(a)(3);
(j) Liens (in addition to those set forth in the preceding paragraphs
(a) through (i) of this (S)5.12) securing Current Debt of the Company or any
Restricted Subsidiary, provided that (i) all Indebtedness secured by such
Liens does not exceed $5,000,000 and (ii) the Company would be permitted to
incur at least $1 of additional Current Debt under the provisions of
(S)5.11(a)(7); and
(k) any extension, renewal or replacement of any Lien permitted by the
preceding paragraphs (e) through (j) of this (S)5.12, incurred in connection
with the extension, renewal or refunding of Funded Debt secured thereby
which is permitted by the limitations contained in (S)5.11(a)(6), provided
that such Lien shall not extend to any property which was not subject to
such Lien immediately prior to such extension, renewal or replacement.
Section 5.13. Restricted Payments. The Company will not, and will not
permit any of its Subsidiaries to, declare or pay any dividends, purchase,
redeem, retire or otherwise acquire for value any of its capital stock now or
hereafter outstanding, or any warrants or other rights to acquire such stock,
return any capital to its stockholders as such, or make any distribution of
assets to its stockholders as such, or permit any of its Subsidiaries to
purchase, redeem, retire or otherwise acquire for value any stock of the Company
or any warrants or other rights to acquire such stock (such declarations or
payments of dividends, purchases, redemptions or retirements of capital stock
and warrants, rights or options and all such payments or distributions being
herein collectively called "Restricted Payments"); except that:
(i) the Company may declare and deliver dividends and distributions
payable in common stock of the Company;
(ii) Wholly-owned Subsidiaries may declare, pay and deliver dividends
and distributions payable in cash, common stock or other assets to the
Company or any other Subsidiary of the Company; and
(iii) so long as no Default or Event of Default has occurred and is
continuing or would be caused thereby, the Company or any Subsidiary of the
Company may purchase, redeem, retire or otherwise acquire for value its
capital stock and may declare and pay dividends payable in cash on its
capital stock.
The Company will not declare any dividend which constitutes a Restricted
Payment payable more than 60 days after the date of declaration thereof.
Section 5.14. Investments;. The Company will not, and will not
permit any Restricted Subsidiary to, make any Investments, other than:
-00-
XX/XX Xxxxxxxxxxxxx, Inc. Note Agreement
(a) Investments existing as of the Closing Date and reflected on
Schedule II hereto;
(b) Investments by the Company and its Restricted Subsidiaries in and
to Restricted Subsidiaries, including any Investment in a corporation which,
after giving effect to such Investment, will become a Restricted Subsidiary;
(c) Investments in commercial paper maturing in 270 days or less from
the date of issuance which, at the time of acquisition by the Company or any
Restricted Subsidiary, is accorded a rating of A-2 or better by Standard &
Poors Corporation ("S&P") or Prime-2 or better by Moodys Investors Service, Inc.
("Moodys") or is accorded a comparable rating by any other internationally
recognized credit rating agency of similar standing;
(d) Investments in Securities of (i) the United States of America or
any agency or instrumentality of the United States of America, the payment or
guarantee of which constitutes a full faith and credit obligation of the United
States of America or (ii) any foreign nation maturing in 12 months or less from
the date of acquisition thereof which are of comparable credit quality as the
Securities referred to in clause (i) of this (S)5.14(d) (as rated by an
internationally recognized rating service then in the business of rating
government Securities);
(e) Investments in bank instruments maturing within one year from the
date of acquisition thereof issued by a bank or trust company (i) organized
under the laws of the United States of America or any state thereof, having
capital, surplus and undivided profits aggregating at least $100,000,000 and
whose long-term certificates of deposit are, at the time of acquisition of such
instruments by the Company or a Restricted Subsidiary, rated A or better by S&P
or A or better by Moodys or (ii) organized under the laws of any foreign nation,
having capital, surplus and undivided profits aggregating at least
$1,000,000,000;
(f) Investments in marketable shares of adjustable-rate preferred
stock commonly known by such terms as Dutch Auction Preferred Stock, Capital
Market Preferred Stock, Remarketable Preferred Stock, Variable Rate Preferred
Stock, or similar terms, which, at the time of acquisition by the Company or a
Restricted Subsidiary, are accorded the highest rating by any nationally
recognized credit rating agency without regard to suffixes;
(g) Investments in money market programs of investment companies
regulated under the Investment Company Act of 1940, as amended, which, at the
time of acquisition by the Company or a Restricted Subsidiary, if rated, are (or
if such money market programs are not rated the underlying investments of which
are) rated A-1 by S&P or Prime-1 by Moodys or are accorded an equivalent rating
by any other nationally recognized credit rating agency of similar standing,
provided that such money market programs invest only in Investments of the types
described in paragraphs (c) through (e) above;
-00-
XX/XX Xxxxxxxxxxxxx, Inc. Note Agreement
(h) Investments in repurchase agreements, having terms of less than
90 days, for government obligations of the type referred to in paragraph (d)
above with a commercial bank or trust company organized under the laws of
the United States of America and meeting the requirements set forth in
paragraph (e)(i) above;
(i) Investments in treasury stock of the Company, to the extent
permitted by (S)5.13;
(j) receivables arising from the sale of goods and services in the
ordinary course of business of the Company and its Restricted Subsidiaries;
(k) loans, advances or reimbursement obligations in the usual and
ordinary course of business to officers, directors and employees for (i)
travel expenses and moving or relocation expenses related to a transfer,
(ii) education expenses, (iii) entertainment expenses or (iv) loans to
purchase capital stock of Holding (not to exceed in the aggregate
$5,000,000), all incidental to carrying on the business of the Company or
any Restricted Subsidiary;
(1) advances in the usual and ordinary course of business to officers,
directors and employees against bonuses previously granted but not yet paid
under any management incentive program;
(m) Investments received in connection with the bona fide settlement
of debts created in the ordinary course of business of the Company or a
Restricted Subsidiary;
(n) Investments in Joint Ventures existing on the Closing Date and set
forth on Schedule II, and after the Closing Date Investments in Joint
Ventures not listed on Schedule II ("Additional Joint Ventures"); provided
that (i) any such Joint Venture is in and continues in the same type of
business as is conducted by the Company on the Closing Date, (ii) none of
the Company or any Restricted Subsidiary is a general partner (or would be
liable to the extent of a general partner) of any such Joint Venture, and
(iii) at the time of any Investment in an Additional Joint Venture the
aggregate Investments made by the Company and its Subsidiaries in Additional
Joint Ventures (after giving effect to the Investment to be made) shall not
exceed 20% of the Consolidated Net Worth of the Company and its
Subsidiaries; and
(o) other Investments made in each fiscal year in an aggregate
principal amount not exceeding $5,000,000 in each such fiscal year.
In valuing any Investments for the purpose of applying the limitations set
forth in this (S)5.14, such Investments shall be taken at the original cost
thereof, without allowance for any subsequent write-offs or appreciation or
depreciation therein, but less any amount repaid or recovered on account of
capital or principal.
-00-
XX/XX Xxxxxxxxxxxxx, Inc. Note Agreement
For purposes of this (S)5.14, at any time when a corporation becomes a
Restricted Subsidiary, all Investments of such corporation at such time shall be
deemed to have been made by such corporation, as a Restricted Subsidiary, at
such time.
Section 5.15. Mergers, Consolidations and Sales of Assets;. (a)
The Company will not, and will not permit any Restricted Subsidiary to, (i)
consolidate with or be a party to a merger with any other corporation or (ii)
effect a Disposition of all or any substantial part (as defined in paragraph (b)
of this (S)5.15) of the assets of the Company and its Restricted Subsidiaries;
provided, however, that:
(1) any Restricted Subsidiary may merge or consolidate with or into
the Company or any Restricted Subsidiary so long as in any merger or
consolidation involving the Company, the Company shall be the surviving or
continuing corporation;
(2) the Company may consolidate or merge with, or effect a Disposition
of all or substantially all of its assets to, any other Person if (i) in
the case of a consolidation or merger, either the Company shall be the
surviving or continuing corporation, or the surviving, continuing or
acquiring Person, if other than the Company, is organized under the laws of
the United States of America or any state thereof and expressly assumes the
covenants and obligations in the Notes and this Agreement by written
agreement in a form customary for such transactions and reasonably
satisfactory in form to the holders of at least 66-2/3% of the aggregate
principal amount of the outstanding Notes, (ii) at the time of such
consolidation or merger or Disposition of assets and after giving effect
thereto no Default or Event of Default shall have occurred and be
continuing, and (iii) after giving effect to such consolidation or merger
or Disposition of assets the surviving, continuing, or acquiring Person
would be permitted to incur at least $1.00 of additional Funded Debt under
the provisions of (S)5.11(a)(3); and
(3) any Restricted Subsidiary may effect a Disposition of all or any
substantial part of its assets to the Company or any Restricted Subsidiary.
(b) As used in this (S)5.15, a Disposition shall be deemed to be a
"substantial part" of the assets of the Company and its Restricted Subsidiaries
if (i) the book value of such assets, when added to the book value of all other
assets of which a Disposition is made during (x) the 12-month period ending with
the date of such Disposition exceeds 15% of Consolidated Total Assets or (y) the
period from and after the date of this Agreement to the date of such Disposition
exceeds an amount equal to 30% of Consolidated Total Assets, in each case
determined as of the end of the immediately preceding fiscal year, or (ii) such
assets, when added to all other assets of which a Disposition is made during the
12-month period ending with the date of such Disposition contributed at least
15% of Consolidated Net Income, determined as of the end of the immediately
preceding fiscal year. A sale, lease or other disposition of assets shall not
be considered a Disposition for the purposes of the foregoing limitation set
forth in this paragraph (b) if the net proceeds (whether or not in cash)
generated by such sale, lease or disposition of assets are either (i) reinvested
in the
-00-
XX/XX Xxxxxxxxxxxxx, Inc. Note Agreement
business of the Company and its Restricted Subsidiaries within 18 months
from the date such net proceeds are received by the Company or a Restricted
Subsidiary or (ii) applied to reduce outstanding Senior Funded Debt.
Section 5.16. Guaranties. The Company will not, and will not
permit any Restricted Subsidiary to, become or be liable in respect of any
Guaranty except (a) Guaranties by the Company or a Restricted Subsidiary which
(i) are limited in amount to a stated maximum dollar exposure and incurred in
compliance with the provisions of this Agreement or (ii) constitute Guaranties
of obligations incurred in the ordinary course of business and not in connection
with the borrowing of money, (b) indemnifications given by the Company or any
Restricted Subsidiary for actual losses suffered or actual expenses incurred by
Citicorp USA, Inc. ("Citicorp") and ABN AMRO Bank ("ABN") in connection with the
enforcement by Citicorp and ABN of a Guaranty by a Restricted Subsidiary of the
Companys obligations under the Credit Agreement, and similar indemnifications
given by the Company or any Restricted Subsidiary under any future agreement
under which Indebtedness for borrowed money may be issued after the Closing Date
in compliance with the provisions of this Agreement, (c) indemnifications given
by the Company, as the seller or purchaser of capital stock or assets of another
Person for actual losses suffered or actual expenses incurred by the indemnified
party which indemnifications are usual and customary in such transactions, and
(d) standard indemnifications given by the Company for actual losses suffered or
actual expenses incurred by an underwriter in connection with a public offering
of the Companys capital stock, Current Debt or Funded Debt; provided, however,
that the indemnifications described in subsections (b), (c) and (d) of this
(S)5.16 shall not be permitted if the granting of any of such indemnification
would have a Material Adverse Effect.
Section 5.17. Repurchase of Notes. Neither the Company nor any
Restricted Subsidiary or Affiliate, directly or indirectly, may repurchase or
make any offer to repurchase any Notes unless an offer has been made to
repurchase Notes, pro rata, from all holders of the Notes at the same time and
upon the same terms. In case the Company repurchases or otherwise acquires any
Notes, such Notes shall immediately thereafter be cancelled and no Notes shall
be issued in substitution therefor. Without limiting the foregoing, upon the
repurchase or other acquisition of any Notes by the Company, any Restricted
Subsidiary or any Affiliate, such Notes shall no longer be outstanding for
purposes of any section of this Agreement relating to the taking by the holders
of the Notes of any actions with respect hereto, including, without limitation,
(S)6.3, (S)6.4 and (S)7.1.
Section 5.18. Accounting Changes. The Company will not and will
not permit any division or Subsidiary to make or permit, any significant change
in accounting policies or reporting practices, except for any such change
required or permitted by GAAP.
Section 5.19. Plan Terminations. The Company will not and will
not permit any ERISA Affiliate of the Company to terminate, any Plan so as to
result in liability of the Company or any ERISA
-17-
BW/IP International, Inc. Note Agreement
Affiliate of the Company to the PBGC in excess of $2,000,000, or permit to exist
any event or condition which reasonably presents a material risk of a
termination by the PBGC of any Plan with respect to which the Company or any
ERISA Affiliate of the Company would, in the event of such termination, incur
liability to the PBGC in excess of $2,000,000.
Section 5.20. Employee Benefit Costs and Liabilities. The
Company will not and will not permit any ERISA Affiliate of the Company to
create or suffer to exist, (i) any Insufficiency with respect to a Plan or any
Withdrawal Liability with respect to a Multiemployer Plan if, immediately after
giving effect to such Insufficiency or Withdrawal Liability, the aggregate
amount of Insufficiencies and Withdrawal Liabilities of all Plans and
Multiemployer Plans, respectively, of the Company and its ERISA Affiliates
exceeds $10,000,000 or (ii) any liability with respect to welfare plans (as
defined in Section 3(1) of ERISA) if, immediately after giving effect to such
liability, the aggregate annualized costs (including, without limitation, the
cost of insurance premiums) with respect to such plans of the Company and its
ERISA Affiliates in any fiscal year of the Company would exceed $10,000,000.
Section 5.21. Charter and Bylaws. The Company will not and will
not permit any Restricted Subsidiary to amend, modify or change in any manner,
the Certificate of Incorporation or the By-laws of the Company or any such
Subsidiary other than an amendment to the Certificate of Incorporation or By-
laws which would not materially impair the interests or the rights of the
Purchasers under the Agreements or the Notes.
Section 5.22. Reports and Rights of Inspection. The Company
will keep, and will cause each Restricted Subsidiary to keep, proper books of
record and account in which full and correct entries will be made of all
dealings or transactions of, or in relation to, the business and affairs of the
Company or such Restricted Subsidiary, in accordance with GAAP consistently
applied (except for changes disclosed in the financial statements furnished to
you pursuant to this (S)5.22 and concurred in by the independent public
accountants referred to in (S)5.22(b) hereof), and will furnish to you so long
as you are the holder of any Note and to each other Institutional Holder of the
then outstanding Notes (in duplicate if so specified below or otherwise
requested):
(a) Quarterly Statements. As soon as available and in any event
within 50 days after the end of each of the first three quarters of each
fiscal year of the Company, consolidated balance sheets of the Company and
its Restricted Subsidiaries as of the end of such quarter, setting forth in
comparative form the consolidated figures for the fiscal year then most
recently ended, and consolidated statements of income and cash flows of the
Company and its Restricted Subsidiaries for the period commencing at the
end of the previous fiscal year and ending with the end of such quarter, in
each case setting forth in comparative form the consolidated figures for
the fiscal year then most recently ended, certified by the chief accounting
officer of the Company as fairly presenting the financial condition of the
Company and its Restricted Subsidiaries as at the dates indicated and the
results of their operations for the periods indicated, subject to changes
resulting from audit and normal year-end adjustment;
-18-
BW/IP International, Inc. Note Agreement
(b) Annual Statements. As soon as available and in any event within
100 days after the end of each fiscal year of the Company, a copy of the annual
audit report for such year for the Company and its Restricted Subsidiaries,
containing financial statements (including a consolidated balance sheet,
consolidated statements of income and stockholders equity and cash flows of the
Company and its Restricted Subsidiaries) for such year, in each case setting
forth in comparative form the consolidated figures for the fiscal year then most
recently ended, certified by Price Waterhouse LLP or other nationally recognized
independent public accountants. The certification shall be unqualified (except
for qualifications necessary as a result of a condition or event or a change in
accounting procedures which would not have a Material Adverse Effect) and shall
state that such consolidated financial statements present fairly the financial
position of the Company and its Restricted Subsidiaries as at the dates
indicated and the results of their operations and cash flow for the periods
indicated in conformity with GAAP applied on a basis consistent with prior years
(except as otherwise stated therein) and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards;
(c) Compliance Certificates. Together with each delivery of the
reports of the Company and its Restricted Subsidiaries pursuant to paragraphs
(b) and (c) above, a compliance certificate for the quarter or year, as
applicable, executed by the chief accounting officer of the Company (i) stating
that the signer has reviewed the terms of this Agreement and has made, or caused
to be made under his or her supervision, a review in reasonable detail of the
transactions and condition of the Company and its Restricted Subsidiaries during
the accounting period covered by such financial statements and that such review
has not disclosed the existence during or at the end of such accounting period,
and that the signer does not have knowledge of the existence as at the date of
the compliance certificate, of any condition or event that constitutes a Default
or an Event of Default or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action the
Company has taken, is taking and proposes to take with respect thereto, (ii)
including the computations in reasonable detail evidencing compliance during (as
required thereunder) and at the end of such accounting periods with the
restrictions contained in (S)(S)5.11, 5.13, 5.14 and 5.15, and (iii) detailing
the Company's calculation of the amount of obligations guaranteed pursuant to
each outstanding Guaranty, if any;
(d) Accountant's Certificates. Together with each delivery of the
Company's annual report pursuant to subsection (b) above, a written statement by
the independent public accountants giving the report thereon (i) stating that
their audit examination has included a review of the terms of this Agreement as
they relate to accounting matters and (ii) stating whether, in connection with
their audit examination, any condition or event that constitutes a Default or an
Event of Default has come to their attention, and if such a condition or event
has come to their attention, specifying the nature and period of existence
thereof, provided that such accountants shall not be liable by reason of any
failure to obtain knowledge of any such Default or Event of Default that would
not be disclosed in the course of a reasonable audit examination;
-19-
BW/IP International, Inc. Note Agreement
(e) Audit Reports. Promptly upon receipt thereof, one copy of each
interim or special audit made by independent accountants of the books of the
Company or any Restricted Subsidiary and any management letter received from
such accountants, if the event or condition which prompted such audit or
management letter could have a Material Adverse Effect;
(f) Accounting Change. Promptly after any significant change in
accounting policies or reporting practices, notice and a description in
reasonable detail of such change;
(g) Notices of ERISA Events.
(1) Promptly and in any event within 30 days after the Company or
any ERISA Affiliate of the Company knows or has reason to know that
any ERISA Event referred to in clause (i) of the definition of ERISA
Event with respect to any Plan has occurred which might result in
liability to the PBGC a statement of the chief accounting officer of
the Company describing such ERISA Event and the action, if any, that
the Company or such ERISA Affiliate has taken or proposes to take with
respect thereto;
(2) Promptly and in any event within 10 days after the Company or
any ERISA Affiliate of the Company knows or has reason to know that
any ERISA Event (other than an ERISA Event referred to in paragraph
(1) above) with respect to any Plan has occurred which might result in
liability to the PBGC, a statement of the chief accounting officer of
the Company describing such ERISA Event and the action, if any, that
the Company or such ERISA Affiliate has taken or proposes to take with
respect thereto;
(3) Promptly and in any event within five business days after
receipt thereof by the Company or any ERISA Affiliate of the Company
from the PBGC, copies of each notice from the PBGC of its intention to
terminate any Plan or to have a trustee appointed to administer any
Plan;
(4) Promptly and in any event within seven business days after
receipt thereof by the Company or any ERISA Affiliate of the Company
from the sponsor of a Multiemployer Plan, a copy of each notice
received by the Company or any ERISA Affiliate of the Company
concerning (w) the imposition of Withdrawal Liability by a
Multiemployer Plan, (x) the determination that a Multiemployer Plan
is, or is expected to be, in reorganization within the meaning of
Title IV of ERISA, (y) the termination of a Multiemployer Plan within
the meaning of Title IV of ERISA or (z) the amount of liability
incurred, or expected to be incurred, by the Company or any ERISA
Affiliate of the Company in connection with any event described in
clause (w), (x) or (y) above;
-20-
BW/IP International, Inc. Note Agreement
(h) SEC and Other Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports
that the Company or any of its Restricted Subsidiaries sends to its
stockholders generally, and copies of all regular, periodic and special
reports, and all registration statements, that the Company or any of its
Restricted Subsidiaries files with the Securities and Exchange Commission
or any governmental authority that may be substituted therefor, or with any
national securities exchange, and notice of, and copies of any orders in,
any material actions, suits and proceedings affecting the Company or any of
its Restricted Subsidiaries, issued by any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic
or foreign, Federal or state, having jurisdiction over the Company or any
of its Restricted Subsidiaries;
(i) Notice of Violations. Promptly after the occurrence thereof,
notice of the receipt by the Company of any notice, order, directive or
other communication from a governmental authority alleging violations of or
noncompliance with any Environmental Law which could reasonably be expected
to have a Material Adverse Effect; and
(j) Requested Information. Such other information respecting the
condition or operations, financial or otherwise, of the Company or any of
its Subsidiaries as any Purchaser or any other Institutional Holder may
reasonably request.
Section 5.23. Changes in Status of Subsidiaries;. So long as no
Default or Event of Default shall have occurred and be continuing, the Board of
Directors of the Company may at any time and from time to time designate a
previously Unrestricted Subsidiary as a Restricted Subsidiary or designate a
previously Restricted Subsidiary as an Unrestricted Subsidiary, provided that
(i) immediately after such designation and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing, (ii) a
Restricted Subsidiary may not be designated by the Board of Directors of the
Company as an Unrestricted Subsidiary if at the time of such designation the
Subsidiary so designated owns, directly or indirectly, any Indebtedness, capital
stock or other Securities of the Company or any Restricted Subsidiary, (iii)
immediately thereafter the Company could incur $1.00 of additional Funded Debt
under the provisions of (S)5.11(a)(3), and (iv) such Subsidiary shall not have
been previously redesignated pursuant to this (S)5.23.
For purposes of (S)5.14, all Investments of the Company and its Restricted
Subsidiaries in a Restricted Subsidiary which is designated as an Unrestricted
Subsidiary shall be deemed to have been made immediately after such designation.
Any notice of designation pursuant to this (S)5.23 shall be accompanied by
a certificate signed by the chief financial officer of the Company stating that
the provisions of this (S)5.23 have been complied with in connection with such
designation and setting forth the name of each other Subsidiary (if any) which
has or will become an Unrestricted Subsidiary or a Restricted Subsidiary, as the
case may be, as a result of such designation.
-00-
XX/XX Xxxxxxxxxxxxx, Inc. Note Agreement
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default;. Any one or more of the following shall
constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest on any Note when
the same shall have become due and such default shall continue for more
than five business days; or
(b) Default shall occur in the making of any required prepayment
on any of the Notes as provided in (S)2.1; or
(c) Default shall occur in the making of any other payment of the
principal of any Note or premium, if any, thereon at the expressed or any
accelerated maturity date or at any date fixed for prepayment; or
(d) Default shall be made in the payment when due (whether by lapse of
time, by declaration, by call for redemption or otherwise) of the
principal of or interest on any Funded Debt or Current Debt (other than
the Notes) of the Company or any Restricted Subsidiary owing under any
indenture or instrument evidencing or under which the Company or any
Restricted Subsidiary has, at the date hereof or shall hereafter have,
outstanding indebtedness for borrowed money or other Securities in a
principal amount in excess of $5,000,000 and such default shall continue
beyond the period of grace, if any, allowed with respect thereto; or
(e) An event of default, as defined in any indenture or instrument
evidencing or under which the Company or any Restricted Subsidiary has, at
the date hereof or shall hereafter have, outstanding indebtedness for
borrowed money or other Securities in a principal amount in excess of
$5,000,000, shall happen and be continuing, and such indebtedness or other
securities shall have been accelerated so that the same shall be or become
due and payable prior to the date on which the same would otherwise have
become due and payable; or
(f) Default shall occur in the observance or performance of any
provision of this Agreement which is not remedied within 30 days after the
earlier of (i) the day on which a Responsible Officer of the Company first
obtains knowledge of such default, or (ii) the day on which written notice
thereof is given to the Company by the holder of any Note; or
(g) Any representation or warranty made by the Company herein, or made
by the Company in any statement or certificate furnished by the Company in
connection with the consummation of the issuance and delivery of the Notes
or furnished by the Company pursuant hereto, is untrue in any material
respect as of the date of the issuance or making thereof; or
-00-
XX/XX Xxxxxxxxxxxxx, Inc. Note Agreement
(h) Final uninsured judgment or judgments for the payment of money
aggregating in excess of $5,000,000 is or are outstanding against the
Company or any Restricted Subsidiary or against any property or assets of
either and any one of such judgments has remained unpaid, unvacated,
unbonded or unstayed by appeal or otherwise for a period of 30 days from
the date of its entry; or
(i) A custodian, liquidator, trustee or receiver is appointed for the
Company or any Restricted Subsidiary or for the major part of the property
of either and is not discharged within 30 days after such appointment; or
(j) The Company or any Restricted Subsidiary is generally not paying
its debts as they become due or makes an assignment for the benefit of
creditors, or the Company or any Restricted Subsidiary applies for or
consents to the appointment of a custodian, liquidator, trustee or receiver
for the Company or such Restricted Subsidiary or for the major part of the
property of either; or
(k) Bankruptcy, reorganization, arrangement or insolvency proceedings,
or other proceedings for relief under any bankruptcy or similar law or laws
for the relief of debtors, are instituted by or against the Company or any
Restricted Subsidiary and, if instituted against the Company or any
Restricted Subsidiary, are consented to or are not dismissed within 60 days
after such institution.
Section 6.2. Notice to Holders. When any Event of Default described in
the foregoing (S)6.1 has occurred, or if the holder of any Note or of any other
evidence of Funded Debt or Current Debt of the Company (in an aggregate
outstanding principal amount in excess of $5,000,000) gives any notice or takes
any other action with respect to a claimed default, the Company agrees to give
notice within five business days of such event to all holders of the Notes then
outstanding.
Section 6.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a), (b) or (c) of (S)6.1 has happened and is continuing,
any holder of any Note may, and when any Event of Default described in
paragraphs (d) through (h), inclusive, of said (S)6.1 has happened and is
continuing, the holder or holders of 25% or more of the principal amount of
Notes at the time outstanding may, by notice to the Company, declare the entire
principal and all interest accrued on all Notes to be, and all Notes shall
thereupon become, forthwith due and payable, without any presentment, demand,
protest or other notice of any kind, all of which are hereby expressly waived.
When any Event of Default described in paragraph (i), (j) or (k) of (S)6.1 has
occurred, then all outstanding Notes shall immediately become due and payable
without presentment, demand or notice of any kind. Upon the Notes becoming due
and payable as a result of any Event of Default as aforesaid, the Company will
forthwith pay to the holders of the Notes the entire principal and interest
accrued on the Notes and, to the extent not prohibited by applicable law, an
amount as liquidated damages for the loss of the bargain evidenced hereby (and
not as a penalty) equal to the Make-Whole Amount, determined as of the date on
which the Notes shall so become due and payable. No course of dealing on the
part of the holder or holders of any Notes nor any delay or failure on the part
of any holder of Notes to exercise any right shall operate as
-23-
BW/IP International, Inc. Note Agreement
a waiver of such right or otherwise prejudice such holders rights, powers and
remedies. The Company further agrees, to the extent permitted by law, to pay to
the holder or holders of the Notes all costs and expenses incurred by them in
the collection of any Notes upon any default hereunder or thereon, including
reasonable fees and expenses to such holders or holders attorneys for all
services rendered in connection therewith.
Section 6.4. Rescission of Acceleration. The provisions of (S)6.3 are
subject to the condition that if the principal of and accrued interest on all or
any outstanding Notes have been declared immediately due and payable by reason
of the occurrence of any Event of Default described in paragraphs (a) through
(h), inclusive, of (S)6.1, the holders of 66-2/3% in aggregate principal amount
of the Notes then outstanding may, by written instrument filed with the Company,
rescind and annul such declaration and the consequences thereof, provided that
at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of any
monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and under this Agreement (except any principal,
interest or premium on the Notes which has become due and payable solely by
reason of such declaration under (S)6.3) shall have been duly paid; and
(c) each and every other Default and Event of Default shall have
been made good, cured or waived pursuant to (S)7.1;
and provided further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
Section 7.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), if the Company shall have obtained
the consent in writing of the holders of at least 66-2/3% in aggregate principal
amount of Notes then outstanding; provided that without the written consent of
the holders of all of the Notes then outstanding, no such amendment or waiver
shall be effective (i) which will change the time of payment (including any
prepayment required by (S)2.1) of the principal of or the interest on any Note
or change the principal amount thereof or change the rate of interest thereon,
or (ii) which will change any of the provisions with respect to optional
prepayments set forth in (S)2, or (iii) which will change the percentage of
holders of the Notes required to consent to any such amendment or waiver of any
of the provisions of (S)6 or this (S)7.
Section 7.2. Solicitation of Holders. So long as there are any
Notes outstanding, the Company will not solicit, request or negotiate for or
with respect to any proposed waiver or amendment of any of the provisions of
this Agreement or the Notes unless each holder of
-24-
BW/IP International, Inc. Note Agreement
Notes (irrespective of the amount of Notes then owned by it) shall be informed
thereof by the Company and shall be afforded the opportunity of considering the
same and shall be supplied by the Company with sufficient information to enable
it to make an informed decision with respect thereto. The Company will not,
directly or indirectly, pay or cause to be paid any remuneration, whether by way
of supplemental or additional interest, fee or otherwise, to any holder of Notes
as consideration for or as an inducement to entering into by any holder of Notes
of any waiver or amendment of any of the terms and provisions of this Agreement
or the Notes unless such remuneration is concurrently offered, on the same
terms, ratably to the holders of all Notes then outstanding.
Section 7.3. Effect of Amendment or Waiver. Any such amendment
or waiver shall apply equally to all of the holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon the Company,
whether or not such Note shall have been marked to indicate such amendment or
waiver. No such amendment or waiver shall extend to or affect any obligation
not expressly amended or waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 8.1. Definitions. Unless the context otherwise requires,
the terms hereinafter set forth when used herein shall have the
following meanings and the following definitions shall be equally applicable to
both the singular and plural forms of any of the terms herein defined:
"Affiliate" shall mean any Person (other than a Restricted Subsidiary) (i)
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company, (ii) which
beneficially owns or holds 5% or more of any class of the Voting Stock of the
Company or (iii) 5% or more of the Voting Stock (or in the case of a Person
which is not a corporation, 5% or more of the equity interest) of which is
beneficially owned or held by the Company or a Subsidiary. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise.
"Capitalized Lease" shall mean any lease the obligation for Rentals with
respect to which is required to be capitalized on a consolidated balance sheet
of the lessee and its subsidiaries in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet of such Person
in accordance with GAAP.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
-00-
XX/XX Xxxxxxxxxxxxx, Inc. Note Agreement
"Company" shall mean BW/IP International, Inc., a Delaware corporation, and
any Person who succeeds to all, or substantially all, of the assets and business
of BW/IP International, Inc.
"Consolidated Funded Debt" shall mean all Funded Debt of the Company and
its Restricted Subsidiaries, determined on a consolidated basis in accordance
with GAAP eliminating intercompany items.
"Consolidated Net Income" for any period shall mean the gross revenues of
the Company and its Restricted Subsidiaries for such period less all expenses
and other proper charges (including taxes on income), determined on a
consolidated basis in accordance with GAAP after eliminating earnings or losses
attributable to outstanding Minority Interests, but excluding in any event:
(a) any gains or losses on the sale or other disposition of
Investments or fixed or capital assets, and any taxes on such excluded
gains and any tax deductions or credits on account of any such excluded
losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Restricted Subsidiary accrued
prior to the date it became a Restricted Subsidiary;
(d) net earnings and losses of any corporation (other than a
Restricted Subsidiary), substantially all the assets of which have been
acquired in any manner by the Company or any Restricted Subsidiary,
realized by such corporation prior to the date of such acquisition;
(e) net earnings and losses of any corporation (other than a
Restricted Subsidiary) with which the Company or a Restricted Subsidiary
shall have consolidated or which shall have merged into or with the Company
or a Restricted Subsidiary prior to the date of such consolidation or
merger;
(f) net earnings of any business entity (other than a Restricted
Subsidiary) in which the Company or any Restricted Subsidiary has an
ownership interest unless such net earnings shall have actually been
received by the Company or such Restricted Subsidiary in the form of cash
distributions;
(g) any portion of the net earnings of any Restricted Subsidiary which
for any reason is unavailable for payment of dividends to the Company or
any other Restricted Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or write-up
of fixed assets or earnings resulting from any material reappraisal,
revaluation or write-up of any other assets;
-00-
XX/XX Xxxxxxxxxxxxx, Inc. Note Agreement
(i) any deferred or other credit (or amortization of a deferred
credit) representing any excess of the equity in any Subsidiary at the date
of acquisition thereof over the amount invested in such Subsidiary;
(j) earnings resulting from the acquisition of debt securities for a
cost less than outstanding principal thereof and accrued interest thereon;
(k) extraordinary gains or losses or transactions of a non-recurring
or non-operating and material nature or arising from gains or losses or sales
relating to the discontinuance of assets;
(l) any gain arising from the acquisition of any Securities of the
Company or any Restricted Subsidiary; and
(m) any reversal of any contingency reserve, which reversal is
required under GAAP to be disclosed in the financial statements of the
Company, except to the extent that provision for such contingency reserve
shall have been made from income arising during such period.
"Consolidated Net Worth" shall mean as of the date of any determination
thereof the net worth of the Company and its Restricted Subsidiaries on a
consolidated basis determined in accordance with GAAP.
"Consolidated Subsidiaries" of any Person shall mean all subsidiaries of such
Person that should be consolidated with such Person for financial reporting
purposes in accordance with GAAP.
"Consolidated Total Assets" shall mean as of the date of any determination
thereof all assets of the Company and its Restricted Subsidiaries, as shown on
its consolidated balance sheet and determined in accordance with GAAP.
"Consolidated Total Capitalization" shall mean Consolidated Net Worth plus
Consolidated Funded Debt.
"Credit Agreement" shall mean that certain Credit Agreement dated as of
December 1, 1995 among the Company, the financial institutions named therein and
Citicorp USA, Inc., as agent, and ABN AMRO Bank, as co-agent.
"Current Debt" of any Person shall mean as of the date of any determination
thereof, and without duplication, (i) all Indebtedness of such Person for
borrowed money other than Funded Debt of such Person and (ii) Guaranties by such
Person of Current Debt of others; provided, however, that Current Debt shall not
include obligations under letters of credit and/or performance bonds incurred by
such Person in the ordinary course of business until drawn upon by the
beneficiary thereof and then, only to the extent (i) so drawn upon and (ii) such
Person has an unsatisfied reimbursement obligation with respect thereto, which
reimbursement obligation is of a character described in the foregoing clauses
(i) or (ii).
-00-
XX/XX Xxxxxxxxxxxxx, Inc. Note Agreement
"Default" shall mean any event or condition the occurrence of which would,
with the lapse of time or the giving of notice, or both, constitute an Event of
Default.
"Disposition" shall mean a sale, lease or other disposition of assets (other
than in the ordinary course of business) of the Company and its Restricted
Subsidiaries.
"Dutch Facility" shall mean the unsecured Dutch Guilder 50,000,000 Credit
Agreement, dated September 10, 1993, as amended, between BW/IP International
B.V. and Algemene Bank Nederland N.V. and the guaranty executed and delivered in
connection therewith by the Company.
"Environmental Law" shall mean any and all statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental restrictions of any
federal, state or local governmental authority within the United States of
America, or any state or territory thereof and which relate to the environment
or the release of any materials into the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA shall be construed to also refer to any successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that is,
along with the Company, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in section 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.
"ERISA Event" shall mean (i) the occurrence of a Reportable Event, unless
the 30-day notice requirement with respect thereto has been waived by the PBGC;
(ii) the provision by the administrator of any Plan of a notice of intent to
terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such
notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA); (iii) the cessation of operations at a facility in the circumstances
described in Section 4062(e) of ERISA; (iv) the withdrawal by the Company or an
ERISA Affiliate of the Company from a Multiple Employer Plan during a plan year
for which it was a substantial employer, as defined in Section 4001(a)(2) of
ERISA; (v) the failure by the Company or any ERISA Affiliate of the Company to
make a payment to a Plan required under Section 302(f)(1) of ERISA, which
Section imposes a lien for failure to make required payments; (vi) the adoption
of an amendment to a Plan requiring the provision of security to such Plan,
pursuant to Section 307 of ERISA; or (vii) the institution by the PBGC of
proceedings to terminate a Plan, pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition which, in the reasonable judgment of the
Company, might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, a Plan.
"Event of Default" shall have the meaning set forth in (S)6.1.
-00-
XX/XX Xxxxxxxxxxxxx, Inc. Note Agreement
"Funded Debt" of any Person shall mean, without duplication (i) all
Indebtedness of such Person for borrowed money or which has been incurred in
connection with the acquisition of assets in each case having a final maturity
of one or more than one year from the date of origin thereof (or which is
renewable or extendible at the option of the obligor for a period or periods
more than one year from the date of origin), including all payments in respect
thereof that are required to be made within one year from the date of any
determination of Funded Debt, whether or not the obligation to make such
payments shall constitute a current liability of the obligor under GAAP, (ii)
all Capitalized Rentals of such Person, and (iii) all Guaranties by such Person
of Funded Debt of others; provided, however, that Funded Debt shall not include
obligations under letters of credit and/or performance bonds incurred by such
Person in the ordinary course of business until drawn upon by the beneficiary
thereof and then, only to the extent (A) so drawn upon and (B) such Person has
an unsatisfied reimbursement obligation with respect thereto, which
reimbursement obligation is of a character described in the foregoing clauses
(i), (ii) or (iii).
"GAAP" shall mean generally accepted accounting principles at the time in
the United States, consistently applied.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (i) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of such Indebtedness or obligation, (y) to
maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, (iii) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make payment
of the Indebtedness or obligation, or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, a Guaranty in respect of any Capitalized Lease
shall be deemed to be Indebtedness equal to the Capitalized Rentals with respect
thereto which have been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
"Holding" shall mean BW/IP, Inc. (formerly known as BWIP Holding, Inc.), a
Delaware corporation of which the Company is a subsidiary, and any person who
succeeds to all, or substantially all, of the assets and business of BWIP
Holding, Inc.
"Indebtedness" of any Person shall mean and include all obligations of such
Person which in accordance with GAAP shall be classified upon a balance sheet of
such Person as
-29-
BW/IP International, Inc. Note Agreement
liabilities of such Person, and in any event shall include all
(i) obligations of such Person for borrowed money or which has been incurred in
connection with the acquisition of property or assets, (ii) obligations secured
by any Lien upon property or assets owned by such Person, even though such
Person has not assumed or become liable for the payment of such obligations,
(iii) obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person,
notwithstanding the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited to repossession
or sale of property, (iv) Capitalized Rentals and (v) Guaranties of obligations
of others of the character referred to in this definition.
"Institutional Holder" shall mean any insurance company, bank, savings and
loan association, trust company, investment company, charitable foundation,
employee benefit plan (as defined in ERISA) or other institutional investor or
financial institution that hereafter becomes a registered holder of a Note
pursuant to (S)9.1.
"Insufficiency" shall have the same meaning as in ERISA.
"Investments" shall mean all investments, in cash or by delivery of property
made, directly or indirectly in any Person, whether by acquisition of shares of
capital stock, indebtedness or other obligations or Securities or by loan,
advance, capital contribution or otherwise; provided, however, that
"Investments" shall not mean or include routine investments in property to be
used or consumed in the ordinary course of business.
"Joint Venture" shall mean a joint venture, partnership or other similar
arrangement, whether in corporate, partnership, limited liability company or
other legal form; provided that in no event shall any Subsidiary of any Person
be considered to be a Joint Venture.
"Lien" shall mean any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the purposes of this
Agreement, the Company or a Restricted Subsidiary shall be deemed to be the
owner of any property which it has acquired or holds subject to a conditional
sale agreement, Capitalized Lease or other arrangement pursuant to which title
to the property has been retained by or vested in some other Person for security
purposes and such retention or vesting shall constitute a Lien.
"Make-Whole Amount" shall mean in connection with any prepayment or
acceleration of the Notes of any series the excess, if any, of (i) the aggregate
present value as of the date of such prepayment of each dollar of principal
being prepaid (taking into account the application of such prepayment required
by (S)2.1) and the amount of interest (exclusive of interest accrued to the date
of prepayment) that would have been payable in respect of such
-30-
BW/IP International, Inc. Note Agreement
dollar if such prepayment had not been made, determined by discounting such
amounts at the Reinvestment Rate from the respective dates on which they would
have been payable, over (ii) 100% of the principal amount of the outstanding
Notes being prepaid. If the Reinvestment Rate is equal to or higher than 7.14%
in the case of any prepayment of the Series A Notes and 7.17% in the case of any
prepayment of the Series B Notes, the Make-Whole Amount shall be zero. For
purposes of any determination of the Make-Whole Amount:
"Reinvestment Rate" shall mean .50%, plus the arithmetic mean of the
yields under the respective headings "This Week" and "Last Week" published
in the Statistical Release under the caption "Treasury Constant Maturities"
for the maturity (rounded to the nearest month) corresponding to the
Weighted Average Life to Maturity of the principal being prepaid (taking
into account the application of such prepayment required by (S)2.1). If no
maturity exactly corresponds to such Weighted Average Life to Maturity,
yields for the published maturity next longer than the Weighted Average
Life to Maturity and for the published maturity next shorter than the
Weighted Average Life to Maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment Rate shall be
interpolated from such yields on a straight-line basis, rounding in each of
such relevant periods to the nearest month. For the purposes of calculating
the Reinvestment Rate, the most recent Statistical Release published prior
to the date of determination of the Make-Whole Amount shall be used.
"Statistical Release" shall mean the then most recently published
statistical release designated "H.15(519)" or any successor publication
which is published weekly by the Federal Reserve System and which
establishes yields on actively traded U.S. Government Securities adjusted
to constant maturities or, if such statistical release is not published at
the time of any determination hereunder, then such other reasonably
comparable index which shall be designated by the holders of 66-2/3% in
aggregate principal amount of the outstanding Notes of the series to be
prepaid, provided that it is understood that such holders will consult with
the Company prior to making such designation.
"Weighted Average Life to Maturity" of the principal amount of the
Notes of the series being prepaid shall mean, as of the time of any
determination thereof, the number of years obtained by dividing the then
Remaining Dollar-Years of such principal by the aggregate amount of such
principal. The term "Remaining Dollar-Years" of such principal shall mean
the amount obtained by (i) multiplying (x) the remainder of (1) the amount
of principal that would have become due on each scheduled payment date if
such prepayment had not been made, less (2) the amount of principal on the
Notes of the applicable series scheduled to become due on such date after
giving effect to such prepayment and the application thereof in accordance
with the provisions of (S)2.1, by (y) the number of years (calculated to
the nearest one-twelfth) which will elapse between the date of
determination and such scheduled payment date, and (ii) totalling the
products obtained in (i).
-00-
XX/XX Xxxxxxxxxxxxx, Inc. Note Agreement
"Material Adverse Effect" shall mean a material adverse effect,
individually or in the aggregate, upon (i) the business, operations, properties,
prospects, assets or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, or (ii) the ability of the Company to perform or
of the Purchasers to enforce the obligations and duties of the Company under the
Agreements and the Notes.
"Minority Interests" shall mean any shares of stock of any class of a
Consolidated Subsidiary (other than directors qualifying shares as required by
law) that are not owned by the Company and/or one or more of its Consolidated
Subsidiaries. Minority Interests shall be valued by valuing Minority Interests
constituting preferred stock at the voluntary or involuntary liquidating value
of such preferred stock, whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and surplus applicable
thereto adjusted, if necessary, to reflect any changes from the book value of
such common stock required by the foregoing method of valuing Minority Interests
in preferred stock.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA to which the Company or any ERISA Affiliate of the
Company is making, or is obligated to make, contributions or has within any of
the preceding five plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" shall mean a single employer plan, as defined in
Section 4001(a)(15) of ERISA, which (i) is maintained for employees of the
Company or an ERISA Affiliate of the Company and at least one Person other than
the Company and its ERISA Affiliates or (ii) was so maintained and in respect of
which the Company or an ERISA Affiliate of the Company could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or were to
be confirmed.
"Overdue Rate" shall mean the lesser of (a) the maximum interest rate
permitted by law and (b) the greater of (i) 9.14% in the case of the Series A
Notes and 9.17% in the case of the Series B Notes and (ii) the rate which Xxxxxx
Guaranty Trust Company of New York announces from time to time as its prime
lending rate, as in effect from time to time, plus 2%.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Plan" shall mean a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or any ERISA Affiliate of the Company
or as to which the Company or any ERISA Affiliate of the Company contributed or
is a member or otherwise may have any liability, other than a Multiemployer
Plan.
"Purchasers" shall have the meaning set forth in (S)1.1.
-00-
XX/XX Xxxxxxxxxxxxx, Inc. Note Agreement
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of the
property) payable by the Company or a Restricted Subsidiary, as lessee or
sublessee under a lease of real or personal property, but shall be exclusive of
any amounts required to be paid by the Company or a Restricted Subsidiary
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes and similar charges. Fixed rents under
any so-called "percentage leases" shall be computed solely on the basis of the
minimum rents, if any, required to be paid by the lessee regardless of sales
volume or gross revenues.
"Reportable Event" shall have the same meaning as in ERISA.
"Responsible Officer" of any Person shall mean the chief executive officer,
the chief operating officer, the chief financial officer, the chief accounting
officer, the chief legal officer of such Person or any individual designated by
such Person from time to time to receive notices.
"Restricted Investments" shall mean all Investments, other than Investments
described in clauses (a) through (o) of (S)5.14.
"Restricted Subsidiary" shall mean any Subsidiary (i) which is designated
as such on Annex A to Exhibit B hereto or designated as such in the most recent
written notice with respect to such Subsidiary given by the Company pursuant to
(S)5.23, and (ii) of which more than 80% (by number of votes) of the Voting
Stock is beneficially owned by the Company or by any Restricted Subsidiary.
"Security" shall have the same meaning as in Section 2(1) of the Securities
Act of 1933, as amended.
"Senior Funded Debt" shall mean all Consolidated Funded Debt, other than
Subordinated Funded Debt.
"Subordinated Funded Debt" shall mean all unsecured Funded Debt of the
Company which by its terms is junior in right of payment to other Funded Debt of
the Company.
The term "subsidiary" shall mean as to any particular parent corporation
any corporation of which more than 50% (by number of votes) of the Voting Stock
shall be beneficially owned, directly or indirectly, by such parent corporation.
The term "Subsidiary" shall mean a subsidiary of the Company.
"Unrestricted Subsidiary" shall mean any Subsidiary which is not a
Restricted Subsidiary.
"Voting Stock" shall mean Securities of any class or classes, the holders
of which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
-00-
XX/XX Xxxxxxxxxxxxx, Inc. Note Agreement
"Wholly-owned" when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors qualifying shares) and all Funded Debt and Current
Debt shall be owned by the Company and/or one or more of its Wholly-owned
Subsidiaries.
"Withdrawal Liability" shall have the same meaning given such term under
Part I of Subtitle E of Title IV of ERISA.
Section 8.2. Accounting Principles. Where the character or
amount of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, the same shall be done in accordance
with GAAP, to the extent applicable, except where such principles are
inconsistent with the requirements of this Agreement.
Section 8.3. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action in
question is taken directly or indirectly by such Person.
SECTION 9. MISCELLANEOUS.
Section 9.1. Registered Notes. The Company shall cause to be
kept at its principal office a register for the registration and transfer of the
Notes (hereinafter called the "Note Register") and the Company will register or
transfer or cause to be registered or transferred as hereinafter provided any
Note issued pursuant to this Agreement.
At any time and from time to time the registered holder of any Note which
has been duly registered as hereinabove provided may transfer such Note upon
surrender thereof at the principal office of the Company duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder of such Note or its attorney duly authorized in writing.
The Person in whose name any registered Note shall be registered shall be
deemed and treated as the owner and holder thereof for all purposes of this
Agreement. Payment of or on account of the principal, premium, if any, and
interest on any registered Note shall be made to or upon the written order of
such registered holder.
Section 9.2. Exchange of Notes. At any time and from time to
time, upon not less than ten days notice to that effect given by the holder of
any Note initially delivered or of any Note substituted therefor pursuant to
(S)9.1, this (S)9.2 or (S)9.3, and, upon surrender of such Note at its office,
the Company will deliver in exchange therefor, without expense to such holder,
except as set forth below, a Note of the same series for the same aggregate
principal amount as the then unpaid principal amount of the Note of the series
so surrendered, or Notes of the same series in the denomination of $500,000 or
any amount in excess thereof as such holder shall specify, dated as of the date
to which interest has been paid on the Note so surrendered or, if such surrender
is prior to the payment of any interest
-34-
BW/IP International, Inc. Note Agreement
thereon, then dated as of the date of issue, registered in the name of such
Person or Persons as may be designated by such holder, and otherwise of the same
form and tenor as the Notes so surrendered for exchange. The Company may require
the payment of a sum sufficient to cover any stamp tax or governmental charge
imposed upon such exchange or transfer.
Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of
evidence satisfactory to the Company of the loss, theft, mutilation or
destruction of any Note, and in the case of any such loss, theft or destruction
upon delivery of a bond of indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of such mutilation upon
surrender and cancellation of the Note, the Company will make and deliver
without expense to the holder thereof, a new Note of the same series, of like
tenor, in lieu of such lost, stolen, destroyed or mutilated Note. If the
Purchaser or any subsequent Institutional Holder is the owner of any such lost,
stolen or destroyed Note, then the affidavit of an authorized officer of such
owner, setting forth the fact of loss, theft or destruction and of its ownership
of such Note at the time of such loss, theft or destruction shall be accepted as
satisfactory evidence thereof and no further indemnity shall be required as a
condition to the execution and delivery of a new Note other than the written
agreement of such owner to indemnify the Company.
Section 9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees to pay
directly (i) your out-of-pocket expenses in connection with the preparation,
execution and delivery of this Agreement and the transactions contemplated
hereby, limited to the reasonable charges and disbursements of Xxxxxxx and
Xxxxxx, your special counsel, duplicating and printing costs and charges for
shipping the Notes, adequately insured to you at your home office or at such
other place as you may designate, expenses incurred in obtaining a Private
Placement Number from Standard & Poors Corporation with respect to the Notes
being purchased by you, and (ii) expenses relating to any amendment, waivers or
consents pursuant to the provisions hereof, including, without limitation, any
amendments, waivers, or consents resulting from any work-out, renegotiation or
restructuring relating to the performance by the Company of its obligations
under this Agreement and the Notes. The Company also agrees that it will pay
and save you harmless against any and all liability with respect to stamp and
other document taxes, if any, which may be payable or which may be determined to
be payable in connection with the execution and delivery of this Agreement or
the Notes, whether or not any Notes are then outstanding. The Company agrees to
protect and indemnify you against any liability for any and all brokerage fees
and commissions payable or claimed to be payable to any Person in connection
with the transactions contemplated by this Agreement, provided that you hereby
acknowledge that you have not retained any broker or agent in connection with
the transactions contemplated by this Agreement.
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative.
No delay or failure on the part of the holder of any Note in the exercise of any
power or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof, or
the exercise of any other power or right, and the rights and remedies of the
holder of any Note are cumulative to, and are not exclusive of, any rights or
remedies any such holder would otherwise have.
-00-
XX/XX Xxxxxxxxxxxxx, Inc. Note Agreement
Section 9.6. Notices. All communications provided for hereunder
shall be in writing and, if to you, delivered or mailed prepaid by registered or
certified mail or overnight air courier, or by facsimile communication, in each
case addressed to you at your address appearing on Schedule I to this Agreement
or such other address as you or the subsequent holder of any Note initially
issued to you may designate to the Company in writing, and if to the Company,
delivered or mailed by registered or certified mail or overnight air courier, or
by facsimile communication, to the Company at 000 Xxxxxxxxx Xxxxxxxxx, Xxxxx
000, Xxxx Xxxxx, Xxxxxxxxxx 00000, Attention: Treasurer or to such other
address as the Company may in writing designate to you or to a subsequent holder
of the Note initially issued to you; provided, however, that a notice to you by
overnight air courier shall only be effective if delivered to you at a street
address designated for such purpose in Schedule I, and a notice to you by
facsimile communication shall only be effective if made by confirmed
transmission to you at a telephone number designated for such purpose in
Schedule I, or, in either case, as you or a subsequent holder of any Note
initially issued to you may designate to the Company in writing.
Section 9.7. Successors and Assigns. This Agreement shall be
binding upon the Company and its successors and assigns and shall inure to your
benefit and to the benefit of your successors and assigns, including each
successive holder or holders of any Notes.
Section 9.8. Survival of Covenants and Representations. All
covenants, representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with the
Closing Date, shall survive the closing and the delivery of this Agreement and
the Notes.
Section 9.9. Severability. Should any part of this Agreement
for any reason be declared invalid or unenforceable, such decision shall not
affect the validity or enforceability of any remaining portion, which remaining
portion shall remain in force and effect as if this Agreement had been executed
with the invalid or unenforceable portion thereof eliminated and it is hereby
declared the intention of the parties hereto that they would have executed the
remaining portion of this Agreement without including therein any such part,
parts or portion which may, for any reason, be hereafter declared invalid or
unenforceable.
Section 9.10. Confidentiality. You agree that you will use your
best efforts not to disclose without the prior written consent of the Company
(other than to your directors, officers, employees, auditors, agents,
professional consultants or counsel whose function requires such access or to
another holder of the Notes) any information with respect to the Company or any
Restricted Subsidiary which is furnished pursuant to this Agreement and which is
designated by the Company to you in writing as confidential, provided that you
may disclose any such information (i) as has become generally available to the
public, (ii) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state or Federal regulatory body having or
claiming to have jurisdiction over you or to the National Association of
Insurance Commissioners or similar organizations or their successors, (iii) as
may be required or appropriate in response to any summons or subpoena or in
connection with any litigation, (iv) to the extent that you believe it
appropriate in order to protect your investment in the Notes or in order to
comply with any law, order,
-36-
BW/IP International, Inc. Note Agreement
regulation or ruling applicable to you or (v) to the prospective transferee in
connection with any contemplated transfer of any of the Notes by you.
Section 9.11. Governing Law. This Agreement and the Notes issued and
sold hereunder shall be governed by and construed in accordance with
Illinois law.
Section 9.12. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
-37-
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
BW/IP INTERNATIONAL, INC.
By /s/ XXXXX XXX
---------------------------
Its Xxxxx Xxx, Treasurer
Accepted as of November 15, 1996.
-38-
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES TO BE
OF PURCHASERS PURCHASED
MUTUAL OF OMAHA INSURANCE COMPANY $7,000,000
Mutual of Xxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Investment Division
Telefacsimile: (000) 000-0000
Confirmation: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"BW/IP International, Inc. 7.14% Senior Notes, Series A, due November 15,
2006, PPN 056045 A* 8, principal, premium or interest") to:
First National Bank Omaha
ABA #1040-00016
16th and Xxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
for credit to
Mutual of Omaha Insurance Company's
Account No. 26-743587
Notices
All notices and communications, to be addressed as first provided above,
except notices with respect to payments and written confirmation of each
such payment, to be addressed: Attention: Investments/Securities
Accounting.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. #00-0000000.
SCHEDULE I
(to Note Agreement)
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES TO BE
OF PURCHASERS PURCHASED
UNITED WORLD LIFE INSURANCE COMPANY $1,000,000
Mutual of Xxxxx Xxxxx
Xxxxx, XX 00000-0000
Attn: Investment Division
Telefacsimile:
Confirmation:
Payments:
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"BW/IP International, Inc. 7.14% Senior Notes, Series A, Due November 15,
2006 , PPN 056045 A* 8 principal, premium or interest") to:
First Bank, N.A.
ABA #0000-0000-0
00xx & Xxxxxx Xxxxxxx
Xxxxx, XX 00000
for credit to
United World Life Insurance Company
Account No. 1-487-0167-0397
Attn: P&I Department
Notices
All notices and communications, to be addressed as first provided
above, except notices with respect to payments and written
confirmation of each such payment, to be addressed: Attention:
Investments/Securities Accounting.
Name of Nominee in which Notes are to be issued: None.
Taxpayer I.D. #00-0000000
I-2
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES TO BE
OF PURCHASERS PURCHASED
COMPANION LIFE INSURANCE COMPANY $1,000,000
Mutual of Xxxxx Xxxxx
Xxxxx, XX 00000-0000
Attn: Investment Division
Telefacsimile:
Payments:
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"BW/IP International, Inc. 7.14% Senior Notes, Series A, Due November 15,
2006, PPN 056045 A* 8 principal, premium or interest") to:
Bank of New York
ABA #000000000
000 Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
for credit to
Companion Life Insurance Company
Account No. 111566 Income Collection
Notices
All notices and communications, except with respect to payments, to be
addressed as first provided above with a duplicate copy to the address set
forth below. Notices with respect to payments and written confirmation of
each such payment, to be addressed: Attention: Investments/Securities
Accounting with duplicate copy to:
Companion Life Insurance Company
000 Xxxxxxxx Xxxxx Xxxxxx
Xxx, Xxx Xxxx 00000-0000
Attn: Financial Division
Name of Nominee in which Notes are to be issued: HARE & Co.
Taxpayer I.D. #00-0000000
I-3
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES TO BE
OF PURCHASERS PURCHASED
UNITED OF OMAHA LIFE INSURANCE COMPANY $10,000,000
Mutual of Xxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Investment Division
Telefacsimile: (000) 000-0000
Confirmation: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"BW/IP International, Inc. 7.14% Senior Notes, Series A, due November 15,
2006, PPN 056045 A* 8, principal, premium or interest") to:
First Bank, N.A.
ABA #0000-0000-0
00xx & Xxxxxx Xxxxxxx
Xxxxx, Xxxxxxxx 00000
for credit to
United of Omaha Life Insurance Company
Account No. 0-0000000-0000
Notices
All notices and communications, to be addressed as first provided above,
except notices with respect to payment, and written confirmation of each
such payment,to be addressed: Attention: Investments/ Securities
Accounting.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. #00-0000000.
I-4
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES TO BE
OF PURCHASERS PURCHASED
BERKSHIRE LIFE INSURANCE COMPANY $2,000,000
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Securities Department
Telefacsimile (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as BW/IP
International, Inc. 7.14% Senior Notes, Series A, due 2006, PPN 056045 A* 8,
principal or interest") to:
The Chase Manhattan Bank, N.A. (ABA #000000000)
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
for credit to: Berkshire Life Insurance Company
Account Number 002-4-020877
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. #00-0000000
I-5
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES B NOTES TO BE
OF PURCHASERS PURCHASED
TRANSAMERICA LIFE INSURANCE AND $9,000,000
ANNUITY COMPANy
c/o Transamerica Investment Services
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxxx
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as BW/IP
International, Inc. 7.14% Senior Notes, Series A, due November 15, 2006, PPN
056045 A* 8, principal or interest") to:
Federal Reserve Bank of Boston
Boston Safe Deposit & Trust
Boston, Massachusetts
ABA 000-000-000
Acct#: 12-526-1
FFC: Cost Center 1253
Re: Mellon Securities
Transamerica Life Insurance and Annuity Company (IMS)
Account No. TRAF 0000000
Ref: Cusip and Description
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment
and all account statements, to:
Transamerica Life Companies
P. O. Box 2101 - Securities Accounting
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
I-6
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES B NOTES TO BE
OF PURCHASERS PURCHASED
NATIONWIDE LIFE INSURANCE COMPANY $20,000,000
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000-0000
Telefacsimile: (000) 000-0000
Payments
All payments on or in respect of the Notes to be
by bank wire transfer of Federal or other
immediately available funds (identifying each
payment as "BW/IP International, Inc. 7.17%
Senior Notes, Series B, due March 31, 2007,
PPN 056045 A@ 6, principal, premium or interest")
to:
The Bank of New York
ABA #000-000-000
BNF: IOC566
F/A/O: Nationwide Life Insurance Company
Attn: P&I Department
Notices
All notices concerning payment on or in respect of the Notes to:
Nationwide Life Insurance Company
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000-0000
Attention: Investment Accounting
All notices and communications other than those in respect to
payments to be addressed:
Nationwide Life Insurance Company
Xxx Xxxxxxxxxx Xxxxx - (0-00-00)
Xxxxxxxx, Xxxx 00000-0000
Attention: Corporate Fixed-Income Securities
Name of Nominee in which Notes are to be issued: None
Tax I.D. #00-0000000
I-7
SCHEDULE II
Investments Existing as of the
Closing Date
$13,000,000 time deposits
The Company has an equity interest in the Subsidiaries listed in Annex A to
Exhibit B:
The Company has an equity interest in the Joint Ventures listed as follows:
JURISDICTION OF PERCENTAGE OF
NAME OF JOINT VENTURE INCORPORATION OWNERSHIP
Ebara-Xxxxx Xxxxxxx, Ltd. Japan 50%
Hyosung-Ebara Co., Ltd. Korea 5%
BW/IP-XX Xxxxxxxx
Services Company Ltd. United Arab Emirates 49%
SCHEDULE II
(to Note Agreement)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"). ANY SALE, TRANSFER OR OTHER DISPOSITION OF THIS NOTE
(OTHER THAN TO THE ISSUER HEREOF) MAY BE MADE ONLY IF MADE (A) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (B) PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
BW/IP INTERNATIONAL, INC.
7.14% Senior Note, Series A,
Due November 15, 2006
PPN: 056045 A* 8
No.
, 19
$ ------- --
BW/IP International, Inc., a Delaware corporation (the "Company"), for value
received, hereby promises to pay to
or registered assigns
on the fifteenth day of November, 2006
the principal amount of
DOLLARS ($ )
--------
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 7.14% per annum from the date hereof until maturity, payable
semiannually on the fifteenth day of each May and November in each year
(commencing May 15, 1997) and at maturity. The Company agrees to pay interest
on overdue principal (including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally enforceable) on any
overdue installment of interest, at the Overdue Rate (as defined in the Note
Agreements hereinafter referred to) after the due date, whether by acceleration
or otherwise, until paid. Both the principal hereof and interest hereon are
payable at the principal office of Bank of America Illinois in Chicago, Illinois
in coin or currency of the United States of America which at the time of payment
shall be legal tender for the payment of public and private debts.
This Note is one of the 7.14% Senior Notes due November 15, 2006 (the "Series A
Notes") of the Company in the aggregate principal amount of $30,000,000 issued
together
EXHIBIT A-1
(to Note Agreement)
with the 7.17% Senior Notes, Series B, due March 31, 2007 in the aggregate
principal amount of $20,000,000 (the Series A Notes together with the Series B
Notes, the "Notes") pursuant to the terms and provisions of the separate Note
Agreements, each dated as of November 15, 1996 (the "Note Agreements"), entered
into by the Company with the original Purchasers therein referred to and this
Note and the holder hereof are entitled equally and ratably with the holders of
all other Notes outstanding under the Note Agreements to all the benefits
provided for thereby or referred to therein. Reference is hereby made to the
Note Agreements for a statement of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreements may be
declared due prior to their expressed maturity dates and certain prepayments are
required to be made thereon, all in the events, on the terms and in the manner
and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of the
Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreements.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, premium, if any, and interest on this
Note shall be made only to or upon the order in writing of the registered
holder.
This Note and the Note Agreement are governed by and construed in
accordance with Illinois law.
BW/IP INTERNATIONAL, INC.
By
-----------------------
Its
A-1-2
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"). ANY SALE, TRANSFER OR OTHER DISPOSITION OF THIS NOTE
(OTHER THAN TO THE ISSUER HEREOF) MAY BE MADE ONLY IF MADE (A) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (B) PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
BW/IP INTERNATIONAL, INC.
7.17% Senior Note, Series B
Due March 31, 2007
PPN: 056045 A@ 8
No.
, 19
--------- --
$
BW/IP International, Inc., a Delaware corporation (the "Company"), for
value received, hereby promises to pay to
or registered assigns
on the thirty-first day of March, 2007
the principal amount of
DOLLARS ($ )
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 7.17% per annum from the date hereof until maturity, payable
semiannually on the fifteenth day of each May and November in each year
(commencing May 15, 1997) and at maturity. The Company agrees to pay interest
on overdue principal (including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally enforceable) on any
overdue installment of interest, at the Overdue Rate (as defined in the Note
Agreements hereinafter referred to) after the due date, whether by acceleration
or otherwise, until paid. Both the principal hereof and interest hereon are
payable at the principal office of Bank of America Illinois in Chicago, Illinois
in coin or currency of the United States of America which at the time of payment
shall be legal tender for the payment of public and private debts.
This Note is one of the 7.17% Senior Notes, Series B, due November 15, 2007
(the "Series B Notes") of the Company in the aggregate principal amount of
$20,000,000 issued
EXHIBIT A-2
(to Note Agreement)
together with the 7.14% Senior Notes, Series A, due November 15, 2006 in the
aggregate principal amount of $30,000,000 (the Series B Notes and together with
the Series A Notes the "Notes") under and pursuant to the terms and provisions
of the separate Note Agreements, each dated as of November 15, 1996 (the "Note
Agreements"), entered into by the Company with the original Purchasers therein
referred to and this Note and the holder hereof are entitled equally and ratably
with the holders of all other Notes outstanding under the Note Agreements to all
the benefits provided for thereby or referred to therein. Reference is hereby
made to the Note Agreements for a statement of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreements may be
declared due prior to their expressed maturity dates and certain prepayments are
required to be made thereon, all in the events, on the terms and in the manner
and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of the
Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreements.
This Note is registered on the books of the Company and is transferable only
by surrender thereof at the principal office of the Company duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder of this Note or its attorney duly authorized in writing. Payment of or on
account of principal, premium, if any, and interest on this Note shall be made
only to or upon the order in writing of the registered holder.
This Note and the Note Agreement are governed by and construed in accordance
with Illinois law.
BW/IP INTERNATIONAL, INC.
By
----------------------
Its
A-2-2
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to you as follows:
1. Subsidiaries. Annex A attached hereto states the name of each
of the Companys Subsidiaries, its jurisdiction of incorporation and the
percentage of its Voting Stock owned by the Company and/or its Subsidiaries.
Those Subsidiaries listed in Section 1 of said Annex A constitute Restricted
Subsidiaries. The Company and each Subsidiary has good and marketable title to
all of the shares it purports to own of the stock of each Subsidiary, free and
clear in each case of any Lien. All such shares have been duly issued and are
fully paid and non-assessable.
2. Due Incorporation, Etc. Each of the Company and its Restricted
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction indicated next to such corporations
name on Annex A hereto as supplemented and has all requisite corporate power and
authority to own or lease and operate its properties and to carry on its
business as now conducted, and, with respect to the Company, to execute and
deliver, and to perform all of its obligations under the Agreements and the
Notes. Each of the Company and its Subsidiaries is duly qualified or licensed
to do business as a foreign corporation in good standing in all jurisdictions in
which it owns or leases assets and property or in which the conduct of its
business requires it to so qualify or be licensed, except where the failure to
so qualify or be licensed would not have a Material Adverse Effect.
3. Authorization of Borrowing, Etc. (a) Authorization of
Borrowing, No Conflict. The execution, delivery and performance by the Company
of the Agreements, the payment and performance of all obligations thereunder,
and the issuance, delivery and payment of the Notes and the consummation of the
transactions contemplated by the Agreements and the Notes are within the
Companys corporate powers, have been duly authorized by all necessary corporate
action by the Company, do not contravene (i) the Companys certificate of
incorporation or by-laws, or (ii) any law, rule, regulation (including, without
limitation, Regulation G, T or X of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree, determination or
award or any contractual restriction binding on or affecting the Company or any
Restricted Subsidiary or any of the properties of any of them, and do not result
in or require the creation of any Lien upon or with respect to any of its
properties; neither the Company nor any of its Subsidiaries is in default under
any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination, award or restriction, in any respect which is likely to have a
Material Adverse Effect.
(b) Governmental Consents. No authorization, consent, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is currently or is reasonably expected to be required on the
part of the Company for the due execution, delivery or performance by the
Company of the Agreements and the Notes, the payment and performance of the
obligations incurred thereunder by the Company, and the
EXHIBIT B
(to Note Agreement)
issuance, delivery and payment of the Notes and the consummation of the
transactions contemplated by the Agreements and the Notes, except such
authorizations, consents, approvals, other actions, notices or filings which, if
not obtained, either (i) would not adversely affect the ability of the Company
to perform the transactions contemplated by the Agreements and the Notes, or
(ii) would not have a Material Adverse Effect.
(c) Due Execution and Delivery; Binding Obligations. The Agreements
and the Notes have been, or upon execution will be, duly executed and delivered
by the Company, and the obligations incurred thereunder are, or upon execution
will be, legally valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms.
4. Business and Property. You have heretofore been furnished with
a copy of the Confidential Private Placement Memorandum, dated October, 1996
(the "Memorandum") prepared by BA Securities, Inc., which generally sets forth
the business conducted by the Company and its Subsidiaries and the principal
properties of the Company and its Subsidiaries.
5. Financial Condition. The consolidated balance sheets of the
Company and its Subsidiaries as of December 31 in each of the years 1991 and
1995 and the related consolidated statements of income and cash flows for the
fiscal years ending on such dates, copies of which have been furnished to each
Purchaser, each accompanied by a report thereon containing an opinion
unqualified as to scope limitations imposed by the Company and otherwise without
qualification except as therein noted, by Price Waterhouse LLP were prepared in
conformity with GAAP. All such financial statements fairly present the
consolidated financial position of the Company and its Subsidiaries as at the
respective dates thereof and the consolidated results of operations and cash
flows of the Company and its Subsidiaries for each of the periods covered
thereby, subject, in the case of any unaudited interim financial statements, to
changes resulting from normal year-end adjustments and since December 31, 1995
there has been no material adverse change in the business, condition (financial
or otherwise), operations or properties of the Company or the Company and its
Subsidiaries taken as a whole.
6. Absence of Litigation; Litigation Description. No actions,
suits, investigations, litigation or proceedings are pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its Subsidiaries or the properties of the Company or any such Subsidiary before
any court, arbitrator or governmental agency, department, commission, board,
bureau or instrumentality, domestic or foreign, (a) that would have a Material
Adverse Effect, or (b) which purports to affect the legality, validity or
enforceability of the Agreements or the Notes.
7. Payment of Taxes. The Company and each of its Subsidiaries have
filed or caused to be filed all material tax returns (Federal, state, local and
foreign) required to be filed and paid all material amounts of taxes shown
thereon to be due, including interest and penalties, except for (a) such taxes
as are being contested in good faith and by proper proceedings and with respect
to which appropriate reserves are being maintained by the
B-2
Company or any such Subsidiary, as the case may be or (b) those the failure to
pay which would not have a Material Adverse Effect. The consolidated tax returns
of the Company and its consolidated Subsidiaries have been audited through
December 31, 1992 for Federal income tax purposes. The provisions for taxes on
the books of the Company and each Subsidiary are adequate for all open years,
and for its current fiscal period.]
8. Governmental Regulation. The Company is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940,
each as amended, or to any Federal or state statute or regulation limiting its
ability to incur indebtedness for money borrowed. No Subsidiary is subject to
any regulation that would limit the ability of the Company to enter into or
perform its obligations under the Agreements or the Notes.
9. Not a Purpose Credit. The Company and its Subsidiaries are not
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation G, T or X issued by the
Board of Governors of the Federal Reserve System) and no proceeds from the sale
of the Notes will be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin stock.
None of the Indebtedness of the Company incurred under the Note Agreements or
the Notes is secured either directly or indirectly by margin stock.
10. ERISA. (a) No ERISA Event which might result in liability to
PBGC (other than for premiums payable under Title IV of ERISA) has occurred or
is reasonably expected to occur with respect to any Plan.
(b) Schedule B (Actuarial Information) to the December 31, 1995
annual report (Form 5500 Series) for each Plan, copies of which have been filed
with the Internal Revenue Service and furnished to the Purchasers, is complete
and accurate and fairly presents the funding status of such Plan, and since the
date of such Schedule B there has been no material adverse change in such
funding status.
(c) Neither the Company nor any ERISA Affiliate of the Company has
incurred, or is reasonably expected to incur, any Withdrawal Liability to any
Multiemployer Plan.
(d) Neither the Company nor any ERISA Affiliate of the Company has
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of Title IV
of ERISA, and no Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated within the meaning of Title IV of ERISA.
(e) The consummation of the transactions provided for in the
Agreements and compliance by the Company with the provisions thereof and the
Notes issued thereunder will not involve any prohibited transaction within the
meaning of ERISA or Section 4975 of the Code.
B-3
(f) No Plan maintained by the Company or any ERISA Affiliate of the
Company, nor any trust created thereunder, has incurred any "accumulated funding
deficiency" as defined in Section 302 of ERISA. Neither the Company nor any
ERISA Affiliate of the Company has any contingent liability with respect to any
post-retirement "welfare benefit plan" (as such term is defined in ERISA) except
as has been disclosed to the Purchasers.
11. Disclosure. No representation or warranty of the Company
contained in the Agreements (including any Schedule or Exhibit furnished in
connection therewith), the financial statements referred to in paragraph 5, the
Memorandum or any other document, certificate or written statement furnished to
any Purchaser by or on behalf of the Company for use in connection with the
transactions contemplated by the Agreements contains any untrue statement of a
material fact or omits to state a material fact (known to the Company in the
case of any documents not furnished by it) necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances under which the same were made. The projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by the Persons responsible for preparing such
projections and pro forma financial information to be reasonable at the time
made, it being recognized by the Purchasers that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected
results. There are no facts known to the Company (other than matters of a
general economic nature) that have had or could reasonably be expected to have a
Material Adverse Effect that have not been disclosed herein or in the other
documents, certificates and written statements referred to in this paragraph 11.
12. Insurance. The Company and its Subsidiaries have in full force
insurance coverage of their respective properties, assets and business
(including casualty, general liability, products liability and business
interruption insurance) that is (i) no less protective in any material respect
than the insurance the Company and its Subsidiaries have carried in accordance
with their past practices, (ii) prudent given the nature of the business of the
Company and its Subsidiaries and the prevailing practice among companies
similarly situated and (iii) in compliance with the provisions of (S)5.7 of the
Agreements.
13. Environmental Matters. (a) The Company and each of its
Subsidiaries is in compliance in all respects with all Environmental Laws the
non-compliance with which can reasonably be expected to have a Material Adverse
Effect and (b) there has been no "release or threatened release of a hazardous
substance" (as defined by the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, 42 U.S.C. (S)9601 et seq.) or any other
release, emission or discharge into the environment of any hazardous or toxic
substance, pollutant or other materials from the Companys or its Subsidiaries
property other than as permitted under applicable Environmental Law and other
than those which would not have a Material Adverse Effect. Other than disposals
for which the Company has been indemnified in full or that certain disposal for
which the Company has been partially indemnified by Xxxx-Xxxxxx Corporation and
for which the Company has made adequate reserves, all "hazardous waste" (as
defined by the Resource Conservation and Recovery Act, 42 U.S.C. (S)6901 et seq.
(1976) and the regulations
B-4
thereunder, 40 CFR Part 261 ("RCRA")) generated at the Companys or any
Subsidiaries properties and removed for disposal has in the past been and shall
continue to be disposed of at sites which maintain valid permits under RCRA and
any applicable state or local Environmental Law.
14. Performance of Agreements. No Default or Event of Default has
occurred and is continuing. Neither the Company nor any of its Subsidiaries is
in default in the performance, observance or fulfillment of any of the
obligations, covenants, or conditions contained in any other contractual
obligation of the Company or of such Subsidiary, except where the consequences,
direct or indirect, of such default or defaults, if any, has not had and could
not reasonably be expected to have a Material Adverse Effect and no condition
exists that, with the giving of due notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default, if any, has not had and could not be reasonably be expected to
have a Material Adverse Effect.
15. Indebtedness; Liens. Annex B attached hereto correctly
describes all Current Debt, Funded Debt and Capitalized Leases of the Company
and its Restricted Subsidiaries outstanding on September 30, 1996. Neither the
Company nor any of its Restricted Subsidiaries has granted any Liens securing
Current Debt or Funded Debt since September 30, 1996.
16. Title to Properties. The Company and each Restricted Subsidiary
has good and sufficient title to all material parcels of real property and has
good title to all the other material items of property it purports to own,
including that reflected in the most recent balance sheet referred to in
paragraph 5 hereof, except as sold or otherwise disposed of in the ordinary
course of business and except for Liens permitted by the Agreements.
17. Patents and Trademarks. The Company and each Restricted
Subsidiary owns or possesses all the patents, trademarks, trade names, service
marks, copyright, licenses and rights necessary for the present and planned
future conduct of its business, without any known conflict with the rights of
others.
18. Use of Proceeds. The net proceeds from the sale of the Notes
will be used by the Company to prepay indebtedness and for general corporate
purposes.
19. Private Offering. Neither the Company, directly or indirectly,
nor any agent on its behalf has offered or will offer the Notes or any similar
Security or has solicited or will solicit an offer to acquire the Notes or any
similar Security from or has otherwise approached or negotiated or will approach
or negotiate in respect of the Notes or any similar Security with any Person
other than the Purchasers and not more than 45 other institutional investors,
each of whom was offered a portion of the Notes at private sale for investment.
Neither the Company, directly or indirectly, nor any agent on its behalf has
offered or will offer the Notes or any similar Security or has solicited or will
solicit an offer to acquire the Notes or any similar Security from any Person so
as to bring the issuance and sale of the Notes within the provisions of Section
5 of the Securities Act of 1933, as amended.
B-5
SUBSIDIARIES OF THE COMPANY
1. RESTRICTED SUBSIDIARIES:
PERCENTAGE
OF VOTING STOCK
NAME OF JURISDICTION OF OWNED BY COMPANY AND
SUBSIDIARY INCORPORATION EACH OTHER SUBSIDIARY
BW/IP-New Mexico, Inc. Delaware 100%
BW/IP International (Bardados), Ltd. Barbados 100%
BW/IP International IP, Inc. California 100%
BW/IP International of Oklahoma, Inc. Oklahoma 100%
BW/IP International of Pennsylvania, Inc. Pennsylvania 100%
BW/IP International (GP), Inc. California 100%
BW/IP International (LP), Inc. California 100%
Xxxxx Xxxxxxx Argentina I.C.S.A Argentina 51%
BW/IP International Ltd. Canada 100%
BW/IP International S.A.R.L. France 100%
BW/IP International GmbH Germany 100%
BW/IP International B.V. Holland 100%
PT BW Mechanical Seals Indonesia Indonesia 75%
BW/IP International, s.f.a Italy 100%
BW Mechanical Xxxxx X.X. Japan 100%
Xxxxx Xxxxxxx K.K. Japan 100%
BW Mechanical Seals (Malaysia) Sdn Bhd Malaysia 70%
Xxxxx Xxxxxxx Co., S.A de C.V. Mexico 100%
BW/Abahsain Seal Company Limited Saudi Arabia 60%
BW Mechanical Seals (S.E.A.) Pte. Ltd. Singapore 100%
BW/IP International S.A. Spain 100%
BW/IP-SIAM Co., Ltd. Thailand 60%
BW/IP International Limited United Kingdom 100%
BW/IP de Venezuela S.A. Venezuela 100%
BW/IP International S.A. Belgium 100%
XX/XX Xxxxxxx Xxxxx XxxX & Xx. XX Xxxxxxx 100%
BW/IP Services B.V. Holland 100%
BW/IP Pacific Dichtungstechnik AG Switzerland 100%
BW/IP Pacific Wietz Verwaltungs GmbH Germany 100%
BW/IP Pacific Wietz Dichtungstechnik GmbH Austria 100%
ANNEX A
(to Closing Certificate)
2. SUBSIDIARIES (OTHER THAN RESTRICTED SUBSIDIARIES):
NAME OF SUBSIDIARY
None
DESCRIPTION OF DEBT AND LEASES
1. Current Debt of the Company and its Restricted Subsidiaries outstanding on
September 30, 1996 is as follows:
OUTSTANDING PRINCIPAL
DESCRIPTION AMOUNT
Yen Loan from affiliate, matured 10/31/96 $898,000
Yen short term loan,
Total line (Yen)100 million $135,000
Bolivian short term loan,
Total line $500,000 $ 74,000
2. Funded Debt (other than Capitalized Rentals) of the Company and its
Restricted Subsidiaries outstanding on September 30, 1996 is as follows:
OUTSTANDING PRINCIPAL
DESCRIPTION AMOUNT
$100 million credit line
Maturing 12/1/2000 $66,500,000
7.92% senior notes: face amount of $50 million;
payable $8,333,333 in each of 1997, 1998
and 1999; interest payable semi-annually $25,000,000
3. Capitalized Leases of the Company and its Restricted Subsidiaries
outstanding on September 30, 1996 are as follows:
Various leases for machinery and equipment which have Capitalized
Rentals owing thereunder in the aggregate amount of $143,000.
ANNEX B
(to Closing Certificate)
DESCRIPTION OF SPECIAL COUNSELS CLOSING OPINION
The closing opinion of Xxxxxxx and Xxxxxx, special counsel to the Purchasers,
called for by (S)4.1(b) of the Note Agreements, shall be dated the applicable
Closing Date and addressed to the Purchasers, shall be satisfactory in form and
substance to the Purchasers and shall be to the effect that:
1. The Company is a corporation, validly existing and in good
standing under the laws of the State of Delaware and has the corporate power
and the corporate authority to execute and deliver the Note Agreements and to
issue the Notes.
2. The Note Agreements have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed and
delivered by the Company and constitute the legal, valid and binding
obligations of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law).
3. The Notes issued on such Closing Date have been duly authorized
by all necessary corporate action on the part of the Company, have been duly
executed and delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent conveyance or similar
laws affecting creditors rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreements do not, under existing law,
require the registration of the Notes under the Securities Act of 1933, as
amended, or the qualification of an indenture under the Trust Indenture Act
of 1939, as amended.
The opinion of Xxxxxxx and Xxxxxx shall also state that the opinion of Xxxx
X. Xxxxx, Principal Counsel to the Company, is satisfactory in scope and form to
Xxxxxxx and Xxxxxx and that, in their opinion, the Purchasers are justified in
relying thereon.
In rendering the opinion set forth in paragraph 1 above, Xxxxxxx and Xxxxxx
may rely solely upon an examination of the Certificate of Incorporation
certified by, and a certificate of good standing of the Company from, the
Secretary of State of the State of Delaware and the By-laws of the Company.
With respect to matters of fact upon which such opinion is based, Xxxxxxx and
Xxxxxx may rely on appropriate certificates of public officials and officers of
the Company.
EXHIBIT C
(to Note Agreement)
DESCRIPTION OF CLOSING OPINION
OF PRINCIPAL COUNSEL TO THE COMPANY
The closing opinion of Xxxx X. Xxxxx, Esq., Principal Counsel for the
Company, which is called for by (S)4.1(b) of the Note Agreements, shall be dated
the applicable Closing Date and addressed to the Purchasers, shall be
satisfactory in scope and form to the Purchasers and shall be to the effect
that:
1. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, with corporate
power and authority under the laws of such State to own and operate its
properties and conduct its business as now conducted.
2. The Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of the States
of California, Connecticut, Illinois, New Mexico, Oklahoma and Texas.
3. The Company has the corporate power and authority to execute
and perform the Note Agreements and to issue the Notes.
4. The Note Agreements have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed and
delivered by the Company and constitute the legal, valid and binding contracts
of the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
creditors rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law).
5. The Notes issued on such Closing Date have been duly authorized
by all necessary corporate action on the part of the Company, have been duly
executed and delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law).
6. No approval, consent or withholding of objection on the part of,
or filing, registration or qualification with, any governmental body, Federal or
state, is necessary in connection with the execution and delivery of the Note
Agreements or the Notes issued on such Closing Date.
7. The issuance and sale of the Notes issued on such Closing Date
and the execution, delivery and performance by the Company of the Note
Agreements do not conflict with or result in any breach of any of the provisions
of or constitute a default under or result in the creation or imposition of any
Lien upon any of the property of
EXHIBIT D
(to Note Agreement)
the Company pursuant to the provisions of the Certificate of Incorporation
or By-laws of the Company or any agreement or other instrument known to such
counsel to which the Company is a party or by which the Company may be
bound.
8. The issuance, sale and delivery of the Notes issued on such
Closing Date under the circumstances contemplated by the Note Agreements do
not, under existing law, require the registration of the Notes issued on
such Closing Date under the Securities Act of 1933, as amended, or the
qualification of an indenture under the Trust Indenture Act of 1939, as
amended.
9. Neither the purchase of the Notes issued on such Closing Date
nor the use by the Company of all or any portion of the proceeds of the sale
of the Notes issued on such Closing Date will violate Section 7 of the
Securities Exchange Act of 1934, as amended, or applicable regulations
including without limitation, Regulations G, T and X of the Board of
Governors of the Federal Reserve System (12 C.F.R. Chapter II), and it is
not necessary for the Purchasers to obtain a statement in conformity with
requirements of Federal Reserve Form G-3 under said Regulations in
connection with such sale.
The opinion of Xxxx X. Xxxxx shall cover such other matters relating to the
sale of the Notes as the Purchasers may reasonably request. With respect to
matters of fact on which such opinion is based, such counsel shall be entitled
to rely on appropriate certificates of public officials and officers of the
Company.
D-2
