<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant To Section 13 Or 15(d)
Of The Securities Exchange Act Of 1934
Date of Report August 1, 1996
ROPER INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-19818 51-0263969
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File Number) Identification No.)
160 Ben Burton Road, Bogart, Georgia 30622
-----------------------------------------------------------------------
(Address of principal executive offices)
(706)369-7170
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Following the execution of an Asset Purchase Agreement on May 22, 1996,
Roper Industries, Inc. (the "Company" or "Roper") completed on that date the
acquisition of the operating assets (excluding real estate) of Fluid Metering,
Inc. ("FMI"), a New York corporation whose principal offices are located in
Oyster Bay, New York, which is engaged in the business of manufacturing and
selling domestically and internationally low-flow, precision dispense pumps. The
purchase price of approximately $30,224,000 was determined as a result of arms-
length negotiations between the Company and FMI, and consisted of (i)
$23,000,000 paid in cash at closing, (ii) the delivery on May 29, 1996 of
124,026 restricted shares of the Company common stock at an agreed value of
$45.96 per share, (iii) $1,124,000 cash to be paid to FMI June 21, 1996 to fund
the redemption of its outstanding debentures and (iv) $400,000 in cash to be
paid in equal installments on May 22, 1997 and 1998. Approximately $3,000,000 of
the Company's common shares at the agreed value paid as part of the purchase
price was placed in escrow by FMI pursuant to an escrow agreement entered into
for the purpose of securing certain of FMI's indemnification obligations
contained in the Asset Purchase Agreement. The cash portion of the purchase
price was financed under the amended and restated credit agreement dated May 8,
1996 by and between the Company and NationsBank, N.A. (South), as initial lender
and agent.
There were no material relationships between FMI and the Company or any of
the Company's affiliates, directors, officers, or associates of any such
director or officer.
The Company has transferred the FMI operating assets to its wholly owned
Delaware subsidiary, Fluid Metering, Inc., which it intends will continue in the
business of manufacturing and selling low-flow, precision dispense fluid
handling products.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
Financial statements of FMI required to be reported because of its
acquisition by the Company are contained in a separate section. See "Index
to Financial Statements" on Page F-1.
(b) PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The accompanying unaudited pro forma condensed consolidated balance sheet
and statements of earnings reflect the combined financial position and
operations of Roper and FMI. They also give effect to the acquisitions of
Uson Corporation (Uson) and Prex Corporation (Prex) on March 6, 1995 and
Metrix Instrument Co. (Metrix) on September 29, 1995. These acquisitions
were accounted for under the purchase method of accounting.
The pro forma condensed consolidated balance sheet at April 30, 1996
assumes that the acquisition of FMI occurred on that date. The pro forma
condensed consolidated statements of earnings assume that all the
acquisitions described above were completed November 1, 1994.
The financial information for FMI is based on its fiscal year ended
December 31, 1995. The pro forma condensed consolidated statement of
earnings for the year ended October 31, 1995 includes the operations of FMI
for the twelve month period ended December 31, 1995. Accordingly, net
sales and net earnings of $2,887,000 and $499,000 respectively, are
included in both the pro forma condensed consolidated statements of
earnings for the year ended October 31, 1995 and six month period ended
April 30, 1996.
The pro forma financial information should be read in conjunction with the
consolidated financial statements of Roper included in its 1995 Annual
Report on Form 10-K, Roper's quarterly report on Form 10-Q for the quarter
ended April 30, 1996, and the financial statements of FMI included herein.
The pro forma information is not necessarily indicative of the results
which actually would have occurred had the transactions been in effect on
the dates and for the periods indicated or which may result in the future.
<PAGE>
(c) EXHIBITS:
*2. Asset Purchase Agreement dated May 22, 1996, by and among Roper
Industries, Inc. and Fluid Metering, Inc. and its stockholders.
*3.1 Amended and Restated Certificate of Incorporation.
*3.2 Amended and Restated By-laws.
*4.1 Second Amended and Restated Agreement dated May 8, 1996, by and
between Roper Industries, Inc. and NationsBank, N.A. (South) as
initial lender and as agent.
4.2 First Modification of Second Amended and Restated Agreement dated May
8, 1996, by and between Roper Industries, Inc. and NationsBank, N.A.
(South) as initial lender and as agent.
23 Consent of Deutsch, Marin & Company.
- ---------------------
* Incorporated herein by Reference to Roper Industries, Inc. Report on Form 8-K
filed on June 6, 1996.
<PAGE>
<TABLE>
<CAPTION>
INDEX TO FINANCIAL STATEMENTS
<S> <C>
Independent Auditors' Report F-2
Balance Sheets as at April 30, 1996 (Unaudited)
and December 31, 1995 F-3
Statements of Income and Retained Earnings for
the Four-Month Periods ended April 30, 1996
(Unaudited) and April 30, 1995 (Unaudited)
and the Year ended December 31, 1995 F-4
Statements of Cash Flows for the Four-Month
Periods ended April 30, 1996 (Unaudited) and
April 30, 1995 (Unaudited) and the Year ended
December 31, 1995 F-5
Notes to Financial Statements F-6
F-1
</TABLE>
<PAGE>
[LETTERHEAD OF DEUTSCH, MARIN & COMPANY]
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Fluid Metering, Inc.
We have audited the accompanying balance sheet of Fluid Metering, Inc. as at
December 31, 1995 and the related statements of income and retained earnings and
of cash flows for the year then ended. These statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fluid Metering, Inc. as of
December 31, 1995 and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
East Meadow, New York
/s/ Deutsch Marin & Company
February 1, 1996, except as
to Note 8, which is as of
May 22, 1996
F-2
<PAGE>
FLUID METERING, INC.
Balance Sheets
<TABLE>
<CAPTION>
April 30, December 31,
Assets 1996 1995
------ ---------- ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,524,181 1,761,985
Marketable securities (note 2) 1,254,889 1,254,889
Accounts receivable 1,326,901 1,841,412
Inventories (note 4) 2,015,165 1,381,595
Other current assets 15,076 81,581
---------- ----------
Total current assets 7,136,212 6,321,462
Property, plant and equipment, net (note 3) 313,567 327,514
Other assets 13,000 10,000
---------- ----------
$ 7,462,779 6,658,976
========== ==========
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Accounts payable $ 76,400 39,898
Accrued royalties payable (note 5) 35,285 86,915
Accrued profit sharing contribution 60,457 181,372
Accrued payroll 23,626 42,630
Accrued interest payable 18,583 28,667
Other accrued expenses 23,925 23,787
---------- ----------
Total current liabilities 238,276 403,269
---------- ----------
Debentures payable (note 5) 1,115,000 1,115,000
---------- ----------
Stockholders' Equity:
Common stock, $.10 par value. Authorized
2,000,000 shares; 55,000 shares outstanding 5,500 5,500
Additional paid-in capital 16,000 16,000
Retained earnings 6,088,003 5,119,207
---------- ----------
Total stockholders' equity 6,109,503 5,140,707
Commitments and contingencies (note 6) - -
---------- ----------
$ 7,462,779 6,658,976
========== ==========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
FLUID METERING, INC.
Statements of Income and Retained Earnings
<TABLE>
<CAPTION>
Four Months Year
Ended Ended
April 30, December 31,
1996 1995 1995
------- ------ -----------
(Unaudited)
<S> <C> <C> <C>
Sales $ 5,139,637 3,880,524 13,700,433
Cost of goods sold 2,107,806 1,560,977 5,756,986
---------- ---------- ----------
Gross profit 3,031,831 2,319,547 7,943,447
Selling, general and administrative
expenses (note 5,7) 1,236,859 1,599,547 5,386,474
---------- ---------- ----------
Operating income 1,794,972 720,000 2,556,973
Dividend/interest income 38,494 74,579 180,766
Interest expense 37,166 37,166 110,833
Loss on sale of securities - 66,050 65,120
---------- ---------- ----------
Net income 1,796,300 691,363 2,561,786
Retained earnings at beginning of period 5,119,207 4,341,099 4,341,099
Dividends 827,504 925,374 1,783,678
---------- ---------- ----------
Retained earnings at end of period $ 6,088,003 4,107,088 5,119,207
========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
FLUID METERING, INC.
Statements of Cash Flows
<TABLE>
<CAPTION>
Four Months Year
Ended Ended
April 30, December 31,
1996 1995 1995
------- ------ -----------
(Unaudited)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 1,796,300 691,363 2,561,786
---------- --------- ----------
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation 26,382 16,660 69,065
Loss on sale of marketable securities,
net - 66,050 65,120
Changes in assets and liabilities:
Accounts receivable 514,511 143,729 (360,917)
Inventories (633,570) (125,204) (45,661)
Other current assets 66,505 (21,111) (73,838)
Security deposit (3,000) - -
Taxes and accrued expenses payable (164,993) 266,584 32,746
---------- --------- ---------
Total adjustments (194,165) 346,708 (313,485)
---------- --------- ---------
Net cash provided by
operating activities 1,602,135 1,038,071 2,248,301
---------- --------- ---------
Cash flows from investing activities:
Proceeds from sales of marketable
securities - 1,440,527 1,907,434
Purchases of marketable securities - - (1,232,500)
Purchase of equipment (26,734) (14,195) (109,598)
Disposal of equipment 14,299 - -
---------- --------- ---------
Net cash (used for) provided by
investing activities (12,435) 1,426,332 565,336
---------- --------- ---------
Cash flows from financing activities:
Advances to officers - (203,853) -
Dividends (827,504) (925,374) (1,783,678)
---------- --------- ---------
Net cash (used for)
financing activities (827,504) (1,129,227) (1,783,678)
---------- --------- ---------
Net increase in cash and cash equivalents 762,196 1,335,176 1,029,959
Cash and cash equivalents at beginning of
period 1,761,985 732,026 732,026
---------- --------- ---------
Cash and cash equivalents at end of
period $2,524,181 2,067,202 1,761,985
========== ========= =========
Supplemental disclosure of cash
flow information:
Cash paid during the period for
interest $ 47,250 38,918 110,166
========== ========= =========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
FLUID METERING, INC.
Notes to Financial Statements
(1) Summary Of Significant Accounting Policies
------------------------------------------
Basis of Operations
-------------------
The Company manufactures and sells valveless metering pumps and
dispensers primarily for biomedical, commercial, industrial and
agricultural OEM applications. Sales to Abbott Laboratories and several
of Abbott's affiliated entities approximated $2,100,000 (unaudited),
$1,400,000 (unaudited) and $5,000,000 during the four months ended April
30, 1996 and 1995, and the year ended December 31, 1995, respectively.
The Company had foreign sales of approximately $1,000,000 in 1995.
Cash Equivalents and Short-term Investments
-------------------------------------------
For purposes of the combined statement of cash flows, the Company
considers all highly liquid investment instruments with original
maturities of three months or less to be cash equivalents. Cash
equivalents of approximately $2,154,386 (unaudited) and $1,631,428 at
April 30, 1996 and December 31, 1995, respectively, consisted of
certificates of deposit and brokerage account short-term funds.
Inventories
-----------
Inventory is valued at the lower of cost or market, primarily on a last-
in, first-out (LIFO) basis. All obsolete or non-saleable merchandise has
been valued at net realizable value at the lower of cost or market.
Property, Plant and Equipment
-----------------------------
Property, plant and equipment are stated at cost and, for assets acquired
prior to January 1, 1981, are depreciated and amortized using both the
straight line and declining balance methods over the estimated useful
lives of the related assets. For assets placed in service after December
31, 1980, the Company has elected to record depreciation under the
Accelerated Cost Recovery System (ACRS) and equipment has been
depreciated over a three/five year period. For assets acquired after
December 31, 1986, the Company has elected to record depreciation under
the Modified Accelerated Cost Recovery System (MACRS). In accordance with
this provision, equipment is being depreciated using the double declining
balance method over a five/seven year period. These procedures differ
from generally accepted accounting principles, which require depreciation
to be provided over the estimated average useful lives of the assets. Any
difference in the current year's provision for depreciation on these
assets, based upon the usage of MACRS, rather that the estimated average
useful lives, is not significant.
(Continued)
F-6
<PAGE>
FLUID METERING, INC.
Notes to Financial Statements
(1) Summary Of Significant Accounting Policies (Continued)
------------------------------------------
Property, Plan and Equipment (Continued)
----------------------------
Maintenance and repairs are charged to expense as incurred and major
renewals and betterment are capitalized. The cost of property retired or
disposed of is removed from the accounts, along with the accumulated
depreciation, and any resulting gain or loss is reflected in income.
Revenue Recognition and Accounts Receivable
-------------------------------------------
The Company recognizes revenue at the time a product is shipped to the
customer. Accounts receivable are reflected net of an allowance for
uncollectible accounts, which allowance reflects management's estimate of
collectibility, based upon a review of open accounts receivable and prior
years' collection experience. The allowance for doubtful accounts was
$27,080 (unaudited) and $37,580 at April 30, 1996 and December 31, 1995,
respectively .
Patent Cost
-----------
Expenses incurred in the development of potential patentable processes
and patent applications are charged to operations as incurred.
Retirement Plan
---------------
The Company has a profit sharing plan which covers substantially all
employees. Annually, the Company's board of directors may elect to
contribute up to a maximum of 15% of the compensation of eligible
employees. The Company recorded expenses of $60,457 (unaudited), $60,457
(unaudited), and $181,337 for the four months ended April 30, 1996 and
1995, and the year ended December 31, 1995, respectively.
Income Taxes
------------
The Company has elected to be taxed as an "S" Corporation effective for
the tax year beginning January 1, 1992. Accordingly, the shareholders are
taxed on the profits of the Corporation at the personal level.
Unaudited Interim Financial Information
---------------------------------------
The unaudited interim financial information reflects all adjustments
which are, in the opinion of management, necessary to a fair presentation
of the results for the interim periods presented.
(Continued)
F-7
<PAGE>
FLUID METERING, INC.
Notes to Financial Statements
(2) Marketable Securities
---------------------
Marketable securities are carried at cost, which approximates market value.
They are considered available for sale.
<TABLE>
<CAPTION>
As at April 30, 1996
--------------------------------------------
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
<S> <C> <C> <C> <C>
US Treasury notes,
due within one year $ 982,500 8,905 991,405
Municipal bonds, due
within one year 250,000 (702) 249,298
Western Publishing
Group 22,389 (11,327) 11,063
---------------------------------------------
$ 1,254,889 8,905 (12,029) 1,251,766
=============================================
As at December 31, 1995
----------------------------------------------
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
US Treasury notes,
due within one year $ 982,500 14,690 997,190
Municipal bonds, due
within one year 250,000 978 250,978
Western Publishing
Group 22,389 (14,514) 7,875
----------------------------------------------
$ 1,254,889 15,668 (14,514) 1,256,043
==============================================
</TABLE>
(Continued)
F-8
<PAGE>
FLUID METERING, INC.
Notes to Financial Statements
(3) Property, Plant and Equipment
-----------------------------
Property, plant and equipment are comprised as follows:
<TABLE>
<CAPTION>
April 30, December 31,
1996 1995
-------- -----------
(Unaudited)
<S> <C> <C>
Land $ 93,221 93,221
Building 273,181 273,181
Machinery and equipment 486,874 476,810
Furniture and fixtures 42,731 42,731
Leasehold improvements 16,670 15,012
Data processing software 10,110 10,110
-------- -------
922,787 911,065
Accumulated depreciation 609,220 583,551
-------- -------
$ 313,567 327,514
======== =======
Depreciation $ 26,382 69,065
======== =======
(4) Inventories
-----------
The components of inventories are as follows:
April 30, December 31,
1996 1995
-------- ----------
(Unaudited)
Raw materials $ 1,715,165 1,124,162
Work in progress 125,000 99,623
Finished goods 175,000 157,810
---------- ---------
$ 2,015,165 1,381,595
========== =========
</TABLE>
(5) Related Party Transactions
--------------------------
Debentures Payable
------------------
The Company has issued debentures in the original principal amount of
$1,275,000, of which $1,115,000 is outstanding at April 30, 1996 and
December 31, 1995. The debentures mature on June 1, 2000 and bear interest
at the rate of 10% per annum. The debentures are callable at the option of
the Company. Related parties hold approximately 94% of the outstanding
debentures.
(Continued)
F-9
<PAGE>
FLUID METERING, INC.
Notes to Financial Statements
(5) Related Party Transactions (Continued)
--------------------------
Royalties
---------
Under the terms of an agreement dated February 4, 1963, Harry E. Pinkerton,
as owner of certain patents, granted an exclusive license to Fluid Metering,
Inc., for the manufacture, use and sale of products embodying his patented
inventions. In consideration of the license, the corporation pays royalties
of 3% of the net sales to Harry E. Pinkerton.
Four Months Ended Year ended
April 1996 April 1995 December 31, 1995
Royalty expense totals $ 154,703 116,823 412,186
======== ======== ========
(6) Commitments and Contingencies
-----------------------------
The Company leases vehicles and certain storage containers under operating
leases. The vehicle leases terminate at various times through 1997. The
storage containers are leased on a month-by-month basis.
In addition to its main facility, which the Company owns, the Company leases
additional space in Oyster Bay, New York, on a month-to-month basis.
Rent expense totaled $12,600 (unaudited), $6,600 (unaudited), and $26,400
for the four months ended April 30, 1996 and 1995, and the year ended
December 31, 1995, respectively. Future minimum rental payments required
under these operating leases are not considered material.
(7) Research and Development Costs
------------------------------
Research and development costs charged to operations were $18,395
(unaudited), $6,184 (unaudited), and $54,463 for the four months ended April
30, 1996 and 1995 and the year ended December 31, 1995, respectively.
(8) Event Subsequent to the Date of the Report of Independent Auditor
-----------------------------------------------------------------
(unaudited)
On May 22, 1996, the Company sold substantially all its assets to Roper
Industries, Inc. ("Roper") for approximately $23 million in cash and $5.7
million in Roper common stock, plus assumption by Roper of $1,115,000 in
outstanding debentures (note 5). Subsequent to the acquisition by Roper, the
outstanding debentures were to be redeemed. In addition, the royalty
agreement (note 5) with Harry E. Pinkerton was terminated.
F-10
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
YEAR ENDED OCTOBER 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Historical
-----------------------
1995 Pro forma Pro forma Pro forma
Roper Acquisitions Adjustments Combined FMI Adjustments
-------- ------------ ----------- --------- ------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net sales $175,421 11,356 - 186,777 13,700 -
Cost of sales 81,618 5,295 - 86,913 5,757 -
-------- ------------ ----------- --------- ------ ----------
Gross profit 93,803 6,061 - 99,864 7,943 -
Selling, general, and
administrative expenses 56,392 3,324 581 (a),(d) 60,297 5,386 (1,197)(a),(b),(c)
-------- ------------ ------------ --------- ------ ----------
Operating income 37,411 2,737 (581) 39,567 2,557 1,197
Interest expense 1,952 - 1,284 (e) 3,236 111 1,910 (e),(f),(g)
Other income 542 (17) 17 (d) 542 116 (116)(d)
-------- ------------ ------------ --------- ------ ----------
Earnings before taxes 36,001 2,720 (1,848) 36,873 2,562 (829)
Income taxes 12,730 - 311 (h),(i) 13,041 - $659 (h),(i)
-------- ------------ ------------ --------- ------ -----------
Net earnings $ 23,271 2,720 (2,159) 23,832 2,562 (1,488)
======== ============ =========== ========= ====== ============
Net earnings per common share $ 1.54 - - 1.57 - -
======== ============ =========== ========= ====== ============
Weighted average common shares
outstanding 15,130 - 24 (j) 15,154 - 124 (j)
======== ============ =========== ========= ====== ============
<CAPTION> Pro forma
Combined
---------
<S> <C>
Net sales 200,477
Cost of sales 92,670
---------
Gross profit 107,807
Selling, general, and
administrative expenses 64,486
---------
Operating income 43,321
Interest expense 5,257
Other income 542
---------
Earnings before taxes 38,606
Income taxes 13,700
---------
Net earnings 24,906
=========
Net earnings per common share 1.63
=========
Weighted average common shares
outstanding 15,278
=========
See accompanying notes to unaudited pro forma condensed consolidated statements of earnings
</TABLE>
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
a) Reflects the amortization of goodwill resulting from the excess of the
purchase price over the fair value of the net assets: (i) Uson and Prex-
$218,000 in 1995, (ii) Metrix $424,000 in 1995, and (iii) FMI $906,000 in
1995 and $453,000 in 1996. Goodwill will be amortized on a straight-line
basis over periods ranging from 15 to 30 years.
b) Compensation expense attributable to the former owners and executive
officers of FMI has been reduced to reflect expected post acquisition levels
as defined within their respective employment agreements with Roper.
Accordingly, the historical amounts for selling, general, and administrative
expenses are reduced by $1,691,000 for 1995 and $324,000 for 1996.
c) Reflects cancellation of a royalty agreement between FMI and a related
party, whereby royalties were paid at a rate of 3% of net sales. In
conjunction with the acquisition by Roper, this royalty agreement was
terminated. Accordingly, the historical amounts for selling, general and
administrative expenses are reduced by $412,000 in 1995 and $242,000 in
1996.
d) Adjustments for non-recurring items, principally interest and investment
income, as all excess funds will be employed for debt service purposes, and
elimination of commissions paid by Uson to an unconsolidated subsidiary
(Foreign Sales Corporation). Such unconsolidated subsidiary was not acquired
in the purchase of assets of Uson. These adjustments total: (i) Uson-
($107,000) in 1995, (ii) Metrix- $29,000 in 1995, and (iii) FMI- ($116,000)
in 1995 and ($113,000) in 1996.
e) The interest expense increase of $3,275,000 for 1995 and $1,006,000 for 1996
results from increased borrowings of $12,440,000, $12,180,000, and
$24,888,000 related to the acquisitions of Uson in February 1995, Metrix in
September 1995, and FMI in May 1996, respectively. The credit agreement
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS, CONTD.
provides for, at the option of the Company, a variable interest rate based
upon the London Interbank Offered Rate (LIBOR) plus a variable factor based
upon the performance of the Company as measured against certain specified
ratios, or the prime interest rate. The interest rate assumed in these pro
forma statements is 8% for both 1995 and 1996.
f) Reflects elimination of interest expense on FMI's debentures as assumed
redeemed using proceeds from Roper's credit agreement. The reduction in
interest expense was $111,000 in 1995 and $55,000 in 1996.
g) Additional deferred loan costs amortization expense associated with the
restated and amended credit agreement- $30,000 in 1995 and $15,000 in 1996.
Deferred loan costs will be amortized on a straight-line basis over 5 years.
h) The provision for income taxes has been adjusted to reflect the income tax
effect of the above adjustments calculated using a combined Federal and
state statutory rate of 35% for Uson, Prex and Metrix and 38% for FMI. The
goodwill resulting from the acquisitions of Uson, Metrix and FMI will be
deductible for income tax purposes.
i) Adjustment for income taxes on earnings calculated using a combined Federal
and state statutory rate of 35% for Uson, Prex and Metrix and 38% for FMI.
All these companies were Subchapter S Corporations for Federal income tax
purposes.
j) Additional shares of Roper common stock issued in connection with the
acquisitions of Prex and FMI.
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
APRIL 30, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
Historical
---------------------
Pro forma Pro forma
Roper FMI Adjustments Combined
----------- -------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,955 2,524 (2,524) (a) 1,955
Marketable securities - 1,255 (1,255) (a) -
Receivables 37,279 1,327 - 38,606
Inventories 25,462 2,015 355 (e) 27,832
Other current assets 1,357 15 (15) (a) 1,357
-------- ----- ------ -------
Total current assets 66,053 7,136 (3,439) 69,750
Property, plant and equipment, net 21,874 314 (162) (a) 22,026
Intangible and other assets, net 66,949 13 27,310 (a),(d),(f) 94,272
-------- ----- ------ -------
$154,876 7,463 23,709 186,048
======== ===== ====== =======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,150 76 - 8,226
Other current liabilities 10,595 162 (54) (a) 10,703
Income taxes payable 2,186 - - 2,186
-------- ----- ------ -------
Total current liabilities 20,931 238 (54) 21,115
Long-term debt 12,652 1,115 23,773 (b),(c),(f) 37,540
Other liabilities 2,436 - 400 (b) 2,836
Stockholders' equity:
Common stock 150 6 (5) (a),(b) 151
Additional paid-in capital 44,781 16 5,683 (a),(b) 50,480
Retained earnings 73,926 6,088 (6,088) (a) 73,926
-------- ----- ------ -------
Total stockholders' equity 118,857 6,110 (410) 124,557
-------- ----- ------ -------
$154,876 7,463 23,709 186,048
======== ===== ====== =======
</TABLE>
See accompanying notes to unaudited pro forma condensed consolidated balance
sheet
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
a) To adjust for assets not acquired and liabilities not assumed in the purchase
of FMI.
b) Reflects the purchase price for FMI consisting of: (i) $23,000,000 paid in
cash at closing, (ii) 124,026 shares of Roper common stock issued, with a
market value of $45.96 per share, (iii) assumption of debentures outstanding,
with a principal balance of $1,115,000, and (iv) $400,000 in cash to be paid
in equal installments on each of May 22, 1997 and 1998. In addition, direct
acquisition costs related to the purchase are assumed to be $500,000. The
cash portion of the consideration plus the direct acquisition costs are
assumed to be financed under Roper's amended and restated credit agreement.
FMI's debentures are assumed to have been redeemed using borrowings under
Roper's credit agreement.
c) Upon final determination of post-closing adjustments, Roper additionally
expects to pay approximately $125,000 to the FMI shareholders, which payment
is assumed to have been made from its credit agreement.
d) Adjustment to reflect the difference between the purchase price and the fair
value of assets purchased as goodwill which totals $27,175,000.
e) Adjustment to reflect the change in FMI's valuation method for inventories
from last-in, first-out (LIFO) to first-in, first-out (FIFO).
f) To record additional deferred loan costs, totaling $148,000, related to the
amended and restated credit agreement dated May 8, 1996 by and between Roper
and NationsBank, N.A. (South), as initial lender and agent. The cash portion
of the purchase price was financed under this credit agreement.
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
SIX MONTHS ENDED APRIL 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Historical
---------------
Pro forma Pro forma
Roper FMI Adjustments Combined
-------- ----- ----------- ---------
<S> <C> <C> <C> <C>
Net sales $100,001 8,027 - 108,028
Cost of sales 48,501 3,439 - 51,940
-------- ----- ----------- ---------
Gross profit 51,500 4,588 - 56,088
Selling, general, and administrative
expenses 29,167 2,351 (113)(a),(b),(c) 31,405
-------- ------ ----------- --------
Operating income 22,333 2,237 113 24,683
Interest expense 679 55 966 (e),(f),(g) 1,700
Other income (expense) 92 113 (113)(d) 92
-------- ------ ----------- --------
Earnings before taxes 21,746 2,295 (966) 23,075
Income taxes 7,284 - $505 (h),(i) 7,789
-------- ------ ----------- --------
Net earnings $ 14,462 2,295 (1,471) 15,286
======== ====== =========== ========
Net earnings per common share $ 0.94 - - 0.99
======== ====== =========== ========
Weighted average common shares
outstanding 15,364 - 124 (j) 15,488
======== ====== =========== ========
</TABLE>
See accompanying notes to unaudited pro forma condensed consolidated statements
of earnings
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the reporting person has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
ROPER INDUSTRIES, INC.
----------------------
(Registrant)
Date August 1, 1996 By /s/ Martin S. Headley
------------------- ---------------------
Martin S. Headley
Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Number Exhibit
- ------ -------
2. Asset Purchase Agreement dated May 22, 1996, by and among Roper
Industries, Inc. and Fluid Metering, Inc. and its stockholders,
contained in Exhibit 2 to the Roper Industries, Inc. Report on Form
8-K filed June 6, 1996, and incorporated herein by this reference.
3.1 Amended and Restated Certificate of Incorporation, contained in
Exhibit 3.1 to the Roper Industries, Inc. Report on Form 8-K filed
June 6, 1996, and incorporated herein by this reference.
3.2 Amended and Restated By-laws, contained in Exhibit 3.2 to the Roper
Industries, Inc. Report on Form 8-K filed June 6, 1996, and
incorporated herein by this reference.
4 Second Amended and Restated Credit Agreement (and material annexes and
exhibits thereto) dated May 8, 1996 by and between Roper Industries,
Inc. and NationsBank, N.A. (South) as initial lender and as agent,
contained in Exhibit 4 to the Roper Industries, Inc. Report on Form
8-K filed June 6, 1996, and incorporated herein by this reference.
4.2 First Modification of Second Amended and Restated Credit Agreement
dated May 8, 1996 by and between Roper Industries, Inc. and
NationsBank, N.A. (South) as initial lender as agent.
23 Consent of Deutsch, Marin & Company.
<PAGE>
EXHIBIT 4.2
FIRST MODIFICATION OF SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
THIS MODIFICATION is made and entered into as of the 8th day of July,
1996 (the "Effective Date"), among ROPER INDUSTRIES, INC., a Delaware
--------------
corporation (hereinafter referred to as the "Borrower"), NATIONSBANK, N.A.
--------
(SOUTH), a national banking corporation, in its capacity as the Initial Lender
under the Credit Agreement described below (the "Initial Lender"), and
--------------
NATIONSBANK, N.A. (SOUTH) in its capacity as the Agent for the Lenders pursuant
to Article XIII of the Credit Agreement (the "Agent").
-----
STATEMENT OF FACTS
------------------
Pursuant to that certain Second Amended and Restated Credit Agreement,
dated as of May 8, 1996, among Borrower, the Initial Lender, and the Agent (the
"Credit Agreement"), the Initial Lender has agreed to provide Borrower with
----------------
certain loan and letter of credit facilities on the terms and conditions set
forth in the Credit Agreement (all capitalized terms used in this Modification
and which are not otherwise expressly defined herein shall have the respective
meanings given such terms in the Credit Agreement).
The Initial Lender desires to assign a portion of its rights and
obligations under the Credit Agreement as modified by this Modification to each
of NBD Bank, a Michigan banking corporation ("NBD"), Robert Fleming & Co.
---
Limited, a private company organized under the laws of England ("Fleming"), and
-------
SunTrust Bank, Atlanta, a Georgia banking corporation ("SunTrust"; NBD, Fleming
--------
and SunTrust being herein collectively referred to as the "Additional Lenders"),
------------------
all pursuant to Section 14.05 of the Credit Agreement, and the parties hereto
desire to make certain modifications of the terms and conditions of the Credit
Agreement in anticipation of such assignments, and the parties are entering into
this Modification in order to consent to such assignments and to make such
modifications, all in accordance with and subject to the terms and conditions
hereinafter set forth in this Modification.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants herein set forth, as well as for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties do hereby agree as follows:
STATEMENT OF TERMS
------------------
SECTION 1. MODIFICATION OF CREDIT AGREEMENT. Subject to the terms
--------------------------------
and conditions hereof, the parties hereby agree to modify the Credit Agreement
as of the Effective Date as follows:
<PAGE>
(A) The Cash Management Loan Limit shall be increased from $2,000,000
to $5,000,000 and Annex I to the Credit Agreement shall be amended to such
-------
extent.
(B) Section 5.01(a) of the Credit Agreement shall be deleted in its
entirety and the following new Section 5.01(a) shall be substituted in lieu
thereof:
(a) For the convenience of the parties and as an integral part of
the transactions contemplated hereby, and subject to and upon the
terms and conditions set forth in this Agreement, the Cash Management
Lender may in its discretion make, from time to time during the
Revolving Loan Period and upon the Borrower's request, Cash Management
Loans to the Borrower in an aggregate principal amount outstanding at
any one time not to exceed the Cash Management Loan Limit as in effect
at such time, notwithstanding the fact that such Cash Management
Loans, once aggregated with the Cash Management Lender's Pro Rata
Share of all other Loans and the Letters of Credit and Reimbursement
Obligations then outstanding, may exceed the Cash Management Lender's
Pro Rata Share of the Total Credit Commitments then in effect;
provided, however, that notwithstanding anything in this Agreement
-------- -------
to the contrary, (i) the Cash Management Lender shall not make any
Cash Management Loan if the aggregate outstanding principal balance of
all of the Loans plus the Aggregate Stated Amount of all outstanding
----
Letters of Credit plus the aggregate outstanding principal amount of
----
all Reimbursement Obligations exceeds, or would exceed with the making
of such Cash Management Loan, the Total Credit Commitments then in
effect, (ii) the Lenders shall not be obligated hereunder to make any
Series A Revolving Loans, Series B Revolving Loans or Term Loans if
the aggregate outstanding principal balance of all of the Loans plus
----
the aggregate Stated Amount of all outstanding Letters of Credit plus
----
the aggregate outstanding principal amount of all of the Reimbursement
Obligations exceeds, or would exceed with the making of such Loans,
the Total Credit Commitments as then in effect, (iii) no Letter of
Credit shall be issued under this Agreement if, after giving effect to
such issuance, the sum of the aggregate Stated Amount of all Letters
of Credit then outstanding plus the aggregate principal balance of all
----
Loans and Reimbursement Obligations then outstanding will exceed the
Total Credit Commitments then in effect, (iv) if at any time the
aggregate outstanding principal balance of all of the Loans plus the
----
aggregate outstanding Stated Amount of all outstanding Letters of
Credit plus the aggregate outstanding principal amount of all of the
----
Reimbursement Obligations shall exceed the Total Credit Commitments as
then in effect, Borrower shall immediately upon receipt of notice from
the Agent or any Lender, or immediately upon the Borrower's otherwise
acquiring notice thereof, repay such Loans or Reimbursement
-2-
<PAGE>
Obligations or cause the early termination of such Letters of Credit
to the extent necessary to eliminate such excess or, if such payment
or termination does not eliminate such excess, cause to be deposited
with the Agent Cash Collateral in an amount and of the type
satisfactory to the Agent and in which the Agent is granted a first-
priority Lien (for the benefit of the Lenders) to secure the
Obligations pursuant to documentation in form and substance
satisfactory to the Agent (but such excess shall nevertheless
constitute Obligations that are evidenced by the Credit Documents,
guaranteed by the Guaranty Agreements, secured by the Collateral and
otherwise entitled to all benefits and security of this Agreement and
the other Credit Documents), and (v) in the event that Borrower elects
to reduce the amount of the Total Series A Revolving Loan Commitments
or the Total Series B Revolving Loan Commitments, the sum of the
aggregate outstanding principal balance of all of the Loans plus the
----
aggregate outstanding principal balance of the Reimbursement
Obligations plus the aggregate Stated Amount of all outstanding
----
Letters of Credit shall not exceed the reduced amount of the Total
Credit Commitments after giving effect to any such reduction (and, in
any such case, Borrower shall immediately prepay such Loans, pay any
Reimbursement Obligations, cause the early termination of any Letters
of Credit or deposit Cash Collateral with the Agent to the extent
necessary to eliminate any such excess). The limitations on the
maximum permissible outstanding principal balance of the Loans and the
Reimbursement Obligations and the maximum permissible outstanding
Stated Amount of the Letters of Credit specified in clauses (i), (ii)
and (iii) above and the prepayment and early termination requirements
specified in clauses (iv) and (v) above shall be in addition to and
shall supplement any similar provisions set forth in Sections 3.01(a),
3.03, 4.01(a), 4.03, 5.03 or 6.01 of this Agreement.
(C) Sections 5.02(b) and (c) of the Credit Agreement shall be deleted in
their entireties and the following new Sections 5.02(b) and (c) shall be
substituted in lieu thereof:
(d) Accrued interest on the Cash Management Loans shall be
payable to the Cash Management Lender in arrears on the first (1st)
day of each calendar month, commencing with the month following the
month in which the initial Cash Management Loan is made, and
continuing to be due on the first (1st) day of each month thereafter
as well as on the Credit Expiration Date.
(c) In addition to any principal reduction which may be required
at any time under Section 5.01(a) or 5.03 hereof, and subject to any
-3-
<PAGE>
acceleration of maturity pursuant to Section 12.02 hereof, the
aggregate outstanding principal balance of the Cash Management Loans
shall be due and payable in full on the Business Day which immediately
precedes the Credit Expiration Date.
(D) Section 5.03 of the Credit Agreement shall be deleted in its entirety
and the following new Section 5.03 shall be substituted in lieu thereof:
SECTION 5.03. EXCESS CASH MANAGEMENT LOANS. If at any time the
----------------------------
aggregate outstanding principal amount of all of the Cash Management
Loans shall exceed the amount of the Cash Management Loan Limit then
in effect, the Borrower shall immediately upon receipt of notice
thereof from the Agent or any Lender, or immediately upon the
Borrower's acquiring actual knowledge thereof, prepay the Cash
Management Loans (from its own funds or, subject to the terms and
conditions of the Agreement, from the proceeds of Series A Revolving
Loans or Series B Revolving Loans) to the extent necessary to
eliminate such excess (but such excess shall nevertheless constitute
obligations that are evidenced by the Credit Documents, secured by the
Collateral, guaranteed by the Guaranty Agreements and otherwise
entitled to all benefits and security of this Agreement and the other
Credit Documents).
(E) Section 5.04 of the Credit Agreement shall be deleted in its entirety
and the following new Section 5.04 shall be substituted in lieu thereof:
SECTION 5.04 REFINANCING OF CASH MANAGEMENT LOANS.
------------------------------------
Notwithstanding anything in this Agreement to the contrary, the Cash
Management Lender may request, on the Borrower's behalf and from time
to time prior to the Credit Expiration Date and regardless of whether
or not the conditions specified in Section 8.02 hereof are then
satisfied, that all Lenders (including, without limitation, the Cash
Management Lender in its capacity as a Lender) make Revolving Credit
Loans for the purpose of refinancing some or all of the principal
balance of the Cash Management Loans which may be then outstanding and
all of the Lenders shall make such Revolving Loans (according to each
Lender's respective Pro Rata Share thereof and with such Revolving
Loans to be made, first, as Series A Revolving Loans and then as
Series B Revolving Loans). If a request for such Revolving Loans is
made by the Cash Management Lender by 12:30 p.m. (Eastern Time) on any
Business Day, each other Lender shall disburse to the Cash Management
Lender its Pro Rata Share of such Revolving Loans in immediately
available funds by 1:30 p.m. (Eastern Time) on the same Business Day
(or, in the case of Fleming only, by 1:30 p.m. (Eastern Time) on the
-4-
<PAGE>
first (1st) Business Day thereafter in the event Fleming is a Lender
hereunder), and if such payment is not in fact made available to the
Cash Management Lender by any Lender by such deadline, the Cash
Management Lender shall be entitled to recover such amount on demand
from such Lender together with interest thereon until so received at
the Federal Fund Rate.
(F) Section 7.04(h) of the Credit Agreement shall be deleted in its
entirety and the following new Section 7.04(h) shall be substituted in lieu
thereof:
(h) Solely for purposes of computing the Commitment Fees payable
by the Borrower to the Agent under this Section 7.04 for any
particular quarterly period, the daily average unused portion of the
Series A Revolving Loan Commitments for such period shall be computed
by treating any and all Cash Management Loans outstanding during such
period as a usage of all of the Lenders' Series A Revolving Loan
Commitments (or if such Credit Commitments are fully utilized, as a
usage of all of the Lenders' Series B Revolving Loan Commitments). All
Commitment Fees paid by the Borrower to the Agent hereunder shall be
distributed by the Agent to the Lenders in accordance with the
Lenders' respective Pro Rata Shares; provided, however, that solely
-------- -------
for purposes of calculating the Commitment Fees distributable
hereunder by the Agent to any Lender for any particular quarterly
period, (i) any and all Cash Management Loans outstanding during such
period shall be treated solely as a usage of the Cash Management
Lender's Credit Commitments (in the order provided above), and (ii)
each Lender's Pro Rata Share of the Series A Revolving Loan Commitment
Fees or the Series B Revolving Loan Commitment Fees payable by the
Borrower to the Agent for any particular quarterly period (as the case
may be) shall be an amount equal to the result obtained by multiplying
such Series A Revolving Loan Commitment Fees or Series B Revolving
Loan Commitment Fees (as the case may be) by a fraction, the numerator
of which shall be the daily average unused portion of such Lender's
Series A Revolving Commitment or Series B Revolving Loan Commitment
(as the case may be) for such period as determined in accordance with
clause (i) of this proviso and the denominator of which shall be the
sum of the daily average unused portions of all of the Lenders' Series
A Revolving Loan Commitments or Series B Revolving Loan Commitments
(as the case may be) for such period as determined in accordance with
clause (i) of this proviso. If the total Commitment Fees payable by
the Borrower to the Agent for any particular quarterly period as
determined in accordance with the first sentence of this paragraph (h)
are less than the total Commitment Fees for such period which would
have been payable if such Commitment Fees had been determined in
-5-
<PAGE>
accordance with clause (i) of the proviso in the second sentence of
this paragraph (h), the Cash Management Lender shall pay the
deficiency to the other Lenders, but the deficiency amount so payable
by the Cash Management Lender to the other Lenders for any particular
quarterly period shall be reduced (on a pro rata basis) by the amount
of any interest which accrued on the Cash Management Loans during such
quarterly period but which was not paid by the Borrower when due. In
the event that any such deficiency payments by the Cash Management
Lender to the other Lenders are reduced for a particular quarterly
period on account of the Borrower's failure to pay any accrued
interest for such period on the Cash Management Loans, and in the
further event that the Cash Management Lender subsequently collects
such accrued interest, the Cash Management Lender shall pay to the
other Lenders (in accordance with their respective pro rata shares
thereof) an amount equal to the amount by which such deficiency
payment was reduced on account of such interest.
(G) Section 11.06 of the Credit Agreement shall be amended by deleting
clause (v) which appears at the end thereof and by substituting the following
new clause (v) in lieu thereof:
(v) acquire stock of any new or additional Subsidiary or acquire
all or substantially all of the assets of any other Person to the
extent any such acquisition (or series of related acquisitions)
constitutes a Permitted Acquisition and provided that not less than
five (5) days prior to the consummation of such acquisition (or series
of related acquisitions) Borrower provides the Agent and each Lender
with a duly completed and executed Permitted Acquisition Certificate
for such acquisition (or series of related acquisitions) demonstrating
that such acquisition is a Permitted Acquisition and that the Borrower
will be in compliance with the financial covenants set forth in
Sections 10.09(a), (b), (d) and (e) thereof on a pro forma basis after
--- -----
giving effect of such acquisition.
(H) The Credit Agreement shall be further modified by deleting Exhibit
-------
H-2 as originally attached thereto and by substituting in lieu thereof the
- ---
replacement Exhibit H-2 attached to this Modification.
-----------
SECTION 2. ASSIGNMENTS TO ADDITIONAL LENDERS. (a) Subject to the terms
---------------------------------
and conditions hereof, each of the Borrower and the Agent do hereby consent,
pursuant to Section 14.05(a) of the Credit Agreement, to the assignment by the
Initial Lender to the Additional Lenders as of the Effective Date of the
following portions of the Initial Lender's Credit Commitments and related rights
and obligations under the Credit Agreement as amended by this Modification (but
such assignments shall not include the Initial Lender's rights or obligations as
the Cash Management Lender):
-6-
<PAGE>
<TABLE>
<CAPTION>
Amount of
Percentage of Total Total Credit
Credit Commitments Commitments
Additional Lender to be Assigned to be Assigned
- ------------------- -------------------- --------------
<S> <C> <C>
NBD 18% $18,000,000
Fleming 10% $10,000,000
SunTrust 22% $22,000,000
</TABLE>
(b) Pursuant to Section 14.05(e) of the Credit Agreement, the
aforesaid assignments shall be effective upon the Agent's receipt of Assignment
and Acceptance Agreements for the same executed by the Initial Lender and the
Additional Lenders (collectively, the "Additional Lender Assignments") together
-----------------------------
with the Initial Lender's initial Series A Revolving Loan Note and initial
Series B Revolving Loan Note, and upon such receipt (i) the Agent shall give
notice thereof to the Borrower, (ii) the Agent and the Borrower shall accept the
Additional Lender Assignments, (iii) the Borrower shall execute and deliver to
the Agent, in exchange for the surrendered initial Series A Revolving Loan Note
and initial Series B Revolving Loan Note, replacement Series A Revolving Loan
Notes and Series B Revolving Loan Notes payable to the order of each of the
Initial Lender and the Additional Lenders in amounts equal to such Lender's
respective Credit Commitments after giving effect to such assignments
(collectively, the "Replacement Revolving Loan Notes") (such Replacement
--------------------------------
Revolving Loan Notes shall be in an aggregate stated principal amount equal to
the aggregate stated principal amount of the surrendered Notes, shall be dated
as of the Effective Date, and shall otherwise be in the appropriate forms
attached to the Credit Agreement, and the Notes surrendered by the Initial
Lender shall be returned by the Agent to the Borrower marked "canceled"), and
iv) the revised Annex I to the Credit Agreement which is attached to this
-------
Modification (and which reflects such assignments as well as the increase in the
Cash Management Loan Limit provided above) shall supersede and replace the
original version of Annex 1 as attached to the Credit Agreement and shall be
-------
substituted by each of the Agent, the Borrower, the Initial Lender and the
Additional Lenders in lieu thereof.
(c) Upon the effectiveness of the Additional Lender Assignments, each
of the Additional Lenders shall pay to the Initial Lender an amount of
immediately available funds equal to the aggregate outstanding principal balance
of the portion of Loans so assigned by the Initial Lender to such Additional
Lender.
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS. This Modification
-------------------------------------
(including without limitation the various modifications, consents and other
agreements set forth herein) shall become effective, as of the Effective Date,
upon the satisfaction of each and every one of the following conditions to such
effectiveness:
(a) The Agent shall have received the following documents in form and
substance reasonably satisfactory to the Agent (collectively the "Supplemental
------------
Credit Documents"):
- ----------------
(i) This Modification duly completed and executed by the
Borrower, the Agent and the Initial Lenders;
-7-
<PAGE>
(ii) A replacement Cash Management Loan Note in the stated
principal amount of the revised Cash Management Loan Limit provided
above and duly executed on behalf of Borrower (the "Replacement Cash
----------------
Management Loan Note") ;
--------------------
(iii) The Additional Lender Assignments duly completed and
executed by all parties thereto;
(iv) The Replacement Revolving Loan Notes duly executed on behalf
of the Borrower;
(v) The written consent of each of the existing Guarantors to the
execution, delivery and performance of this Modification and the other
Supplemental Credit Documents, which consent shall be evidenced by
each such Guarantor's signing one or more counterparts of this
Modification in the appropriate space indicated below and returning
the same to the Agent;
(vi) Certificates of each of the Borrower and the existing
Guarantors in substantially the forms of Exhibit 1 attached hereto (in
---------
the case of the Borrower), Exhibit 2 attached hereto (in the case of
---------
each existing corporate Guarantor), and Exhibit 3 attached hereto (in
---------
the case of each existing partnership Guarantor), all duly executed
and appropriately completed; and
(vii) An opinion of counsel for the Borrower in the form of
Exhibit 4 attached hereto (subject to such changes therein as may be
---------
acceptable to the Agent and the Initial Lender).
(b) Each and every representation and warranty of Borrower set forth
in Section 5 below shall be true and correct in all material respects as of the
date of this Modification.
(c) There shall not exist as of the date of this Modification, and
after giving effect to this Modification, any Default or Event of Default under
the Credit Agreement as amended by this Modification.
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES. Borrower
-----------------------------------------
represents and warrants that (a) each of Borrower and the Guarantors has all
requisite corporate power and authority to execute and deliver the Supplemental
Credit Documents to which it is a party and to perform its obligations under
such Supplemental Credit Documents, and the Supplemental Credit Documents to
which each such Credit Party is a party have been duly authorized by all
requisite corporate action on the part of such Credit Party, have been duly
executed and delivered by authorized officers of such Credit Party, and
constitute valid obligations of such Credit Party, legally binding upon and
enforceable against such Credit Party in accordance with their terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
-8-
<PAGE>
creditors' rights generally or by general principles of equity; and (b) after
giving effect to this Modification, (i) no Default or Event of Default is
existing under the Credit Agreement on and as of the date hereof and (ii) the
representations and warranties of the Borrower set forth in Article IX of the
Credit Agreement are true and correct in all material respects on and as of the
date of this Modification with the same force and effect as if made on and as of
each of such date (except as to the extent that any of such representations or
warranties relates to a specific prior date or period).
SECTION 5. AGENT EXPENSES. Without limiting its obligations under the
--------------
Credit Agreement, the Borrower agrees to pay on demand all of the Agent's
respective reasonable attorneys' fees and expenses and all other reasonable out-
of-pocket costs incurred by the Agent in connection with its evaluation,
negotiation, documentation or consummation of the Supplemental Credit Documents
and the transactions contemplated hereby or thereby.
SECTION 6. MISCELLANEOUS. (a) Except as herein provided, the Credit
-------------
Agreement shall remain unchanged and in full force and effect, and each
reference to the Credit Agreement in the Credit Agreement and the other Credit
Documents shall be deemed to be a reference to the Credit Agreement as hereby
amended and as the same may be further amended, supplemented or otherwise
modified and in effect from time to time hereafter.
(b) This Modification may be executed in a number of several
counterparts, each of which shall be identical and all of which when taken
together shall constitute one and the same instrument, and any of the parties
hereto may execute this Modification by signing one or more of such
counterparts.
(c) This Modification shall be governed by, and construed in
accordance with, the internal laws of the State of Georgia (without giving
effect to its conflicts of law rules).
(d) This Modification shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Modification
to be executed as of the day and year first above written and Borrower has
caused its seal to be hereunto affixed as of such date.
BORROWER:
(CORPORATE SEAL) ROPER INDUSTRIES, INC.
ATTEST:
/s/ Shanler D. Cronk By: /s/ Zane E. Metcalf
- ---------------------------------- ----------------------------------
Assistant Secretary Vice President
(Signatures continued on following page)
-9-
<PAGE>
INITIAL LENDER:
NATIONSBANK, N.A. (SOUTH)
By: /s/R.C. Ellis
----------------------------------
Senior Vice President
AGENT:
NATIONSBANK,N.A. (SOUTH),
AS AGENT
By: /s/R.C. Ellis
----------------------------------
Senior Vice President
-10-
<PAGE>
EXHIBIT 23
[LETTERHEAD OF DEUTSCH, MARIN & COMPANY APPEARS HERE]
INDEPENDENT AUDITORS' CONSENT
August 1, 1996
The Board of Directors
Roper Industries Inc.
We consent to the incorporation by reference in the Roper Industries, Inc.
Registration Statements on Form S-8 of our report dated February 1, 1996, with
respect to the balance sheet of Fluid Metering, Inc. as of December 31, 1995,
and the related statements of income and cash flows for the year ended December
31, 1995, which report appears in the Form 8K of Roper Industries Inc. dated
August 1, 1996.
Deutsch, Marin & Company
East Meadow, New York
August 1, 1996
