LADISH CO., INC.
SERIES B TERMS AGREEMENT TO NOTE PURCHASE AGREEMENTS
Dated as of May 16, 2006
Re: $40,000,000 6.14% Senior Notes, Series B, Due May 16, 2016
TABLE OF CONTENTS
(Not a part of this Series B Terms Agreement) SECTION HEADING PAGE
1. AUTHORIZATION OF SERIES B NOTE 1
2. SALE AND PURCHASE OF SERIES B NOTES 1
3. CLOSING 2
4. USE OF PROCEEDS 2
5. REPAYMENT PROVISIONS GENERALLY 2
6. INCORPORATION OF AGREEMENT 2
7. CONDITIONS TO CLOSING 2
8. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 3
9. REQUIRED PREPAYMENTS 3
10. MAKE-WHOLE AMOUNT FOR THE SERIES B NOTES 3
11. REPRESENTATIONS AND WARRANTIES OF THE SERIES B PURCHASERS 5
12. GOVERNING LAW 5
SCHEDULE A - Series B Purchaser Information
EXHIBIT 1 - Form of 6.14% Senior Note, Series B, due May 16, 2016
EXHIBIT A - Supplemental Representations and Warranties - - SCHEDULE 5.4 - Subsidiaries, Affiliates, Directors and Officers
- - SCHEDULE 5.5 - Financial Statements
- - SCHEDULE 5.15 - Indebtedness
EXHIBIT B-1 - Conformed copy of Note Purchase Agreements dated as of July 20, 2001
EXHIBIT B-2 - Conformed copy of First Amendment dated as of May 15, 2006, to Note Purchase Agreements
SERIES B TERMS AGREEMENT
THIS Series B Terms Agreement made and entered into as of this 16th day of May, 2006 (this " Series B Terms Agreement" ), by and between LADISH CO., INC., a Wisconsin corporation (the " Company" ), and each of the Purchasers named in Schedule A hereto (the " Series B Purchasers" ), respectively;
WHEREAS, the Company and the respective purchasers listed on Schedule A thereto have entered into the separate and several Note Purchase Agreements, each dated as of July 20, 2001, as amended by a First Amendment thereto dated as of May 15, 2006 (as so amended, the " Original Agreement" ), conformed copies of each of which are attached hereto as Exhibits B-1 and B-2, respectively (and as such Original Agreement is further amended or supplemented from time to time, the " Agreement" ); and
WHEREAS, the Company desires to issue and sell, and the Series B Purchasers desire to purchase, an additional series of unsecured promissory notes (Series B) in accordance with the terms specified below;
NOW, THEREFORE, subject to compliance with all of the closing conditions of Section 4 of the Agreement, the parties signatory hereto agrees as follows:
1. Authorization of Series B Notes . The Company will authorize the issuance and sale of $40,000,000 aggregate principal amount of its 6.14% Senior Notes, Series B, due May 16, 2016 (the " Series B Notes" ), to be dated the date of issue, to bear interest from such date at the rate of 6.14% per annum, payable semi-annually, on the 16th day of each May and November in each year (commencing November 16, 2006) and at maturity and to bear interest on overdue principal (including any overdue prepayment of principal) and premium, if any, and (to the extent legally enforceable) on any overdue installment of interest at the rate per annum from time to time equal to the greater of (i) 8.14% or (ii) 2% over the rate of interest publicly announced by U.S. Bank National Association from time to time in Milwaukee, Wisconsin as its " base" or " prime" rate. The Series B Notes will mature on May 16, 2016 and will be substantially in the form of Exhibit 1 attached to this Series B Terms Agreement. The term " Series B Note" as used herein shall include any and all of the 6.14% Series B Notes delivered pursuant to this Series B Terms Agreement and any Series B Notes issued in substitution therefor pursuant to Section 13 of the Agreement.
2. Sale and Purchase of Series B Notes . The Company will issue and sell to the Series B Purchasers, and the Series B Purchasers will purchase from the Company on the Closing Date (as hereinafter defined), the Series B Notes of the Company in the aggregate principal amount set forth opposite their respective names on Schedule A attached hereto as a price of 100% of the principal amount thereof. Ladish Co., Inc. Series B Terms Agreement to Note Purchase Agreements
3. Closing. Delivery of the Series B Notes will be made at the offices of Chapman and Cutler LLP, 111 West Monroe Street, Chicago, Illinois 60603 against payment therefor in Federal or other funds current and immediately available for credit to the Company' s account at JPMorgan Chase Bank, N.A., 111 East Wisconsin Avenue, Milwaukee, Wisconsin, Acct. No. 020717166 (ABA routing number 021000021), in the amount of the purchase price determined in accordance with Section 2 above not later than 10:00 A.M. Chicago time, on May 16, 2006 or such earlier or later date (but in any event not later than May 18, 2006) as the Company and the Series B Purchasers shall mutually agree upon (the " Closing Date" ). If on the Closing Date the Company shall fail to tender such Series B Notes to any Series B Purchaser as provided above in this Section 3, or any of the conditions specified in Section 7 hereof shall not have been fulfilled to any Series B Purchaser' s satisfaction, such Series B Purchaser shall, at such Series B Purchaser' s election, be relieved of all further obligations under this Series B Terms Agreement, without thereby waiving any rights such Series B Purchaser may have by reason of such failure or such nonfulfillment.
4. Use of Proceeds. The proceeds from the sale of the Series B Notes will be used to refinance existing bank indebtedness and for general corporate purposes.
5. Repayment Provisions Generally . Unless otherwise specified herein to the contrary, the Company shall repay the Series B Notes in accordance with the repayment provisions of the Agreement and shall be subject to the mandatory and optional repayment provisions of the Agreement.
6. Incorporation of Agreement . This Series B Terms Agreement hereby incorporates by reference all other provisions of the Agreement, except to the extent in conflict with any of the provisions of this Series B Terms Agreement, as though all of such provisions were set forth herein. Each Series B Purchaser, severally, and the Company agree that such Series B Purchaser shall have a separate Agreement with the Company in the form attached hereto as Exhibit B, as supplemented by the terms and provisions of this Series B Terms Agreement, including all schedules and exhibits hereto. All capitalized terms used herein and not defined herein shall have the meaning assigned to them in the Agreement.
7. Conditions to Closing . Each Series B Purchaser' s obligation to purchase and pay for the Series B Notes to be sold to it on the Closing Date is subject to the fulfillment to its satisfaction, prior to or on the Closing Date, of the conditions set forth in Section 4 of the Agreement, (A) except that all references to " Purchaser" therein shall be deemed to refer to the Series B Purchasers hereunder, all references to " this Agreement" shall be deemed to refer to the Agreement as supplemented by this Series B Terms Agreement, all references to " Notes" or " Series A Notes" therein shall be deemed to refer to the Series B Notes and all references to the " Memorandum" therein shall be deemed to refer to the Memorandum as defined in Exhibit A hereto, and (B) except that the representations and warranties set forth in Section 5 of the Agreement shall be modified as provided in Section 8 hereof, and to the following additional conditions:
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(a) the First Amendment dated as of May 15, 2006, referred to in the first recital of this Terms Agreement shall have been executed by the Company and the holders of the Series A Notes and shall be in full force and effect, and the terms thereof shall be satisfactory to the Series B Purchasers.
(b) Any guaranty by a Subsidiary or any other Affiliate of the Company with respect to the Company' s obligations under its Amended and Restated Credit Agreement among the Company, U.S. Bank National Association (formerly known as Firstar Bank, National Association), as agent, and the lender parties thereto, dated as of April 14, 2000, as amended, shall have been released and no longer in force or effect, and satisfactory evidence thereof shall have been provided to the Series B Purchasers.
8. Representations and Warranties of the Company . With respect to each of the representations and warranties contained in Section 5 of the Agreement, the Company represents and warrants to the Series B Purchasers that, as of the date hereof, such representations and warranties are true and correct (A) except that all references to " Purchaser" therein shall be deemed to refer to the Series B Purchasers hereunder, all references to " this Agreement" shall be deemed to refer to the Agreement as supplemented by this Series B Terms Agreement, and all references to " Notes" or " Series A Notes" therein shall be deemed to refer to the Series B Notes, and (B) except for changes to such representations and warranties or the Schedules referred to therein, which changes are set forth in the attached Exhibit A.
9. Required Prepayments . On May 16, 2010 and on each May 16 thereafter to and including May 16, 2015 the Company will prepay $5,714,286 principal amount (or such lesser principal amount as shall then be outstanding) of the Series B Notes at par and without payment of the Make-Whole Amount or any premium, provided that upon any partial prepayment of the Series B Notes pursuant to Section 8.2 of the Agreement or purchase of the Series B Notes permitted by Section 8.5 of the Agreement, the principal amount of each required prepayment of the Series B Notes becoming due under this Section 9 of this Series B Terms Agreement on and after the date of such prepayment or purchase shall be reduced in the same proportion as the aggregate unpaid principal amount of the Series B Notes is reduced as a result of such prepayment or purchase. The principal amount of the Series B Notes to be prepaid pursuant to this Section 9 shall be allocated among all of the Series B Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.
10. Make-Whole Amount for the Series B Notes . As used in this Series B Terms Agreement and the Agreement with respect to any Series B Note, the term " Make-Whole Amount" means, solely with respect to such Series B Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Series B Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount for any Series B Note, the following terms have the following meanings:
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" Called Principal" means, with respect to any Series B Note, the principal of such Series B Note that is to be prepaid pursuant to Section 9(c) of this Series B Terms Agreement or has become or is declared to be immediately due and payable pursuant to Section 12.1 of the Agreement, as the context requires.
" Discounted Value" means, with respect to the Called Principal of any Series B Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Series B Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.
" Reinvestment Yield" means, with respect to the Called Principal of any Series B Note, .50% over the yield to maturity implied by (i) the yields reported, as of 10:00 A.M. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as " Page PX1" (or such other display as may replace Page PX1) on Bloomberg Financial Markets (" Bloomberg" ) or, if Page PX1 (or its successor screen on Bloomberg) is unavailable, the Telerate Access Service screen which corresponds most closely to Page PX1 for the most recently issued actively traded U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Pr