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As filed with the Securities and Exchange Commission
on December 12, 1996
Registration No. 333-______
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_________________________________
United States Filter Corporation
(Exact name of registrant as specified in its charter)
DELAWARE 3589
(State or other jurisdiction (Primary Standard Industrial
of incorporation or organization) Classification Code Number)
33-0266015
(I.R.S. Employer
Identification No.)
40-004 COOK STREET
PALM DESERT, CALIFORNIA 92211
(619) 340-0098
(Address, including zip code, and
telephone number, including area code, of
registrant's principal executive offices)
___________________
DAMIAN C. GEORGINO
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
UNITED STATES FILTER CORPORATION
40-004 COOK STREET
PALM DESERT, CALIFORNIA 92211
(619) 340-0098
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
___________________
Copy to:
JANICE C. HARTMAN
KIRKPATRICK & LOCKHART LLP
1500 OLIVER BUILDING
PITTSBURGH, PENNSYLVANIA 15222
(412) 355-6500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time after this registration statement becomes
effective.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. ____
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If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. X
___
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering. ____
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, please check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. ____
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. ____
______________________________
CALCULATION OF REGISTRATION FEE
TITLE OF
EACH CLASS PROPOSED PROPOSED
OF MAXIMUM MAXIMUM
SECURITIES AMOUNT TO OFFERING AGGREGATE AMOUNT OF
TO BE BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE (1) PRICE (1) FEE
Common
stock,
par value
$.01
per 80,412
share shares $31.56 $2,537,803 $770
(1) Estimated solely for the purpose of calculating the
registration fee; computed in accordance with Rule 457(c) on
the basis of the average of the high and low sales prices
for the Common Stock on December 11, 1996 as reported on the
New York Stock Exchange Composite Tape.
______________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
Information contained herein in subject to completion or
amendment. A registration statement relating to these
securities has been filed with the Securities and Exchange
Commission. These securities may not be sold nor may offers
to buy be accepted prior to the time the registration
statement becomes effective. This Prospectus shall not
constitute an offer to sell or the solicitation of an offer to
buy nor shall there be any sale of these securities in any
State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such State.
SUBJECT TO COMPLETION DATED DECEMBER 12, 1996
PROSPECTUS
, 1996
80,412 SHARES
UNITED STATES FILTER CORPORATION
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
___________________
This prospectus provides for the offering of up to an
aggregate of 80,412 shares (the "Shares") of the Common Stock,
par value $.01 per share ("Common Stock"), of United States
Filter Corporation (the "Company"). The Shares were acquired by
the Selling Stockholder named herein on September 30, 1996 in
consideration of the sale to the Company of a portion of the
stock of Kisco Water Treatment Company pursuant to the terms of a
Stock Purchase Agreement dated as of September 20, 1996 (the
"Stock Purchase Agreement"). As of the date of this Prospectus,
9,460 of the Shares are held in escrow to secure the indemnity
obligations of the Selling Stockholder under the Stock Purchase
Agreement. See "Selling Stockholder."
The Shares may be offered or sold by or for the account of
the Selling Stockholder from time to time or at one time on one
or more exchanges or otherwise, at prices and on terms to be
determined at the time of sale, to purchasers directly or by or
through brokers or dealers who may receive compensation in the
form of discounts, commissions or concessions. The Selling
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Stockholder and any such brokers or dealers may be deemed to be
"underwriters" within the meaning of the United States Securities
Act of 1933, as amended (the "Securities Act"), and any
discounts, concessions and commissions received by any such
brokers and dealers may be deemed to be underwriting commissions
or discounts under the Securities Act. The Company will not
receive any of the proceeds from any sale of the Shares offered
hereby. See "Use of Proceeds," "Selling Stockholder" and "Plan
of Distribution."
The Common Stock is listed on the New York Stock Exchange
(the "NYSE") and traded under the symbol "USF." The last
reported sale price of the Common Stock on the NYSE on December
11, 1996 was $31.875 per share.
_____________________
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR CERTAIN
CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE COMMON STOCK.
_____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files periodic reports, proxy
solicitation materials and other information with the Securities
and Exchange Commission (the "Commission"). Such reports, proxy
solicitation materials and other information can be inspected and
copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's Regional Offices
located at Seven World Trade Center, Suite 1300, New York, New
York 10048 and Citicorp Center 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. Copies of such materials can
be obtained from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The Commission maintains a Web site that contains
reports, proxy and information statements and other information
regarding registrants that file electronically with the
Commission. Such reports, proxy and information statements and
other information may be found on the Commission's site address,
http://www.sec.gov. The Common Stock is listed on the NYSE.
Such reports, proxy solicitation materials and other information
can also be inspected and copied at the NYSE at 20 Broad Street,
New York, New York 10005.
The Company has filed with the Commission a registration
statement on Form S-3 (herein, together with all amendments and
exhibits, referred to as the "Registration Statement") under the
Securities Act with respect to the offering made hereby. This
Prospectus does not contain all of the information set forth in
the Registration Statement, certain portions of which are omitted
in accordance with the rules and regulations of the Commission.
Such additional information may be obtained from the Commission's
principal office in Washington, D.C. as set forth above. For
further information, reference is hereby made to the Registration
Statement, including the exhibits filed as a part thereof or
otherwise incorporated herein. Statements made in this
Prospectus as to the contents of any documents referred to are
not necessarily complete, and in each instance reference is made
to such exhibit for a more complete description and each such
statement is modified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company (File No. 1-
10728) with the Commission pursuant to the Exchange Act are
incorporated by reference: The Company's Annual Report on Form
10-K for the fiscal year ended March 31, 1996; the Company's
Current Reports on Form 8-K dated May 31, 1996 (as amended on
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Form 8-K/A dated June 28, 1996), June 10, 1996, June 27, 1996 and
July 15, 1996 (two such Current Reports), August 23, 1996,
September 6, 1996, October 28, 1996, November 6, 1996 and
December 2, 1996; and the description of the Common Stock
contained in the Company's Registration Statement on Form 8-A, as
the same may be amended.
All documents and reports subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this Prospectus and prior to the termination of
the offering made by this Prospectus shall be deemed to be
incorporated by reference herein. Any statement contained herein
or in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which is
or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of
such person, without charge, a copy of any or all of the
documents that are incorporated herein by reference, other than
exhibits to such information (unless such exhibits are
specifically incorporated by reference into such documents).
Requests should be directed to Vice President, General Counsel
and Secretary, United States Filter Corporation, 40-004 Cook
Street, Palm Desert, California 92211 (telephone (619) 340-0098).
THE COMPANY
The Company is a leading global provider of industrial and
municipal water and wastewater treatment systems, products and
services, with an installed base of systems that the Company
believes is one of the largest worldwide. The Company offers a
single-source solution to industrial and municipal customers
through what the Company believes is the industry's broadest
range of cost-effective systems, products, services and proven
technologies. In addition, the Company has one of the industry's
largest networks of sales and service facilities. The Company
capitalizes on its large installed base, extensive distribution
network and manufacturing capabilities to provide customers with
ongoing local service and maintenance. The Company is also a
leading provider of service deionization and outsourced water
services, including the operation of water and wastewater
treatment systems at customer sites.
The Company's principal executive offices are located at 40-
004 Cook Street, Palm Desert, California 92211, and its telephone
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number is (619) 340-0098. References herein to the Company refer
to United States Filter Corporation and its subsidiaries, unless
the context requires otherwise.
RISK FACTORS
Prospective investors should consider carefully the
following factors relating to the business of the Company,
together with the other information and financial data included
or incorporated by reference in this Prospectus, before acquiring
the securities offered hereby. Information contained or
incorporated by reference in this Prospectus includes "forward-
looking statements" which can be identified by the use of
forward-looking terminology such as "believes," "contemplates,"
"expects," "may," "will," "should," "would" or "anticipates" or
the negative thereof or other variations thereon or comparable
terminology. No assurance can be given that the future results
covered by the forward-looking statements will be achieved. The
following matters constitute cautionary statements identifying
important factors with respect to such forward-looking
statements, including certain risks and uncertainties, that could
cause actual results to vary materially from the future results
covered in such forward-looking statements. Other factors could
also cause actual results to vary materially from the future
results covered in such forward-looking statements.
ACQUISITION STRATEGY
In pursuit of its strategic objective of becoming the
leading global single-source provider of water and wastewater
treatment systems and services, the Company has, since 1991,
acquired and successfully integrated more than 45 United States
based and international businesses with strong market positions
and substantial water and wastewater treatment expertise. The
Company plans to continue to pursue acquisitions that complement
its technologies, products and services, broaden its customer
base and expand its global distribution network. The Company's
acquisition strategy entails the potential risks inherent in
assessing the value, strengths, weaknesses, contingent or other
liabilities and potential profitability of acquisition candidates
and in integrating the operations of acquired companies.
Although the Company generally has been successful in pursuing
these acquisitions, there can be no assurance that acquisition
opportunities will continue to be available, that the Company
will have access to the capital required to finance potential
acquisitions, that the Company will continue to acquire
businesses or that any business acquired will be integrated
successfully or prove profitable.
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INTERNATIONAL TRANSACTIONS
The Company has made and expects it will continue to make
acquisitions and expects to obtain contracts in markets outside
the United States. While these activities may provide important
opportunities for the Company to offer its products and services
internationally, they also entail the risks associated with
conducting business internationally, including the risk of
currency fluctuations, slower payment of invoices,
nationalization and possible social, political and economic
instability. In particular, the purchase price for the pending
acquisition by the company of the businesses of the Process
Equipment Division ("PED") of United Utilities Plc is
Pound/Sterling 125.5 million, comprised of approximately
Pound/Sterling 100.5 million in cash and Pound/Sterling 25.0
million in shares of Common Stock. The Company has entered into
a forward contact pursuant to which it is obligated to purchase
100.0 million British pounds sterling for approximately $159.3
million at any time between December 16, 1996 and February 14,
1997, for the purpose of hedging the cash portion of the price of
its acquisition of PED. With respect to the remaining
Pound/Sterling 0.5 million cash portion of the consideration and
the Pound/Sterling 25.0 million in shares of Common Stock, to the
extent the value of the United States dollar declines relative to
pounds sterling prior to the closing of the acquisition, the cost
to the Company of acquiring PED would increase. In addition, if
the acquisition of PED is not consummated, or the acquisition is
consummated after February 14, 1997, the Company would be at risk
with respect to the Pound/Sterling 100.0 million it purchased
pursuant to such forward contract to the extent that the value of
the British pound sterling decreases relative to the value of
other currencies.
RELIANCE ON KEY PERSONNEL
The Company's operations are dependent on the continued
efforts of senior management, in particular Richard J. Heckmann,
the Company's Chairman of the Board, President and Chief
Executive Officer. There are no employment agreements between
the Company and the members of its senior management, except
Thierry Reyners, the Company's Executive Vice President--European
Group. Should any of the senior managers be unable to continue
in their present roles, the Company's prospects could be
adversely affected.
PROFITABILITY OF FIXED PRICE CONTRACTS
A significant portion of the Company's revenues are
generated under fixed price contracts. To the extent that
original cost estimates are inaccurate, costs to complete
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increase, delivery schedules are delayed or progress under a
contract is otherwise impeded, revenue recognition and
profitability from a particular contract may be adversely
affected. The Company routinely records upward or downward
adjustments with respect to fixed price contracts due to changes
in estimates of costs to complete such contracts. There can be
no assurance that future downward adjustments will not be
material.
CYCLICALITY AND SEASONALITY
The sale of capital equipment within the water treatment
industry is cyclical and influenced by various economic factors
including interest rates and general fluctuations of the business
cycle. A significant portion of the Company's revenues are
derived from capital equipment sales. While the Company sells
capital equipment to customers in diverse industries and in
global markets, cyclicality of capital equipment sales and
instability of general economic conditions could have an adverse
effect on the Company's revenues and profitability.
The sale of water and wastewater distribution equipment and
supplies is also cyclical and influenced by various economic
factors including interest rates, land development and housing
construction industry cycles. Sales of such equipment and
supplies are also subject to seasonal fluctuation in northern
climates. As a result of recent acquisitions, the sale of water
and wastewater distribution equipment and supplies is a
significant component of the Company's business. Cyclicality and
seasonality of water and wastewater distribution equipment and
supplies sales could have an adverse effect on the Company's
revenues and profitability.
POTENTIAL ENVIRONMENTAL RISKS
The Company's business and products may be significantly
influenced by the constantly changing body of environmental laws
and regulations, which require that certain environmental
standards be met and impose liability for the failure to comply
with such standards. The Company is also subject to inherent
risks associated with environmental conditions at facilities
owned, and the state of compliance with environmental laws, by
businesses acquired by the Company. While the Company endeavors
at each of its facilities to assure compliance with environmental
laws and regulations, there can be no assurance that the
Company's operations or activities, or historical operations by
others at the Company's locations, will not result in cleanup
obligations, civil or criminal enforcement actions or private
actions that could have a material adverse effect on the Company.
In that regard federal and state environmental regulatory
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authorities have commenced civil enforcement actions related to
alleged multiple violations of applicable wastewater pretreatment
standards by a wholly owned subsidiary of the Company at a
Connecticut ion exchange regeneration facility acquired by the
Company in October 1995 from Anjou International Company
("Anjou"). A grand jury investigation is pending which is
believed to relate to the same conditions that were the subject
of the civil actions. The Company has certain rights of
indemnification from Anjou which may be available with respect to
these matters. In addition, the Company's activities as owner
and operator of certain hazardous waste treatment and recovery
facilities are subject to stringent laws and regulations and
compliance reviews. Failure of these facilities to comply with
those regulations could result in substantial fines and the
suspension or revocation of the facility's hazardous waste
permit. In other matters, the Company has been notified by the
United States Environmental Protection Agency that it is a
potentially responsible party under the Comprehensive
Environmental Response, Compensation, and Liability Act
("CERCLA") at certain sites to which the Company or its
predecessors allegedly sent waste in the past. It is possible
that the Company could receive other such notices under CERCLA or
analogous state laws in the future. The Company does not believe
that its liability, if any, relating to such matters will be
material. However, there can be no assurance that such matters
will not be material. In addition, to some extent, the
liabilities and risks imposed by environmental laws on the
Company's customers may adversely impact demand for certain of
the Company's products or services or impose greater liabilities
and risks on the Company, which could also have an adverse effect
on the Company's competitive or financial position.
COMPETITION
The water and wastewater treatment industry is fragmented
and highly competitive. The Company competes with many United
States based and international companies in its global markets.
The principal methods of competition in the markets in which the
Company competes are technology, prompt availability of local
service capability, price, product specifications, customized
design, product knowledge and reputation, ability to obtain
sufficient performance bonds, timely delivery, the relative ease
of system operation and maintenance, and the prompt availability
of replacement parts. In the municipal contract bid process,
pricing and ability to meet bid specifications are the primary
considerations. While no competitor is considered dominant,
there are competitors which have significantly greater resources
than the Company, which, among other things, could be a
competitive disadvantage to the Company in securing certain
projects.
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TECHNOLOGICAL AND REGULATORY CHANGE
The water and wastewater treatment business is characterized
by changing technology, competitively imposed process standards
and regulatory requirements, each of which influences the demand
for the Company's products and services. Changes in regulatory
or industrial requirements may render certain of the Company's
treatment products and processes obsolete. Acceptance of new
products may also be affected by the adoption of new government
regulations requiring stricter standards. The Company's ability
to anticipate changes in technology and regulatory standards and
to develop successfully and introduce new and enhanced products
on a timely basis will be a significant factor in the Company's
ability to grow and to remain competitive. There can be no
assurance that the Company will be able to achieve the
technological advances that may be necessary for it to remain
competitive or that certain of its products will not become
obsolete. In addition, the Company is subject to the risks
generally associated with new product introductions and
applications, including lack of market acceptance, delays in
development or failure of products to operate properly.
MUNICIPAL AND WASTEWATER MARKET
Completion of certain recent and pending acquisitions will
increase significantly the percentage of the Company's revenues
derived from municipal customers. While municipalities represent
an important market in the water and wastewater treatment
industry, contractor selection processes and funding for projects
in the municipal sector entail certain additional risks not
typically encountered with industrial customers. Competition for
selection of a municipal contractor typically occurs through a
formal bidding process which can require the commitment of
significant resources and greater lead times than industrial
projects. In addition, demand in the municipal market is
dependent upon the availability of funding at the local level,
which may be the subject of increasing pressure as local
governments are expected to bear a greater share of the cost of
public services.
A company recently acquired by the Company, Zimpro
Environmental, Inc. ("Zimpro"), is party to certain agreements
(entered into in 1990 at the time Zimpro was acquired from
unrelated third parties by the entities from which it was later
acquired by the Company), pursuant to which Zimpro agreed, among
other things, to pay the original sellers a royalty of 3.0% of
its annual consolidated net sales of certain products in excess
of $35.0 million through October 25, 2000. Under certain
interpretations of such agreements, with which the Company
disagrees, Zimpro could be liable for such royalties with respect
to the net sales attributable to products, systems and services
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of certain defined wastewater treatment businesses acquired by
Zimpro or the Company or the Company's other subsidiaries after
May 31, 1996. The defined businesses include, among others,
manufacturing machinery and equipment, and engineering,
installation, operation and maintenance services related thereto,
for the treatment and disposal of waste liquids, toxic waste and
sludge. One of the prior sellers has revealed in a letter to the
Company an interpretation contrary to that of the Company. The
Company believes that it would have meritorious defenses to any
claim based upon any such interpretation and would vigorously
pursue the elimination of any threat to expand what it believes
to be its obligations pursuant to such agreements.
SHARES ELIGIBLE FOR FUTURE SALE
The market price of the Common Stock could be adversely
affected by the availability for public sale of shares held on
November 10, 1996 by security holders of the Company, including:
(i) up to 3,750,093 shares which may be delivered by Laidlaw Inc.
or its affiliates ("Laidlaw"), at Laidlaw's option in lieu of
cash, at maturity pursuant to the terms of 5-3/4% Exchangeable
Notes due 2000 of Laidlaw (the amount of shares or cash delivered
or paid to be dependent within certain limits upon the value of
the Common Stock at maturity); (ii) 7,636,363 shares issuable
upon conversion of the Company's 6% Convertible Subordinated
Notes due 2005 at a conversion price of $18.33 per share of
Common Stock; (iii) 9,113,924 shares issuable upon conversion of
the Company's 4-1/2% Convertible Subordinated Notes at a
conversion price of $39.50 per share of Common Stock; (iv)
2,908,171 outstanding shares that are currently registered for
sale under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to two shelf registration statements;
and (v) 7,036,939 shares which are subject to agreements pursuant
to which the holders have certain rights to request the Company
to register the sale of such holders' Common Stock under the
Securities Act and/or, subject to certain conditions, to include
certain percentages of such shares in other registration
statements filed by the Company (1,980,000 of which shares also
may be sold from time to time by the holder thereof pursuant to
Rule 144 under the Securities Act). In addition, the Company has
registered for sale under the Securities Act 5,777,380 shares
which may be issuable by the Company from time to time in
connection with acquisitions of businesses from third parties.
USE OF PROCEEDS
The Selling Stockholder will receive all of the net proceeds
from any sale of the Shares offered hereby, and none of such
proceeds will be available for use by the Company or otherwise
for the Company's benefit.
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SELLING STOCKHOLDER
The Shares which may be offered pursuant to this Prospectus
will be offered by or for the account of Thomas J. Goulet (the
"Selling Stockholder"), who acquired the Shares on September 30,
1996 pursuant to the Stock Purchase Agreement. The 80,412 Shares
constitute all of the shares of Common Stock beneficially owned
by the Selling Stockholder and represented less than 1% of the
shares of Common Stock outstanding on November 10, 1996.
Pursuant to the terms of an Escrow Agreement dated September
30, 1996 (the "Escrow Agreement"), 9,460 of the Shares (the
"Escrow Shares") are held in escrow as of the date of this
prospectus to secure the indemnity obligations of the Selling
Stockholder under the Stock Purchase Agreement. The Selling
Stockholder is obligated to deposit the proceeds of any sale of
the Escrow Shares in the escrow. The Escrow Agreement provides
that any Escrow Shares, or the proceeds of any disposition of any
Escrow Shares, not previously used or set aside to satisfy claims
made under the Escrow Agreement and not held pending the
resolution of disputed claims will be released from the escrow
account on March 31, 1997. The Selling Stockholder intends to
sell all of the Shares including those held for his account under
the Escrow Agreement.
PLAN OF DISTRIBUTION
Shares offered hereby may be sold from time to time or at
one time by or for the account of the Selling Stockholder on one
or more exchanges or otherwise; directly to purchasers in
negotiated transactions; by or through brokers or dealers, which
may include Donaldson, Lufkin & Jenrette Securities Corporation,
in ordinary brokerage transactions or transactions in which a
broker or dealer solicits purchasers; in block trades in which
brokers or dealers will attempt to sell Shares as agent but may
position and resell a portion of the block as principal; in
transactions in which a broker or dealer purchases as principal
for resale for its own account; or in any combination of the
foregoing methods. Shares may be sold at a fixed offering price,
which may be changed, at the prevailing market price at the time
of sale, at prices related to such prevailing market price or at
negotiated prices. Brokers or dealers may arrange for others to
participate in any such transaction and may receive compensation
in the form of discounts, commissions or concessions payable by
the Company and/or the purchasers of Shares. The proceeds to the
Selling Stockholder from any sale of Shares will be net of any
expenses to be borne by the Selling Stockholder. If required at
the time that a particular offer of Shares is made, a supplement
to this Prospectus will be delivered that describes any material
arrangements for the distribution of Shares and the terms of the
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offering, including, without limitation, any discounts,
commissions or concessions and other items constituting
compensation from the Selling Stockholder or otherwise. The
Company may agree to indemnify participating brokers or dealers
against certain civil liabilities, including liabilities under
the Securities Act. The Company and the Selling Stockholder are
obligated to indemnify each other against certain civil
liabilities arising under the Securities Act.
The Selling Stockholder and any such brokers or dealers may
be deemed to be "underwriters" within the meaning of the
Securities Act, in which event any discounts, commissions or
concessions received by such brokers or dealers and any profit on
the resale of the Shares purchased by such brokers or dealers may
be deemed to be underwriting commissions or discounts under the
Securities Act.
The Company has informed the Selling Stockholder that the
provisions of Rules 10b-6 and 10b-7 under the Exchange Act may
apply to their sales of Shares and has furnished the Selling
Stockholder with a copy of these rules. The Company also has
advised the Selling Stockholder of the requirement for delivery
of a prospectus in connection with any sale of the Shares.
Any Shares covered by this Prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under
Rule 144 rather than pursuant to this Prospectus. There is no
assurance that the Selling Stockholder will sell any or all of
the Shares. The Selling Stockholder may transfer, devise or gift
such Shares by other means not described herein.
The Company has agreed to reimburse the Selling Stockholder
to the extent the net proceeds from the sale, in whole or in
part, of the Shares pursuant to the Registration Statement are
less than $31.875 per Share, plus 7% interest per annum from
December 9, 1996 through the date of sale, and to purchase the
Shares which have not been sold pursuant to the Registration
Statement on or before January 31, 1997, at $31.875 per Share.
The Company will pay all of the expenses, including, but not
limited to, fees and expenses of compliance with state securities
or "blue sky" laws, incident to the registration of the Shares,
other than certain stock transfer taxes.
VALIDITY OF COMMON STOCK
The validity of the Shares of Common Stock offered hereby
will be passed upon for the Company by Damian C. Georgino, Vice
President, General Counsel and Secretary of the Company.
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INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The consolidated financial statements of United States
Filter Corporation and its subsidiaries as of March 31, 1995 and
1996 and for each of the three years in the period ended March
31, 1996, except for the consolidated financial statements of
Davis Water & Waste Industries, Inc. and its subsidiaries as of
April 30, 1996 and 1995 and for each of the three years in the
period ended April 30, 1996, have been audited by KPMG Peat
Marwick LLP, independent certified public accountants, as stated
in their report incorporated by reference herein. The
consolidated financial statements of Davis Water & Waste
Industries, Inc. and its subsidiaries, which have been
consolidated with those of the Company, have been audited by
Price Waterhouse LLP as stated in their report incorporated
herein by reference. Such financial statements of the Company
and its consolidated subsidiaries are incorporated by reference
herein in reliance upon the report of such firms. Both of the
foregoing accounting firms are independent auditors.
The combined financial statements of the Systems and
Manufacturing Group of Wheelabrator Technologies Inc. as of
December 31, 1994 and 1995 and for each of the years in the three
year period ended December 31, 1995 have been incorporated by
reference herein in reliance upon the report of KPMG peat Marwick
LLP, independent certified public accountants, which report is
incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
The aggregated financial statements of the United Utilities
PLc Process Equipment Division as of March 31, 1996 have been
incorporated by reference herein in reliance upon the report of
KPMG Audit Plc, independent chartered accountants, which report
is incorporated by reference herein, and upon the authority of
said firm as experts in accounting and auditing.
The consolidated financial statements of Davis Water & Waste
Industries, Inc. incorporated in this Prospectus by reference to
the audited historical financial statements included in United
States Filter Corporation's Form 8-K dated June 27, 1996 have
been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
The consolidated financial statements of Zimpro
Environmental, Inc. as of December 31, 1995 and 1994 and for each
of the three years in the period ended December 31, 1995
incorporated herein by reference, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report
thereon incorporated by reference elsewhere herein, and are
included in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
13
<PAGE>
The audited financial statements of WaterPro Supplies
Corporation as of December 31, 1995 and for the period from April
7, 1995 to December 31, 1995 incorporated by reference in this
prospectus have been audited by Arthur Andersen LLP, independent
public accountants as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance
upon the authority of said firm as experts in giving said report.
14
<PAGE>
NO PERSON HAS BEEN AUTHORIZED
TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS
OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, AND, IF
GIVEN OR MADE, SUCH
INFORMATION OR
REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER
TO SELL OR THE SOLICITATION 80,412 SHARES
OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE
SECURITIES TO WHICH IT UNITED STATES FILTER CORPORATION
RELATES OR AN OFFER TO SELL
OR THE SOLICITATION OF AN
OFFER TO BUY SUCH SECURITIES COMMON STOCK
IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE
HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
_____________ ________________
TABLE OF CONTENTS
PROSPECTUS
PAGE
________________
Available Information . . . 2
Incorporation of Certain
Documents by Reference . 2
The Company . . . . . . . . 3
Risk Factors . . . . . . . 3
Use of Proceeds . . . . . . 5
Selling Stockholder . . . . 5
Plan of Distribution . . . 5
Validity of Common Stock . 6
Independent Certified Public
Accountants . . . . . . . . 6 ___________, 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by the Company in
connection with the distribution of the securities being
registered, other than underwriting discounts and commissions,
which will be borne by the Selling Stockholder, are as follows:
Securities and Exchange Commission Filing Fee . . . $ 770
Accounting Fees and Expenses . . . . . . . . . . . . 5,000
Legal Fees and Expenses . . . . . . . . . . . . . . . 5,000
Miscellaneous Expenses . . . . . . . . . . . . . . . 230
Total . . . . . . . . . . . . . . . $11,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Certificate of Incorporation and the By-laws of the
Company provide for the indemnification of directors and officers
to the fullest extent permitted by the General Corporation Law of
the State of Delaware, the state of incorporation of the Company.
Section 145 of the General Corporation Law of the State of
Delaware authorizes indemnification when a person is made a party
or is threatened to be made a party to any proceeding by reason
of the fact that such person is or was a director, officer,
employee or agent of the corporation or is or was serving as a
director, officer, employee or agent of another enterprise, at
the request of the corporation, and if such person acted in good
faith and in a manner reasonably believed by him or her to be in,
or not opposed to, the best interests of the corporation. With
respect to any criminal proceeding, such person must have had no
reasonable cause to believe that his or her conduct was unlawful.
If it is determined that the conduct of such person meets these
standards, he or she may be indemnified for expenses incurred
(including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her in
connection with such proceeding.
If such a proceeding is brought by or in the right of the
corporation (i.e., a derivative suit), such person may be
indemnified against expenses actually and reasonably incurred if
he or she acted in good faith and in a manner reasonably believed
by him or her to be in, or not opposed to, the best interests of
the corporation. There can be no indemnification with respect to
any matter as to which such person is adjudged to be liable to
the corporation; however, a court may, even in such case, allow
II-2
<PAGE>
such indemnification to such person for such expenses as the
court deems proper.
Where such person is successful in any such proceeding, he
or she is entitled to be indemnified against expenses actually
and reasonably incurred by him or her. In all other cases,
indemnification is made by the corporation upon determination by
it that indemnification of such person is proper because such
person has met the applicable standard of conduct.
The Company maintains an errors and omissions liability
policy for the benefit of its officers and directors, which may
cover certain liabilities of such individuals to the Company.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits. The following exhibits are filed as part of
this registration statement:
EXHIBIT
NUMBER DESCRIPTION
------- -----------
5.01 Opinion of Damian C. Georgino as to the
legality of the securities being registered
23.01 Consent of Damian C. Georgino (included in
Exhibit 5.01)
23.02 Consents of KPMG Peat Marwick LLP and KPMG
Audit Plc
23.03 Consent of Price Waterhouse LLP
23.04 Consent of Ernst & Young LLP
23.05 Consent of Arthur Andersen LLP
24.01 Powers of Attorney (included on signature page
of this registration statement)
99.01 Stock Purchase Agreement dated as of September
20, 1996 among United States Filter
Corporation, Thomas J. Goulet, M&I Ventures
Corporation, Kisco Water Treatment Company and
Illinois Water Treatment, Inc.
99.02 Amendment to Stock Purchase Agreement dated as
of September 30, 1996 among Thomas J. Goulet,
M&I Ventures Corporation, United States Filter
Corporation, Illinois Water Treatment, Inc.
and Kisco Water Treatment Company
II-3
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
99.03 Option, Transfer and Registration Rights
Agreement dated as of September 30, 1996 among
the registrant, Thomas J. Goulet and M&I
Ventures Corporation
99.04 Indemnity Escrow Agreement dated as of
September 30, 1996 among the registrant,
Thomas J. Goulet and M&I Ventures Corporation
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the registration statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the registration
statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (i) and (ii) do not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
II-4
<PAGE>
relating to the securities offered therein, and the offering of
such securities at the time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(4) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference
in the registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Palm Desert, State of California, on December 12,
1996.
UNITED STATES FILTER CORPORATION
By: /s/ Richard J. Heckmann
---------------------------------
Richard J. Heckmann
Chairman of the Board, President
and Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Kevin L. Spence
and Damian C. Georgino, and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any
and all capacities, to sign any and all amendments to this
Registration Statement, and to file the same, with all exhibits
thereto, and other documentation in connection therewith, with
the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in or about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Capacity Date
--------- -------- -----
/s/ Richard J. Heckmann Chairman of the December 12, 1996
-------------------------- Board, President
Richard J. Heckman and Chief
Executive
Officer
(Principal
Executive
Officer) and a
Director
<PAGE>
/s/ Kevin L. Spence Vice President December 12, 1996
-------------------------- and Chief
Kevin L. Spence Financial
Officer
(Principal
Financial and
Accounting
Officer)
/s/ Michael J. Reardon Executive Vice December 12, 1996
-------------------------- President and a
Michael J. Reardon Director
/s/ Tim L. Traff Senior Vice December 12, 1996
-------------------------- President and a
Tim L. Traff Director
/s/ James E. Clark Director December 12, 1996
--------------------------
James E. Clark
Director
--------------------------
John L. Diederich
Director
--------------------------
Robert S. Hillas
Director
--------------------------
Arthur B. Laffer
/s/ Alfred E. Osborne, Jr. Director December 12, 1996
--------------------------
Alfred E. Osborne, Jr.
Director
--------------------------
J. Danforth Quayle
/s/ C. Howard Wilkins, Jr. Director December 12, 1996
--------------------------
C. Howard Wilkins, Jr.
<PAGE>
EXHIBIT INDEX
EXHIBIT SEQUENTIAL PAGE
NUMBER DESCRIPTION NUMBER
------- ----------- ---------------
5.01 Opinion of Damian C. Georgino as to
the legality of the securities being
registered
23.01 Consent of Damian C. Georgino
(included in Exhibit 5.01)
23.02 Consents of KPMG Peat Marwick LLP
and KPMG Audit Plc
23.03 Consent of Price Waterhouse LLP
23.04 Consent of Ernst & Young LLP
23.05 Consent of Arthur Andersen LLP
24.01 Powers of Attorney (included on
signature page of this registration
statement)
99.01 Stock Purchase Agreement dated as of
September 20, 1996 among United
States Filter Corporation, Thomas J.
Goulet, M&I Ventures Corporation,
Kisco Water Treatment Company and
Illinois Water Treatment, Inc.
99.02 Amendment to Stock Purchase
Agreement dated as of September 30,
1996 among Thomas J. Goulet, M&I
Ventures Corporation, United States
Filter Corporation, Illinois Water
Treatment, Inc. and Kisco Water
Treatment Company
99.03 Option, Transfer and Registration
Rights Agreement dated as of
September 30, 1996 among the
registrant, Thomas J. Goulet and M&I
Ventures Corporation
99.04 Agreement dated as of September 30,
1996 among the registrant, Thomas J.
Goulet and M&I Ventures Corporation
Exhibit 23.02
INDEPENDENT AUDITORS' CONSENT
To the Board of Directors and Shareholders
United States Filter Corporation:
We consent to the use of our reports incorporated by
reference herein and the reference to our firm under the heading
"Independent Certified Public Accountants" in the Prospectus.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Orange County, California
December 11, 1996
<PAGE>
INDEPENDENT AUDITORS' CONSENT
To the Board of Directors and Shareholders
United States Filter Corporation:
We consent to the use of our reports incorporated by
reference herein and the reference to our firm under the heading
"Independent Certified Public Accountants" in the Prospectus.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Chicago, Illinois
December 11, 1996
<PAGE>
CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS
To the Board of Directors and Shareholders
United Utilities PLC
We consent to the use of our report dated 16 October 1996
relating to the aggregated financial statements of the United
Utilities PLC Process Division as of 31 March 1996 and 1995 and
for each of the years in the two year period ended 31 March 1996
and the reference to our firm under the heading "Independent
Certified Public Accountants" in the prospectus to be dated 12
December 1996.
/s/ KPMG Audit Plc
KPMG Audit Plc
Chartered Accountants Manchester
Registered Auditors 12 December 1996
Exhibit 23.03
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectus constituting part of this Registration Statement on
Form S-3 of United States Filter Corporation of our report dated
June 13, 1996 relating to the consolidated financial statements
of Davis Water & Waste Industries, Inc., which appears in the
Current Report on Form 8-K of United States Filter Corporation
dated June 27, 1996. We also consent to the reference to us
under the heading "Independent Certified Public Accountants" in
such Prospectus.
Price Waterhouse LLP
Atlanta, Georgia
December 11, 1996
Exhibit 23.04
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Independent Certified Public Accountants" in the Registration
Statement (Form S-3) and related Prospectus of United States
Filter Corporation for the registration of 80,412 shares of its
common stock and to the incorporation by reference therein of our
report dated February 8, 1996, except for Notes 4 and 10, as to
which the date is May 10, 1996, with respect to the consolidated
financial statements of Zimpro Environmental, Inc. included in
the Current Report on Form 8-K of United States Filter
Corporation dated May 31, 1996, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
Minneapolis, Minnesota
December 11, 1996
Exhibit 23.05
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our
report dated February 8, 1996 included in United States Filter
Corporation's Report on Form 8-K dated November 6, 1996 and to
all references to our Firm included in this registration
statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Minneapolis, Minnesota
December 11, 1996
Exhibit 99.01
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement ("Agreement"), dated as of the 20th day
of September, 1996, by and among THOMAS J. GOULET, an individual
("Goulet"), M&I Ventures Corporation, a Wisconsin corporation
("M&I"), UNITED STATES FILTER CORPORATION, a Delaware corporation
("USF"), through its wholly-owned subsidiary, ILLINOIS WATER
TREATMENT, INC., a Delaware corporation ("Buyer"), and KISCO
WATER TREATMENT COMPANY, a Missouri corporation (the "Company").
Goulet and M&I are hereinafter individually referred to as
"Seller" and collectively referred to as "Sellers".
Sellers desire to sell all of the issued and outstanding shares
of capital stock of the Company, consisting of an aggregate of
582,000 shares of common stock issued and issuable under the
outstanding warrant to purchase capital stock of the Company held
by M&I (the "Warrant") (the "Company Shares") to Buyer, and Buyer
desires to purchase the Company Shares, on the terms and subject
to the conditions set forth below. Goulet is the holder of
351,000 shares and M&I is entitled to issuance of 231,000 shares
by exercise of the Warrant. In consideration of the
representations, warranties, covenants and agreements contained
herein, Sellers, Buyer and the Company, each intending to be
legally bound hereby, agree as set forth below.
ARTICLE I.
DEFINITIONS; CONSTRUCTION
1.1 Definitions. As used in this Agreement, the following
terms have the meanings specified in this Section 1.1. All
accounting terms not specifically defined herein shall be
construed in accordance with Accounting Principles.
"Accounting Principles" has the meaning given that term
in Section 2.6(a).
"Adjusted Closing Balance Sheet" has the meaning given
that term in Section 2.6(a).
"Affiliate" means, with respect to any Person, any
other Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with such Person.
"Agreement" means this Stock Purchase Agreement, as it
may be amended from time to time.
"Benefit Plan" has the meaning given that term in
Section 3.21(a).
<PAGE>
"Business" means the manufacture of commercial and
industrial water treatment equipment as currently conducted by
the Company.
"Buyer" means Illinois Water Treatment, Inc., a
Delaware corporation and a wholly-owned subsidiary of USF.
"Buyer Damages" has the meaning given that term in
Section 7.2.
"Buyer Indemnitees" has the meaning given that term in
Section 7.2.
"Ceiling Amount" has the meaning given that term in
Section 7.4(b).
"CERCLIS" means the United States Comprehensive
Environmental Response Compensation Liability Information System
List pursuant to Superfund.
"Closing" has the meaning given that term in Section
2.3.
"Closing Date" has the meaning given that term in
Section 2.3.
"Code" means the United States Internal Revenue Code of
1986, as amended, and the applicable rulings and regulations
thereunder.
"Company Group" has the meaning given that term in
Section 3.21(b).
"Company Plan" has the meaning given that term in
Section 3.21(a).
"Company Shares" has the meaning given that term in the
introductory paragraph of this Agreement.
"Contract" and "Contracts" have the respective meanings
given those terms in Section 3.13.
"Damages" has the meaning given that term in Section
7.7.
"Defined Benefit Plan" has the meaning given that term
in Section 3.21(e).
"Encumbrance" means any liability, debt, mortgage, deed
of trust, pledge, security interest, encumbrance, option, right
of first refusal, agreement of sale, adverse claim, easement,
lien, assessment, restrictive covenant, encroachment, burden or
- 2 -
<PAGE>
charge of any kind or nature whatsoever or any item similar or
related to the foregoing.
"Environmental Law" means any applicable Law relating
to public health and safety or protection of the environment,
including common law nuisance, property damage and similar common
law theories.
"ERISA" means the United States Employee Retirement
Income Security Act of 1974, as amended, and the applicable
rulings and regulations thereunder.
"FASB" means the United States Financial Accounting
Standards Board or its successor.
"Final Closing Balance Sheet" has the meaning given to
that term in Section 2.6(d).
"Financial Statements" has the meaning given that term
in Section 3.7(b).
"Governing Documents" means, with respect to any Person
who is not a natural Person, the certificate or articles of
incorporation, bylaws, deed of trust, formation or governing
agreement and other charter documents or organization or
governing documents or instruments of such Person.
"Governmental Body" means any court, government
(federal, state, local or foreign), department, commission,
board, bureau, agency, official or other regulatory,
administrative or governmental authority or instrumentality.
"Indemnified Party" has the meaning given that term in
Section 7.7.
"Indemnifying Party" has the meaning given that term in
Section 7.7.
"Intellectual Property" has the meaning given that term
in Section 3.20.
"IRS" means the United States Internal Revenue Service.
"Knowledge of the Company" means the best knowledge of
the Company and/or the Sellers based upon reasonable inquiry.
"Law" means any applicable federal, state, municipal,
local or foreign statute, law, ordinance, rule, regulation or
order of any kind or nature whatsoever including any public
policy, order of any Governmental Body or principle of common
law.
- 3 -
<PAGE>
"Litigation" has the meaning given that term in Section
3.12.
"Multiemployer Plan" has the meaning given that term in
Section 3.21(f).
"NYSE" means the New York Stock Exchange.
"Net Operating Assets" has the meaning given that term
in Section 2.5.
"Other Agreement" means each other agreement or
document contemplated hereby to be executed and delivered in
connection with the transactions contemplated by this Agreement
on or before Closing.
"PBGC" means the United States Pension Benefit Guaranty
Corporation.
"PCBs" means polychlorinated biphenyls.
"Permit" and "Permits" have the respective meanings
given those terms in Section 3.14.
"Person" means and includes a natural person, a
corporation, an association, a partnership, a limited liability
company, a trust, a joint venture, an unincorporated
organization, a business, any other legal entity, and a
Governmental Body.
"Post-Closing Purchase Price Adjustment" means the
post-closing adjustment to the Purchase Price pursuant to Section
2.5.
"Preliminary Closing Balance Sheet" has the meaning
given that term in Section 2.6(a).
"Purchase Price" has the meaning given that term in
Section 2.2.
"Qualified Plan" has the meaning given that term in
Section 3.21(d).
"Real Property" has the meaning given that term in
Section 3.15.
"Receivables" has the meaning given that term in
Section 3.10.
"Regulated Material" means any hazardous substance as
defined by any Environmental Law and any other material regulated
by any applicable Environmental Law, including petroleum,
- 4 -
<PAGE>
petroleum-related material, crude oil or any fraction thereof,
PCBs, and friable asbestos.
"Related Party" has the meaning given that term in
Section 3.16.
"SEC" means the United States Securities and Exchange
Commission.
"Security Right" means, with respect to any security,
any option, warrant, subscription right, preemptive right, other
right, proxy, put, call, demand, plan, commitment, agreement,
understanding or arrangement of any kind relating to such
security, whether issued or unissued, or any other security
convertible into or exchangeable for any such security.
"Security Right" includes any right relating to issuance, sale,
assignment, transfer, purchase, redemption, conversion, exchange,
registration or voting and includes rights conferred by statute,
by the issuer's Governing Documents or by agreement.
"Seller Damages" has the meaning given that term in
Section 7.3.
"Seller Indemnitees" has the meaning given that term is
Section 7.3.
"Selling Group" means a member, whether past or
present, of Seller's affiliated group of corporations within the
meaning of Code Section 1504(a).
"Securities Act" means the United States Securities Act
of 1933, as amended.
"Subsidiary" means any corporation, partnership, joint
venture or other entity in which the Company owns, directly or
indirectly, more than 20% of the outstanding voting securities or
equity interests.
"Superfund" means the United States Comprehensive
Environmental Response Compensation and Liability Act of 1980, 42
U.S.C. Sections 6901 et seq., as amended.
"Tax" means any domestic or foreign federal, state,
county or local tax, levy, impost or other charge of any kind
whatsoever, including any interest or penalty thereon or addition
thereto, whether disputed or not.
"Tax Return" means any return, declaration, report,
claim for refund, or information return or statement relating to
any Tax, including any schedule or attachment thereto, and
including any amendment thereof.
- 5 -
<PAGE>
"Transfer Agreement" means the Option, Transfer and
Registration Agreement substantially in the form of Exhibit 1.1.
"USF" means United States Filter Corporation, a
Delaware corporation.
"USF Common Stock" means USF's common stock, par value
$0.01 per share.
"USF Shares" has the meaning given that term in Section
2.4.
"USF Share Value" has the meaning given that term in
Section 2.4.
1.2 Construction. As used herein, unless the context
otherwise requires: (i) references to "Article" or "Section" are
to an article or section hereof; (ii) all "Exhibits" and
"Schedules" referred to herein are to Exhibits and Schedules
attached hereto and are incorporated herein by reference and made
a part hereof; (iii) "include", "includes" and "including" are
deemed to be followed by "without limitation" whether or not they
are in fact followed by such words or words of like import; and
(iv) the headings of the various articles, sections and other
subdivisions hereof are for convenience of reference only and
shall not modify, define or limit any of the terms or provisions
hereof.
ARTICLE II.
THE TRANSACTION
2.1 Sale and Purchase of Company Shares. Upon the terms
and subject to the conditions of this Agreement and in
consideration of the Purchase Price, Sellers shall sell, assign,
transfer and deliver the Company Shares to Buyer, and Buyer shall
purchase from Sellers and take delivery of the Company Shares, at
the Closing, free of all Encumbrances.
2.2 Purchase Price. The aggregate purchase price for the
Company Shares shall be US$4,250,000 (the "Purchase Price")
increased or decreased by the Post-Closing Purchase Price
Adjustment, if any.
2.3 Closing. The consummation of the purchase and sale of
the Company Shares and the other transactions contemplated hereby
(the "Closing") shall take place at 10:00 a.m., local time, on
September 30, 1996, at the offices of von Briesen, Purtell &
Roper, s.c., 411 East Wisconsin Avenue, Suite 700, Milwaukee,
Wisconsin, or at such other time, date or place as the parties
agree (the "Closing Date").
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2.4 Payment. Upon the terms and subject to the conditions
of this Agreement, (i) at Closing, Buyer shall deliver the
Purchase Price to Sellers pro rata by delivery of that number of
________
shares of common stock of USF, par value $0.01 (rounded in the
aggregate to the nearest whole share; collectively, such shares
together with any shares of common stock of USF delivered to
Sellers pursuant to the Post-Closing Purchase Price Adjustment,
the "USF Shares") that is equal to the Purchase Price less the
amount to be held in escrow pursuant to Section 7.4 (the "Escrow
Amount"), divided by the closing price for the USF Shares as
reported by the NYSE on the fifth to the last trading day
preceding the Closing Date (the "USF Share Value"), and (ii)
subject to Buyer's right to hold in escrow USF Shares pursuant to
Section 7.4 for the time period described therein. Within five
(5) business days after the determination of the Post-Closing
Purchase Price Adjustment is made and the time period described
in Section 7.4 has expired, Buyer and Sellers shall settle the
Post-Closing Purchase Price Adjustment as follows: (x) if the
Post-Closing Purchase Price Adjustment results in an increase in
the Purchase Price, Buyer shall deliver to Sellers, pro rata,
________
that number of shares of common stock of USF, valued at the USF
Share Value, equal to the Post-Closing Purchase Price Adjustment
(or cash in the event the Put Right or the Call Offer provided
for in the Transfer Agreement have been exercised), and (y) if
the Post-Closing Purchase Price Adjustment results in a decrease
in the Purchase Price, that number of USF Shares valued at the
USF Share Value (or cash, if applicable), equal to the Post-
Closing Purchase Price Adjustment shall be distributed to Buyer
from the escrow established pursuant to Section 7.4(b).
2.5 Post-Closing Purchase Price Adjustment. If the Net
Operating Assets of the Company at the close of business on the
Closing Date as shown on the Adjusted Closing Balance Sheet
("Closing Balance") is more than $5,000 greater or more than
$5,000 less than $1,513,414.88, the total Net Operating Assets
balance on June 30, 1996 ("June Balance"), then the Purchase
Price shall be increased or decreased (as appropriate), dollar-
for dollar, by the amount of such excess or deficiency (i.e., to
the extent that the Closing Balance exceeds the June Balance plus
$5,000 or is less than the June Balance less $5,000). "Net
Operating Assets" means the Company's total assets (other than
cash and cash equivalents) less liabilities, as adjusted and
calculated in accordance with the procedure established for
delivering the Final Closing Balance Sheet in Section 2.6. Prior
to or at Closing, the Company will distribute existing cash in
payment of expenses pursuant to Sections 3.24 and 8.1, and to
redeem its outstanding preferred stock and outstanding
subordinated debt, with any remaining cash to be distributed pro
rata to Sellers as a dividend.
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2.6 Closing Balance Sheets.
(a) Preliminary and Adjusted Closing Balance Sheets.
Promptly after the Closing, Seller shall prepare a consolidated
balance sheet of the Company as of the close of business on the
Closing Date (the "Preliminary Closing Balance Sheet"). The
Preliminary Closing Balance Sheet shall be prepared in accordance
with the Accounting Principles but will not reflect the results
of the physical inventory taken on September 30, 1996. As used
herein, "Accounting Principles" mean the set of principles and
methodologies applied on a basis consistent with past practices
of the Company, except that no item shall fail to be included
therein or excluded therefrom on the basis of materiality,
individually or collectively. The parties shall conduct a
physical count of the inventory of the Company as of the close of
business on September 30, 1996 in accordance with generally
accepted auditing standards. The results of such inventory will
be included in the Adjusted Closing Balance Sheet. Buyer shall
examine and review the Preliminary Closing Balance Sheet in
accordance with generally accepted auditing standards and, based
upon such examination, make such adjustments, if any, to the
Preliminary Closing Balance Sheet as shall in its judgment be
required to cause the Preliminary Closing Balance Sheet to
reflect fairly those items required to be reflected therein in
accordance with the Accounting Principles (after examination and
any adjustment, the "Adjusted Closing Balance Sheet").
(b) Delivery of Adjusted Closing Balance Sheet.
Within 30 days after Seller has delivered to Buyer the
Preliminary Closing Balance Sheet, the Adjusted Closing Balance
Sheet shall be delivered by Buyer to Sellers. Sellers and their
representatives shall be provided complete access to all work
papers and other information used by Buyer in preparing the
Adjusted Closing Balance Sheet. The Adjusted Closing Balance
Sheet, when delivered by Buyer to Sellers, shall be deemed
conclusive and binding on the parties for purposes of determining
the Post-Closing Purchase Price Adjustment, unless Seller
notifies Buyer in writing within thirty (30) days after receipt
of the Adjusted Closing Balance Sheet of its disagreement
therewith, which notice shall state with reasonable specificity
the reasons for any disagreement and identify the items and
amounts in dispute.
(c) Arbitration. If any disagreement concerning the
Post-Closing Purchase Price Adjustment is not resolved by Buyer
and Sellers within thirty (30) days following the receipt by
Buyer of notice from Seller of a disagreement concerning the
Post-Closing Purchase Price Adjustment, the undisputed amount, if
any, shall be paid in accordance with Section 2.5, and Buyer and
Sellers shall promptly engage, on standard terms and conditions
for a matter of such nature, a nationally recognized firm of
independent accountants to resolve such dispute. The firm of
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independent accountants shall be proposed in writing by Buyer to
Sellers. In the absence of prompt agreement on the identity of
the independent accountants, the Chicago office of the accounting
firm of Ernst & Young, LLP shall be engaged by the parties. The
engagement agreement with the independent accountants shall
require the independent accountants to make their determination
with respect to the items in dispute within ninety (90) days
following the receipt by Sellers of the Adjusted Closing Balance
Sheet. Buyer and Sellers shall each pay one-half of the cost of
the fees and expenses of such independent accountants at the time
of payment of the Post-Closing Purchase Price Adjustment. The
resolution by the independent accountants of any dispute
concerning the Post-Closing Purchase Price Adjustment shall be
final, binding and conclusive upon the parties and shall be the
parties' sole and exclusive remedy regarding any dispute
concerning the Post-Closing Purchase Price Adjustment.
(d) Final Closing Balance Sheet. The Adjusted Closing
Balance Sheet, as modified by the parties' agreement and by any
determination by the independent accountants as described in this
Section 2.6, shall be the "Final Closing Balance Sheet".
2.7 Transfer Agreement. The USF Shares shall be entitled
to the benefits of and subject to the restrictions contained in
the Transfer Agreement.
2.8 USF Guaranty. USF guaranties the performance by Buyer
of its obligations under Article II and Section 6.4, subject to
all of the applicable terms and conditions thereof.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
OF SELLER(S) AND THE COMPANY
As an inducement to Buyer and USF to enter into this
Agreement and consummate the transactions contemplated hereby,
and subject to the limitations set forth below and in Article
VII, each of the Sellers and the Company, severally but not
jointly, represents and warrants to Buyer and USF as follows.
Each Seller's responsibility for breach of any representation or
warranty hereunder shall be limited to such Seller's pro rata
________
share of the Escrow Amount and the Sellers aggregate
responsibility for such a breach shall be limited to the Ceiling
Amount (with the exception of any liability under Section 7.6).
3.1 Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws
of its jurisdiction of organization, and has the corporate power
and authority to own or lease its properties, carry on its
business as now conducted, enter into this Agreement and the
Other Agreements to which it is or is to become a party and
perform its obligations hereunder and thereunder.
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3.2 Authorization; Enforceability. This Agreement and each
Other Agreement to which Sellers or the Company, or any of them,
is a party have been duly executed and delivered by and
constitute the legal, valid and binding obligations of such
party, enforceable against it in accordance with their respective
terms. Each Other Agreement to which either Sellers or the
Company is to become a party pursuant to the provisions hereof,
when executed and delivered by such party, will constitute the
legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with the terms of such Other
Agreement. All actions contemplated by this Section and this
Agreement have been duly and validly authorized by all necessary
proceedings by Sellers and the Company.
3.3 Company Shares; Capitalization. The authorized capital
stock of the Company consists solely of 601,250 shares of capital
stock, US$.08 par value per share, of which 600,000 shares are
common stock and 1,250 shares are 6% Cumulative Preferred Stock
and none are held in its treasury. At Closing, the Company
Shares will constitute all of the issued and outstanding shares
of capital stock of the Company. The Company Shares are or will
at Closing be owned of record, legally and beneficially by
Sellers as follows: 351,000 shares of common stock held by Goulet
and 231,000 shares of common stock issuable to M&I upon exercise
of the Warrant (which also holds the 1,250 shares of Preferred
Stock to be redeemed at or prior to Closing). Except as set
forth on Schedule 3.3, there are no Security Rights relating to
any of the Company Shares. All rights and powers to vote the
Company Shares are (or would upon exercise of the Warrant be)
held exclusively by Sellers. The Company represents that all of
the Company Shares are or will be validly issued prior to the
Closing, fully paid and nonassessable, were not issued in
violation of the terms of any agreement or other understanding,
and were issued in compliance with all applicable federal and
state securities or "blue sky" laws and regulations.
3.4 Subsidiaries and Investments. The Company does not
own, nor has it ever owned, any shares of capital stock of or
other equity interest in any corporation, partnership, joint
venture or other entity.
3.5 Qualification. The Company is duly qualified and in
good standing as a foreign corporation and is duly authorized to
transact business in each jurisdiction wherein the character of
the properties owned or leased by it or the nature of the
activities conducted by it makes such qualification and good
standing necessary.
3.6 No Violation of Laws or Agreements; Consents. Neither
the execution and delivery of this Agreement or any Other
Agreement to which Sellers or the Company is or is to become a
party, the consummation of the transactions contemplated hereby
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or thereby nor the compliance with or fulfillment of the terms,
conditions or provisions hereof or thereof by Sellers or the
Company will: (i) contravene any provision of the Governing
Documents of the Company, (ii) conflict with, result in a breach
of, constitute a default or an event of default (or an event that
might, with the passage of time or the giving of notice or any of
them, constitute a default or event of default) under any of the
terms of, result in the termination of, result in the loss of any
right under, or give to any other Person the right to cause such
a termination of or loss under, any asset of the Company,
including any Permit, Intellectual Property, license, franchise,
indenture, mortgage or any other contract, agreement or
instrument to which either Sellers or the Company is a party or
by which any of the Company's assets may be bound or affected,
(iii) result in the creation, maturation or acceleration of any
liability or obligation of the Company (or give to any other
Person the right to cause such a creation, maturation or
acceleration), (iv) violate any Law or violate any judgment or
order of any Governmental Body to which the Company is subject or
by which any of the Company assets may be bound or affected, or
(v) result in the creation or imposition of any Encumbrance upon
any of the Company Shares or asset of the Company or give to any
other Person any interest or right therein. No consent, approval
or authorization of, or registration or filing with, any Person
is required in connection with the execution or delivery by
Sellers or the Company, or any of them, of this Agreement or any
of the Other Agreements to which either, or any of them is or is
to become a party pursuant to the provisions hereof or the
consummation by or the Company, or any of them, of the
transactions contemplated hereby or thereby.
3.7 Financial Information.
(a) Records. The books of account and related records
of the Company reflect accurately and in detail its assets,
liabilities, revenues, expenses and other transactions.
(b) Financial Statements. Attached as Exhibit 3.7(b)
are the consolidated and consolidating balance sheets, income
statements and statements of cash flows for the Company at
September 30, 1995, 1994, 1993 and for the years then ended, and
attached hereto as Exhibit 3.7(b) are the unaudited annual
balance sheets and income statements for the Company at July 31,
1996 and for the periods then ended (collectively, the "Financial
Statements"). The Financial Statements (i) are accurate, correct
and complete in accordance with the books of account and records
of the Company, (ii) have been prepared in accordance with the
Accounting Principles on a consistent basis throughout the
indicated periods, and (iii) present fairly the consolidated
financial condition, assets, and liabilities and results of
operation of the Company at the dates and for the relevant
periods indicated in accordance with the Accounting Principles.
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(c) Undisclosed Liabilities. The Company has no debt,
obligation or liability, absolute, fixed, contingent or
otherwise, of any nature whatsoever, whether due or to become
due, including, to the Knowledge of the Company, any unasserted
claim, whether incurred directly or by any predecessor thereto,
and whether arising out of any act, omission, transaction,
circumstance, sale of goods or services, state of facts or other
condition, except: (i) those reflected or reserved against on the
Financial Statements in the amounts shown therein; (ii) those not
required under Accounting Principles to be reflected or reserved
against in the Financial Statements that are expressly quantified
and set forth in the Contracts identified pursuant to
Section 3.13; (iii) those disclosed on Schedule 3.7(c) attached
hereto; and (iv) those of the same nature as those set forth on
the Financial Statements (or not required to be so set forth
pursuant to the Accounting Principles) that have arisen in the
ordinary course of business of the Company after the date of the
latest Financial Statements through the date hereof, all of which
have been consistent in amount and character with past practice
and experience, and none of which, individually or in the
aggregate, has had or will have a material adverse effect on the
business, financial condition or prospects of the Company and
none of which represents a liability for breach of contract or
warranty or has arisen out of tort, infringement of any
intellectual property rights, or violation of Law or is claimed
in any pending or threatened legal proceeding.
(d) No Changes. Since the date of the Financial
Statements, to the Closing Date, the Company has conducted its
business only in the ordinary course. Without limiting the
generality of the foregoing sentence, since the date of the
Financial Statements, there has not been any: (i) material
adverse change in the financial condition, assets, liabilities,
net worth, earning power, business or prospects of the Company;
(ii) material damage or destruction to any asset of the Company,
whether or not covered by insurance; (iii) strike or other labor
trouble at the Company; (iv) creation of any Encumbrance on any
asset of the Company; (v) except as provided for in Section 2.5,
declaration or payment of any dividend or other distribution on
or with respect to or redemption or purchase by the Company of
any shares of capital stock of the Company, including any of the
Company Shares; (vi) increase in the salary, wage or bonus of any
managerial employee of the Company except those done in the
normal course of business for periodic raises in accordance with
past business practices, or any increase in the number of such
employees; (vii) asset acquisition or expenditure in excess of
US$5,000, other than the purchase of inventory in the ordinary
course of business; (viii) amendment to any Company Plan; (ix)
change in any method of accounting; (x) payment to or transaction
with any Related Party, which payment or transaction is not
specifically disclosed on Schedule 3.16; (xi) disposition of any
asset (other than inventory in the ordinary course of business)
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for less than fair market value; (xii) payment, prepayment or
discharge of any liability other than in the ordinary course of
business or any failure to pay any liability when due,
(xiii) write-offs or write-downs of any assets of the Company;
(xiv) creation, termination or amendment of, or waiver of any
right under, any material agreement of the Company; or (xv)
agreement or commitment to do any of the foregoing.
3.8 Taxes.
(a) Tax Returns; Payment. The Company has filed or
caused to be filed on a timely basis, or will file or cause to be
filed on a timely basis, all Tax Returns that are required to be
filed by it prior to or on the Closing Date with respect to the
Company's interest therein pursuant to the Law of each
governmental authority with taxing power over it. To the
Knowledge of the Company all such Tax Returns were or will be, as
the case may be, correct and complete. The Company has paid all
Taxes that have become due as shown on such Tax Returns or
pursuant to any assessment received as an adjustment to such Tax
Returns, except such Taxes, if any, as are being contested in
good faith and disclosed on the attached Schedule 3.8. The
Company is not currently the beneficiary of any extension of time
within which to file any Tax Return. No claim has been made by a
taxing authority of a jurisdiction where the Company does not
file Tax Returns that it is or may be subject to taxation in that
jurisdiction.
(b) Withholding. The Company has withheld and paid
all Taxes required to have been withheld and paid in connection
with amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other third party.
3.9 Inventory. All of the inventory owned by the Company
is valued on the books and records of the Company and in the
Financial Statements at lower of cost or market, the cost thereof
being determined on a LIFO basis in accordance with Accounting
Principles. To the Knowledge of the Company, all other finished
goods inventory of the Company is in good, merchantable and
useable condition and is salable in the ordinary course of
business within a reasonable time and at normal profit margins,
and all of the raw materials and work-in-process inventory of the
Company can reasonably be expected to be consumed in the ordinary
course of business within a reasonable period of time. None of
the Company's inventory is obsolete or has been consigned to
others or is on consignment from others.
3.10 Receivables. Schedule 3.10, attached hereto, discloses
all trade and other accounts receivable of the Company
("Receivables") outstanding as of September 19, 1996 presented on
an aged basis and separately identifies each account and the
total amount of each related Receivable. All Receivables,
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whether reflected on the Financial Statements disclosed on
Schedule 3.10 hereto or created after the date of the Financial
Statements, arose from bona fide sale transactions of the
_________
Company, and to the Knowledge of the Company no portion of any
Receivable is subject to counterclaim, defense or set-off or is
otherwise in dispute except as set forth in Schedule 3.10.
Except to the extent of the recorded reserve for doubtful
accounts, to the Knowledge of the Company all of the Receivables,
net of the reserves reflected on the Final Closing Balance Sheet
are collectible in the ordinary course of business and should be
fully collected within (i) one hundred twenty (120) days after
having been created or (ii), for those Receivables set forth on
Schedule 3.10 as being over 120 days old, 120 days after the
Closing Date, in each case using commercially reasonable efforts,
except for contract reserves and retainages.
3.11 Condition of Assets; Business; Title.
(a) Condition of Assets; Business. The buildings,
fixtures, improvements, machinery, equipment, tools, furniture,
improvements and tangible personal property of the Company are in
good operating condition and repair and are suitable for the
purposes for which they are used in the Business. The Company is
engaged in the Business and no other business. All of the
Company's assets are reflected on the Financial Statements or,
under Accounting Principles, are not required to be reflected
thereon and include substantially all assets that are necessary
for use in and operation of the Business.
(b) Title. The Company has good and marketable title
to all of its assets, free and clear of all of Encumbrances,
except for those Encumbrances disclosed in Schedule 3.11(b)
attached hereto.
3.12 No Pending Litigation or Proceedings. Except as
described on Schedule 3.12, no action, suit, investigation, claim
or proceeding of any nature or kind whatsoever, whether civil,
criminal or administrative, by or before any Governmental Body or
arbitrator ("Litigation") is pending or, to the Knowledge of and
the Company, threatened against or affecting the Company, the
Business, any of the Company's assets, any of the Company Shares,
or any of the transactions contemplated by this Agreement or any
Other Agreement, and to the Knowledge of the Company there is no
basis for any Litigation. The Company has not been a party to
any other litigation during the past five (5) years. There is
presently no outstanding judgment, decree or order of any
Governmental Body against or affecting the Company, the Business,
any of the Company's assets, any of the Company Shares, or any of
the transactions contemplated by this Agreement or any Other
Agreement. Except as described on Schedule 3.12, the Company
does not have pending any Litigation against any third party.
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3.13 Contracts; Compliance. Disclosed on Schedule 3.13,
3.15, 3.17, 3.19, 3.20 or 3.21, each of which are attached
hereto, is a brief description of each contract, lease,
indenture, mortgage, instrument, commitment or other agreement,
arrangement or understanding, oral or written, formal or
informal, to which the Company is a party or by which it or its
assets may be affected, except for service agreements whose
annual contract price is less than US$25,000, and that (i) is
material to the Business or the Company's assets or operations,
individually or in the aggregate, (ii) involves the purchase,
sale or lease of any asset, materials, supplies, inventory or
services in excess of US$25,000 per year, (iii) has an unexpired
term of more than six (6) months from the date hereof, taking
into account the effect of any renewal options, (iv) relates to
the borrowing or lending of any money or guarantee of any
obligation, (v) limits the right of the Company to compete in any
line of business or otherwise restricts any right the Company may
have, (vi) is an employment or consulting contract involving
payment of compensation and benefits, or (vii) was not entered
into in the ordinary course (each, a "Contract" and collectively,
the "Contracts"). Each Contract is a legal, valid and binding
obligation of the Company and is in full force and effect. To
the Knowledge of the Company, the Company and each other party to
each Contract has performed all obligations required to be
performed by it thereunder and is not in breach or default, and
is not alleged to be in breach or default, in any respect
thereunder, and no event has occurred and no condition or state
of facts exists (or would exist upon the giving the notice or the
lapse of time or any of them) that would become or cause a
breach, default or event of default thereunder, would give to any
Person the right to cause such a termination or would cause an
acceleration of any obligation thereunder. The Company is not
currently renegotiating any contract in excess of US$25,000,
except as those Contracts disclosed on Schedule 3.13 attached
hereto, nor has the Company received any notice of non-renewal or
price increase or sales or production allocation with respect to
any Contract.
3.14 Permits; Compliance With Law. The Company holds all
permits, certificates, licenses, franchises, privileges,
approvals, registrations and authorizations required under any
applicable Law or otherwise advisable in connection with the
operation of its assets and Business (each, a "Permit" and
collectively, "Permits"). Each permit is valid, subsisting and
in full force and effect. The Company is in material compliance
with and has fulfilled and performed its obligations under each
Permit, and, to the Knowledge of the Company, no event or
condition or state of facts exists (or would exist upon the
giving of notice or lapse of time or any of them) that could
constitute a breach or default under any Permit. Except as set
forth in Schedule 3.14, the Company has received no notice of any
violation of law and, to the Knowledge of the Company it is not
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currently in violation of any law and no event has occurred or
condition or state of facts exist which could give rise to any
such violation. The Company has not received any notice of
nonrenewal of any Permit.
3.15 Real Property. Schedule 3.15, attached hereto,
discloses and summarizes all real properties currently used or
leased by the Company or in which the Company has an interest
(collectively, the "Real Property") and identifies the record
title holder of all of the Real Property. The Company owns no
Real Property. The Company has the right to quiet enjoyment of
all Real Property in which it holds a leasehold interest for the
full term, including all renewal rights, of the lease or similar
agreement relating thereto. Copies of all title insurance
policies written in favor of the Company and all surveys relating
to the Real Property leased by the Company have been delivered to
Buyer. To the Knowledge of the Company, the use and operation of
all Real Property conform to all applicable building, zoning,
safety and subdivision Laws, Environmental Laws and other Laws,
and all restrictive covenants and restrictions and conditions
affecting title. The Company has not received any written or
oral notice of assessments for public improvements or
condemnation against any Real Property.
3.16 Transactions With Related Parties. No Related Party is
or has been during the past five (5) years a party to any
transaction, agreement or understanding with the Company except
pursuant to arrangements disclosed on Schedule 3.16, attached
hereto. For this purpose a Related Party is defined as a Seller,
an Affiliate of a Seller, including the Company, an officer or
director of M&I or the Company, and any spouse, sibling, ancestor
or lineal descendant of Goulet.
3.17 Labor Relations. Except as set forth in Schedule 3.17,
no employee of the Company is represented by any union or other
labor organization. No representation election, arbitration
proceeding, grievance, labor strike, dispute, slowdown, stoppage
or other labor trouble is pending or, to the Knowledge of the
Company, threatened against, involving, affecting or potentially
affecting the Company. No complaint against the Company is
pending or, to the Knowledge of the Company, threatened before
the National Labor Relations Board, the Equal Employment
Opportunity Commission or any similar state or local agency, by
or on behalf of any employee or the Company. Except as set forth
in Schedule 3.17, the Company has no contingent liability for
sick leave, vacation time, severance pay or any similar item. To
the Knowledge of the Company, the Company has no contingent
liability for any occupational disease of any of its employees,
former employees or others. Neither the execution and delivery
of this Agreement, the performance of the provisions hereof nor
the consummation of the transactions contemplated hereby will
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trigger any severance pay obligation under any contract or under
any Law.
3.18 Products Liability; Warranties. To the Knowledge of
the Company, there is no litigation, investigation, proceeding or
claim pending or threatened against or relating to the Company,
its properties or business, of facts or circumstances, which
could reasonably give rise to a material claim for bodily injury
or property damage resulting from accidents occurring at any
time, alleged or otherwise growing out of or alleged to have
grown out of the manufacture, sale, distribution, existence,
maintenance and/or use of products distributed by the Company
prior to Closing. To the Knowledge of the Company, the Company
shall have no liability after the Closing Date not fully covered
by insurance or warranties relating to any product manufactured,
distributed or sold by the Company prior to the Closing Date,
whether or not such liability relates to products that are
defective or improperly designed or manufactured or in breach of
any express or implied product warranty. The attached Schedule
3.18 discloses and describes the terms of all express product
warranties under which the Company has distributed its products
prior to the Closing Date.
3.19 Insurance. The attached Schedule 3.19 discloses all
insurance policies with respect to which the Company is the
owner, insured or beneficiary and the manner in which the Company
provides coverage for workers compensation claims. The Company
believes that the policies are reasonable, in both scope and
amount, in light of the risk attendant to the Business. The
Company will not have any liability after the Closing for
retrospective or retroactive premium adjustments, except as
disclosed on the attached Schedule 3.19. For the past five (5)
years, all insurance policies covering product liability and
general liability maintained by or for the benefit of the Company
have been "occurrence" policies and not "claims made" policies.
3.20 Intellectual Property Rights. Except as disclosed in
Schedule 3.20, there are no Intellectual Property rights, license
agreements or the like used or granted to or owned by the
Company. The attached Schedule 3.20 discloses all of the
trademark and service mark rights, applications and
registrations, trade names, fictitious names, service marks,
logos and brand names, copyrights, copyright applications,
letters patent, patent applications and licenses of any of the
foregoing owned or used by the Company in or applicable to the
Business. The Company has the entire right, title and interest
in and to, or has the exclusive perpetual royalty-free right to
use, the intellectual property rights disclosed on the attached
Schedule 3.20 and all other processes, know-how, show-how,
formulae, trade secrets, inventions, discoveries, improvements,
blueprints, specifications, drawings, designs, and other
proprietary rights necessary or applicable to or advisable for
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use in the Business ("Intellectual Property"), free and clear of
all Encumbrances. The Company has no Intellectual Property under
license. The Intellectual Property is valid and not the subject
of any interference, opposition, re-examination or cancellation.
To the Knowledge of the Company, no person is infringing upon nor
has any Person misappropriated any Intellectual Property. To the
Knowledge of the Company, it is not infringing upon the
Intellectual Property rights of any other Person.
3.21 Employee Benefits.
(a) Benefit Plans; Company Plans. The attached
Schedule 3.21 discloses all written and unwritten "employee
benefit plans" within the meaning of Section 3.3 of ERISA, and
any other written and unwritten profit sharing, pension, savings,
deferred compensation, fringe benefit, insurance, medical,
medical reimbursement, life, disability, accident, post-
retirement health or welfare benefit, stock option, stock
purchase, sick pay, vacation, employment, severance, termination
or other plan, agreement, contract, policy, trust fund or
arrangement (each, a "Benefit Plan"), whether or not funded and
whether or not terminated, (a) maintained or sponsored by the
Company, or (b) with respect to which the Company (or Sellers
with respect to the Company) has or may have liability or is
obligated to contribute, or (c) that otherwise covers any of the
current or former employees of the Company or their
beneficiaries, or (d) as to which any such current or former
employees or their beneficiaries participated or were entitled to
participate or accrue or have accrued any rights thereunder
(each, a "Company Plan").
(b) Company Group Matters; Funding. Neither the
Company nor any corporation that may be aggregated with the
Company under Section 414(b), (c), (m) or (o) of the Code (the
"Company Group") has any obligation to contribute to or any
direct or indirect liability under or with respect to any Benefit
Plan of the type described in Sections 4063 and 4064 of ERISA or
Section 413(c) of the Code. The Company does not have any
liability, and after the Closing the Company will not have any
liability, with respect to any Benefit Plan of any other member
of the Company Group, whether as a result of delinquent
contributions, distress terminations, fraudulent transfers,
failure to pay premiums to the PBGC, withdrawal liability or
otherwise. No accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code) exists nor has
any funding waiver from the IRS been received or requested with
respect to any Company Plan or any Benefit Plan of any member of
the Company Group and no excise or other Tax is due or owing
because of any failure to comply with the minimum funding
standards of the Code or ERISA with respect to any of such plans.
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(c) Compliance. To the Knowledge of the Company, each
of the Company Plans and all related trusts, insurance contracts
and funds have been created, maintained, funded and administered
in all respects in compliance with all applicable Laws and in
compliance with the plan document, trust agreement, insurance
policy or other writing creating the same or applicable thereto.
No Company Plan is or is proposed to be under audit or
investigation, and no completed audit of any Company Plan has
resulted in the imposition of any Tax, fine or penalty.
(d) Qualified Plans. No Company Plan is a qualified
plan under Section 401(a) of the Code and exempt from United
States Federal income tax under Section 501(a) of the Code (a
"Qualified Plan").
(e) No Defined Benefit Plans. No Company Plan is a
defined benefit plan within the meaning of Section 3(35) of ERISA
(a "Defined Benefit Plan"). No Defined Benefit Plan sponsored or
maintained by any member of the Company Group has been terminated
or partially terminated after September 1, 1974, except as set
forth on Schedule 3.21. Each Defined Benefit Plan identified as
terminated on Schedule 3.21 has met the requirement for standard
termination for single-employer plans contained in Section
4041(b) of ERISA. During the five (5) year period ending on the
Closing Date, no member of the Company Group has transferred a
Defined Benefit Plan to a corporation that was not, at the time
of transfer, related to the transferor in any manner described in
Sections 414(b), (c), (m) or (o) of the Code.
(f) Multiemployer Plans. No Company Plan is a
multiemployer plan within the meaning of Section 3(37) or Section
4001(a)(3) of ERISA (a "Multiemployer Plan"). No member of the
Company Group has withdrawn from any Multiemployer Plan or
incurred any withdrawal liability to or under any Multiemployer
Plan. No Company Plan covered any employee with any member of
the Company Group in any foreign country or territory.
(g) Prohibited Transactions; Fiduciary Duties; Post-
retirement Benefits. No prohibited transaction (within the
meaning of Section 406 of ERISA and Section 4975 of the Code)
with respect to any Company Plan exists or has occurred that
could subject the Company to any liability or Tax under Part 5 of
Title I of ERISA or Section 4975 of the Code. To the Knowledge
of the Company, no member of the Company Group, nor any
administrator or fiduciary of any Company Plan, nor any agent of
any of the foregoing, has engaged in any transaction or acted or
failed to act in a manner that will subject the Company to any
liability for a breach of fiduciary or other duty under ERISA or
any other applicable Law. With the exception of the requirements
of Section 4980B of the Code, no post-retirement benefits are
provided under any Company Plan that is a welfare benefit plan as
described in ERISA Section 3(1).
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3.22 Environmental Matters.
(a) Compliance; No Liability. To the Knowledge of the
Company, the Company has operated the Business and each parcel of
Real Property in compliance with all applicable environmental
Laws. To the Knowledge of the Company, the Company is not
subject to any liability, penalty or expense (including legal
fees) and will not hereafter suffer or incur any loss, liability,
penalty or expense (including legal fees) by virtue of any
violation of any Environmental Law occurring prior to the
Closing.
(b) Treatment; CERCLIS. The Company has not treated,
stored, recycled or disposed of any Regulated Material on any
real property, and, to the Knowledge of the Company, no other
Person has treated, stored, recycled or disposed of any Regulated
Material on any part of the Real Property. The Company has not
transported any Regulated Material or arranged for the
transportation of any Regulated Material to any location that is
listed or proposed for listing on the National Priorities List
pursuant to Superfund, on CERCLIS or any other location that is
the subject of federal, state or local enforcement action or
other investigation that may lead to claims against the Company
for cleanup costs, remedial action, damages to natural resources,
to other property or for personal injury including claims under
Superfund. None of the Real Property is listed or, to the
knowledge of Seller or the Company, proposed for listing on the
National Priorities List pursuant to Superfund, CERCLIS or any
state or local list of sites requiring investigation or cleanup.
(c) Notices; Existing Claims; Certain Regulated
Materials; Storage Tanks. The Company has not received any
request for information, notice of claim, demand or other
notification that it is or may be potentially responsible with
respect to any investigation, abatement or cleanup of any
threatened or actual release of any Regulated Material. The
Company is not required to place any notice or restriction
relating to the presence of any Regulated Material at any Real
Property or in any deed to any Real Property. The Company has
provided to Buyer a list of all sites to which the Company has
transported any Regulated Material for recycling, treatment,
disposal, other handling or otherwise. There has been no past,
and there is no pending or contemplated, claim by the Company
under any Environmental Law or Laws based on actions of others
that may have impacted on the Real Property, and the Company has
not entered into any agreement with any Person regarding any
Environment Law, remedial action or other environmental liability
or expense. All storage tanks located on the Real Property,
whether underground or aboveground, are disclosed on Schedule
3.22, and all such tanks and associated piping are in sound
condition and are not leaking and have not leaked.
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3.23 Customer Relations. Except as set forth on Schedule
3.23, to the knowledge of the Company, there exists no condition
or state of facts or circumstances involving the Company's
customers, suppliers, distributors or sales representatives that
the Company can reasonably foresee could adversely affect the
Business after the Closing Date.
3.24 Finders' Fees. Neither Seller nor the Company nor any
of their respective officers, directors or employees has
employed any broker or finder or incurred any liability for any
brokerage fee, commission or finders' fee in connection with any
of the transactions contemplated hereby or by any Other
Agreement, except with respect to Cleary Gull Reiland & McDevitt,
Inc., who acted as financial advisor to the Company and whose
fees will be paid by the Company at Closing.
3.25 Securities Matters. Each Seller is an "accredited
investor" within the meaning of Rule 501 of the Securities Act.
Each Seller is acquiring the USF Shares not with a view to or in
connection with any distribution of such shares.
3.26 Disclosure. None of the representations or warranties
of the Company contained herein and none of the information
contained in the Schedules referred to in Article III is false or
misleading in any material respect or omits to state a fact
herein or therein necessary to make the statements herein or
therein not misleading in any material respect.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Sellers to enter into this Agreement and
consummate the transactions contemplated hereby, each of USF and
Buyer jointly and severally represents and warrants to Sellers as
follows:
4.1 Organization. USF and Buyer are corporations duly
organized, validly existing and in good standing under the laws
of the State of Delaware and the Commonwealth of Massachusetts,
respectively, and have the corporate power and authority to own
or lease its properties, carry on its business, enter into this
Agreement and the Other Agreements to which it is or is to become
a party and perform its obligations hereunder and thereunder.
4.2 Authorization; Enforceability. This Agreement and each
Other Agreement to which Buyer or USF is a party, respectively,
have been duly executed and delivered by and constitute the
legal, valid and binding obligations of Buyer and USF,
respectively, enforceable in accordance with their respective
terms. Each Other Agreement to which Buyer and USF is to become
a party pursuant to the provisions hereof, when executed and
delivered by Buyer or USF, will constitute the legal, valid and
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binding obligation of Buyer and USF, respectively, enforceable
against Buyer and USF, as appropriate, in accordance with the
terms of such Other Agreement. All actions contemplated by this
Section have been duly and validly authorized by all necessary
proceedings by Buyer and USF.
4.3 No Violation of Laws; Consents. Neither the execution
and delivery of this Agreement or any Other Agreement to which
Buyer or USF is or is to become a party, the consummation of the
transactions contemplated hereby or thereby nor the compliance
with or fulfillment of the terms, conditions or provisions hereof
or thereof by Buyer or USF will: (i) contravene any provision of
the Governing Documents of Buyer or USF, or (ii) violate any Law
or any judgment or order of any Governmental Body to which Buyer
or USF is subject or by which any of its assets may be bound or
affected. Except for listing of the USF Shares on the NYSE, no
consent, approval or authorization of, or registration or filing
with, any person is required in connection with the execution or
delivery by Buyer of this Agreement or any of the Other Agreement
to which Buyer is or is to become a party pursuant to the
provisions hereof or the consummation by Buyer of the
transactions contemplated hereby or thereby.
4.4 No Pending Litigation or Proceedings. No Litigation is
pending or, to the knowledge of Buyer, threatened against or
affecting Buyer in connection with any of the transactions
contemplated by this Agreement or any Other Agreement to which
Buyer is or is to become a party. There is presently no
outstanding judgment, decree or order of any Governmental Body
against or affecting Buyer in connection with the transactions
contemplated by this Agreement or any Other Agreement to which
Buyer is or is to become a party.
4.5 Capitalization. The authorized capital stock of USF
consists of 150,000,000 shares of common stock. The authorized
capital stock of Buyer consists of 400 shares of common stock,
par value $100.00 per share. The USF Shares to be issued to
Sellers pursuant to this Agreement will be duly authorized,
validly issued, fully paid and nonassessable and not subject to
preemptive rights created by statute, the USF's Certificate of
Incorporation or by-laws or any agreement to which the Buyer or
USF is a party or is bound.
4.6 SEC Filings. Buyer has delivered or made available to
each Seller all material filings made by USF under the Securities
Exchange Act of 1934 since the end of its most recent fiscal
year.
4.7 Finders' Fees. Neither Buyer nor any of its officers,
directors or employees has employed any broker or finder or
incurred any liability for any brokerage fee, commission or
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finders' fee in connection with any of the transactions
contemplated hereby.
ARTICLE V.
CERTAIN COVENANTS
5.1 Conduct of Business Pending Closing. From and after
the date hereof and until the Closing Date, unless Buyer shall
otherwise consent in writing, the Company shall, and Sellers
shall cause the Company to, conduct its affairs as follows:
(a) Ordinary Course; Compliance. The Business shall
be conducted only in the ordinary course and consistent with past
practice. The Company shall maintain its property, equipment and
other assets consistent with past practice and shall comply in a
timely fashion with the provisions of all Contacts and Permits
and its other agreements and commitments. The Company shall use
its best effort to keep its business organization intact, keep
available the services of its present employees and preserve the
goodwill of its suppliers, customers and others having business
relations with it. The Company shall maintain in full force and
effect the policies of insurance disclosed on Schedule 3.19,
subject only to variations required by the ordinary operations of
the Business, or else shall obtain, prior to the lapse of any
such policy, substantially similar coverage with insurers of
recognized standing.
(b) Transactions. The Company shall not: (i) amend
its Governing Documents; (ii) change its authorized or issued
capital stock or issue any Security Rights with respect to shares
of its capital stock (other than pursuant to Section 2.5); (iii)
enter into any contract or commitment the performance of which
may extend beyond the Closing, except those made in the ordinary
course of business, the terms of which are consistent with past
practice; (iv) enter into any employment or consulting contract
or arrangement that is not terminable at will and without penalty
or continuing obligation; (v) fail to pay any Tax or any other
liability or charge when due, other than charges contested in
good faith by appropriate proceedings; (vi) make, change or
revoke any Tax election or make any agreement or settlement with
any taxing authority; (vii) take any action or omit to take any
action that will cause a breach or termination of any Contract,
other than termination by fulfillment of the terms thereunder; or
(viii) increase any employee's salary, wage, benefits or bonus or
increase the number of employees of Company other than consistent
with business conditions and past practices.
5.2 Access, Information and Documents. Sellers and the
Company shall give to Buyer and to Buyer's employees and
representatives (including accountants, actuaries, attorneys,
environmental consultants and engineers) access during the normal
business hours to all of the properties, books, Tax Returns,
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contracts, commitments, records, officers, personnel and
accountants (including independent public accountants and their
audit workpapers concerning the Company) of the Company and shall
furnish to Buyer all such documents and copies of documents and
all information with respect to the properties, liabilities and
affairs of the Company and the Subsidiaries as Buyer may
reasonably request. All information provided to Buyer and/or USF
pursuant to this Section 5.2 shall be subject to the terms of the
letter agreement concerning confidentiality executed by USF dated
July 22, 1996, and both USF and Buyer shall be bound thereby.
5.3 Certain Tax Matters.
(a) Tax on Company Income. All federal, state or
local income tax of the Company for all taxable periods whether
prior to or after the Closing Date shall be paid by the Company
when due.
(b) Mutual Cooperation. Buyer and Sellers shall each
provide the other, and Buyer shall cause the Company to provide
Sellers, with such assistance as may reasonably be requested by
any of them in connection with the preparation of any Tax Return,
any Tax audit, or any judicial or administrative proceedings
relating to any Tax, and each will retain and provide the other
with any records or information that may be relevant to such Tax
Return, Tax audit, proceeding or determination. The party
requesting assistance hereunder shall reimburse the other for
direct expenses incurred in providing such assistance.
5.4 Covenant Not to Compete.
(a) Restriction. For a period of one (1) year from
and after the Closing Date, Goulet shall not, except as an
officer or employee of USF, Buyer, the Company or their
Affiliates, or with the prior written consent of USF, directly or
indirectly, own, manage, operate, join, control or participate in
the ownership, managements, operation or control of, or be
employed or otherwise connected as an officer, employer,
stockholder, partner or otherwise with, any business that at any
relevant time during such period directly or indirectly competes
with the Business in the United States. Ownership of not more
than 2% of the outstanding stock of any publicly traded company
shall not be a violation of this Section 5.4.
(b) Enforcement. The restrictive covenant contained
in this Section is a covenant independent of any other provisions
of this Agreement and the existence of any claim that Seller may
allege against any other party to this agreement, whether based
on this Agreement or otherwise, shall not prevent the enforcement
of this covenant. Sellers agree that Buyer's remedies at law for
any breach or threat of breach by Goulet of the provisions of
this Section will be inadequate, and the Buyer shall be entitled
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<PAGE>
to any injunction or injunctions to prevent breached of the
provision of this Section and to enforce specifically the terms
and provisions hereof, in addition to any other remedy to which
Buyer may be entitled at law or equity. In the event of
litigation regarding this covenant not to compete, the prevailing
party in such litigation shall, in addition to any other remedies
the prevailing party may obtain in such litigation, be entitled
to recover from the other party its reasonable legal fees and out
of pocket costs incurred by such party in enforcing or defending
its rights hereunder. The length of time for which this covenant
not to compete shall be in force shall not include any period of
violation or any other period required for litigation during
which Buyer seeks to enforce this covenant. Should any provision
of this Section be adjudged to any extent invalid by any
competent tribunal, such provision will be deemed modified to the
extent necessary to make it enforceable.
5.5 Publicity. The parties will not issue any press
release or otherwise make any announcements to the public or the
employees or the Company with respect to this Agreement without
the prior written consent of the other party except as required
by Law. This Section shall expire on the 30th day after the
Closing Date.
5.6 Fulfillment of Agreements. Each party hereto shall use
its best efforts to cause all of those conditions to the
obligations of the other under Article VI that are not beyond its
reasonable control to be satisfied on or prior to the Closing and
shall use its best efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective the
transactions contemplated by this Agreement.
ARTICLE VI.
CONDITIONS TO CLOSING; TERMINATION
6.1 Conditions Precedent to Obligation of Buyer. The
obligation of Buyer to proceed with the Closing under this
Agreement is subject to the fulfillment prior to or at Closing of
the following conditions, any one or more of which may be waived
in whole or in part by Buyer at Buyer's sole option:
(a) Bringdown of Representations and Warranties;
Covenants. Each of the representations and warranties of Sellers
and the Company contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date,
with the same force and effect as though such representations and
warranties had been made on, as of and with reference to the
Closing Date. Each of Sellers and the Company shall have
performed in all respects all of the covenants and complied with
all of the provisions required by this Agreement to be performed
or complied with by it at or before the Closing.
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<PAGE>
(b) Litigation. No statute, regulation or order of
any Governmental Body shall be in effect that restrains or
prohibits the transactions contemplated hereby or that would
limit or adversely affect Buyer's ownership of the Company Shares
or control of the Company, and there shall not have been
threatened, nor shall there be pending, any action or proceeding
by or before any Governmental Body challenging the lawfulness of
or seeking to prevent or delay any of the transactions
contemplated by this Agreement or any of the Other Agreements or
seeking monetary or other relief by reason of the consummation of
any of such transactions.
(c) No Material Adverse Change. Between the date
hereof and the Closing Date, there shall have been no material
adverse change, regardless of insurance coverage therefor, in the
Business or any of the assets, results of operations,
liabilities, prospects or condition, financial or otherwise, of
the Company.
(d) Private Placement. Buyer shall be satisfied that
there shall be a valid private placement of the USF Shares to be
delivered pursuant hereto under the Securities Act and under any
applicable state securities laws, including representations or
questionnaires or both from each Seller to the effect that each
has such knowledge and experience in financial and business
matters that would permit him to be capable of evaluating the
merits and risks of an investment in the USF Shares.
(e) Transfer Agreement. The Transfer Agreement shall
have been executed and delivered by Seller.
(f) Listing on NYSE. The USF Shares shall have been
authorized for listing on the NYSE, subject to official notice of
issuance.
(g) Environmental Assessment. Buyer shall be
satisfied that the environmental condition of the Real Property
is acceptable based upon an environmental assessment conducted by
Buyer at its sole cost and expense.
(h) Closing Certificate; Closing Documents. Seller
shall have delivered a certificate, dated the Closing Date, in
such detail as Buyer shall reasonably request, certifying to the
fulfillment of the conditions set forth in subparagraphs (a),
(b), and (c) of this Section 6.1. Such certificate shall
constitute a representation and warranty of Seller with regard to
the matters therein for purposes of this Agreement. Buyer shall
have received the other documents referred to in Section 6.3.
All agreements, certificates, opinions and other documents
delivered by Sellers or the Company to Buyer hereunder shall be
in form and substance satisfactory to counsel for Buyer, in the
exercise of such counsel's reasonable professional judgment.
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(i) Interview of Employees of Company. In conducting
its due diligence review prior to execution of this Agreement,
the Company asked the Buyer to refrain from contacting employees
of the Company. As a condition to Closing, Buyer shall be
reasonably satisfied that any additional facts arising from such
contacts after the execution of this Agreement do not indicate a
material adverse change in the condition of the Company or its
operations at variance with information otherwise provided by the
Company.
6.2 Conditions Precedent to Obligation of Sellers. The
obligation of Sellers to proceed with the Closing under this
Agreement is subject to the fulfillment prior to or at Closing of
the following conditions, any one or more of which may be waived
in whole or in part by Sellers acting jointly at their option.
(a) Bringdown of Representations and Warranties;
Covenants. Each of the representations and warranties of Buyer
contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date, with the same
force and effect as though such representations and warranties
had been made on, as of and with reference to the Closing Date.
Buyer shall have performed all of the covenants and complied in
all respects with all of the provisions required by this
Agreement to be performed or complied with by it at or before the
Closing.
(b) Litigation. No statute, regulation or order of
any Governmental Body shall be in effect that restrains or
prohibits the transactions contemplated hereby, and there shall
not have been threatened, nor shall there be pending, any action
or proceeding by or before any Governmental Body challenging the
lawfulness of or seeking to prevent or delay any of the
transactions contemplated by this Agreement or the Other
Agreements or seeking monetary or other relief by reason of the
consummation of such transactions.
(c) No Material Adverse Change. Between the date
hereof and the Closing Date, there shall have been no material
adverse change, regardless of insurance coverage therefor, in the
Business or any of the assets, results of operations,
liabilities, prospects or condition, financial or otherwise, of
the Company.
(d) Closing Certificate. Buyer shall have delivered a
certificate, dated the Closing Date, in such detail as Sellers
shall reasonably request, certifying to the fulfillment of the
conditions set forth in subparagraphs (a) and (b) of this Section
6.2. Such certificate shall constitute a representation and
warranty of Buyer with regard to the matters therein for purposes
of this Agreement.
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<PAGE>
(e) Listing on NYSE. the USF Shares shall have been
authorized for listing on the NYSE, subject to official notice of
issuance.
(f) Transfer Agreement. USF shall have executed and
delivered the Transfer Agreement.
(g) Closing Documents. Sellers shall have received
the other documents referred to in Section 6.4. All agreements,
certificates, opinions and other documents delivered by Buyer to
Seller hereunder shall be in form and substance satisfactory to
counsel for Seller, in the exercise of such counsel's reasonable
professional judgment.
6.3 Deliveries at the Closing by Sellers. Sellers shall
deliver or cause to be delivered to Buyer at the Closing:
(a) Certificates or documents of assignment
representing the Company Shares duly endorsed in negotiable form
or accompanied by stock powers duly executed in blank with all
transfer taxes, if any, paid in full.
(b) Certificates of the appropriate public officials
to the effect that the Company was a validly existing corporation
in good standing in its state of incorporation as of a date not
more than ten (10) days prior to the Closing Date.
(c) Incumbency and specimen signature certificates
dated the Closing Date, signed by the officers of the Company and
certified by its Secretary.
(d) True and correct copies of (A) the Governing
Documents (other than the bylaws) of the Company as of a date not
more than ten (10) days prior to the Closing Date, certified by
the Secretary of State of its state of incorporation and (B) the
bylaws of the Company as of the Closing Date, certified by its
Secretary.
(e) Certificates of the Secretary of the Company (A)
setting forth all resolutions of the Board of Directors of the
Company and, if necessary, the stockholders, authorizing the
execution and delivery of this Agreement and the performance by
the Company of the transactions contemplated hereby, and (B) to
the effect that the Governing Documents of the Company, as the
case may be, delivered pursuant to Section 6.3(d) were in effect
at the date of adoption of such resolution, the date of execution
of this Agreement and the Closing Date.
(f) General releases by all officers and directors of
the Company and by each Seller of all liability of the Company or
any Subsidiary to them and of any claim that they or any of them
may have against the Company (exclusive of pension obligations).
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(g) The minute books, stock ledgers and corporate seal
of the Company.
(h) The opinion of von Briesen, Purtell & Roper, s.c.,
legal counsel to Sellers and the Company, in substantially the
form of Exhibit 6.3(h).
(i) Resignations of the officers and directors of the
Company effective at the Closing.
(j) The assignment of stock certificate described in
Section 7.4(b).
(k) Such other agreements and documents as Buyer may
reasonably request.
6.4 Deliveries at the Closing by Buyer. Buyer shall
deliver or cause to be delivered to Sellers at the Closing:
(a) Stock certificates evidencing the USF Shares duly
registered in the name of the Sellers and registered at the
address of the Sellers identified in Section 8.3 using the
respective Sellers' Federal tax identification numbers.
(b) A certificate of the appropriate public official
to the effect that Buyer is a validly existing corporation and in
good standing in the State of Delaware as of a date not more than
ten (10) days prior to the Closing Date.
(c) Incumbency and specimen signature certificates
signed by the officers of Buyer and certified by the Secretary or
Assistant Secretary of Buyer.
(d) The opinion of Michael E. Hulme, Assistant General
Counsel to Buyer, in substantially the form of Exhibit 6.4(d).
(e) Subject to Section 7.4(b), the delivery to the
Sellers, pro rata, and as set forth on Schedule 6.4(e), of the
________
USF Shares.
(f) Such other agreements and documents as Seller may
reasonably request.
6.5 Termination. This Agreement may be terminated at any
time prior to Closing by: (i) mutual consent of Buyer, Sellers
and Company; (ii) Buyer, if any of the conditions specified in
Section 6.1 hereof shall not have been fulfilled by October 10,
1996 and shall not have been waived by Buyer; (iii) Sellers, if
any of the conditions specified in Section 6.2 hereof shall not
have been fulfilled by October 10, 1996 and shall not have been
waived by Sellers; or (iv) Sellers, at their sole discretion and
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as a result of information made known to them, at any time prior
to October 1, 1996.
6.6 Investment Advisor. In the event that Sellers are not
"accredited investors" or "qualified investors" pursuant to the
Securities Act, (a) Sellers, or any one or more of them, may
select and retain an investment advisor or representative of
their choosing to assist them at such Sellers' sole cost and
expense or (b) Sellers may select an investment advisor or
representative provided by Buyer, the fees and costs associated
with the employment of such investment advisor shall be paid by
Buyer.
ARTICLE VII.
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
7.1 Survival of Representations. All representations,
warranties and agreements made by any party in this Agreement or
pursuant hereto shall survive the Closing, but all claims for
damages made by virtue of such representations, warranties and
agreements shall be made under, and subject to the limitations
set forth in, this Article VII. Disclosures with respect to any
representation and warranty set forth in Articles III and IV are
cumulative and shall be deemed disclosure with respect to any
other representation and warranty therein, however any limitation
or qualification set forth in any one representation and warranty
therein shall not limit or qualify any other representation and
warranty therein. After the Closing, the Company shall have no
liability to Sellers for any breach of any representation or
warranty made by Sellers or the Company to Buyer in this
Agreement, in any certificate or document furnished pursuant
hereto by Sellers or the Company or any Other Agreement to which
Sellers or the Company, or any of them, is or is to become a
party.
7.2 Indemnification by Sellers. Notwithstanding any term
in this Agreement to the contrary, and subject to the limitation
provided in the introductory language to Article III and
Section 7.4, Sellers shall indemnify, defend, save and hold Buyer
and its officers, directors, employees, agents and Affiliates
(including, after the Closing, the Company; collectively, "Buyer
Indemnitees") harmless from and against all demands, claims,
allegations, liabilities, costs and expenses (including
reasonable legal fees, interest, penalties, and all reasonable
amounts paid in investigation, defense or settlement of any of
the foregoing, whether or not the underlying demands, claims,
allegations, etc., of third parties are meritorious;
collectively, "Buyer Damages") asserted against, imposed upon,
resulting to, required to be paid by or incurred by any Buyer
Indemnities, directly or indirectly, in connection with, arising
out of, which could result in, or which would not have occurred
but for, (i) a breach of any representation or warranty made by
- 30 -
<PAGE>
Sellers or the Company in this Agreement, in any certificate or
document furnished pursuant hereto by Sellers or the Company or
any Other Agreement to which Sellers or the Company, or any of
them is or is to become a party, (ii) a breach or nonfulfillment
of any covenant or agreement made by Seller or the Company in or
pursuant to this Agreement or in any Other Agreement to which
Sellers or the Company, or any of them, is or is to become a
party, (iii) any and all liabilities of the Company, whether due
or to become due, existing on the Closing Date or arising out of
any transaction entered prior to the Closing Date, except for
liabilities disclosed in writing to Buyer on or before Closing or
fully reserved on the Final Closing Balance Sheet (other than the
liabilities covered by Section 7.2(vi) hereof), (iv)
noncompliance with or a violation of and any Buyer Damages with
respect to Environmental Laws and related to events prior to the
Closing, (v) any material liability under any warranty or
guarantee or other similar promise, or any material contract or
agreement, given, issued, made or entered into by Company on or
before Closing (except those disclosed in writing to Buyer on or
before Closing), and/or (vi) any pending or threatened litigation
disclosed as Item 1 on Schedule 3.12 to this Agreement. The
foregoing to the contrary notwithstanding the liability of
Sellers hereunder shall be several and they shall contribute to
such indemnification pro rata based upon their respective equity
________
interests in the Company.
7.3 Indemnification by Buyer. Buyer shall indemnify,
defend, save and hold Sellers and their officers, directors,
agents, representatives, successors and permitted assigns
(collectively, "Seller Indemnitees") harmless from and against
any and all demands, claims, actions or causes of action,
assessments, losses, damages, deficiencies, liabilities, costs
and expenses (including reasonable legal fees, interest,
penalties, and all reasonable amounts paid in investigation,
defense or settlement of any of the foregoing), whether or not
the underlying demands, claims, allegations, etc., of third
parties are meritorious, (collectively, "Seller Damages")
asserted against, imposed upon, resulting to, required to be paid
by or incurred by any Seller Indemnitees, directly or indirectly,
in connection with, arising out of, which could result in, or
which would not have occurred but for, (i) a breach of any
representation or warranty made by Buyer in this Agreement or in
any certificate or document furnished pursuant hereto by Buyer or
any Other Agreement to which Buyer is or is to become a party,
(ii) a breach or nonfulfillment of any covenant or agreement made
by Buyer in or pursuant to this Agreement and in any Other
Agreement to which Buyer is or is to become a party, and (iii)
post-Closing actions and omissions by the Company or its officers
or directors.
7.4 Limitation of Liability. Notwithstanding the
foregoing, Sellers' obligations to indemnify Buyer Indemnitees
- 31 -
<PAGE>
against any Buyer Damages shall be subject to all of the
following limitations:
(a) Threshold. No indemnification shall be made under
Section 7.2 until the aggregate amount of Buyer Damages
thereunder exceeds US $50,000, and then only for claims in excess
of such amount (the "Basket").
(b) Ceiling. No indemnification shall be made under
Section 7.2 to the extent that Buyer Damages exceed US $500,000
in the aggregate (the "Ceiling Amount") less the Basket;
provided, however, that such Ceiling Amount shall not apply in
any way to any claim for Buyer Damages sustained by reason of a
breach of any representation or warranty relating to those
matters governed by Section 3.3. In order to secure Sellers'
obligations under Section 7.2 and to provide a fund for payment
of the Post-Closing Purchase Price Adjustment under Section 2.5
an escrow shall be established for the benefit of Sellers and
Buyer for the time period specified in Section 7.5, and Sellers
and Buyer shall deposit in escrow an amount of USF Shares equal
to the Ceiling Amount based upon the USF Share Value (the "Escrow
Amount"). In connection with the establishment of the escrow,
Sellers and Buyer shall enter into an Escrow Agreement in the
form attached as Exhibit 7.4(b) which shall provide, amongst
other things, that (i) Sellers shall execute and deliver to the
Escrow Agent (as defined in the Escrow Agreement) an assignment
of stock certificate (with the name of assignee left in blank) in
the form attached to the Escrow Agreement and (ii), if the
Sellers, pursuant to the Transfer Agreement's provisions,
register and sell the USF Shares, the proceeds from the sale of
any USF Shares held in escrow shall be deposited in escrow. In
the event that the Buyer Indemnitees suffer Buyer Damages in
excess of the Basket specified in Section 7.4(a), Buyer shall be
entitled to receive payment from the escrow equal to the value of
such Buyer Damages and Sellers shall have no further right or
claim thereto.
(c) Pro Rata Contribution. Sellers shall be required
________
to contribute to the indemnification provided for herein,
severally and pro rata, based upon their respective equity
________
interests in the Company (subject to the limitations set forth in
this Agreement).
7.5 Time Period. Seller shall be obligated to indemnify
Buyer Indemnitees by virtue of Section 7.2 only for those Buyer
Damages as to which Buyer has given Seller written notice thereof
within six (6) months after the Closing Date; provided, however,
that with respect to any claim for Buyer Damages sustained by
reason of a breach of any representation or warranty relating to
those matters governed by Sections 3.8, 3.21 and 3.22, Seller's
liability shall be limited to Buyer Damages as to which such
written notice shall have been given within the periods of the
- 32 -
<PAGE>
applicable federal and state statutes of limitations related to
such matters; provided further, that, with respect to any claim
for Buyer Damages sustained by reason of a breach of any
representation and warranty governed by Sections 3.3, 3.4,
3.11(b), and 3.16, Seller's liability hereunder shall not be
limited as to time. Six (6) months after the Closing Date,
Sellers shall be entitled to the delivery of the remaining amount
retained in escrow which exceeds the value of any claim brought
in accordance with the Notice of Claim required by Section 7.7.
If no Notice of Claim is received within six (6) months after the
Closing Date, all amounts held in escrow shall be delivered to
Sellers.
7.6 Fraud; Intentional Misrepresentation. The limitations
set forth in Sections 7.4(a) and 7.4(b) shall not apply to Buyer
Damages arising out of (i) fraud or (ii) the breach of any
representation or warranty contained herein or pursuant hereto if
such representation or warranty was made with actual knowledge
that it contained an untrue statement of a fact or omitted to
state a fact necessary to make the statements of fact contained
therein not misleading; provided, however, that (a) in no event
shall a Seller be liable for any such fraud or breach by the
other Seller, and (b) in no event shall a Seller be liable for an
amount in excess of such Seller's pro rata share of the Purchase
Price.
7.7 Notice of Claims. If any Buyer Indemnitee or Seller
Indemnitee (an "Indemnified Party") believes that it has suffered
or incurred or will suffer or incur any Buyer Damages or Seller
Damages, as the case may be ("Damages"), for which it is entitled
to indemnification under this Article VII, such Indemnified Party
shall so notify the party or parties from whom indemnification is
being claimed (the "Indemnifying Party") in writing with
reasonable promptness and reasonable particularity in light of
the circumstances then existing. If any action at law or suit in
equity is instituted by or against a third party with respect to
which any Indemnified Party intends to claim any Damages, such
Indemnified Party shall promptly notify the Indemnifying Party of
such action or suit. The failure of an Indemnified Party to give
any notice required by this Section shall not affect any of such
party's rights under this Article VII or otherwise except and to
the extent that such failure is actually prejudicial to the
rights or obligations of the Indemnifying Party.
7.8 Third Party Claims. The Indemnified Party shall have
the right to conduct and control, through counsel of its
choosing, the defense of any third party claim, action or suit,
and the Indemnified Party may compromise or settle the same,
provided that the Indemnified Party shall give the Indemnifying
Party advance notice of any proposed compromise or settlement;
provided, however, that if the Indemnified Party compromises or
settles the suit listed as Item 1 on Schedule 3.12 for an amount
- 33 -
<PAGE>
in excess of $130,000 the Indemnified Party shall also obtain the
Indemnifying Party's consent to such compromise or settlement,
which consent shall not be unreasonably withheld. In the event
there is disagreement with respect to the reasonableness of such
settlement such dispute shall be resolved pursuant to the
provisions of Section 7.9. The Indemnified Party shall permit
the Indemnifying Party to participate in the defense of any such
action or suit through counsel chosen by the Indemnifying Party,
provided that the fees and expenses of such counsel shall be
borne by the Indemnifying Party. If the Indemnified Party
permits the Indemnifying Party to undertake, conduct and control
the conduct and settlement of such action or suit, (i) the
Indemnifying Party shall not thereby permit to exist any
Encumbrance upon any asset of the Indemnified Party; (ii) the
Indemnifying Party shall not consent to any settlement that does
not include as an unconditional term thereof the giving of a
complete release from liability with respect to such action or
suit to the Indemnified Party; (iii) the Indemnifying Party shall
permit the Indemnified Party to participate in such conduct or
settlement through counsel chosen by the Indemnified Party; and
(iv) the Indemnifying Party shall agree promptly to reimburse the
Indemnified Party for the full amount of any Damages including
fees and expenses of counsel for the Indemnified Party incurred
after giving the foregoing notice to the Indemnifying Party and
prior to the assumption of the conduct and control of such action
or suit by the Indemnifying Party.
7.9 Good Faith Effort to Settle Disputes. Buyer and
Sellers agree that, prior to commencing any litigation against
the other concerning any matter with respect to which such party
intends to claim a right of indemnification in such proceeding,
the respective chief executive officers (or officers holding such
authority) of such parties shall meet in a timely manner and
attempt in good faith to negotiate a settlement of such dispute
during which time such officers shall disclose to the others all
relevant information relating to such dispute. In the event that
the parties are unable to amicably resolve the matter or matters
in dispute, the parties shall submit all matters still in dispute
to arbitration in accordance with the arbitration rules of the
American Arbitration Association. Sellers shall select an
arbitrator and Buyer shall select an arbitrator and the two
arbitrators so selected shall select a third arbitrator. The
decision of the arbitrators shall be final and binding on the
parties. Such matter shall be submitted to arbitration within
thirty (30) days from the date that either Seller or Buyer
declares that any matter in dispute cannot be amicably resolved.
All costs and expenses of arbitration shall be paid equally by
Sellers on one hand and Buyer on the other. Any cash or other
monetary award shall be paid within thirty (30) days of the
arbitrators final decision. Arbitration shall be held in
Chicago, Illinois.
- 34 -
<PAGE>
7.10 Payment. All indemnification payments to be made by
Sellers under this Article VII shall be made by distributions
from escrow as provided herein. All indemnification payments to
be made by Buyer under this Article VII shall be made within
thirty (30) days of the final determination with respect thereto.
ARTICLE VIII.
MISCELLANEOUS
8.1 Costs and Expenses. Subject to Sections 2.6(c), and
8.10, Buyer and Sellers shall each pay their respective expenses,
brokers' fees and commissions, and the parties hereby agree that
the pre-Closing expenses of the Company incurred in connection
with this Agreement and the transactions contemplated hereby,
including all accounting, legal and appraisal fees and settlement
charges shall be paid by the Company.
8.2 Further Assurances. Sellers shall, at any time and
from time to time on and after the Closing Date, upon request by
Buyer and without further consideration, take or cause to be
taken such actions and execute, acknowledge and deliver, or cause
to be executed, acknowledged and delivered, such instruments,
documents, transfers, conveyances and assurances as may be
required or desirable for the better conveying, transferring,
assigning, delivering, assuring and confirming the Company Shares
to Buyer or any of the assets used in the Business to the
Company.
8.3 Notices. All notices and other communications given or
made pursuant to this Agreement shall be in writing and shall be
deemed to have been duly given or made (i) the second business
day after the date of mailing, if delivered by registered or
certified mail, postage prepaid, (ii) upon delivery, if sent by
hand delivery, (iii) upon delivery, if sent by prepaid courier,
with a record of receipt, or (iv) the next day after the date of
dispatch, if sent by cable, telegram, facsimile or telecopy (with
a copy simultaneously sent by registered or certified mail,
postage prepaid, return receipt requested), to the parties at the
following addresses:
(a) if to Buyer to:
Illinois Water Treatment, Inc.
c/o United States Filter Corporation
40-004 Cook Street
Palm Desert, CA 92211
Attention: Chief Executive Officer
Telecopy: (619) 341-9368
with a required copy to the General Counsel of
Buyer at the above address and telecopy number
- 35 -
<PAGE>
(b) if to Sellers, to:
Thomas J. Goulet and M&I Ventures Corporation
765 West Jonathan Lane 770 North Water Street
Milwaukee, WI 53217 Milwaukee, WI 53202
with a required copy to:
Robert J. Loots
von Briesen, Purtell & Roper, s.c.
400 East Wisconsin Avenue, Suite 700
Milwaukee, WI 53202-4470
Notices to the Company shall be addressed in care of Sellers
before Closing and in care of Buyer after Closing. Any party
hereto may change the address to which notice to it, or copies
thereof, shall be addressed, by giving notice thereof to the
other parties hereto in conformity with the foregoing.
8.4 Currency. All currency references herein are to United
States dollars.
8.5 Offset; Assignment; Governing Law. Buyer shall be
entitled to offset or recoup from any amounts due to Sellers from
Buyer hereunder or under any Other Agreement against any
obligation of Sellers to Buyer hereunder or under any Other
Agreement. Seller shall be entitled to offset or recoup from any
amounts due to Buyer from Sellers hereunder or under any Other
Agreement against any obligation of Buyer to Sellers hereunder or
under any Other Agreement. This Agreement and all the rights and
powers granted hereby shall bind and inure to the benefit of the
parties hereto and their respective permitted successors and
assigns. This Agreement and the rights, interests and
obligations hereunder may not be assigned by any hereto without
the prior written consent of the other parties hereto, except
that Buyer may make such assignments to any Affiliate or Buyer
provided that Buyer remains liable hereunder. This Agreement
shall be governed by and construed in accordance with the laws of
the State of Delaware without regard to its conflict of law
doctrines.
8.6 Amendment and Waiver; Cumulative Effect. To be
effective, any amendment or waiver under this Agreement must be
in writing and be signed by the party against whom enforcement of
the same is sought. Neither the failure of any party hereto to
exercise any right, power or remedy provided under this Agreement
or to insist upon compliance by any other party with its
obligations hereunder, nor any custom or practice of the parties
at variance with the terms hereof shall constitute a waiver by
such party of its right to exercise any such right, power or
remedy or to demand such compliance. The rights and remedies of
the parties hereto are cumulative and not exclusive of the rights
- 36 -
<PAGE>
and remedies that they otherwise might have now or hereafter, at
law, in equity, by statute or otherwise.
8.7 Entire Agreement; No Third Party Beneficiaries. This
Agreement and the Schedules and Exhibits set forth all of the
promises, covenants, agreements, conditions and undertakings
between the parties hereto with respect to the subject matter
hereof, and supersede all prior or contemporaneous agreements and
understandings, negotiations, inducements or conditions, express
or implied, oral or written. This Agreement is not intended to
confer upon any Person other than the parties hereto any rights
or remedies hereunder, except the provisions of Sections 7.2 and
7.3 relating to Buyer Indemnitees and Seller Indemnitees.
8.8 Severability. If any term or other provision of this
Agreement is held by a court of competent jurisdiction to be
invalid, illegal or incapable of being enforced under any rule of
Law in any particular respect or under any particular
circumstances, such term or provision shall nevertheless remain
in full force and effect in all other respects and under all
other circumstances, and all other terms, conditions and
provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are
fulfilled to the fullest extent possible.
8.9 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an
original but all of which together shall be deemed to be one and
the same instrument.
8.10 Attorneys' Fees. If either party commences or is made
a party to an action or proceeding to enforce or interpret this
Agreement, the prevailing party in such action or proceeding
shall be entitled to recover from the other party all attorneys'
fees, costs and expenses incurred in connection with such action
or proceeding or any appeal or enforcement of any judgment
obtained in any such action or proceeding.
- 37 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
_________________________________
Thomas J. Goulet
M&I VENTURES CORPORATION:
__________________________________
By:
Title
ILLINOIS WATER TREATMENT, INC.
__________________________________
By:
Title
UNITED STATES FILTER CORPORATION
__________________________________
By:
Title:
KISCO WATER TREATMENT COMPANY
__________________________________
By:
Title: President
- 38 -
Exhibit 99.02
AMENDMENT TO STOCK PURCHASE AGREEMENT
The Stock Purchase Agreement dated as of the 20th day of
September 1996, by and among Thomas J. Goulet, M&I Ventures
Corporation, United States Filter Corporation, Illinois Water
Treatment, Inc. and Kisco Water Treatment Company, is hereby
amended as follows:
For valuable consideration, receipt of which is hereby
acknowledged, Section 7.2 is hereby amended by the addition of
the following language in the next to last sentence:
7.2 and/or (vii) any liability resulting from a claim by
Erica Miles based upon the alleged sexual harassment
incident on June 13, 1996, as and to the extent such
incident results in a claim being filed against the
Company prior to expiration of the time period
specified in Section 7.5 and does not reasonably result
from any action taken, directly or indirectly, by the
Company after Closing.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the 30th day of September, 1996.
/s/ Thomas J. Goulet
----------------------------------
Thomas J. Goulet
M&I VENTURES CORPORATION
By: /s/ William G. Krugler
-----------------------------
William G. Krugler
Title: Vice President
ILLINOIS WATER TREATMENT, INC.
By: /s/ Michael E. Hulme, Jr.
-----------------------------
Title: Vice President
UNITED STATES FILTER CORPORATION
By: /s/ Michael E. Hulme, Jr.
----------------------------------
Title: Atty-in-fact for
D. Georgino, Vice Pres.
<PAGE>
KISCO WATER TREATMENT COMPANY
By: /s/ Thomas J. Goulet
------------------------------
Title: President
Exhibit 99.03
_________________________________________________________________
Option, Transfer and Registration Agreement
among
United States Filter Corporation,
Thomas J. Goulet
and
M&I Ventures Corporation
dated as of
September 30, 1996
_________________________________________________________________
<PAGE>
Option, Transfer and Registration Agreement
among
United States Filter Corporation,
Thomas J. Goulet
and
M&I Ventures Corporation
dated as of
September 30, 1996
TABLE OF CONTENTS
PAGE
1. Certain Definitions . . . . . . . . . . . . . . . . 1
2. Restrictions on Transferability . . . . . . . . . . 2
3. Restrictive Legends . . . . . . . . . . . . . . . . 2
4. Notice of Proposed Transfers . . . . . . . . . . . . 3
5. Company Registration . . . . . . . . . . . . . . . . 4
6. Expenses of Registration . . . . . . . . . . . . . . 5
7. Indemnification . . . . . . . . . . . . . . . . . . 5
8. Obligations of the Company . . . . . . . . . . . . . 7
9. Securities Law Compliance . . . . . . . . . . . . . 7
10. Standoff Agreement . . . . . . . . . . . . . . . . 7
11. Rule 144 Requirements . . . . . . . . . . . . . . . 7
12. Put Right and Call Offer . . . . . . . . . . . . . 8
13. Amendment . . . . . . . . . . . . . . . . . . . . . 9
14. Investment Representation. . . . . . . . . . . . . . 9
15. Notices, etc.. . . . . . . . . . . . . . . . . . . . 9
16. Entire Agreement; Severability . . . . . . . . . . . 10
17. Governing Law . . . . . . . . . . . . . . . . . . . 10
18. Counterparts . . . . . . . . . . . . . . . . . . . . 10
<PAGE>
OPTION, TRANSFER AND REGISTRATION AGREEMENT
This Option, Transfer and Registration Agreement
("Agreement") is entered into as of September 30, 1996 among
United States Filter Corporation, a Delaware corporation (the
"Company"), Thomas J. Goulet and M&I Ventures Corporation, a
Wisconsin corporation, with reference to certain shares of Common
Stock, $.01 par value (the "Common Stock") of the Company.
1. Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
"Commission" shall mean the United States Securities
and Exchange Commission or any other federal agency at the
time administering the Securities Act.
"Escrow Agent" shall mean Firstar Trust Company of
Milwaukee, Wisconsin.
"Escrow Agreement" shall mean the escrow agreement
provided for in the Stock Purchase Agreement.
"Exchange Act" shall mean the United States Securities
Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder, all as the same
shall be in effect at the time and any successor thereto.
"Holders" shall mean Thomas J. Goulet and M&I Ventures
Corporation, a Wisconsin corporation.
"Registrable Shares" shall mean the Shares; provided,
however, that Shares shall be treated as Registrable Shares
only if and so long as they have not been (i) sold in a
public distribution or a public securities transaction, or
(ii) sold in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act as a
result of which all transfer restrictions and restrictive
legends with respect thereto are removed upon the
consummation of such sale.
The terms "register", "registered" and "registration"
refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities
Act, and the declaration or ordering of the effectiveness of
such registration statement.
"Registration Expenses" shall mean all registration,
qualification and filing fees, fees and disbursements of
counsel for the Company, accounting fees incident to any
such registration, state securities or blue sky fees and
expenses, transfer agent and registrar fees, reasonable fees
<PAGE>
and expenses of any special experts retained by the Company
in connection with any such registration, and any listing
fees.
"Restricted Shares" shall mean the shares of the
Company required to bear the legend set forth in paragraph
(a) of Section 3 hereof.
"Rule 144" shall mean Rule 144 promulgated under the
Securities Act, as such Rule shall be in effect at the time,
and any successor thereto.
"Securities Act" shall mean the United States
Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder, all as the same
shall be in effect at the time.
"Selling and Distribution Expenses" shall mean all
underwriting discounts, selling commissions and stock
transfer taxes attributable to the sale of Shares by the
Holders and any out-of-pocket expenses of the Holders
incurred in connection with the registration of Shares,
including, without limitation, fees and disbursements of
counsel for the Holders if such counsel is not also counsel
for the Company, printing expenses and marketing expenses.
"Shares" shall mean the 133,333 shares of Common Stock
issued to or for the benefit of the Holders on the date
hereof, as that number shall be adjusted pursuant to the
Stock Purchase Agreement, and any shares of Common Stock
issued in respect thereof in connection with stock splits,
stock dividends or distributions, or combinations or similar
recapitalizations, on or after the date hereof.
"Stock Purchase Agreement" shall mean the Stock
Purchase Agreement dated as of September 20, 1996 by and
among the parties hereto, Kisco Water Treatment Company and
Illinois Water Treatment, Inc.
2. Restrictions on Transferability. The Shares may be
sold, assigned, transferred or pledged only in accordance with
the conditions specified in this Agreement, which conditions are
intended to ensure compliance with the provisions of the
Securities Act.
3. Restrictive Legends.
(a) Each certificate representing Shares shall (unless
otherwise permitted by subsection (c) of this Section 3 or
Section 4) be stamped with the following legend:
- 2 -
<PAGE>
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
BEEN ISSUED PURSUANT TO AN EXEMPTION FROM AND HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933. SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED
OR PLEDGED IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL
(WHICH MAY BE COUNSEL FOR THE COMPANY) REASONABLY
ACCEPTABLE TO IT STATING THAT SUCH REGISTRATION IS NOT
REQUIRED.
(b) Each certificate representing Shares shall also be
stamped with the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS AND CONDITIONS OF AN AGREEMENT
BETWEEN CERTAIN STOCKHOLDERS AND THE CORPORATION WHICH
INCLUDES RESTRICTIONS ON CERTAIN SALES OF THE
SECURITIES. COPIES OF THE AGREEMENT MAY BE OBTAINED
UPON WRITTEN REQUEST TO THE SECRETARY OF THE
CORPORATION.
(c) Each Holder consents to the Company's making a
notation on its records and giving instructions to any transfer
agent of the Company in order to implement the restrictions on
transfer established in this Agreement. The legend placed on any
certificate pursuant to Section 3(a) and any notations or
instructions with respect to the Restricted Shares represented by
such certificate will be promptly removed, and the Company will
promptly issue a certificate without such legend to the Holder of
such Restricted Shares (i) if such Restricted Shares are
registered under the Securities Act (but only in connection with
the actual sale of such securities) and a prospectus meeting the
requirements of Section 10 of the Securities Act is available or
(ii) if the Holder thereof satisfies the requirements of Rule
144(k) and, where reasonably determined necessary by the Company,
provides the Company with an opinion of counsel for the Holder of
the Shares, both such counsel and such opinion being reasonably
satisfactory to the Company, to the effect that (A) the Holder
meets the requirements of Rule 144(k) or (B) a public sale,
transfer or assignment of the Shares may be made without
registration.
4. Notice of Proposed Transfers. The holder of each
certificate representing Restricted Shares by acceptance thereof
agrees to comply in all respects with the provisions of this
Section 4. Prior to any proposed sale, assignment, transfer or
pledge of any Restricted Shares, unless there is in effect a
registration statement under the Securities Act covering the
proposed transfer, the Holder thereof shall notify the Company in
writing of such Holder's intention to effect such sale,
assignment, transfer or pledge and the intended manner and
circumstances thereof in reasonable detail. If requested by the
- 3 -
<PAGE>
Company, any such notice shall be accompanied at such Holder's
expense by a written opinion of legal counsel who is, and whose
legal opinion shall be, reasonably satisfactory to the Company,
addressed to the Company, to the effect that the proposed
transfer of Restricted Shares may be effected without
registration under the Securities Act, and by such certificates
and other information as the Company may reasonably require to
confirm such opinion, whereupon the Holder of such Restricted
Shares shall be entitled to transfer such Restricted Shares in
the manner contemplated by such opinion. Each certificate
evidencing the Restricted Shares transferred as above provided
shall bear, except if such transfer is made pursuant to Rule 144,
the appropriate restrictive legend set forth in Section 3(a)
above, except that such certificate shall not bear such
restrictive legend if in the opinion of counsel for such Holder
and the Company such legend is not required in order to establish
compliance with any provisions of the Securities Act. So long as
such restrictive legend shall be required to remain on any such
certificates, the transfer of the Restricted Shares represented
thereby shall be conditioned upon the transferee thereof becoming
a party hereto (except that such transferee shall have no rights
under Sections 5 or 12 hereof unless the transferee is a Holder).
5. Company Registration.
(a) Notice of Registration. If, at any time or from
time to time, the Company shall determine to register any of its
Common Stock, either for its own account or the account of a
security holder or holders for distribution pursuant to an
underwritten offering, the Company will (i) promptly give to each
Holder written notice thereof, and (ii) include in such
registration (and any related qualification under blue sky laws
or other compliance), subject to Section 5(b), all the
Registrable Shares held by such Holder if so requested in writing
by the Holder within 30 days after receipt of such written notice
from the Company.
(b) Underwriting. The right of the Holders to
registration pursuant to this Section 5 shall be conditioned upon
the Holders' participation in such underwriting and the inclusion
of all the Registrable Shares held by such Holders in the
underwriting to the extent provided herein. The Holder,
proposing to distribute all the Registrable Shares held by such
Holder through such underwriting shall (together with the Company
and the other holders distributing shares of Common Stock through
such underwriting), if required by the managing underwriter of
such offering, enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting
by the Company (or by the holders who have demanded such
registration), and shall provide to the Company upon written
request such information referenced in Section 5(d) hereof as may
be specified in such request. Notwithstanding any other
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<PAGE>
provision of this Section 5, if the managing underwriter in its
sole discretion determines that marketing factors require a
limitation of the number of shares to be underwritten, the
managing underwriter may limit the Registrable Shares to be
included in such registration. The Company shall so advise all
Holders and the other holders distributing their securities
through such underwriting pursuant to piggyback registration
rights similar to this Section 5, and the number of Registrable
Shares and other securities that may be included in the
registration and underwriting by such Holders and such other
holders shall be reduced by the number of shares determined by
the managing underwriter not to be included in such registration,
such cutback to be allocated among all Holders and such other
holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Shares held by such Holders and
such other securities by such other holders. If any Holder
disapproves of the terms of any such underwriting, such Holder
may elect to withdraw therefrom by written notice to the Company
and the managing underwriter.
(c) Right to Terminate Registration. The Company
shall have the right to terminate or withdraw any registration
under this Section 5 prior to the effectiveness of such
registration whether or not the Holders have elected to include
securities in such registration.
6. Expenses of Registration. All Registration Expenses
incurred in connection with any registration pursuant to Section
5 shall be borne by the Company. All Selling and Distribution
Expenses attributable to the Registrable Shares registered on
behalf of the Holders shall be borne by the Holders of the
Registrable Shares included in such registration pro rata on the
basis of the number of Registrable Shares so registered.
7. Indemnification.
(a) The Company will indemnify each Holder, each of
its officers, directors, employees and agents and each person
controlling such Holder within the meaning of Section 15 of the
Securities Act, with respect to which registration, qualification
or compliance has been effected pursuant to this Agreement,
against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or
threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any
such registration, qualification or compliance, or any omission
(or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not
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<PAGE>
misleading, or any violation by the Company of any rule or
regulation promulgated under the Securities Act or any other
federal, state or common law rule or regulation applicable to the
Company in connection with any such registration, qualification
or compliance, and the Company will reimburse each such Holder,
each of its officers, directors, employees and agents and each
person controlling such Holder for any legal and any other
expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or
action, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability
or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission made in reliance
upon and in conformity with any written information furnished to
the Company pursuant to an instrument duly executed by such
Holder or controlling person and stated to be specifically for
use therein.
(b) Each Holder will, if Registrable Shares held by
such Holder are included in the securities as to which such
registration, qualification or compliance is being effected,
indemnify the Company, each of its directors and officers, each
underwriter, if any, of the Company's securities covered by such
a registration statement, each person who controls the Company or
such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of its officers
and directors and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, against all claims,
losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, persons,
underwriters or control persons for any legal or any other
expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in
each case to the extent, but only if and to the extent, that such
untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon
and in conformity with any written information furnished to the
Company pursuant to an instrument duly executed by such Holder
and stated to be specifically for use therein.
(c) Each party entitled to indemnification under this
Section 7 (the "Indemnified Party") shall give written notice to
the party required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought, and
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<PAGE>
shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense
of such claim or litigation, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld), and
the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this
Agreement unless, but only to the extent that, the failure to
give such notice is actually prejudicial to an Indemnifying
Party's ability to defend such action. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with
the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
(d) In order to provide for just and equitable
contribution to joint liability under the Securities Act in any
case in which any Holder of Registrable Shares exercising rights
under this Agreement, or any controlling person of any such
Holder, makes a claim for indemnification pursuant to this
Section 7 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and
the expiration of time to appeal or the denial of the last right
of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 7 provides for
indemnification in such case, then, the Company and such Holder
will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from
others) in such proportion so that such Holder is responsible for
the portion represented by the percentage that the public
offering price of its Registrable Shares offered by the
registration statement bears to the public offering price of all
Shares offered by such registration statement; and the Company is
responsible for the remaining portion not payable by any other
Holder or holder; provided, however, that, in any such case, (A)
no such Holder will be required to contribute any amount in
excess of the public offering price of all such Registrable
Shares offered by it pursuant to such registration statement; and
(B) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled
to contribution from any person who was not guilty of such
fraudulent misrepresentation.
8. Obligations of the Company. Whenever required under
this Agreement to effect the registration of any Registrable
Shares, the Company shall, as expeditiously as reasonably
possible:
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<PAGE>
(a) Furnish to the Holders whose Registrable Shares
have been included in a registration statement such numbers of
copies of the registration statement and all amendments thereto,
any prospectus included in such registration statement, including
any preliminary prospectus, in conformity with the requirements
of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of
Registrable Shares owned by them.
(b) Enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with the
managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its
obligations under such an agreement.
9. Securities Law Compliance. The Holders of Registrable
Shares included in any registration pursuant to this Agreement
covenant that they will comply with the Securities Act and with
the Exchange Act with respect to any such registration.
10. Standoff Agreement. The Holders agree in connection
with any registration of the Company's securities, upon request
of the underwriters managing any underwritten offering of the
Company's securities, not to sell, make any short sale of, loan,
grant any option for the purchase of, or otherwise dispose of any
Registrable Shares (other than those included in such
registration), without the prior written consent of the Company
or such underwriters, as the case may be, for such period of time
(not to exceed 120 days) from the effective date of such
registration as may be requested by the Company or such managing
underwriters.
11. Rule 144 Requirements. The Company agrees to:
(a) use its best efforts to file with the Commission
in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act;
(b) furnish to any Holder of Registrable Securities
upon request (i) a written statement by the Company as to its
compliance with the requirements of Rule 144(c), and the
reporting requirements of the Securities Act and the Exchange
Act, (ii) a copy of the most recent annual or quarterly report of
the Company, and (iii) such other reports and documents of the
Company as such Holder may reasonably request to avail itself of
any similar rule or regulation of the Commission allowing itself
to sell any such securities without registration; and
(c) cooperate with any Holder in such manner as such
Holder may reasonably request so as to enable sales made in
compliance with the requirements of Rule 144 to be made in
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<PAGE>
compliance with the requirements of any transfer agent, registrar
or the broker through whom any sales are to be executed.
12. Put Right and Call Offer.
(a) Subject to Section 12(b) below, each Holder shall
have the right to sell (a "Put Right") during the Put Right
Exercise Period (as defined below), and upon exercise of that
right the Company shall purchase, all the Shares then owned by
such Holder at a purchase price per Share equal to 100% of the
Specified Price (as defined below) during the Put Right Exercise
Period. If the Put Right is not duly exercised during the Put
Right Exercise Period, it shall expire at the end of the Put
Right Exercise Period. A Put Right may be exercised only once by
each Holder.
(b) The Company may offer to purchase from each Holder
or from all of the Holders (a "Call Offer") during the Call Offer
Period (as defined below) all or any portion of the Shares then
owned by such Holders at a purchase price equal to 110% of the
Specified Price (as defined below). The Holders may, at their
option, accept such Call Offer upon written notice delivered to
the Company within twenty business days after notice of the Call
Offer is given to the Holders. If any Holder does not duly
accept the Call Offer in accordance with the terms of the Call
Offer and this Agreement, or if any such Holder accepts the Call
Offer but subsequently does not sell to the Company the Shares
agreed to be sold by such Holder to the Company within the period
provided for in this Section 12, then both the Call Offer and all
rights of the Holders under Section 12(a) with respect to the
Shares subject to such Call Offer shall then immediately expire
and be of no further force and effect.
(c) The "Specified Price" for each Share subject to a
Put Right or a Call Offer shall be $31.875, which is equal to the
closing price of the common stock of the Company as reported by
the New York Stock Exchange on the fifth to the last trading day
preceding the date of this Agreement. The "Put Right Exercise
Period" and the "Call Offer Period" shall each be the 10-day
period commencing on the 60th day after the date of this
Agreement. A Put Right may be exercised and a Call Offer may be
made only by written notice to the Company or the Holders, as the
case may be, and such notice shall contain the number of Shares
to be purchased and the identity of the Holder selling such
Shares. The purchase price payable upon purchase and sale of the
Shares subject to a Put Right or Call Offer hereunder shall be
paid in cash on the Closing Date (as defined below).
(d) In the event of an exercise of a Put Right or the
making of a Call Offer, the parties to such transaction shall
mutually determine a closing date (a "Closing Date") which shall
not be more than 10 days, subject to any applicable regulatory
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<PAGE>
waiting periods, after the date the Put Right is exercised or
Call Offer is made and accepted by one or more Holders, as the
case may be, or if any such day is not a business day, then the
first business day thereafter; provided, however, that in no
event shall such Closing Date be later than December 30, 1996.
Such closing ("Closing") shall be held at 11:00 a.m., local time,
or at such other time and at such place as the parties may agree.
On the Closing Date of a purchase of Shares pursuant to this
Section, the Holders shall deliver to the Company certificates,
with stock powers duly endorsed in blank, representing the Shares
to be purchased. In the event any such Shares are then held in
escrow under the Escrow Agreement, such Shares will be delivered
by the Escrow Agent and the cash proceeds with respect thereto
will be delivered to the Escrow Agent. In addition, if the
person selling the Shares is the personal representative of a
deceased Holder, the personal representative shall also deliver
to the Company (i) copies of letters testamentary or letters of
administration evidencing his appointment and qualification,
(ii) a certificate issued by the Internal Revenue Service
pursuant to Section 6325 of the United States Internal Revenue
Code of 1986, as amended (the "Code"), discharging the Shares
being sold from liens imposed by the Code (or, if it is not
possible to obtain such certificate by the Closing Date, the sale
of such Shares may be consummated and the proceeds placed in
escrow pending receipt thereof), and (iii) an estate tax waiver
issued by the state of the decedent's domicile.
13. Amendment. Any provision of this Agreement may be
amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only by the written consent of the Company and
the Holders. Any amendment or waiver effected in accordance with
this Section 16 shall be binding upon each Holder of any
Registrable Shares then outstanding, each future holder of any
Shares who is a party to this Agreement, and the Company.
14. Notices, etc. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed
to have been duly given if delivered by hand, courier service,
United States mail (return receipt requested) or by facsimile,
addressed as follows:
If to the Company to:
Illinois Water Treatment, Inc.
c/o United States Filter Corporation
40-004 Cook Street
Palm Desert, CA 92211
Attention: Chief Executive Officer
Telecopy: (619) 341-9368
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<PAGE>
with a copy to the General Counsel of United States
Filter Corporation at the above address and telecopy
number.
If to Holders to:
Thomas J. Goulet
765 West Jonathan Lane
Milwaukee, WI 53217
and
M&I Ventures Corporation
770 North Water Street
Milwaukee, WI 53202
with a required copy to:
Robert J. Loots
von Briesen, Purtell & Roper
400 East Wisconsin Avenue
Suite 700
Milwaukee, WI 53202-4470
or to such other address or facsimile number of a party of which
such party has given notice to the other parties pursuant to this
Section.
15. Entire Agreement; Severability. This Agreement and the
Stock Purchase Agreement together with the Schedules and Exhibits
thereto set forth all of the provisions, covenants, agreements,
conditions and undertakings among the parties hereto with respect
to the subject matter hereof. The provisions of this Agreement
are severable, and in the event that any one or more provisions
are deemed illegal or unenforceable, the remaining provisions
shall remain in full force and effect.
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws (other than those with
respect to choice of law) of the State of Delaware. Each of the
parties hereto agrees that all claims in any action or proceeding
arising out of or related to this Agreement may be heard and
determined in any Delaware state court or federal court sitting
in the State of Delaware.
17. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall
be deemed an original, but all of which together shall constitute
one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
UNITED STATES FILTER CORPORATION
By: ______________________________
Damian C. Georgino
Vice President, General Counsel
and Secretary
By: ______________________________
Thomas J. Goulet
M&I Ventures Corporation
By: ______________________________
William G. Krugler
Vice President
- 12 -
Exhibit 99.04
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement") is made and
entered into as of the ____ day of September, 1986, between
Thomas J. Goulet, an individual ("Goulet") and M&I Ventures
Corporation, a Wisconsin corporation ("M&I") (collectively
"Seller" or "Sellers") and Illinois Water Treatment, Inc.,
("Buyer"), and Firstar Trust Company of Milwaukee, Wisconsin
("Escrow Agent").
WHEREAS, Sellers and Buyer have entered into a Stock
Purchase Agreement ("Stock Purchase Agreement") relating to the
purchase of all of the outstanding capital stock of Kisco Water
Treatment Company, a Missouri corporation (the "Company"), a copy
of which is attached hereto as Exhibit A and is by this reference
made a part hereof; and
WHEREAS, the Stock Purchase Agreement provides in Section
7.4(b) that a portion of the purchase price in the form of common
stock of United States Filter Corporation ("USF Shares") be
deposited into escrow on the date hereof for the purpose of
distributing to Buyer any Post-Closing Purchase Price Adjustment
pursuant to Section 2.4 and securing the Sellers' obligation to
indemnify Buyer pursuant to the provisions of Article VII of the
Stock Purchase Agreement; and
WHEREAS, USF, Goulet and M&I have entered into an Option,
Transfer and Registration Agreement (the "Transfer Agreement"), a
copy of which is attached as Exhibit B and is by this reference
made a part hereof, under the terms of which all or a portion of
the USF Shares to be held on deposit hereunder may be converted
to cash by exercise of the Put Right or Call Offer thereunder.
WHEREAS, Seller and Buyer have requested that Escrow Agent
act as "Escrow Agent" pursuant to Section 7.4(b) of, and in
accordance with the terms and conditions of, the Stock Purchase
Agreement, and Escrow Agent has consented and agreed to do so, on
the terms and conditions described below.
NOW, THEREFORE, for and in consideration of the premises,
covenants and agreements hereinafter made, the receipt and
sufficiency of which is hereby acknowledged, Sellers, Buyer and
Escrow Agent covenant and agree as follows:
1. ESCROW DEPOSIT. Seller hereby deposits with Escrow
Agent, and Escrow Agent hereby acknowledges receipt of 15,686
shares of USF common stock. In the event such stock is converted
to cash pursuant to the Transfer Agreement, Escrow Agent hereby
agrees to deposit such amount into an interest bearing account
with a bank, savings and loan institution or other depository
reasonably satisfactory to Seller, Buyer and Escrow Agent (the
<PAGE>
"Depository"), or to invest in interest bearing obligations of
the United States or agencies maturing in not more than ninety
(90) days, with the income thereon to accrue for the account of
Sellers. Subject to the provisions of paragraph 2 of this
Agreement, such stock or cash shall be held for a period of six
(6) months from the date hereof (the "Escrow Period").
2. DISBURSEMENT OF ESCROW.
(a) Any USF Shares or cash from sale proceeds required
to be distributed to Buyer as a Post-Closing Purchase Price
Adjustment pursuant to Section 2.4 shall be disbursed to Buyer
upon Escrow Agent's receipt of written notice from Sellers and
Buyer confirming the amount of such distribution.
(b) The Escrow Agent shall disburse from the principal
of the escrow account any amounts which become payable to Buyer
by way of indemnification pursuant to Article VII of the Stock
Purchase Agreement.
(c) The Escrow Agent is authorized to disburse escrow
assets only as directed jointly by Buyer and Sellers; provided,
however, that if Buyer and Sellers disagree as to the amount
properly payable from this escrow, such disagreement shall be
resolved pursuant to the procedure outlined in Section 7.9 of the
Stock Purchase Agreement.
3. PURPOSE OF ESCROW. Seller and Buyer mutually
acknowledge that the sole purpose of this Agreement is to hold
shares of USF Shares or cash in escrow pursuant to the Stock
Purchase Agreement and that their respective rights thereto shall
be determined by that Agreement.
4. ESCROW AGENT FEE. The fee of the Escrow Agent for its
services hereunder shall be its reasonable, usual and customary
charges and shall be paid by Buyer.
5. LIMITATION OF ESCROW AGENT'S LIABILITY. Escrow Agent
shall not be liable to Sellers or to Buyer or any of them for any
losses, costs, claims, damages, liabilities or expenses which
they may suffer or incur by reason of any one or more of the
following:
(a) the failure of the Depository; or
(b) any action taken or omitted to be taken in
accordance with the terms hereof; or
(c) any action taken or omitted to be taken in
reliance upon any document, including any written
notice of authorization to disburse as provided
for hereinabove, all of which writings Escrow
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<PAGE>
Agent can rely upon as to due execution, validity,
effectiveness, and also as to truth and accuracy
of the information contained therein. Escrow
Agent's liability hereunder shall be limited to
any actions taken or omitted to be taken which are
found by a court of law to be willful misconduct
or gross negligence.
6. INDEMNIFICATION. Except for acts or omissions of the
Escrow Agent which are found by a court of law to be a breach of
this Agreement, or to be in the nature of gross negligence or
willful misconduct, Sellers and Buyer hereby jointly and
severally indemnify and hold harmless Escrow Agent from and
against any and all losses, claims, damages, liabilities, costs
or expenses, including, without limitation, attorneys' fees and
all trial and/or appellate court costs, which arise out of or are
connected with this Agreement, the appointment of Escrow Agent
hereunder, or any actions or omissions of Escrow Agent in the
performance of its responsibilities hereunder, including, without
limitation, any litigation arising out of or involving the
subject matter of this Agreement.
7. GENERAL. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns, and shall be governed by and construed in
accordance with the laws of the State of Wisconsin. Escrow Agent
shall be bound only by the terms of this Agreement and shall not
be bound by or have any responsibility or incur any liability
with respect to the Stock Purchase Agreement between Sellers and
Buyer. No modification, amendment or waiver of the terms hereof
shall be valid or effective unless in writing and signed by all
of the parties hereto. This Agreement may be executed in
multiple counterpart originals, each of which shall be deemed to
be and shall constitute an original.
8. NOTICES. Any notices sent by any of the parties to any
other of the parties hereto shall be sent by prepaid certified
mail, return receipt requested, to the addresses set forth below,
shall include a copy to the party who is not the addressee of
such notice, and shall be deemed received on the third (3rd)
business day after mailing:
(a) If to Sellers, to:
Thomas J. Goulet and M&I Ventures Corporation
765 West Jonathan Lane Attention: William G. Krugler
Milwaukee, WI 53217 770 North Water Street
Milwaukee, WI 53202
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<PAGE>
with a copy to:
Robert J. Loots
von Briesen, Purtell & Roper, s.c.
400 East Wisconsin Avenue
Milwaukee, WI 53202
(b) If to Buyer, to:
Illinois Water Treatment, Inc.
c/o United States Filter Corporation
40-004 Cook Street
Palm Desert, CA 92211
Attention: Chief Executive Officer
with a copy to:
the General Counsel of Buyer at the above address and
telecopy number
(c) If to Escrow Agent, to:
Firstar Trust Company
615 East Michigan Street, 4th Floor
Milwaukee, WI 53202
Attention: William Caruso
9. BENEFIT. This Agreement shall be binding upon and
inure to the benefit of the parties, their successors and
assigns.
10. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same agreement.
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto have caused
this Agreement to be executed and delivered as of the day and
year first above written.
Sellers:
/s/ Thomas J. Goulet
----------------------------------
Thomas J. Goulet
M&I Ventures Corporation
/s/ William G. Krugler
----------------------------------
Title: Vice President
Buyer:
Illinois Water Treatment, Inc.
By: /s/ Michael E. Hulme, Jr.
-----------------------------
Title: Vice President
Escrow Agent:
Firstar Trust Company
By: /s/ William Caruso
----------------------------
Title: Assistant Vice President
Attest: /s/ D. J. Mayer
--------------------------
Title: Assistant Secretary
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