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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
REPORT ON FORM 8-K
CURRENT REPORT
Pursuant To Section 13 Or 15(d)
Of The Securities Exchange Act Of 1934
Date of Report June 5, 1996
ROPER INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-19818 51-0263969
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization) File Number) Identification No.)
160 Ben Burton Road, Bogart, Georgia 30622
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(Address of principal executive offices)
(706)369-7170
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(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Following the execution of an Asset Purchase Agreement on May 22, 1996, Roper
Industries, Inc. (the "Company") 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,
and which is engaged in the business of manufacturing and selling domestically
and in international markets 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 each of 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 an 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.
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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 not presently available and will be provided
subsequently in an amendment to this Report on Form 8-K on or before
August 4, 1996.
(B) PRO FORMA CONDENSED FINANCIAL INFORMATION
Pro forma financial information required to be reported because of FMI's
acquisition by the Company are not presently available and will be provided
subsequently in an amendment to this Report on Form 8-K on or before
August 4, 1996.
(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 Second Amended and Restated Credit Agreement dated May 8, 1996, by and
between Roper Industries, Inc. and NationsBank, N.A.(South)as initial
lender and as agent.
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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.
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(Registrant)
Date June 5,1996 By /s/ A. Donald O'Steen
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A. Donald O'Steen
Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Number Exhibit *
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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 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
_______________________________________________________________________
* The following schedules or similar attachments to the above Exhibits have been
omitted and will be furnished supplementary to the Commission upon request.
<TABLE>
<CAPTION>
ASSET PURCHASE AGREEMENT
<S> <C> <C>
Exhibit A-1 - Bill of Sale, Assignment and Assumption Agreement
Exhibit A-2 - Assignment of Full Title to Patents and Applications
Exhibit A-3 - Assignment of Full Title to Patents and Applications
Exhibit A-4 - Assignment of Partial Title to Patents and Applications
Exhibit A-5 - Assignment of Patent Licenses
Exhibit A-6 - Assignment of Trademark Registrations
Exhibit A-7 - Assignment and Transfer of Lease
Exhibit B - FMI Financial Statements
Exhibit C - Buyer Financial Statements
Exhibit D - Escrow Agreement
Exhibit E-1 - FMI Stockholder Employment Agreement
Exhibit E-2 - FMI Stockholder Employment Agreement
Exhibit F - Lease Agreement Between FMI and Buyer
</TABLE>
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
<TABLE>
<CAPTION>
<S> <C> <C>
Exhibit E - Agreement Regarding Security Documents Form
Exhibit F-1 - Form of Opinion of Iowa Subsidiaries' Outside Counsel
Exhibit F-2 - Form of Opinion of Borrower's and Guarantors' Primary
Outside Counsel
Exhibit G-1 - Form of Certificate of Borrower
Exhibit G-2 - Form of Certificate of Corporate Guarantor
Exhibit G-3 - Form of Certificate of Partner Guarantor
Exhibit H-1 - Compliance Certificate Form
Exhibit H-2 - Permitted Acquisition Certificate Form
Exhibit I - Assignment and Acceptance Form
Schedule 9.01 - Subsidiaries
Schedule 9.03 - Actions Pending
Schedule 9.06 - Taxes
Schedule 9.08 - ERISA Plans
Schedule 9.12 - Intellectual Property Rights
Schedule 9.13 - Environmental Matters
Schedule 11.01 - Permitted Indebtedness
Schedule 11.02 - Permitted Liens
Schedule 11.03 - Permitted Guaranties
</TABLE>
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ASSET PURCHASE AGREEMENT
This agreement ("Agreement") is entered into on May 22, 1996, by and
between Roper Industries, Inc., a Delaware corporation (the "Buyer"), Fluid
Metering, Inc., a New York corporation ("FMI"), and for purposes of Articles 6,
7 and 8 only, Harry E. Pinkerton III and Dennis T. Pinkerton (each of the latter
individuals, an "FMI Stockholder"). The Buyer, FMI and the FMI Stockholders are
referred to collectively herein as the "Parties."
This Agreement contemplates a transaction in which the Buyer (i) will
purchase certain of the assets of FMI, and all Intellectual Property owned by
the FMI Stockholders and used in the business of FMI, and (ii) will assume
certain of the liabilities of FMI in return for cash and shares of common stock
of Roper Industries, Inc.
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. DEFINITIONS.
"Accredited Investor" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"Acquired Assets" means (except for those assets excluded below) all
right, title, and interest in and to all of the assets of FMI and to all of the
Intellectual Property assets of any FMI Stockholder which is used in the
business of FMI as presently conducted, including all of:
(a) FMI's leaseholds and subleaseholds in real property, improvements,
fixtures, and fittings thereon, and easements, rights-of-way, and other
appurtenants thereto (such as appurtenant rights in and to public streets);
(b) FMI's tangible personal property (such as machinery, equipment,
inventories of raw materials and supplies, manufactured and purchased
parts, goods in process and finished goods, furniture, automobiles, trucks,
tractors, trailers, tools, jigs, and dies);
(c) FMI's, and any FMI Stockholder's, Intellectual Property, goodwill
associated therewith, licenses and sublicenses granted and obtained with
respect thereto, and rights thereunder, remedies against infringements
thereof, and rights to protection of interests therein under the laws of
all jurisdictions;
(d) FMI's leases, subleases, and rights thereunder; to the extent they
are assignable;
(e) FMI's agreements, contracts, indentures, mortgages, instruments,
Security Interests, guaranties, other similar arrangements, and rights
thereunder (but not including the Debentures);
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(f) FMI's accounts, notes, and other receivables;
(g) FMI's securities (other than those included in the definition of
Cash);
(h) FMI's claims, deposits, prepayments, refunds, causes of action,
choses in action, rights of recovery, rights of set off, and rights of
recoupment;
(i) FMI's franchises, approvals, permits, licenses, orders,
registrations, certificates, variances, and similar rights obtained from
governments and governmental agencies to the extent they are assignable;
(j) FMI's books, records, ledgers, files, documents, correspondence,
lists, plats, architectural plans, drawings, and specifications, creative
materials, advertising and promotional materials, studies, reports, and
other printed or written materials;
(k) FMI's cash in the amount of Three Hundred Thousand Dollars
($300,000);
(l) FMI's rights and interests in FMI's group dental and group
accident plans;
provided, however, that the Acquired Assets shall not include:
(i) any insurance policy of any kind;
(ii) prepaid insurance, prepaid taxes, and transfers and
exchanges;
(iii) any rights or interests in and with respect to the assets
associated with any Employee Benefit Plan other than FMI's group
dental and group accident plans;
(iv) any agreement or other understanding with any labor union,
including, without limitation, (A) that certain Agreement between
United Service Workers of America, Local 355, SEIU, AFL-CIO, CLC (the
"Union") and FMI, dated July 1, 1994 to June 30, 1997, (B) that certain
Associate Membership Agreement between the Union and FMI dated August
1, 1994, or (C) any other agreement or understanding with any labor
union regarding any Employee Benefit Plan;
(v) the corporate charter, qualifications to conduct business as
a foreign corporation, arrangements with registered agents relating to
foreign qualifications, taxpayer and other identification numbers,
seals, minute books, stock transfer books, blank stock certificates,
and other documents relating to the organization, maintenance, and
existence of FMI as a corporation;
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(vi) any of the rights of FMI under this Agreement (or under any
side agreement between FMI and any FMI Stockholder and between FMI or
any FMI Stockholder on the one hand and the Buyer on the other hand
entered into on or after the date of this Agreement);
(vii) any right, title, or interest in and to any and all of FMI's
Cash (except as set forth in (k) above), bank accounts, brokerage
accounts, or other cash equivalents; or
(viii) the real properties owned by FMI and located at 29 Orchard
Street, Oyster Bay, New York, and in Brunswick, North Carolina.
"Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, penalties, fines, costs, amounts
paid in settlement, Liabilities, obligations, Taxes, liens, losses, expenses,
and fees, including court costs and reasonable attorneys' fees and expenses;
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of
Code Sec. 1504(a) (or any similar group defined under a similar provision of
state, local, or foreign law).
"Agreed Value" means that price per share of the Buyer Shares which is
the average of the closing sales prices of the common stock of Roper Industries,
Inc. on each of the three (3) trading days immediately preceding and immediately
following (each a "Trading Day") the Closing Date as reported by the National
Association of Securities Dealers Automated Quotation System ("NASDAQ").
"Applicable Rate" means the corporate base rate of interest announced
from time to time by NationsBank.
"Assumed Liabilities" means (except for those liabilities excluded
below):
(a) all current Liabilities of FMI set forth on the face of the Most
Recent Balance Sheet (rather than in any notes thereto);
(b) all current Liabilities of FMI which have arisen after the Most
Recent Fiscal Month End in the Ordinary Course of Business (other than any
liability resulting from, arising out of, or caused by any breach of
contract, breach of warranty claims which are not Product Warranty Claims,
tort, infringement, or violation of law);
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(c) all Liabilities and obligations of FMI expressly provided for
under the written agreements, contracts, leases, licenses, instruments and
other items referred to in the definition of Acquired Assets either:
(i) to furnish goods, services, and other non-Cash benefits to
another party after the Closing; or
(ii) to pay for goods, services, and other non-Cash benefits that
another party will furnish to it after the Closing;
provided, however, that the Assumed Liabilities shall not include:
(i) any royalties payable and any liability in respect of long-
term debt, including the Debentures;
(ii) any Liability of FMI or of any stockholder of FMI for
income, transfer, sales, use, and other Taxes arising in connection
with the consummation of the transactions contemplated hereby
(including any income Taxes arising because FMI is transferring the
Acquired Assets, because FMI has an Excess Loss Account in the stock of
any of its Subsidiaries or because FMI has deferred gain on any
Deferred Intercompany Transaction);
(iii) any Liability for ad valorem taxes pertaining to the
business and operations of FMI conducted prior to the Closing Date;
(iv) any Liability of FMI for the unpaid taxes of any Person
(other than FMI), whether as a transferee or successor, by contract,
or otherwise;
(v) any Liability or obligation in connection with any insurance
policy of any kind;
(vi) any Liability or obligation of FMI or any FMI Stockholder
with respect to any of its Employee Benefit Plans other than FMI's
group dental and group accident plans;
(vii) any Liability or obligation of FMI or any FMI Stockholder
with respect to any agreement or other understanding with any labor
union, including, without limitation, (A) that certain Agreement
between United Service Workers of America, Local 355, SEIU, AFL-CIO,
CLC (the "Union") and FMI, dated July 1, 1994 to June 30, 1997, (B)
that certain Associate Membership Agreement between the Union and FMI
dated August 1, 1994, or (C) any other agreement or understanding with
any labor union regarding any Employee Benefit Plan;
(viii) any Liability of FMI for costs and expenses incurred in
connection with this Agreement and the transactions contemplated
hereby;
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(ix) any Liability or obligation of FMI under this Agreement (or
under any side agreement between FMI and any FMI Stockholder or between
FMI or any FMI Stockholder on the one hand and the Buyer on the other
hand);
(x) any Product Liability Claim; or
(xi) any liability of FMI under applicable Environmental, Health
and Safety Laws.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, occurrence, event, incident, action,
failure to act, or transaction that forms or would probably form the basis for
any specified consequence.
"Buyer" has the meaning set forth in the preface above.
"Buyer Shares" means the shares of common stock, par value $.01, of
Roper Industries, Inc., which shares shall be delivered to FMI (or to the
stockholders of FMI if FMI so directs at the Closing) and the Escrow Agent as
provided in (S) 2(c) below without registration (but with registration rights as
set forth in (S) 6(e) hereunder) under, and subject to the restrictions imposed
by, the Securities Act.
"Buyer Disclosure Schedule" has the meaning set forth in (S) 4 below.
"Cash" means cash and cash equivalents (including marketable
securities and short term investments) calculated in accordance with GAAP
applied on a basis consistent with the preparation of the Financial Statements.
"Closing" has the meaning set forth in (S) 2(e) below.
"Closing Balance Sheet" has the meaning set forth in (S) 2(c)(iv)
below.
"Closing Date" has the meaning set forth in (S) 2(e) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Controlled Group of Corporations" has the meaning set forth in Code
Sec. 1563.
"Confidential Information" means all confidential and/or proprietary
information, data and documents of FMI or its predecessors or affiliates used in
its business and operations including, but not limited to, trade secrets,
processes, procedures, technical data, customer lists, computer software,
intellectual property, formula, methods, practices and statistics; provided,
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that Confidential Information shall not include any information that has entered
or enters the public domain through no fault of FMI, its Affiliates or the FMI
Stockholders or which FMI is required to disclose by legal process or to defend
itself in a legal proceeding.
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"Debentures" means that certain long term debt of FMI in the aggregate
principal amount of approximately $1,115,000 as reflected in the Most Recent
Balance Sheet.
"Debenture Payment" means $1,124,300.
"Deferred Intercompany Transaction" has the meaning set forth in
Treas. Reg. (S) 1.1502-13.
"Employee Benefit Plan" means any (a) nonqualified deferred
compensation or retirement plan or arrangement which is an Employee Pension
Benefit Plan (as defined in ERISA Sec. 3(2)), (b) qualified defined contribution
retirement plan or arrangement which is an Employee Pension Benefit Plan, (c)
qualified defined benefit retirement plan or arrangement which is an Employee
Pension Benefit Plan (including any Multiemployer Plan), or (d) Employee Welfare
Benefit Plan (as defined in ERISA Sec. 3(1)) or material fringe benefit plan or
program.
"Environmental, Health, and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local and foreign governments (and all
agencies thereof) concerning pollution or protection of the environment, public
health and safety, or employee health and safety, including laws relating to
omissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic material or wastes in
ambient air, surface water, ground water, or lands or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" means Choate, Hall & Stewart.
"Escrow Agreement" means that Agreement by and among Buyer, FMI and
Choate, Hall & Stewart, as escrow agent, pursuant to which Buyer Shares
delivered to FMI as part of the Purchase Price are deposited in escrow as
security for the indemnification obligations of FMI and the FMI Stockholders set
forth in (S) 7 below.
"Escrowed Buyer Shares" means a number of Buyer Shares, owned by one
or more of the FMI Parties, for which shares the Agreed Value is Two Million
Eight Hundred Fifty Thousand Dollars ($2,850,000).
"Excess Loss Account" has the meaning set forth in Treas. Reg.
1.1502-19.
"Extremely Hazardous Substance" has the meaning set forth in Sec. 302
of the Emergency Planning and Community Right-to-Know Act of 1986, as amended.
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"Fiduciary" has the meaning set forth in ERISA Sec. 3(21).
"Financial Statement(s)" has the meaning set forth in (S) 3(g) below.
"FMI" has the meaning set forth in the preface above.
"FMI Disclosure Schedule" has the meaning set forth in (S) 3 below.
"FMI Parties" means FMI and the FMI Stockholders.
"FMI Plan" means the Employee Benefit Plans listed on Schedule (S)3(x)
of the FMI Disclosure Schedule.
"FMI Share" means any share of the Common Stock, par value $.10 per
share, of FMI.
"FMI Stockholder(s)" means Harry E. Pinkerton III and/or Dennis T.
Pinkerton who are collectively the majority stockholders of FMI.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"Indemnification Claim" shall mean any claim subject to
indemnification pursuant to Article 7 hereof.
"Indemnified Party" shall mean a Party or Parties seeking or entitled
to indemnification pursuant to Article 7 hereof.
"Indemnifying Party" shall mean a Party or Parties hereto responsible
for indemnifying an Indemnified Party pursuant to Article 7 hereof.
"Intellectual Property" means:
(a) all inventions (whether patentable or unpatentable and whether or
not reduced to practice), all improvements thereto, and all patents, patent
applications, and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof;
(b) all trademarks, service marks, trade dress, logos, trade names and
corporate names, together with all translations, adaptations, derivations,
and combinations thereof and including all goodwill associated therewith,
and all applications, registrations, and renewals in connection therewith;
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(c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith;
(d) all masks works and all applications, registrations, and renewals
in connection therewith;
(e) all trade secrets and confidential business information (including
ideas, research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, technical data,
designs, drawings, specifications, customer and supplier lists, pricing and
cost information, and business and marketing plans and proposals);
(f) all computer software (including data and related documentation);
(g) all other proprietary rights; and
(h) all copies and tangible embodiments thereof (in whatever form or
medium).
"Knowledge" means actual knowledge of the FMI Stockholders, after due
inquiry of the following FMI employees: David Pelad, Dennis Scorcia, Robert
Warren and Laura DeMaria.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Most Recent Balance Sheet" means the balance sheet as of April 30,
1996 required in (S) 3(g) below.
"Most Recent Financial Statements" means all the financial statements
at or for FMI's fiscal month ended April 30, 1996 required in (S) 3(g) below.
"Most Recent Fiscal Month End" has the meaning set forth in (S) 3(g)
below.
"Most Recent Fiscal Year End" has the meaning set forth in (S) 3(g)
below.
"Multiemployer Plan" has the meaning set forth in ERISA Sec. 3(37).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Party" has the meaning set forth in the preface above.
"PBGC" means the Pension Benefit Guaranty Corporation.
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"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Process Agent" has the meaning set forth in (S) 8 below.
"Product Liability Claim" means any Liability other than a Product
Warranty Claim arising from any use of or defect in any FMI products sold on or
prior to the date of Closing (regardless of the date of any loss, bodily injury,
or property damage claimed to have resulted from such uses or defects).
"Product Warranty Claims" means claims of FMI customers and/or users
made following Closing in the Ordinary Course of Business with respect to
products sold by FMI on and prior to the Closing Date which (i) are based solely
on FMI's written product warranties and (ii) are only for the repair or
replacement remedies expressed in such written product warranties.
"Prohibited Transaction" has the meaning set forth in ERISA Sec. 406
and Code Sec. 4975.
"Public Information" means all Forms 10-K, 10-Q, 8-K, and proxy
statement of Buyer since October 31, 1995.
"Purchase Price" has the meaning set forth in (S) 2(c) below.
"Reportable Event" has the meaning set forth in ERISA Sec. 4043.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for Taxes not yet due and payable or for Taxes that
the taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Sec. 59A),
customs duties, capital stock, franchise
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profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not.
"Tax Return" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
2. PURCHASE AND SALE OF FMI ASSETS.
(a) Purchase and Sale of Assets. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from FMI, and
FMI agrees to, and agrees to cause the FMI Stockholders to, sell, transfer,
convey, assign and deliver to the Buyer, all of the Acquired Assets at the
Closing for the consideration specified below in this (S) 2.
(b) Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and become
responsible for the Assumed Liabilities at the Closing. The Buyer will not
assume or have any responsibility, however, with respect to any Liability
or obligation of FMI or any FMI Stockholder not included within the
definition of Assumed Liabilities.
(c) Purchase Price. Subject to the adjustment set forth in subsection
(d) of this (S) 2, Buyer agrees to make the following payments to FMI or
its designees as set forth in a schedule delivered to Buyer prior to
Closing for the Acquired Assets:
(i) At Closing, TWENTY TWO MILLION EIGHT HUNDRED THOUSAND DOLLARS
($22,800,000), in cash, by wire transfer or delivery of other
immediately available funds;
(ii) On the fifth Trading Day following the Closing Date, that
number of Buyer Shares (rounded up to the next whole share) which,
based on the Agreed Value, are equal to the aggregate amount of FIVE
MILLION SEVEN HUNDRED THOUSAND DOLLARS ($5,700,000); provided,
however, that number of Buyer Shares which are Escrowed Buyer Shares
shall be delivered to the Escrow Agent on behalf of FMI;
(iii) At Closing and on each of the first and second
anniversaries of the Closing Date, TWO HUNDRED THOUSAND DOLLARS
($200,000) in cash, payable by wire transfer or delivery of other
immediately available funds and without deduction, counterclaim or
set-off; and
(iv) Buyer agrees that it will assume the liability of FMI to pay
an amount equal to the Debenture Payment on behalf of FMI when the
Debentures
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are redeemed in accordance with this (S)2(c)(iv) (but the Debentures
will not be assigned to, or assumed by, Buyer hereunder). FMI agrees
(A) to give notice of redemption of the Debentures to the holders
thereof as soon as practicable following the Closing, (B) to transfer
to Buyer, in immediately available funds at least one (1) day before
the specified redemption date (the "Redemption Date"), an amount (the
"Excess Amount") equal to the excess of (x) the amounts due under the
Debentures as of the Redemption Date over (y) the amount of the
Debenture Payment, and (C) to provide Buyer with all necessary
information such as names, addresses and amounts due to the holders
thereof as of the Redemption Date. Provided FMI performs in
accordance with the foregoing sentence, Buyer agrees, on the
Redemption Date, (A) to make the payments specified by FMI to be due
under the Debentures to the holders of Debentures who have surrendered
their respective Debentures in accordance with the redemption
procedures described in the notice of redemption, and (B) to pay any
remaining amount of the Debenture Payment and the Excess Amount to
FMI. The Parties agree that the payments described in the preceding
sentence in accordance with this (S)2(c)(iv) shall constitute full
satisfaction of Buyer's liabilities with respect to the Debenture
Payment and the Debentures hereunder.
(d) Following the Closing:
(i) A balance sheet as of the Closing Date (the "Closing Balance
Sheet") shall be prepared by FMI from the books and records of FMI,
which Closing Balance Sheet shall be prepared on an accrual basis in
accordance with accounting principles applied in a manner consistent
with those methods and practices consistently employed by FMI in the
preparation of its financial statements, but showing as current
liabilities only the Assumed Liabilities (i.e., accounts payable,
accrued payables) and as current assets only Acquired Assets. Buyer
shall have the right, at its own expense, to have its own certified
public accountant or other accounting professional observe the
preparation of the Closing Balance Sheet, which will include the right
to ask questions, receive information and make copies of work papers
and other relevant materials. The Closing Balance Sheet shall be
prepared and delivered within 30 days after the Closing to Buyer.
Buyer may accept the Closing Balance Sheet in writing and shall have a
period of 60 days after its receipt thereof to notify FMI of any
objections thereto, and if Buyer fails to deliver such notice within
such 60-day period, Buyer shall be deemed to have accepted the Closing
Balance Sheet as so presented to Buyer. If Buyer timely raises any
such objections, the Parties shall meet in person or by any other
reasonable means of communication in an attempt to resolve any
disputes, but to the extent that any such disputes shall remain
unresolved for 30 days after Buyer's notice of objections, then such
disputes shall be referred to the resident partner in the New York,
New York office of an independent certified public accounting firm
mutually chosen by the Parties' respective accounting professionals,
which partner shall be presented with the Parties' materials and
positions with respect to the matters in dispute. The fees and
expenses of such
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partner shall be borne equally between the Parties. Such partner,
acting as an expert and not as an arbitrator, shall resolve all
remaining disputes, and his decision in that regard shall be final and
binding upon the Parties.
(ii) In the event that either (A) the sum of accounts receivable
and inventory, less those Assumed Liabilities constituting current
liabilities (which shall in no event include any portion of the
Debentures), as set forth on the Closing Balance Sheet, is less than
or greater than Two Million Nine Hundred Thousand Dollars ($2,900,000)
or (B) the amount of Cash set forth on the Closing Balance Sheet is
less than or greater than Three Hundred Thousand Dollars ($300,000),
the Purchase Price will be reduced by the amount(s) of any or both
shortfalls and/or will be increased by the amounts of either or both
excess amounts. Any adjustment to the Purchase Price shall not be
subject to any deductible under (S) 7 hereof and shall be paid in cash
within five (5) business days following the date of determination
thereof by wire transfer or delivery of other immediately available
funds.
(e) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Powell,
Goldstein, Frazer & Murphy, 191 Peachtree Street NE, Suite 1600, Atlanta,
GA contemporaneously with the execution hereof (the "Closing Date").
(f) Deliveries at the Closing. (i) At the Closing FMI will deliver to
the Buyer the various certificates, instruments, and documents referred to
in (S) 5(a) below; (ii) the Buyer will deliver to FMI the various
certificates, instruments, and documents referred to in (S) 5(b) below;
(iii) FMI and the FMI Stockholders will execute, acknowledge (if
appropriate), and deliver to the Buyer (A) assignments (including
Intellectual Property transfer documents) in the forms attached hereto as
Exhibits A-1 through A-7 and (B) such other instruments of sale, transfer,
conveyance, and assignment as the Buyer and its counsel may request; (iv)
the Buyer will execute, acknowledge (if appropriate), and deliver to FMI
(A) an assumption in the form attached hereto as Exhibit A-7 and (B) such
other instruments of assumption as FMI and the FMI Stockholders and their
counsel reasonably may request; and (v) the Buyer will deliver to FMI the
consideration specified in (S) 2(c)(i) and (iii) above.
(g) Allocation. The Parties agree to allocate the Purchase Price (and
all other capitalizable costs) among the Acquired Assets for all purposes
(including financial accounting and tax purposes) in accordance with an
allocation schedule to be agreed upon by the Parties at Closing or as soon
as practicable thereafter. The Closing Balance Sheet need not be used as a
basis for the allocation schedule.
3. REPRESENTATIONS AND WARRANTIES OF FMI. FMI represents and warrants to
the Buyer that the statements contained in this (S) 3 are correct and complete
as of the Closing Date, except as set forth in the disclosure schedule prepared
by FMI accompanying this Agreement and initialed by the Parties (the "FMI
Disclosure Schedule"), which disclosure schedule is
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incorporated herein by reference. The FMI Disclosure Schedule will be arranged
in paragraphs corresponding to the lettered and numbered paragraphs contained in
this (S) 3.
(a) Organization of FMI; Investment Interest.
(i) FMI is a corporation duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its incorporation,
is duly qualified to conduct business in every jurisdiction where such
qualification is required. The authorized capital stock of FMI
consists only of 2,000,000 shares of common stock, of which 55,000
shares are outstanding, and 13,350 shares of preferred stock, none of
which are outstanding. Harry E. Pinkerton III and Dennis T. Pinkerton
are FMI's majority stockholders and respectively hold 46% (being
25,420 shares) and 46% (being 25,420 shares) of the outstanding common
stock of FMI. The remaining common stock is owned by (A) the Harry E.
Pinkerton, III Family Trust, which owns 2,080 shares of common stock
of FMI, and (B) the Dennis T. Pinkerton Family Trust, which owns 2,080
shares of common stock. Except as disclosed in this (S) 3(a)(i),
there are no other stockholders of FMI. There are no outstanding
subscriptions, warrants, options or other agreements or rights of any
kind to purchase or otherwise to receive or to be issued, or
securities or obligations of any kind convertible into, any shares of
capital stock or other security of FMI.
(ii) FMI is an Accredited Investor. FMI understands that the
Buyer Shares being acquired by it have not been, and are not proposed
to be (except as set forth in (S) 6(e)), registered under the
Securities Act or any state securities laws, and are being offered and
sold in reliance upon United States federal and state exemptions for
transactions not involving any public offering. FMI acknowledges that
it is acquiring the Buyer Shares for investment purposes and not with
a view to, or intention to effect, the distribution thereof in
violation of the Securities Act or any applicable state securities
laws, and that such Shares may not be disposed of in contravention of
the Securities Act or any applicable state securities laws. FMI
represents that it is a sophisticated investor with knowledge and
experience in business and financial matters, is able to evaluate the
risks and benefits of the investment in its Shares, has received the
Public Information concerning the Buyer and has had the opportunity to
obtain additional information as desired in order to evaluate the
merits of and the risks inherent in acquiring such Buyer Shares.
(b) Authorization of Transaction. FMI and each FMI Stockholder has
full power and authority (including full corporate power and authority) to
execute and deliver this Agreement and to perform its or his obligations
hereunder. Without limiting the generality of the foregoing, the board of
directors of FMI and the stockholders of FMI have duly authorized the
execution, delivery, and performance of this Agreement by FMI. This
Agreement constitutes the valid and legally binding obligation of FMI and
the FMI Stockholders, enforceable in accordance with its terms and
conditions. FMI and its stockholders do not need to give any notice to,
make any filing with, or obtain any
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authorization, consent, or approval of any governmental agency in order for
the Parties to consummate the transactions contemplated by this Agreement
(including the assignments and assumptions referred to in (S) 2 above)
other than the notification and approval under the Hart-Scott-Rodino Act.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in (S) 2 above),
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which FMI or any FMI
Stockholder is subject or any provision of the charter or bylaws of FMI or
(ii) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which FMI or
any FMI Stockholder is a party or by which it is bound or to which any of
its assets is subject (or result in the imposition of any Security Interest
upon any of its assets).
(d) Brokers' Fees. Neither FMI nor any FMI Stockholder has any
Liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement for which the Buyer could become liable or obligated.
(e) Title to Assets. FMI has good and marketable title to, or a valid
leasehold interest in, the properties and assets used by FMI, located on
its premises, or shown on the Most Recent Balance Sheet or acquired after
the date thereof (other than the real estate owned by FMI as to which no
representation is made in this (S) 3(e)), free and clear of all Security
Interests, except for properties and assets disposed of in the Ordinary
Course of Business since the date of the Most Recent Balance Sheet.
Without limiting the generality of the foregoing, FMI and, in the case of
those items of Intellectual Property owned by any FMI Stockholder which are
included in the Acquired Assets, the FMI Stockholders have good and
marketable title to all of the Acquired Assets, free and clear of any
Security Interest or restriction on transfer.
(f) Subsidiaries. FMI has never had any Subsidiaries.
(g) Financial Statements. Attached hereto as Exhibit B are the
following financial statements (collectively the "Financial Statements"):
(i) balance sheets, statements of income, changes in
stockholders' equity, and cash flow as of the fiscal years ended
December 31, 1992 and December 31, 1993 for FMI reviewed by FMI's
accountants;
(ii) audited balance sheets, statements of income, changes in
stockholders' equity, and cash flow as of and for the fiscal years
ended December
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31, 1994 and December 31, 1995 (the "Most Recent Fiscal Year End") for
FMI; and
(iii) unaudited balance sheet and statement of income, change in
stockholders' equity, and cash flow (the "Most Recent Financial
Statements") as of and for the four (4) months ended April 30, 1996
(the "Most Recent Fiscal Month End") for FMI.
The Financial Statements (including the notes thereto) have been prepared
on an accrual basis in accordance with accounting principles applied on a
consistent basis throughout the periods covered thereby, present fairly the
financial condition of FMI as of such dates and the results of operations
of FMI for such periods (subject only to normal year-end adjustments which
in the aggregate are not material), are correct and complete, and are
consistent with the books and records of FMI (which books and records are
correct and complete).
(h) Events Subsequent to Most Recent Fiscal Month End. Since the Most
Recent Fiscal Month End, there has not been any material adverse change in
the business, financial condition, operations, or results of operations of
FMI. Without limiting the generality of the foregoing since that date:
(i) FMI has not sold, leased, transferred, or assigned any of its
assets, tangible or intangible outside the Ordinary Course of
Business;
(ii) FMI has not entered into any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and
licenses) either involving more than $50,000 or outside the Ordinary
Course of Business;
(iii) FMI has not, and to the Knowledge of FMI, no other party
has, accelerated, terminated, modified, or canceled any agreement,
contract, lease, or license (or series of related agreements,
contracts, leases, and licenses) involving more than $50,000 to which
FMI is a party or by which it is bound;
(iv) FMI has not imposed or permitted any Security Interest upon
any of its assets, tangible or intangible;
(v) FMI has not made any capital expenditure (or series of
related capital expenditures) either involving more than $50,000 or
outside the Ordinary Course of Business;
(vi) FMI has not made any capital investment in, any loan to, or
any acquisition of the securities or assets of, any other Person;
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<PAGE>
(vii) FMI has not issued any note, bond, or other debt security
or created, incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalized lease obligation;
(viii) FMI has not delayed or postponed the payment of accounts
payable or other Liabilities outside of the Ordinary Course of
Business;
(ix) FMI has not canceled, compromised, waived, or released any
right or claim (or series of related rights and claims) outside the
Ordinary Course of Business;
(x) FMI has not granted any license or sublicense of any rights
under or with respect to any Intellectual Property;
(xi) there has been no change made or authorized in the charter
or bylaws of FMI;
(xii) FMI has not experienced any material damage, destruction,
or loss (whether or not covered by insurance) to its property;
(xiii) FMI has not made any loan to, or entered into any other
transaction with, any of its directors, officers, and employees;
(xiv) FMI has not entered into any employment contract or
collective bargaining agreement, written or oral, or modified the
terms of any existing such contract or agreement;
(xv) FMI has not granted any increase in the base compensation of
any of its directors, officers, and employees;
(xvi) FMI has not adopted, amended, modified or terminated any
bonus, profit-sharing incentive, severance, or other plan, contract,
or commitment for the benefit of any of its directors, officers, and
employees (or taken any such action with respect to any other Employee
Benefit Plan);
(xvii) FMI has not made any other change in employment terms for
any of its directors, officers, and employees;
(xviii) FMI has not made or pledged to make any charitable or
other capital contribution;
(xix) there has not been any other occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary Course of
Business involving FMI; and
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(xx) FMI has not committed to any of the foregoing.
(i) Undisclosed Liabilities. To the knowledge of FMI, FMI has no
Liability (and there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand
against FMI giving rise to any Liability), except for (i) Liabilities set
forth on the face of the Most Recent Balance Sheet (rather than in any
notes thereto) and (ii) Liabilities which have arisen after the Most Recent
Fiscal Month End in the Ordinary Course of Business (none of which results
from, arises out of, or was caused by any breach of contract, breach of
warranty claims which are not Product Warranty Claims, tort, infringement,
or violation of law).
(j) Legal Compliance. FMI has complied with all applicable laws
(including rules, regulations, codes, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof), the failure to comply with
which will result in Adverse Consequences the costs of which will exceed
$10,000, and no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or commenced against FMI
alleging any failure so to comply.
(k) Tax Matters.
(i) FMI has filed all Tax Returns that it was required to file
and was due. All such Tax Returns were correct and complete in all
material respects. All Taxes owed by FMI (whether or not shown on any
Tax Return) have been paid. FMI currently is not the beneficiary of
any extension of time within which to file any Tax Return. FMI has
not received any notice of a claim made by an authority in a
jurisdiction where FMI does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction. There are no Security
Interests on any of the Acquired Assets that arose in connection with
any failure (or alleged failure) to pay any Tax. FMI has never been a
member of an Affiliated Group that has filed a "consolidated return"
within the meaning of Code Sec. 1501, or has filed a combined or
consolidated return with another corporation with any other taxing
authority.
(ii) FMI 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.
(iii) Neither FMI nor any FMI Stockholder has received any
notice or other indication that any authority is considering assessing
any additional Taxes for any period for which Tax Returns have been
filed. There is no dispute or claim concerning any Tax Liability of
FMI either (A) claimed or raised by any authority in writing or (B) as
to which FMI or any FMI Stockholder has knowledge based upon personal
contact with any agent or representative of such authority. FMI has
delivered a copy of all federal, state, local, and foreign
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income Tax returns filed with respect to FMI for taxable periods ended
on or after December 31, 1991, indicates those Tax Returns that have
been audited, and indicates those Tax Returns that currently are the
subject of audit. FMI has delivered to the Buyer correct and complete
copies of all federal income Tax Returns, examination reports, and
statements of deficiencies assessed against or agreed to by FMI since
December 31, 1991.
(iv) FMI has not waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(v) FMI neither has made any payments, is obligated to make any
payments, or is a party to any agreement that under certain
circumstances could obligate it to make any payments that will not be
deductible under Code Sec. 280G. FMI is not a party to any Tax
allocation or sharing agreement. FMI (A) has not been a member of an
Affiliated Group filing a consolidated federal income Tax Return
(other than a group the common the common parent of which was the FMI)
or (B) has no Liability for the Taxes of any Person (other than FMI)
under Treas. Reg. (S) 1.1502-6 (or any similar provision of state,
local, or foreign law), as a transferee or successor, by contract, or
otherwise.
(l) Real Property.
(i) FMI owns the property located at 29 Orchard Street, Oyster
Bay, New York, and, with respect to such parcel of owned real
property:
(A) there are no pending or, to the Knowledge of FMI,
threatened condemnation proceedings, lawsuits, or administrative
actions relating to the property or other matters affecting
adversely the current use or occupancy thereof;
(B) to the Knowledge of FMI, the parcel of real property is
in compliance with all zoning and other laws, ordinances and
requirements;
(C) to the Knowledge of FMI, all facilities located on the
parcel of property have received all approvals of governmental
authorities (including licenses and permits) required in
connection with the ownership or operation thereof and have been
operated and maintained in all material respects in accordance
with applicable laws, rules, and regulations;
(D) there are no leases, subleases, concessions, or other
agreements, written or oral, granting to any party or parties the
right of use or occupancy of any portion of the parcel of real
property other than the lease contemplated in this Agreement in
favor of Buyer;
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(E) there are no outstanding options or rights of first
refusal to purchase the parcel of real property, or any portion
thereof or interest therein which would adversely impact Buyer's
use of the property; and
(F) there are no parties (other than FMI) in possession of
the parcel of real property.
(ii) The only real property which FMI leases is in the building
located at 47 West Main Street, Oyster Bay, New York (the "Main Street
Property"). FMI has delivered to the Buyer a correct and complete
copy of the lease for the Main Street Property (as amended to date).
With respect to such lease:
(A) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect;
(B) FMI is not, and to the Knowledge of FMI, no party to the
lease or sublease is, in breach or default, and no event has
occurred which, with notice or lapse of time, would constitute a
breach or default or permit termination, modification, or
acceleration thereunder;
(C) FMI has not, and to the Knowledge of FMI, no party to
the lease or sublease has, repudiated any provision thereof;
(D) to the Knowledge of FMI, there are no disputes, oral
agreements, or forbearance programs in effect as to the lease;
(E) FMI has not assigned, transferred, conveyed, mortgaged,
deeded in trust, or encumbered any interest in the leasehold; or
(F) to the Knowledge of FMI, all facilities leased
thereunder have received all approvals of governmental
authorities (including licenses and permits) required in
connection with the operation thereof and have been operated and
maintained in all material respects in accordance with applicable
laws, rules, and regulations.
(m) Intellectual Property.
(i) FMI owns or has the right to use pursuant to license,
sublicense, agreement, or permission of all Intellectual Property
necessary for the operation of the business of FMI as presently
conducted and all such Intellectual Property or rights thereto are
included within the Acquired Assets; provided, however, that this
sentence shall not be deemed to mean that all patents included within
the Acquired Assets are valid or enforceable. Each item of
Intellectual Property included among the Acquired Assets and owned or
used by FMI or any FMI Stockholder immediately prior to the Closing
hereunder will be owned or available
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for use by the Buyer on identical terms and conditions immediately
subsequent to the Closing hereunder.
(ii) To the Knowledge of FMI, none of FMI or any FMI Stockholder
has interfered with, infringed upon, misappropriated, or otherwise
come into conflict with any Intellectual Property rights of third
parties, and none of FMI or any FMI Stockholder has ever received any
charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation (including
any claim that any of FMI or any FMI Stockholder must license or
refrain from using any Intellectual Property rights of any third
party). To the Knowledge of FMI, no third party has interfered with,
infringed upon, misappropriated, or otherwise come into conflict with
any Intellectual Property rights of FMI or any FMI Stockholder.
(iii) (S) 3(m)(iii) of the FMI Disclosure Schedule identifies
each patent or registration which has been issued or transferred to
FMI or any FMI Stockholder with respect to any of its or his
Intellectual Property, identifies each pending patent application for
registration which FMI or any FMI Stockholder has made with respect to
any of its or his Intellectual Property, and identifies each license,
agreement, or other permission which any of FMI or any FMI Stockholder
has granted to any third party with respect to any of its or his
Intellectual Property(together with any exceptions). FMI and each FMI
Stockholder has delivered to the Buyer correct and complete copies of
all such patents, registrations, applications, licenses, agreements,
and permissions (as amended to date) and has made available to the
Buyer correct and complete copies of all other written documentation
evidencing ownership and prosecution (if applicable) of each such
item. (S) 3(m)(iii) of the FMI Disclosure Schedule also identifies
each trade name or unregistered trademark used by FMI in connection
with any of its businesses. With respect to each item of Intellectual
Property required to be identified in (S) 3(m)(iii) of the FMI
Disclosure Schedule:
(A) FMI or any FMI Stockholder possesses all right, title,
and interest in and to the item, free and clear of any Security
Interest, license, or other restriction;
(B) the item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;
(C) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand is pending or, to the
Knowledge of FMI, threatened, which challenges the legality,
validity, enforceability, use, or ownership of the item;
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(D) Neither FMI nor any FMI Stockholder has ever agreed to
indemnify any Person for or against any interference,
infringement, misappropriation, or other conflict with respect to
the item; and
(iv) (S) 3(m)(iv) of the FMI Disclosure Schedule identifies each
item of Intellectual Property that any third party (other than any FMI
Stockholder) owns and that FMI uses pursuant to license, sublicense,
agreement, or permission. FMI has delivered to the Buyer correct and
complete copies of all such licenses, sublicenses, agreements, and
permissions (as amended to date). With respect to each item of
Intellectual Property required to be identified in (S) 3(m)(iv) of the
FMI Disclosure Schedule;
(A) the license, sublicense, agreement, or permission
covering the item is legal, valid, binding, enforceable, and in
full force and effect;
(B) the license, sublicense, agreement, or permission will
continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of
the transactions contemplated hereby (including the assignments
and assumptions referred to in (S) 2 above);
(C) FMI is not, and to the Knowledge of FMI, no other party
to the license, sublicense, agreement, or permission is in breach
or default, and no event has occurred which with notice of lapse
of time would constitute a breach or default or permit
termination, modification, or acceleration thereunder;
(D) FMI has not, and to the Knowledge of FMI, no other party
to the license, sublicense, agreement, or permission has
repudiated any provision thereof;
(E) with respect to each sublicense, the representations and
warranties set forth in subsections (A) through (D) above are
true and correct with respect to the underlying license;
(F) to the Knowledge of FMI, the underlying item of
Intellectual Property is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(G) to the Knowledge of FMI, no action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand is
pending or threatened, which challenges the legality, validity,
or enforceability of the underlying item of Intellectual
Property; and
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(H) FMI has not granted any sublicense or similar right with
respect to the license, sublicense, agreement, or permission.
(n) Tangible Assets. FMI owns or leases all buildings, machinery,
equipment, and other tangible assets necessary for the conduct of its
businesses as presently conducted. Each such tangible asset is free from
any known material defects, has been maintained in accordance with normal
industry practice, is in good operating condition and repair (subject to
normal wear and tear), and is suitable for the purposes for which it
presently is used.
(o) Inventory. The inventory of FMI consists of raw materials and
supplies, manufactured and purchased parts, goods in process, and finished
goods, all of which is merchantable and fit for the purpose for which it
was procured or manufactured, and none of which is slow-moving (except for
parts and components on hand for servicing products already sold),
obsolete, damaged, or defective, subject only to the reserve for inventory
write down set forth on the face of the Most Recent Balance Sheet (rather
than in any notes thereto) as adjusted for the passage of time through the
Closing Date in accordance with the past custom and practice of FMI.
(p) Contracts. FMI has delivered to the Buyer a correct and complete
copy of each written agreement listed below (as amended to date) and, where
applicable, a written summary setting forth the terms and conditions of
each oral agreement referred to below.
(i) all written or oral customer orders, and the purchase prices
thereof, accepted by FMI and in order backlog as of the Most Recent
Month End;
(ii) any written agreement (or group of related agreements) for
the lease of personal property to or from any Person providing for
lease payments in excess of $15,000 per annum;
(iii) any written agreement (or group of related agreements) for
the purchase or sale of raw materials, commodities, supplies,
products, or other personal property, or for the furnishing or receipt
of services, the performance of which will extend over a period of
more than one year, or which to the Knowledge of FMI, will result in a
loss to FMI, or which involves consideration, in excess of $50,000;
(iv) any oral or written agreement concerning a partnership or
joint venture;
(v) any oral or written agreement (or group of related
agreements) under which it has created, incurred, assumed, or
guaranteed any indebtedness for borrowed money, or any capitalized
lease obligation, under which it has imposed a Security Interest on
any of its assets, tangible or intangible;
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(vi) any oral or written agreement involving any FMI Stockholder
to which FMI is a party;
(vii) any oral or written profit sharing, stock option, stock
purchase, stock appreciation, deferred compensation, severance, or
other plan or arrangement for the benefit of its current or former
directors, officers, and employees (which is not listed on (S) 3(x) of
the FMI Disclosure Schedule);
(viii) any oral or written agreement for the employment of any
individual on a full-time, part-time, consulting, or other basis
providing annual compensation in excess of $50,000 or providing
severance benefits;
(ix) any oral or written agreement under which it has advanced or
loaned any amount to any of its directors, officers, and employees;
(x) any written agreement under which the consequences of a
default or termination would have an adverse effect in the amount of
$50,000 or more on the business, financial condition, operations or
results of operations of FMI; or
(xi) any other written agreement (or group of related agreements)
the performance of which involves consideration in excess of $50,000.
With respect to each such agreement: (A) the agreement is legal, valid,
binding, enforceable, and in full force and effect, subject to applicable
bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization,
arrangement, moratorium or other similar laws from time to time in affect
creditor's rights generally; (B) to the Knowledge of FMI, the agreement
will continue to be legal, valid, binding, enforceable, and in full force
and effect on identical terms following the consummation of the
transactions contemplated hereby (including the assignments and assumptions
referred to in (S) 2 above), subject to applicable bankruptcy, insolvency,
fraudulent conveyance or transfer, reorganization, arrangement, moratorium
or other similar laws from time to time in affect creditor's rights
generally; (C) FMI is not, and to the Knowledge of FMI, no other party, is
in material breach or default, and no event has occurred which with notice
or lapse of time would constitute a material breach or default, or permit
termination, modification, or acceleration, under the agreements; and (D)
no party has repudiated any provision of the agreement. With respect to
each customer order of FMI, FMI has no Knowledge of any Basis for
cancellation thereof.
(q) Notes and Accounts Receivable. Notes and accounts receivable of
FMI included among the Acquired Assets are at least in the amounts
reflected in the Most Recent Balance Sheet and all such notes and accounts
receivable are reflected properly on their books and records, are valid
receivables subject to no setoffs or counterclaims, are current and
collectible, and will be collected in accordance with their terms at their
recorded amounts, subject only to the reserve for bad debts set forth on
the face of the
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Most Recent Balance Sheet (rather than in any notes thereto) as adjusted
for the passage of time through the Closing Date in accordance with the
past custom and practice of FMI.
(r) Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of FMI.
(s) Insurance. FMI has provided a true and complete copy to Buyer of
each insurance policy providing product liability coverage to which FMI has
been a party, a named insured, or otherwise the beneficiary of coverage at
any time within the past five 5 years.
With respect to each such product liability insurance policy: (A) all
policy premiums have been paid in full, and to the Knowledge of FMI, the
policy is legal, valid, binding, enforceable, and in full force and effect
with respect to the periods for which it purports to provide coverage
subject to applicable bankruptcy, insolvency, fraudulent conveyance or
transfer, reorganization, arrangement or moratorium or other similar laws
from time to time affecting creditor's rights generally; (B) neither FMI
nor, to the Knowledge of FMI, any other party to the policy is in breach or
default (including with respect to the payment of premiums or the giving of
notices), and no event has occurred which, with notice or the lapse of
time, would constitute such a breach or default, or permit termination,
modification, or acceleration, under the policy; and (C) no party to the
policy has repudiated any provision thereof. FMI has provided true and
complete copies of or provided a written description of any self-insurance
arrangements affecting FMI.
(t) Litigation. FMI (i) is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge and (ii) is not a party nor, to
the Knowledge of FMI, is threatened to be made a party to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or quasi-
judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator.
(u) Product Warranty. Each product manufactured, sold, leased, or
delivered by FMI has been in conformity with all applicable contractual
commitments and all express and implied warranties, and FMI has no
Liability (and there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand
against it giving rise to any Liability) for replacement or repair thereof
or other damages in connection therewith, subject only to any reserve for
product warranty claims set forth on the face of the Most Recent Balance
Sheet (rather than in any notes thereto) as adjusted for the passage of
time through the Closing Date in accordance with the past custom and
practice of FMI. Except as otherwise may be provided by applicable law, to
the Knowledge of FMI, no product manufactured, sold, leased, or delivered
by FMI is subject to any guaranty, warranty, or other indemnity beyond the
applicable standard terms and conditions of sale or lease. FMI has
previously delivered to Buyer true and complete copies of the standard
terms and conditions of sale or lease for FMI (containing applicable
guaranty, warranty, and indemnity provisions).
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(v) Product Liability. There are no existing or, to the Knowledge of
FMI, threatened, claims against FMI arising out of any injury to
individuals or property as a result of the ownership, possession, or use of
any product manufactured, sold, leased, or delivered by FMI which could
result in Liability to FMI.
(w) Employees. To the Knowledge of FMI, no executive, key employee,
or group of employees has any plans to terminate employment with FMI. FMI
is not a party to or bound by any collective bargaining agreement, nor has
any of them experienced any strikes, grievances, claims of unfair labor
practice. To the Knowledge of FMI, there is no organizational effort
presently being made or threatened by or on behalf of any labor union with
respect to employees of FMI.
(x) Employee Benefits.
(i) No other corporation, trade, business, or other entity,
would, together with FMI, now or in the past 5 years, constitute a
single employer within the meaning of Code (S) 414.
(ii) FMI has previously provided to Buyer true and complete
copies of all of the Employee Benefit Plans which are presently in
effect or which have previously been in effect in the last 5 years for
the benefit of current or former employees, officers, directors or
consultants of FMI (the "FMI Plans").
(iii) Except as set forth in (S) 3(x) of the FMI Disclosure
Schedule, FMI does not maintain and has never maintained an "employee
benefit pension plan," within the meaning of ERISA (S) 3(2), that is
or was subject to Title IV of ERISA.
(iv) There is no lien outstanding upon any Acquired Assets
pursuant to Code (S) 412(n) in favor of any FMI Plan. No Acquired
Assets have been provided as security to any FMI Plan pursuant to Code
(S) 401(a)(29).
(v) Except as set forth in (S) 3(x) of the FMI Disclosure
Schedule, FMI has no past, present or future obligation or liability
to contribute to any multiemployer plan as defined in ERISA Section
3(37).
(vi) FMI has complied in all material respects with the
continuation health coverage requirements of Code (S) 4980B and ERISA
(S)(S) 601 through 608.
(vii) FMI is not obligated, contingently or otherwise, under any
agreement to pay any amount which would be treated as a "parachute
payment," as defined in Code (S) 280G(b) (determined without regard to
Code (S) 280G(b)(2)(A)(ii)).
(y) Guaranties. FMI is not a guarantor or otherwise liable for any
Liability or obligation (including indebtedness) of any other Person.
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(z) Environment, Health, and Safety.
(i) FMI has complied with all Environmental, Health, and Safety
Laws, the failure to comply with which could result in Adverse
Consequences in an amount in excess of $50,000 individually or in the
aggregate, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, or notice has been filed or
commenced against FMI alleging such failure.
(ii) FMI has no Liability (and FMI has not handled or disposed of
any substance, arranged for the disposal of any substance, exposed any
employee or other individual to any substance or condition, or owned
or operated any property or facility in any manner that could form the
Basis for any present or future action, suit, proceeding, hearing,
investigations, charge, complaint, claim or demand against any of FMI
giving rise to any Liability) for damage to any site, location, body
of water (surface or subsurface), for any illness of or personal
injury to any employee or other individual, or for any reason under
any Environmental, Health, and Safety Laws.
(iii) Except as set forth in (S) 3(z) of the FMI Disclosure
Schedule, all properties and equipment used in the business of FMI
have been free of any amounts of asbestos, PCB's, methylene chloride,
trichlorethylene, 1,2-trans-dichloroethylene, dioxins, dibenzofurans,
and Extremely Hazardous Substances, the presence of which could result
in Adverse Consequences in an amount in excess of $50,000 individually
or in the aggregate.
(aa) Certain Business Relationships With FMI. Except as set forth in
(S) 3(aa) of the FMI Disclosure Schedule, none of the FMI Stockholders and
their Affiliates has been involved in any business arrangement or
relationship with FMI within the past 12 months, and none of FMI
Stockholders owns any asset, tangible or intangible, which is used in the
business of FMI.
(ab) Disclosure. To the Knowledge of FMI, the representations and
warranties contained in this (S) 3 (including the FMI Disclosure Schedule)
do not as of the Closing Date contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statement and information contained in this (S) 3 not misleading.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and
warrants to FMI and the FMI Stockholders that the statements contained in this
(S) 4 are correct and complete as of Closing Date, except as set forth in the
disclosure schedule prepared by Buyer accompanying this Agreement and initialed
by the Parties (the "Buyer Disclosure Schedule"), which disclosure schedule is
incorporated herein by reference. The Buyer Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this (S) 4.
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(a) Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified as a foreign
corporation to do business in every jurisdiction where such qualification
is required.
(b) Authorization of Transaction. The Buyer has full power and
authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. The
execution, delivery and performance of this Agreement, including, without
limitation, the issuance of the Buyer Shares pursuant hereto, have been
duly authorized by all required corporate action. The Buyer Shares, when
issued in accordance with this Agreement, will be validly issued, fully-
paid and non-assessable. This Agreement constitutes the valid and legally
binding obligation of the Buyer, enforceable in accordance with its terms
and conditions. The Buyer need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government
or governmental agencies in order for the Parties to consummate the
transactions contemplated by this Agreement (including the assignment and
assumption referred to in (S) 2 above) other than the notification and
approval under the Hart-Scott-Rodino Act.
(c) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in (S) 2 above) will
(i) violate any constitution, state, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Buyer is subject, or
any provision of its charter or bylaws or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Buyer is a party or by which
it is bound or to which any of its assets is subject.
(d) Broker's Fees. The Buyer has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which FMI or the FMI
Stockholders could become liable or obligated.
(e) Disclosure. To the Knowledge of Buyer, the representation and
warranties contained in this (S) 4 (including the Buyer Disclosure
Schedule) and the Public Information do not contain any untrue statements
of a material fact or omit to state any material fact necessary in order to
make the statements contained in this (S) 4 or therein not misleading.
(f) Financial Statements. Attached hereto as Exhibit C are the
following financial statements (collectively the "Buyer Financial
Statements"):
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(i) audited balance sheets, statements of income, changes in
stockholders' equity, and cash flow as of and for the fiscal years
ended December 31, 1993, December 31, 1994, and December 31, 1995 for
Buyer; and
(ii) unaudited balance sheet and statement of income, change in
stockholders' equity, and cash flow (the "Most Recent Financial
Statements") as of and for the three (3) months ended January 31, 1996
(the "Most Recent Fiscal Month End") for Buyer.
The Buyer Financial Statements (including the notes thereto) have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods covered thereby,
present fairly the financial condition of Buyer as of such dates and the
results of operations of Buyer for such periods (subject only to normal
year-end adjustments which in the aggregate are not material), are correct
and complete, and are consistent with the books and records of Buyer (which
books and records are correct and complete).
(g) Events Subsequent to Most Recent Fiscal Quarter End. Since
January 31, 1996, there has not been any material adverse change in the
business, financial condition, operations, or results of operations of
Buyer.
5. CONDITIONS TO OBLIGATION TO CLOSE.
(a) Conditions to Obligation of the Buyer. The obligation of the
Buyer to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the
following conditions.
(i) Buyer documents evidencing the transfer of the Acquired
Assets described in (S) 2(f);
(ii) FMI and the Escrow Agent shall have executed and delivered
to the Buyer the Escrow Agreement, in form and substance as set forth
in Exhibit D attached hereto;
(iii) Buyer shall have received Employment Agreements executed
by the FMI Stockholders in the form and substance as set forth in
Exhibits E-1 and E-2 attached hereto;
(iv) Buyer shall have received a Lease Agreement executed by FMI
in the form and substance as set forth in Exhibit F attached hereto;
and
(v) all actions to be taken by FMI in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments,
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and other documents required to effect the transactions contemplated
hereby will be reasonably satisfactory in form and substance to the
Buyer.
The Buyer may waive any condition specified in this (S) 5(a) if it executes
a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of FMI and the FMI Stockholders. The
obligation of FMI to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
(i) FMI shall have received documents evidencing the assumption
by Buyer of the Assumed Liabilities.
(ii) Buyer shall have paid the applicable purchase price under
(S) 2(c)(i) and (iii);
(iii) the Buyer shall have executed and delivered to FMI the
Escrow Agreement;
(iv) Buyer shall have executed and delivered Employment
Agreements with Harry E. Pinkerton III and Dennis T. Pinkerton in the
form and substance as set forth in Exhibits E-1 and E-2 attached
hereto;
(v) FMI shall have received a Lease Agreement executed by Buyer
in the form and substance as set forth in Exhibit F hereto.
(vi) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to FMI.
FMI may waive any condition specified in this (S) 5(b) if it executes a
writing so stating at a prior to the Closing.
6. POST-CLOSING COVENANTS. The Parties agree as follows with respect to
the period following the Closing.
(a) General. In case at any time after the Closing any further action
is necessary to carry out the purposes of this Agreement, each of FMI, the
FMI Stockholders, and Buyer will take such further action (including the
execution and delivery of such further instruments and documents) as any
other Party reasonably may request, at the sole cost and expense of the
requesting Party (unless the requesting Party is entitled to
indemnification therefor hereunder). FMI and the FMI Stockholders
acknowledge and agree that from and after the Closing the Buyer will be
entitled to possession of all documents, books, records (including Tax
records), agreements, and
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financial data of any sort relating to FMI not excluded from the definition
of Acquired Assets in this Agreement; provided, however, that FMI and the
FMI Stockholders shall have the right to obtain access to such documents,
books, records (including Tax records), agreements, and financial data and
make photocopies thereof for a proper purpose, such as in connection with
the preparation of their tax returns. Buyer further agrees to keep such
records for a period of seven (7) years after the Closing Date, or, if
Buyer wishes to move the records from Long Island, New York, or to destroy
such records, Buyer shall give thirty (30) days' notice to FMI and allow
FMI to copy such records to be moved or take such records to be destroyed.
(b) Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand in connection
with (i) any transaction contemplated under this Agreement or (ii) any
fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or
prior to the Closing Date involving FMI or any FMI Stockholder, each of the
other Parties will reasonably cooperate with the contesting or defending
Party and his or its counsel in the contest or defense, make available his
or its personnel, and provide such testimony and access to his or its books
and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending
Party (unless the contesting or defending Party is entitled to
indemnification therefor under (S) 7 below).
(c) Transition. FMI and each of the FMI Stockholders will use its
(his) best efforts not to take any action that is designed or intended to
have the effect of discouraging any lessor, licensor, customer, supplier,
or other business associate of FMI from maintaining the same business
relationships with the Buyer after the Closing as it maintained with FMI
prior to the Closing.
(d) Confidentiality. FMI will treat and hold as confidential all of
the Confidential Information, refrain from using any of the Confidential
Information and deliver promptly to the Buyer or destroy, at the request
and option of the Buyer, all tangible embodiments (and all copies) of the
Confidential Information which are in its possession. In the event that
FMI is requested or required (by oral question or request for information
or documents in any legal proceeding, interrogatory, subpoena, civil
investigative demand, or similar process) to disclose any Confidential
Information, FMI will notify the Buyer promptly of the request or
requirement so that the Buyer may seek an appropriate protective order or
waive compliance with the provisions of this (S) 6(d). If, in the absence
of a protective order or the receipt of a waiver hereunder, FMI is, on the
advice of counsel, compelled to disclose any Confidential Information to
any tribunal or else stand liable for contempt, FMI may disclose the
Confidential Information to the tribunal; provided, however, that FMI shall
use its reasonable efforts to obtain, at the reasonable request of the
Buyer and at the Buyer's sole expense, an order or other assurance that
confidential treatment will be accorded to such portion of the Confidential
Information required to be disclosed as the Buyer shall designate.
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(e) Registration Rights.
(i) As used in this (S) 6(e), the following shall have the
following respective meanings:
"Commission" shall mean the Securities and Exchange
Commission, or any other federal agency at the time administering
the Securities Act.
"Holder" shall mean any holder of the outstanding Buyer
Shares that have not been sold to the public. For purposes of
this (S) 6(e), "Buyer Shares" shall include any shares of capital
stock issued in respect of the Buyer Shares upon any stock split,
stock dividend or distribution, recapitalization or similar
event.
"Registration Statement" shall mean a registration statement
filed or to be filed by Buyer under the Securities Act which is
available to register under the Securities Act a sale of any of
the Buyer Shares by or for the account of any Holder. Such term
includes any prospectus included in the Registration Statement.
"Transfer" shall mean any sale or other disposition of any
Buyer Shares which would constitute a sale thereof under the
Securities Act.
(ii) Each certificate representing any Buyer Shares and, except
as otherwise provided in (S) 6(e)(iii) hereof, each certificate issued
upon exchange or transfer of any Buyer Shares (whether or not such
exchange or transfer shall constitute a Transfer) shall be stamped or
otherwise imprinted with a legend substantially in the following form:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER ANY SECURITIES LAWS AND MAY ONLY BE SOLD IN
COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS. IN PARTICULAR,
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED OR OTHERWISE DISPOSED OF (1) UNLESS A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, WITH
RESPECT TO SUCH SHARES SHALL THEN BE IN EFFECT OR (2) UNLESS THE
COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT ANY PROPOSED TRANSFER OR
DISPOSITION OF SUCH SHARES IS EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
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(iii) Prior to any proposed Transfer of any Buyer Shares (other than under
the circumstances described in (S) 6(e)(iv), the Holder thereof shall
give written notice to the Buyer of the intention to effect such
Transfer. Each such notice shall describe the manner of the proposed
Transfer and shall be accompanied by an opinion of counsel reasonably
satisfactory to Buyer to the effect that the proposed transfer of
Buyer Shares may be effected without registration under the Securities
Act and under applicable state securities or blue sky laws. Upon
confirmation that such opinion is reasonably satisfactory to Buyer,
the Holder of such Buyer Shares shall be entitled to transfer such
Buyer Shares in accordance with the terms of its notice. Each
certificate for Buyer Shares transferred as above provided shall bear
the legend set forth in (S) 6(e)(ii) hereof except that such
certificate shall not bear such legend if (i) such Transfer is in
accordance with provisions of Rule 144 (or any other rule permitting
public sale without registration under the Securities Act) or (ii) the
opinion of counsel referred to above is to the further effect that the
transferee and any subsequent transferee (other than an affiliate of
Buyer) would be entitled to Transfer such securities in a public sale
without registration under the Securities Act.
(iv) (A) If following the Closing Date, Buyer determines that
it will file a Registration Statement for any public offering of
securities, Buyer shall give written notice to each Holder, at
least 30 days in advance of filing such Registration Statement,
that such filing is expected to be made. Upon written request of
any Holder made within fifteen (15) days after receipt of Buyer's
written notice and subject to the limitations set forth in this
(S) 7(e)(iv), Buyer shall include in such Registration Statement
Buyer Shares specified in the Holder's request for the purpose of
registering those Buyer Shares for sale by or for the account of
such Holder (and any related qualification under blue sky or
other state securities laws) and in any underwriting involved
therein. Subject to the provisions of this (S) 6(e) Buyer shall
have exclusive control over the filing, amending, withdrawal and
other actions regarding such Registration Statement.
Notwithstanding anything in the foregoing to the contrary, the
Buyer shall have no obligation to give notice to any Holder with
respect to the filing of, or to include any Buyer Shares for any
Holder in, any Registration Statement on Form S-8 or Form S-4.
(B) If, on the second anniversary of the Closing Date, Buyer
is a reporting company under the Securities Exchange Act and any
Holder holds a number of Buyer Shares for which registration
rights have not been foregone under (S) 6(e)(xiii) in excess of
the number of Buyer Shares that may be sold by such Holder
immediately under Rule 144, such Holder, by written notice to
Buyer during the period from the second anniversary of the
Closing Date until ninety (90) days before the third anniversary
of the Closing Date, may request that Buyer prepare and file, and
Buyer shall use its best efforts to prepare and file, within
sixty (60)
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days following the receipt of such notice, a Registration
Statement on a form available for the registration of Buyer
Shares for resale, covering the Buyer Shares for which
registration rights have not been foregone under (S) 6(e)(xiii)
in excess of the number of Buyer Shares that may be sold
immediately under Rule 144 at the time of such notice, and shall
use its best efforts to have such Registration Statement become
effective and keep such Registration Statement effective until
the earlier of (i) the time when all the included Buyer Shares
have been sold by Holder, or (ii) the third anniversary of the
Closing Date.
(C) If, during the period from the Closing Date to the
second anniversary of the Closing Date, Buyer should cease being
a reporting company under the Securities Exchange Act and any
Holder holds Buyer Shares for which registration rights have not
been foregone under (S)6(e)(xiii) and for which any Holder has
not had an opportunity to sell all of such Holder's Buyer Shares
in any transaction or proposed transaction in connection with
Buyer's ceasing to be a reporting company (the "Repurchase
Shares"), then such Holder may, upon ten (10) business days'
prior written notice to Buyer but no later than ten (10) business
days following the second anniversary of the Closing Date,
request that Buyer purchase such Repurchase Shares at a purchase
price per share equal to the Agreed Value plus an amount equal to
a compounded annual interest rate of ten percent (10%) of the
Agreed Value, accrued from the Closing Date up to and including
the date of such notice. Buyer agrees to purchase such
Repurchase Shares in accordance with the terms of this (S)
6(e)(iv)(C) within ten (10) business days after receipt of such
notice.
(v) If the securities to be sold by Buyer pursuant to a
Registration Statement described in (S) 6(e)(iv)(A) hereof are to be
sold in any underwritten public offering, the right of any Holder to
have Buyer Shares included in the same Registration Statement shall be
conditioned upon the inclusion of such Holder's Buyer Shares in the
same underwriting. Buyer, all Holders and all other security holders
proposing to sell securities in such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or
underwriters selected by Buyer. Notwithstanding any other provisions
of this (S) 6(e)(v), if the managing underwriter determines that
marketing factors require a limitation of the number of securities to
be included in the underwriting, the managing underwriter and Buyer
may limit the number of Buyer Shares to be included in the
underwriting for all Holders, in the aggregate, to any number which,
together with any other securities of the same class that Buyer may be
contractually obligated to register for others, shall not be less than
10 percent (10%) of the total number included in the underwriting.
Buyer shall advise all Holders who shall have requested inclusion of
their Buyer Shares in the same underwriting of the aggregate number of
Buyer Shares that may be included for all Holders. Such aggregate
number shall be allocated among all such Holders in proportion, as
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nearly as practical, to the number of Buyer Shares for which each
Holder requested registration, provided that any decrease in the
number of shares to be included in the Registration Statement pursuant
to the provisions of this (S) 6(e)(v) shall be allocated, as nearly as
practicable, first among selling shareholders holding shares of
capital stock as to which the Buyer is not contractually obligated to
register, and second, among selling shareholders having such
contractual rights, as nearly as practicable, in proportion to the
number of shares of capital stock for which such selling shareholders
requested registration. No Buyer Shares excluded from an underwriting
by reason of such marketing limitation shall be included in the
Registration Statement. If any Holder disapproves of the terms of the
underwriting, he may elect to withdraw his Buyer Shares by giving
written notice to Buyer and the managing underwriter. After receiving
any such notice, Buyer shall withdraw such Holder's Buyer Shares from
the Registration Statement. If a withdrawal of Buyer Shares or any
withdrawal of other securities (except a complete withdrawal of all
securities that were to be sold by Buyer, in which case Buyer may
withdraw the Registration Statement in its entirety) makes it
possible, with the marketing limitation set by the managing
underwriter and Buyer, to include in the underwriting a greater number
of Buyer Shares held by other Holders participating in such
underwriting, then to the extent practical, without delaying the
underwriting, Buyer shall offer to all Holders who then have Buyer
Shares included in the underwriting an opportunity to include
additional Buyer Shares in the proportion previously described in this
(S) 6(e)(v).
(vi) In connection with the registration under the Securities Act
of any sale of Buyer Shares by or for the account of any Holder
pursuant to (S) 6(iv) hereof, Buyer shall file on a timely basis
appropriate applications or other instruments to register, qualify or
obtain exemptions for the sale under such state securities or blue sky
laws as the managing underwriter shall reasonably specify or, if the
sale is not to be an underwritten public offering, such state
securities or blue sky laws as the Holder may reasonably request.
Buyer, however, shall have no obligation to file any applications or
other instruments in any jurisdiction in which either (i) no such
filing is required with respect to the proposed sale of Buyer Shares
by or for the account of the Holder, in the opinion of qualified
counsel selected by Buyer, or (ii) Buyer would be required to execute
a general consent to service of process, to register as a broker or
dealer or to cause any officer or employee of Buyer to register as a
dealer, broker, or salesman or in any similar capacity. Buyer shall
use its best efforts in good faith to obtain and maintain for a
reasonable period, up to six months, an effective registration,
qualification or exemption under the applications or other instruments
filed by Buyer pursuant to this (S) 6(e)(vi).
(vii) All expenses incurred in connection with any Registration
Statement filed or prepared for filing pursuant (S) 6(e)(iv) hereof
and in connection with all related state securities or blue sky
applications or other instruments, including without limitation all
registration, filing and qualification fees, printing
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expenses, fees and disbursements of counsel for Buyer and fees and
expenses of accountants incidental to such Registration Statement, and
fees and disbursements for one counsel to the Holders incidental to
such Registration Statement shall be borne by Buyer. Notwithstanding
any other provision of this (S) 6(e)(vii), each Holder shall bear the
entire amount of any discount or commission allowed or paid to any
underwriter in connection with any sale of Buyer Shares by or for the
account of such Holder.
(viii) In connection with any Registration Statement filed
pursuant to this (S) 6(e), Buyer shall indemnify and hold harmless
each Holder whose Buyer Shares are included in the Registration
Statement, each underwriter who may purchase from or sell any Buyer
shares for any such Holder and each person who controls any such
Holder or any such underwriter, within the meaning of the Securities
Act, from and against any and all losses, claims, damages and
liabilities caused by any untrue statements or alleged untrue
statement of a material fact contained in the Registration Statement
or any related state securities or blue sky applications other
instruments or caused by any omission or alleged omission to state in
the Registration Statement or any related state securities or blue sky
applications or other instruments any material fact required to be
stated or necessary to make the statements which are made, in light of
the circumstances in which they are made, not misleading, except
insofar as such losses, claims, damages or liabilities are caused by
any untrue statement or alleged untrue statement or omission or
alleged omission based upon written information furnished to Buyer by
such Holder, underwriter or controlling person expressly for use in
the Registration Statement or any related state securities or blue sky
applications or other instruments. Each Holder whose Buyer Shares are
included in any Registration Statement filed pursuant to this (S) 6(e)
shall indemnify Buyer, its directors, each officer signing the
Registration Statement, each other person (including each other
Holder) whose securities are included in the Registration Statement,
each underwriter who may purchase from or sell any securities for
Buyer or any other person pursuant to the Registration Statement and
each person, if any, who controls Buyer, any such other person or any
such underwriter, within the meaning of the Securities Act, from and
against any and all losses, claims, damages and liabilities caused by
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any related state
securities or blue sky applications or other instruments or caused by
any omission or alleged omission to state in the Registration
Statement or any related state securities or blue sky applications or
other instruments any material fact required to be stated or necessary
to make the statements which are made, in light of the circumstances
in which they are made, not misleading, insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or
alleged untrue statement or omission or alleged omission based upon
written information furnished by the Holder from who indemnification
is sought expressly for use in the Registration Statement or any
related state securities or blue sky application or other instruments;
provided, that the obligations of such Holders hereunder shall be
limited to any amount equal to the
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proceeds to each such Holder of securities sold as contemplated
herein; provided, further, that the foregoing indemnity agreement
shall not inure to the benefit of the Buyer or any underwriter, or any
director or officer of, or person controlling, the Buyer or such
Holder, other shareholder or underwriter, in respect of any person's
asserted loss, claim, damage or liability resulting from the purchase
of securities from the Buyer or such Holder, other shareholder or
underwriter if a copy of the prospectus, offering circular or other
document (as then amended or supplemented) was not sent or given to
such person at or prior to the written confirmation of the sale of
securities to such person, and such prospectus, offering circular or
other document would have cured the defect giving rise to such loss,
claim, damage or liability. Each party entitled to indemnification
under this Section (S) 6(e)(viii) (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 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 any
litigation resulting therefrom, shall be approved by the indemnified
party (whose approval shall not be unreasonably 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 Section 6(e)(viii)
unless and to the extent such failure shall have prejudiced the
indemnified party. 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. No
indemnifying party shall be subject to any liability for any
settlement made by the indemnified party without the indemnifying
party's consent (which consent shall not be unreasonably withheld).
Each indemnified party shall furnish such information regarding itself
or the claim in question as an indemnifying party may reasonably
request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom. To the
extent the provisions contained in this (S) 6(e) are in conflict with
any indemnification provisions that are included in any underwriting
agreement entered into by Buyer and one or more Holders with one or
more underwriters in connection with any underwritten public offering
registered under any registration statement filed pursuant to this (S)
6(e), the provisions of the underwriting agreement shall govern. The
indemnities provided for in this (S) 6(e)(viii) shall be independent
of and in addition to any other indemnity provision of this Agreement.
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(ix) Each Holder whose Buyer Shares are included in any
Registration Statement filed pursuant to this (S) 6(e) shall furnish
to Buyer such information regarding such Holder and the sale proposed
by such Holder as may be reasonably required for inclusion in the
Registration Statement or any related state securities or blue sky
applications or other instruments, as may be reasonably necessary to
provide supplemental information to the Commission, the National
Association of Securities Dealers, Inc. or any administrator of any
state securities or blue sky law, or as Buyer or any underwriter may
reasonably request.
(x) From and after the date of this Agreement, the Buyer will not
enter into an agreement with any holder or prospective holder of any
securities of the Buyer giving such holder or prospective holder the
right to require the Buyer to initiate or effect any registration of
any securities of the Buyer on terms more favorable than granted to
the Holders herein. Any right given by the Buyer or to any holder or
prospective holder of the Buyer's securities in connection with the
registration of securities will be conditioned such that it will be
consistent with the provisions of this Section 6(e) and with the
rights of the Holders provided in this Agreement.
(xi) With a view to making available the benefits of certain
rules and regulations of the Commission that may permit the sale of
the Buyer Shares to the public without registration, the Buyer agrees
that it will
(A) at all times file with the Commission in a timely manner
all reports and other documents required to be filed by the Buyer
under the Securities Act, if any, and the Exchange Act, and to
comply with all other requirements, if any, of Rule 144(c) (1) or
any successor provision thereto until three (3) years and ninety
(90) days following the Closing Date.
(B) so long as any Holder owns any Buyer Shares, furnish to
the Holder promptly upon request a written statement by the Buyer
as to its compliance with the reporting requirements of Rule 144
and of the Securities Act and the Exchange Act, a copy of the
most recent annual or quarterly report of the Buyer, and such
other reports and documents filed with the Commission as any
Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such
securities without registration.
(xii) In the case of each registration effected by the Buyer
pursuant to this Section 6(e), the Buyer will keep each Holder advised
in writing as to the initiation of each registration and as to the
completion thereof. At its expense, the Buyer will
(A) keep such registration effective for a period of 120
days or until the Holder or Holders have completed the
distribution described in
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the registration statement relating thereto, whichever first
occurs; provided, that in the case of any registration on
Form S-3 of Buyer Shares that are intended to be offered on a
continuous or delayed basis, such 120-day period shall be
extended, if necessary, to keep the registration statement
effective until all such Buyer Shares are sold if Rule 415, or
any successor rule under the Securities Act, permits an offering
on a continuous or delayed basis and applicable rules under the
Securities Act governing the obligation to file a post-effective
amendment permit, in lieu of filing a post-effective amendment
that (i) includes any prospectus required by Section 10(a)(3) of
the Securities Act or (ii) reflects facts or events representing
a material or fundamental change in the information set forth in
the registration statement, the incorporation by reference of
information required to be included in (i) and (ii) above to be
contained in periodic reports filed pursuant to Section 13 or
15(d) of the Exchange Act in the registration statement, and
(B) furnish such number of prospectuses and other documents
incident thereto as a Holder from time to time reasonably
requests.
(xiii) Notwithstanding the foregoing provisions of this
(S) 6(e), Buyer shall not be obligated to file a Registration
Statement hereunder or to include on another Registration Statement
Buyer Shares held by a Holder if at the time of filing the Holders
requesting to participate in the offering are entitled to sell the
Buyer Shares for which registration has been requested immediately
under Rule 144 (or any successor rule or regulation) during any 90 day
period, or to include in any Registration Statement Buyer Shares which
could have been included in any prior Registration Statement of Buyer
under this (S) 6(e), but which were not so included for reason other
than a limitation on the number of Buyer Shares included in such prior
Registration Statement pursuant to (S) 6(e)(v).
The registration rights granted in this (S) 6(e) are not assignable, in
whole or in part, without the prior written consent of Buyer, except such rights
shall transfer with the ownership of the Buyer Shares.
As a condition to having Buyer Shares included in any Registration
Statement filed pursuant to this (S) 6(e), each Holder shall agree that in
selling the Buyer Shares the Holder will comply with all applicable laws and
regulations, including, but not limited to, Rules 10b-6 and 10b-7 promulgated
under the Securities Exchange Act.
(f) Employee Matters.
(i) On the day following the Closing Date, Buyer shall offer
employment in a similar position to each employee of FMI who on the
Closing Date is actively at work or absent from work due to short-term
disability, maternity leave, jury duty, military service, vacation,
layoff with recall rights, or
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other short-term leave (the "Employees") at a rate of base
compensation equal to 105% of their base compensation immediately
prior to the Closing Date. Buyer shall also offer to Employees
participation in those compensation and benefit programs (other than
tax qualified retirement plans) which are no less favorable in the
aggregate than those in effect at FMI immediately prior to the Closing
Date. Notwithstanding the foregoing, the terms and conditions of the
employment of Employees who are FMI Stockholders shall be governed by
the terms and conditions of their employment contracts attached hereto
as Exhibits E-1 and E-2, respectively. Buyer shall make participation
in the Buyer's Employees' Retirement Savings Plan available to the
Employees who accept employment with Buyer on substantially the same
terms as generally apply to other employees of Buyer and its
affiliates participating in such Plan, and, in that regard, such
Employees who satisfy the Plan's eligibility criteria (counting
service with FMI prior to the Closing Date) as of May 31, 1996 shall
be eligible to commence participation in such Plan as of June 1, 1996;
provided, however, if the Closing does not occur on May 22, 1996, the
dates in the foregoing sentence shall be deemed to be June 30, 1996,
and July 1, 1996, respectively.
(ii) The service with FMI prior to the Closing date of the
Employees who accept employment with Buyer shall be taken into account
for all relevant purposes under Buyer's Employee Benefit Plans and
other compensation and benefit programs, including without limitation,
credit for eligibility, vesting, benefit accrual, participation, level
of benefits, and optional forms of payment.
(iii) Buyer shall take all appropriate action necessary to
implement a group health plan (or plans) covering the Employees (and
their dependents) as of the Closing Date which plan (or plans) shall
(1) waive any pre-existing condition limitations, (2) waive any
eligibility waiting periods, (3) give effect, in determining or
applying any deductible and maximum out-of-pocket limitations, to
claims incurred, amounts paid by, any amounts reimbursed to, such
Employees under the group health plans maintained by FMI for their
benefit immediately prior to the Closing Date, and (4) have a level of
benefits such that the actual coverage of an Employee (or any of his
or her covered dependents) under such group health plan (or plans)
would, if the Employee had made an election under Section 4980B(f) of
the Code or Part 6 of Title I of ERISA with respect to any group
health plan maintained by FMI, constitute an event described in
Section 4980B(F)(2)(B)(iv) of the Code and Section 602(2)(D) of ERISA.
(iv) Any former employees of FMI or their dependents receiving
health continuation coverage under an FMI Plan as of the Closing, or
becoming eligible for such coverage due to a qualifying event
occurring on or before the Closing, shall be provided with health
continuation coverage satisfying the requirements of Section 4980B of
the Code and Sections 601 through 608 of ERISA after the Closing
through health benefit plans maintained by Buyer or its affiliates.
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(g) Non-Competition. FMI covenants and agrees with Buyer that FMI
shall not compete directly or indirectly with Buyer during the three (3)
year period after the Closing Date and shall not, during such period, make
public statements in derogation of Buyer. Competing directly or indirectly
with Buyer shall mean (i) engaging or (ii) having a material interest,
directly or indirectly, as owner, employee, officer, director, partner,
venturer, stockholder, capital investor, consultant, agent, principal,
advisor, or otherwise, either alone or in association with others, in the
operations of any entity or party engaged in or preparing to engage in the
business of the development, manufacture, or sale of fluid handling
products in any of those geographic areas where FMI or Buyer or any of its
affiliates engaged in the development, manufacture, or sale of fluid
handling products conducts business at Closing. Competing directly or
indirectly with Buyer, as used in this Agreement, shall not be deemed to
include an ownership interest as an inactive investor, which for purposes
of this Agreement shall mean the beneficial ownership of five percent (5%)
or less of the outstanding shares of any series or class of securities of
any competitor of Buyer.
(h) Non-Raid. FMI covenants and agrees with Buyer that during the
three (3) year period after the Closing Date, FMI will not, without the
written consent of Buyer, (i) solicit any of the employees of FMI who were
employed by FMI within the one (1) year period immediately prior to the
Closing Date, (ii) interfere with the relationship of Buyer with any such
employees, or (iii) personally target or solicit any person or entity who
is, or was within the one (1) year period immediately prior to the Closing
Date, a customer, vendor, distributor, representative or agent of FMI.
(i) Name Change. FMI covenants and agrees that as soon as practicable
after the Closing Date FMI will, in cooperation and coordination with
Buyer, change its name to a name dissimilar to "Fluid Metering, Inc." in a
manner that will reasonably ensure that FMI Acquisition Corp. or another
Affiliate of Buyer designated by Buyer will be permitted to change its name
to "Fluid Metering."
(j) Insurance. To the extent that FMI has insurance for Product
Liability Claims which are not Assumed Liabilities, FMI agrees to promptly
take all reasonable action required to avail itself of the benefits of such
insurance.
(k) Maintenance of Corporate Existence. FMI agrees that for a period
of one (1) year after Closing, it shall maintain its corporate existence
(and neither liquidate nor dissolve) and that during the entire such
period, it shall maintain a net worth, as determined in accordance with
GAAP, of at least One Hundred Thousand Dollars ($100,000).
7. REMEDIES FOR BREACHES OF THIS AGREEMENT AND THE ASSET PURCHASE
AGREEMENT.
(a) Survival of Representations and Warranties. All representations,
warranties, covenants, indemnities and agreements contained in or made
pursuant to this Agreement (including any schedule hereto and any
certificate or document delivered
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pursuant hereto other than the Employment Agreements, the Escrow Agreement
and the Lease, whose provisions shall survive in accordance with their
terms) shall survive the Closing and shall expire one (1) year following
the Closing Date, except that the following obligations shall survive
indefinitely: (i) the Buyer's obligations contained in (S)(S) 2(b) and
2(c)(iii) and FMI's obligations under (S) 2(c)(iv); (ii) the
representations and warranties of FMI contained in (S)(S) 3(a), (b),
(c)(i), (d), (e) and (f); (iii) the representations and warranties of Buyer
contained in (S)(S) 4(a), (b), (c) and (d); and (iv) the Parties'
obligations under Articles 6, 7 (except for (S) 7(b)(ii)) and 8 (except for
(S) 8(a)). No action, claim, or proceeding may be brought by any Party
hereto against any other Party resulting from, arising out of, or caused by
a breach of a representation or warranty contained herein, or the failure
to perform any covenant or other obligations hereunder, after the time such
representation, warranty or covenant ceases to survive pursuant to the
preceding sentence, unless written notice of such claim setting forth with
specificity the basis for such claim is delivered to the applicable Party
prior to such time.
(b) Indemnification Provisions for Benefit of the Buyer. Subject to
the limitations set forth in (S)7(b)(iii)), FMI and the FMI Stockholders
shall have the following indemnification obligations:
(i) In the event FMI breaches (or in the event any third party
alleges facts that, if true, would mean FMI has breached) any of its
representations, warranties, and covenants contained in this
Agreement, and, if there is an applicable survival period pursuant to
(S) 7(a) above, provided that the Buyer makes a written claim for
indemnification setting forth with specificity the basis for such
claim to the FMI Parties pursuant to (S) 8(g) below within such
survival period, then FMI and the FMI Stockholders jointly and
severally agree to indemnify the Buyer, subject to the limitations set
forth herein, from and against the entirety of any Adverse
Consequences the Buyer may suffer through and after the date of the
claim for indemnification (including any Adverse Consequences the
Buyer may suffer after the end of any applicable survival period)
resulting from, arising out of, or caused by the breach (or the
alleged breach);
(ii) FMI and the FMI Stockholders will indemnify, defend and hold
harmless Buyer from and against any Adverse Consequences as a result
of claims based on or arising from any liabilities or obligations of
FMI or the FMI Stockholders which are not Assumed Liabilities, which
indemnification shall not be subject to any deductible; and
(iii) The foregoing indemnification obligations are subject to
the following terms and conditions:
(A) There shall be no obligation to indemnify Buyer from and
against any Adverse Consequences resulting from, arising out of,
or caused by the breach (or alleged breach) of any
representation, warranty or covenant of FMI contained in
(S) 3(c)(ii) and (S) 3(g)-(ab) of this Agreement
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until the Buyer has suffered Adverse Consequences by reason
thereof in excess of One Hundred Thousand Dollars ($100,000), and
then only to the extent of the excess;
(B) The aggregate liability of the FMI Parties under this
Agreement shall in no event exceed the Agreed Value of the
Escrowed Buyer Shares, and the sole recourse of Buyer shall be
limited to the Escrowed Buyer Shares (subject to the FMI Parties'
option of substituting cash for all or any portion of the
Escrowed Buyer Shares pursuant to (S) 7(f)), except that, with
------
respect to any Adverse Consequences resulting from, arising out
of, or caused by the breach (or alleged breach) of any
representation, warranty or covenant of FMI contained in
(S) 3(a), (b), (c)(i), (d), (e) or (f) or (S)(S)6(d), (g) or (h)
of this Agreement, the indemnification obligations shall be the
joint and several liability of the FMI Parties up to an amount
not to exceed the Purchase Price, provided that any
Indemnification Claim with respect to any such breach shall be
first satisfied out of the Escrowed Buyer Shares; and
(C) Notwithstanding any provision in this Agreement to the
contrary, in the event any inaccuracies or breaches of any
representation, warranty or covenant of FMI or any FMI
Stockholder are known to Buyer at or prior to the Closing, (i)
Buyer shall disclose to FMI any such inaccuracy or breach, and
(ii) FMI and the FMI Stockholders shall have no liability to
Buyer for any liabilities incurred by Buyer with respect to such
inaccuracies or breaches so known to Buyer.
(c) Indemnification Provisions for Benefit of FMI.
(i) In the event the Buyer breaches (or in the event any third
party alleges facts that, if true, would mean the Buyer has breached)
any of its representations, warranties, and covenants contained in
this Agreement, and, if there is an applicable survival period
pursuant to (S) 7(a) above, provided that FMI or any FMI Stockholder
makes a written claim for indemnification setting forth with
specificity the basis for such claim against the Buyer pursuant to
(S) 8(g) below within such survival period, then the Buyer agrees to
indemnify FMI and the FMI Stockholders from and against the entirety
of any Adverse Consequences (up to but not in excess of the Purchase
Price) FMI or any FMI Stockholder may suffer through and after the
date of the claim for indemnification (including any Adverse
Consequences FMI or any FMI Stockholder may suffer after the end of
any applicable survival period) resulting from, arising out of, or
caused by the breach (or the alleged breach).
(ii) Notwithstanding anything to the contrary herein contained,
(i) Buyer will indemnify, defend and hold harmless FMI and the FMI
Stockholders from and against any Adverse Consequences as a result of
claims based on or
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arising from any Assumed Liabilities or the operation of the Acquired
Assets by Buyer (and its successors and assigns) after the Closing
Date and (ii) such indemnification shall not be limited in time or
amount or subject to any deductible or cap.
(d) Method of Asserting Claims.
(i) With respect to any third-party claim:
(A) If any third party shall notify any Party with respect
to any matter (a "Third Party Claim") which may give rise to a
claim for indemnification against any other Party under (S) 7(b)
or (c), then the Indemnified Party shall promptly notify each
Indemnifying Party thereof in writing; provided, however, that
(subject to the applicable survival period set forth in (S) 7(a)
above) no delay on the part of the Indemnified Party in notifying
any Indemnifying Party shall relieve the Indemnifying Party from
any obligation hereunder unless (and then solely to the extent)
the Indemnifying Party thereby is prejudiced.
(B) The Indemnifying Party shall have fifteen (15) days
after receipt of notice from the Indemnified Party of a Third
Party Claim ("Notice Period") to notify the Indemnified Party in
writing (A) whether or not the Indemnifying Party disputes such
Third Party Claim specifying in reasonable detail the basis for
such dispute, and (B) notwithstanding any such dispute, whether
or not it desires, at its sole cost and expense, to defend the
Indemnified Party against such Third Party Claim in accordance
with the provisions hereof.
(C) If the Indemnifying Party disputes the Third Party Claim
or the amount thereof (whether or not the Indemnifying Party
elects to defend the Indemnified Party against such
Indemnification Claim), such dispute shall be resolved by
arbitration in accordance with (S) 7(g) hereof. Pending the
resolution of any such dispute, the Third Party Claim shall not
be settled without the prior written consent of the Indemnified
Party, such consent not to be unreasonably withheld.
(D) If the Indemnifying Party notifies the Indemnified Party
within the Notice Period that the Indemnifying Party will defend
the Indemnified Party against the Third Party Claim, then except
as hereinafter provided, the Indemnifying Party will have the
right to defend the Indemnified Party against the Third Party
Claim with counsel of its choice satisfactory to the Indemnified
Party so long as the Indemnifying Party (i) diligently conducts
the defense of such Third Party Claim, and (ii) shall not enter
into a settlement, or entry of a final judgment or final award
with respect to, any such Third Party Claim without the consent
of the
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Indemnified Party unless such settlement, judgment or award
requires no more than a monetary payment for which the
Indemnified Party is fully indemnified and does not involve any
other matters binding upon the Indemnified Party.
(E) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with
(S) 7(d)(i)(D) above, (A) the Indemnified Party may retain
separate co-counsel at its sole cost and expense and participate
in the defense of the Third Party Claim, and (B) the Indemnified
Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnifying Party (not to be
withheld unreasonably).
(F) If the Indemnifying Party elects not to defend the
Indemnified Party against the Third Party Claim, whether by
giving the Indemnified Party timely notice as provided above or
otherwise, then the amount of any such Third Party Claim, or if
the same is defended by the Indemnifying Party or the Indemnified
Party, then that portion thereof as to which such defense is
unsuccessful or the amount of such settlement, final judgment or
final award described in (S)7(d)(i)(D), in each case, shall be
conclusively deemed to be a liability of the Indemnifying Party
hereunder, unless the Indemnifying Party shall have disputed its
liability to the Indemnified Party as provided in (S) 7(d)(i)(B),
in which event such dispute shall be resolved as provided in (S)
7(g) hereof.
(ii) If the Indemnification Claim involves a matter other than a
Third Party Claim, the Indemnified Party shall promptly send a notice
of the Indemnification Claim to the Indemnifying Party. Indemnifying
Party shall have fifteen (15) days after receipt from the Indemnified
Party of notice of the Indemnification Claim to dispute the
Indemnification Claim in writing specifying in reasonable detail the
basis for such objection. Failure to timely so dispute the
Indemnification Claim shall constitute acceptance of the claim for
indemnification by the Indemnifying Party and the claim for
indemnification shall be paid in accordance with (S) 7(e) hereof. If
notice of the dispute is timely made by the Indemnifying Party and the
dispute is not resolved within twenty (20) days from the date the
Indemnifying Party received notice of the dispute, such dispute shall
be resolved in accordance with (S) 7(g).
(iii) If any Indemnification Claim hereunder involves a matter
for which the Escrowed Buyer Shares are a remedy or the sole remedy as
described in (S) 7(b)(iii), the Parties hereto shall, in addition to
the notices required pursuant to this (S) 7(d), give the appropriate
notices required under (S) 7(f).
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(e) Payment. Upon a final determination of the amount of an
Indemnification Claim, whether by agreement between the Indemnifying Party
and the Indemnified Party or by arbitration or otherwise, the Indemnifying
Party shall pay the amount of such finally determined Indemnification Claim
in cash within ten (10) days of the date such amount is determined;
provided, however, that if the Indemnifying Party is FMI (and/or the FMI
Stockholders) and the Indemnification Claim is made for any matter for
which a remedy or the sole remedy is the Escrowed Buyer Shares, the Parties
shall follow the procedures set forth in (S) 7(f) below.
(f) Escrow Procedure.
(i) For purposes of this (S) 7, the following terms will have the
meanings set forth below:
(A) "Acknowledgement" shall mean a written statement of FMI
acknowledging receipt of a Request and giving instructions to the
Escrow Agent to make disbursements from the Escrowed Items to the
extent requested in the Request.
(B) "Objection" shall mean a written response by FMI to a
Request which sets forth (i) the amount of payment in the Request
to which FMI objects, and (ii) the reasons for the objection.
(C) "Request" shall mean a written request of Buyer to
Escrow Agent to deliver all or part of the Escrowed Items and
which sets forth (i) the amount of the requested payment, (ii)
the provisions of the Agreement upon which Buyer bases its claim
for reimbursement, and (iii) a brief description of the facts and
circumstances which Buyer asserts giving rise to its claim for
indemnification.
(D) "Joint Writing" shall mean a written notice or
instruction to the Escrow Agent signed by both FMI (or the FMI
Stockholders) and Buyer.
(ii) At any time and from time to time while the Escrowed Buyer
Shares are held by the Escrow Agent, FMI and/or the FMI Stockholders
may exchange all or any part of the Escrowed Buyer Shares for cash,
upon written notice to Buyer and the Escrow Agent and delivery of the
cash to the Escrow Agent. The cash shall be exchanged for that number
of Escrowed Buyer Shares whose Agreed Value is (rounding up or down to
the nearest whole share) equal to such cash. In the event of any such
cash exchange, the cash, together with any Escrowed Buyer Shares held
by the Escrow Agent under the Escrow Agreement, shall be referred to
as the "Escrowed Items."
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(iii) The term of the Escrow Agreement, and the period during
which the Escrow Agent shall hold the Escrowed Items, shall expire on
the date that is the earliest to occur of (i) the payment (or
resolution of dispute in accordance with (S)7(g) hereof) of all
Indemnification Claims for which the Escrow Agent has received a
Request on or before the first (1st) anniversary of the date hereof;
(ii) the payment of the entire balance of the Escrowed Items in
accordance with this (S) 7(f); or (iii) the receipt by the Escrow
Agent of a Joint Writing directing the disposition of the balance of
the Escrowed Buyer Shares (hereinafter, the date of such termination,
as it may be extended pursuant to (S) 7(f)(vii) hereof, being referred
to as the "Termination Date"). The Escrowed Items shall be held until
delivered to Buyer or FMI according to the terms hereof.
(iv) At any time and from time to time on or prior to the first
(1st) anniversary of the date hereof, Buyer may make a Request of
Escrow Agent, a copy of which shall be sent at the same time to the
FMI Parties. The FMI Parties shall promptly issue an Acknowledgment
or an Objection to the Escrow Agent. If within thirty (30) days after
the date upon which the Escrow Agent receives a copy of the Request
the Escrow Agent has received an Acknowledgment or has not received an
Objection, Escrow Agent shall promptly deliver to Buyer the amount
specified in the Request, in cash, if any is then held as an Escrowed
Item, with the balance paid by delivery of a number of Escrowed Buyer
Shares whose Agreed Value is approximately (rounding up or down to the
nearest whole share) equal to the balance of the amount specified in
the Request.
(v) If within thirty (30) days after the date upon which the
Escrow Agent receives a copy of the Request the Escrow Agent receives
an Objection, Escrow Agent shall (A) promptly notify the Buyer of the
Objection (enclosing a copy thereof); (B) promptly deliver to Buyer
cash, if any is then held as an Escrowed Item, with the balance paid
by delivery of a number of Escrowed Buyer Shares whose Agreed Value is
approximately (rounding up or down to the nearest whole share) equal
to that portion of the balance of the amount specified in the Request
not objected to in the Objection, and (iii) set aside a number of
Escrowed Buyer Shares whose Agreed Value is approximately (rounding up
or down to the nearest whole share) equal to that portion of the
amount specified in the Request questioned in the Objection ("Set-
Aside").
(vi) All Objections shall be resolved in accordance with (S) 7(g)
hereof.
(vii) The Escrow Agent's obligations with respect to the
Escrowed Items and the Termination Date shall be extended with respect
to any Set-Aside and the Escrow Agent shall hold such Set-Aside (or
cash substituted by any FMI Party in lieu thereof) until the earlier
to occur of the following events: (i) Buyer and the FMI Parties direct
the application or payment of the Set-Aside in a Joint Writing, or
(ii) Escrow Agent receives a certified copy of final nonappealable
order or the notice of final award of the arbitrator described in
Section (S)7(g) with respect to
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the Set-Aside. Upon receipt thereof, Escrow Agent shall take whatever
action with respect to the Set-Aside as is required by such Joint
Writing or notice of final order or award, as the case may be. Any
payment of Escrowed Buyer Shares which the Escrow Agent delivers to
Buyer shall be valued based on the Agreed Value and shall be made by
calculating to the nearest whole share (and rounding up or down as the
case may be) equal to the amount to be paid.
(viii) The Escrow Agent shall hold the Escrowed Items until the
earlier to occur of (i) the Termination Date, or (ii) the occurrence
of events authorizing the Escrow Agent to make a payment of all or
part of the Escrowed Items as set forth above. If any Escrowed Items
are remaining after all payments pursuant to (S) 7 (f)(i)-(vii) above
(including all payments with respect to any Set-Aside have been made),
such remaining Escrowed Items shall be distributed to the FMI Parties,
each as his or its interest may appear.
(ix) Buyer agrees that all cash dividends or distributions in
respect of the Escrowed Buyer Shares shall be paid to the FMI Party as
his or its interest may appear as record owner of the Escrowed Buyer
Shares. Additional shares of Buyer common stock issued on or with
respect to the Escrowed Buyer Shares as a result of any stock split,
stock dividend or other capital adjustment to, or reclassification of,
or share exchange with, Escrowed Buyer Shares at the time of such
event, shall be issued in the name of the FMI Party holding the
Escrowed Buyer Shares with respect to which such additional shares
were offered and immediately delivered to the Escrow Agent, together
with stock powers endorsed in blank by the FMI Party holding such
Escrowed Buyer Shares, and shall constitute Escrowed Buyer Shares to
be held by the Escrow Agent under the terms of the Escrow Agreement.
Any other distributions in respect of the Escrowed Buyer Shares shall
be delivered to the FMI Parties, each as his or its interest may
appear as record owner of the Escrowed Buyer Shares.
(x) The Parties may not amend this (S) 7(f) without the
consent of the Escrow Agent. If, pursuant to this (S) 7(f), the
Escrow Agent delivers a certificate to Buyer representing a greater
number of Escrowed Buyer Shares than required to be distributed to
Buyer pursuant to this (S) 7(f), Buyer agrees to issue certificates in
appropriate share denominations, to be deposited in escrow as the
Escrowed Buyer Shares, and the FMI Parties agree to execute stock
powers endorsed in blank with respect to such issued certificates, in
exchange for such delivered certificate as necessary to effect
distributions and cash substitutions.
(xi) Any distribution by the Escrow Agent of the Escrowed Items
to Buyer hereunder shall be made pro rata in accordance with the
respective ownership of the FMI Parties.
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(g) Arbitration.
(i) Except as set forth below in (S) 7(g)(ii), all disputes under
this Article 7 shall be settled by arbitration in a location in the
State of New York mutually acceptable to the Parties before a single
arbitrator pursuant to the rules of the American Arbitration
Association. Arbitration may be commenced at any time by any of the
FMI Parties on the one hand or the Buyer on the other by giving
written notice to each other that such dispute has been referred to
arbitration under this (S) 7(g). The arbitrator shall be selected by
the joint agreement of the FMI Parties and Buyer, but if they do not
so agree within twenty (20) days after the date of receipt of the
notice referred to above, the selection shall be made pursuant to the
rules from the panels of arbitrators maintained by such Association.
Any award rendered by the arbitrator shall be conclusive and binding
upon the parties hereto; provided, however, that any such award shall
be accompanied by a written opinion of the arbitrator giving the
reason for the award. This provision for arbitration shall be
specifically enforceable by the parties and the decision of the
arbitrator in accordance herewith shall be final and binding and there
shall be no right of appeal therefrom. The arbitrator shall assess,
as part of his award to the prevailing party, all or such part as the
arbitrator deems proper of the arbitration expenses of the prevailing
party (including reasonable attorneys' fees) and of the arbitrator
against the party that is unsuccessful in such claim, defense or
objection. The arbitrator shall submit his award in writing to the
Parties hereto with a copy to the Escrow Agent.
(ii) Unless the Parties shall otherwise agree, any disputes
arising with respect to (S)(S) 6(d), (g) or (h) hereof shall be
settled by a court having jurisdiction thereof, and shall not be
decided by arbitration pursuant to (S) 7(g)(i).
(iii) Nothing contained in this (S)7(g) shall prevent the
Parties from settling any dispute by mutual agreement at any time.
(h) Determination of Adverse Consequences. The Parties shall take
into account the time cost of money (using the Applicable Rate as the
interest rate) in determining Adverse Consequences for purposes of this (S)
7; provided, however, that no interest shall accrue on the amount of an
Indemnification Claim until such amount (and the payment obligation
thereof) is finally determined hereunder.
(i) Insurance. Buyer agrees to avail itself of the benefits of any
then-existing insurance coverage for any matter that is the subject of an
Indemnification Claim hereunder, and any proceeds received by Buyer from
such insurance shall reduce, dollar for dollar, the amount of such
Indemnification Claim.
(j) Post-Closing. Following the Closing, the remedy of FMI, on the
one hand, and the Buyer on the other hand, with respect to any breach or
threatened breach of a representation, warranty or covenant contained
herein or with respect to any event,
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circumstance or condition occurring on or before the Closing shall be
limited to the enforcement of the indemnification obligations set forth in
(S) 7; provided, however, that nothing provided in this (S) 7(i) shall
limit the right of any Party to seek any equitable remedy available to
enforce his or its rights hereunder in accordance with (S) 8 (n).
8. MISCELLANEOUS.
(a) Press Releases and Public Announcements. Neither FMI nor any FMI
Stockholder shall issue any press release or make any public announcement
relating to the subject matter of this Agreement without the prior written
approval of the Buyer. Buyer, upon prior notice to FMI, may make any public
disclosure it believes in good faith is required or permitted by applicable
law or any listing or trading agreement concerning its publicly-traded
securities.
(b) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns, other than Holders to whom
registration rights have been assigned in accordance with (S) 6(e) hereof.
(c) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties
and supersedes any prior understandings, agreements, or representations by
or between the Parties, written or oral, to the extent they related in any
way to the subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this
Agreement or any of its rights, interests, or obligations hereunder without
the prior written approval of the other Party; provided, however, that the
Buyer may (i) assign any or all of its rights and interests hereunder to
one or more of its Affiliates and (ii) designate one or more of its
Affiliates to perform its obligations hereunder (in any or all of which
cases the Buyer nonetheless shall remain responsible for the performance of
all of its obligations hereunder).
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.
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(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and
then two business days after) it is sent by registered or certified mail,
return receipt requested, postage prepaid, and addressed to the intended
recipient as set forth below:
If to FMI and the FMI Stockholders:
Harry E. Pinkerton III Copy to: Nora Schneider
Fluid Metering, Inc. Choate, Hall & Stewart
P.O. Box 179 Exchange Place
29 Orchard Street 53 State Street
Oyster Bay, New York 11771 Boston, MA 02109
(516) 922-6050 (617) 248-5000
and
Dennis T. Pinkerton
501 Bay Fifth Street
West Islip, New York 11795
(516) 587-3029
If to Buyer:
Derrick N. Key Copy to: Shanler D. Cronk, Esq.
Roper Industries, Inc. Roper Industries, Inc.
160 Ben Burton Road 160 Ben Burton Road
Bogart, Georgia 30622 Bogart, Georgia 30622
(706) 369-7170 (706) 369-7170
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth
above using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail, or electronic
mail), but no such notice, request, demand, claim, or other communication
shall be deemed to have been duly given unless and until it actually is
received by the intended recipient. Any Party may change the address to
which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Party notice in the
manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the State of New York without
giving effect to any choice or conflict of law provision or rule (whether
of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New
York.
(i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
each of the
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Buyer, FMI and the FMI Stockholders. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or
subsequent default, misrepresentation, or breach of warranty or covenant
hereunder or affect in any way any rights arising by virtue of any prior or
subsequent such occurrence.
(j) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision
in any other situation or in any other jurisdiction.
(k) Expenses. Buyer, FMI and each FMI Stockholder will bear its (his)
own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby.
(l) Construction. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.
The word "including" shall mean including without limitation. Nothing in
the FMI Disclosure Schedule or Buyer Disclosure Schedule shall be deemed
adequate to disclose an exception to a representation or warranty made
herein unless the disclosure schedule identifies the exception with
reasonable particularity and describes the relevant facts in reasonable
detail. Without limiting the generality of the foregoing, the mere listing
(or inclusion of a copy) of a document or other item shall not be deemed
adequate to disclose an exception to a representation or warranty, made
herein (unless the representation or warranty has to do with the existence
of the document or other item itself). The Parties intend that each
representation, warranty, and covenant contained herein in any respect, the
fact that there exists another representation, warranty or covenant
relating to the same subject matter (regardless of the relative levels of
specificity) which the Party has not breached shall not detract from or
mitigate the fact that the Party is in breach of the first representation,
warranty, or covenant.
(m) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.
(n) Specific Performance. Each of the Parties acknowledges and agrees
that the other Party would be damaged irreparably in the event any of the
provisions of (S)(S) 6(d), (g) and (h) and (S) 7(g) of this Agreement are
not performed in accordance with their specific terms or otherwise are
breached. Accordingly, each of the Parties agrees that the other Party
shall be entitled to an injunction or injunctions to prevent breaches of
(S)(S) 6(d), (g), (h) and (S) 7(g) of this Agreement and to enforce
specifically such provisions hereof in any action instituted in any court
of the United States or any state thereof having, in accordance with the
terms of this Agreement, jurisdiction over the Parties and the matter, in
addition to any other remedy to which it may be entitled, at law or in
equity.
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(o) Tax Matters. Buyer and FMI will provide each other with such
cooperation and information as either of them may reasonably require of the
other in connection with the filing of any Tax Return, including Tax
Returns relating to the application of the successor employer rules for
payroll Tax purposes contained in Code Sections 3121(a)(1) and 3306(b)(1),
the determination of a liability for Taxes or a right to a refund for
Taxes, or the preparation for litigation or investigation of any claim for
Taxes or a right to a refund for Taxes, or the preparation for cooperation
and information shall include all relevant Tax Returns, and other documents
and records, or portions thereof relating to or necessary in connection
with the preparation of records, or portions thereof relating to or
necessary in connection with the preparation of such Tax Returns or other
determination of Tax liability. Each Party shall retain all Tax Returns,
schedules, workpapers, and all other materials, records or documents until
the expiration of the statute of limitations for the taxable years to which
such Tax Returns and other documents relate. After expiration of the
statute of limitations, such party shall notify the other party in writing
that it desires to dispose of or destroy the Tax Returns and other
documents and shall provide such other party with the right for thirty (30)
days after the tendering of such notice to copy or take possession of such
Tax Returns and other documents. Any information obtained under this
provision shall be kept confidential by the parties, except as may be
necessary in connection with the filing of such Tax Returns.
(p) Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in New York in any
action or proceeding arising out of or relating to (S)(S) 6(d), (g) or (h)
of this Agreement or the enforcement of any arbitration award pursuant to
(S) 7(g) and agrees that all claims in respect of the action or proceeding
may be heard and determined in any such court. Each Party also agrees not
to bring any action or proceeding arising out of or relating to this
Agreement in any other court. Each of the Parties waives any defense of
inconvenient forum to the maintenance of any action or proceeding so
brought and waives any bond, surety, or other security that might be
required of any other Party with respect thereto. Each Party appoints The
Prentice-Hall Corporation System, Inc. (the "Process Agent") as his or its
agent to receive on is or its behalf service of copies of the summons and
complaint and any other process that might be served in the action or
proceeding. Any Party may make service on any other Party by sending or
delivering a copy of the process (i) to the Party to be served at the
address and in the manner provided for the giving of notices in (S) 8(g)
above or (ii) to the Party to be served in care of the Process Agent at the
address and in the manner provided for the giving of notices in (S) 8(g)
above. Each Party agrees that a final judgment in any action or proceeding
so brought shall be conclusive and may be enforced by suit on the judgment
or in any other manner provided by law or in equity.
(q) Transfer Laws. The Buyer acknowledges that FMI will not comply
with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
BUYER
Roper Industries, Inc.
By: /s/ A. DONALD O'STEEN
------------------------------------------
A. Donald O'Steen
Vice President and Chief Financial Officer
FMI
Fluid Metering, Inc.
By: /s/ HARRY E. PINKERTON III
-------------------------------------------
Harry E. Pinkerton III
President
For Purposes of Articles 6, 7, and 8 Only:
FMI STOCKHOLDERS:
/s/ HARRY E. PINKERTON III
----------------------------------------------
Harry E. Pinkerton III
/s/ DENNIS T. PINKERTON
----------------------------------------------
Dennis T. Pinkerton
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RESTATED CERTIFICATE OF INCORPORATION
OF
ROPER INDUSTRIES, INC.
ADOPTED APRIL 1996
This Restated Certificate of Incorporation was duly adopted by unanimous
written consent of the Board of Directors of Roper Industries, Inc. in
accordance with the provisions of Section 245 of the General Corporation Law of
the State of Delaware. The Corporation was originally formed under the name
Dexter Holdings, Inc. pursuant to an original Certificate of Incorporation filed
with the Secretary of State of the State of Delaware on December 17, 1981. The
following Restated Certificate of Incorporation restates and integrates the
original Certificate of Incorporation and all amendments filed with the
Secretary of State of Delaware prior to April 11, 1996.
1. The name of the corporation is:
ROPER INDUSTRIES, INC.
2. The address of the corporation's registered office in the State of
Delaware is 1013 Centre Road in the City of Wilmington, County of New Castle,
and the name of the registered agent thereat is The Prentice-Hall Corporation
System, Inc.
3. The nature of the business of the corporation and the purposes to be
conducted or promoted by it are as follows:
(a) To design, manufacture, purchase, lease, distribute, install, repair,
service, sell, import, export and otherwise deal in or with any and all kinds of
positive displacement rotary and centrifugal pumps and industrial machinery, and
all related supplies, components, equipment and products;
(b) To acquire all or any part of the stock or other securities, goodwill,
rights, property or assets of any kind and to undertake or assume all or any
part of the obligations or liabilities of any corporation, association,
partnership, syndicate, entity, or person located in or
<PAGE>
organized under the laws of any state, territory or possession of the United
States of America or any foreign country, and to pay for the same in cash,
stock, bonds, debentures, notes, or other securities, secured or unsecured, of
this or any other corporation or otherwise in any manner permitted by law, and
to conduct in any lawful manner all or any part of any business so acquired; and
(c) To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.
In addition to the general powers conferred by the laws of the State of
Delaware and the purposes hereinbefore set forth, the corporation shall also
have the following powers:
(d) To issue any of the shares of its capital stock of any class or series
thereof now or hereafter authorized for such consideration as may be permitted
by law and upon such terms and conditions as the Board of Directors may deem
proper in its absolute discretion, and the stock so issued shall be fully paid
and not liable to any further call or payment thereof; in the absence of actual
fraud in the transaction, the judgment of the Board of Directors as to the value
of the property or other consideration received for the shares of capital stock
shall be conclusive; and
(e) To borrow money, make, issue and sell, pledge, or otherwise dispose of
checks, drafts, bills of exchange, documents of title, bonds, debentures, notes
and other evidence of indebtedness of all kinds, whether unsecured or secured by
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mortgage, pledge or otherwise of any or all of the assets of the corporation,
and without limit as to amount; and generally to mortgage, pledge or sell any
stock or other securities or other property held by it, all on such terms and
conditions as the Board of Directors;
4. A. The total number of shares of stock which the corporation shall
have authority to issue is twenty-six million (26,000,000) shares, divided into
two (2) classes as follows:
(i) twenty-five million (25,000,000) shares, each to be of the
par value of one cent ($.01), and to be designated as Common Stock; and
(ii) one million (1,000,000) shares, each to be of the par value
of one cent ($.01), and to be designated as Preferred Stock.
B. (i) Each outstanding share of Common Stock shall entitle
the holder thereof to five (5) votes on each matter properly submitted to
the stockholders of the corporation for their vote, waiver, release or
other action; except that no holder of outstanding shares of Common Stock
shall be entitled to exercise more than one (1) vote on any such matter in
respect of any share of Common Stock with respect to which there has been
change in beneficial ownership during the four (4) years immediately
preceding the date on which a determination is made of the stockholders of
the corporation who are entitled to vote or to take any other action.
(ii) A change in beneficial ownership of an outstanding share of
Common Stock shall be deemed to have occurred whenever a change occurs in
any person or persons who, directly or indirectly, through any contract,
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<PAGE>
agreement, arrangement, understanding, relationship or otherwise has or
shares any of the following:
(a) voting power, which includes, without limitation, the
power to vote or to direct the voting power of such share of Common
Stock;
(b) investment power, which includes, without limitation,
the power to direct the sale or other disposition of such shares of
Common Stock;
(c) the right to receive or to retain the proceeds of any
sale or other disposition of such share of Common Stock; or
(d) the right to receive or to retain any distributions,
including, without limitation, cash dividends, in respect of such
share of Common Stock.
(iii) Without limiting the generality of the foregoing
section (ii) of this subparagraph B, the following events or
conditions shall be deemed to involve a change in beneficial ownership
of a share of Common Stock:
(a) in the absence of proof to the contrary provided in
accordance with the procedures set forth in section (v) of this
subparagraph B, a change in beneficial ownership shall be deemed to
have occurred (1) whenever an outstanding share of Common Stock is
transferred of record into the name of any other person and (2) upon
the issuance of shares in a public offering;
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(b) in the case of an outstanding share of Common Stock held
of record in the name of a corporation, general partnership, limited
partnership, voting trustee, bank, trust company, broker, nominee or
clearing agency, if it has not been established pursuant to the
procedures set forth in section (v) of this subparagraph B that there
has been no change in the person or persons who or that direct the
exercise of the rights referred to in clauses (ii)(a) through (ii)(d),
inclusive, of this subparagraph B with respect to such outstanding
share of Common Stock during the period of four (4) years immediately
preceding the date on which a determination is made of the
stockholders of the corporation entitled to vote or to take any other
action (or since February 12, 1992 for any period ending on or before
February 12, 1992), then a change in beneficial ownership of such
share of Common Stock shall be deemed to have occurred during such
period;
(c) in the case of an outstanding share of Common Stock held
of record in the name of any person as a trustee, agent, guardian or
custodian under the Uniform Gifts to Minors Act as in effect in any
jurisdiction, a change in beneficial ownership shall be deemed to have
occurred whenever there is a change in the beneficiary of such trust,
the principal of such agent, the ward of such guardian, the minor for
whom such custodian is acting or in such trustee, agent, guardian or
custodian; or
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(d) in the case of outstanding shares of Common Stock
beneficially owned by a person or group of persons who, after
acquiring, directly or indirectly, the beneficial ownership of five
percent (5%) of the outstanding shares of Common Stock, fails to
notify the corporation of such ownership within ten (10) days after
such acquisition, a change in beneficial ownership of such shares of
Common Stock shall be deemed to occur on each day while such failure
continues.
(iv) Notwithstanding any other provision in this subparagraph B
to the contrary, no change in beneficial ownership of an outstanding share
of Common Stock shall be deemed to have occurred solely as a result of:
(a) any event that occurred prior to February 12, 1992 or
pursuant to the terms of any contract (other than a contract for the
purchase and sale of shares of Common Stock contemplating prompt
settlement), including contracts providing for options, rights of
first refusal and similar arrangements, in existence on February 12,
1992 and to which any holder of shares of Common Stock is a party;
provided, however, that any exercise by an officer or employee of the
-------- -------
corporation or any subsidiary of the corporation of an option to
purchase Common Stock after February 12, 1992 shall, notwithstanding
the foregoing and clause (iv)(f) hereof, be deemed a change in
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<PAGE>
beneficial ownership irrespective of when that option was granted to
said officer or employee;
(b) any transfer of any interest in an outstanding share of
Common Stock pursuant to a bequest or inheritance, by operation of law
upon the death of any individual, or by any other transfer without
valuable consideration, including, without limitation, a gift that is
made in good faith and not for the purpose of circumventing the
provisions of this Article Fourth;
(c) any changes in the beneficiary of any trust, or any
distribution of an outstanding share of Common Stock from trust, by
reason of the birth, death, marriage or divorce of any natural person,
the adoption of any natural person prior to age eighteen (18) or the
passage of a given period of time or the attainment by any natural
person of a specific age, or the creation or termination of any
guardianship or custodial arrangement;
(d) any appointment of a successor trustee, agent, guardian
or custodian with respect to an outstanding share of Common Stock if
neither such successor has nor its predecessor had the power to vote
or to dispose of such share of Common Stock without further
instructions from others;
(e) any change in the person to whom dividends or other
distributions in respect of an outstanding share of Common Stock are
to be paid pursuant to the issuance or modification of a revocable
dividend payment order;
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<PAGE>
(f) any issuance of a share of Common Stock by the
corporation or any transfer by the corporation of a share of Common
Stock held in treasury other than in a public offering thereof, unless
otherwise determined by the Board of Directors at the time of
authorizing such issuance or transfer;
(g) any giving of a proxy in connection with a solicitation
of proxies subject to the provisions of Section 14 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations
thereunder promulgated;
(h) any transfer, whether or not with consideration, among
individuals related or formerly related by blood, marriage or adoption
("relatives") or between a relative and any person controlled by one
or more relatives where the principal purpose for the transfer is to
further the estate tax planning objectives of the transferor or of
relatives of the transferor:
(i) any appointment of a successor trustee as a result of
the death of the predecessor trustee (which predecessor trustee shall
have been a natural person);
(j) any appointment of a successor trustee who or which was
specifically named in a trust instrument prior to February 12, 1992;
or
-8-
<PAGE>
(k) any appointment of a successor trustee as a result of
the resignation, removal or failure to qualify of a predecessor
trustee or as a result of mandatory retirement pursuant to the express
terms of a trust instrument; provided, that less than fifty percent
--------
(50%) of the trustees administering any single trust will have changed
(including in such percentage the appointment of the successor
trustee) during the four (4) year period preceding the appointment of
such successor trustee.
(v) For purposes of this subparagraph B, all determinations
concerning changes in beneficial ownership, or the absence of any such
change, shall be made by the Board of Directors of the corporation or, at
any time when the corporation employs a transfer agent with respect to the
shares of Common Stock, at the corporation's request, by such transfer
agent on the corporation's behalf. Written procedures designed to
facilitate such determinations shall be established and may be amended,
from time to time, by the Board of Directors. Such procedures shall
provide, among other things, the manner of proof of facts that will be
accepted and the frequency with which such proof may be required to be
renewed. The corporation and any transfer agent shall be entitled to rely
on any and all information concerning beneficial ownership of the
outstanding shares of Common Stock coming to their attention from any
source and in any manner reasonably deemed by them to be reliable, but
neither the corporation nor any transfer agent shall be charged with any
other knowledge concerning the beneficial ownership of outstanding shares
of Common Stock.
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<PAGE>
(vi) In the event of any stock split or stock dividend with
respect to the outstanding shares of Common Stock, each share of Common
Stock acquired by reason of such split or dividend shall be deemed to have
been beneficially owned by the same person from the same date as that on
which beneficial ownership of the outstanding share or shares of Common
Stock, with respect to which such share of Common Stock was distributed,
was acquired.
(vii) Each outstanding share of Common Stock, whether at any
particular time the holder thereof is entitled to exercise five (5) votes
or one (1) vote, shall be identical to all other shares of Common Stock in
all respects, and together the outstanding shares of Common Stock shall
constitute a single class of shares of the corporation.
C. Authority is hereby granted to the Board of Directors of the
corporation to adopt, from time to time, a resolution or resolutions
providing for the issuance of shares of Preferred Stock in one or more
series; and the Board of Directors is hereby expressly granted and vested
with the authority to determine and to fix with respect to each series of
Preferred Stock any or all of the designations and the powers, preferences
and rights, and the qualifications, limitations or restrictions of such
Preferred Stock, including, but not limited to, the determination of the
following:
(i) the distinctive designation of such series of Preferred
Stock and the number of shares which shall constitute such series,
which number may be increased (except where otherwise provided by the
Board of Directors) or decreased (but not below the number of shares
thereof then outstanding) from time to time by the Board of Directors;
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(ii) the rate of dividends, if any, payable on the shares of
such series of Preferred Stock, the conditions upon which and the
dates when such dividends shall be payable, whether such dividends
shall be cumulative (and, if so, from which date or dates), and
whether payable in preference to dividends payable on any other class
or classes of stock or on any other series of Preferred Stock;
(iii) whether or not the shares or such series of Preferred
Stock shall have voting powers, and, if voting powers are granted, the
extent of such voting powers;
(iv) whether or not the shares of such series of Preferred
Stock shall be redeemable and, if so, the terms and conditions of such
redemption, including, but not limited to, the date or dates upon or
after which they shall be redeemable and the amount per share payable
in case of redemption, which amount may vary under different
conditions and at different redemption dates;
(v) whether or not the shares of such series of Preferred
Stock shall be entitled to the benefit of a retirement fund or sinking
fund, and, if so, the terms and conditions of such fund;
(vi) whether or not the shares of such series of Preferred
Stock shall be convertible into or exchangeable for shares of any
other class or classes of stock of the corporation or of any other
series of Preferred Stock and, if made so convertible or exchangeable,
the time or times, the conversion price or prices, or the rate or
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rates of exchange, and the adjustments thereof, it any, at which such
conversion or exchange may be made, and any other terms and conditions
of such conversion or exchange;
(vii) the rights of the holders of the shares of such
series of Preferred Stock upon the voluntary or involuntary
liquidation, dissolution or winding-up, or merger, consolidation or
distribution or sales of assets of the corporation;
(viii) the conditions and restrictions, if any, on the
payment of dividends or on the making of other distributions on, or
the purchase, redemption or other acquisition by the corporation of
the Roper Industries, Inc. Common Stock or of any other class of stock
or other series of Preferred Stock of the corporation ranking junior
to the shares of such series of Preferred Stock as to dividends or on
liquidation;
(ix) the conditions and restrictions, if any, on the
creation of indebtedness of the corporation or any subsidiary or on
the authorization or issue of any additional stock of the corporation
ranking on a parity with or prior to the shares of such series of
Preferred Stock as to dividends or on liquidation; and,
(x) any other preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof.
D. Subject to the foregoing, the authorized shares of stock of
any class of the corporation may be issued by the corporation from time to time
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and for such consideration, not less than the par value thereof, and upon such
terms as may be fixed from time to time by the Board of Directors, and any and
all shares so issued, the full consideration for which shall have been paid or
delivered, shall be deemed fully-paid and non-assessable stock and shall not be
liable to any further call or assessment thereon.
E. The holders of stock, as such, of any class of the
corporation shall have no preemptive or preferential right to purchase or
subscribe for any part of the unissued capital stock of the corporation of any
class or for any new issue of stock of any class, whether now or hereafter
authorized or issued, or to purchase or subscribe for any bonds or other
obligations, whether or not convertible into stock of any class of the
corporation, now or hereafter authorized or issued other than such, if any, as
the Board of Directors of the corporation from time to time may fix pursuant to
the authority hereby conferred by the Certificate of Incorporation of the
corporation; and the Board of Directors may issue stock of the corporation, or
securities or obligations convertible into stock, without offering such issue of
stock or such securities or obligations, either in whole or in part, to the
stockholders of the corporation.
F. Subject to any limitations contained in the resolution or
resolutions providing for the issue of any series of Preferred Stock, the
holders of Common Stock shall be entitled to receive, when and as declared by
the Board of Directors out of the assets of the corporation which are by law
available therefor, dividends payable in cash, in property or in shares of
Common Stock. No dividends, other than dividends payable only in shares of
Common Stock of the corporation, shall be paid on Common Stock if cash dividends
in full to which all outstanding shares of Preferred Stock of all series shall
then be entitled for the then current dividend period and (where such dividends
are cumulative) for all past dividend periods shall not have been paid or
declared and set apart in full.
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<PAGE>
G. In the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the corporation, the holders of Common Stock shall
be entitled, after payment or provision for payment of the debts and other
liabilities of the corporation and of the amounts to which the holders of the
Preferred Stock shall be entitled, to share ratably in the remaining net assets
of the corporation. Neither a consolidation nor a merger of the corporation
with or into any other corporation; nor a merger of any other corporation with
or into the corporation; nor a reorganization of the corporation; nor the
purchase or redemption of all or part of the outstanding shares of stock of any
class or classes of the corporation; nor the sale or transfer of the property
and business of the corporation as, or substantially as, an entity shall be
considered a liquidation, dissolution or winding-up of the corporation for
purposes of the preceding sentence.
Pursuant to the authority conferred upon the Board of Directors by this
Article 4, the Certificate of Designation, Preferences and Rights of Series A
Preferred Stock set forth as Exhibit A hereto was duly adopted by said Board of
Directors on January 8, 1996 and filed with the Secretary of State of the State
of Delaware on January 10, 1996.
5. The Board of Directors shall have the power (i) to make, alter or
amend the By-laws, subject only to such limitations, if any, as the By-laws of
the corporation may from time to time impose; (ii) from time to time to fix and
determine and to vary the amount to be reserved as working capital of the
corporation, and, before the payment of any dividends or making any distribution
or profits, to set aside out of the surplus or net profits of the corporation
such sum or sums as the Board may from time to time in its absolute discretion
think proper either as additional working capital or as a reserve fund to meet
contingencies, or for the repairing or maintaining of any property of the
corporation, or for such other corporate purposes as the Board of Directors
shall think conducive to the interests of the corporation, subject only to such
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limitations, if any, as the By-laws of the corporation may from time to time
impose; (iii) from time to time, to the extent now or hereafter permitted by the
laws of Delaware, to sell, lease, exchange or otherwise dispose of any part of
the property and assets of the corporation which the Board of Directors deems it
expedient and for the best interests of the corporation to dispose of, or
disadvantageous to continue to own, without assent of the stockholders by vote
or otherwise; (iv) to issue or cause to be issued from time to time all or any
part of the authorized capital stock of the corporation on such terms and for
such consideration as the Board of Directors may determine in its discretion
without obtaining the approval of the holders of any of the then outstanding
capital stock; (v) pursuant to the affirmative vote of the holders of a majority
of the shares of stock issued and outstanding having voting power given at a
stockholders' meeting duly called for that purpose, to sell, lease, exchange, or
otherwise dispose of all or substantially all of the property and assets of the
corporation, including its goodwill and its corporate franchises, upon such
terms and conditions as the Board of Directors deems expedient and for the best
interest of the corporation; (vi) from time to time to authorize the corporation
to borrow money or to pledge the credit of the corporation by guaranty or
otherwise, and to issue, sell, pledge, or otherwise deliver or dispose of stock
of this or any other corporation, bonds, debentures, notes or other evidences of
indebtedness, whether unsecured or secured by mortgage, pledge or other lien of
any or all of the assets of the corporation, all on such terms and conditions as
the Board of Directors may determine or authorize in its discretion without
obtaining the approval of any of the holders of any of the then outstanding
capital stock of the corporation and; (vii) to exercise any and all other powers
conferred by law or by this certificate or which may be
conferred upon the Board of Directors by the corporation through appropriate By-
law provisions or otherwise.
6. The Board of Directors, by resolution or resolutions duly adopted
by it, may designate one or more committees, each committee to consist of one or
more directors of the corporation, which, to the extent provided in the
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<PAGE>
resolution or resolutions or in the By-laws of the corporation, but subject to
any limitations specifically imposed by the laws of Delaware, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the corporation and may authorize the
seal of the corporation to be affixed to all papers which may require it.
7. No contract, act or transaction of the corporation with any
person, firm or corporation shall be affected or invalidated by reason of the
fact that any director or officer of the corporation is a party to or is
interested in such contract, act or transaction, or in any way connected with
such person, firm or corporation, provided that such interest or connection
shall have been disclosed or known to the corporation. Any director of the
corporation having any such interest or connection may, nevertheless, be counted
in determining the existence of a quorum at any meeting of the Board of
Directors or a committee which shall authorize any such contract, act or
transaction and may vote thereon with full force and effect. No such officer or
director nor any such person, firm or corporation in or with which such director
or officer is connected shall be liable to account to the corporation for any
profit realized from or through any such contract, act or transaction.
8. (i) Except as otherwise provided in this Certificate of
Incorporation or the General Corporation law of the State of Delaware, the
business and affairs of the corporation shall be managed by or under the
direction of a Board of Directors consisting of such number of members as may be
fixed, subject to the rights of the holders of any series of preferred stock
then outstanding, from time to time, by the affirmative vote of the majority of
the members of the Board of Directors of the corporation, but not less than the
minimum number authorized by the State of Delaware. The directors shall be
divided into three classes, as nearly equal in number as possible. The
directors serving at such time shall designate individual directors as the
initial members of such classes, with the term of office of the first class to
expire at the 1997 Annual Meeting of Stockholders, the term of office of the
second class to expire at the 1998 Annual Meeting of Stockholders and the
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<PAGE>
term of office of the third class to expire at the 1999 Annual Meeting of
Stockholders. At each Annual Meeting of Stockholders following the initial
classification and election, directors elected to succeed those directors whose
terms expire shall be elected for a term of office to expire at the third
succeeding Annual Meeting of Stockholders after their election.
(ii) Subject to the rights of the holders of any series of preferred
stock then outstanding, any director, or the entire Board of Directors, may be
removed from office at any time, but only for cause and only by the affirmative
vote of the holders of at least a majority of the voting power of all of the
shares of the corporation entitled to vote for the election of directors. For
purposes of this Article 8, cause for removal shall be construed to exist only
if the director whose removal is proposed has been convicted of a felony by a
court of competent jurisdiction or has been adjudged by a court of competent
jurisdiction to be liable for negligence or misconduct in the performance of his
duty to the corporation in a matter of substantial importance to the
corporation.
(iii) Subject to the rights of the holders of any series of preferred
stock then outstanding, newly created directorships resulting from any increase
in the authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause shall be filled by a majority vote of the directors then
in office, and directors so chosen shall hold office for a term expiring at the
Annual Meeting of Stockholders at which the term of the class to which they have
been elected expires.
9. The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation or any
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amendment thereto in the manner now or hereafter prescribed by the laws of the
State of Delaware, and all rights conferred on the stockholders hereunder are
granted subject to that reservation.
10. The duration of the corporation shall be perpetual.
11. A director of the corporation shall not be personally liable to
the corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law as the same exists or hereafter may be amended or (iv) for any transaction
from which the director derived an improper personal benefit. If the Delaware
General Corporation Law hereafter is amended to authorize the further
elimination or limitation of the liability of directors, then, in addition to
the limitation on personal liability provided herein, the liability of a
director of the corporation shall be limited to the fullest extent permitted by
the amended Delaware General Corporation Law. Any repeal or modification of this
paragraph by the stockholders of the corporation shall be prospective only, and
shall not adversely affect any limitation on the personal liability of a
director of the corporation existing at the time of such repeal or modification.
12. No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the corporation may be taken
without a meeting, and the power of stockholders of the corporation to take any
such action by means of a consent or consents in writing, without a meeting, is
specifically denied.
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IN WITNESS WHEREOF, Roper Industries, Inc. has caused this Restated
Certificate of Incorporation to be signed by Derrick N. Key, its President, and
John N. Marden, its Secretary, this 11th day of April 1996.
/s/ Derrick N. Key
-------------------------
Derrick N. Key,
President
/s/ John N. Marden
- -------------------------
John N. Marden, Secretary
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<PAGE>
EXHIBIT A
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A PREFERRED STOCK
of
ROPER INDUSTRIES, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Derrick N. Key, President, and John N. Marden, Secretary, of Roper
Industries, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with the provisions of
Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation of the said Corporation, the said Board of
Directors on January 8, 1996, adopted the following resolution creating a series
of twenty five thousand (25,000) shares of Preferred Stock designated as Series
A Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation by the Certificate of Incorporation, the
Board of Directors does hereby provide for the issue of a series of
Preferred Stock, $.01 par value, of the Corporation, to be designated
"Series A Preferred Stock" (hereinafter referred to as the "Series A
Preferred Stock"), and does hereby fix and herein state and express
the designations, powers, preferences and relative and other special
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rights and the qualifications, limitations and restrictions thereof,
as follows:
Section 1. Designation and Amount. The shares of such series shall
----------------------
be designated as "Series A Preferred Stock" and the number of shares initially
constituting such series shall be twenty five thousand (25,000); provided,
however, that, if more than a total of twenty five thousand (25,000) shares of
Series A Preferred Stock shall be issuable upon the exercise of the Rights (the
"Rights") issued pursuant to the Rights Agreement dated as of January
8, 1996 between the Corporation and SunTrust Bank, Atlanta, as Rights Agent, the
Board of Directors of the Corporation, pursuant to Section 151(g) of the General
Corporation Law of the State of Delaware, shall direct by resolution or
resolutions that a certificate be properly executed, acknowledged, filed and
recorded, in accordance with the provisions of Section 103 thereof, providing
for the total number of shares of Series A Preferred Stock authorized to be
issued to be increased (to the extent the Certificate of Incorporation then
permits) to the largest number of whole shares (rounded up to the nearest whole
number) issuable upon exercise of the Rights.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the last day of each fiscal quarter in
each year or on such dates as the Board of Directors shall approve (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Preferred Stock, in an amount per
share of Series A Preferred Stock (rounded to the nearest cent) equal to the
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greater of (i) $.01 or (ii) subject to the provision for adjustment hereinafter
set forth, one thousand (1,000) times the aggregate per share amount of all cash
dividends, and one thousand (1,000) times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock, par value $.01 per share, of the Corporation (the "Common Stock")
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Preferred Stock. If the
Corporation shall at any time after January 8, 1996 (the "Rights Dividend
Declaration Date") (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock into a larger number
of shares, or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, if no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $.01 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
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(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date fixed
for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
-------------
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to one
thousand (1000) votes on all matters submitted to a vote of the shareholders of
the Corporation. If the Corporation shall at any time after the Rights Dividend
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock into a larger number
of shares, or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the number of votes per share to which holders
of shares of Series A Preferred Stock were entitled immediately prior to such
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event shall be adjusted by multiplying such number by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
shareholders of the Corporation.
(C) (i) If at any time dividends on any Series A Preferred
Stock shall be in arrears in an amount equal to six (6) quarterly dividends
thereon, the occurrence of such contingency shall mark the beginning of a period
(herein called a "default period") which shall extend until such time when all
accrued and unpaid dividends for all previous quarterly dividend periods and for
the current quarterly dividend period on all shares of Series A Preferred Stock
then outstanding shall have been declared and paid or set apart for payment.
During each default period, all holders of Preferred Stock (including holders of
the Series A Preferred Stock) with dividends in arrears in an amount equal to
six (6) quarterly dividends thereon, voting as a class, irrespective of series,
shall have the right to elect two (2) Directors.
(ii) During any default period, such voting right of the holders of
Series A Preferred Stock may be exercised initially at a special meeting called
pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of
shareholders, and thereafter at annual meetings of shareholders, provided that
neither such voting right nor the right of the holders of any other series of
Preferred Stock, if any, to increase, in certain cases, the authorized number of
Directors shall be exercised unless the holders of ten percent (10%) in number
of shares of Preferred Stock
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outstanding shall be present in person or by proxy. The absence of a quorum of
the holders of Common Stock shall not affect the exercise by the holders of
Preferred Stock of such voting right. At any meeting at which the holders of
Preferred Stock shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a class, to elect Directors
to fill such vacancies, if any, in the Board of Directors as may then exist up
to two (2) Directors or, if such right is exercised at an annual meeting, to
elect two (2) Directors. If the number which may be so elected at any special
meeting does not amount to two (2) Directors, the holders of the Preferred Stock
shall have the right to make such increase in the number of Directors as shall
be necessary to permit the election by them of the two (2) Directors. After the
holders of the Preferred Stock shall have exercised their right to elect
Directors in any default period and during the continuance of such period, the
number of Directors shall not be increased or decreased except by vote of the
holders of Preferred Stock as herein provided or pursuant to the rights of any
equity securities ranking senior to or pari passu with the Series A Preferred
---- -----
Stock.
(iii) Unless the holders of Preferred Stock shall, during an existing
default period, have previously exercised their right to elect Directors, the
Board of Directors may order, or any shareholder or shareholders owning in the
aggregate not less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request, the calling of
special meeting of the holders of Preferred Stock, which meeting shall thereupon
be called by the President, a Vice-President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which holders
of Preferred Stock are entitled to vote pursuant to this paragraph (C)(iii)
shall be given to each holder of record of Preferred Stock by mailing a copy of
such notice to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than twenty
(20) days and not later than sixty (60) days after such order or request or in
default of the calling of such meeting within sixty (60) days after such order
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or request, such meeting may be called on similar notice by any shareholder or
shareholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding. Notwithstanding the
provisions of this paragraph (C)(iii), no such special meeting shall be called
during the period within sixty (60) days immediately preceding the date fixed
for the next annual meeting of the shareholders.
(iv) In any default period, the holders of Common Stock, and other
classes of stock of the Corporation if applicable, shall continue to be entitled
to elect the whole number of Directors until the holders of Preferred Stock
shall have exercised their right to elect two (2) Directors voting as a class,
after the exercise of which right (x) the Directors so elected by the holders of
Preferred Stock shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in paragraph
(C)(ii) of this Section 3) be filled by vote of a majority of the remaining
Directors theretofore elected by the holders of the class of stock which elected
the Director whose office shall have become vacant. References in this
paragraph (C) to Directors elected by the holders of a particular class of stock
shall include Directors elected by such Directors to fill vacancies as provided
in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right
of the holders of Preferred Stock as a class to elect Directors shall cease, (y)
the term of any Directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of Directors shall be such number as may be
provided for in the Certificate of Incorporation or By-laws irrespective of any
increase made pursuant to the provisions of paragraph (C)(ii) of this Section 3
(such number being subject, however, to change thereafter in any manner provided
by law or in the Certificate of Incorporation or By-laws). Any vacancies in the
Board of Directors effected by the provisions of clauses (y) and (z) in the
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preceding sentence may be filled by a majority of the remaining Directors, even
though less than a quorum.
(D) Except as set forth herein, holders of Series A Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
--------------------
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except dividends paid ratably
on the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
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<PAGE>
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, provided that the corporation may
at any time redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred
Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or classes.
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<PAGE>
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
-----------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
--------------------------------------
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall have received
$10 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment (the
"Series A Liquidation Preference"). Following the payment of the full amount of
the Series A Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series A Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) one thousand (1000) (as appropriately adjusted as
set forth in subparagraph C below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the
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<PAGE>
Common Stock) (such number in clause (ii), the "Adjustment Number"). Following
the payment of the full amount of the Series A Liquidation Preference and the
Common Adjustment in respect of all outstanding shares of Series A Preferred
Stock and Common Stock, respectively, holders of Series A Preferred Stock and
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of preferred stock, if any,
which rank on a parity with the Series A Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the event, however,
that there are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Stock.
(C) If the Corporation shall at any time after the Rights Dividend
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock into a larger number
of shares, or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the Adjustment Number in effect immediately
prior to such event shall be adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. If the Corporation shall
---------------------------
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
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<PAGE>
securities, cash and/or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to one thousand (1000) times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time
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<PAGE>
after the Rights Dividend Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock into a larger number of shares, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 8. No Redemption. The shares of Series A Preferred Stock
-------------
shall not be redeemable.
Section 9. Ranking. The Series A Preferred Stock shall rank junior
-------
to all other series of the Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
Section 10. Amendment. The Certificate of Incorporation of the
---------
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series A
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of a majority or more of the outstanding shares of Series A
Preferred Stock, voting separately as a class.
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<PAGE>
Section 11. Fractional Shares. Series A Preferred Stock may be
-----------------
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury as of the 8th
day of January.
/s/ Derrick N. Key
------------------------------
Derrick N. Key,
President
Attest:
/s/ John N. Marden
- -------------------------
John N. Marden, Secretary
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<PAGE>
EXHIBIT 3ii
AMENDED AND RESTATED
BY-LAWS
ROPER INDUSTRIES, INC.
ARTICLE I
---------
Stockholders' Meetings
----------------------
1. Places of meetings. All meetings of stockholders shall be held at such
------------------
place or places in or outside of Delaware as the board of directors may from
time to time determine or as may be designated in the notice of meeting or
waiver of notice thereof, subject to any provisions of the laws of Delaware.
2. Annual meetings. Unless otherwise determined from time to time by the
---------------
board of directors, the annual meeting of stockholders shall be held each year
for the election of directors and the transaction of such other business as may
properly come before the meeting on the last Wednesday in the fourth month
following the close of the fiscal year commencing at some time between 10 A.M.
and 3 P.M., if not a legal holiday and if a legal holiday, then on the day
following at the same time. If the annual meeting is not held on the date
designated, it may be held as soon thereafter as convenient and shall be called
the annual meeting. Written notice of the time and place of the annual meeting
shall be given by mail to each stockholder entitled to vote at his address as it
appears on the records of the corporation not less than the minimum nor more
than the maximum number of days permitted under the laws of Delaware prior to
the scheduled date thereof, unless such notice is waived as provided by Article
VIII of these By-laws.
3. Special meetings. A special meeting of stockholders may be called at
----------------
any time by order of the board of directors or the executive committee. Written
notice of the time, place and specific purposes of such meetings shall be given
by mail to each stockholder entitled to vote thereat at his address as it
appears on the records of the corporation not less than the minimum nor more
<PAGE>
than the maximum number of days prior to the scheduled date thereof permitted
under the laws of Delaware, unless such notice is waived as provided in Article
VIII of these By-laws.
4. Meetings without notice. Meetings of the stockholders may be held at
-----------------------
any time without notice when all the stockholders entitled to vote thereat are
present in person or by proxy.
5. Voting. At all meetings of stockholders, each stockholder entitled to
------
vote on the record date as determined under Article V Section 3 of these By-laws
or if not so determined as prescribed under the laws of Delaware
shall be entitled to such number of votes for each share of stock standing on
record in his name, as shall be determined in accordance with the provisions of
Article 4 of the certificate of incorporation or any amendment thereto.
6. Quorum and Action. At any stockholders' meeting, a majority of the
-----------------
number of shares of stock outstanding and entitled to vote thereat present in
person or by proxy shall constitute a quorum, but a smaller interest may adjourn
any meeting from time to time, and the meeting may be held as adjourned without
further notice, subject to such limitations as may be imposed under the laws of
Delaware. When a quorum is present at any meeting, a majority of the number of
shares of stock entitled to vote present thereat shall decide any question
brought before such meeting unless the question is one upon which a different
vote is required by express provision of the laws of Delaware, the certificate
of incorporation or these By-laws, in which case such express provision shall
govern.
7. List of stockholders. At least ten days before every meeting, a
--------------------
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order and showing the address of and the number of shares
registered in the name of each stockholder, shall be prepared by the secretary
-2-
<PAGE>
or the transfer agent in charge of the stock ledger of the corporation. Such
list shall be open for examination by any stockholder as required by the laws of
Delaware. The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine such list or the books of the corporation or to
vote in person or by proxy at such meeting.
ARTICLE II
----------
Board of Directors
------------------
1. Number and qualification. Subject to the rights of the holders of any
------------------------
series of preferred stock then outstanding, members of the board of directors
shall be elected at each annual meeting of stockholders, in accordance with and
subject to the provisions of the certificate of incorporation. Each director so
elected shall serve until the election and qualification of his successor or
until his earlier resignation or removal as provided in these By-laws. The
initial number of directors shall be such as may be determined by the
incorporators unless the initial directors are named in the certificate of
incorporation, and thereafter the number of directors shall be such as may be
determined, subject to the rights of the holders of any series of preferred
stock then outstanding, from time to time by the affirmative vote of the
majority of the members of the board of directors, but in no event shall the
number be less than the minimum authorized under the laws of Delaware. In case
of any increase in the number of directors between elections by the
stockholders, the additional directorships shall be considered vacancies and
shall be filled in the manner prescribed in Article IV of these By-laws.
Directors need not be stockholders. The initial board of directors shall be
elected by the incorporators, unless such directors are named in the certificate
of incorporation.
-3-
<PAGE>
2. Powers. The business and affairs of the corporation shall be carried
------
on by or under the direction of the board of directors, which shall have all the
powers authorized by the laws of Delaware, subject to such limitations as may be
provided by the certificate of incorporation or these By-laws.
3. Compensation. The board of directors may from time to time by
------------
resolution authorize the payment of fees or other compensation to the directors
for services as such to the corporation, including, but not limited to, fees for
attendance at all meetings of the board or of the executive or other committees,
and determine the amount of such fees and compensation. Directors shall in any
event be paid their traveling expenses for attendance at all meetings of the
board or of the executive or other committees. Nothing herein contained shall be
construed to preclude any director from serving the corporation in any other
capacity and receiving compensation therefor in amounts authorized or otherwise
approved from time to time by the board or the executive committee.
4. Meetings and quorum. Meetings of the board of directors may be held
-------------------
either in or outside of Delaware. A quorum shall be one-third the then
authorized total number of directors, but not less than two directors unless a
board of one director is authorized under the laws of Delaware in which event
one director shall constitute a quorum. A director will be considered present
at a meeting, even though not physically present, to the extent and in the
manner authorized by the laws of Delaware.
-4-
<PAGE>
The board of directors may from time to time provide for the holding of
regular meetings with or without notice and may fix the times and places at
which such meetings are to be held. Meetings other than regular meetings may be
called at any time by the president or the chairman of the board and must be
called by the president or by the secretary or an assistant secretary upon the
request of any director.
Notice of each meeting, other than a regular meeting (unless required by
the board of directors), shall be given to each director by mailing the same to
each director at his residence or business address at least ten days before the
meeting or by delivering the same to him personally or by telephone or telecopy
at least two days before the meeting.
Notice of any meeting shall state the time and place of such meeting, but
need not state the purposes thereof unless otherwise required by the laws of
Delaware, the certificate of incorporation, the By-laws, or the board of
directors.
5. Executive Committee. The board of directors may by resolution passed
-------------------
by a majority of the whole board provide for an executive committee of two or
more directors and shall elect the members thereof to serve at the pleasure of
the board and may designate one of such members to act as chairman. The board
may at any time change the membership of the committee, fill vacancies in it,
designate alternate members to replace any absent or disqualified members at any
meeting of the committee, or dissolve it.
During the intervals between the meetings of the board of directors, the
executive committee shall possess and may exercise any or all of the powers of
the board of directors in the management or direction of the business and
affairs of the corporation and under the By-laws to the extent authorized by
-5-
<PAGE>
resolution adopted by a majority of the entire board of directors, subject to
such limitations as may be imposed by the laws of Delaware.
The executive committee may determine its rules of procedure and the notice
to be given of its meetings, and it may appoint such committees and assistants
as it shall from time to time deem necessary. A majority of the members of the
committee shall constitute a quorum.
6. Other committees. The board of directors may by resolution provide for
----------------
such other committees as it deems desirable and may discontinue the same at its
pleasure. Each such committee shall have the powers and perform such duties,
not inconsistent with law, as may be assigned to it by the board.
7. Action without meetings. Any action required or permitted to be taken
-----------------------
at any meeting of the board of directors or any committee thereof may be taken
without meeting to the extent and in the manner authorized by the laws of
Delaware.
-6-
<PAGE>
ARTICLE III
-----------
Officers
--------
1. Titles and election. The officers of the corporation shall be a
-------------------
president, a secretary and a treasurer, who shall initially be elected as soon
as convenient by the board of directors and thereafter, in the absence of
earlier resignations or removals, shall be elected at the first meeting of the
board following any annual stockholders' meeting, each of whom shall hold office
at the pleasure of the board except as may otherwise be approved by the board or
executive committee, or until his earlier resignation, removal under these By-
laws or other termination of his employment. Any person may hold more than one
office if the duties can be consistently performed by the same person, and to
the extent permitted by the laws of Delaware.
The board of directors, in its discretion, may also at any time elect or
appoint a chairman of the board of directors who shall be a director, and one or
more vice presidents, assistant secretaries and assistant treasurers and such
other officers as it may deem advisable, each of whom shall hold office at the
pleasure of the board, except as may otherwise be approved by the board or
executive committee, or until his earlier resignation, removal or other
termination of employment, and shall have such authority and shall perform such
duties as may be prescribed or determined from time to time by the board or in
case of officers other than the chairman of the board, if not so prescribed or
determined by the board, as the president or the then senior executive officer
may prescribe or determine.
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<PAGE>
The board of directors may require any officer or other employee or agent
to give bond for the faithful performance of his duties in such form and with
such sureties as the board may require.
2. Duties. Subject to such extension, limitations, and other provisions
------
as the board of directors or the By-laws may from time to time prescribe or
determine, the following officers shall have the following powers and duties:
(a) Chairman of the Board. The chairman of the board, when present, shall
---------------------
preside at all meetings of the stockholders and of the board of directors and
shall be charged with general supervision of the management and policy of the
corporation, and shall have such other powers and perform such other duties as
the board of directors may prescribe from time to time.
(b) President. Subject to the board of directors and the provisions of
---------
these By-laws, the president shall be the chief executive officer of the
corporation, shall exercise the powers and authority and perform all of the
duties commonly incident to his office, shall in the absence of the chairman of
the board preside at all meetings of the stockholders and of the board of
directors if he is a director, and shall perform such other duties as the board
of directors or executive committee shall specify from time to time. The
president or a vice president, unless some other person is thereunto
specifically authorized by the board of directors or executive committee, shall
sign all bonds, debentures, promissory notes, deeds and contracts of the
corporation.
(c) Vice President. The vice president or vice presidents shall perform
--------------
such duties as may be assigned to them from time to time by the board of
directors or by the president if the board does not do so. In the absence or
disability of the president, the vice presidents in order of seniority may,
-8-
<PAGE>
unless otherwise determined by the board, exercise the powers and perform the
duties pertaining to the office of president, except that if one or more
executive vice presidents has been elected or appointed, the person holding such
office in order of seniority shall exercise the powers and perform the duties of
the office of president.
(d) Secretary. The secretary or in his absence an assistant secretary
---------
shall keep the minutes of all meetings of stockholders and of the board of
directors, give and serve all notices, attend to such correspondence as may be
assigned to him, keep in safe custody the seal of the corporation, and affix
such seal to all such instruments properly executed as may require it, and shall
have such other duties and powers as may be prescribed or determined from time
to time by the board of directors or by the president if the board does not do
so.
(e) Treasurer. The treasurer, subject to the order of the board of
---------
directors, shall have the care and custody of the moneys, funds, valuable papers
and documents of the corporation (other than his own bond, if any, which shall
be in the custody of the president), and shall have, under the supervision of
the board of directors, all the powers and duties commonly incident to his
office. He shall deposit all funds of the corporation in such bank or banks,
trust company or trust companies, or with such firm or firms doing a banking
business as may be designated by the board of directors or by the president if
the board does not do so. He may endorse for deposit or collection all checks,
notes, etc., payable to the corporation or to its order. He shall keep accurate
books of account of the corporation's transactions, which shall be the property
of the corporation, and together with all its property in his possession, shall
be subject at all times to the inspection and control of the board of directors.
The treasurer shall be subject in every way to the order of the board of
directors, and shall render to the board of directors and/or the president of
the corporation, whenever they may require it, an account of all his
transactions and of the financial condition of the corporation. In addition to
the foregoing, the treasurer shall have such duties as may be prescribed or
determined from time to time by the board of directors or by the president if
the board does not do so.
-9-
<PAGE>
3. Delegation of authority. The board of directors or the executive
-----------------------
committee may at any time delegate the powers and duties of any officer for the
time being to any other officer, director or employee.
4. Compensation. The compensation of the Chairman of the Board, the
------------
president, all vice presidents, the secretary and the treasurer shall be fixed
by the board of directors or the executive committee, and the fact that any
officer is a director shall not preclude him from receiving compensation or from
voting upon the resolution providing the same.
ARTICLE IV
----------
Resignations, Vacancies and Removals
------------------------------------
1. Resignations. Any director or officer may resign at any time by
------------
giving written notice thereof to the board of directors, the president or the
secretary. Any such resignation shall take effect at the time specified therein
or, if the time be not specified, upon receipt thereof; and unless otherwise
specified therein, the acceptance of any resignation shall not be necessary to
make it effective.
2. Vacancies. (a) Directors. When the office of any director
--------- ---------
becomes vacant or unfilled whether by reason of death, resignation, removal,
-10-
<PAGE>
increase in the authorized number of directors or otherwise, such vacancy or
vacancies may be filled, subject to the rights of the holders of any series of
preferred stock then outstanding, by a majority vote of the directors then in
office, although less than a quorum. Any director so elected by the board shall
serve until the election and qualification of his successor or until his earlier
resignation or removal as provided in these By-laws. The directors may also
reduce their authorized number by the number of vacancies in the board, in
accordance with the provisions of the certificate of incorporation, provided
such reduction does not reduce the board to less than the minimum authorized by
the laws of Delaware.
(b) Officers. The board of directors may at any time or from time to
--------
time fill any vacancy among the officers of the corporation.
3. Removals. (a) Directors. Except as may otherwise be prohibited
-------- ---------
or restricted under the laws of Delaware, the stockholders may, at any meeting
called for such purpose, remove any director from office, but only for cause, as
such term is defined in, and subject to the provisions of, Article 8 of the
certificate of incorporation.
(b) Officers. Subject to the provisions of any validly existing
--------
agreement, the board of directors may at any meeting remove from office any
officer, with or without cause, and may elect or appoint a successor; provided
that if action is to be taken to remove the president the notice of meeting or
waiver of notice thereof shall state that one of the purposes thereof is to
consider and take action on his removal.
-11-
<PAGE>
ARTICLE V
---------
Capital Stock
-------------
1. Certificate of stock. Every stockholder shall be entitled to a
--------------------
certificate or certificates for shares of the capital stock of the corporation
in such form as may be prescribed or authorized by the board of directors, duly
numbered and setting forth the number and kind of shares represented thereby.
Such certificates shall be signed by the chairman of the board, the president or
a vice president and by the treasurer or an assistant treasurer or by the
secretary or an assistant secretary. Any or all of such signatures may be in
facsimile if and to the extent authorized under the laws of Delaware.
In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed on a certificate has ceased to be such
officer, transfer agent or registrar before the certificate has been issued,
such certificate may nevertheless be issued and delivered by the corporation
with the same effect as if he were such officer, transfer agent or registrar at
the date of issue.
2. Transfer of stock. Shares of the capital stock of the corporation
-----------------
shall be transferable only upon the books of the corporation upon the surrender
of the certificate or certificates properly assigned and endorsed for transfer.
If the corporation has a transfer agent or agents or transfer clerk and
registrar of transfers acting on its behalf, the signature of any officer or
representative thereof may be in facsimile.
The board of directors may appoint a transfer agent and one or more
co-transfer agents and a registrar and one or more co-registrars of transfer and
may make or authorize the transfer agents to make all such rules and regulations
-12-
<PAGE>
deemed expedient concerning the issue, transfer and registration of shares of
stock.
3. Record dates. (a) In order that the corporation may determine
------------
the stockholders entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the board of directors may fix in advance a
record date which, in the case of a meeting, shall be not less than the minimum
nor more than the maximum number of days prior to the scheduled date of such
meeting permitted under the laws of Delaware and which, in the case of any other
action, shall be not more than the maximum number of days prior to any such
action permitted by the laws of Delaware.
(b) If no such record date is fixed by the board, the record date
shall be that prescribed by the laws of Delaware.
(c) A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
4. Lost certificates. In case of loss or mutilation or destruction
-----------------
of a stock certificate, a duplicate certificate may be issued upon such terms as
may be determined or authorized by the board of directors or executive committee
or by the president if the board or the executive committee does not do so.
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<PAGE>
ARTICLE VI
----------
Fiscal Year, Bank Deposits, Checks, etc.
---------------------------------------
1. Fiscal Year. The fiscal year of the corporation shall commence or
-----------
end at such time as the board of directors may designate.
2. Bank deposits, checks etc. The funds of the corporation shall be
-------------------------
deposited in the name of the corporation or of any division thereof in such
banks or trust companies in the United States or elsewhere as may be designated
from time to time by the board of directors or executive committee, or by such
officer or officers as the board or executive committee may authorize to make
such designations.
All checks, drafts or other orders for the withdrawal of funds from
any bank account shall be signed by such person or persons as may be designated
from time to time by the board of directors or executive committee or as
may be designated by any officer or officers authorized by the board of
directors or executive committee to make such designations. The signatures on
checks, drafts or other orders for the withdrawal of funds may be in facsimile
if authorized in the designation.
ARTICLE VII
-----------
Books and Records
-----------------
1. Place of keeping books. Unless otherwise expressly required by
----------------------
the laws of Delaware, the books and records of the corporation may be kept
outside of Delaware.
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<PAGE>
2. Examination of books. Except as may otherwise be provided by the
--------------------
laws of Delaware, the certificate of incorporation or these By-laws, the board
of directors shall have power to determine from time to time whether and to what
extent and at what times and places and under what conditions any of the
accounts, records and books of the corporation are to be open to the inspection
of any stockholder. No stockholder shall have any right to inspect any account
or book or document of the corporation except as prescribed by statute or
authorized by express resolution of the stockholders or of the board of
directors.
ARTICLE VIII
------------
Notices
-------
1. Requirements of notice. Whenever notice is required to be given
----------------------
by statute, the certificate of incorporation or these By-laws, it shall not mean
personal notice unless so specified, but such notice may be given in writing by
depositing the same in a post office, letter box, or mail chute, postpaid and
addressee to the person to whom such notice is directed at the address of such
person on the records of the corporation, and such notice shall be deemed given
at the time when the same shall be thus mailed.
2. Waivers. Any stockholder, director or officer may, in writing or
-------
by telegram or cable, at any time waive any notice or other formality required
by statute, the certificate of incorporation or these By-laws. Such waiver of
notice, whether given before or after any meeting or action, shall be deemed
equivalent to notice. Presence of a stockholder either in person or by proxy at
any stockholders' meeting and presence of any director at any meeting of the
board of directors shall constitute a waiver of such notice as may be required
by any statute, the certificate of incorporation or these By-laws.
-15-
<PAGE>
ARTICLE IX
----------
Seal
----
The corporate seal of the corporation shall consist of two concentric
circles between which shall be the name of the corporation and in the center of
which shall be inscribed "Corporate Seal, Delaware".
ARTICLE X
---------
Powers of Attorney
------------------
The board of directors or the executive committee may authorize one or
more of the officers of the corporation to execute powers of attorney delegating
to named representatives or agents power to represent or act on behalf of the
corporation, with or without power of substitution.
In the absence of any action by the board or the executive committee,
the president, any vice president, the secretary or the treasurer of the
corporation may execute for and on behalf of the corporation waivers of notice
of stockholders' meetings and proxies for such meetings in any company in which
the corporation may hold voting securities.
ARTICLE XI
----------
Indemnification of Directors and Officers
-----------------------------------------
1. Definitions. As used in this article, the term "person" means any
-----------
past, present or future director or officer of the corporation or a designated
officer of an operating division of the corporation.
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<PAGE>
2. Indemnification granted. The corporation shall indemnify, to the
-----------------------
full extent and under the circumstances permitted by the Delaware General
Corporation Law in effect from time to time, any person as defined above, made
or threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative by
reason of the fact that he is or was a director, officer of the corporation or
designated officer of an operating division of the corporation, or is or was an
employee or agent of the corporation, or is or was serving at the specific
request of the corporation as a director, officer, employee or agent of another
company or other enterprise in which the corporation should own, directly or
indirectly, an equity interest or of which it may be a creditor.
This right of indemnification shall not be deemed exclusive of any
other rights to which a person indemnified herein may be entitled by By-law,
agreement, vote of stockholders or disinterested directors or otherwise, and
shall continue as to a person who has ceased to be a director, officer,
designated officer, employee or agent and shall inure to the benefit of the
heirs, executors, administrators and other legal representatives of such person.
It is not intended that the provisions of this article be applicable to, and
they are not to be construed as granting indemnity with respect to, matters as
to which indemnification would be in contravention of the laws of Delaware or of
the United States of America whether as a matter of public policy or pursuant to
statutory provision.
3. Miscellaneous. The board of directors may also on behalf of the
-------------
corporation grant indemnification to any individual other than a person defined
herein to such extent and in such manner as the board in its sole discretion may
from time to time and at any time determine.
ARTICLE XII
-----------
Amendments
----------
These By-laws may be amended or repealed either:
(a) at any meeting of stockholders at which a quorum is present by
vote of at least sixty-six and two-thirds percent (66-2/3%) of the number of
shares of stock entitled to vote present in person or by proxy at such meeting
as provided in Article I Sections 5 and 6 of these By-laws, or
(b) at any meeting of the board of directors by a majority vote of the
directors then in office;
provided the notice of such meeting of stockholders or directors or
waiver of notice thereof contains a statement of the substance of the proposed
amendment or repeal.
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<PAGE>
SECOND
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF MAY 8, 1996
AMONG
ROPER INDUSTRIES, INC.
AND
THE LENDERS LISTED HEREIN
AND
NATIONSBANK, N.A. (SOUTH),
AS AGENT
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C>
ARTICLE I - DEFINITIONS; CONSTRUCTION........................................................... 1
Section 1.01 Definitions............................................................ 1
Section 1.02. Accounting Terms and Determinations................................... 20
Section 1.03. Other Definitional Conventions........................................ 21
ARTICLE II - SERIES A REVOLVING LOANS.......................................................... 21
Section 2.01. Series A Revolving Loan Commitments; Use of Proceeds.................. 21
Section 2.02. Series A Series A Revolving Loan Notes; Repayment of
Principal and Interest................................................ 22
Section 2.03. Excess Series A Revolving Loans; Reduction in Series A
Revolving Loan Commitments............................................ 22
ARTICLE III - SERIES B REVOLVING LOANS......................................................... 23
Section 3.01. Series B Revolving Loan Commitments; Use of Proceeds.................. 23
Section 3.02. Series B Revolving Loan Notes; Repayment of Principal and
Interest.............................................................. 24
Section 3.03. Excess Series B Revolving Loans; Reductions in Series B
Revolving Loan Commitments............................................ 24
ARTICLE IV. TERM LOANS........................................................................ 25
Section 4.01. Term Loans; Use of Proceeds........................................... 25
Section 4.02. Term Loan Notes; Repayment of Principal and Interest.................. 26
Section 4.03. Modification of Security Documents.................................... 26
ARTICLE V - CASH MANAGEMENT LOANS.............................................................. 27
Section 5.01. Cash Management Loans; Use of Proceeds, Etc........................... 27
Section 5.02. Cash Management Loan Note; Repayment of Principal and
Interest.............................................................. 27
Section 5.03. Excess Cash Management Loans.......................................... 27
Section 5.04. Refinancings of Cash Management Loans................................. 28
ARTICLE VI - LETTERS OF CREDIT................................................................. 29
Section 6.01. Amount, Terms and Issuance of Letters of Credit....................... 29
Section 6.02. Reimbursement Obligations............................................. 30
Section 6.03. Increased Cost........................................................ 31
Section 6.04. Legal Restrictions on Letters of Credit............................... 31
Section 6.05. Indemnification....................................................... 31
Section 6.06. Nature of Agent's and Lender's Duties................................. 32
Section 6.07. Purchase and Sale of Participation Interests in Letters of
Credit................................................................ 33
ARTICLE VII - GENERAL CREDIT TERMS............................................................. 35
Section 7.01. Requests for and Disbursements of Loans............................... 35
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Section 7.02. Multicurrency Advances.................................... 37
Section 7.03. Interest.................................................. 37
Section 7.04. Fees...................................................... 39
Section 7.05. Payments, Prepayments and Computations.................... 41
Section 7.06. Collateral and Guaranties................................. 44
Section 7.07. Capital Adequacy.......................................... 45
Section 7.08. Unavailability............................................ 46
Section 7.09. Increased Costs........................................... 46
Section 7.10. Sharing of Payments, Etc.................................. 46
Section 7.11. Loan Accounts............................................. 47
Section 7.12. Funding Losses............................................ 48
Section 7.13. Assumptions Concerning Funding of LIBOR Advances.......... 48
Section 7.14. Apportionment of Payments................................. 48
Section 7.15. Agreements Regarding Interest and Other Charges........... 48
Section 7.16. Credit Expirations Date................................... 49
Section 7.17. Benefits to Guarantors.................................... 49
Section 7.18. Several Commitments....................................... 49
ARTICLE VIII - CONDITIONS PRECEDENT TO CREDIT EVENTS................................ 49
Section 8.01 Conditions Precedent to Initial Credit Event.............. 49
Section 8.02 Conditions Precedent to All Credit Events................. 51
ARTICLE IX - REPRESENTATIONS AND WARRANTIES......................................... 52
Section 9.01. Organization; Subsidiaries; Authorization; Valid and
Binding Obligations....................................... 52
Section 9.02. Financial Statements...................................... 53
Section 9.03. Actions Pending........................................... 53
Section 9.04. Outstanding Indebtedness.................................. 53
Section 9.05. Title to Properties....................................... 53
Section 9.06. Taxes..................................................... 53
Section 9.07. Conflicting Agreements and Other Matters.................. 53
Section 9.08. ERISA..................................................... 54
Section 9.09. Governmental Consent...................................... 54
Section 9.10. Compliance with Laws and Regulations...................... 54
Section 9.11. Possession of Licenses, Franchises, Etc. ................. 54
Section 9.12. Licenses, Etc. ........................................... 55
Section 9.13. Environmental Law Compliance.............................. 55
Section 9.14. Solvency.................................................. 55
Section 9.15. Margin Regulations and Investment Company Act, Etc. ...... 56
Section 9.16. Labor Matters............................................. 56
Section 9.17. Brokers................................................... 56
Section 9.18. Insurance................................................. 56
Section 9.19. Disclosure................................................ 57
Section 9.20. Reaffirmation............................................. 57
Section 9.21. Revisions or Updates of Schedules......................... 57
ARTICLE X - AFFIRMATIVE COVENANTS................................................... 57
Section 10.01. Financial Statements and Other Reports and Notices........ 57
Section 10.02. Inspection of Property.................................... 60
Section 10.03. Books and Records......................................... 60
Section 10.04. Maintenance of Insurance.................................. 60
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C> <C>
Section 10.05. Maintenance of Corporate Existence, Properties,
Franchises, Etc. .......................................... 60
Section 10.06. Payment of Taxes and Claims................................ 61
Section 10.07. Type of Business........................................... 61
Section 10.08. Compliance with Laws, Etc.................................. 61
Section 10.09. Financial Covenants........................................ 61
Section 10.10. Additional Credit Parties.................................. 63
Section 10.11. Bond Document Compliance by Borrower....................... 63
ARTICLE XI - NEGATIVE COVENANTS...................................................... 63
Section 11.01. Indebtedness............................................... 64
Section 11.02. Liens...................................................... 64
Section 11.03. Guaranties................................................. 65
Section 11.04. Merger of Sale of Assets................................... 66
Section 11.05. ERISA Matters.............................................. 66
Section 11.06. Investments................................................ 66
Section 11.07. Sale and Lease-Back Transactions........................... 67
Section 11.08. Transaction With Affiliates................................ 67
Section 11.09. Fiscal Year Change......................................... 67
Section 11.10. Use of Proceeds............................................ 67
Section 11.11. Amendment, Termination or Waiver of Bond Documents......... 67
ARTICLE XII - EVENTS OF DEFAULT...................................................... 68
Section 12.01. Events of Default.......................................... 68
Section 12.02. Remedies................................................... 70
ARTICLE XIII - THE AGENT............................................................. 72
Section 13.01. Appointment of Agent....................................... 72
Section 13.02. Nature of Duties of Agent.................................. 72
Section 13.03. Lack of Reliance on Agent.................................. 72
Section 13.04. Certain Rights of Agent.................................... 73
Section 13.05. Reliance by Agent.......................................... 73
Section 13.06. Indemnification of Agent................................... 73
Section 13.07. Agent in its Individual Capacity........................... 73
Section 13.08. Holders of Notes and Interests............................. 74
Section 13.09. Successor Agent............................................ 74
Section 13.10. Security Documents, Notice of Defaults, Etc................ 75
ARTICLE XIV - MISCELLANEOUS.......................................................... 76
Section 14.01. Notices.................................................... 76
Section 14.02. No Waiver; Remedies Cumulative............................. 76
Section 14.03. Payment of Expenses; Indemnity............................. 77
Section 14.04. Right of Set-off........................................... 78
Section 14.05. Assignments and Participations............................. 79
Section 14.06. Further Assurances......................................... 82
Section 14.07. Benefit of Agreement....................................... 82
Section 14.08. Amendments; Exercise of Discretion......................... 83
Section 14.09. Time of Essence............................................ 83
Section 14.10. Governing Law.............................................. 83
Section 14.11. Counterparts............................................... 83
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Section 14.12. Effectiveness; Survival........................... 84
Section 14.13. Severability...................................... 84
Section 14.14. Independence of Covenants; Independent Nature of
Lenders' Rights................................... 84
Section 14.15. Headings Descriptive.............................. 84
Section 14.16. Termination of Agreement.......................... 84
Section 14.17. Entire Agreement; Supersession of Prior Credit
Agreements; Survival of Bond Documents and Prior
Security Documents................................ 85
Section 14.18. Judgement Currency................................ 85
Section 14.19. Dollar Equivalent Computations.................... 86
Section 14.20. Refinancing of Indebtedness....................... 86
Section 14.21. Jury Trial Waiver; Consent to Forum............... 86
</TABLE>
Signatures
Annex I - Lender Information
Annex II - Interest Rate and Commitment Fee Rate Matrix
Exhibit A - Series A Revolving Loan Note Form
Exhibit B - Series B Revolving Loan Note Form
Exhibit C - Term Loan Note Form
Exhibit D - Cash Management Loan Note Form
Exhibit E - Agreement Regarding Security Documents Form
Exhibit F-1 - Form of Opinion of Borrower's and Guarantors' Primary
Outside Counsel
Exhibit F-2 - Form of Opinion of Iowa Subsidiaries' Outside Counsel
Exhibit G-1 - Form of Certificate of Borrower
Exhibit G-2 - Form of Certificate of Corporate Guarantor
Exhibit G-3 - Form of Certificate of Partnership Guarantor
Exhibit H-1 - Compliance Certificate Form
Exhibit H-2 - Permitted Acquisition Certificate Form
Exhibit I - Assignment and Acceptance Agreement Form
Schedule 9.01 - Subsidiaries
Schedule 9.03 - Actions Pending
Schedule 9.06 - Taxes
Schedule 9.08 - ERISA Plans
Schedule 9.12 - Intellectual Property Rights
Schedule 9.13 - Environmental Matters
Schedule 11.01 - Permitted Indebtedness
Schedule 11.02 - Permitted Liens
Schedule 11.03 - Permitted Guaranties
-iv-
<PAGE>
SECOND
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement")
---------
made and entered into as of May 8, 1996, by and among ROPER INDUSTRIES, INC., a
Delaware corporation ("Borrower"), the Initial Lender named herein and any
--------
other banks and other lending institutions which may hereafter be listed on
Annex I attached hereto as the same may be amended from time to time and any
- -------
permitted assigns thereof (collectively, the "Lenders"), and NATIONSBANK, N.A.
-------
(SOUTH), a national banking association and the successor by merger to Bank
South, N.A., in its capacity as the Agent for the Lenders pursuant to Article
XIII hereof (the "Agent").
-----
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrower, the Initial Lender and the Agent are parties to an
Amended and Restated Credit Agreement, dated as of September 30, 1994, as
heretofore amended (collectively, the "Prior 1994 Credit Agreement"), pursuant
---------------------------
to which the Initial Lender has provided Borrower with certain loan and letter
of credit facilities on the terms and subject to the conditions and requirements
set forth in the Prior 1994 Credit Agreement; and
WHEREAS, the Prior 1994 Credit Agreement itself previously amended and
restated that certain Credit Agreement dated as of September 30, 1992, as
amended, among Borrower, the Lenders signatory thereto and the Agent (the "Prior
-----
1992 Credit Agreement"); and
- ---------------------
WHEREAS, the parties now desire to amend and restate the Prior 1994
Credit Agreement in its entirety as herein set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, as well as other good and valuable consideration,
the Borrower, the Initial Lender and the Agent hereby agree to amend and restate
the Prior 1994 Credit Agreement as follows:
ARTICLE I.
DEFINITIONS; CONSTRUCTION
-------------------------
SECTION 1.01. DEFINITIONS. For purposes of this Agreement, the
-----------
following terms shall have the indicated meanings as set forth below:
"Accounts" shall mean all accounts, contract rights, chattel paper,
--------
instruments and documents, whether now owned or hereafter created or acquired by
Borrower or any of its Domestic Subsidiaries or in which any such Credit Party
now has or hereafter acquires any interest.
<PAGE>
"Adjusted LIBOR" shall mean, for any Interest Period, the rate per
--------------
annum (rounded upwards to the nearest 1/16th of one percentage point, if
necessary) equal to the quotient obtained by dividing (i) the offered rate for
Dollar deposits (or, in the case of any Multicurrency Advance, for deposits in
the same currency in which such advance will be made) for a period comparable to
such Interest Period appearing on the Telerate Screen Page 3750 (or as quoted or
published by such other recognized independent quote service as may be selected
by the Agent from time to time) as of 11:00 a.m., London time, on the day that
is two (2) Business Days prior to the beginning of such Interest Period (but if
at least two such rates appear on such screen or are so quoted at such time, the
offered rate for such Interest Period shall be the arithmetic mean of such
rates) by (ii) a percentage equal to one (1) minus the then average stated
maximum amount (stated as a decimal) of all reserve requirements applicable to
any member of the Federal Reserve System in respect of Eurocurrency liabilities
as defined in Regulation D of the Board of Governors of the Federal Reserve
System (or any successor categories for such liabilities under such Regulation
D).
"Affiliate" of any Person means any other Person directly or
---------
indirectly controlling, controlled by, or under common control with, such
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" shall mean NationsBank, acting as agent for the Lenders in the
-----
manner and to the extent described in this Agreement and the other Credit
Documents, or any successor acting as such agent pursuant to Article XIII
hereof.
"Agent Fees" shall mean the fees required to be paid by Borrower to
----------
the Agent pursuant to Section 7.04(g) hereof.
This "Agreement" shall mean this Second Amended and Restated Credit
---------
Agreement, as amended or supplemented from time to time.
"Agreement Regarding Security Documents" shall mean the Agreement
--------------------------------------
Regarding Security Documents executed by the Borrower and the Guarantors, in
substantially the form of Exhibit E attached to this Agreement, pursuant to
---------
Section 8.01 hereof.
"AMOT" shall mean AMOT Controls Corporation, a Delaware corporation,
----
and its successors and permitted assigns.
"AMOT U.K." shall mean AMOT Investments, Ltd., a private company
---------
organized under the laws of England which was formerly known as Legistshelfco
No. 98 Limited, and its successors and assigns.
"AMOT U.K. Overdraft Indebtedness" shall mean the Indebtedness of AMOT
--------------------------------
U.K. under an overdraft line of credit established in the United Kingdom in an
amount not to exceed $1,000,000 in aggregate outstanding principal amount at any
one time.
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<PAGE>
"Assigning Lenders" shall have the meaning given such term in Section
-----------------
14.05(b) hereof.
"Assignment and Acceptance Agreement" shall mean any Assignment and
-----------------------------------
Acceptance Agreement, in the form of Exhibit I attached to this Agreement,
---------
executed by any Assigning Lender and its assignee in connection with such
Assigning Lender's assignment of all or any portion of its rights and
obligations under this Agreement to such assignee pursuant to Section 14.05
hereof.
"Authority" shall mean the Jackson County Industrial Development
---------
Authority and its successors and assigns.
"Available Foreign Currencies" shall mean British pounds sterling,
----------------------------
Canadian dollars, French francs, German marks, Italian lira or Japanese yen.
"Bankruptcy Code" shall mean the Bankruptcy Code of 1978, as amended
---------------
(11 U.S.C. (S) 101 et seq.).
-- ---
"Bank South" shall mean Bank South, a Georgia banking corporation
----------
formerly known as Bank South, N.A. and a predecessor-in-interest to NationsBank.
"Bond Documents" shall mean the Bonds, the Bond Letter of Credit, the
--------------
Bond Indenture, the Bond Lease, and the Bond Guaranty.
"Bond Guaranty" shall mean the Guaranty Agreement, dated as of June 1,
-------------
1990, executed by the Borrower in favor of the Bond Trustee, and any
modification thereof or replacement therefor.
"Bond Indenture" means the Indenture of Trust, dated as of June 1,
--------------
1990, between the Authority and the Bond Trustee, and any modification thereof
or replacement therefor.
"Bond Lease" means the Lease Agreement, dated as of June 1, 1990
----------
between the Authority, as lessor, and the Borrower, as lessee, and any
modification thereof or replacement therefor.
"Bond Letter of Credit" shall mean the Irrevocable Letter of Credit
---------------------
No. 51823 issued on July 25, 1990 by Bank South in favor of the Bond Trustee and
for the account of the Borrower in the original stated amount of $3,134,750, and
any extensions, renewals, modifications or replacements thereof or therefor.
"Bond Letter of Credit Agreement" shall mean the Letter of Credit
-------------------------------
Agreement, dated as of June 1, 1990, between Borrower and Bank South, and any
modifications or replacements thereof and therefor.
-3-
<PAGE>
"Bond Letter of Credit Documents" shall mean the Bond Letter of Credit
-------------------------------
and the Bond Security Deed.
"Bond Security Deed" shall mean the Deed to Secure Debt and Security
------------------
Agreement, dated as of June 1, 1990, executed by Borrower and the Authority in
favor of Bank South with respect to certain property located in Jackson County,
Georgia and which was improved with the proceeds of the Bonds, and any
modifications or replacements thereof.
"Bond Trustee" shall mean SunTrust Bank, Atlanta (formerly known as
------------
Trust Company Bank), acting in its capacity as the trustee for the holders of
the Bonds, and any successor trustee thereto or co-trustee therewith.
"Bonds" shall mean the $3,000,000 in original aggregate principal
-----
amount of the Jackson County Industrial Development Authority Industrial
Development Revenue Bonds (Roper Industries, Inc. Project), Series 1990, and any
extensions, renewals, modifications or replacements thereof or therefor.
"Borrower" shall mean Roper Industries, Inc., a Delaware corporation,
--------
and its successors and permitted assigns.
"Break Point" shall mean, for each currency shown below, the amount of
-----------
such currency shown below:
<TABLE>
<S> <C>
British Pounds Sterling - (Pounds)3,000,000
Canadian Dollars - C$15,000,000
German Marks - DM15,000,000
French Francs - F30,000,000
Italian Lira - IL15,000,000,000
Japanese Yen - (Yen)1,500,000,000
</TABLE>
"Business Day" shall mean any day excluding Saturday, Sunday and any
------------
other day on which banks are required or authorized to close in Atlanta,
Georgia, and if the applicable Business Day relates to any LIBOR Advance or the
determination of any Interest Period or the calculation of the Adjusted LIBOR
therefor, any day on which trading is not carried on by and between banks in
Dollars (or, in the case of any Multicurrency Advance, the currency in which
such advance is made) in the London interbank market.
"California Deed of Trust" shall mean the Deed of Trust, Assignment of
------------------------
Rents and Security Agreement, dated as of September 30, 1992, executed by AMOT
in favor of Continental Lawyers Title Company as Trustee for the benefit of the
Agent, and covering AMOT's real property located in Contra Costa County,
California, and any modifications or replacements thereof.
"Capital Expenditures" shall mean, with respect to any particular
--------------------
period and Person, all expenditures made and liabilities incurred by such Person
during such period for the
-4-
<PAGE>
acquisition of items which are not, in accordance with GAAP, treated as expense
items for such Person in the period made or incurred or as a prepaid expense
applicable to a future period, and such term shall include that portion of any
Capitalized Lease Obligations of such Person originally incurred during such
period that is capitalized under GAAP, all as determined on a consolidated
basis; provided, however, that such term shall not include any expenditures
--------
made or liabilities incurred as part of the purchase price paid or other
consideration given for a Permitted Acquisition.
"Capitalized Lease Obligations" shall mean, with respect to any
-----------------------------
Person, any Indebtedness of such Person represented by obligations under a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of such Indebtedness for purposes hereof
shall be the capitalized amount of such obligations as determined in accordance
with GAAP on a consolidated basis.
"Cash Collateral" shall mean (i) certificates of deposit issued by the
---------------
Agent or any Lender or (ii) other cash equivalents acceptable in all respects to
the Agent and the Required Lenders.
"Cash Distributions" shall mean, for any particular period, the cash
------------------
dividends paid and other cash distributions made by Borrower during such period
on its capital stock to any or all of its shareholders.
"Cash Management Lender" shall mean NationsBank.
----------------------
"Cash Management Loan Limit" shall mean, at any time, the amount shown
--------------------------
as such on Annex I attached hereto (as such annex may be amended from time to
-------
time).
"Cash Management Loan Note" shall mean the Cash Management Loan Note
-------------------------
issued by the Borrower and payable to the order of the Cash Management Lender as
evidence of the Cash Management Loans and which Note shall be in the form of
Exhibit D attached hereto, and any extension, renewal, modification or
- ---------
replacement thereof or therefor.
"Cash Management Loan Settlement Date" shall mean the first (1st)
------------------------------------
Business Day of each month commencing with the month following the month in
which the initial Cash Management Loan is made hereunder.
"Cash Management Loans" shall mean, collectively, the advances made by
---------------------
the Cash Management Lender to Borrower pursuant to Section 5.01 hereof.
"CCC" shall mean Compressor Controls Corporation, an Iowa corporation.
---
"Closing Fee" shall mean the fee required to be paid by Borrower
-----------
pursuant to Section 7.04(f) hereof.
-5-
<PAGE>
"Code" shall mean the Internal Revenue Code of 1986, as amended from
----
time to time.
"Collateral" shall mean (i) any and all of the property which is
----------
pledged or collaterally assigned to Agent or in which the Agent is otherwise
granted a Lien to secure the Obligations pursuant to any or all of the Security
Documents, and (ii) any and all cash and non-cash proceeds of the foregoing.
"Commitment Fee Rates" shall mean the Series A Revolving Loan
--------------------
Commitment Fee Rate and the Series B Revolving Loan Commitment Fee Rate.
"Commitment Fees" shall mean the Series A Revolving Loan Commitment
---------------
Fees and the Series B Revolving Loan Commitment Fees.
"Compliance Certificate" shall mean a certificate of the president or
----------------------
chief financial officer of the Borrower in substantially the form of Exhibit H-1
-----------
attached hereto.
"Contractual Obligation" of any Person shall mean any provision of any
----------------------
agreement, instrument, security, or undertaking to which such Person is a party
or by which it or any of the property owned by it is bound.
"Credit Commitments" shall mean any or all of the Lenders' Series A
------------------
Revolving Loan Commitments and Series B Revolving Loan Commitments.
"Credit Documents" shall mean, collectively, this Agreement, the
----------------
Notes, the Letters of Credit, and the Security Documents.
"Credit Event" shall mean each borrowing of a Loan hereunder or the
------------
issuance of any Letter of Credit pursuant hereto.
"Credit Expiration Date" shall mean June 30, 1997, as such date may be
----------------------
extended, accelerated or amended from time to time pursuant to Section 7.16,
12.02, or 14.08 hereof, respectively.
"Credit Parties" shall mean, collectively, Borrower, each of the
--------------
Guarantors, and every other Person who from time to time hereafter executes a
Security Document with respect to all or any portion of the Obligations.
"Current Assets" shall mean, as of any date, the amount at which all
--------------
of the current assets of a Person should be shown on a balance sheet of such
Person at such date in accordance with GAAP, all as determined on a consolidated
basis.
"Current Liabilities" shall mean, as of any date, the amount at which
-------------------
all of the current liabilities of a Person should be shown on a balance sheet of
such Person at such date in accordance with GAAP, all as determined on a
consolidated basis.
-6-
<PAGE>
"Current Ratio" shall mean, as of any particular date and with respect
-------------
to any particular Person, the ratio of such Person's Current Assets to its
Current Liabilities as of such date.
"Date of Issuance" shall mean, with respect to each Letter of Credit,
----------------
the date of issuance and delivery by the Issuing Bank of such Letter of Credit.
"Debt Service Coverage Ratio" shall mean, for any particular fiscal
---------------------------
year or fiscal quarter and based on the consecutive four-quarter period ending
therewith, the ratio of the Borrower's Operating Cash Flow for such period to
Borrower's Debt Service Requirements for such period.
"Debt Service Requirements" shall mean, for any particular period and
-------------------------
for any particular Person, the sum of (i) the aggregate of all principal
payments scheduled to be made during the succeeding 12-month period in respect
of any long-term Indebtedness for borrowed money of such Person (which, in the
case of the Borrower, shall include the Term Loans and the Borrower's
Indebtedness with respect to the Bonds and the other Bond Documents), plus (ii)
the aggregate of all payments scheduled to be made during the succeeding 12-
month period in respect of the Capitalized Lease Obligations of such Person,
plus (iii) the Interest Expense of such Person for the 12-month period ending
- ----
with such period, plus (iv) the aggregate amount of all Cash Distributions made
----
by Borrower during the 12-month period ending with such period, plus (v) for any
----
period which ends on or prior to the Credit Expiration Date, an amount equal to
twenty percent (20%) of the sum of (x) the aggregate dollar amount of the Series
B Revolving Loan Commitments as in effect at the end of such period (or, in the
case of any period ending on the Credit Expiration Date, as in effect on the
immediately preceding Business Day) less (y) the aggregate outstanding principal
----
balance of the Term Loans as of such date, all as determined on a consolidated
basis.
"Default" shall mean any condition or event which, with notice or
-------
lapse of time or both, would constitute an Event of Default.
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful money of
------ ----------- -
the United States of America.
"Dollar Equivalent" shall mean, with respect to any monetary amount in
-----------------
a currency other than Dollars, at any time for the determination thereof, the
amount of Dollars obtained by converting such foreign currency involved in such
computation into Dollars at the spot rate for the purchase of Dollars with the
applicable foreign currency as quoted by the Agent at approximately 11:00 a.m.
London time, on the date of determination thereof specified herein or, if the
date of determination thereof is not otherwise specified herein, on the date
which is two (2) Business Days prior to such determination.
"Domestic Subsidiaries" shall mean any and all Subsidiaries of
---------------------
Borrower which are organized under the laws of the United States of America or
any State hereof.
-7-
<PAGE>
"Drawing" shall mean, with respect to any Letter of Credit, a drawing
-------
made by the beneficiary of such Letter of Credit.
"Eastern Time" shall mean, as of any date, the time of day as in
------------
effect on such day in the Eastern time zone of the United States of America.
"EBITDA" shall mean, with respect to any particular period and Person,
------
the sum of the Net Income of such Person for such period plus all amounts
----
deducted in arriving at such Net Income in respect of interest, taxes,
depreciation and amortization, all as determined on a consolidated basis.
"Eligible Assignee" shall mean (i) any Lender, (ii) any commercial
-----------------
bank, trust company or other financial institution which is an Affiliate of any
Lender, or (iii) subject to the prior written consent of the Agent and the
Borrower (which consent shall not be unreasonably withheld), any other
commercial bank, trust company or other financial institution which at the time
it executes an Assignment and Acceptance Agreement has a combined capital and
surplus of at least $100,000,000.
"Environmental Laws" means all federal, state, local and foreign laws
------------------
relating to pollution or protection of the environment, including laws relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including without limitation ambient air, surface water,
ground water or land), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
or wastes, and any and all regulations, codes, plans, orders, decrees,
judgments, injunctions, notices or demand letters issued, entered, promulgated
or approved thereunder.
"Equipment" shall have the meaning given such term in the Security
---------
Agreements.
"ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended from time to time.
"Event of Default" shall have the meaning provided in Article XII.
----------------
"Existing Domestic Subsidiaries" shall mean the Existing Subsidiaries
------------------------------
which are Domestic Subsidiaries.
"Existing Subsidiaries" shall mean the Subsidiaries listed on Schedule
--------------------- --------
9.01 as attached to this Agreement as of the date of the Initial Credit Event.
- ----
"Federal Funds Rate" means, for any day, the rate per annum (rounded
------------------
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with member banks
of the Federal Reserve System arranged by Federal
-8-
<PAGE>
funds brokers on such day, as published by the Board of Governors of the Federal
Reserve System or the Federal Reserve Bank of Atlanta on the Business Day next
succeeding such day, provided that (i) if the day for which such rate is to be
--------
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the immediately preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not
published for any day, the Federal Funds Rate for such day shall be the average
of the quotations for such day on such transactions received by the Agent from
three (3) federal funds brokers of recognized standing selected by the Agent.
"Fees" shall mean the Agent Fees, the Closing Fee, the Commitment Fees
----
and the Letter of Credit Fees.
"Fixed Rate" shall mean Adjusted LIBOR or the Treasury Securities
----------
Rate.
"Fixed Rate Advance" shall mean any Loans hereunder (or portion
------------------
thereof) which bear interest based on any Fixed Rate.
"Fleming" shall mean Robert Fleming & Co. Limited.
-------
"Foreign Subsidiary" shall mean any Subsidiary of the Borrower which
------------------
is not a Domestic Subsidiary.
"Funded Debt" shall mean, as determined for Borrower on a consolidated
-----------
basis, and without duplication, all Indebtedness for money borrowed (which shall
include the Borrower's Indebtedness with respect to the Bonds and the other Bond
Documents), all Indebtedness evidenced or secured by Purchase Money Liens, all
Capitalized Lease Obligations and all conditional sales contracts.
"Funded Debt Ratio" shall mean, for any particular fiscal year or
-----------------
fiscal quarter, the ratio of Borrower's Funded Debt as of the end of such period
to Borrower's EBITDA for the consecutive four-quarter period ending therewith.
"Future Domestic Subsidiaries" shall mean any Persons which become
----------------------------
Domestic Subsidiaries after the date of the Initial Credit Event.
"GAAP" shall mean generally accepted accounting principles set forth
----
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board or such other
statements by such other entity as may be approved by a significant segment of
the accounting profession in the United States of America, and which are
applicable to the circumstances as of the date of the determination thereof.
"Gatan International, Inc." shall mean Gatan International, Inc., a
-------------------------
Delaware corporation.
-9-
<PAGE>
"Georgia Security Deeds" shall mean (i) the Leasehold Deed to Secure
----------------------
Debt and Security Agreement, dated as of September 30, 1992, executed by
Borrower in favor of the Agent , with respect to Borrower's leasehold interest
in certain improved real property located in Jackson County, Georgia, (ii) the
Leasehold Deed to Secure Debt and Security Agreement, dated as of September 30,
1992, executed by Borrower in favor of the Agent, with respect to certain real
property located in Jackson County, Georgia, (iii) the Deed to Secure Debt and
Security Agreement, dated as of September 30, 1992, executed by Roper
Properties, Inc. (predecessor-in-interest to Roper Pump Company) in favor of the
Agent, with respect to certain real property located in Jackson County, Georgia,
and (iv) any modifications or replacements of any of the foregoing.
"Guarantors" shall mean each and every Subsidiary who may be now or
----------
hereafter required to guaranty some or all of the Obligations pursuant to
Section 7.06 or Section 10.10 hereof.
"Guaranty" shall mean any contractual obligation, contingent or
--------
otherwise, of a Person with respect to any Indebtedness or other obligation or
liability of another Person, including without limitation, any such
Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed, co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including Contractual Obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase, or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or any agreement to provide
funds for the payment or discharge thereof (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition, or to make any
payment other than for value received.
"Guaranty Agreements" shall mean any and all Guaranty Agreements now
-------------------
or hereafter executed by the Guarantors in favor of the Agent and the Lenders
pursuant to Section 7.06 or 10.10 hereof, each substantially in the form of
Exhibit B attached to the Prior 1992 Credit Agreement, and any modifications or
- ---------
replacements thereof or therefor.
"Indebtedness" of any Person shall mean, without duplication:
------------
(i) all obligations of such Person which in accordance with GAAP
would be shown on the balance sheet of such Person as a liability
(including, without limitation, obligations for borrowed money and for the
deferred purchase price of property or services, and obligations evidenced
by bonds, debentures, notes or other similar instruments);
(ii) all rental obligations under leases required to be capitalized
under GAAP;
(iii) all Guaranties of such Person (including contingent
reimbursement obligations under undrawn letters of credit);
-10-
<PAGE>
(iv) Indebtedness of others secured by any Lien upon property owned
by such Person, whether or not assumed; and
(v) obligations or liabilities of such Person under currency
exchange contracts, interest rate hedging contracts, or similar agreements.
"Initial Credit Event" shall mean the first Credit Event which occurs
--------------------
on or after the date of this Agreement.
"Initial Lender" shall mean NationsBank (in its individual capacity
--------------
and assignee of the other lenders under the Prior 1994 Credit Agreement).
"Intellectual Property Documents" shall mean any and all Patent
-------------------------------
Collateral Assignment Agreements substantially in the form of Exhibit E-1
-----------
attached to the Prior 1992 Credit Agreement and any and all Trademark Security
Agreements substantially in the form of Exhibit E-2 attached to the Prior 1992
-----------
Credit Agreement to be executed by the Borrower and each Subsidiary in favor of
the Agent pursuant to Section 7.06 hereof, and any modifications or replacements
of or for any of the foregoing.
"Interest Expense" shall mean, for any particular period and for any
----------------
particular Person, the total interest expense of such Person for such period
(including, without limitation, interest expense attributable to Capitalized
Lease Obligations in accordance with GAAP, all capitalized interest, all
commissions, discounts and other fees and charges owed with respect to bankers
acceptance financing, and total interest expense, whether shown as interest
expense or as loss and expenses on sales of receivables under any receivables
purchase facility), all as determined on a consolidated basis in accordance with
GAAP.
"Interest Period" shall mean, in the case of the determination of any
---------------
Adjusted LIBOR rate, a one (1), two (2), three (3) or six (6) month period as
selected by Borrower, or in the case of the determination of any Treasury
Securities Rate, a one (1), two (2) or three (3) year period as selected by
Borrower; provided, however, that (i) in the event an Interest Period applicable
--------
to a LIBOR Advance would end on a day which is not a Business Day, such Interest
Period shall be deemed to end on the immediately succeeding Business Day, unless
such extension would cause such Interest Period to end in the next calendar
month, in which case such Interest Period shall be deemed to end on the
immediately preceding Business Day, (ii) any Interest Period applicable to any
LIBOR Advance which begins on a day for which there is not a numerically
corresponding day in the calendar month in which such Interest Period ends
shall, subject to parts (iii) and (iv) below, end on the immediately preceding
Business Day, (iii) no Interest Period shall extend beyond any date upon which
any principal payment is due with respect to the Loans unless the aggregate
principal amount of all Loans that are Prime Rate Advances or that have Interest
Periods which will expire on or before the date such principal payment is due is
equal to or in excess of the amount of such principal payment, and (iv) Borrower
shall not be entitled to select any Interest Period for any Loan which extends
beyond the final maturity date thereof.
-11-
<PAGE>
"Inventory" shall mean all inventory of Borrower or any of its
---------
Domestic Subsidiaries, whether now owned or hereafter acquired by any such
Credit Party, including, but not limited to, all finished goods intended for
sale or lease by any such Credit Party, or for display or demonstration; all
work in process; all raw materials and other materials and supplies of every
nature and description used or which might be used in connection with the
manufacture, printing, packing, shipping, advertising, selling, leasing or
furnishing of such goods or otherwise used or consumed in any such Credit
Party's business.
"Issuing Bank" shall mean, with respect to any Letter of Credit, the
------------
Agent or the Lender which issued such Letter of Credit.
"Lender" and "Lenders" shall mean the Initial Lender and any other
------ -------
banks or other lending institutions which may be listed on Annex I attached
-------
hereto as the same may be amended from time to time, and each assignee thereof
of which Borrower and the Agent receives notice pursuant to Section 14.05
hereof.
"Lessor Waiver and Consent" shall mean any and all Lessor Waivers and
-------------------------
Consents now or hereafter executed by any lessors of any of the Borrower's or
any Guarantor's facilities in favor of the Agent pursuant to Section 7.06
hereof, each substantially in the form of Exhibit N attached to the Prior 1992
---------
Credit Agreement (or in such other form as is reasonably acceptable to the
Agent), and any modification or replacement thereof or therefor.
"Letter of Credit Fees" shall mean the fees required to be paid by the
---------------------
Borrower under Section 7.04(e) hereof.
"Letter of Credit Interest" shall mean, with respect to each Lender,
-------------------------
such Lender's undivided risk participation and ownership interest in the Letters
of Credit, the Borrower's Reimbursement Obligations, and all other Obligations
relating to the Letters of Credit, all as purchased by such Lender from an
Issuing Bank pursuant to Section 6.07 hereof, and also including without
limitation such Lender's remaining interest or interests (if any) as an Issuing
Bank after such purchase.
"Letter of Credit Limit" shall mean $5,000,000.
----------------------
"Letter of Credit Request" shall have the meaning given such term in
------------------------
Section 6.01 hereof.
"Letters of Credit" shall mean any and all letters of credit which may
-----------------
be now or hereafter issued by the Issuing Banks for the account of Borrower
pursuant to Section 6.01 hereof and any extensions, renewals, modifications or
substitutions thereof or therefore which may be in effect at any particular
time, and such term shall specifically include (i) the Bond Letter of Credit
which shall be deemed to have been issued by NationsBank in its capacity as
Agent for the Lenders and (ii) any Letters of Credit issued by Bank South, as
agent under the Prior 1992 Credit Agreement or the Prior 1994 Credit Agreement
and which are still outstanding as of the date of this Agreement.
-12-
<PAGE>
"LIBOR Advance" shall mean any Loans hereunder (or portion thereof)
-------------
which bear interest based on Adjusted LIBOR.
"Lien" shall mean any mortgage, pledge, security interest, security
----
deposit, encumbrance, lien or charge of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement to
give any financing statement under the Uniform Commercial Code of any
jurisdiction).
"Loans" shall mean, collectively, the Revolving Loans, the Term Loans,
-----
and the Cash Management Loans.
"Margin Regulations" shall mean Regulation G, Regulation T, Regulation
------------------
U or Regulation X of the Board of Governors of the Federal Reserve System, as
the same may be in effect from time to time.
"Multicurrency Advances" shall mean any Loans hereunder (or portion
----------------------
thereof) which are made in any Available Foreign Currency.
"Multiemployer Plan" shall have the meaning given such term in Section
------------------
4001(a)(3) of ERISA.
"NationsBank" shall mean NationsBank, N.A. (South), a national banking
-----------
association and successor by merger to Bank South, and its successors and
permitted assigns.
"Net Income" shall mean, for any particular period and Person, the net
----------
income of such Person for such period (taken as a single accounting period) as
determined on a consolidated basis in accordance with GAAP, excluding (to the
extent otherwise included therein) any gains or losses, together with any
related provisions for taxes, realized upon any sale of assets other than in the
ordinary course of business; provided that there also shall be excluded
--------
therefrom the income (or loss) of any other Person accrued prior to the date
such other Person becomes a Subsidiary of the Person whose net income is being
measured or is merged into or consolidated with the Person whose net income is
being measured or any of its other Subsidiaries or such other Person's assets
are acquired by the Person whose net income is being measured or any of its
other Subsidiaries.
"Net Worth" shall mean, as of any date and with respect to any Person,
---------
such Person's total shareholders' equity (including capital stock, additional
paid-in capital and retained earnings, after deducting treasury stock) which
would appear as such on a balance sheet of such Person as of such date prepared
in accordance with GAAP, all as determined on a consolidated basis.
"Notes" shall mean, collectively, the Series A Revolving Loan Notes,
-----
the Series B Revolving Loans, the Term Loan Notes and the Cash Management Note.
-13-
<PAGE>
"Notice of Borrowing" shall have the meaning given such term in
-------------------
Section 7.01(a) hereof.
"Obligations" shall mean, collectively, all amounts now or hereafter
-----------
owing to any or all of the Agent or the Lenders by Borrower or any other Credit
Party pursuant to the terms of this Agreement, any Note, or any other Credit
Document, including without limitation, the unpaid principal balance of any and
all Loans, Reimbursement Obligations, and Letter of Credit Interests, and all
interest, fees, expenses and other charges relating thereto or accruing thereon,
as well as any and all other indebtedness, liabilities, and obligations of
Borrower or any other Credit Party, whether direct or indirect, absolute or
contingent, or liquidated or unliquidated, which may be now existing or may
hereafter arise under any of the Credit Documents, and together with any and all
renewals, extensions, modifications or refinancings of any of the foregoing.
"O.C.G.A." shall mean the Official Code of Georgia Annotated as
-------- ----------------------------------
amended from time to time.
"Officer's Certificate" shall mean a certificate signed in the name of
---------------------
Borrower by its President, chief financial officer, or one of its Vice
Presidents.
"Operating Cash Flow" shall mean, with respect to any particular
-------------------
period, the sum of (i) Borrower's EBITDA for such period less (ii) Borrower's
----
Capital Expenditures for such period less (iii) Borrower's cash income taxes for
----
such period, all as determined on a consolidated basis.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
----
successor thereto.
"Permitted Acquisition Certificate" shall mean a certificate of the
---------------------------------
president, chief financial officer or treasurer of the Borrower in substantially
the form of Exhibit H-2 attached hereto.
-----------
"Permitted Acquisitions" shall mean any acquisition (or series of
----------------------
related acquisitions) by the Borrower or any of its Subsidiaries of the stock of
any new or additional Subsidiary or of all or substantially all of the assets of
another Person (other than another existing Subsidiary) which meets all of the
following requirements: (i) the total consideration paid for such acquisition
(or such series of related acquisitions) shall not exceed the lesser of (x)
$55,000,000 or (y) eight times the Verifiable EBITDA of the acquired business
(except that the total purchase price for Borrower's acquisition of Gatan
International, Inc. may total up to $55,000,000 without regard to its Verifiable
EBITDA), (ii) not more than $55,000,000 of such consideration shall be financed
with Loan proceeds, (iii) any new or additional Subsidiary so acquired shall
either be (x) a Domestic Subsidiary engaged in substantially the same business
in which the Borrower and its other Subsidiaries are engaged in at such time or
in such other types of business which are reasonably related or incidental
thereto or (y) a Foreign Subsidiary engaged in substantially the same business
in which the Borrower and other Subsidiaries are engaged in at such time or in
such other types of business which are reasonably related or incidental thereto
so long as the cumulative purchase price for all acquisitions made by Borrower
and its Subsidiaries of entities
-14-
<PAGE>
which become Foreign Subsidiaries after the date hereof shall not exceed
$37,500,000 in the aggregate, and (iv) any and all applicable requirements of
Sections 9.01(b) and 10.10 of this Agreement with respect to any new or
additional Subsidiary so acquired shall be satisfied.
"Permitted Liens" shall mean any Lien of a kind specified in
---------------
subparagraphs (a) through (k) of Section 11.02 hereof.
"Person" shall mean any individual, partnership, firm, corporation,
------
association, joint venture, trust or other entity, or any government or
political subdivision or agency, department or instrumentality thereof.
"Plan" shall mean any "employee pension benefit plan" (as defined in
---- -----------------------------
Section 3 of ERISA) which is or has been established or maintained, or to which
contributions are or have been made, by Borrower or any of its Subsidiaries or
by any trade or business, whether or not incorporated, which, together with
Borrower or any Subsidiary, is under common control, as described in Section
414(b) or (c) of the Code.
"Pledged Deposit Agreements" shall mean any and all Pledged Deposit
--------------------------
Agreements entered into among the Agent, any Credit Party and any Credit Party's
depository institution pursuant to Section 7.06 hereof, each substantially in
the form of Exhibit O attached to the Prior 1992 Credit Agreement (or in such
---------
other form as is acceptable to the Agent), and any modification or replacement
thereof or therefor.
"Prime Rate" shall mean a per annum rate equal to the rate of interest
----------
announced from time to time by the Agent as its "prime rate", "prime lending
rate", "base rate" or similar reference rate (with each change therein to be
effective as of the date of such change). Each such rate announced by the Agent
is a reference rate and does not necessarily represent the lowest or best rate
actually charged by it to any customer. The Agent may make commercial loans or
other loans at rates of interest at, above or below such reference rate. In the
event the Agent ceases to use its "prime rate", "prime lending rate", "base
rate" or similar reference rate as a standard, the Agent shall designate as a
substitute therefor.
"Prime Rate Advance" shall mean any Loans hereunder (or portion
------------------
thereof) which bear interest based on the Prime Rate.
"Prior 1992 Credit Agreement" shall have the meaning given such term
---------------------------
in the preamble to this Agreement.
"Prior 1994 Credit Agreement" shall have the meaning given such term
---------------------------
in the preamble to this Agreement.
"Pro Rata Share" shall mean, when used with reference to any Lender
--------------
and any described aggregate or total amount, an amount equal to the result
obtained by multiplying such described aggregate or total amount by a fraction,
the numerator of which shall be such Lender's Total Credit Commitments on such
date and the denominator of which shall be the sum of Total
-15-
<PAGE>
Credit Commitments of all of the Lenders on such date, and if the Credit
Commitments of the Lenders have been terminated such term shall mean an amount
equal to the result obtained by multiplying such described aggregate or total
amount by a fraction, the numerator of which shall be the aggregate unpaid
principal balance of the Obligations owing to such Lender on such date and the
denominator of which shall be the aggregate unpaid principal balance of all of
the Obligations owing to all of the Lenders as of such date.
"Purchase Money Indebtedness" shall mean (i) Indebtedness for the
---------------------------
payment of all or any part of the purchase price of any fixed assets, (ii) any
Indebtedness incurred for the sole purpose of financing or refinancing all or
any part of the purchase price of any fixed assets, (iii) Capitalized Lease
Obligations, and (iv) any renewals, extensions or refinancings thereof (but not
any increases in the principal amounts thereof outstanding at that time), except
that Purchase Money Indebtedness shall not include any unsecured current
liabilities covered by Section 11.01(b) hereof or Capitalized Lease Obligations
covered by Section 11.01(c) hereof.
"Purchase Money Lien" shall mean a Lien upon fixed assets which
-------------------
secures the Purchase Money Indebtedness relating thereto but only if such Lien
shall at all times be confined solely to the fixed assets the purchase price of
which was financed or refinanced through the incurrence of the Purchase Money
Indebtedness secured by such Lien and only if such Lien secures solely such
Purchase Money Indebtedness.
"Real Estate Collateral" shall mean the real property, buildings other
----------------------
improvements and fixtures covered by the Real Estate Collateral Documents.
"Real Estate Collateral Documents" shall mean the Georgia Security
--------------------------------
Deeds and the California Deed of Trust.
"Reimbursement Obligations" shall mean the Borrower's Obligations
-------------------------
under Section 6.02 hereof to reimburse any and all Issuing Banks for any and all
Drawings honored by them under any or all of the Letters of Credit, including
without limitation, any and all interest which may accrue thereon.
"Reportable Event" shall mean any of the events set forth in Section
----------------
4043(b) of ERISA.
"Required Lenders" shall mean, at any time, Lenders holding, in the
----------------
aggregate, not less than sixty-six and two-thirds percent (66 2/3%) of the
aggregate dollar amount of the Credit Commitments then in effect, and if the
Credit Commitments of the Lenders have expired or have been terminated such term
shall mean Lenders holding, in the aggregate, not less than sixty-six and two-
thirds percent (66 2/3%) of the then aggregate unpaid principal balance of the
Obligations then outstanding.
"Requirement of Law" for any person shall mean the articles or
------------------
certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other
-16-
<PAGE>
governmental authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Revolving Loan Period" shall mean the period which runs from the date
---------------------
of this Agreement until the Credit Expiration Date.
"Revolving Loans" shall mean the Series A Revolving Loans and the
---------------
Series B Revolving Loans.
"SEC" shall mean the Securities and Exchange Commission, or any
---
successor thereto.
"Security" shall have the same meaning as in Section 2(1) of the
--------
Securities Act of 1933, as amended.
"Security Agreements" shall mean any and all Security Agreements now
-------------------
or hereafter executed by the Borrower or any Guarantor in favor of the Agent
pursuant to Section 7.06 or 10.10 hereof, each in the form of Exhibit C-1 or
-----------
Exhibit C-2 attached to the Prior 1992 Credit Agreement, respectively, and any
- -----------
modifications or replacements thereof or therefor.
"Security Documents" shall mean, collectively, the Guaranty
------------------
Agreements, the Stock Pledge Agreements, the Security Agreements, the Pledged
Deposit Agreements, the Real Estate Collateral Documents, the Intellectual
Property Documents, the Agreement Regarding Security Documents, and each other
guaranty, security or other collateral document, whether now existing or
hereafter executed and delivered, guaranteeing or securing any or all of the
Obligations.
"Senior Funded Debt" shall mean, as of any particular date, Borrower's
------------------
Funded Debt excluding its Subordinated Debt.
"Senior Funded Debt Ratio" shall mean, as of any particular date, the
------------------------
ratio (expressed as a percentage) of Borrower's Senior Funded Debt to its Total
Capitalization as of such date.
"Series A Revolving Loan Commitment" shall mean, at any time and for
----------------------------------
any Lender, the amount of its Series A Revolving Loan Commitment then in effect
as shown on Annex I attached hereto and as such Credit Commitment may be
-------
reduced, assigned or amended pursuant to Section 2.03, 14.05 or 14.08 hereof,
respectively.
"Series A Revolving Loan Commitment Fee Rate" shall mean the
-------------------------------------------
applicable rate per annum set forth in Annex II attached hereto.
--------
"Series A Revolving Loan Commitment Fees" shall mean the fees required
---------------------------------------
to be paid by the Borrower pursuant to Section 7.04(a) hereof.
-17-
<PAGE>
"Series A Revolving Loan Notes" shall mean, collectively, the Series A
-----------------------------
Revolving Loan Notes issued by the Borrower and payable to the order of each of
the Lenders as evidence of the Series A Revolving Loans made by such Lender,
each in the form of Exhibit A attached to this Agreement, and any extensions,
---------
renewals, modifications or replacements thereof or therefor.
"Series A Revolving Loans" shall mean the advances made by the Lenders
------------------------
to Borrower pursuant to Section 2.01 hereof.
"Series B Revolving Loan Commitment" shall mean, at any time and for
----------------------------------
any Lender, the amount of its Series B Revolving Loan Commitment then in effect
as shown on Annex I attached hereto and as such Credit Commitment may be
-------
reduced, assigned or amended pursuant to Section 3.03, 14.05 or 14.08 hereof,
respectively.
"Series B Revolving Loan Commitment Fee Rate" shall mean the
-------------------------------------------
applicable rate per annum set forth in Annex II attached hereto.
--------
"Series B Revolving Loan Commitment Fees" shall mean the fees required
---------------------------------------
to be paid by the Borrower pursuant to Section 7.04(b) hereof.
"Series B Revolving Loan Notes" shall mean, collectively, the Series B
-----------------------------
Revolving Loan Notes issued by the Borrower and payable to the order of each of
the Lenders as evidence of the Series B Revolving Loans made by such Lender,
each in the form of Exhibit B attached to this Agreement, and any extensions,
---------
renewals, modifications or replacements thereof or therefor.
"Series B Revolving Loans" shall mean the advances made by the Lenders
------------------------
to Borrower pursuant to Section 3.01 hereof.
"Stated Amount" shall mean, with respect to each Letter of Credit and
-------------
as of any particular date, the maximum aggregate amount then available for
Drawing under such Letter of Credit.
"Stock Pledge Agreements" shall mean any and all Stock Pledge
-----------------------
Agreements now or hereafter executed by Borrower or any Subsidiary in favor of
the Agent pursuant to Section 7.06 or 10.10 hereof, each in the form of Exhibit
-------
D-1 or Exhibit D-2 attached to the Prior 1992 Credit Agreement, respectively,
- --- -----------
and any modification or replacement thereof or therefor.
"Subordinated Debt" shall mean any and all unsecured Indebtedness for
-----------------
borrowed money of Borrower or any Subsidiary the payment of which is
subordinated in writing to all Obligations on terms and conditions satisfactory
in all respects to the Required Lenders, including without limitation with
respect to interest rates, payment terms, maturities, amortization schedules,
covenants, defaults, remedies and subordination provisions.
"Subsidiary" means, as applied to Borrower, (a) any corporation of
----------
which 50% or more of the outstanding stock (other than directors' qualifying
shares) having ordinary voting power to elect a majority of its board of
directors (or other governing body), regardless of the
-18-
<PAGE>
existence at the time of a right of the holders of any class or classes (however
designated) of securities of such corporation to exercise such voting power by
reason of the happening of any contingency, or any partnership of which 50% or
more of the outstanding partnership interests is, at the time, owned by Borrower
or by one or more Subsidiaries of Borrower, and (b) any other entity which is
controlled or capable of being controlled by Borrower, or by one or more
Subsidiaries of Borrower.
"Tangible Net Worth" shall mean, as of any particular date and with
------------------
respect to any particular Person, the Net Worth of such Person as of such date
less all assets of such Person as of such date which should be classified as
intangible assets under GAAP (including, without limitation, goodwill), all as
determined on a consolidated basis.
"Taxes" shall mean any present or future taxes, levies, imposts,
-----
duties, fees, assessments, deductions, withholdings or other charges of whatever
nature, including without limitation income, gross receipts, excise, property,
sales, transfer, license, payroll, withholding, social security, and franchise
taxes, now or hereafter imposed or levied by the United States of America or any
state, local or foreign government or by any department, agency or other
political subdivision or taxing authority thereof or therein and all interests,
penalties, additions to tax, and other similar liabilities with respect thereto.
"Term Loan Notes" shall mean, collectively, the Term Loan Notes
---------------
executed by the Borrower and payable to the order of each of the Lenders as
evidence of the Term Loans made by such Lender, each in the form of Exhibit C
---------
attached to this Agreement, and any extensions, renewals, modifications or
replacements thereof or therefor.
"Terms Loans" shall mean the advances made by the Lenders to Borrower
-----------
pursuant to Section 4.01 hereof
"Total Capitalization" shall mean, as of any date, the sum of
--------------------
Borrower's Funded Debt plus Borrower's Net Worth, all as determined on a
consolidated basis.
"Total Credit Commitments" shall mean, at any one time, the sum of all
------------------------
of the Lenders' Credit Commitments as in effect at such time (such sum initially
being $100,000,000).
"Total Liabilities" shall mean, as of any date, the amount at which
-----------------
all of the liabilities of such Person should be shown in accordance with GAAP on
a balance sheet of such Person at such date, all as determined on a consolidated
basis (and which, in the case of the Borrower, shall include the Borrower's
Indebtedness with respect to the Bonds and the other Bond Documents).
"Total Series A Revolving Loan Commitments" shall mean, at any time,
-----------------------------------------
the sum of all of the Lenders' Series A Revolving Loan Commitments as then in
effect (such sum initially being $25,000,000).
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<PAGE>
"Total Series B Revolving Loan Commitments" shall mean, at any time,
-----------------------------------------
the sum of all of the Lenders' Series B Revolving Loan Commitments as then in
effect (such sum initially being $75,000,000).
"Treasury Securities Rate" shall mean, for any Interest Period, a rate
------------------------
per annum (rounded upwards to the nearest one-eighth of one percent, if
necessary) equal to the yield to maturity implied by (i) the yield reported as
of 10:00 a.m. (Atlanta time) on the second (2nd) Business Day immediately
preceding the beginning of such Interest Period by Telerate (or such other
quotation service as Agent may select from time to time) for actively traded
United States Treasury securities having a maturity equal or substantially equal
to the length of such Interest Period or (ii) if such yield shall not be
reported as of such date or the yield reported as of such date shall not be
ascertainable in the Agent's reasonable judgment, the Treasury Constant Maturity
Series Yield reported, for the latest date for which such yield shall have been
so reported as of the second (2nd) Business Day next preceding the beginning of
such Interest Period, in Federal Reserve Statistical Release H.15(519) (or any
comparable successor publication) for actively trading United States Treasury
securities having a constant maturity equal or substantially equal to the length
of such Interest Period, and in either of the above cases such implied yield
shall be determined, if necessary, by converting United States Treasury bill
quotations to bond equivalent yields in accordance with accepted financial
practices.
"Treasury Securities Rate Advance" shall mean any Term Loans hereunder
--------------------------------
(or portion thereof) which bear interest based on the Treasury Securities Rate.
"Verifiable EBITDA" shall mean, for any Person to be acquired by
-----------------
Borrower and for any period, such Person's EBITDA for such period as shown on
its audited or reviewed financial statements for its most recently ended fiscal
year as adjusted for any reasonably anticipated reductions in compensation to
such Person's owner or owners (or their replacements) from historical levels for
such period to projected future levels for such owner or owners (or their
replacements) based on Borrower's employment agreements with such owner or
owners (or their replacements) or, in the absence of such agreements, Borrower's
good faith estimates of such reductions.
"Voting Stock" shall mean the securities of any class or classes of a
------------
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
"Working Capital" shall mean, as of any particular date and which
---------------
respect to any particular Person, the amount by which the Current Assets of such
Person as of such date exceed its Current Liabilities as of such date, all as
determined on a consolidated basis.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS. Unless
-----------------------------------
otherwise defined or specified herein, all accounting terms shall be construed
herein, all accounting determinations hereunder shall be made, all financial
statements required to be delivered hereunder shall be prepared, and all
financial records shall be maintained in accordance with GAAP, except that
financial records of the Foreign Subsidiaries may be maintained in accordance
-20-
<PAGE>
with generally accepted accounting principles in effect from time to time in the
jurisdiction of organization of such Foreign Subsidiaries; provided, however,
--------
that compliance with the financial covenants and calculations set forth in
Section 10.09 hereof, and in the definitions used in such covenants and
calculations, shall be calculated, made and applied in accordance with GAAP and
such generally accepted accounting principles in such foreign jurisdictions, as
the case may be, as in effect on the date of this Agreement applied on a basis
consistent with the preparation of the financial statements referred to in
Section 10.01.
SECTION 1.03. OTHER DEFINITIONAL CONVENTIONS. The words "hereof",
------------------------------
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. Any pronoun used herein shall be deemed to cover all genders
and all singular terms used herein shall include the plural and vice versa.
Unless otherwise expressly indicated herein, all references herein to a period
of time which runs "from" or "through" a particular date shall be deemed to
include such date, and all references herein to a period of time which runs "to"
or "until" a particular date shall be deemed to exclude such date.
ARTICLE II.
SERIES A REVOLVING LOANS
------------------------
SECTION 2.01. SERIES A REVOLVING LOAN COMMITMENTS; USE OF PROCEEDS.
----------------------------------------------------
(a) Subject to and upon the terms and conditions set forth in this
Agreement, each Lender severally agrees, upon the Borrower's request, to advance
to the Borrower, from time to time during the Revolving Loan Period, Series A
Revolving Loans in an aggregate principal amount outstanding at any one time not
to exceed such Lender's Series A Revolving Loan Commitment as in effect at such
time; provided, however, that the Lenders shall not be obligated hereunder to
--------
make Series A Revolving Loans if the aggregate outstanding principal balance of
all of the Series A Revolving Loans plus the aggregate Stated Amount of all
----
outstanding Letters of Credit plus the aggregate outstanding principal amount of
----
all the Reimbursement Obligations exceeds, or would exceed with the making of
any Series A Revolving Loan, the Total Series A Revolving Loan Commitments as
then in effect. The Borrower shall be entitled to repay and reborrow Series A
Revolving Loans from time to time in accordance with the provisions of this
Agreement.
(b) The proceeds of the Series A Revolving Loans shall be used to
finance the working capital and general corporate needs of the Borrower and its
Subsidiaries not inconsistent with the terms of this Agreement and to finance
Permitted Acquisitions. It is also contemplated that the proceeds of some of
the Series A Revolving Loans shall be used to refinance the Borrower's
Reimbursement Obligations with respect to the Letters of Credit pursuant to
Section 6.02(a) hereof or to refinance Cash Management Loans pursuant to Section
5.04 hereof.
-21-
<PAGE>
SECTION 2.02. SERIES A SERIES A REVOLVING LOAN NOTES; REPAYMENT OF
----------------------------------------------------
PRINCIPAL AND INTEREST.
- ----------------------
(a) The Borrower's obligation to pay to each Lender the principal of
and interest on the Series A Revolving Loans made by such Lender shall be
evidenced by the records of the Agent and such Lender and by the Series A
Revolving Loan Note payable to such Lender.
(b) Accrued interest on the portion of each Lender's Series A
Revolving Loans consisting of Prime Rate Advances shall be payable to such
Lender in arrears on the first (1st) day of each calendar month, commencing with
the month following the month in which such Lender's initial Series A Revolving
Loan is made, and continuing to be due on the first (1st) day of each month
thereafter, and accrued interest on the portion of each Lender's Series A
Revolving Loans consisting of Fixed Rate Advances shall be payable to such
Lender in arrears on the last day of each Interest Period applicable thereof
and, in the case of any Fixed Rate Advance having an Interest Period in excess
of three (3) months, on each day which occurs every three (3) months after the
initial date of such Interest Period.
(c) In addition to any principal reduction which may be required at
any time under Section 2.03 hereof, and subject to any acceleration of maturity
pursuant to Section 12.02 hereof, the aggregate principal balance of each
Lender's Series A Revolving Loans shall be payable in full on the Credit
Expiration Date.
SECTION 2.03. EXCESS SERIES A REVOLVING LOANS; REDUCTIONS IN SERIES
-----------------------------------------------------
A REVOLVING LOAN COMMITMENTS.
- ----------------------------
(a) If at any time the sum of the aggregate outstanding principal
amount of all of the Series A Revolving Loans plus the aggregate Stated Amount
----
of all outstanding Letters of Credit plus the aggregate outstanding principal
----
amount of all the Reimbursement Obligations shall exceed the Total Series A
Revolving Loan 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
Obligations or cause the early termination of such Letters of Credit to the
extent necessary to eliminate such excess or, if such payment or cancellation
does not eliminate such excess, cause to be deposited with the Agent Cash
Collateral in an amount and of a 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.. If at any time the aggregate outstanding principal
balance of the Series A Revolving Loans plus the aggregate Stated Amount of all
----
outstanding Letters of Credit plus the aggregate outstanding principal amount of
----
all the Reimbursement Obligations shall exceed the Total Series A Revolving Loan
Commitments as then in effect, 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.
-22-
<PAGE>
(b) Upon at least sixty (60) days' prior written notice to the Agent
and each Lender, Borrower may, at its option at any time during the Revolving
Loan Period, terminate the Series A Revolving Loan Commitments of all Lenders in
full or reduce all of the Lenders' Series A Revolving Loan Commitments in
increments of $500,000; provided, however, that (i) the amount of any such
--------
partial reduction shall be applied to all of the Lenders' Series A Revolving
Loan Commitments based on each Lenders' Pro Rata Share of all of the Total
Series A Revolving Loan Commitments, (ii) the sum of the aggregate outstanding
principal balance of all of the Series A Revolving 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 Series A Revolving Loan Commitments after giving
effect to any such termination or reduction (and, in either case, Borrower shall
immediately prepay such Loans, pay any Reimbursement Obligations, cause the
cancellation of Letters of Credit or deposit Cash Collateral with the Agent to
the extent necessary to eliminate any such excess), (iii) if any such
termination or reduction would require that any Fixed Rate Advance be prepaid
prior to the end of its then-current Interest Period, Borrower shall pay any
additional amount due under Section 7.05(e)(iii) hereof, and (iv) any such
termination or reduction shall be irrevocable. In the event any such termination
or reduction is made by Borrower in accordance with this Section, the Agent will
issue to the Borrower and each Lender a revised Annex I to this Agreement
-------
reflecting such termination or reduction, which revised Annex I shall supersede
-------
and replace the prior version thereof and shall be substituted by each party in
lieu thereof.
ARTICLE III.
SERIES B REVOLVING LOANS
------------------------
SECTION 3.01. SERIES B REVOLVING LOAN COMMITMENTS; USE OF PROCEEDS.
----------------------------------------------------
(a) Subject to and upon the terms and conditions set forth in this
Agreement, each Lender severally agrees, upon the Borrower's request, to advance
to the Borrower, from time to time during the Revolving Loan Period, Series B
Revolving Loans in an aggregate principal amount outstanding at any one time not
to exceed such Lender's Series B Revolving Loan Commitment as in effect at such
time; provided, however, that the Lenders shall not be obligated hereunder to
--------
make Series B Revolving Loans if the sum of the aggregate outstanding principal
balance of all of the Series B Revolving Loans plus the aggregate outstanding
----
principal balance of the Term Loans exceeds, or would exceed with the making of
such Series B Revolving Loans, the Total Series B Revolving Loan Commitments as
then in effect. The Borrower shall be entitled to repay and reborrow Series B
Revolving Loans from time to time in accordance with the provisions of this
Agreement.
(b) The proceeds of the Series B Revolving Loans shall be used to
finance the working capital and general corporate needs of the Borrower and its
Subsidiaries not inconsistent with the terms of this Agreement and to finance
Permitted Acquisitions. It is also contemplated that the proceeds of some of the
Series B Revolving Loans shall be used to refinance the Borrower's Reimbursement
Obligations with respect to the Letters of Credit pursuant to Section 6.02(a)
hereof or to refinance Cash Management Loans pursuant to Section 5.04 hereof.
-23-
<PAGE>
SECTION 3.02. SERIES B REVOLVING LOAN NOTES; REPAYMENT OF PRINCIPAL AND
---------------------------------------------------------
INTEREST.
- --------
(a) The Borrower's obligation to pay to each Lender the principal of
and interest on the Series B Revolving Loans made by such Lender shall be
evidenced by the records of the Agent and such Lender and by the Series B
Revolving Loan Note payable to such Lender.
(b) Accrued interest on the portion of each Lender's Series B
Revolving Loans consisting of Prime Rate Advances shall be payable to such
Lender in arrears on the first (1st) day of each calendar month, commencing with
the month following the month in which such Lender's initial Series B Revolving
Loan is made, and continuing to be due on the first (1st) day of each month
thereafter, and accrued interest on the portion of each Lender's Series B
Revolving Loans consisting of Fixed Rate Advances shall be payable to such
Lender in arrears on the last day of each Interest Period applicable thereto
and, in the case of any Fixed Rate Advance having an Interest Period in excess
of three (3) months, on each day which occurs every three (3) months after the
initial date of such Interest Period.
(c) In addition to any principal reduction which may be required at
any time under Section 3.03 hereof, and subject to any acceleration of maturity
pursuant to Section 12.02 hereof, the aggregate principal balance of each
Lender's Series B Revolving Loans which have not been refinanced by Term Loans
pursuant to Section 4.01 below shall be payable in full on the Credit Expiration
Date.
SECTION 3.03. EXCESS SERIES B REVOLVING LOANS; REDUCTIONS IN SERIES B
-------------------------------------------------------
REVOLVING LOAN COMMITMENTS.
- --------------------------
(a) If at any time the sum of the aggregate outstanding principal
amount of all of the Series B Revolving Loans plus the aggregate outstanding
----
principal balance of all of the Term Loans shall exceed the Total Series B
Revolving Loan 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 of the Series B
Revolving Loans or the Term Loans as is necessary to eliminate such excess. If
at any time the aggregate outstanding principal balance of the Series B
Revolving Loans plus the aggregate outstanding principal balance of all of the
----
Term Loans should exceed the Total Series B Revolving Loan Commitments then in
effect, 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.
(b) Upon at least sixty (60) days' prior written notice to the Agent
and each Lender, Borrower may, at its option at any time during the Revolving
Loan Period, terminate the Series B Revolving Loan Commitments of all Lenders in
full or reduce all of the Lenders' Series B Revolving Loan Commitments in
increments of $500,000; provided, however, that (i) the amount of any such
--------
partial reduction shall be applied to all of the Lenders' Series B Revolving
Loan Commitments based on each Lenders' Pro Rata Share of all of the Total
Series B Revolving Loan
-24-
<PAGE>
Commitments, (ii) the sum of the aggregate outstanding principal balance of all
of the Series B Revolving Loans plus the aggregate outstanding principal balance
----
of all of the Term Loans shall not exceed the reduced amount of the Total Series
B Revolving Loan Commitments after giving effect to any such termination or (and
Borrower shall immediately prepay the Series B Revolving Loans or the Term Loans
to the extent necessary to eliminate any such excess), (iii) if any such
termination or reduction would require that any Fixed Rate Advance be prepaid
prior to the end of its then-current Interest Period, Borrower shall pay any
additional amount due under Section 7.05(e)(iii) hereof, and (iv) any such
termination or reduction shall be irrevocable. In the event any such termination
or reduction is made by Borrower in accordance with this Section, the Agent will
issue to the Borrower and each Lender a revised Annex I to this Agreement
-------
reflecting such termination or reduction, which revised Annex I shall supersede
-------
and replace the prior version thereof and shall be substituted by each party in
lieu thereof.
ARTICLE IV.
TERM LOANS
----------
SECTION 4.01. TERM LOANS; USE OF PROCEEDS.
---------------------------
(a) Subject to and upon the terms and conditions set forth in this
Agreement, each Lender severally agrees, upon the Borrower's request, to advance
to the Borrower, from time to time during the Revolving Loan Period, Term Loans
in order to term-out any then outstanding Series B Revolving Loans; provided,
--------
however, that (i) the Lenders shall not be obligated hereunder to make any Term
Loans if, after giving effect to the making of such Term Loans, the sum of the
aggregate outstanding principal balance of all of the Term Loans plus the
----
aggregate outstanding principal balance of all of the Series B Revolving Loans
exceeds the Total Series B Loan Commitments as then in effect, (ii) the Term
Loans requested by Borrower on any given day must equal $10,000,000 (or a
greater integral multiple of $1,000,000 thereof) in aggregate principal amount
for all of the Lenders combined, and (iii) the Series B Revolving Loans to be
refinanced by any Term Loans may not be Multicurrency Advances.
(b) The proceeds of the Term Loans shall be used solely to refinance
Series B Revolving Loans.
(c) At the time Borrower requests any Term Loans hereunder, Borrower
shall specify in writing to the Agent the scheduled term for such Term Loans,
which term may not exceed forty-eight (48) months from the date such Loans are
made. The maturity date for a Term Loan shall be the maturity date set forth in
the Term Loan Note evidencing such Term Loan.
-25-
<PAGE>
SECTION 4.02. TERM LOAN NOTES; REPAYMENT OF PRINCIPAL AND INTEREST.
----------------------------------------------------
(a) The Borrower's obligation to pay to each Lender the principal and
interest on each Term Loan made by such Lender shall be evidenced by the records
of the Agent and such Lender and by the Term Loan Note relating to such Term
Loan which shall be executed and delivered by the Borrower and received by such
Lender before such Lender is obligated to make such Term Loan. Each such Term
Loan Note shall be in the form of Exhibit C attached hereto and shall be (i)
---------
dated as of the date of such Term Loan, (ii) payable to such Lender in an
original stated principal amount equal to such Term Loan, and (iii) payable in
substantially equal monthly installments of principal over the term of such Term
Loan as specified by the Borrower pursuant to Section 4.01(c) above, but in each
case the final payment of principal on such Term Loan shall be in an amount
equal to its entire remaining unpaid principal balance.
(b) Accrued interest on the portion of each Lender's Term Loans
consisting of Prime Rate Advances shall be payable to such Lender in arrears on
the first (1st) day of each calendar month, commencing with the month following
the month in which such Lender's initial Term Loan is made, and continuing to be
due on the first (1st) day of each month thereafter, and accrued interest on the
portion of each Lender's Term Loans consisting of Fixed Rate Advances shall be
payable to such Lender in arrears on the last day of each Interest Period
applicable thereto and, in the case of any Fixed Rate Advance having an Interest
Period in excess of three (3) months, on each day which occurs every three (3)
months after the initial date of such Interest Period. Accrued interest on each
Term Loan also shall be payable on the final maturity date thereof specified in
the Term Loan Note evidencing the same.
SECTION 4.03. MODIFICATION OF SECURITY DOCUMENTS. The Lenders'
----------------------------------
obligations hereunder to make any Term Loans also shall be subject to the
Agent's prior receipt, in form and substance satisfactory to it and to the
extent requested by the Agent at the direction of the Required Lenders, of such
modifications of the Security Documents as the Agent may deem necessary or
appropriate in order to maintain the Agent's first-priority Liens on the
Collateral to secure such Term Loans together with the Agent's receipt of such
binding endorsements of any existing mortgagee title insurance policies which
the Agent may then hold with respect the Real Estate Collateral as the Agent may
deem necessary or appropriate in order to increase the coverage of such
insurance to cover such Term Loans and in order the advance the effective date
of such title insurance through the date of such Term Loans together with the
Agent's receipt of payment from the Borrower of all costs (including, without
limitation, reasonable attorney's fees, recording taxes, intangible taxes, stamp
taxes, documentary taxes, and title insurance costs) as the Agent incurs in
connection with such modifications of the Security Documents.
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<PAGE>
ARTICLE V.
CASH MANAGEMENT LOANS
---------------------
SECTION 5.01. CASH MANAGEMENT LOANS; USE OF PROCEEDS, ETC..
---------------------------------------------
(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 lesser of (i) the
Cash Management Loan Limit as in effect at such time or (ii) the sum of the Cash
Management Lender's unused Credit Commitments as in effect at such time.
(b) The proceeds of the Cash Management Loans shall be used for the
same purposes for which Borrower could obtain Revolving Loans hereunder.
SECTION 5.02. CASH MANAGEMENT LOAN NOTE; REPAYMENT OF PRINCIPAL AND
-----------------------------------------------------
INTEREST.
- --------
(a) The Borrower's obligation to pay the Cash Management Lender the
principal of and interest on the Cash Management Loans shall be evidenced by the
records of such Lender and by the Cash Management Loan Note payable to such
Lender.
(b) Accrued interest on the Cash Management Loans shall be payable to
the Cash Management Lender in arrears on each Cash Management Loan Settlement
Date and also shall be payable to the Cash Management Lender on the Credit
Expiration Date.
(c) In addition to any principal reduction which may be required at
any time under Section 2.03 hereof, and subject to any 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 earlier of (i)
each Cash Management Loan Settlement Date and (ii) the Business Day which
immediately precedes the Credit Expiration Date.
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 lesser of the amount of the Cash Management Loan Limit then in effect
or the sum of the Cash Management Lender's unused Credit Commitments as 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 to the extent necessary to
eliminate such excess. If at any time the aggregate outstanding principal
balance of the Cash Management Loans should exceed the lesser of the Cash
Management Loan Limit then in effect or the sum of the Cash Management Lender's
unused Credit Commitments as then in effect, such excess shall nevertheless
constitute Obligations that are evidenced by the Credit Documents,
-27-
<PAGE>
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.
SECTION 5.04. REFINANCINGS OF CASH MANAGEMENT LOANS. If and to the
-------------------------------------
extent that any Cash Management Loan is not repaid when due, or if required by
the Cash Management Lender upon the occurrence of any Event of Default, and
notwithstanding any other provisions of this Agreement to the contrary, there
shall occur a deemed request by the Borrower for a deemed disbursement by all of
the Lenders of Series A Revolving Loans or Series B Revolving Loans (according
to each Lender's respective Pro Rata Share thereof and with such Loans to be
made, first, as Series A Revolving Loans to the extent of such Lender's unused
Series A Revolving Loan Commitment, and then as Series B Revolving Loans if the
Series B Revolving Loan Commitments are still in effect) equal to the aggregate
principal balance of the Cash Management Loans then outstanding and properly
made in accordance with the terms and conditions of this Agreement, and each
Lender (other than the Cash Management Lender) shall pay to the Cash Management
Lender, upon request therefor by and for the account of the Cash Management
Lender, an amount equal to the principal amount of the then-outstanding Cash
Management Loans multiplied by such Lender's Pro Rata Share. If such request is
made by the Cash Management Lender by 12:30 p.m. (Eastern Time) on any Business
Day, each other Lender's payment thereof shall be made to the Cash Management
Lender 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 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 Funds Rate.
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<PAGE>
ARTICLE VI.
LETTERS OF CREDIT
-----------------
SECTION 6.01. AMOUNTS, TERMS AND ISSUANCE OF LETTERS OF CREDIT.
------------------------------------------------
(a) The Agent shall, on the terms and subject to the conditions
herein set forth, from time to time during the Revolving Loan Period (but in no
event later than the 30th day prior to the Credit Expiration Date), issue for
the account of Borrower Letters of Credit having an aggregate Stated Amount at
any one time which does not exceed the Letter of Credit Limit then in effect;
provided, however, that (i) if mutually agreeable to Borrower, the Agent and
- --------
another Lender, such other Lender may be the Issuing Bank with respect to any
Letter of Credit, (iii) the Agent's and the other Lenders' obligations hereunder
to issue the Letters of Credit may be terminated by the Agent (with the consent
of the Required Lenders) upon the occurrence of an Event of Default in
accordance with the terms of Section 12.02 hereof, (iii) each Letter of Credit
must be in form and substance satisfactory to Borrower, the Agent and the
Issuing Bank (if other than the Agent) and must expire no later than thirty (30)
days prior to the Credit Expiration Date (other than the Bond Letter of Credit
which shall expire no later than June 1, 2000), (iv) the proceeds of each Letter
of Credit may be used only for a purpose for which Borrower could obtain a
Series A Revolving Loan hereunder, (v) the Bond Letter of Credit and all Letters
of Credit issued by the Agent under the Prior 1992 Credit Agreement or the Prior
1994 Credit Agreement and which are still outstanding as of the date of this
Agreement shall be deemed to have been issued by the Agent hereunder and shall
be deemed to be Letters of Credit hereunder, and (vi) no Letter of Credit shall
be issued 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 amount of all Series A Revolving Loans and all Reimbursement
Obligations then outstanding would exceed the Total Series A Revolving Loan
Commitments then in effect.
(b) Whenever Borrower desires to request a Letter of Credit, it shall
give the Agent and the Issuing Bank (if other than the Agent) prior written
notice (or telephonic notice if promptly confirmed in writing) of such request
(a "Letter of Credit Request"), such Letter of Credit Request to be given prior
------------------------
to 11:30 a.m. (Eastern Time) not less than five (5) Business Days prior to the
requested Date of Issuance of such Letter of Credit. Each Letter of Credit
Request shall be irrevocable and shall include (i) the form of the Letter of
Credit which the Borrower requests to be so issued and (ii) such other
information and documents regarding such Letter of Credit and any underlying
transactions as the Agent or any Lender may reasonably request. The Agent shall
promptly notify each other Lender, by telephone or telecopy, of its receipt of
each Letter of Credit Request.
(c) On or before the Date of Issuance of each Letter of Credit,
Borrower shall pay to the Agent the Letter of Credit Fee for such Letter of
Credit required under Section 7.04(c) below.
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SECTION 6.02. REIMBURSEMENT OBLIGATIONS.
-------------------------
(a) Upon receipt by the Issuing Bank of a Drawing under any Letter of
Credit, the Issuing Bank shall promptly notify the Borrower and the Agent (if
the Agent is not the Issuing Bank) of the amount of such Drawing and the date on
which the payment thereof is to be made by the Issuing Bank to the beneficiary
of such Letter of Credit (but the Issuing Bank's failure to give any such notice
shall not affect the Borrower's Reimbursement Obligations hereunder). The
Borrower agrees to reimburse the Issuing Bank for the amount of each Drawing
made under or purported to be made under any Letter of Credit which is paid by
the Issuing Bank, which reimbursement shall be made in full at or prior to the
time the Issuing Bank pays such Drawing (but, in the event the Issuing Bank
fails to give the Borrower the aforesaid prior notice of its intended payment of
any Drawing, such reimbursement shall not be due until the Issuing Bank gives
the Borrower notice of such payment of such Drawing). Forthwith upon its receipt
of any such notice from the Issuing Bank of a Drawing under any Letter of
Credit, the Borrower shall advise the Agent whether or not the Borrower intends
to request a Revolving Loan pursuant to Section 2.01 or 3.01 hereof to finance
its Reimbursement Obligations with respect to such Drawing. In the event the
Borrower fails to so advise the Agent with respect to any particular Drawing
within one (1) Business Day after the date it receives notice of such Drawing,
the Borrower shall be deemed to have requested that Revolving Loans be made
hereunder in order to pay its Reimbursement Obligations with respect to such
Drawing (with such Loans to be made, first, as Series A Revolving Loans to the
extent of the Lenders' unused Series A Revolving Loan Commitments, and then as
Series B Revolving Loans if the Series B Revolving Loan Commitments are still in
effect). The Borrower acknowledges and agrees that its reimbursement in full for
each Drawing paid by the Issuing Bank under a Letter of Credit is intended to be
a contemporaneous exchange for new value given to the Borrower by such Issuing
Bank, the Agent and the Lenders.
(b) Borrower's Reimbursement Obligations hereunder with respect to
any particular Letter of Credit shall be evidenced by the Issuing Bank's records
and absent manifest error shall be absolute, unconditional and irrevocable, and
such reimbursement shall be made strictly in accordance with the terms and
conditions of this Agreement under all circumstances whatsoever, including,
without limitation, the following circumstances: (i) any lack of validity or
enforceability of the transactions contemplated by or related to such Letter of
Credit or any other Letter of Credit; (ii) any amendment or waiver of or consent
to depart from all or any of the terms of the transactions contemplated by or
related to such Letter of Credit or any other Letter of Credit; (iii) the
existence of any claim, set-off, defense or other right which the Borrower may
have at any time against such Issuing Bank, the Agent, any Lender, any Letter of
Credit beneficiary, or any other Person, whether in connection with this
Agreement or the transactions contemplated herein, any Letter of Credit or the
transactions contemplated thereby or any unrelated transactions; or (iv) the
fact that any draft, affidavit, letter, certificate, invoice, bill of lading or
other document presented under or delivered in connection with such Letter of
Credit or any other Letter of Credit proves to have been forged, fraudulent,
invalid or insufficient in any respect or any statement therein proves to have
been untrue or incorrect in any respect.
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SECTION 6.03. INCREASED COST. If the introduction after the date of
--------------
this Agreement of any law or regulation, or any change after the date of this
Agreement in a law or regulation or any interpretation thereof by any court or
administrative, banking or governmental authority charged or claiming to be
charged with the administration thereof applicable to the Agent or any Lender
shall (i) impose, modify or make applicable any reserve, special deposit,
deposit insurance premium, or other similar requirement against any of the
Letters of Credit or any of the Letter of Credit Interests therein purchased by
the Lenders, (ii) impose on the Agent or any Lender any other condition
regarding this Agreement, any Letter of Credit, or any Letter of Credit
Interest, or (iii) subject the Agent or any Lender to any Taxes (other than
taxes based on gross revenues or income) of any kind whatsoever, and the result
of any event referred to in clause (i), (ii) or (iii) above shall be to increase
the cost to the Agent or any Lender of issuing or maintaining any Letter of
Credit or Letter of Credit Interest hereunder (which increased cost shall be the
result of a reasonable allocation of the aggregate of such cost increases
resulting from such events), or to reduce the amount of principal, interest or
any fee or other compensation to be paid to the Agent or any Lender under this
Agreement, then, within ten (10) days after demand for payment by the Agent, the
Borrower shall pay the Agent for itself or on account of such other Lender, from
time to time as specified by the Agent, additional amounts which shall be
sufficient to compensate the Agent or such Lender for such increased cost or
such reduction. A certificate of the Agent or such Lender setting forth in
reasonable detail such increased costs or such reduction incurred by the Agent
or such Lender as a result of any event referred to in clause (i), (ii) or (iii)
above which may be submitted by the Agent or such Lender to the Borrower shall
be conclusive, in the absence of manifest error, as to the amount thereof, and
each such certificate shall set forth the nature of the occurrence giving rise
to such compensation, the additional amount to be paid hereunder on account
thereof, and the method by which such amount was determined. In determining such
amount, the Agent or any Lender may use reasonable averaging and attribution
methods. The obligations of the Borrower under this Section shall survive any
termination of this Agreement.
SECTION 6.04. LEGAL RESTRICTIONS ON LETTERS OF CREDIT. If any
---------------------------------------
restrictions or limitations are imposed upon or determined or held to be
applicable to the Agent, any Lender, the Borrower or any other Credit Party by,
under or pursuant to any law or regulation, whether federal, state, local or
foreign and whether now or hereafter in effect, or by reason of any
interpretation thereof by any Court or any governmental agency, which in the
judgment of the Agent would prevent the Agent from legally incurring liability
under any Letter of Credit, then the Agent shall notify the Borrower and each
other Lender as soon as reasonably practical thereafter, whereupon the
Borrower's right to request and obtain additional Letters of Credit thereafter
shall cease; provided, however, that no such cessation shall affect the
--------
Borrower, the Agent or any Lender's obligations hereunder with respect to any
and all Letters of Credit then issued and outstanding.
SECTION 6.05. INDEMNIFICATION. In addition to any other amounts
---------------
payable by the Borrower to the Agent or any of the Lenders under this Agreement
and without limiting any other indemnification provisions set forth herein, the
Borrower hereby agrees to indemnify each of the Agent and the Lenders from and
to hold such Persons harmless against any and all claims, liabilities, losses,
costs and expenses (including, without limitation, attorney's fees and expenses)
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which the Agent or any Lender may (other than as a result of the gross
negligence or willful misconduct of the Agent or such Lender or the Issuing
Bank's wrongful failure to honor its obligations under any Letter of Credit in
accordance with the terms thereof) incur or be subject to as a consequence,
directly or indirectly, of (i) the issuance of or payment of or failure to pay
under any Letter of Credit or (ii) any suit, investigation, or proceeding as to
which the Agent or any Lender is or may become a party as a consequence,
directly or indirectly, of any Issuing Bank's issuance or payment of or failure
to pay under any Letter of Credit. The obligations of the Borrower under this
Section shall survive any termination of this Agreement.
SECTION 6.06. NATURE OF AGENT'S AND LENDERS' DUTIES. The Borrower
-------------------------------------
hereby assumes all risks of the acts, omissions or misuse of each Letter of
Credit by the beneficiary of such Letter of Credit, and in connection therewith,
neither the Agent nor any Lender shall be responsible: (i) for the validity,
sufficiency, genuineness or legal effect of any document submitted in connection
with the application for or issuance of or the making of any Drawing under any
Letter of Credit that appears on its face to the Issuing Bank involved to be
proper, even if it should in fact prove to be in any respect invalid,
insufficient, inaccurate, untrue, fraudulent or forged; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or any rights or benefits thereunder or
any proceeds thereof, in whole or in part, that appears on its face to the
Issuing Bank involved to be proper, even if it should prove to be invalid or
ineffective for any reason; (iii) for the failure of any beneficiary of any
Letter of Credit to comply fully with the conditions required in order to effect
a Drawing thereunder; (iv) for any errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, telecopy, telex or otherwise;
(v) for any loss or delay in the transmission or otherwise of any document or
draft required in order to make a Drawing under any Letter of Credit; or (vi)
for any consequences arising from causes beyond the control of the Issuing Bank
involved. In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Agent or
any Lender under or in connection with any Letter of Credit or any related
certificates, drafts or other documents if taken or omitted in good faith and in
accordance with the terms of the Issuing Bank's obligations under such Letter of
Credit and in the absence of gross negligence or willful misconduct on the part
of such Issuing Bank shall be binding upon the Borrower and shall not result in
any liability of the Agent or any Lender to the Borrower.
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SECTION 6.07. PURCHASE AND SALE OF PARTICIPATION INTERESTS IN LETTERS
-------------------------------------------------------
OF CREDIT.
- ---------
(a) Subject to the terms and conditions of this Agreement, and with
respect to any Letter of Credit issued or deemed issued under this Agreement,
each Lender (other than the Lender which is the Issuing Bank with respect to
such Letter of Credit) hereby purchases from the Issuing Bank and such Issuing
Bank hereby sells to each such other Lender, an undivided risk participation and
ownership interest (herein called a "Letter of Credit Interest") in and to such
-------------------------
Letter of Credit and the Reimbursement Obligations and all other Obligations
relating to such Letter of Credit, in each case equal to such other Lender's Pro
Rata Share; provided, however, that any interest accruing with respect to any
--------
Drawing paid by the Issuing Bank under such Letter of Credit shall be for the
account of such Issuing Bank, and not for the account of any other Lender,
unless and until such Issuing Bank shall have received funds from such other
Lender in an amount equal to such other Lender's Pro Rata Share of such Drawing
pursuant to paragraph (b) below. The parties hereto acknowledge and agree that
upon payment by any Lender of its Pro Rata Share of any Drawing paid by the
Issuing Bank under any Letter of Credit: (i) such Lender will have an undivided
ownership interest in the Borrower's Reimbursement Obligations with respect
thereto, including interest accruing thereon, in the amount of such Lender's Pro
Rata Share thereof; (ii) such Lender will be a direct creditor of the Borrower
and not of the Issuing Bank with respect to its Letter of Credit Interest; (iii)
such Lender's Letter of Credit Interest will constitute part of the Obligations
of the Borrower to such Lender and will be secured by all of the Collateral
pursuant to the Security Documents and will be guaranteed by all of the
Guarantors pursuant to the Guaranty Agreements; and (iv) such Lender may
exercise all of its rights of payment (including without limitation any set-off
rights against any deposit accounts of the Borrower with such Lender) with
respect to its Letter of Credit Interest. It is expressly understood and agreed
by all of the parties hereto that the transactions contemplated by this Section
6.07 are sales and purchases of undivided risk participation and ownership
interests in the Letters of Credit, the Reimbursement Obligations and other
related Obligations in consideration for each Lender's payments to the Issuing
Bank as provided herein, and the parties hereto further agree that such sales
and purchases shall not constitute loans by any Lender to the Issuing Bank or
sales of securities to any Lender by the Issuing Bank within the meaning of any
federal or state securities laws, and that any such sales and purchases shall
not result in the creation of any fiduciary relationship between any Lender and
the Issuing Bank. It is further understood and agreed that each Lender shall
look only to the Borrower, the other Credit Parties, and the Collateral for the
payment of its Letter of Credit Interest.
(b) In the event the Borrower fails to pay to any Issuing Bank all of
its Reimbursement Obligations with respect to any Drawing paid by the Agent
under any Letter of Credit issued by such Issuing Bank and in the further event
that Loans cannot be made hereunder in order to finance such payment, the Agent
shall give each Lender notice by telephone or telecopy of such facts and each
Lender shall, by no later than 1:30 p.m. (Eastern Time) on the first (1st)
Business Day after its receipt of said notice pay to the Issuing Bank the amount
of such Lender's Pro Rata Share of such Drawing.
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(c) If any Lender shall make a payment to the Issuing Bank for such
Lender's Pro Rata Share of a Drawing under any Letter of Credit issued by such
Issuing Bank and such Issuing Bank or the Agent shall thereafter receive payment
of the Borrower's Reimbursement Obligations for all or any part of such amount,
such Issuing Bank or the Agent shall hold any amount so received in trust for
the Agent and such Lender and shall promptly pay such Lender its Pro Rata Share
of such amount. Any interest accrued on any Reimbursement Obligations and
received by the Agent or another Issuing Bank shall be held by the Agent or such
other Issuing Bank in trust for the Agent and those Lenders who have paid their
Pro Rata Shares of such Reimbursement Obligations and shall be promptly
distributed to such Lenders in accordance with the terms of this Section 6.07.
Notwithstanding anything herein to the contrary, the Agent or another Issuing
Bank shall be obligated to remit payments hereunder to the Lenders with respect
to the Reimbursement Obligations only if and to the extent that the Agent or
such other Issuing Bank actually receives such payments on account of the
Reimbursement Obligations from or on behalf of the Borrower or any of the other
Credit Parties or from the proceeds of any of the Collateral. Any payments of
principal, interest or Letter of Credit Fees received in connection with the
Letters of Credit or the Reimbursement Obligations shall be shared pro rata
among the Agent and the Lenders based upon each such party's respective Pro Rata
Share at such time.
(d) If any payment made by the Agent or another Issuing Bank to any
Lender pursuant to this Section 6.07 is returned or repaid by the Agent or such
other Issuing Bank or must otherwise be returned by the Agent or such other
Issuing Bank for any reason (whether with or without interest), such Lender
will, upon notice from the Agent or such other Issuing Bank, forthwith pay over
to the Agent or such other Issuing Bank its share of the amount so returned or
repaid by the Agent or such other Issuing Bank, whether such amount constitutes
principal, interest, fees or any other amount. Moreover, if for any reason the
Agent or another Issuing Bank makes any payment to any Lender under this Section
6.07 before receiving the corresponding amount of the Reimbursement Obligations
or the Letter of Credit Fees, and if the corresponding payment is not received
by the Agent or such other Issuing Bank from or on behalf of the Borrower within
one (1) Business Day after such payment to a Lender, such Lender will, upon
request by the Agent or such other Issuing Bank, promptly return to the Agent or
such other Issuing Bank such payment (together with interest on such amount from
the date paid by the Agent or such other Issuing Bank to such Lender until
returned by such Lender at the Federal Funds Rate).
(e) No Lender shall be responsible for any default by any other
Lender in its obligations hereunder to make payments to the Agent or another
Issuing Bank on account of such other Lender's Letter of Credit Interest, and
each Lender shall be obligated to make the payments required to be made by it to
the Agent or another Issuing Bank hereunder on account of its Letter of Credit
Interest regardless of the failure of any other Lender to fulfill its
obligations hereunder. To the extent that an Issuing Bank is not reimbursed and
indemnified by the Borrower pursuant to Section 6.05 above, the other Lenders
will reimburse and indemnify such Issuing Bank, ratably according to their
respective Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, actually incurred by or asserted
against such Issuing Bank in performing its duties under any
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Letter of Credit issued by such Issuing Bank, or in any way relating to or
arising out of any such Letter of Credit; provided, however, that no Lender
--------
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Issuing Bank's gross negligence or willful misconduct.
ARTICLE VII.
GENERAL CREDIT TERMS
--------------------
SECTION 7.01. REQUESTS FOR AND DISBURSEMENTS OF LOANS.
---------------------------------------
(a) Whenever Borrower desires to request any Loan hereunder (other
than a Cash Management Loan), it shall give the Agent prior written or
telecopied notice (or telephonic notice promptly confirmed in writing or by
telecopy) of such request (a "Notice of Borrowing"), such Notice of Borrowing to
-------------------
be given prior to 11:30 a.m. (Eastern Time) on the Business Day on which
Borrower desires to obtain such Loan; provided that (i) the Loans of a
--------
particular type requested by Borrower on any given day (other than Cash
Management Loans) must equal or exceed $500,000 in aggregate principal amount,
(ii) Borrower shall be required to give Agent three (3) Business Days' prior
notice if it wishes to borrow hereunder at an Adjusted LIBOR-based interest
rate, and (iii) Borrower shall be required to give Agent ten (10) Business Days'
prior notice if it wishes to borrow hereunder at a Treasury Securities Rate-
based Interest Rate. Each Notice of Borrowing shall be irrevocable and shall
specify whether the requested Loan will be a Series A Revolving Loan, a Series B
Revolving Loan or a Term Loan and the aggregate principal amount of the Loans
requested by the Borrower thereby. If such Notice of Borrowing relates to a
Multicurrency Advance, such Notice of Borrowing shall specify the Available
Foreign Currency in which such Multicurrency Advance is to be made. If such
Notice of Borrowing relates to a Term Loan, such Notice of Borrowing shall be
given not less than ten (10) Business Days' prior to the date such Term Loan is
to be made, shall specify the scheduled term of such Term Loan (which may not
exceed 48 months) and shall be accompanied by duly completed, executed and
delivered Term Loan Notes in accordance with Section 4.02 above. The Agent shall
promptly (and, in any event, by 12:30 p.m. (Eastern Time) on the same Business
Day) notify each other Lender, by telephone or telecopy, of its receipt of such
Notice of Borrowing. Loans also may be deemed to have been requested by Borrower
pursuant to Section 5.04 hereof to refinance Cash Management Loans or pursuant
to Section 6.02 hereof in order to refinance Borrower's Reimbursement
Obligations with respect to any Drawing paid by an Issuing Bank under any Letter
of Credit.
(b) Whenever Borrower desires to request a Cash Management Loan
hereunder, it shall give the Cash Management Lender prior written notice or
telecopied notice (or telephonic notice promptly confirmed in writing or by
telecopy) of such request. In addition, Cash Management Loans may be obtained by
Borrower through the operation of its cash management account with the Cash
Management Lender.
(c) No later than 1:30 p.m. (Eastern Time) on the date of each
advance of Loans hereunder other than Cash Management Loans (or, in the case of
Fleming only (in the
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event Fleming is a Lender hereunder), by no later than 1:30 p.m. (Eastern Time)
on the first (1st) Business Day thereafter), each Lender will make available the
amount of such Loans to be made by it in Dollars (or the Available Foreign
Currency selected by Borrower in the case of any Multicurrency Advance) and in
immediately available funds to the Agent and the Agent, in turn, will make
available to the Borrower the amount so made available by such Lender by
depositing such amount to the account of the Borrower with the Agent or by
otherwise making the amount available to the Borrower as specified in the Notice
of Borrowing therefor; provided, however, that (i) any Loans made to refinance
--------
Borrower's Reimbursement Obligations pursuant to Section 6.02 hereof shall be
disbursed by the Agent's application of the proceeds of such Loans to such
Reimbursement Obligations, (ii) any Loans made to refinance Cash Management
Loans pursuant to Section 5.04 hereof shall be disbursed by each other Lender
directly to the Cash Management Lender, (iii) any Term Loans made to refinance
any Series B Revolving Loans pursuant to Section 4.01 hereof shall be disbursed
by the Agent's distribution of the proceeds thereof to the Lenders for
application to such Series B Revolving Loans, and (iv) in the event Fleming is a
Lender hereunder, the Agent may disburse Fleming's share of any Loan to the
Borrower on the same day that it disburses the other Lenders' shares but any
such advance shall be subject to the other provisions of this subsection. Unless
the Agent shall have been notified by any Lender prior to the date of an advance
of such Loans that such Lender does not intend to make available to the Agent
such Lender's Loans to be advanced on such date (or, in the case of Fleming (in
the event Fleming is a Lender hereunder) on the next Business Day), the Agent
may assume that such Lender has made such amount available to the Agent on such
date and the Agent may make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the Agent by such
Lender on the date of such advance, the Agent shall be entitled to the interest
which accrues hereunder on such amount until it is recovered from such Lenders.
If such Lender does not pay such corresponding amount forthwith upon the Agent's
demand therefor, the Agent shall promptly notify the Borrower, and the Borrower
shall within one (1) Business Day after receiving such notice pay such
corresponding amount to the Agent together with interest until so repaid at the
interest rate then in effect for Prime Rate Advances. Any such payments by any
Lender or the Borrower to the Agent shall be made in the same currency in which
the underlying Loan was advanced by the Agent to the Borrower. Nothing in this
subsection shall be deemed to relieve any Lender from its obligation to fulfill
its Credit Commitments hereunder or to prejudice any rights which the Agent, any
other Lender or the Borrower may have against any Lender as a result of any
default by such Lender hereunder. In the event Fleming is a Lender hereunder and
in the case of any disbursement made by the Agent to the Borrower in
anticipation of reimbursement by Fleming to be made on the next Business Day,
the Agent shall be entitled to receive and retain any interest that may accrue
thereon pursuant to Section 7.03 hereof from the date such disbursement is made
and until reimbursement by Fleming.
(d) The Cash Management Lender will make available the amount of each
Cash Management Loan to be made by it in Dollars and in immediately available
funds by depositing such amount to the account of the Borrower with the Cash
Management Lender.
(e) All advances of Loans under this Agreement made by each Lender
shall constitute part of a single loan transaction between Borrower and such
Lender.
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(f) All advances of Loans of a particular type under this Agreement
shall be made by the Lenders on the basis of their Pro Rate Shares of the
applicable Credit Commitments.
SECTION 7.02. MULTICURRENCY ADVANCES. In lieu of obtaining any
----------------------
Revolving Loans hereunder in Dollars, Borrower may specify in any Notice of
Borrowing that any such Loans thereunder shall be advanced in the Available
Foreign Currency selected by Borrower; provided, however, that (i) each
--------
Multicurrency Advance must also be a LIBOR Advance, (ii) the aggregate
outstanding principal amount of all Multicurrency Advances may not exceed $1
5,000,000 at any particular time, and (iii) the amount of each such
Multicurrency Advance may not be less than $1,000,000. Each Multicurrency
Advance shall be repaid by Borrower in the same currency in which it was made.
If Borrower for any reason fails to repay a Multicurrency Advance in the same
currency in which it was made, or if Borrower shall default in the payment when
due of any payment on a Multicurrency Advance, any affected Lender may, at its
option, require such payment to be made to the Agent in the Dollar Equivalent of
such currency. In any such case, Borrower agrees to hold the Lenders and the
Agent harmless from any loss incurred by any of them arising from any change in
the value of Dollars in relation to the applicable foreign currency between the
date such payment became due and the date of payment thereof as well as for all
reserves, withholding or special deposit requirements imposed on the Agent or
any Lender in connection therewith. The Dollar Equivalent of each Multicurrency
Advance shall be used for the purpose of determining the unutilized portion of
the Borrowing Base or any Credit Commitment on any given day and such Dollar
Equivalent shall be calculated as of the date such Multicurrency Advance was
made.
SECTION 7.03. INTEREST.
--------
(a)(i) The Borrower agrees to pay interest in respect of all unpaid
principal amounts of the Loans from the respective dates such principal amounts
were advanced or incurred until the respective dates such principal amounts are
repaid at the applicable Prime Rate-based interest rate set forth on Annex II
--------
attached hereto, subject to any Fixed Rate election made by Borrower pursuant to
subparagraph (iii) below and subject to adjustment as provided in paragraph (c)
below. If a Loan is repaid on the same day it is made, one (1) day's interest
shall be paid on such Loan. Notwithstanding the foregoing, Borrower and all of
the Lenders may agree in writing on or prior to the Credit Expiration Date to a
mutually-acceptable fixed interest rate for all (or some portion) of the Term
Loans in lieu of the rates shown on Annex II attached hereto; provided that (i)
-------- --------
there shall be no obligation on any Lender's part to offer or agree to any such
fixed rate and (ii) any such fixed rate must be agreed to in writing by Borrower
and all of the Lenders. Also notwithstanding the foregoing, an additional margin
of one-eighth of one percentage point (0.125%) shall be added to the interest
rate applicable to any particular Multicurrency Advance which is in a total
amount for all Lenders combined which is less than the Break Point for the
foreign currency in which such advance is made.
(ii) The applicable interest rate per annum for the Loans will be
determined by the Agent on the date which is forty-five (45) days after the end
of each fiscal quarter of the Borrower based on the Borrower's financial
statements for the immediately preceding fiscal quarter as delivered pursuant to
Section 10.01(i) hereof, with the appropriate rate to be effective
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immediately as of the date of such determination and to remain in effect until
the next quarterly determination. In the event that Borrower fails to deliver
such quarterly financial statements to the Agent within forty-five (45) days
after the end of each fiscal quarter, the interest rate applicable to the Loans
shall be equal to the Prime Rate plus 0% until such financial statements are
----
delivered to the Agent (but, once such statements are so delivered, such rate
shall be subject to adjustment, effective as of the date of the delivery of such
financial statements if such rate adjustment is negative and effective
retroactively to the beginning of such quarterly computation period if such rate
adjustment is positive, in each such case as provided on Annex II attached
--------
hereto, based on the Funded Debt Ratio of the Borrower shown in such financial
statements), but subject to the provisions of paragraph (c) below.
(iii) During each quarterly computation period, (x) the Borrower may,
by written notice (or by telephonic notice promptly confirmed in writing)
delivered to the Agent not later than 10:00 a.m. (Eastern Time) on the third
(3rd) Business Day prior to the first (1st) day of the Interest Period
designated by Borrower in such notice, elect that interest accrue on the Loans
of a particular type (or any portion of such Loans which is in an amount of not
less than $1,000,000 or a greater integral multiple of $100,000 thereof) as
outstanding from time to time during such Interest Period, at the Adjusted
LIBOR-based interest rate applicable to such quarterly computation period, or
(y) the Borrower may, by written notice (or by telephonic notice promptly
confirmed in writing) delivered to the Agent not later than 10:00 a.m. (Eastern
Time) on the second (2nd) Business Day prior to the first (1st) day of the
Interest Period designated by Borrower in such notice, elect that interest
accrue on the Term Loans (or any portion of the Term Loans which is in an amount
of not less than $1,000,000 or a greater integral multiple of $100,000 thereof)
as outstanding from time to time during such Interest Period, at the Treasury
Securities Rate-based interest rate applicable to such quarterly computation
period; provided, however, that (i) upon the occurrence and during the
--------
continuation of any Event of Default, the Agent may, upon the request of the
Required Lenders and upon notice to the Borrower, limit the Borrower to the
Prime Rate-based interest rates set forth on Annex II attached hereto (as
--------
adjusted pursuant to paragraph (c) below), (ii) Multicurrency Advances must be
made as LIBOR Advances, and (iii) Cash Management Loans shall bear interest only
at the Prime Rate-based interest rates set forth on Annex II attached hereto (as
--------
adjusted pursuant to paragraph (c) below). Each such designation by the Borrower
of an interest rate based on one of the Fixed Rates and of an Interest Period
applicable thereto shall be irrevocable and shall remain in effect throughout
such Interest Period. Upon determining any interest rate based on a Fixed Rate
for an Interest Period requested by the Borrower, the Agent shall promptly
notify the Borrower and each Lender by telephone (which shall be promptly
confirmed in writing) of such determination, and such determination shall,
absent manifest error, be final, conclusive and binding for all purposes.
Borrower's selection of an interest rate based on a Fixed Rate for a particular
Interest Period shall not affect Borrower's ability to borrow, prepay and re-
borrow Loans during such Interest Period; provided, however, that Borrower may
be liable to each Lender for a prepayment penalty or breakage costs in the event
that Borrower prepays any Fixed Rate Advance or Multicurrency Advance prior to
the end of the Interest Period applicable thereto as provided in Section 7.05(e)
or 7.12 below, respectively.
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<PAGE>
(b) Borrower's Reimbursement Obligations with respect to any
particular Letter of Credit shall bear interest from the date any Drawing
thereunder is paid by the Issuing Bank until such Issuing Bank is reimbursed
therefor (or until such Reimbursement Obligations are refinanced with the
proceeds of Loans pursuant to Section 6.02 above) at the same rate per annum as
would then be applicable under paragraph (a) above or (c) below if such
Reimbursement Obligation was a Prime Rate Advance outstanding at such time;
provided that no interest shall accrue on Borrower's Reimbursement Obligation
- --------
for any Drawing paid by the Issuing Bank under any Letter of Credit which is
reimbursed in full by the Borrower by 11:00 a.m. (Eastern Time) on the day on
which such Drawing was paid by such Issuing Bank.
(c) After the occurrence and during the continuation of any Event of
Default, the principal amount of all of the Obligations (and, to the extent
permitted by applicable law, all accrued interest thereon) may, if elected by
the Required Lenders in their discretion, bear interest at a rate per annum
equal to as much as two hundred basis points (2.00%) above the otherwise
applicable interest rate under paragraphs (a) and (b) above, which rate
adjustment shall be effective from the date notice thereof is given by the Agent
to the Borrower, and at the option of the Required Lenders, the ability of the
Borrower to elect an Adjusted LIBOR-based or a Treasury Securities Rate-based
interest rate may also be suspended.
SECTION 7.04. FEES.
----
(a) In consideration of the Lenders' making their Series A Revolving
Loan Commitments hereunder available to the Borrower, the Borrower agrees to pay
to the Agent (for the account of and distribution to the Lenders in accordance
with their respective Pro Rata Shares) a non-refundable Series A Revolving Loan
Commitment Fee from the date of this Agreement until the Credit Expiration Date
(or until any earlier date on which the Series A Revolving Loan Commitments are
terminated in full pursuant to Section 2.03 or 12.02 hereof) computed on the
daily average unused portion of the Series A Revolving Loan Commitments in
effect during the period for which such payment is made (as such Credit
Commitments may be reduced pursuant to Section 2.03 hereof), at a rate per annum
equal to the applicable Series A Revolving Loan Commitment Fee Rate set forth on
Annex II attached hereto.
- --------
(b) In consideration of the Lenders' making their Series B Revolving
Loan Commitments hereunder available to the Borrower, the Borrower agrees to pay
to the Agent (for the account of and distribution to the Lenders in accordance
with their respective Pro Rata Shares) a non-refundable Series B Revolving Loan
Commitment Fee from the date of this Agreement until the Credit Expiration Date
(or until any earlier date on which the Series B Revolving Loan Commitments are
terminated in full pursuant to Section 3.03 or 12.02 hereof) computed on the
daily average unused portion of the Series B Revolving Loan Commitments in
effect during the period for which such payment is made (as such Credit
Commitments may be reduced pursuant to Section 3.03 hereof), at a rate per annum
equal to the applicable Series B Revolving Loan Commitment Fee Rate set forth on
Annex II attached hereto.
- --------
(c) The applicable Commitment Fee Rates will be determined by the
Agent on the date which is forty-five (45) days after the end of each fiscal
quarter of the Borrower based on
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<PAGE>
the Borrower's financial statements for the immediately preceding fiscal quarter
as delivered pursuant to Section 10.01(i) hereof, with the appropriate
Commitment Fee Rate to be effective immediately as of the date of such
determination and to remain in effect until the next quarterly determination. In
the event that Borrower fails to deliver such quarterly financial statements to
the Agent within forty-five (45) days after the end of each fiscal quarter, the
applicable Series A Revolving Loan Commitment Fee Rate shall be two-tenths of
one percent (0.20%) and the applicable Series B Revolving Loan Commitment Fee
Rate shall be three-tenths of one percent (0.30%) until such financial
statements are delivered to the Agent (but, once such financial statements are
so delivered, such rate shall be subject to adjustment, effective as of the date
of the delivery of such financial statements if such rate adjustment is negative
and effective retroactively to the beginning of such quarterly computation
period if such rate adjustment is positive, in each such case as provided on
Annex II attached hereto, based on the Funded Debt Ratio of the Borrower shown
- --------
in such financial statements).
(d) Commitment Fees shall be payable by Borrower to the Agent as set
forth above quarterly in arrears commencing on the first (1st) day of the first
(1st) calendar quarter after the date hereof and continuing to be due on the
first (1st) day of each calendar quarter thereafter so long as the Credit
Commitments are in effect as well as on the Credit Expiration Date (or any
earlier date on which the Credit Commitments are terminated in full pursuant to
Section 2.03, 3.03 or 12.02 hereof).
(e) (i) In consideration of the issuance of each Letter of Credit,
the Borrower agrees to pay to the Agent (for the account of and distribution to
the Lenders in accordance with their respective Pro Rata Shares) on the Date of
Issuance thereof a Letter of Credit Fee equal to one percent (1.00%) per annum
of the Stated Amount of such Letter of Credit. Each Letter of Credit Fee due
hereunder with respect to any particular Letter of Credit shall be deemed fully
earned when such Letter of Credit is issued regardless of whether or not any
Drawing is actually made or paid thereunder and regardless of whether or not
such Letter of Credit remains outstanding throughout its entire stated term.
Borrower also shall pay all of the Issuing Bank's other standard fees and
charges for the administration of each Letter of Credit, including the Issuing
Bank's standard fees and charges for honoring Drawings, registering transfers,
granting extensions, or making modifications.
(ii) Notwithstanding anything herein to the contrary, in consideration
of the issuance of the Bond Letter of Credit, Borrower agrees to pay the Agent
(for the account of and distribution to the Lenders in accordance with their
respective Pro Rata Shares) a non-refundable fee for the Bond Letter of Credit
from the date of its issuance to the date of its expiration, computed on the
Stated Amount in effect at the time payment is made, which fee shall be payable
annually in advance commencing on the date of issuance of the Bond Letter of
Credit and continuing to be due on each anniversary of such date until the
expiration of the Bond Letter of Credit and shall be computed at a rate per
annum of 1.0%. If the Bond Letter of Credit is drawn, canceled or otherwise
terminated prior to June 1, 2000 (or any later date to which the expiration of
the Bond Letter of Credit is extended by written agreement of the Agent and the
Lenders in accordance with this Agreement) there shall be no rebate or refund of
any Letter of Credit Fee previously paid by Borrower to the Agent hereunder. The
parties acknowledge that the Bond Letter of Credit Fee for
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<PAGE>
the period from the date of issuance of the Bond Letter of Credit through August
15, 1996 has been paid by Borrower.
(f) In consideration of the Lender's making their Credit
Commitments hereunder available to Borrower, the Borrower agrees to pay to the
Agent (for the account of and distribution to the Lenders in accordance with
their respective Pro Rata Shares) a non-refundable Closing Fee in an amount
equal to $50,000, which fee shall be due and payable in full on the date of the
Initial Credit Event.
(g) In consideration of the Agent executing this Agreement, the
Borrower agrees to pay to the Agent (for its account), on the date of the
Initial Credit Event and annually thereafter, the Agent Fee in the amount
separately agreed to in writing between Borrower and the Agent.
(h) Solely for purposes of computing the Commitment Fees due to the
Cash Management Lender under this Section 7.04, the daily average unused portion
of such Lender's Series A Revolving Loan Commitment shall be computed by
treating the Cash Management Loans made by such Lender hereunder as a usage of
such Lender's Series A Revolving Loan Commitment (or, if such Credit Commitment
is fully utilized, as a usage of such Lender's Series B Revolving Loan
Commitment).
(i) None of the Fees payable hereunder are, or shall be deemed to
be, interest or a charge for the use of money, but rather shall constitute an
"other charge" within the meaning of O.C.G.A. (S) 7-4-2(a)(1).
--------
SECTION 7.05. PAYMENTS, PREPAYMENTS AND COMPUTATIONS.
--------------------------------------
(a) Except as may be otherwise specifically provided herein, all
payments by the Borrower with respect to the Loans, the Reimbursement
Obligations or any other Obligations under this Agreement or any of the other
Credit Documents shall be made without defense, set-off or counterclaim to the
Agent not later than 11:00 a.m. (Eastern Time) on the date when due and shall be
made in Dollars in immediately available funds, except that each Multicurrency
Advance shall be repaid in the same currency in which it was made and in
immediately available funds.
(b)(i) All such payments shall be made free and clear of and without
deduction or withholding for any Taxes in respect to this Agreement, the Notes
or any other Credit Documents or any payments of principal, interest, fees or
other amounts payable hereunder or thereunder (but excluding, except as provided
in paragraph (ii) hereof, any Taxes imposed on the over-all net income of any
Lender). If any Taxes are so levied or imposed on any Lender or the Agent,
Borrower agrees (x) to pay to such Lender or the Agent the full amount of such
Taxes and such additional amounts as may be necessary (as specified in such
Lender's or the Agent's certificate, described in the last sentence of this
paragraph (i), delivered to the Borrower) so that every net payment of all
amounts due hereunder and under the Notes and the other Credit Documents from
the Borrower, after withholding or deduction for or on account of such Taxes
(including any additional sum payable under this Section), will not be less than
the full amount provided for
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<PAGE>
herein had no such deduction or withholding been required, (y) to make such
withholding or deduction and (z) to pay the full amount deducted to the relevant
authority in accordance with applicable law. Borrower will furnish to the Agent,
within thirty (30) days after the day of payment of any Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such payment by the
Borrower. Borrower will indemnify and hold harmless the Agent and each of the
Lenders and reimburse the Agent and each of the Lenders upon written request for
the amount of any Taxes described in the first sentence of this paragraph (i)
and which are so levied and imposed and paid by the Agent or such Lender and any
liability (including penalties, interests and expenses) arising therefrom or
with respect thereto. A certificate as to the amount of such payment by the
Agent or any Lender, absent manifest error, shall be final, conclusive and
binding for all purposes.
(ii) Borrower also shall reimburse the Agent and each Lender, upon
request of the Agent or such Lender, for any Taxes imposed on the over-all net
income of the Agent or such Lender in respect of any amounts paid by or on
behalf of Borrower to or on behalf of the Agent or such Lender pursuant to
paragraph (i) of this subsection (b).
(iii) Each Lender that is organized under the laws of any
jurisdiction other than the United States of America or any State thereof
(including the District of Columbia) agrees to furnish to the Borrower and the
Agent, prior to the time it becomes a Lender hereunder, two copies of either
U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue Service Form
1001 or any successor forms thereto (wherein such Lender claims entitlement to
complete exemption from or a reduced rate of U.S. Federal withholding tax on
interest paid by the Borrower hereunder) and to provide to the Borrower and the
Agent a new Form 4224 or Form 1001 or any successor forms thereto if any
previously delivered form is found to be incomplete or incorrect in any material
respect or upon the obsolescence of any previously delivered forms; provided,
--------
however, that no Lender shall be required to furnish a form under this paragraph
(iii) if it is not entitled to claim an exemption from or a reduced rate of
withholding under applicable law. A Lender that is not entitled to claim an
exemption from or a reduced rate of withholding under applicable law, promptly
upon written request of the Borrower, shall so inform the Borrower and the Agent
in writing.
(c) Whenever any payment to be made hereunder or under any of the
Notes or the other Credit Documents shall be stated to be due on a day which is
not a Business Day, the due date thereof (except as otherwise set forth herein
with respect to Interest Periods applicable to Fixed Rate Advances) shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest thereon shall continue to accrue and shall be payable at the
applicable rate during such extension.
(d) All computation of interest or fees due hereunder or under any
of the other Credit Documents shall be made on the basis of a year of 360 days
and the actual number of days elapsed.
(e) The Loans may be prepaid in whole or in part at any time
without premium or penalty; provided, however, that:
--------
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<PAGE>
(i) any prepayment made on any Term Loan shall be applied, first,
to interest accrued thereon through the date thereof and then to
installments of principal due thereon in the inverse order of maturity
thereof;
(ii) any prepayment of any one type of the Loans shall be applied to
all of the Lenders' Loans of that type in accordance with their respective
Pro Rata Shares thereof;
(iii) a prepayment of a Fixed Rate Advance may be made without
penalty or premium by Borrower only on the last day of the Interest Period
applicable thereto and, if any such prepayment is made on the day that is
not the last day of the applicable Interest Period, Borrower shall pay to
the Agent, for the account of each Lender requesting same, a prepayment
penalty in an amount equal to, at the requesting Lender's option, either
(x) such compensation as may be due to such Lender under Section 7.12
hereof or (y) the excess (if any) of (1) the interest that would have been
payable with respect to such Lender's Fixed Rate Advance for the remainder
of such Interest Period based on the Fixed Rate originally applicable to
such Interest Period over (2) the interest that would have been payable
with respect to such Lender's Fixed Rate Advance for the remainder of such
Interest Period based on the appropriate Fixed Rate as in effect on the
date of such prepayment;
(iv) a prepayment of a Multicurrency Advance may be made without
penalty or premium by Borrower only on the last day of the Interest Period
applicable thereto and, if any such prepayment is made on a day that is not
the last day of the applicable Interest Period, Borrower shall pay to the
Agent, for the account of each Lender requesting same, a prepayment penalty
equal to such compensation as may be due to such Lender under Section 7.12
hereof;
(v) if a fixed interest rate is agreed to by the Borrower and the
Lenders with respect to any of the Term Loans, such agreement may include a
requirement that Borrower pay a prepayment penalty if it thereafter prepays
such Term Loans in whole or in part; and
(vi) any prepayment of any one type of Loans (other than Cash
Management Loans) must equal or exceed $500,000 in aggregate amount for all
of the Lenders combined.
(f) Each determination hereunder by the Agent of an interest rate
or fee shall be made in good faith and, except for manifest error, shall be
final, conclusive and binding for all purposes.
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<PAGE>
SECTION 7.06. COLLATERAL AND GUARANTIES.
-------------------------
(a) The Obligations shall be guaranteed by all of the present and
future Domestic Subsidiaries of the Borrower pursuant to the Guaranty Agreements
executed or to be executed by such Guarantors.
(b) The Obligations also shall be secured pursuant to the Stock
Pledge Agreements by the first-priority and perfected pledge and collateral
assignment to the Agent (for the benefit of the Lenders) of (i) all of the
issued and outstanding shares of the capital stock of all present and future
direct or indirect Domestic Subsidiaries of the Borrower and (ii) sixty-six
percent (66%) of the issued and outstanding shares of the capital stock of each
of the present or future direct or indirect Foreign Subsidiaries of the
Borrower. In any such case, the direct parent company of such Domestic
Subsidiary or Foreign Subsidiary shall execute and deliver a Stock Pledge
Agreement in favor of the Agent together with any and all financing statements,
stock certificates, undated blank stock transfer powers and such other documents
as the Agent may from time to time reasonably request in order to perfect or
maintain the perfection of the Agent's Liens under such Stock Pledge Agreement.
(c) The Obligations also shall be secured by all other real and
personal property assets of the Borrower and the Existing Domestic Subsidiaries
pursuant to the Security Agreements and Real Estate Collateral Documents
executed by such Credit Parties, who also shall execute and deliver any and all
financing statements, fixture filings or other documents as the Agent may
reasonably request from time to time in order to perfect or maintain the
perfection of such Liens.
(d) Without limiting the generality of the foregoing, Borrower and
each Existing Domestic Subsidiary shall execute and deliver to Lender the
Intellectual Property Documents to secure the Obligations and such other
documents as the Lender may reasonably require in order to perfect and maintain
the perfection of the Agent's Liens on any and all Collateral covered thereby.
(e) So long as the Agent has a Lien on any Collateral of Borrower
or any Guarantor consisting of Accounts, Inventory or Equipment, Borrower shall
cause the lessors of all present or future office, manufacturing, storage or
other facilities leased by such Credit Party to execute Lessor Waivers and
Consents in favor of the Agent. In the event the Borrower or any such Guarantor
now or hereinafter maintains or establishes any deposit accounts at any
depository institution other than the Agent (other than payroll accounts used
exclusively for such purpose and in which no excess cash balances are
maintained), and so long as the Agent has a Lien in any Collateral of such
Credit Party consisting of Accounts, Borrower shall use its best efforts to
cause such depository institution to enter into a Pledged Deposit Agreement with
the Agent and the appropriate Credit Party.
(f) In the event that after the date of this Agreement the Borrower
or any of its Existing Domestic Subsidiaries (or any of its Future Domestic
Subsidiaries if required by paragraph (g) below) acquires any real property or
any additional patents, trademarks, service
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<PAGE>
marks or registered copyrights, the Borrower shall promptly give written notice
of such acquisition to the Agent and each Lender and, if requested by the Agent
at the direction of the Required Lenders, Borrower shall execute and deliver (or
cause such Subsidiary to execute and deliver) any and all mortgages, security
deeds, deeds of trust, collateral assignments, security agreements, pledge
agreements, financing statements, fixture filings or other documents as the
Agent or the Required Lenders may request from time to time in order for the
Agent to acquire a Lien (for the benefit of the Lenders) on the property so
acquired by such Credit Party as additional security for the Obligations or to
perfect or maintain the perfection of such Lien.
(g) If at any time on or after the date of this Agreement, the
Borrower's Funded Debt equals or exceeds $50,000,000 or its Tangible Net Worth
is not greater than $25,000,000, the Borrower shall, if and to the extent
requested by the Agent from time to time at the direction of the Required
Lenders, cause its Future Domestic Subsidiaries to execute and deliver any and
all mortgages, securities deeds, deeds of trust, collateral assignments,
security agreements, pledge agreements, financing statements, fixture filings or
other documents as the Agent or the Required Lenders may request from time to
time in order for the Agent to obtain Liens (for the benefit of the Lenders) on
all real and personal property assets of such Future Domestic Subsidiaries as
additional security for the Obligations or to perfect or maintain the perfection
of such Liens, and thereafter such Foreign Domestic Subsidiaries shall be
subject to the provisions of paragraphs (e) and (f) above .
SECTION 7.07. CAPITAL ADEQUACY. Without limiting any other provision
----------------
of this Agreement, in the event that any Lender determines after the date hereof
that the introduction or change after the date of this Agreement of any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, or any change therein or in the interpretation
or application thereof after the date of this Agreement, or compliance by any
Lender with any request or directive regarding capital adequacy (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful) from a central bank or governmental authority or body having
jurisdiction which is introduced or changed after the date of this Agreement,
does or shall have the effect of reducing the rate of return on such Lender's
capital as a consequence of its obligations hereunder or under any Letter of
Credit to a level below that which such Lender could have achieved but for such
law, treaty, rule, regulation, guideline or order or such change or compliance
(taking into consideration such Lender's policies with respect to capital
adequacy and assuming the full utilization of such Lender's capital immediately
before such adoption, change or compliance) by an amount reasonably deemed by
such Lender to be material, then such Lender shall promptly after its
determination of such occurrence notify the Borrower and the Agent thereof. The
Borrower agrees to pay to the Agent, for the account of such Lender, as an
additional fee from time to time, within ten (10) days after written notice and
demand by such Lender, such amount as such Lender certifies to be the amount
that will compensate it for such reduction in connection with its obligations
hereunder. A certificate of such Lender claiming compensation under this Section
7.07 shall be conclusive in the absence of manifest error and shall set forth
the nature of the occurrence giving rise to such compensation, the additional
amount or amounts to be paid to it hereunder and the method by which such
amounts were determined. In determining such amount, the Lender involved may use
reasonable averaging and attribution methods.
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<PAGE>
SECTION 7.08. UNAVAILABILITY. If (i) any Lender determines that the
--------------
making or maintenance by it of any Fixed Rate Advance or Multicurrency Advance
hereunder would violate any applicable law, rule or regulation or the
interpretation or application thereof (whether or not having the force of law),
(ii) any Lender determines that deposits of a type and maturity appropriate to
fund particular Fixed Rate or foreign currency options or particular Interest
Periods hereunder are not available in the relevant market, or (iii) any Lender
determines that, due to circumstances affecting such Lender or the relevant
market or such Lender's position in such market, a particular Fixed Rate does
not fully reflect such Lender's cost of maintaining particular interest rate or
foreign currency options and/or Interest Periods hereunder, then the
availability of such Fixed Rate-based interest rate option, Multicurrency
Advance option and/or Interest Periods hereunder may be suspended by such Lender
(by written notice to the Borrower and the Agent) for new Interest Periods until
such time as market conditions or legal considerations permit it to be
reinstated.
SECTION 7.09. INCREASED COSTS. If, due to either (i) the
---------------
introduction of or any change (other than a change by way of imposition of or
increase in reserve requirements already included in computing the relevant
Fixed Rate) in or in the interpretation of any law or regulation after the date
hereof or (ii) the compliance with any guideline or request from any central
bank or other governmental authority issued after the date hereof (whether or
not having the force of law), there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Fixed Rate
Advance or Multicurrency Advance hereunder, then within ten (10) days after
written notice and demand by such Lender, Borrower shall from time to time pay
to the Agent (for the account of such Lender) additional amounts as are
sufficient to compensate such Lender for such increased cost. Each such notice
and demand shall be accompanied by a certificate of such Lender setting forth in
reasonable detail the basis for computing the additional amount claimed by such
Lender, and each such certificate shall, in the absence of manifest error, be
conclusive evidence of the amount of such cost.
SECTION 7.10. SHARING OF PAYMENTS, ETC.. If any Lender shall obtain
--------------------------
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, from proceeds of Collateral or otherwise) on account of the
Obligations owing to it (other than pursuant to Section 6.03, 7.02, 7.04(b),
7.05(b), 7.07 or 7.09 hereof) in excess of its ratable share of payments on
account of the Obligations obtained by all the Lenders, such Lender shall
forthwith purchase from the other Lenders such participations in the Obligations
owing to them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or any
--------
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from Lender shall be rescinded and such Lender shall repay
to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to the
proportion of (x) the amount of such Lender's required payment to (y) the total
amount so recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered. The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to this Section 6.10 may, to the fullest extent
permitted by law, exercise all of its rights of payment (including any right of
set-off or banker's
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<PAGE>
lien) with respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation.
SECTION 7.11. LOAN ACCOUNTS.
-------------
(a) Each Lender shall open and maintain on its books one or more
separate loan accounts in the name of the Borrower and such loan accounts shall
show as debits thereto such Lender's Loans or Letter of Credit Interest under
this Agreement and as credits thereto all payments received by such Lender and
applied thereto so that the balance of the loan accounts of the Borrower with
each Lender at all times shall reflect the principal amount of such Lender's
Loans and Letter of Credit Interest.
(b) The Agent shall maintain on its books a control account for the
Borrower in which shall be recorded (i) each Loan made hereunder to the
Borrower, (ii) each Letter of Credit issued hereunder and the amount of each
Drawing paid by the Issuing Bank thereunder, (iii) each interest rate applicable
hereunder or under the Notes, (iv) the amount of any principal, interest or fees
due or to become due from the Borrower hereunder or under the Notes, and (v) the
amount of any sum received by the Agent hereunder or under the Notes in respect
of any such principal, interest or fees and each Lender's Pro Rata Share
thereof.
(c) The entries made in the accounts pursuant to paragraph (a) or
(b) above shall be prima facie evidence, in the absence of manifest error, of
----- ----
the existence and amounts of the Obligations of the Borrower therein recorded
and any payments thereon, and in case of discrepancy between such accounts, in
the absence of manifest error, the control account maintained pursuant to
paragraph (b) above shall be controlling.
(d) The Agent on behalf of the Lenders will account to the Borrower
(with a copy to each Lender) monthly with a statement of borrowings, drawings,
charges, and payments made pursuant to this Agreement, and each such account
rendered by the Agent shall be deemed final, binding and conclusive unless the
Agent is notified by the Borrower or any Lender in writing within thirty (30)
days after the date the account is so rendered that the Borrower or such Lender
disputes any item thereof (but any such notice by the Borrower or any Lender
shall be deemed an objection only to those items specifically set forth in such
notice). Failure by the Agent to render any such account shall in no way affect
its or any Lender's rights hereunder or under any of the other Credit Documents.
(e) The Cash Management Lender also will account to the Borrower
monthly with a statement of all Cash Management Loans made and all payments
thereon received by the Cash Management Lender pursuant to this Agreement, and
each such statement rendered by the Cash Management Lender shall be deemed
final, binding and conclusive unless the Cash Management Lender is notified by
the Borrower in writing within thirty (30) days after the date the account is so
rendered that the Borrower disputes any item thereof (but any such notice shall
be deemed an objection only to those items specifically set forth in such
notice). Failure by the Cash Management Lender to render any such account shall
in no way affect its or any other Lender rights hereunder or under any of the
other Credit Documents.
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SECTION 7.12. FUNDING LOSSES. The Borrower shall compensate each
--------------
Lender, upon its written request to the Borrower (which request shall set forth
the basis for requesting such amounts in reasonable detail and which request
shall be made in good faith and, absent manifest error, shall be final,
conclusive and binding upon all of the parties hereto), for all losses, expenses
and liabilities (including, without limitation, any interest paid by such Lender
to lenders of funds borrowed by it to make or carry any Fixed Rate Advances
hereunder or any amounts required to be paid by such Lender as a result of
currency fluctuations of any foreign currency borrowed by it in order to make or
carry a Multicurrency Advance, in either case to the extent not recovered by
such Lender in connection with the re-employment of such funds and including
loss of anticipated profits), which the Lender may sustain: (i) if for any
reason (other than a default by such Lender) a borrowing of any Fixed Rate
Advance or Multicurrency Advance does not occur on the date specified therefor
in a Notice of Borrowing, (ii) if any repayment (including any prepayment) of
any Fixed Rate Advance or Multicurrency Advance occurs on a date which is not
the last day of an Interest Period applicable thereto (except that any Lender
may elect to receive the prepayment penalty specified in Section 7.05(e)(iii)(y)
above in lieu of compensation under this Section 7.12), or (iii) if, for any
reason, the Borrower defaults in its obligation to repay its Fixed Rate Advances
or Multicurrency Advances when due as required by the terms of this Agreement.
SECTION 7.13. ASSUMPTIONS CONCERNING FUNDING OF LIBOR ADVANCES.
------------------------------------------------
Calculation of amounts payable to a Lender under this Agreement with respect to
any LIBOR Advance shall be made as though that Lender had actually funded its
relevant LIBOR Advances through the purchase of deposits in the relevant market
bearing interest at the rate applicable to such LIBOR Advance in an amount equal
to the amount of the LIBOR Advance and having a maturity comparable to the
relevant Interest Period and through the transfer of such LIBOR Advance from an
offshore office of that Lender to a domestic office of that Lender in the United
States of America; provided, however that each Lender may fund each of its LIBOR
--------
Advances in any manner it sees fits and the foregoing assumption shall be used
only for calculation of amounts which may be payable under this Agreement.
SECTION 7.14. APPORTIONMENT OF PAYMENTS. All aggregate principal and
-------------------------
interest payments in respect of Loans and Reimbursement Obligations and all
aggregate payments in respect of Commitment Fees and Letter of Credit Fees
received by the Agent shall be apportioned among all outstanding Credit
Commitments, Loans and Reimbursement Obligations to which such payments relate,
proportionately to the Lenders' respective Pro Rata Shares of such Commitments
and outstanding Obligations. The Agent shall promptly distribute to each Lender
at its address set forth beside its name on Annex I attached hereto or such
other address as any Lender may request its share of all such payments received
by the Agent.
SECTION 7.15. AGREEMENTS REGARDING INTEREST AND OTHER CHARGES.
-----------------------------------------------
Pursuant to O.C.G.A. (S) 7-4-2, Borrower, the Agent and the Lenders hereby agree
--------
that the only charges imposed or to be imposed by the Agent or the Lenders upon
Borrower for the use of money in connection with the Loans or the Letters of
Credit is and will be the interest required to be paid under the provisions of
Section 7.03 hereof as well as the related provisions of the Notes. In no
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event shall the amount of interest due and payable under this Agreement, the
Notes or any of the other Credit Documents exceed the maximum rate of interest
allowed by applicable law (including, without limitation, O.C.G.A. (S) 7-4-18)
--------
and, in the event any such payment is made by Borrower or any other Credit Party
or received by the Agent or any Lender, such excess sum shall be credited as a
payment of principal (or, if no principal shall remain outstanding, shall be
refunded to Borrower or such other Credit Party). It is the express intent
hereof that the Borrower and the other Credit Parties not pay and the Agent and
the Lenders not receive, directly or indirectly or in any manner, interest in
excess of that which may be lawfully paid under applicable law.
SECTION 7.16. CREDIT EXPIRATION DATE. Each Lender's respective
----------------------
obligation to make any Loans or issue any Letters of Credit hereunder shall
expire on the Credit Expiration Date. If requested to do so by the Borrower, all
of the Lenders may, in their sole discretion exercised unanimously pursuant to
Section 14.08(a)(iv) hereof, grant one or more successive extensions of the
Credit Expiration Date, and in the event any such extension is requested by
Borrower and in the further event that such extension is granted by all of the
Lenders, the Agent shall notify the Borrower thereof and the Agent shall issue
to the Borrower and each of the Lenders a written notification of such extension
of the Credit Expiration Date (any Lender's failure to respond affirmatively to
any such extension request shall be considered to be a denial thereof).
Notwithstanding anything herein or in any of the other Credit Documents to the
contrary, each Lender may grant or withhold its consent to any requested
extension of the Credit Expiration Date in its sole and absolute discretion and
none of the Lenders shall be under any obligation (either express or implied) to
grant any such extension.
SECTION 7.17. BENEFITS TO GUARANTORS. In consideration for the
----------------------
execution and delivery by the Guarantors of their Guaranty Agreements, the
Borrower agrees to make the benefit of all Credit Events hereunder available to
the Guarantors.
SECTION 7.18. SEVERAL COMMITMENTS. No Lender shall be responsible
-------------------
for any default by any other Lender in its obligations to make any Loan
hereunder, but each Lender shall remain obligated to make any Loan otherwise
required to be made by it hereunder regardless of the failure of any other
Lender to fulfill its obligations hereunder.
ARTICLE VIII.
CONDITIONS PRECEDENT TO CREDIT EVENTS
-------------------------------------
The respective obligations of the Agent and the Lenders to make any
Loan to Borrower hereunder or to issue any Letter of Credit for its account
hereunder are subject to the satisfaction of the following conditions precedent:
SECTION 8.01. CONDITIONS PRECEDENT TO INITIAL CREDIT EVENT. (a) At
--------------------------------------------
the time of the Initial Credit Event, the Agent and the Initial Lender shall
have received the following (all documents to be in form and substance
satisfactory to the Agent and the Initial Lender):
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(i) this Agreement duly completed and executed;
(ii) the Notes duly completed and executed;
(iii) the Agreement Regarding Security Documents duly completed and
executed;
(iv) the favorable opinion of the primary counsel for the Borrower
and the Guarantors in the form of Exhibit F-1 attached hereto (subject to
-----------
such changes therein as may be acceptable to the Agent and the Initial
Lender) and the favorable opinion of Iowa Counsel for the Guarantors who
are incorporated in the State of Iowa in the form of Exhibit F-2 attached
-----------
hereto (subject to such changes therein as may be acceptable to the Agent
and the Initial Lender);
(v) Certificates of each of the Borrower and the initial Guarantors
in substantially the forms of Exhibit G-1 (in the case of Borrower),
-----------
Exhibit G-2 (in the case of each corporate Guarantor) and Exhibit G-3 (in
----------- -----------
the case of each partnership Guarantor) attached hereto, duly executed and
appropriately completed;
(vi) copies of the Certificate or Articles of Incorporation of the
Borrower and each of the Guarantors (certified in each case by the
Secretary of State or other appropriate official of the state of such
Credit Party's incorporation), together with current good standing
certificates or certificates of existence for each such Credit Party issued
by the Secretary of State or other appropriate official of such Credit
Party's jurisdiction of incorporation and of such other jurisdictions where
such Credit Party presently is qualified to do business as a foreign
corporation;
(vii) copies of all documents and instruments, including all
consents, authorizations and filings, required under any Requirement of Law
or by any Contractual Obligation of Borrower or any Guarantor in connection
with the execution, delivery, performance, validity and enforceability of
the Credit Documents and the other documents to be executed and delivered
hereunder, and such consents, authorizations, filings and orders shall be
reasonably satisfactory in form and substance to the Agent and the Initial
Lender and shall be in full force and effect and all applicable waiting
periods shall have expired;
(viii) all corporate proceedings and all other legal matters in
connection with the authorization, legality, validity and enforceability of
the Credit Documents shall be reasonably satisfactory in form and substance
to Agent and the Initial Lender;
(ix) a Compliance Certificate duly completed and executed by
Borrower and demonstrating Borrower's compliance as of January 31, 1996
with the financial covenants set forth in Section 10.09 hereof; and
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(x) such other documents, certificates, approvals or filings as the
Agent or any Initial Lender may request.
(b) Also, at or before the time of the Initial Credit Event, the
Agent shall have received payment of the Closing Fee (for the account of and
distribution to the Initial Lender) pursuant to Section 7.04(f) in immediately
available funds.
(c) Also, on or before the date of this Agreement, the Initial
Lender shall have acquired by assignment all rights, titles and interests of the
other Lenders under the Prior 1994 Credit Agreement.
SECTION 8.02. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. At the
-----------------------------------------
time of (and after giving effect to) the making of any Loan hereunder or the
issuance of any Letter of Credit hereunder, the following conditions shall have
been satisfied or shall exist:
(a) there shall then exist no Default or Event of Default;
(b) all representations and warranties by Borrower and its
Subsidiaries contained herein or in the other Credit Documents (other than
those representations and warranties which are, by their terms, expressly
limited to the date made or given) shall be true and correct in all
material respects with the same effect as though such representations and
warranties had been made on and as of the date of such Loan;
(c) since the date of the most recent financial statements
described in Section 9.02 or received pursuant to Section 10.01, there
shall have been no change which has had or could reasonably be expected to
have a materially adverse effect on the business, property or assets or
financial condition of Borrower and its Subsidiaries taken as a whole;
(d) there shall be no action or proceeding instituted or pending
before any court or other governmental authority or, to the knowledge of
Borrower, threatened (i) which reasonably could be expected to have a
materially adverse effect on the business, property, assets or financial
condition of Borrower and its Subsidiaries taken as a whole, or (ii)
seeking to prohibit or restrict any Credit Party's ownership or operation
of any material portion of its business or assets or to compel any Credit
Party to dispose of or hold separate all or any material portion of its
businesses or assets, which reasonably could be expected to have a material
adverse effect on the business, properties, assets or financial condition
of Borrower and its Subsidiaries taken as a whole; and
(e) the Loans to be made or the Letters of Credit to be issued, and
in either case the use of proceeds thereof, shall not contravene, violate
or conflict with, or involve any Credit Party, the Agent or any Lender in a
violation of, any law, rule, injunction, or regulation, or determination of
any court of law or other governmental authority.
Each request for a Loan by Borrower and each request for a Letter of
Credit by Borrower shall constitute a representation and warranty by Borrower,
as of the date of such
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Series A Revolving Loan or the issuance of such Letter of Credit, that the
conditions specified in Sections 8.01 and 8.02 have been satisfied.
ARTICLE IX.
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower (as to itself and all of its Subsidiaries) represents and
warrants to the Agent and the Lenders as follows:
SECTION 9.01. ORGANIZATION; SUBSIDIARIES; AUTHORIZATION; VALID AND
----------------------------------------------------
BINDING OBLIGATIONS.
- -------------------
(a) Borrower is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware. Each Subsidiary is
duly organized and validly existing in good standing under the laws of the
jurisdiction in which it is incorporated.
(b) There exist no Subsidiaries other than those identified on
Schedule 9.01 attached hereto (and Borrower hereby covenants that no other
- -------------
Subsidiaries will be created or acquired without (i) giving the Agent and each
Lender not less than thirty (30) days' prior written notice of the creation or
acquisition of any such Subsidiary, and (ii) compliance with any requirement
under Section 10.10 that such Subsidiary become an additional Credit Party).
(c) Each of the Borrower and its Subsidiaries is duly qualified as
a foreign corporation or partnership and in good standing in each jurisdiction
where the ownership of property or the nature of the business transacted by it
makes such qualification necessary, except where the failure to be so qualified
would not have a materially adverse effect on the business, properties, assets
or financial condition of Borrower and its Subsidiaries taken as a whole, and
Borrower has and each Subsidiary has the corporate or partnership power to own
its respective property and to carry on its respective business as now being
conducted.
(d) Each of the Borrower and its Subsidiaries has all requisite
corporate or partnership power and authority to execute and deliver the Credit
Documents to which it is a party and to perform its obligations under such
Credit Documents. The Credit Documents to which Borrower or any Subsidiary is a
party have been duly authorized by all requisite corporate or partnership action
on the part of such Credit Party and duly executed and delivered by authorized
officers or partners of such Credit Party.
(e) Each of the Credit Documents to which Borrower or any
Subsidiary is a party constitutes a valid obligation of such Credit Party,
legally binding upon and enforceable against such Credit Party in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity.
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SECTION 9.02. FINANCIAL STATEMENTS. Borrower has furnished the
--------------------
Agent and each Initial Lender with copies of (i) the audited consolidated
balance sheet of the Borrower and its Subsidiaries as at October 31, 1995, and
the related consolidated statements of income, retained earnings and cash flows
for the twelve (12) month period then ended, including in each case the related
schedules and notes, and (ii) the unaudited consolidated balance sheet of the
Borrower and its Subsidiaries as of January 31, 1996, and the related unaudited
consolidated statements of income, retained earnings and cash flows for the
year-to-date period then ended. The foregoing financial statements fairly
present the consolidated financial condition of the Borrower and its
Subsidiaries as at the dates thereof and the results of their financial
condition for such periods in conformity with GAAP (subject, in the case of
interim financial statements, to normal year-end adjustments). Since October 31,
1995 there has been no material adverse change in the financial condition or
operations of the Borrower and its Subsidiaries taken as a whole.
SECTION 9.03. ACTIONS PENDING. Except as may be disclosed on
---------------
Schedule 9.03 attached hereto, there is no action, suit, investigation or
- -------------
proceeding pending or, to the knowledge of Borrower, threatened against Borrower
or any of its Subsidiaries, or any properties or rights of Borrower or any of
its Subsidiaries, by or before any court, arbitrator or administrative or
governmental body which could reasonably be expected to result in any material
and adverse effect on the business, property, assets or financial condition of
Borrower and its Subsidiaries taken as a whole.
SECTION 9.04. OUTSTANDING INDEBTEDNESS. Neither Borrower nor any of
------------------------
its Subsidiaries has outstanding any Indebtedness except as has been disclosed
on the financial statements described in Section 9.02 above or as may be
permitted by Section 11.01 or 11.03 hereof.
SECTION 9.05. TITLE TO PROPERTIES. Each of the Borrower and its
-------------------
Subsidiaries has good title to all of its respective properties and assets
(other than properties and assets disposed of in the ordinary course of
business), subject to no Lien of any kind except Liens granted under the
Security Documents or permitted pursuant to Section 11.02. All leases necessary
in any material respect for the conduct of the respective businesses of Borrower
and its Subsidiaries are valid and subsisting and are in full force and effect,
there has not been asserted against Borrower any claim of default, and there
exists no default or event or condition which, with notice or lapse of time or
both, would constitute a material default under such leases.
SECTION 9.06. TAXES. Except as may be disclosed on Schedule 9.06
----- -------------
attached hereto, Borrower has and each of its Subsidiaries has filed all
federal, state and other income tax returns which, to the knowledge of the
Borrower, are required to be filed, and each has paid all taxes as shown on such
returns and on all assessments received by it to the extent that such taxes have
become due, except such taxes as are not due or which are being contested in
good faith by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP as required by Section 10.06 below.
SECTION 9.07. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the
---------------------------------------
execution nor delivery of this Agreement, nor fulfillment of or compliance with
the terms and
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<PAGE>
provisions of this Agreement, will conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, or result in
any violation of, or result in the creation of any Lien upon any of the
properties or assets of Borrower or any of its Subsidiaries pursuant to, the
charter or by-laws of Borrower or any of its Subsidiaries, any award of any
arbitrator or any agreement, instrument, order, judgment, decree, statute, law,
rule or regulation to which Borrower or any of its Subsidiaries is subject.
Neither Borrower nor any of its Subsidiaries is a party to, or otherwise subject
to any provision contained in, any instrument evidencing indebtedness of
Borrower or such Subsidiary, any agreement relating thereto or any other
contract or agreement (including its Articles or Certificate of Incorporation or
By-Laws) which limits the amount of, or otherwise imposes restrictions on the
incurring of, Indebtedness of Borrower of the type to be created under this
Agreement or evidenced by the Notes.
SECTION 9.08. ERISA. Except as disclosed on Schedule 9.08 attached
----- -------------
hereto, neither Borrower nor any of its Subsidiaries has any Plans. No
accumulated funding deficiency (as defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, exists with respect to any Plan (other
than a Multiemployer Plan). No liability to the PBGC has been or is expected by
Borrower to be incurred with respect to any Plan (other than a Multiemployer
Plan) by Borrower or any of its Subsidiaries which has or could reasonably be
expected to have a materially adverse effect on the business, property or assets
or financial condition of Borrower and its Subsidiaries taken as a whole.
Neither Borrower nor any of its Subsidiaries has incurred or presently expects
to incur any withdrawal liability under Title IV of ERISA with respect to any
Multiemployer Plan which has or could reasonably be expected to have a
materially adverse effect on the business, property or assets or financial
condition of Borrower and its Subsidiaries taken as a whole. The execution and
delivery of the Credit Documents will not involve any transaction which is
subject to the prohibitions of section 406 of ERISA or in connection with which
a tax could be imposed pursuant to Section 4975 of the Code.
SECTION 9.09. GOVERNMENTAL CONSENT. Except for any recording or
--------------------
filing which may be required by applicable law to perfect or maintain the
perfection of the Agent's Liens in the Collateral, no consent, approval or
authorization of, or declaration or filing with, any governmental authority is
required for the valid execution, delivery and performance by any Credit Party
of the Credit Documents executed by such Person or the consummation of any of
the transactions contemplated by the Credit Documents.
SECTION 9.10. COMPLIANCE WITH LAWS AND REGULATIONS. Each of the
------------------------------------
Borrower and its Subsidiaries complies in all material respects with all
material federal, state, local, and other laws, ordinances and other
governmental rules or regulations to which any of them is subject, including
without limitation, Environmental Laws and laws and regulations relating to
equal employment opportunity and employee safety, and Borrower will promptly
comply in all material respects and will cause each of its Subsidiaries promptly
to comply in all material respects with all such laws and regulations which may
be legally imposed on Borrower or any Subsidiary in the future.
SECTION 9.11. POSSESSION OF LICENSES, FRANCHISES, ETC.. Borrower and
-----------------------------------------
its Subsidiaries possess all material licenses, franchises, certificates,
permits and other authorizations
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from any governmental or regulatory authorities that are necessary in any
material respect for the ownership, maintenance and operation of their
respective properties and assets, and neither Borrower nor any Subsidiary is in
violation of any thereof in any material respect.
SECTION 9.12. LICENSES, ETC.. Borrower and each Subsidiary of
---------------
Borrower have obtained all patents, trademarks, service marks, trade names,
service names, copyrights, licenses, and other similar rights that are necessary
for the operation of its business as presently conducted and as proposed to be
conducted. Except as set forth on Schedule 9.03, nothing has come to the
-------------
attention of Borrower to the effect that (i) any product, process, method,
substance, part or other material presently contemplated to be sold by or
employed by Borrower or any Subsidiary of Borrower in connection with such
business may infringe any patent, trademark, service mark, trade name, service
names, copyright, license or other right owned by any other Person, (ii) there
is pending or threatened any claim or litigation against or affecting Borrower
or any Subsidiary of Borrower contesting its right to sell or use any such
product, process, method, substance, part or other material, or (iii) there is,
or there is pending or proposed, any patent, invention, device, application or
principle or any statute, rule, law, regulation, standard or code which would
prevent, inhibit or render obsolete the production or sale of any products of,
or substantially reduce the projected revenues of, or otherwise materially and
adversely affect the business, condition or operations of, Borrower or any
Subsidiary of Borrower. Schedule 9.12 hereto lists all patents, trademarks and
-------------
registered copyrights owned by the Borrower and its Subsidiaries and any
applications therefor.
SECTION 9.13. ENVIRONMENTAL LAW COMPLIANCE. Borrower and each of its
----------------------------
Subsidiaries have obtained all material permits, licenses and other
authorizations which are required under Environmental Laws, and Borrower and
each of its Subsidiaries are in compliance in all material respects with all
terms and conditions of such permits, licenses and authorizations and are also
in compliance in all material respects with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules and
timetables contained in any applicable Environmental Laws. Except as set forth
on Schedule 9.13 attached hereto, neither Borrower nor any of its Subsidiaries
-------------
is aware of, or has received notice of, any past, present or future events,
conditions, circumstances, activities, practices, incidents, actions or plans
which, with respect to Borrower or any Subsidiary, may interfere with or prevent
compliance or continued compliance in all material respects with Environmental
Laws, or may give rise to any material common law or legal liability, or
otherwise form the basis of any material claim, action, demand, suit,
proceeding, hearing, study or investigation, based on or related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or, threatened
release into the environment, of any pollutant, contaminant, chemical, or
industrial, toxic or hazardous substance or waste, and there is no civil,
criminal or administrative action, suit, demand, claim, hearing, notice or
demand proceeding pending or, to the knowledge of the Borrower, threatened
against Borrower or any Subsidiary relating in any way to Environmental Laws.
SECTION 9.14. SOLVENCY. After giving effect to the transactions
--------
contemplated by the Credit Documents, (i) the property of each Credit Party, at
a fair valuation, will exceed its debts, (ii) each Credit Party's capital will
not be unreasonably small to conduct its business, (iii) no
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Credit Party will have incurred debts, or have intended to incur debts, beyond
its ability to pay such debts as they mature, and (iv) the then-current fair
salable value of each Credit Party's assets will be materially greater than the
amount that will be required to pay its probable liabilities (including debts)
as they become absolute and matured. For purposes of this Section, "debt" means
any liability on a claim, and "claim" means (i) the right to payment, whether or
not such right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured, or (ii) the right to an equitable remedy for breach of performance
if such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured.
SECTION 9.15. MARGIN REGULATIONS AND INVESTMENT COMPANY ACT, ETC. No
---------------------------------------------------
part of the proceeds of any Loan or Letter of Credit will be used for any
purpose which violates, or which would be inconsistent or not in compliance
with, the provisions of the applicable Margin Regulations. No Credit Party is an
"investment company" or a company "controlled" by an "investment company" (as
each of the quoted terms is defined or used in the Investment Company Act of
1940, as amended). No Credit Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, or any foreign,
federal or local statute or regulation limiting its ability to incur
indebtedness for money borrowed, to guarantee such indebtedness or to pledge any
of its assets to secure such indebtedness, as contemplated by this Agreement or
by any other Credit Document.
SECTION 9.16. LABOR MATTERS. Neither Borrower nor any Subsidiary of
-------------
Borrower has experienced any strike, labor dispute, slow down or work stoppage
due to labor disagreements, and, to the best knowledge of Borrower, there is no
strike, dispute, slow down or work stoppage threatened against Borrower or any
Subsidiary. Except as set forth on Schedule 903 attached hereto, there are no
------------
claims or lawsuits which have been asserted or instituted against Borrower on
the basis that it did not perform in respect of any undertakings made towards
its employees or their representatives and no basis for such claim or lawsuits
exists. Borrower has acted in all material respects in accordance with any
agreements entered into with representatives of its employees relating to their
relations with and obligations towards their employees.
SECTION 9.17. BROKERS. There are and will be no claims against the
-------
Agent or any Lender for brokerage commissions, finder's fees or investment
banking fees in connection with the transactions contemplated by this Agreement.
SECTION 9.18. INSURANCE. The Borrower and its Subsidiaries currently
---------
maintain insurance with respect to their respective properties and businesses
with financially sound and reputable insurers, having coverages against
liabilities, losses or damages of the kinds customarily insured against by
reputable companies engaged in the same or similar businesses, such insurance
being in amounts no less than those amounts which are customary for such
companies under similar circumstances. The Borrower and its Subsidiaries have
paid all insurance premiums now due and owing with respect to such insurance
policies and coverages and such policies and coverages are in full force and
effect.
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SECTION 9.19. DISCLOSURE. Neither this Agreement nor any other
----------
document, certificate or statement furnished to the Agent or any Lender by or on
behalf of Borrower or any other Credit Party in connection herewith contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein and therein not materially
misleading. There is no fact peculiar to Borrower or any of its Subsidiaries
which materially or adversely affects or in the future could reasonably be
expected to materially and adversely affect the business, property or assets, or
financial condition of Borrower and its Subsidiaries taken as a whole and which
has not been set forth in this Agreement or in the other documents, certificates
and statements furnished to the Agent or any Lender by or on behalf of Borrower
or the other Credit Parties prior to the date hereof in connection with the
transactions contemplated hereby.
SECTION 9.20. REAFFIRMATION. Each request for a Loan or a Letter of
-------------
Credit made by Borrower pursuant to this Agreement shall constitute an automatic
representation and warranty by Borrower to the Agent and each Lender that there
does not then exist any Default or Event of Default as well as a reaffirmation
by Borrower as of the date of said request of all of the representations and
warranties of the Credit Parties contained in this Agreement and the other
Credit Documents (other than those representations and warranties which are, by
their terms, expressly limited to the date made or given).
SECTION 9.21. REVISIONS OR UPDATES OF SCHEDULES. Should any of the
---------------------------------
information or disclosures provided on any of the Schedules attached hereto
become incorrect in any material respect, the Borrower shall provide promptly to
the Agent and the Lenders in writing such revisions to such Schedule as may be
necessary to correct same, provided that no Schedule shall be deemed to have
been amended, modified or superseded by any such correction, nor shall any
breach of warranty or representation resulting from the inaccuracy or
incompleteness of any such Schedule be deemed to have been cured thereby, unless
and until the Agent and the Required Lenders in their sole and absolute
discretion shall have accepted in writing such revisions to such Schedule.
ARTICLE X.
AFFIRMATIVE COVENANTS
---------------------
For so long as this Agreement is in effect, and unless the Agent and
the Required Lenders expressly consent in writing to the contrary, Borrower
hereby expressly covenants and agrees (for itself and its Subsidiaries) that:
SECTION 10.01. FINANCIAL STATEMENTS AND OTHER REPORTS AND NOTICES.
--------------------------------------------------
Borrower shall promptly deliver to the Agent and each Lender:
(i) as such is available and in any event within forty-five (45)
days after the end of each fiscal quarter of Borrower, a consolidated
statement of income and statement of cash flows of Borrower and its
Subsidiaries for the period from the beginning of such fiscal year to the
end of such period, and a consolidated balance
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sheet of Borrower and its Subsidiaries as at the end of such period,
setting forth in the case of each quarterly statement in comparative form
figures for the corresponding period in the preceding fiscal year, all in
reasonable detail, prepared in accordance with GAAP (subject to changes
resulting from normal year-end adjustments), but not audited, and
accompanied by a duly completed and executed Compliance Certificate dated
as of the date of the delivery of such financial statements;
(ii) within one hundred twenty (120) days after the end of each
fiscal year of Borrower, a consolidated statement of income and statement
of cash flows of Borrower and its Subsidiaries for such year, and a
consolidated balance sheet of Borrower and its Subsidiaries as at the end
of such year, setting forth in each case in comparative form corresponding
figures from the preceding annual audit, all in reasonable detail, prepared
in accordance with GAAP and reasonably satisfactory in scope to the Agent
and audited in accordance with generally accepted auditing standards and
certified to Borrower by independent public accountants of recognized
standing in the United States of America selected by Borrower and
reasonably acceptable to the Agent whose certificate shall be unqualified,
which financial statements shall be accompanied by a duly completed and
executed Compliance Certificate dated as of the date of the delivery of
such financial statements;
(iii) promptly upon receipt thereof, a copy of each other report
submitted to the Borrower or any Subsidiary by its independent public
accountants in connection with any annual, interim or special audit made by
them of the books of the Borrower or any such Subsidiary (including,
without limitation any management report prepared in connection with such
accountants' annual audit of the Borrower and its Subsidiaries);
(iv) not less than thirty (30) days prior to the end of each fiscal
year of Borrower, Borrower also shall provide each of the Lenders and the
Agent with a copy of the Borrower's business plan for the coming fiscal
year which shall include quarterly projections and a projected balance
sheet, income statement, and statements of cash flows for each of the
Borrower and its Subsidiaries separately and for the Borrower on a
consolidated basis;
(v) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as it shall
send to its stockholders, if any, and copies of all registration statements
and all reports which it files with the SEC (or any governmental body or
agency succeeding to the functions of the SEC);
(vi) promptly upon obtaining knowledge of an Event of Default, an
Officer's Certificate specifying the nature and period of existence thereof
and what action Borrower proposes to take with respect thereto;
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(vii) immediately upon becoming aware that the holder of any evidence
of indebtedness or any security of Borrower or any Subsidiary has given
notice or taken any other action with respect to a claimed default or event
of default with respect to such indebtedness or security or event which,
with the giving of notice or passage of time, or both, would constitute a
default with respect to such indebtedness or security, an Officer's
Certificate specifying the notice given or action taken by such holder and
the nature of the claimed default or event and what action Borrower or the
Subsidiary is taking or proposes to take with respect thereto;
(viii) promptly after learning thereof, any (x) notice that Borrower
or any Subsidiary is not in compliance in all material respects with all
terms and conditions of any permit, license or authorization which is
required under Environmental Laws, or that Borrower or any Subsidiary is
not in compliance in all material respects with all other limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable
Environmental Laws; (y) notice of any past, present or future events,
conditions, circumstances, activities, practices, incidents, actions or
plans which, with respect to Borrower or any Subsidiary, may materially
interfere with or prevent compliance in all material respects or continued
compliance in all material respects with any applicable Environmental Laws;
and (z) notice or claim of any civil, criminal or administrative action,
suit, demand, claim, hearing, notice or demand letter, notice of violation,
investigation, or proceeding pending or threatened against Borrower or any
Subsidiary relating in any way to any applicable Environmental Laws;
(ix) promptly after (a) the occurrence thereof, notice of the
institution by any Person of any action, suit or proceeding or any
governmental investigation or any arbitration, before any court or
arbitrator or any governmental or administrative body, agency, or official,
against Borrower, any Subsidiary, or any material property of any of them,
in which the amount in controversy is stated to be more than $100,000
individually or in the aggregate or, where no amount in controversy is
stated, which might, if adversely determined, have a material and adverse
effect on the business, property or assets or financial condition of
Borrower and its Subsidiaries taken as a whole, or (b) the receipt of
actual knowledge thereof, notice of the threat of any such action, suit,
proceeding, investigation or arbitration, each such notice under this
subsection to specify, if known, the amount of damages being claimed or
other relief being sought, the nature of the claim, the Person instituting
the action, suit, proceeding, investigation or arbitration, and any other
significant features of the claim;
(x) promptly after the filing thereof, copies of any annual report
required to be filed by Borrower or any of its Subsidiaries pursuant to
ERISA
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connection with each Plan and any other employee benefit plan of
Borrower or its Subsidiaries;
(xi) promptly after learning thereof, notice of the occurrence of
any Reportable Event or of any additional act or condition arising in
connection with any Plan which Borrower believes might constitute grounds
for the termination thereof by the PBGC or for the appointment by any
appropriate United States district court of a trustee to administer such
Plan;
(xii) not less than thirty (30) days prior thereto, notice of any
intended domestication of any Foreign Subsidiary as a Domestic Subsidiary,
whether by merger, consolidation, stock transfer, re-incorporation or
otherwise; and
(xiii) with reasonable promptness, such other information relating to
the operations, management, business and financial condition of Borrower or
its Subsidiaries or any Plan, as the Agent or any Lender may reasonably
request in writing from time to time.
SECTION 10.02. INSPECTION OF PROPERTY. Borrower will permit any
----------------------
Person designated by the Agent or any Lender in writing to visit and inspect any
of the properties of Borrower and its Subsidiaries, to examine the corporate
books and records of Borrower and its Subsidiaries and such other documents as
the Agent or any Lender may reasonably request and make copies thereof or
extracts therefrom, and to discuss the affairs, finances and accounts of any of
such corporations with the officers of Borrower and Borrower's Subsidiaries and
with Borrower's independent public accountants, all at such reasonable times and
as often as the Agent or such Lender may reasonably request.
SECTION 10.03. BOOKS AND RECORDS. Borrower shall, and shall cause
-----------------
each Domestic Subsidiary to, keep its books, records and accounts in accordance
with GAAP and practices applied on a basis consistent with preceding years.
SECTION 10.04. MAINTENANCE OF INSURANCE. Borrower shall maintain and
------------------------
cause each Subsidiary to maintain, with financially sound and responsible
insurers reasonably acceptable to the Agent, insurance with respect to its
properties and business against such casualties and contingencies (including
worker's compensation and public liability, larceny, embezzlement or other
criminal misappropriation) and in such amounts as is customary in the case of
similarly situated corporations engaged in the same or similar businesses. From
time to time, upon written request by the Agent at reasonable intervals,
Borrower will deliver an Officer's Certificate specifying the details of such
insurance in effect.
SECTION 10.05. MAINTENANCE OF CORPORATE EXISTENCE, PROPERTIES,
----------------------------------------------
FRANCHISES, ETC.. Except to the extent otherwise permitted hereby, Borrower
- -----------------
and each Subsidiary will do or cause or cause to be done all things reasonably
necessary to preserve, renew and keep in full force and effect the corporate
existence of Borrower and its Subsidiaries and the patents, trademarks, service
marks, trade names, service names, copyrights, licenses, permits, franchises and
other
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rights, including distributorship and franchise agreements, that continue to be
useful in some material respect to the business of Borrower or such Subsidiary,
and at all times maintain, preserve and protect all patents, trademarks, service
marks, trade names, service names, copyrights, licenses, permits, franchises and
other rights, including distributorship and franchise agreements, that continue
to be useful in some material respect to the business of Borrower or such
Subsidiary, and preserve all the remainder of its property useful in the conduct
of its business and keep the same in good repair, working order and condition
(ordinary wear and tear excepted), and from time to time, make, or cause to be
made, all needful and proper repairs, renewals, replacements, betterments and
improvements thereto so that the business carried on in connection therewith may
be properly and advantageously conducted at all times.
SECTION 10.06. PAYMENT OF TAXES AND CLAIMS. Borrower and each
---------------------------
Subsidiary will pay and discharge or cause to be paid and discharged all taxes,
assessments and governmental charges or levies imposed upon it or upon its
respective income and profits or upon any of its property, real, personal or
mixed or upon any part thereof, before the same shall become in default as well
as all lawful claims for labor, materials and supplies or otherwise, which, if
unpaid, might become a Lien or charge upon such properties or any part thereof,
provided that Borrower and its Subsidiaries shall not be required to pay and
- --------
discharge or cause to be paid and discharged any such tax, assessment, charge,
levy or claim so long as the validity thereof shall be timely contested in good
faith by appropriate proceedings and it shall have set aside on its books in
accordance with GAAP adequate reserves with respect to any such tax, assessment,
charge, levy or claim, so contested; and provided, further, that payment with
--------
respect to any such tax, assessment, charge, levy or claim shall be made before
any property of Borrower or any Subsidiary shall be seized or sold in
satisfaction thereof.
SECTION 10.07. TYPE OF BUSINESS. Borrower will remain, and will
----------------
cause each Subsidiary to remain, substantially in the same businesses in which
Borrower and its Subsidiaries are engaged as of the date of this Agreement or in
such other types of business which are reasonably related or incidental thereto.
SECTION 10.08. COMPLIANCE WITH LAWS, ETC.. Borrower shall comply,
---------------------------
and cause each of its Subsidiaries to comply, in all material respects, with all
Requirements of Law and Contractual Obligations applicable to or binding on any
of them, except where the failure to so comply would not have a material adverse
effect on the business, property or assets or financial condition of the
Borrower and its Subsidiaries taken as a whole. Without limiting the generality
of the immediately preceding sentence, Borrower shall undertake to correct or
avoid the actual or potential environmental problems described on Schedule 9.13
-------------
within the respective time periods indicated therein; provided, however, that
--------
any such time period shall be extended so long as Borrower is diligently and
continuously pursuing the corrective or avoidance action involved in good faith
but has been unable to complete such action due to circumstances which are
beyond its reasonable control.
SECTION 10.09. FINANCIAL COVENANTS. Borrower shall comply with the
-------------------
following financial covenants:
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(a) Borrower's Current Ratio shall not be less than 1.50 to 1.0 as of
the end of any fiscal quarter or year of Borrower ending on or after
January 31, 1996;
(b) Borrower shall maintain a Tangible Net Worth as of the end of
each fiscal year ending on or after October 31, 1995 (and as of the end of
each fiscal quarter in each such fiscal year) of not less than the sum of
$37,235,000 plus fifty percent (50%) of Borrower's Net Income after taxes
for each fiscal year of Borrower ending on or after October 31, 1996 (but
such sum shall not be decreased if Borrower suffers a net loss in any one
year); provided, however, that Borrower's Tangible Net Worth may be reduced
--------
after the date of this Agreement on a one-time basis to not less than
($15,000,000) (that is, a negative $15,000,000) as a result of the
intangible assets acquired by Borrower in connection with an acquisition
transaction (or series of related acquisitions) so long as (i) Borrower
provides the Agent at or before the closing of such transaction with a
certificate of its president or chief financial officer demonstrating to
the Agent's satisfaction that on a pro forma basis Borrower's Tangible Net
--- -----
Worth will be increased to not less than $10,000,000 as of the end of its
first full fiscal quarter following the first anniversary of the date of
the closing of such acquisition (or acquisitions), (ii) Borrower maintains
a Tangible Net Worth as of the end of such fiscal quarter of not less than
$10,000,000, (iii) Borrower maintains a Tangible Net Worth as of the end of
the fiscal year in which such quarter occurs of not less than the sum of
(x) $10,000,000 plus (y) 50% of Borrower's Net Income after taxes for the
----
remainder of such fiscal year, and (iv) Borrower maintains a Tangible Net
Worth as of the end of each succeeding fiscal year of not less than the sum
of (x) its minimum required Tangible Net Worth hereunder for the prior year
plus (y) 50% of Borrower's Net Income after taxes for each such fiscal year
----
for which such Net Income is positive; provided further, however, that
----------------
after Borrower's Tangible Net Worth has been reduced to not less than
($15,000,000) as permitted by the preceding proviso and after Borrower's
Tangible Net Worth has been increased back to not less than $10,000,000 as
required by such proviso, Borrower's Tangible Net Worth thereafter may be
reduced from time to time to not less than $10,000,000 as a result of the
intangible assets acquired by Borrower in connection with an acquisition
transaction (or series of related acquisitions) so long as (1) Borrower's
Tangible Net Worth as of the end of its fiscal year in which such
acquisition (or acquisitions) occurs shall not be less than its Tangible
Net Worth immediately after such acquisition (or acquisitions) plus 50% of
----
Borrower's Net Income after taxes for the remainder of such fiscal year if
such Net Income is positive and (2) Borrower maintains a Tangible Net Worth
as of the end of each succeeding fiscal year of not less than the sum of
(x) its minimum required Tangible Net Worth hereunder for the prior year
plus (y) 50% of Borrower's Net Income after taxes for each such fiscal year
for which such Net Income is positive.
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(c) Borrower's Debt Service Coverage Ratio, as determined at the end
of each fiscal quarter or year ending on or after the date January 31, 1996
and based on the 4-quarter period ending therewith shall not be less than
1.5 to 1.0.
(d) Borrower's Senior Funded Debt Ratio shall not be more than 50% as
of the end of any fiscal quarter or fiscal year of Borrower which ends
January 31, 1996.
(e) Borrower's Funded Debt Ratio, as determined at the end of each
fiscal quarter or year ending on or after January 31, 1996 and based on the
4-quarter period ending therewith, shall not exceed 3.5 to 1.0.
SECTION 10.10. ADDITIONAL CREDIT PARTIES. Promptly after (a) the
-------------------------
creation or acquisition of any Subsidiary not listed on Schedule 9.01 as
-------------
attached on the date of the Initial Credit Event, or (b) the domestication of
any Foreign Subsidiary as a Domestic Subsidiary, Borrower shall execute and
deliver, or cause to be executed and delivered, (i) a Stock Pledge Agreement
from the direct parent company of such Subsidiary in substantially the same form
as Exhibit D-1 or Exhibit D-2 attached to the Prior 1992 Credit Agreement (as
----------- -----------
appropriate) with respect to all capital stock of such Subsidiary (but such
pledge shall be limited to 66% of such stock if such Subsidiary is a non-
domesticated Foreign Subsidiary), (ii) a Guaranty Agreement from such Subsidiary
(but not if it is a non-domesticated Foreign Subsidiary) in substantially the
same form as Exhibit B attached to the Prior 1992 Credit Agreement, and (iii) if
---------
required under Section 7.06(g) hereof, a Security Agreement from such Subsidiary
(but not if it is a non-domesticated Foreign Subsidiary) in substantially the
form of Exhibit C-2 attached to the Prior 1992 Credit Agreement together with
-----------
related documents of the kind described in Sections 5.01 (e), (f), (g), (h),
(i), (j), (k), (l), (m), (r) and (s) of the Prior 1992 Credit Agreement, all in
form and substance satisfactory to the Agent.
SECTION 10.11. BOND DOCUMENT COMPLIANCE BY BORROWER. Borrower shall
------------------------------------
keep, observe, perform, carry out and execute in every particular each and every
one of its covenants, agreements and obligations contained in the Bond
Documents, and, upon request by the Agent, Borrower shall deliver or cause to be
delivered to the Agent correct and complete copies of any and all instruments,
documents, loan requests, affidavits and other written materials submitted to
the Borrower by the Authority, the Bond Trustee or any contractor in connection
with the Bond Documents and the completion of the construction of the Project
(as defined in the Bond Lease).
ARTICLE XI
NEGATIVE COVENANTS
------------------
For so long as this Agreement is in effect, and unless the Agent and
the Required Lenders expressly consent in writing to the contrary, Borrower
hereby expressly covenants and agrees (for itself and its Subsidiaries) as
follows:
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SECTION 11.01. INDEBTEDNESS. Borrower will not, and will not permit
------------
any Subsidiary to, create, incur, assume or suffer to exist any Indebtedness,
except
(a) Indebtedness evidenced by or arising under this Agreement or any
of the other Credit Documents;
(b) Unsecured current liabilities (not resulting from any borrowing)
incurred in the ordinary course of business for current purposes, not
represented by a promissory note or other evidence of indebtedness;
(c) Capitalized Lease Obligations to the extent permitted under
Section 10.09 hereof;
(d) Purchase Money Indebtedness (other than Capitalized Lease
Obligations) which at no time exceeds $500,000 in aggregate outstanding
principal amount;
(e) Indebtedness under the Bond Documents;
(f) Other Indebtedness described in Schedule 11.01 attached hereto;
(g) Indebtedness of the Borrower or any Subsidiary as an account
party for any letter of credit issued by any financial institution (other
than a Letter of Credit) if such letter of credit is issued solely as
security for performance or payment by the Borrower or such Subsidiary
under any contract which is not otherwise prohibited by this Agreement and
which has been entered into in the ordinary course of business of the
Borrower or such Subsidiary;
(h) Subordinated Debt incurred by the Borrower or any Subsidiary in
amounts and on other terms and conditions which are acceptable in all
respects to the Agent and the Required Lenders;
(i) AMOT U.K. Overdraft Indebtedness; and
(j) Renewals or extensions of any Indebtedness described in
paragraphs (c), (d), (e), (f), (g), (h) or (i) above provided that the
principal amount thereof is not increased.
SECTION 11.02. LIENS. Borrower will not, and will not permit any
-----
Subsidiary to, create, assume or suffer to exist any Lien upon any of its
property or assets, whether now owned or hereafter acquired, except
(a) Liens for taxes (including ad valorem taxes), assessments or
other governmental charges or levies not yet due or which are being
actively contested in good faith by appropriate proceedings, if adequate
reserves with respect thereto are maintained on the books of Borrower or
its Subsidiaries, as the case may be, in accordance with GAAP;
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(b) Statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by law created in the
ordinary course of business for amounts not yet due or which are being
contested in good faith by appropriate proceedings, if adequate reserves
with respect thereto are maintained on the books of Borrower or its
Subsidiaries, as the case may be, in accordance with GAAP;
(c) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security benefits or obligations or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, performance and return-of-money bonds
and other similar obligations, provided that such Liens were not incurred
--------
in connection with the borrowing of money or the obtaining of advances;
(d) Liens on property or assets of a Subsidiary to secure obligations
of such Subsidiary to Borrower or to another Subsidiary of Borrower;
(e) Purchase Money Liens securing Purchase Money Indebtedness to the
extent permitted under Section 11.01 above;
(f) Zoning ordinances, easements, licenses, restrictions on the use
of real property and minor irregularities in title thereto which do not
materially impair the use of such property in the operation of the business
of Borrower or any Subsidiary or the value of such property;
(g) Inchoate liens arising under ERISA to secure current service
pension liabilities as they are incurred under the provisions of Plans from
time to time in effect;
(h) Rights reserved to or vested in any municipality or governmental,
statutory or public authority to control or regulate any property of
Borrower or any Subsidiary, or to use such property in a manner which does
not materially impair the use of such property for the purposes for which
it is held by Borrower or any Subsidiary;
(i) Liens identified in Schedule 11.02, attached hereto and made a
--------------
part hereof by reference;
(j) Liens granted pursuant to the Bond Documents to secure
Indebtedness permitted under Section 11.01(e) hereof; and
(k) Liens granted pursuant to the Security Documents.
SECTION 11.03. GUARANTIES. Borrower and its Subsidiaries shall not
----------
become or remain liable with respect to any Guaranty, except for (i) advances in
the ordinary course of such Credit Party's business to its officers and
employees to cover travel, entertainment or moving expenses to be incurred by
them in connection with such Credit Party's business, (ii) endorsements
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of instruments or items of payment for deposit or collection in the ordinary
course of business, (iii) any Guaranties issued under the Bond Documents to
guarantee Indebtedness permitted under Section 11.01(e) hereof; (iv) the
Guaranties issued pursuant to the transactions contemplated by this Agreement;
(v) any Guaranties of the AMOT U.K. Overdraft Indebtedness; and (vi) any other
Guaranties described on Schedule 11.03 attached hereto.
--------------
SECTION 11.04. MERGER OR SALE OF ASSETS. Borrower will not, and
------------------------
will not permit any Subsidiary to, merge, consolidate or exchange shares with
any other corporation, or sell, lease or transfer or otherwise dispose of all or
substantially all of its assets to any Person, other than sales, leases,
transfers or other dispositions of inventory in the ordinary course of business
or particular items of obsolete or unnecessary equipment in the ordinary course
of business, except
(i) any Subsidiary may merge or consolidate with Borrower (provided
that Borrower shall be the surviving corporation therefrom) or with any one
or more other Subsidiaries;
(ii) any Subsidiary may sell, lease, transfer or otherwise dispose
of all or any substantial part of its assets to Borrower or another
Subsidiary;
(iii) any other Person may merge or consolidate with Borrower or any
Subsidiary; provided that such transaction shall not violate Section
--------
11.06(v) hereof, no other Default or Event of Default shall be caused
thereby and Borrower or such Subsidiary shall be the surviving corporation
therefrom.
SECTION 11.05. ERISA MATTERS. Neither Borrower nor any Subsidiary
-------------
shall incur or suffer to exist any material accumulated funding deficiency
within the meaning of ERISA or incur any material liability to the PBGC
established under ERISA (or any successor thereto under ERISA).
SECTION 11.06. INVESTMENTS. Borrower shall not, and shall not permit
-----------
any Subsidiary to, make or have outstanding any loan or advance to, or own,
purchase or acquire any stock, obligations (other than accounts receivable
generated in the ordinary course of business) or securities of, or any interest
in, or make any capital contribution to or acquire all or substantially all of
the assets of, any other Person, except that the Borrower and any Subsidiary
may: (i) acquire and own stock, obligations or securities received in settlement
of debt created in the ordinary course of business which is owing to the
Borrower or such Subsidiary; (ii) own, purchase or acquire (A) commercial paper,
banker's acceptances or certificates of deposit issued by any Lender (or its
parent holding company) or by any other United States commercial bank or enter
into repurchase agreements with such Lenders or banks with respect to
obligations described in this clause (ii), (B) obligations of reputable issuers
located in the United States which obligations have a short-term rating of A-1
or better by Standard & Poor's Corporation or P-1 by Moody's Investors Service,
Inc., (C) obligations of the United States government or any agency thereof, and
(D) obligations guaranteed by the United States government or any agency
thereof, in each case such obligations described in this clause (ii) to be due
within one year and one day from the date of acquisition; (iii) endorse
negotiable instruments for collection or deposit in the
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ordinary course of business; (iv) own stock of the Subsidiaries listed on
Schedule 9.01; and (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
each 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 Borrower
will be in compliance with the financial covenants set forth in Section 10.09
hereof on a pro forma basis after giving effort to such acquisition.
--- -----
SECTION 11.07. SALE AND LEASE-BACK TRANSACTIONS. Borrower will not,
--------------------------------
and will not permit any Subsidiary to, enter into or permit to remain in effect
any arrangement with any lender or investor or to which such lender or investor
is a party providing for the leasing by Borrower or any Subsidiary of real or
personal property which has been or is to be sold or transferred by Borrower or
any Subsidiary to such lender or investor or to any Person to whom funds have
been or are to be advanced by such lender or investor on the security of such
property or rental obligations of Borrower or any Subsidiary.
SECTION 11.08. TRANSACTIONS WITH AFFILIATES. Borrower will not, and
----------------------------
will not permit any Subsidiary to, directly or indirectly purchase, acquire or
lease any property from, or sell, transfer or lease any property to, or
otherwise deal with, in the ordinary course of business or otherwise, any
Affiliate, except upon terms not less favorable to Borrower or the Subsidiary
than if the relationship of Affiliate did not exist.
SECTION 11.09. FISCAL YEAR CHANGE. Borrower shall not change its
------------------
fiscal year.
SECTION 11.10. USE OF PROCEEDS. Borrower shall not use (or permit to
---------------
be used) the proceeds of any of the Loans or Letters of Credit for any purpose
other than as and to the extent permitted by the applicable provisions of
Section 2.01(b), 3.01(b), 4.01(b), 5.01(b) or 6.01(a) hereof.
SECTION 11.11. AMENDMENT, TERMINATION OR WAIVER OF BOND DOCUMENTS.
--------------------------------------------------
Borrower shall not amend, terminate or waive or permit any non-compliance with
or termination of any of the terms and conditions of any of the Bond Documents.
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<PAGE>
ARTICLE XII.
EVENTS OF DEFAULT
SECTION 12.01. EVENTS OF DEFAULT. Each of the following events shall
-----------------
constitute an Event of Default under this Agreement:
(i) failure by Borrower to pay any of the Obligations (whether
principal, interest, fees or other amounts) when and as the same become due
and payable (whether at maturity, on demand, or otherwise), and, in the
case of any failure to pay any interest or fees due hereunder (other than
the Closing Fee and Agent Fee), the continuation of such failure for five
(5) days after the due date of such payment; or
(ii) Borrower or any Subsidiary shall (1) apply for or consent to
the appointment of or the taking of possession by a receiver, custodian,
trustee or liquidator of Borrower or any Subsidiary or of all or a
substantial part of the property of Borrower or any Subsidiary, (2) admit
in writing the inability of Borrower or any Subsidiary, or be generally
unable, to pay the debts of Borrower or any Subsidiary as such debts become
due, (3) make a general assignment for the benefit of the creditors of
Borrower or any Subsidiary, (4) commence a voluntary case under the
Bankruptcy Code (as now or hereafter in effect), (5) file a petition
seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of
debts, (6) fail to controvert in a timely or appropriate manner, or
acquiesce in writing to, any petition filed against Borrower or any
Subsidiary in an involuntary case under the Bankruptcy Code, or (7) take
any action for the purpose of effecting any of the foregoing; or
(iii) a proceeding or case shall be commenced, without the
application of Borrower or any Subsidiary, in any court of competent
jurisdiction, seeking (1) the liquidation, reorganization, dissolution,
winding-up or composition or readjustment of debts of Borrower or any
Subsidiary, (2) the appointment of a trustee, receiver, custodian,
liquidator or the like of Borrower or any Subsidiary or of all or any
substantial part of the assets of Borrower or any Subsidiary, or (3)
similar relief in respect of Borrower or any Subsidiary under any law
relating to bankruptcy, insolvency, reorganization, winding-up or
composition and adjustment of debts, and such proceeding or case shall
continue undismissed, or an order, judgment or decree approving or ordering
any of the foregoing shall be entered and continue in effect, for a period
of sixty (60) days from commencement of such proceeding or case or the date
of such order, judgment or decree, or any order for relief against Borrower
or any Subsidiary shall be entered in an involuntary case or proceeding
under the Bankruptcy Code; or
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(iv) any representation or warranty made by Borrower herein or by
Borrower or any other Credit Party in any of the other Credit Documents
shall be false or misleading in any material respect on the date as of
which made (or deemed made); or
(v) any default shall occur in the performance or observance of
any term, condition or provision contained in Section 7.06(g), 9.01(b),
10.09, 10.10 or Article XI of this Agreement; or
(vi) any default shall occur in the performance or observance of
any term, condition or provision contained in this Agreement and not
referred to in clauses (i) through (v) above, which default shall continue
for thirty (30) days after the earlier of the date Borrower acquires
knowledge thereof or the Agent or any Lender gives Borrower written notice
thereof;
(vii) any provision of this Agreement or any other Credit Document
shall at any time for any reason cease to be valid and binding in
accordance with its terms on Borrower or any Credit Party which executed
it, or the validity, enforceability, or priority thereof shall be contested
by Borrower or any such Credit Party, or any Credit Party shall terminate
or repudiate (or attempt to terminate or repudiate) any Credit Document
executed by it; or
(viii) the occurrence of an Event of Default under (and as defined
in, and after giving effect to any notice and/or cure rights expressly
provided in) any of the Credit Documents or any of the Bond Documents; or
(ix) default in the payment of principal of or interest on any
other Indebtedness of Borrower or any Subsidiary for money borrowed (or any
obligation under conditional sale or other title retention agreement or any
obligation secured by purchase money mortgage or deed to secure debt or any
Indebtedness under notes payable or drafts accepted representing extensions
of credit or on any Capitalized Lease Obligation), or default in the
performance of any other agreement, term or condition contained in any
agreement under which any such Indebtedness is created, guaranteed or
secured if the effect of such default is to entitle the holder or holders
of such Indebtedness (or a trustee on behalf of such holder or holders) to
cause such obligation to become due prior to its stated maturity; provided
--------
that in each and every case noted above the aggregate then outstanding
principal balance of the Indebtedness involved (or all such Indebtedness
combined) must equal or exceed $100,000; or
(x) default in the payment of principal of or interest on any
other Indebtedness of Borrower or any Subsidiary for money borrowed from
any Lender or any Affiliate of a Lender (other than an Obligation) or on
any Capitalized Lease Obligation with a Lender or any Affiliate of a
Lender, or default in the performance of any other agreement, term, or
condition contained in any
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agreement under which any such Indebtedness is created, guaranteed or
secured if the effect of such default is to entitle such Lender to then
cause such Indebtedness to become due prior to its stated maturity [the
parties intend that a default may constitute an Event of Default under this
paragraph (x) even if such default would not constitute an Event of Default
under paragraph (ix) immediately above]; or
(xi) a judgment or order for the payment of money in excess of
$100,000 or otherwise having a materially adverse effect on the Borrower
and its Subsidiaries taken as a whole shall be rendered against the
Borrower or any of its Subsidiaries and such judgment or order shall not be
released, vacated, stayed or fully bonded-off within thirty (30) days after
the date of its issue or entry; or
(xii) the acquisition after the date of this Agreement by any Person
or, by any two or more Persons, acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act
of 1934) of either (a) twenty percent (20%) or more of the outstanding Voting
Stock of the Borrower or (b) the power to direct or cause the direction of the
management and policies of the Borrower whether through the ownership of voting
securities, by contract, or otherwise; or
(xiii) a Reportable Event shall occur which the Agent or the Required
Lenders determine in good faith constitutes grounds for the termination by the
PBGC of any Plan or for the appointment by the appropriate United States
district court of a trustee for any Plan, or if any Plan shall be so terminated
or any such trustee shall be so requested or appointed, or if Borrower or any of
its Subsidiaries is in "default" (as defined in Section 4219(c)(5) of ERISA)
with respect to payments to a Multiemployer Plan resulting from Borrower's or
such Subsidiary's complete or partial withdrawal from such Plan.
SECTION 12.02. REMEDIES. Upon the occurrence of an Event of Default,
--------
the Agent may, upon the written request of the Required Lenders, exercise one or
more of the following remedies:
(i) by written notice to Borrower, terminate the Agent's and the
Lenders' respective remaining obligations hereunder to make any further
Loans or issue any further Letters of Credit pursuant to this Agreement,
whereupon all such obligations shall terminate immediately and any
remaining accrued but unpaid Commitment Fees shall become forthwith due and
payable without any other notice or demand of any kind; and
(ii) by written notice to Borrower, declare the principal of and any
accrued interest on the Notes, the Reimbursement Obligations and all other
Obligations to be, and whereupon the same shall become, immediately due and
payable, and the same shall thereupon become due and payable without
further
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demand, presentment, protest or notice of any kind, all of which are hereby
expressly waived by Borrower;
(iii) by written notice to Borrower, require that Borrower
immediately pay to the Agent (for the account of the Lenders) an amount of
immediately available funds equal to the aggregate Stated Amount of all of
the Letters of Credit then outstanding and the funds so paid by Borrower
shall be deposited by the Agent in a trust or collateral account with the
Agent for which the Agent shall have the sole power of access, investment
and withdrawal, and such funds shall be applied by the Agent at such times
and from time to time to satisfy the Borrower's Reimbursement Obligations
with respect to such Letters of Credit, and the Borrower hereby pledges,
assigns and grants to the Agent (for the benefit of the Lenders) a first-
priority security interest in and Lien on such account and any and all such
funds therein and the proceeds thereof as collateral for the Obligations
(and upon the termination of this Agreement, the expiration or release of
all of the Letters of Credit, and the payment in full of all of the
Obligations, any remaining surplus of such funds shall be paid by the Agent
to the Borrower, but the Agent and the Lenders shall have no obligation or
responsibility to invest any such funds or to pay interest thereon, and the
Agent and the Lenders shall have no liability to the Borrower for any
investment loss resulting from any investment of such funds by the Agent in
its discretion); and
(iv) exercise all or any of its rights and remedies as it may
otherwise have under any of the other Credit Documents or any applicable
law;
provided, however, that upon the occurrence of an Event of Default specified in
- --------
Section 12.01(ii) or Section 12.01(iii) above, the result which would occur upon
the giving of notice pursuant to Section 12.02(i), (ii) and (iii) shall occur
automatically without the giving of any such notice. No failure or delay on the
part of the Agent or the Lenders to exercise any right or remedy hereunder or
under the Credit Documents shall operate as a waiver thereof, nor shall any
single or partial exercise of any right or remedy hereunder preclude any further
exercise thereof or the exercise of any further right or remedy hereunder or
under the Credit Documents. No exercise by the Agent or the Lenders of any
remedy under the other Credit Documents shall operate as a limitation on any
rights or remedies of the Agent or the Lenders under this Agreement, except to
the extent of moneys actually received by the Agent or the Lenders under the
other Credit Documents. Without limiting the generality of the foregoing, and in
addition to the remedies set forth above, upon the occurrence of an Event of
Default, the Agent may, at its option, as provided in Section 6.01(f) of the
Bond Indenture, upon the written request of the Required Lenders, give written
notice to the Bond Trustee of the occurrence of an Event of Default hereunder
and requesting that the same be treated as an Event of Default under the Bond
Indenture.
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ARTICLE XIII.
THE AGENT
---------
SECTION 13.01. APPOINTMENT OF AGENT. Each Lender hereby designates
--------------------
NationsBank as Agent to act as herein specified. Each Lender hereby irrevocably
authorizes the Agent to take such action on its behalf under the provisions of
this Agreement and the other Credit Documents and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of the Agent by the terms hereof and thereof and such other powers as
are reasonably incidental thereto. The Agent may perform any of its duties
hereunder by or through its agents or employees.
SECTION 13.02. NATURE OF DUTIES OF AGENT. The Agent shall have no
-------------------------
duties or responsibilities except those expressly set forth in this Agreement
and the other Credit Documents. Neither the Agent nor any of its officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its or their
gross negligence or willful misconduct. The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have by reason of
this Agreement any fiduciary duties to any Lender; and nothing in this
Agreement, express or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Agreement or the other
Credit Documents except as expressly set forth herein or therein.
SECTION 13.03. LACK OF RELIANCE ON AGENT.
-------------------------
(a) Independently and without reliance upon the Agent, each Lender,
to the extent it deems appropriate, has made and shall continue to make (i) its
own independent investigation of the financial condition and affairs of the
Borrower and the other Credit Parties in connection with the taking or not
taking of any action in connection herewith, and (ii) its own appraisal of the
creditworthiness of the Borrower and the other Credit Parties, and, except as
expressly provided in this Agreement, the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
its possession before the making of any of the Loans, the issuance of any of the
Letters of Credit, or at any time or times thereafter.
(b) The Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement, the Notes, the
Security Documents, or any other Credit Documents, or the financial condition of
the Borrower or any other Credit Party, or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement, the Notes, the Security Documents or the other
Credit Documents, or the financial condition of the Borrower or any other Credit
Party, or the existence or possible existence of any Default or Event of
Default.
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SECTION 13.04. CERTAIN RIGHTS OF AGENT. If the Agent shall request
-----------------------
instructions from the Required Lenders with respect to any act or action
(including the failure to act) in connection with this Agreement or any other
Credit Document, the Agent shall be entitled to refrain from such act or taking
such action unless and until the Agent shall have received instructions from the
Required Lenders; and the Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, but subject to the
terms of Section 14.08 hereof, no Lender shall have any right of action
whatsoever against the Agent as a result of the Agent acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders.
SECTION 13.05. RELIANCE BY AGENT. The Agent shall be entitled to
-----------------
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cable gram, radiogram, order or other documentary, teletransmission or
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person. The Agent may consult with
legal counsel (including counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 13.06. INDEMNIFICATION OF AGENT. To the extent that Agent is
------------------------
not reimbursed and indemnified by the Borrower, the Lenders will reimburse and
indemnify the Agent, ratably according to their respective shares of the Total
Credit Commitments (or, if the Credit Commitments are no longer outstanding,
according to their respective shares of the total outstanding Obligations), for
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in performing its duties
hereunder, in any way relating to or arising out of this Agreement or any of the
other Credit Documents; provided that no Lender shall be liable for any portion
--------
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agent's
gross negligence or willful misconduct.
SECTION 13.07. AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
--------------------------------
commitments under this Agreement or any of the other Credit Documents, the Loans
made by it, the Letters of Credit issued by it, and the Notes issued to it, the
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties specified
herein; and the terms "Lenders", "Required Lenders", or any similar terms used
------- ----------------
herein shall, unless the context clearly otherwise indicates, include the Agent
in its individual capacity. The Agent may accept deposits from, lend money to,
and generally engage in any kind of banking, trust, financial advisory or other
business with the Borrower or any affiliate of the Borrower as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Borrower for services in connection with this Agreement
and otherwise without having to account for the same to the Lenders.
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SECTION 13.08. HOLDERS OF NOTES AND INTERESTS. The Agent may deem
------------------------------
and treat the payee of any Note or Letter of Credit Interest as the owner
thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Agent pursuant to
Section 14.05 below. Any request, authority or consent of any Person who, at the
time of making such request or giving such authority or consent, is the holder
of any Note or Letter of Credit Interest shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or Letter of Credit
Interest or any Note or Letter of Credit Interest issued in exchange therefor.
SECTION 13.09. SUCCESSOR AGENT.
---------------
(a) The Agent may resign at any time by giving written notice thereof
to the Lenders and the Borrower and may be removed at any time with or without
cause by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right, upon five (5) days' notice to the
Borrower, to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within thirty (30) days after the retiring Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Agent, then, upon
five (5) days' notice to the Borrower, the retiring Agent may, on behalf of the
Borrower, appoint a successor Agent, which shall be a bank which maintains an
office in the United States, or a commercial bank organized under the laws of
the United States of America or any State thereof, or any Affiliate of such
bank, having a combined capital and surplus of at least $100,000,000.
(b) Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent
and such successor Agent shall be bound by the terms and conditions of this
Agreement to the same extent as would have been the case if such successor Agent
had been an original signatory hereto, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article XIII shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement.
(c) Neither NationsBank nor any successor Agent may resign or be
removed as the Agent hereunder while NationsBank or such successor Agent (as the
case may be) is the issuer of any then outstanding Letter of Credit unless and
until (i) such outstanding Letter of Credit is canceled and replaced by a
substitute Letter of Credit issued by the new Agent or (ii) NationsBank or such
successor Agent (as the case may be) is otherwise released from liability on
such outstanding Letter of Credit.
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SECTION 13.10. SECURITY DOCUMENTS, NOTICE OF DEFAULTS, ETC.
--------------------------------------------
(a) Each Lender hereby authorizes the Agent to enter into each of the
Security Documents and to take all actions contemplated thereby. All rights and
remedies under the Security Documents may be exercised by the Agent for the
benefit of the Lenders and the other beneficiaries thereof upon the terms
thereof. With the consent of the Required Lenders, the Agent may assign its
rights and obligations as Agent under any of the Security Documents to any
affiliate of the Agent or to any trustee, which assignee in each such case must
assume all obligations of the Agent, and thereafter shall be entitled to all the
rights of the Agent, under the applicable Security Document and all rights
hereunder of the Agent with respect to the applicable Security Document.
(b) In each circumstance where, under any provision of any Security
Document, the Agent shall have the right to grant or withhold any consent,
exercise any remedy, make any determination or direct any action by the Agent
under such Security Document, the Agent shall act in respect of such consent,
exercise of remedies, determination or action, as the case may be, with the
consent of and at the direction of the Required Lenders; provided, however, that
--------
no such consent of the Required Lenders shall be required with respect to any
consent, determination or other matter that is, in the Agent's judgment,
ministerial or administrative in nature. In each circumstance where any consent
of or direction from the Required Lenders is required, the Agent shall send to
the Lenders a written notice setting forth a description in reasonable detail of
the matter as to which consent or direction is requested and the Agent's
proposed course of action with respect thereto. In the event the Agent shall not
have received a response from any Lender within five (5) Business Days after the
giving of such notice, such Lender shall be deemed to have agreed to the course
of action proposed by the Agent.
(c) The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent has
received notice from a Lender or a Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Agent receives such a notice, the
-----------------
Agent shall promptly give notice thereof to the other Lenders. The Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
--------
Agent shall receive such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable and in the best interest
of the Lenders.
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ARTICLE XIV
MISCELLANEOUS
-------------
SECTION 14.01. NOTICES. All notices, requests and other
-------
communications hereunder shall be in electronic, telephonic (confirmed in
writing) or written (including telecopier or similar writing) form and shall be
given to the party to whom sent, addressed to it, if directed to the Agent, to:
NationsBank, N.A. (South)
600 Peachtree Street, N.E.
19th Floor
Atlanta, Georgia 30308
Attn: Nan C. Hillis and W. Brad Davis
Telecopy: (404) 607-6323
and if directed to Borrower, to:
Roper Industries, Inc.
160 Ben Burton Road
Bogart, Georgia 30622
Attn: Vice President and Treasurer
Telecopy: (706) 353-6496
and if directed to any Lender, to its address as shown on Annex I attached
-------
hereto, or to such other address or telephone or telecopier number as any such
party may hereafter specify for the purpose by notice to the other parties.
Each such notice, request or communication shall be effective (i) if given by
telecopy, when such communication is transmitted to the telecopy number herein
specified, (ii) if given by mail within the United States of America, three (3)
Business Days after such communication is deposited in the United States mail
with first class postage prepaid, return receipt requested, addressed as
aforesaid, (iii) if sent for overnight delivery within the United States of
America by Federal Express or other reputable national overnight delivery
service, one (1) Business Day after such communication is entrusted to such
service for overnight delivery and with recipient signature required, addressed
as aforesaid, or (iv) if given by any other means, when delivered at the address
of the party to whom such notice is being delivered.
SECTION 14.02. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay
------------------------------
on the part of the Agent or any Lender in exercising any right or remedy
hereunder and no course of dealing between any Credit Party and the Agent or any
Lender shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy hereunder or under the Notes preclude any other
or further exercise thereof or the exercise of any other right or remedy
hereunder. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies which the Agent or any Lender would
otherwise have. No notice to or demand on any Credit Party not required
hereunder or under the Note in any case shall entitle any Credit Party to any
other or further notice or demand in similar or other circumstances or
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constitute a waiver of the rights of the Agent or any Lender to any other or
further action in any circumstances without notice or demand.
SECTION 14.03. PAYMENT OF EXPENSES; INDEMNITY.
------------------------------
(a) Borrower shall:
(i) whether or not the transactions hereby contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses of the
Agent actually incurred without giving effect to any statutory presumption
in connection with the administration (both before and after the execution
hereof and including advice of counsel as to the rights and duties of the
Agent with respect thereto) of, or in connection with the preparation,
execution and delivery of, preservation of rights under, enforcement of, or
any refinancing, renegotiation or restructuring of, this Agreement or any
other Credit Document or any instruments referred to therein or any
amendment, waiver or consent relating thereto, including, without
limitation, the reasonable fees and disbursements of counsel for the Agent
actually incurred without giving effect to any statutory presumption; and
(ii) pay and hold each Lender harmless from and against any and all
present and future stamp, documentary, property, ad valorem or other
-- -------
similar Taxes with respect to this Agreement, any of the Notes or any other
Credit Documents, any Collateral described therein, or any payments due
thereunder, and save each Lender harmless from and against any and all
liabilities with respect to or resulting from any delay or omission to pay
such Taxes.
(b) In addition to the other amounts payable by Borrower under this
Agreement (including, without limitation, subsection (a) above) or any of the
other Credit Documents, Borrower hereby agrees to pay and indemnify each of the
Agent and the Lenders from and against all claims, liabilities, losses, costs
and expenses (including, without limitation, reasonable attorneys' fees and
expenses) which the Agent or such Lender may (other than as a result of the
gross negligence or willful misconduct of such Person) actually incur or be
subjected to (and without giving effect to any statutory presumption) as a
consequence, directly or indirectly, of (i) any actual or proposed use of any
Letter of Credit or any proceeds of any of the Loans or the Letters of Credit or
any Credit Party's entering into or performing under any Credit Document, (ii)
any breach by the Borrower or any of its Subsidiaries of any warranty, term or
condition in, or the occurrence of any other default under, this Agreement or
any of the other Credit Documents, including without limitation all reasonable
attorney's fees or expenses resulting from the settlement or defense of any
claims or liabilities arising as a result of any such breach or default, (iii)
allegations of participation or interference by the Agent or any Lender in the
management, contractual relations or other affairs of the Borrower or any
Subsidiary, (iv) the Agent's or any Lender's holding any Lien on or
administering any of the Collateral, (v) allegations that the Agent or any
Lender has joint liability with the Borrower or any Subsidiary to any third
party for any reason, or (vi) any suit, investigation or proceeding as to which
the Agent or any Lender is involved as a consequence, directly or indirectly, of
its execution of this Agreement or
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any of the other Credit Documents, the making of any Loan, the holding of any
Lien on any of the Collateral or any other event or transaction contemplated by
this Agreement or any of the Credit Documents.
(c) Without limiting the indemnities set forth in paragraph (b) above
or set forth elsewhere in this Agreement or the other Credit Documents, the
Borrower also shall indemnify each of the Agent and the Lenders for any and all
expenses and costs (including without limitation, remedial, removal, response,
abatement, clean-up, investigative, closure and monitoring costs), losses,
claims (including claims for contribution or indemnity and including the cost of
investigating or defending any claim and whether or not such claim is ultimately
defeated, and whether such claim arose before, during or after any Credit
Party's ownership, operation, possession or control of its business, property or
facilities or before, on or after the date hereof, and including also any
amounts paid incidental to any compromise or settlement by the Agent or any
Lender with the holders of any such claim), lawsuits, liabilities, obligations,
actions, judgments, suits, disbursements, encumbrances, liens, damages
(including, without limitation, damages for contamination or destruction of
natural resources), penalties and fines of any kind or nature whatsoever
(including without limitation in all cases the reasonable fees and expenses of
counsel in connection therewith) actually incurred, suffered or sustained by the
Agent or such Lender (and without giving effect to any statutory presumption)
based upon on, arising under or relating to any Environmental Laws based on,
arising out of or relating to in whole or in part the existence or exercise of
any rights or remedies by the Agent or any Lender under this Agreement, any
other Credit Document or any related documents.
(d) If and to the extent that any of the indemnity obligations of the
Borrower under this Section 14.03 or any other provision of this Agreement or
the other Credit Documents are unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
SECTION 14.04. RIGHT OF SET-OFF.
----------------
(a) To the fullest extent permitted by law, upon the occurrence and
during the continuance of any Event of Default, the Agent and each Lender is
hereby authorized at any time and from time to time, without prior notice to
Borrower (any such notice being expressly waived by Borrower), to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by the Agent or
such Lender to or for the credit or the account of Borrower against any of the
Obligations of Borrower now or hereafter existing under this Agreement, or any
of the other Credit Documents, irrespective of whether the Agent or such Lender
shall have made any demand hereunder or thereunder and although such obligations
may be unmatured. The Agent and each Lender shall endeavor in good faith to give
prompt notice of any such set-off to the Borrower, the Agent and each other
Lender as promptly as practical after such set-off has occurred.
(b) The Agent and each Lender agrees promptly to notify Borrower
after any set-off and application, provided that the failure to give such notice
--------
shall not affect the validity of such set-off and application. Subject to the
provisions of subsection (a), the rights of the Agent
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and each Lender under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the Agent or such
Lender may have.
(c) The proceeds of the Agent's or any Lender's exercise of any set-
off rights as aforesaid shall be shared with the Agent and the other Lenders to
the extent required under Section 7.10 above.
SECTION 14.05. ASSIGNMENTS AND PARTICIPATIONS.
------------------------------
(a) Except as set forth in Section 14.05(j) below, no Lender may
assign all or any portion of its rights and obligations under this Agreement to
another Person without first obtaining the prior written consent of the Agent
and the Borrower to the proposed assignment, and the consent of the Agent or the
Borrower to any such assignment shall not be unreasonably withheld.
(b) If the Agent and the Borrower give their written consent to an
assignment, then the following provisions shall apply to such assignment:
(i) Each such assignment shall be for a fixed percentage of all or a
certain portion of the rights and obligations of the assigning Lender (the
"Assigning Lender") under this Agreement;
----------------
(ii) The amount of the Assigning Lender's Credit Commitment
(determined as of the date of the Assignment and Acceptance Agreement with
respect to such assignment) being assigned shall be in integral multiples
of $1,000,000 and shall in no event be less than $5,000,000;
(iii) Unless the Assigning Lender's Credit Commitment is reduced to
zero by virtue of the assignment, the unassigned portion of the Assigning
Lender's Credit Commitment shall be in integral multiples of $1,000,000 and
shall not be less than $15,000,000 after giving effect to such assignment;
(iv) Such assignment shall be to an Eligible Assignee; and
(v) the Assigning Lender shall pay the Agent an administrative fee of
$5,000 upon the occurrence of such assignment.
(c) From and after the Effective Date (as defined in the related
Assignment and Acceptance Agreement) of each assignment,
(i) the assignee shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance Agreement, shall have the rights and obligations
of a Lender hereunder; and
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<PAGE>
(ii) the Assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
and Acceptance Agreement, relinquish its rights and be released from its
obligations under this Agreement, and, in the case of an Assignment and
Acceptance Agreement covering all or the remaining portion of an Assigning
Lender's rights and obligations under this Agreement, such Assigning Lender
shall cease to be a party hereto, but the provisions of this Agreement
shall inure to its benefit as to any actions taken or omitted be taken by
it or on its behalf while it was a Lender under this Agreement.
(d) By executing and delivering an Assignment and Acceptance
Agreement, the Assigning Lender and the assignee represent and warrant to each
other, the Borrower, the Agent and the other Lenders as follows:
(i) other than as expressly provided in such Assignment and
Acceptance Agreement, such Assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement
or any of the other Credit Documents or with respect to the execution,
legality, validity, enforceability, genuineness, sufficiency or value of
this Agreement or any of the other Credit Documents;
(ii) the Assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any of the other Credit Parties or the performance or
observance by the Borrower or the other Credit Parties of their respective
obligations under this Agreement or any of the other Credit Documents;
(iii) the assignee has received a copy of this Agreement and the
Security Documents, together with copies of such financial statements and
such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance Agreement;
(iv) such assignee will, independently and without reliance upon the
Agent, the Assigning Lender or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make
its own credit decision in taking or not taking any action under this
Agreement or the other Credit Documents;
(v) such assignee is an Eligible Assignee;
(vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf hereunder and to exercise such powers under
this Agreement as are delegated to the Agent by the terms hereof, together
with such powers as are incidental thereto; and
-80-
<PAGE>
(vii) such assignee shall perform in accordance with the terms hereof
all of the obligations which by the terms of this Agreement are required to
be performed by it as a Lender, including without limitation its obligation
hereunder to fund its portion of any Loans it is required to fund
hereunder.
(e) Upon its receipt of an Assignment and Acceptance Agreement
executed by an Assigning Lender and an Eligible Assignee, together with the Note
subject to such assignment, the Agent shall:
(i) accept such Assignment and Acceptance Agreement;
(ii) give notice thereof to the Borrower and the other Lenders within
five (5) Business Days after its receipt of such notice, and the Borrower
(at its own expense) shall accept such Assignment and Acceptance Agreement
and it shall execute and deliver to the Agent in exchange for the
surrendered Note a new Note payable to the order of such Eligible Assignee
in an amount equal to the Credit Commitment assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance Agreement and, if the
Assigning Bank has retained a Credit Commitment hereunder, a new Note
payable to the order of the Assigning Lender in an amount equal to the
Credit Commitment retained by such Assigning Lender hereunder (such new
Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note, shall be dated the
date of the surrendered Note and shall otherwise be in substantially the
appropriate form attached hereto, as the case may be, and the Note
surrendered by the Assigning Lender shall be returned by the Agent to the
Borrower marked "canceled"); and
(iii) issue to the Borrower and each of the Lenders a revised Annex I
-------
to this Agreement reflecting such assignment, which revised Annex I shall
-------
supersede and replace the prior version thereof and shall be substituted by
each party in lieu thereof.
(f) Any Lender may grant participation interests to participants of
such Lender's choosing in up to thirty-three and one-third percent (331/3%) of
such Lender's rights or obligations under this Agreement and any other Credit
Document, but in that event (i) the Agent and the Borrower shall continue to
deal solely with such Lender and such participation or participations shall not
release such Lender from its obligations under this Agreement or any other
Credit Document, (ii) the participant shall not have any direct rights under
this Agreement or any other Credit Document, except as provided below, and (iii)
the participant's rights against such Lender with respect to its participation
shall be those set forth in the agreement executed by such Lender in favor of
such participant, except that no holder of a participation shall be entitled to
require such Lender to take or omit to take any action under this Agreement or
any other Credit Documents other than action directly affecting the principal
amount of, or any payment date for interest or principal on, the Loans or the
Reimbursement Obligations or any reduction in the rate
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<PAGE>
of interest or fees payable with respect to the Loans, the Reimbursement
Obligations, the Letters of Credit or the Credit Commitments or extending any
Credit Expiration Date. Each participant shall be entitled to the benefits of
any additional compensation payable under Section 7.05(b), 7.07 or 7.09 hereof.
No participant shall have any direct rights against any Credit Party but shall
only have rights derived from the Lender which granted such participant's
participation interest.
(g) Notwithstanding the foregoing, the assignment and participation
limitations set forth in this Section 14.05 shall not apply upon the occurrence
of an Event of Default and during the continuation thereof.
(h) Notwithstanding anything herein to the contrary, any Lender may
at any time assign all or any portion of its rights under this Agreement, the
Note issued to it, and the other Credit Documents to a Federal Reserve Bank or a
Federal Home Loan Bank; provided that no such assignment shall release such
--------
Lender from any of its Obligations hereunder.
(i) If (i) any Taxes referred to in Section 7.05(b) have been levied
or imposed so as to require withholdings or deductions by the Borrower and the
payment by the Borrower of additional amounts to any Lender as a result thereof,
(ii) any Lender shall make demand for payment of any material additional amounts
as compensation for increased costs pursuant to Section 6.03 or 7.09 or for its
reduced rate of return pursuant to Section 7.07, or (iii) any Lender shall
decline to consent to a modification or waiver of the terms of this Agreement or
any of the other Credit Documents requested by the Borrower, then and in any
such event, upon request from the Borrower delivered to such Lender and the
Agent, such Lender shall assign, in accordance with the provisions of Section
14.05(c) above, all of its rights and obligations under this Agreement and the
other Credit Documents to another Lender or an Eligible Assignee selected by the
Borrower in consideration for the payment by such assignee to such Lender of the
principal of, and interest on, the outstanding Loans and Letter of Credit
Interest of such Lender accrued through the date of such assignment, and the
assumption of such Lender's Credit Commitment hereunder, together with any and
all other amounts owing to such Lender under any other provisions of this
Agreement or the other Credit Documents accrued through the date of such
assignment.
SECTION 14.06. FURTHER ASSURANCES. Upon notice from the Agent,
------------------
Borrower will, at any and all times, execute and deliver all such further
documents, assignments, recordings, filings, transfers and assurances as may be
reasonably necessary for the better assuring and confirming of all of the
rights, revenues and other funds pledged or assigned to or mortgaged for the
payment of its obligations hereunder, or intended so to be. Borrower hereby
authorizes and empowers the Agent to file any financing or continuation
statement or fixture filing or any amendments thereto with respect to any of the
Collateral and the Agent's Liens therein or in accordance with the Uniform
Commercial Code of the State of Georgia or any other applicable jurisdiction
without the signature of Borrower.
SECTION 14.07. BENEFIT OF AGREEMENT. This Agreement shall be binding
--------------------
upon and inure to the benefit of and be enforceable by the respective successors
and permitted assigns of the parties hereto; provided that Borrower may not
--------
assign or transfer any of its interest hereunder
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<PAGE>
without the prior written consent of the Agent and all of the Lenders and the
Lenders may not assign or transfer any of their interests hereunder except in
accordance with Section 14.05 hereof.
SECTION 14.08. AMENDMENTS; EXERCISE OF DISCRETION.
----------------------------------
(a) Except for any revisions of Annex I hereto made in accordance
-------
with Section 2.03, 3.03 or 14.05 hereof, no amendment or waiver of any provision
of this Agreement or the other Credit Documents, nor consent to any departure by
the Borrower or any other Credit Party therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Agent and the
Required Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided that no
--------
amendment, waiver or consent shall, unless in writing and signed by all of the
Lenders and the Agent, do any of the following: (i) waive any of the conditions
specified in Section 8.01 hereof, (ii) increase the Credit Commitments of any or
all of the Lenders or subject any or all of the Lenders to any additional
obligations, (iii) reduce the principal of, or interest or fees on, any of the
Loans, Reimbursement Obligations or Credit Commitments, (iv) extend the Credit
Expiration Date or postpone any date fixed for the payment of any principal,
interest, or fees due hereunder or under any of the Notes, (v) change the
percentage of the Credit Commitments or of the aggregate unpaid principal amount
of the Loans or the Reimbursement Obligations, or change the definition herein
of the term "Required Lenders", or otherwise change the number or identity of
----------------
Lenders which shall be required for the Agent or the Lenders (or any of them) to
take or refrain from taking any action hereunder, (vi) release any of the Credit
Parties from liability for any of the Obligations or release any material
portion of the Collateral, or (vii) amend this Section 14.08(a) or Section
7.06(g) or 14.07 above. Notwithstanding the foregoing, no amendment, waiver or
consent shall, unless in writing and signed by the Agent in addition to the
Lenders required hereinabove to take such action, affect the rights or duties of
the Agent under this Agreement or under any of the other Credit Documents.
(b) Unless otherwise specifically indicated, if any agreement,
certificate or other writing, or any action taken or to be taken, is by the
terms of this Agreement required to be satisfactory to the Agent, the Required
Lenders or any Lender, the determination of such satisfaction shall be made by
the Agent, the Required Lenders or such Lender (as the case may be) in such
Person's or Persons' sole and exclusive judgment.
SECTION 14.09. TIME OF ESSENCE. Time is of the essence of this
---------------
Agreement and each of the other Credit Documents.
SECTION 14.10. GOVERNING LAW. This Agreement is intended to be
-------------
performed in the State of Georgia, and shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Georgia without giving effect to its conflicts of law principles.
SECTION 14.11. COUNTERPARTS. This Agreement may be executed in any
------------
number of counterparts and by the different parties hereto on separate
counterparts, each of which when
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<PAGE>
so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
SECTION 14.12. EFFECTIVENESS; SURVIVAL.
-----------------------
(a) This Agreement shall become effective on the date on which all of
the parties hereto shall have signed a copy hereof (whether the same or
different copies) and shall have delivered the same to the Agent or, in the case
of any Lender, shall have given the Agent written or telecopied notice (actually
received by the Agent) that the same has been signed and mailed to the Agent.
(b) All representations and warranties made herein, and the
certificates, reports, notices, and other documents delivered pursuant to this
Agreement, shall survive the execution and delivery of this Agreement, the other
Credit Documents, and such other agreements and documents, the making of the
Loans hereunder, the issuance of the Letters of Credit hereunder, and the
execution and delivery of the Notes. All indemnity obligations of the Borrower
and the other Credit Parties under this Agreement and the other Credit Documents
shall survive the termination of this Agreement and the other Credit Documents.
The Obligations of the Borrower under Sections 6.03, 7.05(b), 7.07 and 7.09
hereof shall survive the payment in full of the Obligations.
SECTION 14.13. SEVERABILITY. In case any provision in or Obligation
------------
under this Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable, in whole or in part, in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
Section 14.14. INDEPENDENCE OF COVENANTS; INDEPENDENT NATURE OF
------------------------------------------------
LENDERS' RIGHTS. All covenants hereunder shall be given independent effect so
- ---------------
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitation of, another covenant, shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists. The amounts payable at any time hereunder to each Lender shall
be a separate and independent debt, and each Lender shall be entitled to protect
and enforce its rights pursuant to this Agreement and its Note, and it shall not
be necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
SECTION 14.15. HEADINGS DESCRIPTIVE. The headings of the several
--------------------
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
SECTION 14.16. TERMINATION OF AGREEMENT. At such time as (i) none of
------------------------
the Lenders or the Agent is obligated any longer under this Agreement (whether
by the terms hereof or as a result of a release of such obligations by the
Borrower) to make any further Loans or issue any further Letters of Credit, (ii)
there are no Letters of Credit outstanding, and (iii) all
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<PAGE>
Obligations have been paid and satisfied in full, this Agreement shall terminate
and each Lender shall surrender to the Borrower any Note which such Lender then
holds, and each Lender and the Agent shall promptly release, or cause to be
released, all Liens granted by any Credit Party under the Credit Documents as
security for any of the Obligations; provided, however, that any and all
--------
indemnity obligations of Borrower or any Subsidiary to the Agent or the Lenders
arising hereunder or under any of the other Credit Documents shall survive the
termination of this Agreement or such other Credit Documents.
SECTION 14.17. ENTIRE AGREEMENT; SUPERSESSION OF PRIOR CREDIT
----------------------------------------------
AGREEMENTS; SURVIVAL OF PRIOR SECURITY DOCUMENTS. This Agreement and the other
- ------------------------------------------------
Credit Documents (i) constitute the entire agreement among the Credit Parties,
the Agent and the Lenders with respect to the Letters of Credit, the Loans, the
other Obligations and the Collateral and (ii) supersede and replace any and all
prior agreements, negotiations, correspondence or understandings among such
parties with respect to such matters (including, without limitation, the Prior
1994 Credit Agreement, the Prior 1992 Credit Agreement and the Bond Letter of
Credit Documents); provided, however, that all Guaranty Agreements and other
Security Documents executed and delivered in connection with the Prior 1992
Credit Agreement and/or the Prior 1994 Credit Agreement shall remain in full
force and effect in accordance with their terms, all references in such Guaranty
Agreements and other Security Documents to the "Credit Agreement" shall be
deemed to be references to this Agreement, and this Agreement shall be entitled
to the benefits and security of such Guaranty Agreements and other Security
Documents.
SECTION 14.18. JUDGMENT CURRENCY.
-----------------
(a) The Credit Parties' obligations hereunder and under the other
Credit Documents to make payments in U.S. Dollars (the "Obligation Currency")
-------------------
shall not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any currency other than the Obligation
Currency, except to the extent that such tender or recovery results in the
effective receipt by any Lender or the Agent of the full amount of the
Obligation Currency expressed to be payable to such Lender or the Agent under
this Agreement or the other Credit Documents. If for the purpose of obtaining or
enforcing judgment against Borrower or any Credit Party in any court or in any
jurisdiction it becomes necessary to convert into or from any currency other
than the Obligation Currency (such other currency being hereinafter referred to
as the "Judgment Currency") an amount due in the Obligation Currency, the
-----------------
conversion shall be made at the Dollar Equivalent determined in each case as of
the day immediately preceding the day on which the judgment is given (such
Business Day being hereinafter referred to as the "Judgment Currency Conversion
----------------------------
Date").
- ----
(b) If there is a change in the rate of exchange prevailing between
the Judgment Currency Conversion Date and the date of actual payment of the
amount due to the Agent or any Lender, the Borrower covenants and agrees to pay,
or cause to be paid, to the Agent or such Lender such additional amounts, if any
(but in any event not a lesser amount), as may be necessary to ensure that the
amount paid in the Judgment Currency, when converted at the rate of exchange
prevailing on the date of payment, will produce the amount of the Obligation
Currency which could have been purchased with the amount of the Judgment
Currency stipulated
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<PAGE>
in the judgment or judicial award at the rate of exchange prevailing on the
Judgment Currency Conversion Date.
(c) For purposes of determining the Dollar Equivalent for this
Section, such amounts shall include any premium and cost payable in connection
with the purchase of the Obligation Currency.
SECTION 14.19. DOLLAR EQUIVALENT COMPUTATIONS. To the extent that
------------------------------
the determination of compliance with any requirement of this Agreement requires
a conversion to U.S. Dollars of foreign currency amounts, such U.S. Dollar
amount shall be computed using the Dollar Equivalent of the amount of such
foreign currency at the time such item is to be calculated or is to be or was
incurred, created or suffered or permitted to exist, or assumed or transferred
or sold for purposes of this Agreement (except if such item was incurred,
created or assumed, or suffered or permitted to exist or transferred or sold
prior to the date hereof, such conversion shall be made based on the Dollar
Equivalent of the amounts of such foreign currency at the date hereof).
SECTION 14.20. REFINANCING OF INDEBTEDNESS. This Agreement and the
---------------------------
Notes being made and delivered by the Borrower hereunder represent a refinancing
of the existing indebtedness and credit facilities under the Prior 1994 Credit
Agreement effective from and after the date of this Agreement. The execution and
delivery of this Agreement and the Notes shall not constitute payment or
satisfaction of any existing indebtedness under the Prior 1994 Credit Agreement
or operate as a novation with respect thereto, nor shall the execution or
delivery thereof operate to release, discharge, or otherwise limit any liability
or obligations of the Borrower under the Prior 1994 Credit Agreement based on
facts or events occurring or existing prior to the execution and delivery of
this Agreement and the Notes.
SECTION 14.21. JURY TRIAL WAIVER; CONSENT TO FORUM. TO THE MAXIMUM
-----------------------------------
EXTENT PERMITTED BY APPLICABLE LAW, THE BORROWER, THE AGENT AND EACH LENDER
IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
OTHER CREDIT DOCUMENTS OR ANY MATTER ARISING HEREUNDER OR THEREUNDER. THE
BORROWER, THE AGENT AND EACH LENDER ALSO AGREE THAT ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS
OR TO ENFORCE ANY JUDGMENT OBTAINED AGAINST BORROWER OR ANY OTHER CREDIT PARTY
IN CONNECTION WITH THIS AGREEMENT MAY BE BROUGHT BY THE AGENT, THE LENDERS OR
THE BORROWER IN THE COURTS OF THE STATE OF GEORGIA SITTING IN FULTON COUNTY OR
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA, OR IN
ANY OTHER COURT TO THE JURISDICTION OF WHICH BORROWER OR SUCH OTHER CREDIT PARTY
OR ANY OF ITS PROPERTY IS OR MAY BE SUBJECT. THE BORROWER, THE AGENT AND EACH
LENDER IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF
GEORGIA SITTING IN FULTON COUNTY AND OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF
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<PAGE>
GEORGIA, AND IRREVOCABLY WAIVES ANY PRESENT OR FUTURE OBJECTION TO VENUE IN ANY
SUCH COURT, AND ANY PRESENT OR FUTURE CLAIM THAT ANY SUCH COURT IS AN
INCONVENIENT FORUM, IN CONNECTION WITH ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in their behalf as of the date first above
stated.
BORROWER:
(CORPORATE SEAL) ROPER INDUSTRIES, INC.
Attest:
By: [SIGNATURE ILLEGIBLE]
--------------------------------
Title: Vice President
--------------------------
[SIGNATURE ILLEGIBLE]
- ---------------------------------
Title: Assistant Secretary
---------------------------
INITIAL LENDER:
NATIONSBANK, N.A. (SOUTH)
By: [SIGNATURE ILLEGIBLE]
--------------------------------
Title: Senior Vice President
--------------------------
AGENT:
NATIONSBANK, N.A. (SOUTH),
as Agent
By: [SIGNATURE ILLEGIBLE]
--------------------------------
Title: Senior Vice President
--------------------------
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<PAGE>
ANNEX I
LENDER INFORMATION
------------------
1. Name of Lender: NATIONSBANK, N.A. (SOUTH)
Address for Notices: 600 Peachtree Street, N.E.
19th Floor
Atlanta, Georgia 30308
Attn: W. Brad Davis
Telecopy No.: (404) 607-6323
Series A Revolving
Loan Commitment*: $25,000,000
Series B Revolving
Loan Commitment*: $75,000,000
Cash Management Loan
Limit: $ 2,000,000
_______________________
* Subject to change in accordance with the terms of the within and foregoing
Credit Agreement.
ANNEX I-1
<PAGE>
ANNEX II
INTEREST RATE AND COMMITMENT FEE RATE MATRIX
If the Borrower's Funded Debt Ratio as of the end of any fiscal quarter is
within a particular range described below, then: (1) the available interest rate
or rates for the Loans for the immediately succeeding quarterly computation
period as provided in Section 7.03(a) of the within and foregoing Second Amended
and Restated Credit Agreement (the Credit Agreement) shall be the Prime Rate
----------------
plus zero basis points (0%) or the appropriate rate or rates specified below
except that: (a) the Cash Management Loans shall bear interest solely at the
applicable Prime Rate-based interest rates, (b) Loans (other than Cash
Management Loans) shall bear interest at any applicable Adjusted LIBOR-based or
Treasury Securities Rate-based interest rates set forth below only if and to the
extent elected by Borrower pursuant to Section 7.03(a)(iii) of the Credit
Agreement, (c) Loans consisting of Multicurrency Advances may only bear interest
at the Adjusted LIBOR-based interest rates, and (e) all interest rates shall be
subject to adjustment pursuant to Section 7.03(c) of the Credit Agreement; and
(2) the applicable Commitment Fee Rates for the immediately succeeding quarterly
computation period as provided in Section 7.04 of the Credit Agreement shall be
the appropriate rates specified below:
<TABLE>
<CAPTION>
=====================================================================================================================
THE APPLICABLE RATE
IF THE BORROWER'S FUNDED THE APPLICABLE RATE FOR ALL FOR ALL TERM LOANS THE COMMITMENT FEE
DEBT RATIO IS: REVOLVING LOANS SHALL BE: SHALL BE: RATES SHALL BE:
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than or equal to 3.5:1.0 Adjusted LIBOR + 1.875% Adjusted LIBOR + Series A - 0.20%
but greater than 3.0:1.0 2.125% or Treasury Series B - 0.30%
Securities Rate +
2.325%
- --------------------------------------------------------------------------------------------------------------------
Less than or equal to 3.0:1.0 Adjusted LIBOR + 1.75% Adjusted LIBOR + Series A - 0.20%
but greater than 2.5:1.0 2.0% or Treasury Series B - 0.30%
Securities Rate +
2.20%
- --------------------------------------------------------------------------------------------------------------------
Less than or equal to 2.5:1.0 Adjusted LIBOR + 1.625% Adjusted LIBOR + Series A - 0.20%
but greater than 2.0:1.0 1.875% or Treasury Series B - 0.30%
Securities Rate +
2.075%
- --------------------------------------------------------------------------------------------------------------------
Less than or equal to 2.0:1.0 Adjusted LIBOR + 1.5% Adjusted LIBOR + Series A - 0.15%
but greater than 1.5:1.0 1.75% or Treasury Series B - 0.25%
Securities Rate +
1.95%
- --------------------------------------------------------------------------------------------------------------------
Less than or equal to 1.5:1.0 Adjusted LIBOR + 1.375% Adjusted LIBOR + Series A - 0.15%
but greater than 1.0:1.0 1.625% or Treasury Series B - 0.25%
Securities Rate +
1.825%
- --------------------------------------------------------------------------------------------------------------------
Less than or equal to 1.0:1.0 Adjusted LIBOR + 1.25% Adjusted LIBOR + Series A - 0.15%
but greater than 0.75:1.0 1.75% or Treasury Series B - 0.25%
Securities Rate + 1.7%
- --------------------------------------------------------------------------------------------------------------------
Less than or equal to 0.75:1.0 Adjusted LIBOR + 1.0% Adjusted LIBOR + Series A - 0.10%
but greater than 0.5:1.0 1.25% or Treasury Series B - 0.20%
Securities Rate +
1.45%
- --------------------------------------------------------------------------------------------------------------------
Less than or equal to 0.5:1.0 Adjusted LIBOR + 0.75% Adjusted LIBOR + Series A - 0.10%
but greater than 0.25:1.0 1.0% or Treasury Series B - 0.20%
Securities Rate + 1.2%
- --------------------------------------------------------------------------------------------------------------------
Less than or equal to 0.25:1.0 Adjusted LIBOR + 0.5% Adjusted LIBOR + Series A - 0.10%
0.75% or Treasury Series B - 0.20%
Securities Rate +
0.95%
====================================================================================================================
</TABLE>
ANNEX II-1
<PAGE>
For example, if Borrower's Funded Debt Ratio as of the end of its fiscal quarter
ending July 31, 1996 is 1.75 to 1.0, then (x) the applicable interest rate for
the immediately succeeding quarterly computation period will be the Prime Rate
plus zero basis points (0%) or, if elected by Borrower pursuant to Section
7.03(a)(iii) of the Credit Agreement, Adjusted LIBOR plus one hundred fifty
basis points (1.50%) for Revolving Loans or either Adjusted LIBOR plus one
hundred seventy-five basis points (1.75%) or Treasury Securities Rate plus one
hundred ninety-five basis points (1.95%) for Term Loans, (y) the applicable
Series A Revolving Loan Commitment Fee Rate for the immediately succeeding
quarterly computation period will be fifteen basis points (0.15%) and (z) the
applicable Series B Revolving Loan Commitment Fee Rate for the immediately
succeeding quarterly computation period will be twenty five basis points
(0.25%).
ANNEX II-2
<PAGE>
EXHIBIT A
FORM OF SERIES A REVOLVING LOAN NOTE
U.S. $______________ ________________, 199__
FOR VALUE RECEIVED, the undersigned ROPER INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
--------
________________________ (herein, together with any subsequent holder hereof,
called the "Lender"), the lesser of _________________________________________
------
U.S. DOLLARS (U.S.$________________) or the aggregate outstanding principal
amount of the Series A Revolving Loans made to the Borrower by Lender pursuant
to the terms of the Credit Agreement referred to below, which principal sum
shall be payable (i) on the Credit Expiration Date as defined in the Credit
Agreement or (ii) on any earlier date on which all amounts outstanding under
this Series A Revolving Loan Note (this "Note") have become due and payable
----
pursuant to the provisions of Article XII of the Credit Agreement. The Borrower
likewise promises to pay interest on the outstanding principal balance of each
Series A Revolving Loan made by the Lender to the Borrower, at such interest
rates, payable at such times, and computed in such manner, as are specified in
the Credit Agreement in strict accordance with the terms thereof.
This Note is issued pursuant to and is subject to the terms and
conditions of, and is one of the Series A Revolving Loan Notes referred to in,
the Second Amended and Restated Credit Agreement, dated as of May __, 1996,
among the Borrower, NationsBank, N.A. (South), as Agent, the Lender, and any
other Lenders which are or may become signatories to such Credit Agreement (as
the same may be amended from time to time, the "Credit Agreement"), and the
----------------
Lender is and shall be entitled to all benefits thereof and of all the Credit
Documents executed and delivered to the Agent or the Lenders in connection
therewith. Terms defined in the Credit Agreement are used herein with the same
meaning. The Credit Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain Events of
Default, provisions relating to prepayments on account of principal hereof prior
to the maturity hereof, and provisions for post-default interest rates. If any
of the Series A Revolving Loans evidenced by this Note constitute Multicurrency
Advances, the Credit Agreement requires that such Loans be repaid in the same
currency in which such Loans were made notwithstanding the fact that this Note
is denominated in U.S. Dollars.
The Borrower agrees to make payments of principal and interest hereon
on the dates and in the amounts specified in the Credit Agreement in strict
accordance with the terms thereof.
In case an Event of Default shall occur and be continuing, the
principal and all accrued interest of this Note may automatically become, or may
be declared, immediately due and payable in the manner and with the effect
provided in the Credit Agreement. The Borrower agrees to pay, and save the
Lender harmless against any liability for the payment of, all reasonable
A-1
<PAGE>
costs and expenses, including reasonable attorneys' fees, actually incurred by
Lender without giving effect to any statutory presumption in connection with the
enforcement by the Lender of any of its rights or remedies under this Note or
the Credit Agreement.
This Note has been delivered in Atlanta, Georgia, and the rights and
obligations of the Lender and the Borrower hereunder shall be construed in
accordance with and governed by the laws of the State of Georgia (without giving
effect to its conflicts of law rules).
The Borrower expressly waives any presentment, demand, protest or
notice in connection with this Note, whether now or hereafter required by
applicable law. This Note is intended to be an instrument under seal.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed,
sealed and delivered by its duly authorized officers as of the date first above
written.
(CORPORATE SEAL) ROPER INDUSTRIES, INC.
By:_________________________________
Title:___________________________
Attest:
__________________________________
Title: ___________________________
A-2
<PAGE>
EXHIBIT B
FORM OF SERIES B REVOLVING LOAN NOTE
U.S.___________ __________________,199___
FOR VALUE RECEIVED, the undersigned ROPER INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
--------
_________________________________ (herein, together with any subsequent holder
hereof, called the "Lender"), the lesser of ____________________________________
------
U.S. DOLLARS (U.S.$_______________) or the aggregate outstanding principal
amount of the Series B Revolving Loans made to the Borrower by Lender pursuant
to the terms of the Credit Agreement referred to below, which principal sum
shall be payable (i) on the Credit Expiration Date as defined in the Credit
Agreement or (ii) on any earlier date on which all amounts outstanding under
this Series B Revolving Loan Note (this "Note") have become due and payable
----
pursuant to the provisions of Article XII of the Credit Agreement. The Borrower
likewise promises to pay interest on the outstanding principal balance of each
Series B Revolving Loan made by the Lender to the Borrower, at such interest
rates, payable at such times, and computed in such manner, as are specified in
the Credit Agreement in strict accordance with the terms thereof.
This Note is issued pursuant to and is subject to the terms and
conditions of, and is one of the Series B Revolving Loan Notes referred to in,
the Second Amended and Restated Credit Agreement, dated as of May __, 1996,
among the Borrower, NationsBank, N.A. (South), as Agent, the Lender, and any
other Lenders which are or may become signatories to such Credit Agreement (as
the same may be amended from time to time, the "Credit Agreement"), and the
----------------
Lender is and shall be entitled to all benefits thereof and of all the Credit
Documents executed and delivered to the Agent or the Lenders in connection
therewith. Terms defined in the Credit Agreement are used herein with the same
meaning. The Credit Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain Events of
Default, provisions relating to prepayments on account of principal hereof prior
to the maturity hereof, and provisions for post-default interest rates. If any
of the Series B Revolving Loans evidenced by this Note constitute Multicurrency
Advances, the Credit Agreement requires that such Loans be repaid in the same
currency in which such Loans were made notwithstanding the fact that this Note
is denominated in U.S. Dollars.
The Borrower agrees to make payments of principal and interest hereon
on the dates and in the amounts specified in the Credit Agreement in strict
accordance with the terms thereof.
In case an Event of Default shall occur and be continuing, the
principal and all accrued interest of this Note may automatically become, or may
be declared, immediately due and payable in the manner and with the effect
provided in the Credit Agreement. The Borrower
B-1
<PAGE>
agrees to pay, and save the Lender harmless against any liability for the
payment of, all reasonable costs and expenses, including reasonable attorneys'
fees, actually incurred by Lender without giving effect to any statutory
presumption in connection with the enforcement by the Lender of any of its
rights or remedies under this Note or the Credit Agreement.
This Note has been delivered in Atlanta, Georgia, and the rights and
obligations of the Lender and the Borrower hereunder shall be construed in
accordance with and governed by the laws of the State of Georgia (without giving
effect to its conflicts of law rules).
The Borrower expressly waives any presentment, demand, protest or
notice in connection with this Note, whether now or hereafter required by
applicable law. This Note is intended to be an instrument under seal.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed,
sealed and delivered by its duly authorized officers as of the date first above
written.
(CORPORATE SEAL) ROPER INDUSTRIES, INC.
By:________________________________
Title:_____________________________
Attest:
________________________________
Title:__________________________
B-2
<PAGE>
EXHIBIT C
FORM OF TERM LOAN NOTE
U.S. $______________ ________________, 1996
FOR VALUE RECEIVED, the undersigned ROPER INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
--------
___________________________________________ (herein, together with any
subsequent holder hereof, called the "Lender"), the lesser of
------
____________________________ U.S. DOLLARS (U.S.$_________________), which
principal sum shall be payable (i) in installments on the due dates and in the
amounts set forth below or (ii) on any earlier date on which all amounts
outstanding under this Term Loan Note (this "Note") have become due and payable
----
pursuant to the provisions of Article XII of the Credit Agreement. The Borrower
likewise promises to pay interest on the outstanding principal balance of each
Term Loan made by the Lender to the Borrower, at such interest rates, payable at
such times, and computed in such manner, as are specified in the Credit
Agreement in strict accordance with the terms thereof.
This Note is issued pursuant to and is subject to the terms and
conditions of, and is one of the Term Loan Notes referred to in, the Second
Amended and Restated Credit Agreement, dated as of May __, 1996, among the
Borrower, NationsBank, N.A. (South), as Agent, the Lender, and any other Lenders
which are or may become signatories to such Credit Agreement (as the same may be
amended from time to time, the "Credit Agreement"), and the Lender is and shall
----------------
be entitled to all benefits thereof and of all the Credit Documents executed and
delivered to the Agent or the Lenders in connection therewith. Terms defined in
the Credit Agreement are used herein with the same meaning. The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain Events of Default, provisions
relating to prepayments on account of principal hereof prior to the maturity
hereof, and provisions for post-default interest rates. [IF ANY OF THE TERM
LOANS EVIDENCED BY THIS NOTE CONSTITUTE MULTICURRENCY ADVANCES, THE CREDIT
AGREEMENT REQUIRES THAT SUCH LOANS BE REPAID IN THE SAME CURRENCY IN WHICH SUCH
LOANS WERE MADE NOTWITHSTANDING THE FACT THAT THIS NOTE IS DENOMINATED IN U.S.
DOLLARS.]
Subject to any acceleration of this Note pursuant to the provisions of
Article XII of the Credit Agreement, the principal balance of this Note shall be
repayable in __________ consecutive monthly installments of $______________ each
which shall be due commencing on _____________, 19___ and shall continue to be
due on the same day of each succeeding month thereafter up to and through
______________, _______, except that in all cases such final installment shall
be in an amount equal to the entire remaining unpaid principal balance of this
Note.
C-1
<PAGE>
The Borrower agrees to make payments of principal and interest hereon
on the dates and in the amounts specified in this Note and in the Credit
Agreement in strict accordance with the terms thereof.
In case an Event of Default shall occur and be continuing, the
principal and all accrued interest of this Note may automatically become, or may
be declared, immediately due and payable in the manner and with the effect
provided in the Credit Agreement. The Borrower agrees to pay, and save the
Lender harmless against any liability for the payment of, all reasonable costs
and expenses, including reasonable attorneys' fees, actually incurred by Lender
without giving effect to any statutory presumption in connection with the
enforcement by the Lender of any of its rights or remedies under this Note or
the Credit Agreement.
This Note has been delivered in Atlanta, Georgia, and the rights and
obligations of the Lender and the Borrower hereunder shall be construed in
accordance with and governed by the laws of the State of Georgia (without giving
effect to its conflicts of law rules).
The Borrower expressly waives any presentment, demand, protest or
notice in connection with this Note, whether now or hereafter required by
applicable law. This Note is intended to be an instrument under seal.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed,
sealed and delivered by its duly authorized officers as of the date first above
written.
(CORPORATE SEAL) ROPER INDUSTRIES, INC.
By:________________________________
Title:__________________________
Attest:
________________________________________
Title:__________________________________
C-2
<PAGE>
EXHIBIT D
FORM OF CASH MANAGEMENT LOAN NOTE
U.S. $2,000,000 MAY __, 1996
FOR VALUE RECEIVED, the undersigned ROPER INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
--------
NATIONSBANK, N.A. (SOUTH) (herein, together with any subsequent holder hereof,
called the "Lender"), the lesser of TWO MILLION U.S. DOLLARS (U.S.$2,000,000) or
------
the aggregate outstanding principal amount of the Cash Management Loans made to
the Borrower by Lender pursuant to the terms of the Credit Agreement referred to
below, which principal sum shall be payable on the earlier of (x) each Cash
Management Loan Settlement Date, (y) the Business Day immediately preceding the
Credit Expiration Date determined pursuant to the Credit Agreement, or (z) the
date on which all amounts outstanding under this Cash Management Loan Note (this
"Note") have become due and payable pursuant to the provisions of Article XII of
----
the Credit Agreement. The Borrower likewise promises to pay interest on the
outstanding principal amount of each Cash Management Loan made by the Lender to
the Borrower, at such interest rates, payable at such times, and computed in
such manner, as are specified in the Credit Agreement in strict accordance with
the terms thereof.
This Note is issued pursuant to and is subject to the terms and
conditions of, and is the Cash Management Loan Note referred to in, the Second
Amended and Restated Credit Agreement, dated as of May __, 1996, among the
Borrower, NationsBank, N.A. (South), as Agent, the Lender, and any other banks
and lending institutions which are or may become signatories to such Credit
Agreement (as the same may be amended from time to time, the "Credit
------
Agreement"), and the Lender is and shall be entitled to all benefits thereof
- ---------
and of all the Credit Documents executed and delivered to the Agent or the
Lenders in connection therewith. Terms defined in the Credit Agreement are used
herein with the same meaning. The Credit Agreement, among other things, contains
provisions for acceleration of the maturity hereof upon the happening of certain
Events of Default, provisions relating to prepayments on account of principal
hereof prior to the maturity hereof, and provisions for post-default interest
rates.
The Borrower agrees to make payments of principal and interest hereon
on the dates and in the amounts specified in the Credit Agreement in strict
accordance with the terms thereof.
In case an Event of Default shall occur and be continuing, the
principal and all accrued interest of this Note may automatically become, or may
be declared, due and payable in the manner and with the effect provided in the
Credit Agreement. The Borrower agrees to pay, and save the Lender harmless
against any liability for the payment of, all reasonable costs and expenses,
including reasonable attorneys' fees, actually incurred by Lender without giving
effect to any statutory presumption in connection with the enforcement by the
Lender of any of its rights under this Note or the Credit Agreement.
D-1
<PAGE>
This Note has been delivered in Atlanta, Georgia, and the rights and
obligations of the Lender and the Borrower hereunder shall be construed in
accordance with and governed by the laws of the State of Georgia.
The Borrower expressly waives any presentment, demand, protest or
notice in connection with this Note, now or hereafter required by applicable
law. This Note is intended to be an instrument under seal.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed
and delivered by its duly authorized officers as of the date first above
written.
(CORPORATE SEAL) ROPER INDUSTRIES, INC.
By:_______________________________
Title:_________________________
Attest:
_______________________________________
Title:_________________________________
D-2
<PAGE>
EXHIBIT E
AGREEMENT REGARDING SECURITY DOCUMENTS
THIS AGREEMENT dated as of May __, 1996, is made by the undersigned
Subsidiaries (collectively, the "Guarantors") of ROPER INDUSTRIES, INC., a
----------
Delaware corporation (the "Borrower"), and by the Borrower in favor of
--------
NATIONSBANK, N.A. (SOUTH), a national banking association and the successor by
merger to Bank South (the "Agent"), acting in its capacity as agent for itself
-----
and any other banks or other lending institutions which may be now or hereafter
become Lenders under (and as such term is defined in) the Credit Agreement (as
hereinafter defined).
STATEMENT OF FACTS
------------------
The Borrower, the Agent and the Lenders have entered into that certain
Second Amended and Restated Credit Agreement, dated as of the date hereof (as
the same may be hereafter further amended, restated, supplemented or otherwise
modified from time to time, and including all schedules, exhibits and
supplements thereto, the "Credit Agreement").
----------------
The Credit Agreement is an amendment and restatement of the "Prior
1994 Credit Agreement" (as such term is defined in the Credit Agreement), which
in turn was an amendment and restatement of the "Prior 1992 Credit Agreement"
(as such term also is defined in the Credit Agreement), pursuant to which the
Lenders and the Agent agreed to make certain loan and letter of credit
facilities available to the Borrower. In connection with the Prior 1994 Credit
Agreement and/or the Prior 1992 Credit Agreement, the Borrower and the
Guarantors executed and delivered to or in favor of the Agent or the Lenders the
documents more particularly described on Schedule A attached hereto and by this
----------
reference made a part hereof (collectively, the "Prior Security Documents").
------------------------
The Borrower owns, directly or indirectly, all of the outstanding
capital stock of each of the Guarantors, and the Borrower and the Guarantors
share an identity of interests as members of a consolidated group of companies
engaged in substantially similar businesses with the Borrower providing (among
other things) certain centralized financial, accounting and management services
to each of the Guarantors, and the consummation of the transactions contemplated
by the Credit Agreement will facilitate the expansion and enhance the over-all
financial strength and stability of the Borrower's entire corporate group,
including the Guarantors.
It is a condition precedent to the Lenders' and the Agent's respective
obligations under the Credit Agreement to continue to make extensions of credit
to or for the benefit of the Borrower that the Borrower and the Guarantors
execute and deliver this Agreement, and the Borrower and the Guarantors desire
to execute and deliver this Agreement in order to satisfy such condition
precedent.
E-1
<PAGE>
NOW, THEREFORE, in consideration of the premises and in order to
induce the Agent and the Lenders to enter into and perform their respective
obligations under the Credit Agreement, the Borrower and the Guarantors hereby
jointly and severally agree as follows in favor of the Agent and the Lenders:
STATEMENT OF TERMS
------------------
1. DEFINED TERMS. Except as otherwise specifically defined in this
-------------
Agreement, each capitalized term used in this Agreement that is defined in the
Credit Agreement shall have the same meaning herein as specified for such term
in the Credit Agreement.
2. CROSS-REFERENCES. Each and every reference in the Prior Security
----------------
Documents to the "Credit Agreement" and to capitalized terms as defined in the
"Credit Agreement" (including, without limitation, the terms "Agent", "Lenders",
"Loans", "Notes" and "Obligations") shall be deemed to refer to and mean the
Credit Agreement as defined and used in this Agreement and to such capitalized
terms as defined and used in such Credit Agreement.
3. REAFFIRMATION OF OBLIGATIONS AND LIENS. Each of the Guarantors
--------------------------------------
does hereby reaffirm all of its indebtedness, obligations and liabilities to the
Agent and the Lenders under the Prior Security Documents executed by it and does
hereby reaffirm the grant of any and all Liens on its property held by the Agent
(for the benefit of the Lenders) under such Prior Security Documents; provided,
--------
however, that nothing in this Agreement or the Credit Agreement is intended, or
shall be construed, to constitute a novation of any such indebtedness,
obligations or liabilities or to modify, affect, release or otherwise impair the
continuity or perfection of such Liens.
4. CONTINUED EFFECTIVENESS OF PRIOR SECURITY DOCUMENTS. Each of the
---------------------------------------------------
Guarantors hereby confirms and agrees that all of the Prior Security Documents
shall remain in full force and effect after giving effect to the execution,
delivery and performance of the Credit Agreement and shall guarantee or secure
(as the case may be) all Obligations which may now exist or hereafter arise
under the Credit Agreement.
5. MISCELLANEOUS. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of Georgia (without giving
effect to the conflict of law principles thereof). This Agreement shall be
binding upon each of the Guarantors and their respective successors and assigns
and shall inure to the benefit of the Lenders, the Agent and their respective
successors and assigns. This Agreement may be executed in any number of several
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together shall constitute one and the same instrument.
E-2
<PAGE>
IN WITNESS WHEREOF, Borrower and each of the Guarantors has caused
this Agreement to be duly executed and delivered by its respective duly
authorized officers and its corporate seal to be hereunto affixed, and the
Collateral Agent has caused this Agreement to be accepted by its duly authorized
officer, all as of the day and year first above written.
BORROWER:
ROPER INDUSTRIES, INC.
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Assistant Secretary
GUARANTORS:
AMOT CONTROLS CORPORATION
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Assistant Secretary
AMOT SALES CORPORATION
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Assistant Secretary
(Signatures continued on following page)
E-3
<PAGE>
(Signatures continued from preceding page)
AMOT/METRIX INVESTMENT
COMPANY
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Assistant Secretary
COMPRESSOR CONTROLS CORPORATION, an Iowa
corporation
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Assistant Secretary
COMPRESSOR CONTROLS CORPORATION, a Delaware
corporation
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Assistant Secretary
(Signatures continued on following page)
E-4
<PAGE>
(Signatures continued from preceding page)
CORNELL PUMP COMPANY
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Assistant Secretary
CORNELL PUMP MANUFACTURING
CORPORATION
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Assistant Secretary
INTEGRATED DESIGNS, INC.
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Secretary
INTEGRATED DESIGNS L.P.
(CORPORATE SEAL)
By: Compressor Controls Corporation,
Attest: an Iowa corporation and its sole
general partner
By:________________________________
Vice President
____________________________
Assistant Secretary
(Signatures continued on following page)
E-5
<PAGE>
(Signatures continued from preceding page)
ISL INTERNATIONAL, INC.
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Assistant Secretary
ISL NORTH AMERICA, INC.
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Assistant Secretary
METRIX INSTRUMENT CO., L.P.
(CORPORATE SEAL)
By: AMOT Sales Corporation, its sole
general partner
Attest:
By:________________________________
Vice President
____________________________
Assistant Secretary
PREX CORPORATION
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Assistant Secretary
(Signatures continued on following page)
E-6
<PAGE>
(Signatures continued from preceding page)
PREX L.P.
(CORPORATE SEAL)
By: Compressor Controls Corporation,
Attest: an Iowa corporation and its sole
general partner
By:___________________________________
Vice President
____________________________
Assistant Secretary
ROPER HOLDINGS, INC.
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Secretary
ROPER INDUSTRIAL PRODUCTS
INVESTMENT COMPANY
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Assistant Secretary
ROPER INTERNATIONAL, INC.
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Secretary
(Signatures continued on following page)
E-7
<PAGE>
(Signatures continued from preceding page)
ROPER INTERNATIONAL PRODUCTS, LTD. (f/k/a
Compressor Controls International, Ltd.)
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Secretary
ROPER PUMP COMPANY
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Assistant Secretary
USON CORPORATION
(CORPORATE SEAL)
Attest:
By:_____________________________________
Vice President
____________________________
Assistant Secretary
(Signatures continued on following page)
E-8
<PAGE>
(Signatures continued from preceding page)
USON L.P.
(CORPORATE SEAL)
By: Compressor Controls Corporation,
Attest: an Iowa corporation and its sole
general partner
By:________________________________
Vice President
____________________________
Assistant Secretary
ACCEPTED:
NATIONSBANK, N.A. (SOUTH),
as Agent
By:_____________________________________
Title:_______________________________
E-9
<PAGE>
SCHEDULE A
1. Guaranty Agreements
-------------------
(a) Guaranty Agreements, dated as of September 30, 1992, executed
separately by Roper Properties, Inc. (predecessor-in-interest to Roper
Pump Company), Roper International, Inc., Roper Holdings, Inc., AMOT
Controls Corporation, Compressor Controls Corporation (an Iowa
corporation) and Compressor Controls International, Ltd. (now known as
Roper International Products, Ltd.).
(b) Guaranty Agreement, dated as of September 30, 1993, executed by
Integrated Designs, Inc.
(c) Guaranty Agreements, dated as of September 23, 1994, executed
separately by ISL International, Inc. and ISL North America, Inc.
(d) Guaranty Agreements, dated as of March 7, 1995, executed separately by
Uson Corporation and Prex Corporation.
(e) Guaranty Agreements, dated as of September 29, 1995, executed
separately by AMOT Sales Corporation, AMOT/METRIX Investment Company,
Inc. and METRIX Instrument Co., L.P.
(f) Guaranty Agreements, dated as of October 31, 1995, executed separately
by Roper Pump Company*, Cornell Pump Manufacturing Corporation,
Cornell Pump Company, Roper Industrial Products Investment Company,
Uson L.P., Integrated Designs L.P., Prex L.P., and Compressor Controls
Corporation (a Delaware corporation).
2. Security Agreements
-------------------
(a) Borrower Security Agreement, dated as of September 30, 1992, executed
by Roper Industries, Inc.
(b) Subsidiary Security Agreements, dated as of September 30, 1992,
executed separately by Roper Properties, Inc. (predecessor-in-interest
to Roper Pump Company), Roper International, Inc., Roper Holdings,
Inc., AMOT Controls Corporation, Compressor Controls Corporation (an
Iowa corporation) and Compressor Controls International, Ltd.
(c) Subsidiary Security Agreement, dated as of September 30, 1993,
executed by Integrated Designs, Inc.
(d) Subsidiary Security Agreements, dated as of September 23, 1994,
executed separately by ISL International , Inc. and ISL North America,
Inc.
E-10
<PAGE>
(e) Subsidiary Security Agreements, dated as of March 7, 1995, executed by
Uson Corporation and Prex Corporation.
(f) Subsidiary Security Agreements, dated as of September 29, 1995,
executed separately by AMOT Sales Corporation, AMOT/METRIX Investment
Company, Inc. and METRIX Instrument Co., L.P.
(g) Subsidiary Security Agreements, dated as of October 31, 1995, executed
separately by Roper Pump Company,* Cornell Pump Manufacturing
Corporation, Cornell Pump Company, Roper Industrial Products
Investment Company, Uson L.P., Integrated Designs, L.P., Prex L.P. and
Compressor Controls Corporation (a Delaware corporation).
(h) First Modification of Subsidiary Security Agreement, dated as of
October 31, 1995, executed by Compressor Controls Corporation (an Iowa
corporation).
3. Stock Pledge Agreements
-----------------------
(a) Borrower Stock Pledge Agreement, dated as of September 30, 1992,
executed by Roper Industries, Inc.
(b) Subsidiary Stock Pledge Agreements, dated as of September 30, 1992,
executed separately by Roper Properties, Inc. and AMOT Controls
Corporation.**
(c) First Supplemental Stock Pledge Agreement, dated as of September 30,
1993, executed by Roper Industries, Inc.
(d) Second Supplemental Stock Pledge Agreement, dated as of September 23,
1994, executed by Roper Industries, Inc.
(e) Subsidiary Stock Pledge Agreement, dated as of September 23, 1994,
executed by ISL International, Inc.
(f) Third Supplemental Borrower Stock Pledge Agreement, dated as of March
7, 1995, executed by Roper Industries, Inc.
(g) First Supplemental Subsidiary Stock Pledge Agreement, dated as of
September 29, 1995, executed by AMOT Controls Corporation.
(h) Fourth Supplemental Borrower Stock Pledge Agreement, dated as of
October 31, 1995, executed by Roper Industries, Inc.
(i) Subsidiary Stock Pledge Agreements, dated as of October 31, 1995,
executed by Cornell Pump Manufacturing Corporation, Uson Corporation,
Integrated Designs, Inc. and Prex Corporation.
(j) First Supplemental Subsidiary Stock Pledge Agreement, dated as of
October 31, 1995, executed by Compressor Controls Corporation (an Iowa
corporation).
E-11
<PAGE>
4. Patent Collateral Assignment Agreements
---------------------------------------
(a) Patent Collateral Assignment Agreements, dated as of September 30,
1992, executed separately by Roper Industries, Inc., AMOT Controls
Corporation and Compressor Controls Corporation (an Iowa corporation).
(b) Patent Collateral Assignment Agreement, dated as of September 30,
1993, executed by Integrated Designs, Inc.
(c) Patent Collateral Assignment Agreement, dated as of September 29,
1995, executed by METRIX Instrument Co., L.P.
5. Trademark Security Agreements
-----------------------------
(a) Trademark Security Agreements, dated as of September 30, 1992,
executed separately by Roper Industries, Inc., Roper Holdings, Inc.,
AMOT Controls Corporation and Compressor Controls Corporation (an Iowa
corporation).
(b) Trademark Security Agreement, dated as of September 29, 1995, executed
by METRIX Instrument Co., L.P.
6. Deeds
-----
(a) Leasehold Deed to Secure Debt and Security Agreement , dated as of
September 30, 1992, executed by Roper Industries, Inc. with respect to
Roper Industries, Inc.s leasehold interest in certain improved real
property located in Jackson County, Georgia (9.154 acres).
(b) Deed to Secure Debt and Security Agreement, dated as of September 30,
1992, executed by Roper Properties, Inc. (predecessor-in-interest to
Roper Pump Company)
(c) Leasehold Deed to Secure Debt and Security Agreement , dated as of
September 30, 1992, executed by Roper Industries, Inc. with respect to
Roper Industries, Inc.s leasehold interest in certain improved real
property located in Jackson County, Georgia (15.28 acres).
(d) Deed of Trust, Assignment of Rents and Security Agreement, dated
September 30, 1992, executed by AMOT Controls Corporation.
__________________________
* Successor by merger to Roper Properties, Inc.
** The Subsidiary Stock Pledge Agreement dated as of September 30, 1992
originally executed by Compressor Controls Corporation ("CCC") in
---
favor of the Agent is no longer in effect in view of CCC's transfer of
direct ownership of all outstanding capital stock of Compressor
Controls International, Ltd. to Roper Industries, Inc. Such shares
are now pledged pursuant to the Second Supplemental Borrower Stock
Pledge Agreement, dated as of September 23, 1994, executed by Roper
Industries, Inc. in favor of the Agent.
E-12
<PAGE>
EXHIBIT F-1
[LETTERHEAD OF POWELL, GOLDSTEIN, FRAZER & MURPHY]
May 8, 1996
Each of the Lenders and the Agent which are
Parties to the Second Amended and Restated Credit
Agreement dated as of May 8, 1996, (the "Credit
------
Agreement") among Roper Industries, Inc., each of
- ---------
the Lenders who are or may become a party thereto
(collectively, the "Lenders"), and NationsBank, N.A.
-------
(South) as agent for the Lenders (the "Agent")
-----
Ladies and Gentlemen:
We have acted as special counsel for Roper Industries, Inc., a
Delaware corporation (the "Borrower"), each of the subsidiaries of the Borrower
--------
set forth on Schedule 1 attached hereto (the "Delaware Subsidiaries"), each of
---------- ---------------------
the subsidiaries of the Borrower listed on Schedule 2 attached hereto (the "Iowa
---------- ----
Subsidiaries"), Roper International, Inc., a Georgia corporation (the "Georgia
- ------------ -------
Subsidiary") and Roper International Products, Ltd., a company organized under
- ----------
the laws of the U.S. Virgin Islands ("RIP"), in connection with the loan,
---
guaranty and collateral transactions which arise under the Credit Agreement
described above. This opinion is furnished pursuant to Section 8.01(iv) of the
----------------
above-referenced Credit Agreement. For purposes of this opinion, the Borrower,
the Delaware Subsidiaries, the Iowa Subsidiaries, the Georgia Subsidiary and RIP
are collectively referred to as the "Credit Parties."
--------------
This opinion is limited by, and is in accordance with, the January 1,
1992 edition of the Interpretive Standards applicable to Legal Opinions to Third
Parties in Corporate Transactions adopted by the Legal Opinion Committee of the
Corporate and Banking Law Section of the State Bar of Georgia (the "Interpretive
------------
Standards"), which Interpretive Standards are incorporated in this opinion
- ---------
letter by reference. Capitalized terms used herein but not otherwise defined
herein shall have the respective meanings given such terms in the Credit
Agreement and the Interpretive Standards.
We have reviewed fully executed counterparts of the following
documents (collectively, the "Credit Documents"):
----------------
(a) The Credit Agreement;
<PAGE>
POWELL, GOLDSTEIN, FRAZER MURPHY
May 8, 1996
Page 2
(b) The Series A Revolving Loan Note of even date herewith executed
by the Borrower in favor of the Initial Lender;
(c) The Series B Revolving Loan Note of even date herewith executed
by the Borrower in favor of the Initial Lender;
(d) The Cash Management Loan Note issued in favor of NationsBank;
(e) The form of Term Loan Notes; and
(f) The Agreement Regarding Security Documents of even date herewith
executed by each of the Delaware Subsidiaries, the Iowa
Subsidiaries, the Georgia Subsidiary and RIP.
We also have examined and relied upon originals or copies of the
following additional documents (the Additional Documents"):
(i) Copies of the certificated of incorporation of the
Borrower, each Delaware Subsidiary and the Georgia Subsidiary, all as
described on Exhibit A attached hereto;
(ii) The good standing certificates or certificates of
existence for the Borrower, each Delaware Subsidiary and the Georgia
Subsidiary, all as described on Exhibit A attached hereto;
---------
(iii) A Certificate of the Borrower, each Delaware Subsidiary
and the Georgia Subsidiary, each dated as of the date hereof, and
executed and delivered concurrently herewith pursuant to Section 8.01
of the Credit Agreement, and to which are attached certified copies of
such Person's by-laws and authorizing board resolutions or, as
applicable, Partnership Agreement, as well as specimen officer
signatures; and
(iv) Such additional instruments, documents, agreements and
other materials as we have considered necessary for the opinions
herein expressed.
We have also considered such matters of law and of fact, including the
examination of originals or copies, certified or otherwise identified to our
satisfaction, of such records, certificates and other documents, as in our
judgement are necessary or appropriate to enable us to render the opinions
hereinafter set forth.
<PAGE>
May 8, 1996
Page 3
During the course of such examinations, we have assumed (i) the
genuineness of all signatures (other than those on behalf of the Credit
Parties), (ii) the authenticity of all documents submitted to us as originals,
(iii) the conformity to original documents of all documents submitted to us as
certified, conformed or photostatic copies, and (iv) the authority of each
person or persons who executed any document on behalf of another person (other
than the Credit Parties). We also have assumed, with your permission, that each
of the Lenders, the Agent, of the Iowa Subsidiaries and RIP has all requisite
power and authority to execute, deliver and perform its obligations under the
Credit Documents executed by it.
We have also assumed that the only interest, fees and other charges
contracted for or to be reserved, charged, taken or paid in connection with the
making of the loans under the Credit Documents are those set forth in the Credit
Documents and that all such interests, fees and charges will be reserved,
charged, taken and applied by the Lenders solely as described in the Credit
Documents, and that no interest shall be reserved, charged, taken or paid under
the Credit Documents on unpaid interest and that under no circumstances shall
the rate of interest paid or payable under the Credit Documents (including any
fees, charges, premiums or similar amounts which may be characterized as
interest) exceed 5.0% per month (whether due by prepayment, acceleration or
otherwise).
Whenever any opinion or confirmation of fact set forth in this opinion
letter is qualified by the words "known to us" or other words of similar
meaning, such words shall mean the current awareness by lawyers in the primary
lawyer group of factual matters such lawyers recognize as being relevant to the
opinion or confirmation so qualification. "Primary lawyer group" means the
lawyer who signs this opinion letter and, solely as to information relevant to
an opinion or confirmation issue, any lawyer currently in this firm who is
engaged in matters on behalf of the Borrower.
Based on the foregoing, and on such other matters as we have deemed
necessary for rendering this opinion, and subject to the exceptions,
qualifications and assumptions noted herein, it is our opinion that:
1. Each of the Delaware Subsidiaries which is a corporation and the
Georgia Subsidiary has been duly incorporated. Each of the Borrower and the
Delaware Subsidiaries which is a corporation is existing and in good standing
under the laws of the State of Delaware. The Georgia Subsidiary is existing and
in good standing under the laws of the State of Georgia. Each of the Delaware
Subsidiaries which is a limited partnership has been validly existing under the
laws of the State of Delaware. Each of the Borrower and roper Pump Company is
duly qualified as a foreign corporation and is in good standing in the State of
Georgia.
<PAGE>
May 8, 1996
Page 4
2. Each of the Borrower, the Delaware Subsidiaries and the Georgia
Subsidiary has all requisite corporate or partnership power and authority to
execute and deliver the Credit Documents to which it is a party and to perform
its obligations under such Credit Documents. The Credit Documents to which each
of the Borrower, the Delaware Subsidiaries and the Georgia Subsidiary is a party
have been duly authorized by all requisite corporate or partnership action on
the part of such Credit Party and, except for the Term Loan Notes, have been
duly executed and delivered by authorized officers of such Credit Party.
3. Each of the Credit Documents to which any Credit Party is a party
is (or, in the case of the Term Loan Notes, when executed and delivered by
Borrower in accordance with the terms and conditions of the Credit Agreement,
will be) enforceable against such Credit Party in accordance with its terms,
except that we express no opinion in this paragraph 3 with respect to (i) the
legality, validity, binding effect, enforceability, perfection or priority of
any Liens granted under the Credit Documents or (ii) any matters governed by
Georgia's interest and usury laws (an opinion as to which is set forth in
paragraph 6 below).
4. Except for any recording or filing which may be required by
applicable law to perfect or maintain the perfection of the Agent's Liens on the
Collateral under the Security Documents, no consent, approval or authorization
of, or declaration or filing with, any governmental authority is required for
the valid execution, delivery and performance by any Credit Party of the Credit
Documents executed by such Credit Party.
5. Neither the execution nor the delivery of the Credit Documents,
nor fulfillment of or compliance with the terms and provisions thereof, will
conflict with, or result in a breach of the terms, conditions or provisions of,
or constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of any Credit Party
pursuant to (a) any statute, law, rule or regulation known to us and to which
any Credit Party is subject or (b) any Reviewed Documents. For purposes of this
opinion, the term "Reviewed Documents" means the Credit Documents, the
Additional Documents set forth in subparagraphs (i), (ii) and (iii) of that
definition, and the Bond Documents.
6. The Credit Documents (other than the Term Loan Notes) do not
violate the interest and usury laws of the State of Georgia. The terms and
provisions of the form of the Term Loan Notes do not violate the interest and
usury laws of the State of Georgia.
Based upon the limitations and qualifications set forth above, we
confirm to you that, to our knowledge, except as set forth on Schedule 9.03 to
-------------
the Credit Agreement, no
<PAGE>
POWELL, GOLDSTEIN, FRAZER & MURPHY
May 8, 1996
Page 5
litigation or other proceeding against any Credit Party or any of such Credit
Party's properties is pending or overtly threatened by written communication to
such Credit Party.
Our opinions set forth above are subject to the following additional
qualifications, exceptions and assumptions:
A. We are qualified to practice law in the State of Georgia and our
opinions herein are limited to (i) the laws of the State of Georgia, (ii) the
corporate and limited partnership statutes of the State of Delaware and (iii)
any applicable Federal laws of the United States of America. We express no
opinion with respect to the laws of any other jurisdiction. We understand that
with regard to matters of Iowa law that the Lenders and the Agent intend to rely
on the opinion dated May 8, 1996 of Brown, Winick, Graves, Gross, Baskerville,
Schoenebaum and Walker, P.L.C. (the "Iowa Opinion"). We know of no reason why
the Lenders and the Agent would not be justified in relying on the Iowa Opinion.
B. Our opinions regarding the legality, validity, binding effect or
enforceability of any of the Credit Documents or the legality, validity, binding
effect, enforceability, or perfection of any security interest granted
thereunder are subject to: (i) the effect of any applicable bankruptcy,
fraudulent transfer, moratorium, insolvency, reorganization, or other similar
laws affecting the rights of creditors generally and (ii) the effect of general
principles of equity (whether considered in a proceeding in equity or at law)
which may, among other things, limit the availability of the remedy of specific
performance.
This opinion is furnished solely for the benefit of the Lenders and
the Agent and their respective successors, assigns and participants in
connection with the transactions contemplated by the Credit Documents and may
not be relied upon by any other person or for any other purpose without our
express prior written permission. We expressly disclaim any duty to update this
letter in the future in the event there are any changes of relevant fact or law
that may affect any of our opinions expressed herein.
Very truly yours,
/s/ Powell, Goldstein, Frazer & Murphy
POWELL, GOLDSTEIN, FRAZER & MURPHY
<PAGE>
POWELL, GOLDSTEIN, FRAZE MURPHY
SCHEDULE 1
DELAWARE SUBSIDIARIES
---------------------
AMOT Controls Corporation, a Delaware corporation
AMOT Sales Corporation, a Delaware corporation
AMOT/Metrix Investment Company, a Delaware corporation
Compressor Controls Corporation, a Delaware corporation
Cornell Pump Company, a Delaware corporation
Cornell Pump Manufacturing Corporation, a Delaware corporation
Integrated Designs, Inc., a Delaware corporation
Integrated Designs, L.P., a Delaware limited partnership
ISL International, Inc., a Delaware corporation
ISL North America, Inc., a Delaware corporation
Metrix Instrument Co., L.P., a Delaware limited partnership
Prex Corporation, a Delaware corporation
Prex L.P., a Delaware limited partnership
Roper Holdings, Inc., a Delaware corporation
Roper Pump Company, a Delaware corporation
Uson Corporation, a Delaware corporation
Uson L.P., a Delaware limited partnership
<PAGE>
POWELL, GOLDSTEIN, FRAZE MURPHY
SCHEDULE 2
----------
IOWA SUBSIDIARIES
-----------------
Compressor Controls Corporation, an Iowa corporation
Roper Industrial Products Investment Co., an Iowa corporation
<PAGE>
POWELL, GOLDSTEIN, FRAZER & MURPHY
EXHIBIT A
---------
<TABLE>
<CAPTION>
Subsidiary Document Certificate
---------- --------
of Existence
------------
<S> <C> <C>
AMOT Controls Corporation, a Delaware corporation Articles of Incorporation certified by the Delaware
Delaware Secretary of State
AMOT/Metrix Investment Company, a Dealware Articles of Incorporation certified by the Delaware
corporation Delaware Secretary of State
AMOT Sales Corporation, a Delaware corporation Articles of Incorporation certified by the Delaware
Delaware Secretary of State
Compressor Controls Corporation, a Delaware Articles of Incorporation certified by the Delaware
corporation Delaware Secretary of State
Compressor Controls Corporation, an Iowa corporation Articles of Incorporation certified by the Iowa
Delaware Secretary of State
Cornell Pump Company, a Delaware corporation Articles of Incorporation certified by the Delaware
Delaware Secretary of State
Cornell Pump Manufacturing Corporation, a Delaware Articles of Incorporation certified by the Delaware
corporation Delaware Secretary of State
Integrated Designs, Inc., a Delaware corporation Articles of Incorporation certified by the Delaware
Delaware Secretary of State
Integrated Designs L.P., a Delaware limited Limited Partnership Certificate certified by the Delaware
partnership Delaware Secretary of State
ISL International, Inc., a Delaware corporation Articles of Incorporation certified by the Delaware
Delaware Secretary of State
ISL North America, Inc., a Dealware corporation Articles of Incorporation certified by the Delaware
Delaware Secretary of State
Metrix Instrument Co., L.P., a Delaware limited Limited Partnership Certificate certified by the Delaware
partnership Delaware Secretary of State
Prex Corporation, a Delaware corporation Articles of Incorporation certified by the Delaware
Delaware Secretary of State
Prex L.P., a Delaware limited partnership Limited Partnership Certificate certified by the Delaware
Delaware Secretary of State
Roper Holdings, Inc., a Delaware corporation Articles of Incorporation certified by the Delaware
Delaware Secretary of State
Roper Industrial Products Investment Co., an Iowa Articles of Incorporation certified by the Iowa
corporation Delaware Secretary of State
Roper Industries, Inc., a Delaware corporation Articles of Incorporation certified by the Delaware
Delaware Secretary of State Georgia
Roper International, Inc., a Georgia corporation Articles of Incorporation certified by the Georgia
Delaware Secretary of State
</TABLE>
<PAGE>
POWELL, GOLDSTEIN, FRAZER & MURPHY
<TABLE>
<CAPTION>
Subsidiary Document Certificate
---------- --------
of Existence
------------
<S> <C> <C>
Roper Pump Company, a Dealware corporation Articles of Incorporation certified by the Delaware
Delaware Secretary of State Georgia
Uson Corporation, a Delaware corporation Articles of Incorporation certified by the Delaware
Delaware Secretary of State
Uson L.P., a Delaware limited partnership Limited Partnership Certificate certified by the Delaware
Delaware Secretary of State
</TABLE>
<PAGE>
EXHIBIT F-2
[LETTERHEAD OF BROWN, WINICK, GRAVES, GROSS, BASKERVILLE,
SCHOENEBAUM AND WALKER, P.L.C.]
May 8, 1996
Each of the Lenders and the Agent which
are Parties to the Second Amended and Restated
Credit Agreement, dates as of May 8, 1996,
as amended (the "Credit Agreement") among
Roper Industries, Inc., each of the Lenders
listed on Annex I thereto as the same may be
further amended from time to time (collectively,
the "Lenders"), and NationsBank, N.A. (South),
as Agent for the Lenders (the "Agent")
Ladies and Gentlemen:
We have acted as Iowa counsel for Compressor Controls Corporation, an
Iowa corporation ("CCC Iowa") and Roper Industrial Products Investment Company
("Roper Iowa"; CCC Iowa and Roper Iowa are hereinafter collectively referred to
as the "Credit Parties") in connection with the loan and collateral transactions
involving the Credit Parties of even date which arise under, and this opinion is
furnished pursuant to, Section 8.01 of the Second Amended and Restated Credit
Agreement described above (the "Credit Agreement"). Capitalized terms used
herein and not otherwise expressly defined herein shall have the meanings given
such terms in the Credit Agreement.
We have reviewed a copy of fully executed counterpart of the Agreement
Regarding Security Documents (the "Credit Document").
We also have examined and relied upon originals or copies of the
following additional documents:
(i) Copies of the Articles of Incorporation of CCC Iowa as certified
by the Secretary of State of Iowa under date of May 2, 1996, and
copies of the Articles of Incorporation of Roper Iowa as
certified by the Secretary of State of Iowa under date of May 1,
1996;
<PAGE>
May 8, 1996
Page 2
(ii) A good standing certificate for CCC Iowa from the Iowa Secretary
of State under date of May 2, 1996, and a good standing
certificate for Roper Iowa from the Iowa Secretary of State under
date of May 1, 1996;
(iii) A certificate of each of the Credit Parties, dates as of May 8,
1996, and executed and delivered concurrently herewith pursuant
to Section 8.01 of the Credit Agreement, and to which are
attached certified copies of such Credit Party's by-laws and
authorizing board resolutions as well as specimen officer
signatures;
(iv) Such additional instruments, documents, agreements and other
materials as we have considered necessary for the opinions herein
expressed.
During the course of such examinations, we have assumed (i) the
genuineness of all signatures, (ii) the authenticity of all documents submitted
to us as originals, (iii) the conformity to original documents of all documents
submitted to us as certified, conformed or photostatic copies, (iv) the
authority of each person or persons who executed any document on behalf of
another person (other than the Credit Parties), and (v) there has been no
modification or revocation of the documents submitted to us and such documents
are still in full force and effect. We also have assumed, with your permission,
that each of the Lenders and the Agent has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Credit
Document.
Based on the foregoing, and on such other matters as we deem necessary
for rendering this opinion, and subject to the exceptions, qualifications and
assumptions noted herein, it is our opinion that:
1. Each of the Credit Parties is a corporation duly organized and
validly existing in good standing under the laws of the State of Iowa and has
all requisite corporate power and authority to execute and deliver the Credit
Documents executed by it and to perform its obligations thereunder.
2. The Credit Document executed by each of the Credit Parties has
been duly authorized by all requisite corporate action on the part of such
Credit Party and has been duly executed and delivered by authorized officers of
such Credit Party.
3. The Credit Document expressly provides that it is to be governed
by the laws of the State of Georgia. We believe that, under applicable Iowa
statutory and case law, an Iowa state court
<PAGE>
May 8, 1996
Page 3
or a federal court sitting in Iowa and applying Iowa conflicts of laws rules
should give effect to the designation of the parties of Georgia law as the
governing law with respect to the Credit Document.
4. Assuming that the Credit Document is governed by the laws of the
State of Iowa, the Credit Document executed by each Credit Party has been duly
executed and delivered by such Credit Party and is the legal, valid and binding
obligation of such Credit Party, enforceable against such Credit Party in
accordance with its terms.
Our opinions set forth above are subject to the following
qualifications:
A. We are qualified to practice law in the State of Iowa and our
opinions herein are limited to the laws of the State of Iowa and any applicable
federal laws of the United States.
B. Our opinions in Paragraph 4 above regarding the legality,
validity, binding effect or enforceability of the Credit Document are subject to
the effect of any applicable bankruptcy, fraudulent transfer, insolvency or
other similar laws affecting creditors' rights generally and to general
equitable principles.
This opinion is furnished solely for the benefit of the Lenders, the
Agent and their respective successors, assigns, participants and counsels in
connection with the transactions contemplated by the Credit Documents and may
not be relied upon by any other person or for any other purpose without our
express prior written permission. We expressly disclaim any duty to update this
letter in the future in the event there are any changes in relevant fact or law
that may affect any of our opinions expressed herein.
Very truly yours,
BROWN, WINICK, GRAVES, GROSS,
BASKERVILLE, SCHOENEBAUM & WALKER, PLC
By /s/ William C. Brown
-------------------------------------
William C. Brown, Partner
<PAGE>
EXHIBIT G-1
CERTIFICATE OF BORROWER
The undersigned officers of ROPERS INDUSTRIES, INC. (the "Borrower"),
a Delaware corporation, hereby certify and covenant in their representative
capacities on behalf of the Borrower as follows:
1. Unless otherwise expressly defined herein, all capitalized terms
used herein shall have the meanings given such terms in, and this Certificate is
being executed and delivered pursuant to Section 8.01 of, the Second Amended and
Restated Credit Agreement, dated as of May ___, 1996, among the Borrower, the
Lender or Lenders signatory thereto, and NationsBank, N.A. (South), a national
banking association and the successor by merger to Bank South, as Agent for such
Lenders (the "Credit Agreement"),
----------------
2. Each of the representations and warranties set forth in Article
IX of the Credit Agreement is true and correct in all material respects on and
as of the date of this Certificate.
3. The Borrower is in compliance with all the terms and provisions
set forth in the Credit Agreement and the other Credit Documents to which it is
a party on and as of the date of this Certificate.
4. No Default or Event of Default has occurred and is continuing on
and as of the date of this Certificate.
5. Since the date of the cost recent financial statements described
in Section 9.02 of the Credit Agreement, there has been no change which has had
or could reasonably be expected to have materially adverse effect on the
business, property or assets or financial condition of the Borrower and its
Subsidiaries, taken as a whole.
6. There is no action or proceeding instituted or pending before any
court or governmental authority or, to the knowledge of the Borrower, threatened
(i) which reasonably could be expected to have a materially adverse effect on
the business, property or assets or financial condition of the Borrower and its
Subsidiaries, taken as a whole, or (ii) which seeks to prohibit or restrict any
Credit Party's ownership or operation of any material portion of its business or
assets or compel any Credit Party to dispose of or hold separate all or any
material portion of its business or assets, and which reasonably could be
expected to have a materially adverse effect on the business, properties, assets
or financial condition of the Borrower and its Subsidiaries, taken as a whole.
7. Attached hereto as Exhibit 1 is a true and correct copy of
---------
resolutions of the Board of Directors of the Borrower which were duly adopted on
______________________, 1996 (collectively, the "Resolutions") and which
authorize the execution, delivery and performance of
G-1-1
<PAGE>
the Credit Agreement, the Notes and the Agreement Regarding Security Documents.
The Resolutions were adopted in accordance with the Certificate of Incorporation
and By-laws of the Borrower. A true, correct and complete copy of the
Borrower's by-laws as in effect on this date (collectively, the "By-Laws") is
-------
attached hereto as Exhibit 2. The Resolutions and the By-Laws are in full force
---------
and effect and have not been ameneded, altered or repealed as of the date hereof
except as shown on such Exhibits.
8. The persons named below are on the date hereof the duly elected
and qualified incumbents of the offices of the Borrower set forth below next to
their respective names, and the signatures appearing at the right of their
respective names below are the genuine signatures of such officers:
NAME AND TITLE SIGNATURE
-------------- ---------
Zane E. Metcalf, Vice President ________________________________
Shanler D. Cronk, Assistant Secretary ________________________________
9. The corporate seal affixed to this Certificate, the Credit
Agreement and the Note is the legally adopted, proper and only official
corporate seal of the Borrower.
10. The chief executive office and principal place of business of the
Borrower as of this date (within the meaning of Official Code of Georgia
------------------------
Annotated (S)(S) 11-9-103(3)(d)) are located in Oconee Country, Georgia.
- ---------
IN WITNESS WHEREOF, the undersigned have executed this Certificate in
their representative capacities on behalf of the Borrower and affixed its
corporate seal hereto, all as of this ___ day of May, 1996.
(CORPORATE SEAL) _____________________________________
Zane E. Metcalf, Vice President of
Roper Industries, Inc.
_____________________________________
Shanler D. Cronk, Assistant Secretary
of Roper Industries, Inc.
G-1-2
<PAGE>
EXHIBIT 1
BOARD RESOLUTIONS OF
ROPER INDUSTRIES, INC.
(THE "CORPORATION")
-----------
WHEREAS, the Corporation has obtained loans and letters of credit from
time to time under the Amended and Restated Credit Agreement, dated as of
September 30, 1994, as heretofore amended (the "Prior Credit Agreement"), among
----------------------
the Corporation, the Lender or Lenders signatory thereto (collectively, the
"Lender(s)"), and NationsBank, N.A (South), as agent for the Lenders (the
---------
"Agent"); and
-----
WHEREAS, it has been proposed that the Prior Credit Agreement be
amended and restated in accordance with the terms of a proposed Second Amended
and Restated Credit Agreement to be entered into among the Corporation, the
Agent and the Lender(s) listed therein in substantially the form presented to
the directors of the Corporation (the "New Credit Agreement"); and
--------------------
WHEREAS, the Corporation's indebtedness to the Lender(s) listed on the
New Credit Agreement for loans made under the New Credit Agreement will be
evidenced by new promissory notes to be executed by the Corporation in favor of
such Lender(s) in substantially the forms attached to the New Credit Agreement
(collectively, the "New Notes"); and
---------
WHEREAS, the Corporation's liabilities to the Lender(s) and the Agent
under the New Credit Agreement and the New Notes will continue to be secured by
all or substantially all of the Corporation's real and personal property assets
pursuant to the various security documents previously executed by the
Corporation in connection with the Prior Credit Agreement, all as confirmed by
the Agreement Regarding Security Documents to be executed by the Corporation and
certain of its subsidiaries in favor of the Lender(s) and the Agent in
substantially the form attached to the New Credit Agreement (the "Agreement
---------
Regarding Security Documents") and
- ----------------------------
WHEREAS, the Board of Directors of the Corporation deems it to be in
the best interest of the Corporation and its shareholders that the Corporation
enter into and execute the New Credit Agreement, the New Notes and the Agreement
Regarding Security Documents (collectively, the "New Credit Documents");
--------------------
NOW, THEREFORE, BE IT RESOLVED, that the New Credit Documents,
together with all transactions contemplated thereby, are hereby approved in
their entirety; and
FURTHER RESOLVED, that the president or any vice president of the
Corporation are each hereby authorized and directed to execute and deliver the
New Credit Documents, in substantially the same forms as reviewed by the Board
of Directors of the Corporation, but with such changes or additions thereto as
the president or any vice president shall deem to be in the best interest of the
Corporation (the president's or any vice president's
G-1-3
<PAGE>
execution of the same containing any such changes or additions being deemed to
evidence conclusively his or her decision that such changes or additions are in
the best interest of the Corporation); and
FURTHER RESOVED, that the aforesaid officers of the Corporation are
each hereby severally authorized and directed to do or to cause to be done all
such other acts and things (including the execution and delivery of such other
documents, security agreements, instruments, financing statements, certificates
and agreements) as any such officer may deem necessary or desirable in order to
carry out and effectuated fully the purposes of the foregoing resolutions; and
FURTHER RESOLVED, that any of the foregoing actions which may already
have been taken by any of the aforesaid officers of the Corporation are hereby
ratified and approved.
G-1-4
<PAGE>
EXHIBIT G-2
CERTIFICATE OF CORPORATE GUARANTOR
The undersigned officers of ______________________________ (the
"Guarantor"), a _____________ corporation, hereby certify and covenant in their
- ----------
representative capacities on behalf of the Guarantor as follows:
1. Unless otherwise expressly defined herein, all capitalized terms
used herein shall have the meanings given such terms in, and this Certificate is
being executed and delivered pursuant to Section 8.01 of, the Second Amended and
Restated Credit Agreement, dated as May __, 1996, among Roper Industries, Inc.,
the Lender or Lenders signatory thereto, and NationsBank, N.A. (South), a
national banking association and the successor by merger to Bank South, as Agent
for such Lenders (the "Credit Agreement").
----------------
2. Each of the representations and warranties pertaining to the
Guarantor set forth in Article IX of the Credit Agreement is true and correct in
all material respects on and as of the date of this Certificate.
3. The Guarantor is in compliance with all the terms and provisions
set forth in the Credit Documents to which it is a party as well as all of the
terms and provisions set forth in the Credit Agreement which are applicable to
the Guarantor, all on and as of the date of this Certificate.
4. Attached hereto as Exhibit 1 is a true and correct copy of
---------
Resolutions of the Board of Directors of the Guarantor which were duly adopted
on _____________, 1996 (collectively, the "Resolutions") and which authorize the
-----------
execution, delivery and performance of the Agreement Regarding Security
Documents to which the Guarantor is a party. The Resolutions were adopted in
accordance with the Certificate or Articles of Incorporation and the By-Laws of
the Guarantor. A true, correct and complete copy of the Guarantor's By-laws
(the "By-Laws") as in effect on this date is attached hereto as Exhibit 2. The
------- ---------
Resolutions and the By-Laws are in full force and effect and have not been
amended, altered or repealed as of the date hereof except as shown on such
Exhibits.
5. The persons named below are on the date hereof duly elected and
qualified incumbents of the offices of the Guarantor set forth below next to
their respective names, and the signatures appearing at the right of their
respective names below are the genuine signatures of such officers:
G-2-1
<PAGE>
NAME AND TITLE SIGNATURE
-------------- ---------
_________________________, _________________ _____________________________
_________________________, _________________ _____________________________
6. The corporate seal affixed to this Certificate and the Agreement
Regarding Security Documents executed on behalf of the Guarantor is the legally
adopted, proper and only official corporate seal of the Guarantor.
7. The chief executive office and principal place of business of the
Guarantor as of this date (within the meaning of Official Code of Georgia
------------------------
Annotated (S)(S) 11-9-103(3)(d)) are located in ___________________ County,
- ---------
_____________________.
IN WITNESS WHEREOF, the undersigned have executed this Certificate in
their representatives capacities on behalf of the Guarantor and have affixed its
corporate seal hereto, all as of this ___ day of _______________, 1996.
(CORPORATE SEAL)
___________________________________
_____________, ____________________
of_________________________________
___________________________________
_____________, ____________________
of_________________________________
G-2-2
<PAGE>
EXHIBIT 1
BOARD RESOLUTIONS OF
______________________________
(the "Corporation")
-----------
WHEREAS, the Corporation is a direct or indirect subsidiary of Roper
Industries, Inc. (the "Parent"); and
------
WHEREAS, the Parent has obtained loans and letters of credit from time
to time under the Amended and Restated Credit Agreement, dated as of September
30, 1994 (the "Prior Credit Agreement"), among the Parent, the Lender or Lenders
----------------------
signatory thereto (collectively, the "Lender(s)"), and NationsBank, N.A.
---------
(South), as agent for the Lender(s) (the "Agent"); and
-----
WHEREAS, the Lender(s) required that the Corporation guarantee all of
the Parent's present and future indebtednesses and liabilities to the Lender(s)
and the Agent under the Prior Credit Agreement, which guaranty was provided
pursuant to the Guaranty Agreement executed by the Corporation in favor of the
Lender(s) and the Agent in substantially the form attached as an exhibit to the
Credit Agreement (the "Guaranty"); and
--------
WHEREAS, the Corporation's liabilities to the Lender(s) and the Agent
under the Guaranty are secured by all or substantially all of the real and
personal property assets of the Corporation pursuant to one or more security
documents, each substantially in the forms attached as an exhibits to the Prior
Credit Agreement, executed by the Corporation in favor of the Agent pursuant to
the Prior Credit Agreement (collectively, the "Security Documents"); and
------------------
WHEREAS, it has been proposed that the Prior Credit Agreement be
amended and restated pursuant to the terms of a Second Amended and Restated
Credit Agreement to be entered into among the Parent, the Agent and the
Lender(s) listed therein in substantially the form submitted to the directors of
the Corporation (the "New Credit Agreement"); and
--------------------
WHEREAS, it is a condition precedent to the effectiveness of the New
Credit Agreement that the Corporation (together with the Parent and certain
other subsidiaries of the Parent) enter into an Agreement Regarding Security
Documents, in substantially the form presented to the directors of the
Corporation (the "Agreement Regarding Security Documents"), pursuant to which
--------------------------------------
the Corporation will consent to the execution, delivery and performance of the
New Credit Agreement and agree that the New Credit Agreement will continue to be
entitled to the benefits and security of the Guaranty and Security Documents
executed by the Corporation; and
WHEREAS, it is to the direct benefit of and is in the best interest of
the Corporation that the Parent be able to continue to obtain loans or letters
of credit from the Lender(s) under the New Credit Agreement; and
G-2-3
<PAGE>
WHEREAS, the Board of Directors of the Corporation therefore deems it
to be in the best interest of the Corporation and its shareholder that the
Corporation enter into and execute the Agreement Regarding Security Documents;
NOW, THEREFORE, BE IT RESOLVED, that the New Credit Agreement and the
aforesaid Agreement Regarding Security Documents, together with all transactions
contemplated thereby, are hereby approved in their entirety; and
FURTHER RESOLVED, that the president or any vice president of the
Corporation are each hereby authorized and directed to execute and deliver the
aforesaid Agreement Regarding Security Documents, in substantially the same form
as reviewed by the Board of Directors of the Corporation, but with such changes
or additions thereto as the president or any vice president shall deem to be in
the best interest of the Corporation (the president's or any vice president's
execution of the same containing any such changes or additions being deemed to
evidence conclusively his or her decision that such changes or additions are in
the best interest of the Corporation); and
FURTHER RESOLVED, that the aforesaid officers of the Corporation are
hereby severally authorized and directed to do or cause to be done all such
other acts and things (including the execution and delivery of such other
documents, security agreements, instruments, financing statements, certificates
and agreements) as any such officer may deem necessary or desirable in order to
carry out and effectuate fully the purposes of the foregoing resolutions; and
FURTHER RESOLVED, that any of the foregoing actions which may already
have been taken by any of the aforesaid officers of the Corporation are hereby
ratified and approved.
G-2-4
<PAGE>
EXHIBIT G-3
CERTIFICATE OF PARTNERSHIP GUARANTOR
The undersigned officers of ______________________________ (the
"General Partner"), a _____________ corporation, hereby certify and covenant in
- ----------------
their representative capacities on behalf of the General Partner that the
General Partner is the sole general partner of ________________________ (the
"Guarantor"), a _________________ limited partnership, and they further certify
- ----------
and covenant in their representative capacities on behalf of the Guarantor and
the General Partner as follows:
1. Unless otherwise expressly defined herein, all capitalized terms
used herein shall have the meanings given such terms in, and this Certificate is
being executed and delivered pursuant to Section 8.01 of, the Second Amended and
Restated Credit Agreement, dated as May __, 1996, among Roper Industries, Inc.,
the Lender or Lenders signatory thereto, and NationsBank, N.A. (South), a
national banking association and the successor by merger to Bank South, as Agent
for such Lenders (the "Credit Agreement").
----------------
2. Each of the representations and warranties pertaining to the
Guarantor set forth in Article IX of the Credit Agreement is true and correct in
all material respects on and as of the date of this Certificate.
3. The Guarantor is in compliance with all the terms and provisions
set forth in the Credit Documents to which it is a party as well as all of the
terms and provisions set forth in the Credit Agreement which are applicable to
the Guarantor, all on and as of the date of this Certificate.
4. Attached hereto as Exhibit 1 is a true and correct copy of
---------
Resolutions of the Board of Directors of the General Partner which were duly
adopted on _____________, 1996 (collectively, the "Resolutions") and which
-----------
authorize the execution, delivery and performance of the Agreement Regarding
Security Documents to which the Guarantor is a party. The Resolutions were
adopted in accordance with the Certificate or Articles of Incorporation and the
By-Laws of the General Partner. A true, correct and complete copy of the
General Partner's By-laws (the "By-Laws") as in effect on this date is attached
-------
hereto as Exhibit 2. Attached hereto as Exhibit 3 is a true and correct copy of
--------- ---------
the partnership agreement of the Guarantor (the "Partnership Agreement") as in
---------------------
effect on the date hereof. The Resolutions, the By-Laws and the Partnership
Agreement are in full force and effect and have not been amended, altered or
repealed as of the date hereof except as shown on such Exhibits.
5. The persons named below are on the date hereof duly elected and
qualified incumbents of the offices of the General Partner set forth below next
to their respective names, and the signatures appearing at the right of their
respective names below are the genuine signatures of such officers:
G-3-1
<PAGE>
NAME AND TITLE SIGNATURE
-------------- ---------
_________________________, _________________ _____________________________
_________________________, _________________ _____________________________
6. The corporate seal affixed to this Certificate and the Agreement
Regarding Security Documents executed on behalf of the Guarantor is the legally
adopted, proper and only official corporate seal of the General Partner.
7. The chief executive offices and principal places of business of
the Guarantor as of this date (within the meaning of Official Code of Georgia
------------------------
Annotated (S)(S) 11-9-103(3)(d)) are located in ___________________ County,
- ---------
_____________________ and the chief executive offices and principal places of
business of the General Partner as of this date (within the meaning of Official
--------
Code of Georgia Annotated (S)(S) 11-9-103(3)(d)) are located in
- -------------------------
___________________ County, _____________________.
IN WITNESS WHEREOF, the undersigned have executed this Certificate in
their representatives capacities on behalf of the Guarantor and the General
Partner and have affixed the General Partner's corporate seal hereto, all as of
this ____ day of May, 1996.
(CORPORATE SEAL) ___________________________________
________________, _________________
of ________________________________
___________________________________
________________, _________________
of ________________________________
G-3-2
<PAGE>
EXHIBIT 1
BOARD RESOLUTIONS OF
______________________________
(THE "CORPORATION")
-----------
WHEREAS, the Corporation is the sole general partner of
______________, a ____________ limited partnership (the "Partnership"); and
-----------
WHEREAS, the Partnership is a direct or indirect subsidiary of Roper
Industries, Inc. (the "Parent"); and
------
WHEREAS, the Parent has obtained loans and letters of credit from time
to time under the Amended and Restated Credit Agreement, dated as of September
30, 1994 (the "Prior Credit Agreement"), among the Parent, the Lender or Lenders
----------------------
signatory thereto (collectively, the Lender(s)), and NationsBank, N.A. (South),
---------
as agent for the Lenders (the "Agent"); and
-----
WHEREAS, the Lender(s) required that the Partnership guarantee all of
the Parent's present and future indebtednesses and liabilities to the Lender(s)
and the Agent under the Prior Credit Agreement, which guaranty was provided
pursuant to the Guaranty Agreement executed by the Partnership in favor of the
Lender(s) and the Agent in substantially the form attached as an exhibit to the
Credit Agreement (the "Guaranty"); and
--------
WHEREAS, the Partnership's liabilities to the Lender(s) and the Agent
under the Guaranty are secured by all or substantially all of the real and
personal property assets of the Partnership pursuant to one or more security
documents, each substantially in the forms attached as an exhibits to the Prior
Credit Agreement, executed by the Partnership in favor of the Agent pursuant to
the Prior Credit Agreement (collectively, the "Security Documents"); and
------------------
WHEREAS, it has been proposed that the Prior Credit Agreement be
amended and restated pursuant to the terms of a Second Amended and Restated
Credit Agreement to be entered into among the Parent, the Agent and the
Lender(s) listed therein in substantially the form submitted to the directors of
the Corporation (the "New Credit Agreement"); and
--------------------
WHEREAS, it is a condition precedent to the effectiveness of the New
Credit Agreement that the Partnership (together with the Parent and certain
other subsidiaries of the Parent) enter into an Agreement Regarding Security
Documents, in substantially the form presented to the directors of the
Corporation (the "Agreement Regarding Security Documents"), pursuant to which
--------------------------------------
the Partnership will consent to the execution, delivery and performance of the
New Credit Agreement and agree that the New Credit Agreement will continue to be
entitled to the benefits and security of the Guaranty and Security Documents
executed by the Partnership; and
G-3-3
<PAGE>
WHEREAS, it is to the direct benefit of and is in the best interest of
the Partnership that the Parent be able to continue to obtain loans or letters
of credit from the Lender(s) under the New Credit Agreement; and
WHEREAS, the Board of Directors of the Corporation therefore deems it
to be in the best interest of the Partnership and its partners that the
Partnership enter into and execute the Agreement Regarding Security Documents;
NOW, THEREFORE, BE IT RESOLVED, that the New Credit Agreement and the
aforesaid Agreement Regarding Security Documents, together with all transactions
contemplated thereby, are hereby approved in their entirety; and
FURTHER RESOLVED, that the president or any vice president of the
Corporation are each hereby authorized and directed to execute and deliver on
behalf of the Partnership the aforesaid Agreement Regarding Security Documents,
in substantially the same form as reviewed by the Board of Directors of the
Corporation, but with such changes or additions thereto as the president or any
vice president shall deem to be in the best interest of the Partnership (the
president's or any vice president's execution of the same containing any such
changes or additions being deemed to evidence conclusively his or her decision
that such changes or additions are in the best interest of the Partnership); and
FURTHER RESOLVED, that the aforesaid officers of the Corporation are
hereby severally authorized and directed to do or cause to be done all such
other acts and things on behalf of the Partnership or the Corporation (including
the execution and delivery of such other documents, security agreements,
instruments, financing statements, certificates and agreements) as any such
officer may deem necessary or desirable in order to carry out and effectuate
fully the purposes of the foregoing resolutions; and
FURTHER RESOLVED, that any of the foregoing actions which may already
have been taken by any of the aforesaid officers of the Corporation are hereby
ratified and approved.
G-3-4
<PAGE>
EXHIBIT H-1
COMPLIANCE CERTIFICATE
This Certificate is delivered pursuant to Section 10.01 of that
certain Second Amended and Restated Credit Agreement, dated as of
______________, 1996, among ROPER INDUSTRIES, INC., a Delaware corporation (the
"Borrower"), and NATIONSBANK, N.A. (SOUTH) and any other banks or other lending
--------
institutions who are or may become signatories thereto (being herein
collectively referred to as the "Lenders"), and NATIONSBANK, N.A. (SOUTH), as
-------
agent for the Lenders (the "Agent") (said Second Amended and Restated Credit
-----
Agreement, as the same may be amended or supplemented from time to time, being
herein referred to as the "Credit Agreement"). All capitalized terms used in
----------------
this Certificate which are defined in the Credit Agreement are used in this
Certificate with the same meanings given such terms in the Credit Agreement.
I hereby certify, to the best of my knowledge and belief and in my
representative capacity on behalf of the Borrower, to the Lenders and the Agent
as follows:
1. I am the duly qualified and acting president or chief financial
officer of the Borrower.
2. I have prepared and reviewed the financial statements of the
Borrower and its Subsidiaries as of and for the period ending
____________________, 19___, true, complete and correct copies of which are
attached hereto as Exhibit 1 (collectively, the "Financial Statements").
--------- --------------------
3. The Financial Statements were prepared in accordance with GAAP
consistently applied and fairly present the financial position and results of
operations of the Borrower and its Subsidiaries as of and for the period ending
on the date of the Financial Statements (subject to normal year-end
adjustments).*
4. At no time during the period covered by the Financial Statements
did the Borrower use any of the proceeds of any of the Loans or Letters of
Credit in violation of any of the applicable use limitations set forth in
Sections 2.01(b), 3.01(b), 4.01(b), 5.01(b) or 6.01(a) of the Credit Agreement,
except as described on Exhibit 2 attached hereto.**
---------
5. I further certify that as of, and for the period ending on, the
date of the Financial Statements, and except as may be disclosed on Exhibit 3
---------
attached hereto:
(a) Borrower's Current Ratio was not less than 1.5 to 1.0 as of
the end of such period;
(b) Borrower's Tangible Net Worth as of the end of such period
was not less than [insert appropriate minimum required Tangible Net
Worth for such period based on the formula in Section 10.09(b) of the
Credit Agreement]
H-1-1
<PAGE>
(c) Borrower's Debt Service Coverage Ratio, as determined at the
end of such period based on the 4-quarter period ending on such date,
was not less than 1.5 to 1.0;
(d) Borrower's Senior Funded Debt Ratio as of the end of such
period was not more than 50%; and
(e) Borrower's Funded Debt Ratio, as determined at the end of
such period based on the 4-quarter period ending on such date, was not
greater than 3.5 to 1.0.
Attached hereto as Exhibit 3 are the calculations required to
---------
establish whether or not the Borrower was in compliance, as of and for the
period ending on the date of the Financial Statements, with the covenants in the
Credit Agreement which are summarized in items (a) through (e) above.
6. No Default or Event of Default has occurred and is continuing as
of the date of this Certificate other than those Defaults or Event of Defaults
(if any) which are described on the aforesaid Exhibits 2 and 3 or which are
----------------
described on Exhibit 4 attached hereto.
---------
7. Borrower's Funded Debt Ratio for its fiscal quarter ending on the
date of the Financing Statements was ___ to 1.0.***
I represent the foregoing information to be true and correct to the
best of my knowledge and belief and I execute this Certificate in my
representative capacity on behalf of the Borrower as of this ___ day of
____________________, 19___.
_______________________________________
Name:__________________________________
Title:_________________________________
_________________________________
* Item 3 to be given only with Compliance Certificates which accompany
quarterly financial statements.
H-1-2
<PAGE>
** Item 4 to be given only with Compliance Certificates which accompany
financial statements which relate to periods in which the Lenders'
Credit Commitments remain in effect.
*** Item 7 to be given only with Compliance Certificates which accompany
quarterly financial statements.
H-1-3
<PAGE>
EXHIBIT H-2
PERMITTED ACQUISITION CERTIFICATE
This Certificate is delivered pursuant to Section 11.06(v) of that
certain Second Amended and Restated Credit Agreement, dated as of
__________________, 1996, among ROPER INDUSTRIES, INC., a Delaware corporation
(the "Borrower"), and NATIONSBANK, N.A. (SOUTH), and any other banks or other
--------
lending institutions who are or may become signatories thereto (being herein
collectively referred to as the "Lenders"), and NATIONSBANK, N.A. (SOUTH), as
-------
agent for the Lenders (the "Agent") (said Second Amended and Restated Credit
-----
Agreement, as the same may be amended or supplemented from time to time, being
herein referred to as the "Credit Agreement"). All capitalized terms used in
----------------
this Certificate which are defined in the Credit Agreement are used in this
Certificate with the same meanings given such terms in the Credit Agreement.
I hereby certify, to the best of my knowledge and belief and in my
representative capacity on behalf of the Borrower, to the Lenders and the Agent
as follows:
1. I am the duly qualified and acting president, chief financial
officer or treasurer of the Borrower.
2. On _____________________, 19___, Borrower intends to acquire a
new or additional Subsidiary. The name of such new or additional Subsidiary
will be ___________________________________________________________ and it will
become a new or additional Subsidiary by way of the acquisition on such date by
[Borrower] [Borrower's Subsidiary ____________________] of [_____% of the
outstanding capital stock] [all or substantially all of the assets of] such new
or additional Subsidiary.
3. The acquisition described in paragraph 2 above (the
"Acquisition") will constitute a Permitted Acquisition.
-----------
4. The total consideration paid for the Acquisition will not exceed
the lesser of (x) $55,000,000 or (y) $____________________ (which equals eight
times the $_____________________ Verifiable EBIDTA of the entity being acquired)
and not more than $55,000,000 of such consideration shall be financed with
proceeds of the Loans.*
5. Any new or additional Subsidiary so acquired will be [a Domestic
Subsidiary engaged in substantially the same business in which the Borrower and
its other Subsidiaries are engaged in at the time or such Acquisition or in such
other types of business which are reasonably related or incidental thereto] [a
Foreign Subsidiary engaged in substantially the same business in which the
Borrower and other Subsidiaries are engaged in at the time of such Acquisition
or in such other types of business which are reasonably related or incidental
thereto.]**
______________________
* Clause (y) will not apply to the acquisition of Gatan International, Inc.
** Item 5 to be given only when any new or additional Subsidiary is to be
acquired in connection with the Acquisition.
H-2-1
<PAGE>
6. After giving effect to the Acquisition, the cumulative purchase
price for all acquisitions made by Borrower and its Subsidiaires of entities
which become Foreign Subsidiaries after the date hereof will not exceed
$37,500,000 in the aggregate.***
7. After giving effect to the Acquisition, the Borrower will be in
compliance with the financial covenants set forth in Section 10.09 of the Credit
Agreement and attached hereto as Exhibit 1 are financial projections for the
---------
Borrower and its Subsidaries which give effect to the Acquisition and
demonstrate such compliance.
8. Attached hereto as Exhibit 2 are copies of financial statements
---------
(including balance sheets and income statements) for the aforesaid new or
additional Subsidiary for its most recently-completed three (3) fiscal years
(or, if such Subsidiary has not been in existence for three complete fiscal
years, for each of the fiscal years in which it has been in existence).
I represent that the foregoing information to be true and correct to
the best of my knowledge and belief and I execute this Certificate in my
representative capacity on behalf of the Borrower as of this ____ day of
____________________, 19____.
Name:________________________________
Title:_______________________________
____________________
*** Item 6 to be given only when any new or additional Foreign Subsidiary is
to be acquired in conncection with the Acquisition.
H-2-2
<PAGE>
EXHIBIT I
ASSIGNMENT AND ACCEPTANCE AGREEMENT
THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT is made as of
_________________, 19___, between ____________________, a ____________________
(the "Assignor") and ____________________________, a __________________ (the
---------
"Assignee"), which parties, for good and valuable consideration, do hereby agree
--------
as follows with reference to the Credit Agreement described below:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
(i) all of the Assignor's rights and obligations under the Credit Agreement, the
Assignor's Notes and the other Credit Documents, (ii) the Assignor's
Commitments, and (iii) the Assignor's Loans, all as of the Effective Date (as
defined below), constituting as of such Effective Date an interest equal to (i)
____% of the Assignor's Commitments and Loans made by Assignor and outstanding
on the Effective Date.
2. The Assignor: (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is, to the best of the Assignor's knowledge, free and clear of any
adverse claim; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Credit Document
or with respect to the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any of the other
Credit Documents; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
other Credit Parties or the performance or observance by the Borrower or the
other Credit Parties of their respective obligations under the Credit Agreement
or the other Credit Documents.
3. The Assignee: (i) has received a copy of the Credit Agreement,
the Assignor's Notes and the Security Documents, together with copies of such
financial statements and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance Agreement; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement or the other Credit Documents; (iii) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement as are delegated to the Agent by the
terms thereof, together with such powers as are incidental thereto; (iv) agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of the Credit Agreement are required to be performed by it as a
Lender; and (v) specifies as its address and telecopier number for notices the
address and telecopier number set forth beneath its name on the signature pages
hereof.
I-1
<PAGE>
4. The effective date for this Assignment and Acceptance
Agreement shall be ____________________, 19__ (the "Effective Date"), which date
--------------
is no less than five (5) Business Days after the date hereof. Following the
execution of this Assignment and Acceptance Agreement, it will be delivered to
the Borrower and to the Agent for acceptance by the Borrower and the Agent
pursuant to Section 14.05 of the Credit Agreement.
5. As of the Effective Date, and upon acceptance by the Assignee,
to the extent provided in this Assignment and Acceptance Agreement and to the
extent of the rights assigned hereunder, (i) the Assignee shall be a party to
the Credit Agreement and have the rights and obligations of a Lender thereunder
for the benefit of the Borrower, the other Lenders and the Agent; (ii) the
Assignee shall enjoy the benefits of the Credit Documents; and (iii) the
Assignor shall, to the extent provided in this Assignment and Acceptance
Agreement, relinquish its rights and be released from its obligations under the
Credit Agreement.
6. Upon such acceptance and from and after the Effective Date,
the Agent shall make all payments under the Credit Agreement and the Notes in
respect (and to the extent) of the interest assigned hereby (including, and
without limitation, all payments of principal, interest and fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.
7. All terms used in this Assignment and Acceptance Agreement and
not otherwise defined shall have the meanings given those terms in the Second
Amended and Restated Credit Agreement (the "Credit Agreement"), dated as of
----------------
________________, 1996, among Roper Industries, Inc., NationsBank, N.A. (South)
and any banks and other lending institutions which are or may become Lenders
thereunder, and NationsBank, N.A. (South) as agent for such Lenders, as provided
in such Credit Agreement, as said agreement may be amended, supplemented or
restated from time to time.
8. This Assignment and Acceptance Agreement shall be governed by,
and construed in accordance with, the laws of the State of Georgia (without
giving affect to its conflicts of law rules.
IN WITNESS WHEREOF, the Assignor and Assignee have caused their
respective duly authorized officers to execute this Assignment and Acceptance
Agreement on their behalf as of the day and year first above set forth.
[ASSIGNOR]
By:___________________________________________
Title:______________________________________
(Signatures continued on following page)
I-2
<PAGE>
(Signatures continued from preceding page)
[ASSIGNEE]
By:__________________________________________
Title:_____________________________________
Address and Telecopier Number:
_____________________________________________
_____________________________________________
Attn:________________________________________
Telecopier:__________________________________
Accepted this _____ day
of ______________, 19__.
ROPER INDUSTRIES, INC.
By:______________________________
Title:_________________________
NATIONSBANK, N.A. (SOUTH), AS AGENT
By:______________________________
Title:_________________________
I-3
<PAGE>
SCHEDULE 9.01
-------------
SCHEDULE OF SUBSIDIARIES
------------------------
ROPER INDUSTRIES, INC.
- ----------------------
Amot Controls Corporation
Amot Investment Ltd.
Compressor Controls Corporation
Cornell Pump Manufacturing Corporation
Integrated Designs, Inc.
Prex Corporation
Roper Holdings, Inc.
Roper Industrial Products Investment Company
Roper Industries (Europe) Ltd.
Roper International, Inc.
Roper International Products, Ltd. (f/k/a Compressor COntrols International,
Ltd.)
Roper Pump Company
Uson Corporation
AMOT CONTROLS CORPORATION
- -------------------------
Amot/Metrix Investment Company, Inc.
Amot Sales Corporation
Metrix Instrument Co., L.P.
AMOT INVESTMENT LTD.
- --------------------
Amot Controls, Ltd.
Amot Controls, S.A.
COMPRESSOR CONTROLS CORPORATION
- -------------------------------
Compressor Controls Corporation - CIS/EE
Integrated Designs L.P.
Prex L.P.
Uson L.P.
CORNELL PUMP MANUFACTURING CORPORATION
- --------------------------------------
Cornell Pump Company
ISL INTERNATIONAL, INC.
- -----------------------
ISL North America, Inc.
ISL Holdings, S.A.
ISL HOLDINGS, S.A.
- ------------------
Instrumentation Scientifique de Laboratoire
("ISL, S.A.")
ISL, S.A.
- ---------
ISL Instrumentation, Limited
ISL South America Representacoes, Ltd.
<PAGE>
SCHEDULE 9.03
-------------
ACTIONS PENDING
---------------
1. Borrower and its Subsidiaries, in the ordinary course of business, are the
subject of, or are parties to, various pending or are parties to, various
pending or threatened legal actions, including those pertaining to product
liability. As of May 1, 1996, such law suits consisted of the following:
Erickson Transportation v. Roper Industries, Inc.
-------------------------------------------------
Timothy Dorl v. Roper Industries, Inc.
--------------------------------------
Norman Langreder v. Roper Properties, Inc.
------------------------------------------
Donna Nichols v. Roper Whitney, Inc., et. al.
---------------------------------------------
Valero Petroleum Company v. Compressor Controls Corporation
-----------------------------------------------------------
Kimberly Lusk v. Roper Whitney Company
--------------------------------------
Gonzales v. Roper Whitney Co., et. al.
--------------------------------------
Morabito v. Roper Whitney Co., et. al.
--------------------------------------
Patel v. Roper Industries, Inc.
-------------------------------
Sierra v. Roper Properties, Inc.
--------------------------------
Thomas v. Roper Pump Company
----------------------------
Borrower believes that it is adequately insured for its liability relating
to the above litigation and that it has established adequate reserves on
its books to cover any deductibles relating to such insurance.
Consequently, Borrower believes that the above-described litigation will
not have a material adverse effect on Borrower and its subsidiaries'
financial condition taken as a whole.
<PAGE>
SCHEDULE 9.03
-------------
ACTIONS PENDING
---------------
1. Borrower and its Subsidiaries, in the ordinary course of business, are the
subject of, or are parties to, various pending or are parties to, various
pending or threatened legal actions, including those pertaining to product
liability. As of May 1, 1996, such law suits consisted of the following:
Erickson Transportation v. Roper Industries, Inc.
-------------------------------------------------
Timothy Dorl v. Roper Industries, Inc.
--------------------------------------
Norman Langreder v. Roper Properties, Inc.
------------------------------------------
Donna Nichols v. Roper Whitney, Inc., et. al.
---------------------------------------------
Valero Petroleum Company v. Compressor Controls Corporation
-----------------------------------------------------------
Kimberly Lusk v. Roper Whitney Company
--------------------------------------
Gonzales v. Roper Whitney Co., et. al.
--------------------------------------
Morabito v. Roper Whitney Co., et. al.
--------------------------------------
Patel v. Roper Industries, Inc.
-------------------------------
Sierra v. Roper Properties, Inc.
--------------------------------
Thomas v. Roper Pump Company
----------------------------
Borrower believes that it is adequately insured for its liability relating
to the above litigation and that it has established adequate reserves on
its books to cover any deductibles relating to such insurance.
Consequently, Borrower believes that the above-described litigation will
not have a material adverse effect on Borrower and its subsidiaries'
financial condition taken as a whole.
<PAGE>
SCHEDULE 9.06
-------------
TAXES
-----
None.
<PAGE>
SCHEDULE 9.08
-------------
ERISA PLANS
-----------
Roper Industries, Inc. and Subsidiaries
Response to Section 8.08 of Credit Agreement
The following exist at the noted company:
Roper Industries, Inc. (Corporate) and Roper Pump Company
- ---------------------------------------------------------
Roper Industries, Inc. Employee Health Benefits Plan
Roper Industries, Inc. Group Life Insurance Plan
Roper Industries, Inc. Employee Benefit Plan
Roper Industries, Inc. Long Term Disability Plan
Roper Industries, Inc. Employees' Retirement Savings Plan (Also covers all
employees of all employing Roper Industries, Inc. U.S. subsidiaries listed in
Schedule 8.01)
Cornell Pump Manufacturing Corporation and Cornell Pump Company
- ---------------------------------------------------------------
Good Health Plan of Oregon
Roper Industries, Inc. Employees Health Benefits Plan (only for
Retirees)
Great West Group Life Insurance
Great West Long Term Disability
United of Omaha Supplemental Life Insurance
SelfInsured/Administered Group Dental Plan
AMOT Controls Corp, and AMOT Sales Corporation
- ----------------------------------------------
Group Dental Plan
Employee Benefits Plan (Roper Indemnity Medical Plan)
Kaiser Foundation Health Plan
Supplemental Sick Leave Policy
Group Long-Term DIsability
Group Life and Accidental Death and Dismemberment Insurance
IAM National Pension Fund
AMOT's Union employees participate in the union plan
<PAGE>
Compressor Controls Corporation and Compressor Controls Corporation - CIS/EE
- ----------------------------------------------------------------------------
Group Major Medical Plan
Group Dental Plan
Group Life Insurance Plan
- Life/AD & D
- Dependent Life
Short-Term Disability
Flexible Spending
- Medical
- Child Care
Integrated Designs L.P.
- -----------------------
Group Major Medical Plan (Met-Life)
Group Term Life Insurance
Group Dental Plan
ISL North America, Inc.
- -----------------------
Group Major Medical Plan (Blue Cross - Blue Shield)
Group Dental
Group Term Life Insurance
Group Short-Term Disability
Uson L.P. and Prex L.P.
- -----------------------
Group Major Medical Plan
Group Term Life Insurance
Metrix Instrument Co., L.P.
- ---------------------------
Group Major Medical Plan
Group Term Life Insurance
Group L.T.D.
<PAGE>
SCHEDULE 9.12
-------------
DISCLOSURE SCHEDULE
-------------------
COMPRESSOR CONTROLS CORPORATION
U.S. Patents
- ------------
3,951,586
3,979,655
3,994,623
4,046,490
4,102,604
4,119,391
4,142,838
RE 30329
4,486,142
4,494,006
4,640,665
4,949,275
United States Applications
- --------------------------
07/902,066
08/225,448
08/287,488
08/395,599
08/398,001
Foreign Patents
- ---------------
1,040,051 (Canada)
1,059,760 (Canada)
1,108,946 (Canada)
1,109,036 (Canada)
1,256,835 (Canada)
1,291,737 (Canada)
EPC: No. 0002360 (France, Germany, Switzerland, U.K.)
1,515,081 (U.K.)
1,494,683 (Japan)
Foreign Applications
- --------------------
EPC No. 89302550-2 (Belgium, France, West Germany, Italy, Netherlands, Spain,
Switzerland, U.K.)
EPC No. 92201362.8 (Belgium, France, West Germany, Italy, Netherlands, Spain,
Switzerland, U.K.)
<PAGE>
EPC No. 92201363.6 (Belgium, France, West Germany, Italy, Netherlands, Spain,
Switzerland, U.K.)
No. 89.1239 (Norway)
No. 89/7281 (South Africa)
No. 126095/1987 (Japan)
U.S. Trademarks
- ---------------
"Miscellaneous Design" 1,221,255
"AIR MISER" 1,396,559
"SAFETY ON" 1,398,132
"RECYCLE TRIP" 1,398,133
Licensing Agreements
- --------------------
Agreement with Honeywell Inc.
(See attached summary - Exhibit A)
Agreement for computer software
(See attached copy - Exhibit B)
Agreement with Honeywell, Inc. through the Process Automation Center Europe
(See attached copy - Exhibit C)
Agreement with Honeywell, Inc. through its Industrial Automation and Control
Division
(See attached copy - Exhibit D)
ROPER HOLDINGS, INC.
Patents
- -------
None
U.S. Trademarks
- ---------------
"Cornell" 927,225
"Roper" 1,272,427
AMOT CONTROLS CORPORATION
U.S. Patents
- ------------
3,985,337
5,072,748
U.S. Trademarks
- ---------------
"AMOT" 662,217
"Vibro-guard 978,112
<PAGE>
Foreign Trademarks
- ------------------
"AMOT" 766,915 (U.K.)
"AMOT" 590,724 (Japan)
"AMOT" 496,660 (Italy)
"AMOT" 394,845 (Benelux)
"AMOT" 1,311,740 (France)
"AMOT" 326,787 (Switzerland)
"SPOT" 352,452 (U.K.)
ROPER INDUSTRIES, INC.
U.S. Patents
- ------------
4,523,900
Foreign Patents
- ---------------
1,224,969
U.S. Trademarks
- ---------------
"Nautilis" 1,537,932
CORNELL PUMP MANUFACTURING COMPANY
U.S. Patents
- ------------
4,335,886
Licensing Agreements
- --------------------
Agreement with HUS Dickstoffpumpen A.G.
(See attached copy - Exhibit D)
INTEGRATED DESIGNS L.P.
Patents
- -------
5,316,181 (U.S.)
License Agreement
- -----------------
Agreement with Tokyo Electron Limited (See attached copy - Exhibit E)
<PAGE>
INSTRUMENTATION SCIENTIFIQUE DE LABORATOIRE
Patents Pending
- ---------------
932360 (France)
9312830 (France)
9314462 (France)
9402339 (France)
Trademarks
- ----------
"ATPEM"
1414528 (France)
1399902 (Great Britain, Northen Ireland)
814961983 (Brazil)
Trademark Office - U.S.
"ISL"
1711905 - France
589909 - International (Germany, Austria, Belgium, Spain, Italy,
Switzerland, Russia)
25.3.92 class 9.42 - Registry of Industrial Property of Spain
718892 - Canada
1511779 - Great Britain and Northen Ireland
4299078 - Japan
1818778 - U.S.
Software Registrations in France
- --------------------------------
93-36-011-00
93-38-002-00
93-39-003-00
93-40-014-00
93-42-003-00
93-43-002-00
93-45-002-00
93-46-005-00
93-48-005-00
93-49-004-00
93-50-008-00
93-52-001-00
94-02-002-00
94-03-010-00
94-06-001-00
94-09-010-00
94-10-008-00
94-14-008-00
93-50-008-00
93-49-004-01
<PAGE>
93-48-005-01
93-36-011-01
93-49-004-02
USON L.P.
Copyright Application for Series 4000 Tester User's Guide
Copyright Application for Series 4000 Tester Operations Manual
Copyright Application for Series 4000 Tester Software Version 1X52
Copyright Application for Series 4000 Tester Software Version 2X8B
Copyright Application for Tester Software Version 700A100
Trademark Intent-To-Use Application, Ser. No. 74/478,316.
METRIX INSTRUMENT CO., L.P.
U.S. Patents
- ------------
#4,504,932
U.S. Registered Trademarks
- --------------------------
"VIBRALERT" # 1,458,084
"VIBRALOG" # 1,141,254
"DATAWATCH" # 988,370
<PAGE>
CREDIT AGREEMENT SCHEDULES -
EXHIBIT A
[LETTERHEAD OF HONEYWELL APPEARS HERE]
18 June 1993
VIA DHL
- -------
Mr. John Hampal
Compressor Controls Corporation
11359 Aurora Avenue
Des Moines, Iowa 50322
U.S.A.
Subject: Representation Agreement
Dear Mr. Hampal:
Enclosed please find two (2) originals of the Representation Agreement,
which have been executed by Mr. Leopold Plattner on behalf of Honeywell. Please
have both originals initialed and signed on behalf of CCC and return one
fully-executed original to me for our files.
It has been a pleasure working with you and the other representatives of
CCC and Roper Industries throughout the negotiations on this new agreement. If
you have any questions, please do not hesitate to contact me.
Sincerely yours,
/s/ C. Lee Essrig
C. Lee Essrig
Enclosure
CC: Mr. Raf Kuppens - Honeywell Brussels
Mr. Peter Schellekens - Honeywell Brussels
<PAGE>
REPRESENTATION AGREEMENT
------------------------
This agreement (hereinafter "Agreement") made as of the 1st day of July 1993, by
and between COMPRESSOR CONTROLS CORPORATION, a corporation owned by Roper
Industries, Inc., Bogart, Georgia 30622 USA and organized under the laws of the
Sate of Iowa, having its principal place of business at 11359 Aurora Avenue,
Des Moines, Iowa 50322 USA (hereinafter "SUPPLIER"), and HONEYWELL INC., a
corporation organized under the laws of the State of Delaware, having its
principal place of business at Honeywell Plaza, Minneapolis, Minnesota 55408 and
acting through the Process Automation Centre Europe, located at 1, Avenue du
Bourget, 1140 Brussels, Belgium (hereinafter "HONEYWELL").
WITNESS THAT:
-------------
WHEREAS, SUPPLIER manufactures certain products and desires to sell such
products in the TERRITORY (as hereinafter defined): and
WHEREAS, HONEYWELL offers export assistance services and access to an
international distribution organization:
NOW THEREFORE, in consideration of the mutual convenants hereinafter contained,
the parties do hereby agree as follows:
1. DEFINITIONS
-----------
1.01 "AFFILIATE" shall mean any corporation in the TERRITORY in which
HONEYWELL owns fifty percent (50%) or more of the share capital.
1.02 "CONFIDENTIAL DISCLOSURE AGREEMENT" shall mean the agreement in
the attached Annex D.
1.03 "DISTRIBUTOR" shall mean any organization in the TERRITORY
appointed by HONEYWELL to market the PRODUCTS in one or more of
the countries in the TERRITORY.
1.04 "ENGINEERING SERVICES" shall mean consultant services, control
system design, control system specification, field engineering,
project management and documentation.
1.05 "HONEYWELL SALES ENTITY (HSE)" shall mean any of the AFFILIATES,
DISTRIBUTORS, or HONEYWELL's Regional Offices, or all of them
collectively.
1.06 "IN-WARRANTY REPAIRS" shall mean the warranty repairs of the
PRODUCTS pursuant to Section 10.02 of this Agreement or any other
PRODUCT warranty agreed to in writing between SUPPLIER and the
relevant AFFILIATE(S).
1.07 "OUT-OF-WARRANTY REPAIRS" shall mean the repair of PRODUCTS
forwarded directly or indirectly to Honeywell B.V. by end-users
in the TERRITORY after expiration of the PRODUCT warranty periods
referred to in Section 10.02 hereof.
1.08 "PRODUCTS" shall mean the products, components, and parts
manufactured or sold by SUPPLIER, or any modified versions
thereof, and listed in the attached Annex A.
Page 1
<PAGE>
1.09 "REPAIR AND SERVICES TERMS AND CONDITIONS" shall mean the terms
and conditions in Annex E, which is attached hereto and
incorporated herein.
1.10 "SERVICES" shall mean check-out, tasting, start-up,
commissioning, maintenance, and training.
1.11 "TERRITORY" shall mean the countries or areas of the world
described in the attached Annex B.
1.12 "TEST EQUIPMENT" shall mean such equipment listed in the attached
Annex F.
1.13 "U.S. LIST PRICE" shall mean SUPPLIER'S current U.S. published
list price.
2. TERM OF AGREEMENT
-----------------
2.01 This Agreement becomes effective as of the day and year written
above, ("EFFECTIVE DATE"), and shall have a term of five (5)
years from the EFFECTIVE DATE, unless terminated sooner because
of bankruptcy or insolvency of one of the parties or otherwise
pursuant to the terms hereof.
2.02 Following expiration of the initial five-year term, this
Agreement may be renewed for successive one (1)-year periods upon
the written consent of the parties given no later than ninety
days prior to the expiration of the initial five-year term, or
any subsequent one-year term, as the case may be.
3. APPOINTMENT
-----------
3.01 SUPPLIER hereby appoints HONEYWELL as its executive
representative for sale of the PRODUCTS in the TERRITORY
described in the attached Annex B, subject to the terms of this
Agreement. However, if HONEYWELL has an opportunity to sell a
complete system including PRODUCTS outside the TERRITORY,
SUPPLIER agrees to consider bundling PRODUCTS with HONEYWELL at a
discount to be negotiated on a case by case basis. The parties
agree to discuss annually whether HONEYWELL will become the
exclusive representative for sale of the PRODUCTS in any of the
following countries: Bulgaria, Czech Republic, Hungary, Poland,
Romania, Slovak Republic, and South Africa.
3.02 Unless otherwise agreed between the parties, SUPPLIER agrees
that, during the term of this Agreement, it shall make no direct
or indirect sales of PRODUCTS to customers within the TERRITORY
described in Annex B other than sales to AFFILIATES or
DISTRIBUTORS or which have been agreed to by HONEYWELL in
writing.
3.03 If SUPPLIER shall develop any new control systems products during
the term hereof, SUPPLIER shall give HONEYWELL the first option
to represent such new products in the TERRITORY, subject to the
terms of this Agreement.
Page 2
<PAGE>
4. DUTIES OF HONEYWELL
-------------------
4.01 Sales of PRODUCTS. HONEYWELL shall make its best continual,
-----------------
diligent effort to arrange for the sale and distribution of the
PRODUCTS in accordance with the terms of this Agreement.
4.02 Market Strategies. HONEYWELL shall make its best continual,
-----------------
diligent effort to continue the implementation of market
strategies for SUPPLIER, drawn from existing data and
consultations with AFFILIATES and DISTRIBUTORS.
4.03 Advertising and Sales Promotion Support. HONEYWELL shall make
---------------------------------------
its best continual, diligent effort to include information on the
PRODUCTS, where appropriate, in HONEYWELL's own advertising and
sales promotion efforts.
4.04 Local Sales Promotion. HONEYWELL shall make its best continual,
---------------------
diligent effort to arrange with AFFILIATES and DISTRIBUTORS for
the promotion of the PRODUCTS and ENGINEERING SERVICES by their
respective sales forces.
4.05 Local Distribution. HONEYWELL shall make its best continual,
------------------
diligent effort to make arrangements with AFFILIATES and
DISTRIBUTORS for their purchase of PRODUCTS and ENGINEERING
SERVICES from SUPPLIER.
4.06 Service Support Plan. HONEYWELL shall make its best continual,
--------------------
diligent effort to cooperate with SUPPLIER to continue the
Service Support Plan for warranty service, maintenance and the
stocking of spare parts for the PRODUCTS sold in the TERRITORY.
Such Service Support shall be in accordance with the attached
Annex E.
4.07 Information/Documentation. HONEYWELL shall make its best
-------------------------
continual, diligent effort to coordinate work between SUPPLIER
and the AFFILIATES and DISTRIBUTORS to ensure communication to
SUPPLIER of product information and documentation requirements
related to this export of the PRODUCTS to the TERRITORY.
4.08 Supervision. HONEYWELL shall make its best continual, diligent
-----------
effort to monitor the PRODUCT distribution in the TERRITORY to
ensure that PRODUCT service support is adequately provided and
that customers are satisfied with the PRODUCTS, and shall
periodically report the results of such monitoring to SUPPLIER.
4.09 Staffing and Facilities. HONEYWELL will make its best
-----------------------
continual, diligent effort to maintain adequate staffing and
facilities to ensure prompt handling of inquiries, orders, and
shipments.
4.10 Each of the duties set out in this Article 4 is a material
obligation of HONEYWELL under this Agreement.
Page 3
<PAGE>
5. DUTIES OF SUPPLIER
------------------
5.01 Prospective Customer Inquiries. SUPPLIER shall refer and forward
------------------------------
promptly to the partinent AFFILIATE or DISTRIBUTOR, copying
HONEYWELL, all inquiries received from prospective customers in
the TERRITORY described in Annex B or from other parties outside
the TERRITORY described in Annex B for resale to customers in the
TERRITORY described in Annex B.
5.02 Sales Tools and Documentation. SUPPLIER shall supply HONEYWELL,
-----------------------------
free of charge, with copies of all its current and future sales
and service documentation for the PRODUCTS in reasonable
quantities, and supply key AFFILIATES and/or DISTRIBUTORS, at
SUPPLIER's cost, with video tapes, sales demonstrators and/or
simulators, in order to assist HONEYWELL in rendering services
under Section 4.03 hereof.
5.03 Spare Parts. SUPPLIER shall make its best continual, diligent
-----------
effort to maintain at all times an adequate inventory of spare
parts to satisfy service and warranty needs for the PRODUCTS.
Specifically, upon receipt of a HONEYWELL, AFFILIATE or
DISTRIBUTOR consigned spares purchase order, on which will be
listed at net price each spare part "no charge," SUPPLIER shall
expediently consign to HONEYWELL, or AFFILIATES or DISTRIBUTORS
designated as regional depots by HONEYWELL, the mutually agreed
to number of PRODUCT spare parts. Such spare parts shall be
located at such regional depots, and SUPPLIER shall bear the cost
of shipment of the spare parts to such depots. SUPPLIER shall
retain title to such spare parts until they are sold, and each
regional depot shall be responsible for management of the
inventory of consigned spare parts. In addition, SUPPLIER shall
sell spare parts for the PRODUCTS to each AFFILIATE and
DISTRIBUTOR in the TERRITORY in the amounts and at the prices and
terms defined in the Service Support Plan.
5.04 Training. SUPPLIER shall inform HONEYWELL of its existing sales
--------
and service training programs, in order to reasonably assist
HONEYWELL in developing the Service Support Plan under Section
4.06 hereof. SUPPLIER shall allow reasonable numbers of AFFILIATE
and DISTRIBUTOR personnel to attend SUPPLIER's existing standard
sales and maintenance training courses at SUPPLIER's training
location(s) tuition free. AFFILIATES and DISTRIBUTORS shall bear
all travel and living expenses of their personal related to such
training. SUPPLIER shall provide reasonable quantities of basic
PRODUCT information to DISTRIBUTORS and AFFILIATES within the
TERRITORY, as coordinated by HONEYWELL, at SUPPLIER's expense. In
addition, SUPPLIER shall reasonably supply suitable trainers, at
its own expense, to provide introductory sales and service
training to AFFILIATES and DISTRIBUTORS in the TERRITORY as
arranged by HONEYWELL.
5.05 Marketing and Technical Assistance. If marketing or technical
----------------------------------
assistance is required by AFFILIATES or DISTRIBUTORS, SUPPLIER
shall provide AFFILIATES or DISTRIBUTORS with timely and
reasonable assistance.
Page 4
<PAGE>
5.06 Business Reputation. SUPPLIER shall make its best continual,
-------------------
diligent effort to pursue a high degree of business integrity in
its dealings with customers for the PRODUCTS, and shall make
diligent and reasonable effort to protect the business reputation
of HONEYWELL in the TERRITORY. SUPPLIER shall not use the
HONEYWELL name, in its advertising or otherwise, without the
prior written consent of HONEYWELL.
5.07 Service Support Plan. SUPPLIER shall make its best continual,
--------------------
diligent effort to continue the Service Support Plan for warranty
service, maintenance, and the stocking of spare parts for the
PRODUCTS sold in the TERRITORY. Such Service Support shall be in
accordance with the attached Annex E.
5.08 Local Product Standards. SUPPLIER shall have the option, if
-----------------------
requested by customers, or to be in line with market
requirements, to modify the PRODUCTS for sale in the TERRITORY,
to comply with local product standards, and any related codes and
regulations, e.g., ISO 9000 and "CE" mark. Such modifications
shall be carried out at SUPPLIER's cost. However, if SUPPLIER
considers that the cost to comply with local product standards,
codes and regulations of any particular country in the TERRITORY
is prohibitive, the parties will in good faith discuss possible
action(s), including but not limited to the possibility of
withdrawing the PRODUCT(S) from this Agreement in that country.
Any resulting action(s) will be taken only upon mutual agreement
of the parties. In the event the parties fail to reach such
mutual agreement, SUPPLIER will have the right to withdraw its
PRODUCT from this Agreement in that country.
5.09 Export Packing. Upon request in any case, SUPPLIER shall pack
--------------
the PRODUCTS in reasonable conformity with HONEYWELL's export
crating guidelines.
5.10 Interface. SUPPLIER shall maintain the ability of the PRODUCTS
---------
to interface with the HONEYWELL TDC 3000 systems by continuing to
support and provide as a standard PRODUCT the protocol and
database emulations for interfacing to the HONEYWELL TDC 3000
system. HONEYWELL shall execute the Multivendor Interface Program
test procedures in order to determine whether the PRODUCTS can be
certified as being compatible with the TDC 3000 system.
5.11 Integration. HONEYWELL and SUPPLIER will cooperate to endeavor
-----------
to provide totally integrated solutions to the market and to
jointly define features that could be placed into PRODUCTS that
might improve or enhance the offering in the marketplace.
5.12 Each of the duties set out this Article 5 are material
obligations of SUPPLIER under this Agreement.
Page 5
<PAGE>
6. BUSINESS PLAN
-------------
6.01 The parties shall jointly develop in good faith a five (5)-year
strategic plan and a separate yearly operational plan which includes
annual growth rate and sales goals for each AFFILIATE. The parties
shall jointly review the results of the annual plan at least two (2)
times per year. If the abovementioned goals are not met, the paries
shall make diligent, good faith effort to agree on solutions to the
failure to meet goals and actions necessary to achieve them.
6.02 Beginning in 1994, SUPPLIER shall implement a calendar year-end bonus
to regard HONEYWELL for achieving TERRITORY-wide sales growth.
SUPPLIER agrees to pay a five percent (5%) bonus on the then current
U.S. LIST PRICE OF PRODUCTS sold by HONEYWELL in any calendar year
where total sale of PRODUCT and ENGINEERING SERVICES exceed the
growth rate that has been mutually agreed upon in the operational
plan developed pursuant to Section 6.01 above.
7. COMPENSATION
7.01 Fee. In compensation for HONEYWELL'S services provided under this
---
Agreement, SUPPLIER shall pay HONEYWELL a basic fee equal to 5% of
U.S. list prices on sales to HSE's. The 5% fee shall terminate
beginning in 1994.
7.02 Manner of Payment. SUPPLIER shall pay such fees to HONEYWELL on all
-----------------
sales of PRODUCTS by SUPPLIER to HSE's or other direct or indirect
sales to customers in the TERRITORY, within thirty (30) days after
the end of each month during which payment for such sales is received
by SUPPLIER. Unless otherwise agreed to by HONEYWELL, all payments to
HONEYWELL, shall be in U.S. dollars, and shall be accompanied by a
statement and copies of related invoices.
invoices.
8. PRODUCT PRICES
--------------
8.01 Beginning in 1994, SUPPLIER shall offer the products and ENGINEERING
SERVICES for sale to HSE's in the TERRITORY described in Annex B, at
U.S. LIST PRICE less a discount of thirty-seven and one-half percent
(37.5%) on PRODUCTS and less a discount of ten percent (10%) on
ENGINEERRING SERVICES. Additional discounts, for strategic purposes,
shall be considered by the parties on a project-by-project basis.
PRODUCT prices shall be effective for one calendar year commencing
with January 1st of the year in which this Agreement becomes
effective. For future calendar years, SUPPLIER shall give HONEYWELL
one hundred twenty (120) days prior written notice of any changes to
the PRODUCT prices. Any price increase shall not exceed the annual
increase in the U.S. Producers Price Index, as published by the U.S.
Government, plus three (3) percentage points. Notwithstanding the
above, SUPPLIER shall have the right to increase prices in excess of
the U.S. Producers Price Index plus three (3) percentage points in
the event of extraordinary cost increase(s). Any increase in price
shall apply only to new orders issued to SUPPLIER on or after the
effective date of such increases. AFFILIATE and DISTRIBUTORS shall
have the sole right to establish PRODUCT resale prices in the
TERRITORY.
Page 6
<PAGE>
8.02 For sales of PRODUCTS and related ENGINEERING SERVICES outside of
the TERRITORY for delivery within the TERRITORY, the discounts
described in Sections 8.01 shall be replaced by the Credit Split
Schedule detailed in Annex C attached hereto.
8.03 Should SUPPLIER sell ENGINEERING SERVICES directly to customers
within the TERRITORY described in Annex B, SUPPLIER will pay the
HSE affected a fee equal to ten percent (10%) of the price of any
such ENGINEERING SERVICES.
8.04 The parties agree that there shall be a mechanism for credit
splits between HSEs and between HSE's and non-HSEs, as detailed
in Annex C attached hereto.
9. PAYMENT
-------
9.01 Unless otherwise agreed to by the parties, payments for the
PRODUCTS shall be made in United States currency to a bank or
banks designated by SUPPLIER. The total amount of invoices
related to the PRODUCTS sold hereunder shall be paid within sixty
(60) days after the receipt of the invoice, or after the shipment
date stated on the bill of lading or airway bill, whichever is
later.
10. WARRANTIES
----------
10.01 Warranty of Title. SUPPLIER warrants that the AFFILIATES and
-----------------
DISTRIBUTORS shall acquire good and clear title to the PRODUCTS,
free and clear of all liens and encumbrances.
10.02 Product Warranty. Supplier warrants to HONEYWELL, the AFFILIATES
----------------
and DISTRIBUTORS and their customers that the PRODUCTS, spare
parts, and any standard and non-standard PRODUCTS delivered
hereunder, shall be free from defects in design, material and
workmanship and shall conform to SUPPLIER's approved product
design specifications for a period of twelve (12) months
following installation of the PRODUCTS, or eighteen (18) months
following shipment form SUPPLIER'S factory, whichever occurs
earlier.
10.02.01 If SUPPLIER receives prompt written notice that a PRODUCT does
not conform to the warranty specified above, and such notice to
SUPPLIER stating the date of the defect and serial number, if
any, for such PRODUCTS, SUPPLIER shall supply to such party free
of charge, CIP, HONEYWELL-designated premises, the parts
necessary to repair or replace the defective PRODUCT, or parts
thereof. In the event of any failure of a product to conform to
the above warranty, SUPPLIER's sole, full and complete obligation
shall be to repair or replace the defective product. SUPPLIER
shall also give HONEYWELL, the AFFILIATES and DISTRIBUTORS, and
their customers the benefit of whatever warranty SUPPLIER
receives with respect to parts manufactured by others, SELLER's
warranty provided above shall not extend to PRODUCTS which have
been modified, altered, or reworked to the degree not
contemplated for and their intended use, or subjected to misuse,
neglect, or improper maintenance or installation. THE ABOVE
WARRANTY OF SUPPLIER BE THE SOLE AND EXCLUSIVE WARRANTY OF
SUPPLIER AND IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED
OR STATUTORY.
Page 7
<PAGE>
IN NO EVENT SHALL SUPPLIER BE LIABLE UNDER THE ABOVE WARRANTY FOR
SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OR LOSS OF PROFITS.
10.02.02 Repair or replacement of defective parts returned after the
warranty period shall be charged for by SUPPLIER at SUPPLIER's
list repair or replacement prices for its most favored customer
and AFFILIATES and DISTRIBUTORS shall pay for all shipping,
customs and clearance charges arising from the shipment of such
replacement parts.
10.03 If the rate of occurrence of defective PRODUCTS exceeds 2% of
PRODUCTS purchased hereunder within any one year period,
HONEYWELL may give written notice to SUPPLIER, and SUPPLIER shall
use its best efforts to remedy the defect, or if necessary,
redesign the PRODUCT.
11. SPARE PARTS
-----------
11.01 SUPPLIER shall maintain availability of spare parts for all
PRODUCTS (on a functional equivalent basis) for a period of ten
(10) years after SUPPLIER has discontinued the PRODUCTS to which
they relate.
12. HONEYWELL PRODUCTS
------------------
12.01 HONEYWELL shall sell the following HONEYWELL products to SUPPLIER
for resale to customers of SUPPLIER:
ST 3000 Series 100 Transmitters, ST 3000 Series 600 Transmitters,
ST 3000 Series 900 Transmitters, and STT 3000 Transmitters.
HONEYWELL's standard terms and conditions shall apply to the sale
of the above-listed HONEYWELL products to SUPPLIER. In addition,
HONEYWELL shall provide a discount which is equivalent to the
discount SUPPLIER is giving to HSE's on the PRODUCTS under this
Agreement.
13. CONFIDENTIALITY
---------------
13.01 In connection with the distribution of the PRODUCTS and
ENGINEERING SERVICES by HONEYWELL, it is understood that certain
information considered proprietary by SUPPLIER and HONEYWELL will
be disclosed. SUPPLIER and HONEYWELL desire that such information
be maintained in confidence. Accordingly, SUPPLIER and HONEYWELL
shall comply with the Confidential Disclosure Provisions,
attached hereto as Annex D and incorporated herein.
14. LIMITATION OF LIABILITY
-----------------------
14.01 Product Claims. SUPPLIER agrees to indemnify and hold HONEYWELL,
---------------
AFFILIATES, DISTRIBUTORS, their agents and employees harmless for
any bodily injury or property damage, loss or claims, arising out
of the sale or distribution of the PRODUCTS hereunder, including
such claims based on breach of SUPPLIER's product warranty in
Section 10.02 hereof, except for such claims which are based on
such indemnified parties' own acts or omissions (other than
resale or distribution of the PRODUCTS.) Such indemnification and
hold harmless agreement shall specifically include, but shall not
be limited to, third party actions brought by customers. Such
indemnification shall include the expenses of the defense by
HONEYWELL, AFFILIATES or DISTRIBUTORS against any suit or claim
Page 8
<PAGE>
against any of them alleging any such loss, claim or damages, and
shall include reasonable attorney's fees expended in such
defense.
14.02 Patent Infringement Claims. SUPPLIER shall, at its own expense,
--------------------------
defend any suit instituted against HONEYWELL, AFFILIATES,
DISTRIBUTORS, or their customers which is based on an allegation
that any PRODUCTS sold or transferred by SUPPLIER hereunder
constitute an infringement of patents, trademarks, or copyrights.
It shall indemnify HONEYWELL, AFFILIATES, DISTRIBUTORS and their
customers against any costs of settlement or any award of damages
and costs, including attorneys fees, made against them by a final
judgment of a court of last resort, if it is determined therein
that any such PRODUCTS constitute an infringement of any patents,
trademarks or copyrights, provided that such parties give
SUPPLIER immediate notice, in writing, of any notice or claim of
infringement and permit SUPPLIER, through SUPPLIER's counsel, to
defend the same, and give all available information, assistance
and authority pursuant to procedural requirements of such
countries to enable SUPPLIER to assume such defense.
14.03 SUPPLIER shall have control of the defense of any such suit,
including appeals from any judgment therein and any negotiations
for the settlement or compromise thereof with full authority to
enter into a binding settlement or compromise. In the event that
such PRODUCTS are held to constitute infringement and their use
is enjoined, SUPPLIER shall, at its option and expense,
(a) procure for HONEYWELL, AFFILIATES, DISTRIBUTORS or their
customers the right to continue using such PRODUCTS so that
they no longer infringe, or
(b) modify such PRODUCTS, such that they are non-infringing, or
(c) accept the return of infringing PRODUCTS and refund all
payments associated therewith.
14.04 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY
INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES RELATING TO OR
ARISING OUT OF THE SALE OF PRODUCTS OR THIS AGREEMENT.
15. TERMINATION FOR CAUSE
---------------------
15.01 If either party to this Agreement should breach any material
obligation hereunder, the injured party may give written notice
to the defaulting party specifying the respect in which such
party has breached the Agreement. If such breach is not remedied
within sixty (60) days after such notice, the injured party may,
by written notice to the defaulting party, terminate this
Agreement, effective immediately.
16. DUTIES UPON TERMINATION
-----------------------
16.01 After termination or expiration of this Agreement, for whatever
reason, SUPPLIER shall continue to supply spare parts to
AFFILIATES and DISTRIBUTORS in quantities sufficient to allow
them to fulfill warranty and maintenance obligations to their
customers, at prices no higher than SUPPLIER's prices to its most
favored customer.
16.02 After termination or expiration of this Agreement, for whatever
reason, SUPPLIER shall re-purchase from AFFILIATES and
Page 9
<PAGE>
DISTRIBUTORS their inventory of the PRODUCTS, at the original
SUPPLIER price.
17. AGREEMENT NOT TO RECRUIT
------------------------
17.01 During the term of the Agreement and for a period of one year
from and after termination, neither party, directly or
indirectly, shall initiate recruitment into its employ, of any
employee of the other party without the prior approval of the
other party, which approval shall not be withheld unreasonably.
18. COMPETING PRODUCTS
------------------
18.01 During the Term of the Agreement, HONEYWELL agrees not to engage
in the business of selling products or applications which would
directly compete with the PRODUCTS in the TERRITORY.
Notwithstanding the above, nothing in this Agreement shall be
construed to prohibit or restrict HONEYWELL from engaging in:
(i) selling any products either manufactured by HONEYWELL or
sourced from another supplier where the products are
specified by the customer; or
(ii) selling any of its current products, including any
modifications, enhancements, improvements, or evolutions,
or from engaging in any activity concerning software or
(iii) selling a competing third-party product or application, or
actively and significantly promoting HONEYWELL products
within the TERRITORY, for implementation of turbocompressor
control, steam turbine control, or gas turbine control if
HONEYWELL gives SUPPLIER ninety (90) days' written notice
of its intention to promote or sell such products or
applications. SUPPLIER and HONEYWELL agree that SUPPLIER
shall have the right to terminate this Agreement ninety
(90) days after receipt of any such notification from
HONEYWELL.
18.02 The provisions of this Article 18 do not preclude HONEYWELL, but
only upon reasonable advance notice to SUPPLIER, from making any
acquisition(s) which might include competing products or
competing product applications, subject to the following:
(i) If the acquisition includes a business which at the time of
the acquisition is selling or distributing a competing
product or competing application in the TERRITORY,
HONEYWELL shall have the right to continue such selling or
distribution.
(ii) If the acquisition includes a business engaged in a
competing product or competing application but such product
or application at the time of the acquisition is not being
sold or distributed in the TERRITORY, HONEYWELL shall be
prohibited from engaging in such sale or distribution in
the TERRITORY for a period of at least one (1) year after
the acquisition is final.
Page 10
<PAGE>
(iii) Upon SUPPLIER's receipt of notice of an acquisition
pursuant to Section 18.02, SUPPLIER may terminate this
Agreement and its REPAIR AND SERVICES TERMS AND CONDITIONS
set out in ANNEX E upon thirty (30) days written notice to
HONEYWELL.
18.03 In the event of termination of this Agreement for any reason,
HONEYWELL's agreement pursuant to Section 18.01 and 18.02 not to
sell or distribute a competing product or competing application
will terminate immediately upon termination of the Agreement.
19. ASSIGNMENT
----------
19.01 No party may assign or delegate the performance of part or all of
its obligations under this Agreement without the prior written
consent of the other party, such consent not to be unreasonably
withheld; provided, that such assignment or delegation shall not
relieve the assigning party of primary responsibility for
performance of its obligations under this Agreement.
Notwithstanding the above, HONEYWELL may assign or delegate the
performance of part or all of its obligations under this
Agreement to any of its affiliates, subsidiaries, or joint
ventures, upon the same terms and conditions of the Agreement.
20. ACQUISITION OR MERGER OF PARTIES
--------------------------------
20.01 In the event that either party is acquired by or merged with an
independent third party (not involving or arising out of
insolvency), the party which is so merged and/or acquired shall
promptly notify the other party of such occurrence or impending
occurrence if it is able to do so. Should the notified party
advise within one (1) month of receipt of such notification that
such merger and/or acquisition is reasonably deemed by the
notified party to create a conflict of interest and/or to be in
any way adverse to the interests of the notified party, then the
parties shall negotiate in good faith to seek an acceptable
solution to such situation within three (3) months. Should the
parties fail to find an acceptable solution within three (3)
months from the commencement of their good faith negotiations,
the party claiming adverse impact or conflict of interest may
terminate this Agreement, subject to Article 16.
21. GOVERNING LAW
-------------
21.01 The laws of the State of Minnesota shall govern in all respects
as the validity, interpretation, construction and enforcement of
this Agreement.
21.02 Nothing contained in this Agreement shall be construed to require
either party to do, and SUPPLIER shall not, directly or
indirectly, do any act or thing that will or could constitute a
violation of the laws of any jurisdiction in the TERRITORY, or
the United States, including but not limited to, the U.S.
Foreign Corrupt Practices Act of 1977, the U.S. export control
laws, and the U.S. anti-boycott laws.
Page 11
<PAGE>
22. ARBITRATION
-----------
22.01 All disputes, controversies, or difference which may arise
between the parties, out of or in relation to or in connection
with this Agreement, or for the breach thereof which cannot be
resolved between or among the parties, shall be finally settled
by arbitration in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce by three (3)
arbitrators. Each party shall appoint one arbitrator of its
choosing, and the two arbitrators thus selected shall appoint the
third arbitrator. Such arbitration shall be held in the English
language in Des Moines, Iowa, if HONEYWELL is the demanding
party, or in Minneapolis, Minnesota, U.S.A. if SUPPLIER is the
demanding party. Either party may seek injunctive relief to
maintain the status quo pending receipt of the arbitral award .
22.02 In order to decide upon the validity, construction, performance
or termination of this Agreement, the arbitrators shall be bound
by the contractual obligations of the parties. The arbitrators
will determine their jurisdiction over persons and subject matter
if such jurisdiction is challenged by one of the parties.
22.03 The award of arbitrators shall:
(i) be rendered in writing, state the grounds of which the
arbitrators base it and determine how the costs of arbitration
shall be borne; the expenses of any party in the defense of its
interest shall be borne by such party;
(ii) be dated and notified to the parties by registered mail, return
of receipt requested, within eight (8) days from its date;
(iii) be carried out voluntarily and without delay, and, failing this,
be made enforceable through either party resorting to a competent
court of any jurisdiction; and
(iv) be final and not subject to appeal before any court, nor other
jurisdiction nor any authority.
22.04 Judgment upon the award may be entered in any court having
jurisdiction, or application may be made to such court for a
judicial acceptance of the award and an order of enforcement, as
the case may be. The parties consent to the personal and subject
matter jurisdiction and the venue of any state or federal court
of the U.S.A. for purposes of such entry of judgment upon the
award, and waive notice and service of process as otherwise
required by the laws applicable to such courts.
Page 12
<PAGE>
23. FORCE MAJEURE
-------------
23.01 Neither party shall be considered in default of performance of
its obligations under this Agreement to the extent that
performance of such obligations is delayed or prevented by force
majeure. Force majeure shall mean any event reasonably
unavoidable or beyond the control of the parties hereto,
including but not limited to, wars (declared or undeclared),
hostilities, revolutions, riots, civil commotion, national
emergency, strikes, lockouts, epidemic, fire, flood, earthquake,
force of nature, explosion, embargo, or any other Act of God, or
any law, proclamation, regulation, ordinance, or other act of any
government or government or governmental agency.
23.02 If either party to this Agreement is prevented from or delayed in
performing any of its material obligations hereunder in any
country in the TERRITORY by force majeure, it shall, within
thirty (30) calendar days after the occurrence of the event of
force majeure has become know, notify the other party of the
circumstances constituting force majeure and of the obligation
which is delayed or prevented, and the party giving the notice
shall thereupon be excused of the performance of such obligation
in such country for as long as the circumstances of force majeure
may continue. Notwithstanding Sections 18.01 and 18.02, HONEYWELL
shall have the right to distribute competing PRODUCTS in the
TERRITORY during any circumstances of force majeure which affect
SUPPLIER's performance under this Agreement.
23.03 If, in the circumstances, the event of force majeure shall
continue for a period of over six (6) months, either party shall
have the right to terminate this Agreement as to the country of
countries in the TERRITORY where performance has been so
adversely affected.
24. WAIVERS AND AMENDMENTS
----------------------
24.01 No failure or delay by either party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof,
nor shall any single or partial waiver thereof include any other
right, power or privilege.
24.02 This Agreement may not be amended, changed, discharged or
terminated except by a written document signed by duly authorized
officers of the parties.
25. NOTICES
-------
25.01 Any notice required or permitted to be given by either party to
the other shall be in writing. It shall be deemed to be effective
only when delivered to an officer of the other party at such
party's address set forth below, or at such other address later
designated in writing, or when sent to such address by certified
mail, postpaid, or by telex. When a notice is given by any other
means, it shall be effective only upon actual receipt by an
officer of the party for which it is intended.
Page 13
<PAGE>
TO SUPPLIER:
COMPRESSOR CONTROLS CORPORATION
11359 Aurora Avenue
Des Moines, Iowa 50322
U.S.A.
Attn: N. Staroselsky
and
ROPER INDUSTRIES, INC.
160 Ben Burton Road
P.O. Box 550
Bogart, Georgia 30622
U.S.A.
Attn: D. Kay
TO HONEYWELL INC. PROCESS AUTOMATION CENTRE EUROPE
1, Avenue du Bourget
1140 Brussels.
Belgium
Attn: L. Plattner
P. Schallakens
26. ENTIRE AGREEMENT
----------------
26.01 This Agreement is the entire agreement between the parties (and
AFFILIATES and DISTRIBUTORS and HSEs) and supersedes and shall be
substituted for each and every prior agreement or understanding with
respect to the PRODUCTS, whether written, oral or otherwise in effect
between HONEYWELL and SUPPLIER.
IN WITNESS WHEREOF, SUPPLIER and HONEYWELL have executed this Agreement.
COMPRESSOR CONTROLS CORPORATION HONEYWELL INC
By__________________________ By /s/ Leopold Plattner
---------------------------
Name________________________ Name LEOPOLD PLATTNER
-------------------------
Title_______________________ Title V.P.- INDUSTRIAL AUTOMATION
------------------------
+ CONTROL
----------
Date________________________ Date 17 JUNE 1993
-------------------------
Page 14
<PAGE>
ANNEX A
-------
PRODUCTS
--------
Family of products and related elements for control of axial and centrifrugal
compressors, steam turbines and gas turbines.
DESCRIPTION OF PRODUCTS
-----------------------
Series II Antisurge Controller
Series II Performance Controller
EAS - Emergency Antisurge Station
Air Miser - Unit Control
Series 3 Antisurge Controller
Series 3 Performance Controller
Series 3 Redundant Control Selector
Series 3 Air Miser Unit Controller
Series 3 Air Miser Station Controller
Series 3 Dual-loop Controller (A/A and A/P models)
Series 3 Plus Antisurge Controller
Series 3 Plus Performance Controller
Series 3 Plus Redundant Control Selector
Series 3 Plus Air Miser Unit Controller
Series 3 Plus Air Miser Station Controller
Series 3 Plus Dual-Loop Controller (A/A and A/P models)
Series 3 Plus Speed Controller
Series 3 Plus Extraction Controller
Series 3 Plus Gas Turbine Fuel Controller
CCC manufactured products within the Series 4 Turbomachinery Control System
SOFTWARE PRODUCTS
-----------------
Command
Compress
Toolbox
Simulator
Page 15
<PAGE>
ANNEX B
-------
TERRITORY
---------
All of the countries in Europe, the Middle East, and Africa except for the
following:
* Bulgaria
* Catch Republic
* Former Soviet Union
* Hungary
* Poland
* Romania
* Saudi Arabia
* Slovak Republic
* South Africa
Page 16
<PAGE>
ANNEX C
-------
CREDIT SPLIT SCHEDULE
---------------------
I. CREDIT SPLIT SCHEDULE BETWEEN HSEs
- -------------------------------------
A SCORE
- --------
This policy covers the principles for rewarding the contribution of parties
involved in international Honeywell - CCC projects.
The objective of the policy is to facilitate information sharing and
inter-affiliate cooperation on international projects with the goal to grow the
business and protect the margins.
This policy replaces the existing policy on credit splits that became effective
in January 1991.
B. POLICY PRINCIPLES
- --------------------
1. The base principle is to share the Net Contributed Margin (NCM) on
international projects between the sales entities involved. The Net
Contributed Margin will be calculated at the time of project completion.
The NCM is the difference between the Sell Price and the Project Cost. The
Project Cost includes the system cost at the location where the order is
placed: this is the system cost increased by the freight, packing,
insurance and duty costs as well as the material related overhead cost.
2. The sales entities involved need to agree on the split of the NCM before
the quotation is submitted to the Buyer. This implies that the originating
location (End-user, OEM or Engineering Contractor sales entity) send a copy
of the complete quotation to the other parties involved as soon as possible
and that sales entities will inform each other on the cost/pricing in an
"open book" fashion and share project related information.
The sharing of the NCM will be based on the contribution that each party
has provided to win the order and complete the project. The following
criteria and weight factors are the basis for the agreement on the sharing:
25% of NCM: to sales entity which has done the end-user selling effort;
25% of NCM: to sales entity which has submitted the original proposal;
25% of NCM: to sales entity which has received the order:
25% of NCM: to sales entity where the control equipment will be installed.
3. Payment of the NCM will occur as payment from the Buyer is received.
4. When the originating location (End-user, OEM or Engineering Contractor
sales entity) does not share information with the other parties involved to
apply the above policy, the NCM will be split equally between the sales
entities involved.
5. No sales participation will result in a 0 % NCM.
II. CREDIT SPLIT SCHEDULE BETWEEN HSEs AND non-HSEs
- ----------------------------------------------------
TO BE DEFINED LATER
Page 17
<PAGE>
ANNEX D
-------
CONFIDENTIAL DISCLOSURE PROVISIONS
----------------------------------
WHEREAS, HONEYWELL and SUPPLIER, for their mutual benefit, acknowledge that
certain confidential and proprietary information has been and will continue to
be disclosed to each other in connection with the distribution by HONEYWELL of
certain PRODUCTS supplied to HONEYWELL by SUPPLIER under the Agreement.
NOW, THEREFORE, both SUPPLIER and HONEYWELL agree that such confidential and
proprietary information received by one party from the other shall be governed
by the following terms and conditions:
DEFINITION
- ----------
"Proprietary Information" shall mean:
(i) that written information stated by the disclosing party in writing to be
considered as confidential and/or proprietary information, and
(ii) that orally disclosed confidential and proprietary information that is
promptly reduced to writing an stated by the disclosing party in writing to
be considered as proprietary information. Such proprietary information
shall not include confidential and proprietary information which:
(a) was in the possession of the receiving party prior to receiving it,,
whether such receipt was before or after the date of the Agreement,
from the transmitting party, or
(b) is or becomes part of the public knowledge or literature by acts other
than those of the receiving party after receiving it, or
(c) is or become available to the receiving party from a source other than
the disclosing party, or
(d) is or become available to a third party from the disclosing party on
an unrestricted basis, or
(e) is transmitted by a party after receiving notification, in writing,
from the other party that it does not desire to receive any further
proprietary information, or
(f) is transmitted after the expiration of the Representation Agreement.
HANDLING OF PROPRIETARY INFORMATION
- ----------------------------------
A party receiving Proprietary Information from the other agrees to treat such
Proprietary Information as confidential and proprietary during the term
(including any renewal or extension) of the Agreement and for a period of three
years following the termination of the Agreement, and will handle such
Proprietary Information with the same degree of care it uses to handle its own
Proprietary Information. There shall be no restrictions on the handling of
technical information which is not Proprietary Information.
Page 18
<PAGE>
LIMITATION ON DISCLOSURE
- ------------------------
During the period referenced above, a party receiving Proprietary Information
from the other shall use its best efforts to ensure that neither it nor its
agents or employees divulge such Proprietary Information in whole or in part to
any of it agents or employees who do not need access to the Proprietary
Information for performance of this Agreement or to any third party, without the
prior written consent of the transmitting party.
LIMITATION ON USE
- -----------------
During the period referenced above, a party receiving Proprietary Information
from the other shall make no commercial use, in whole or in part, of any such
Proprietary Information without the prior written consent of the transmitting
party.
MUTUAL DISCLAIMERS
- ------------------
No rights or obligations other than those expressly recited herein are to be
implied from this Agreement. In particular, no license is hereby granted
directly or indirectly under any patent now held by, or which may be obtained
by, or which is or may be licensable by either party.
Page 19
<PAGE>
U.S. ISSUED PATENTS
<TABLE>
<CAPTION>
DATE PATENT NUMBER/COUNTRY TITLE
- ---- --------------------- -----
<S> <C> <C>
04-20-76 3,951,586/U.S. Method of Operating the Heating Stoves
09-07-76 3,979,655/U.S. Control Systems for Controlling a
Dynamic Compressor
11-30-76 3,994,623/U.S. Method and Apparatus for Controlling a
Dynamic Compressor
09-06-77 4,046,490/U.S. Method and Apparatus for Antisurge
Protection of a Dynamic Compressor
07-25-78 4,102,604/U.S. Method and Apparatus for Noninteracting
Control of Dynamic Compressor Having
Rotating Vanes
10-10-78 4,119,391/U.S. Methods and Systems for Controlling the
Operation and Means for Compressing a
Fluid Medium and the Corresponding
Networks
03-06-79 4,142,838/U.S. Method and Apparatus for Preventing
Surge in a Dynamic Compressor
07-08-80 RE30329/U.S. Method and Apparatus for Antisurge
Problems of a Dynamic Compressor
12-04-84 4,486,142/U.S. Method of Autocratic Limitation for a
Controller Variable in a Multivariable
System
01-15-85 4,494,006/U.S. Method of Apparatus for Controlling a
Muticompressor Station
02-03-87 4,640,665/U.S. Method of Controlling a Muticompressor
Station
08-14-90 4,949,276/U.S. Method and Apparatus for Preventing
Surge in a Dynamic Compressor
</TABLE>
Page 20
<PAGE>
FOREIGN ISSUED PATENTS
<TABLE>
<CAPTION>
DATE PATENT NUMBER/COUNTRY TITLE
- ---- --------------------- -----
<S> <C> <C>
06-21-78 1,515,081/Great Britain Method of Operating the Heating Stoves
10-10-78 1,040,051/Canada Methods and Systems for Controlling the
Operation and Means for Compressing a
Fluid Medium and the Corresponding
Networks
08-07-79 1,059,760/Canada Method of Operating the Heating Stoves
09-15-81 1,108,946/Canada Method of Apparatus for Preventing
Surge in a Dynamic Compressor
09-15-81 1,109,036/Canada Method and Apparatus for Antisurge
Protection of a Dynamic Compressor
05-25-83 0002360/EPC-Effective Method of Automatically Limiting one
in: France, Germany Controlled Variable of a Multivariable
Switzerland, and System and Apparatus for Antisurge
United Kingdom Protection of a Dynamic Compressor
04-20-89 1494,683/Japanese Control Method and Apparatus for
Serial No. Preventing Surge in a Dynamic Compressor
07-04-89 125835/Canada Serial Method and Apparatus for Controlling a
No. Muticompressor Station
</TABLE>
Page 21
<PAGE>
ANNEX 1
-------
REPAIR AND SERVICES TERMS AND CONDITIONS
----------------------------------------
WHEREAS Honeywell B.V., an AFFILIATE of Honeywell and a company registered in
the Netherlands, and having its principal place of business at Laarderhoogtweg
18, 1101 EA Amsterdam, the Netherlands ("Honeywell B.V."), has the facilities
for testing and repairing the PRODUCTS and related spare parts at its Repair
Center in Amsterdam, and has also the organization to provide start-up,
commissioning and maintenance services as well as providing technician and
operator training for the PRODUCTS in Amsterdam or at the site;
NOW, THEREFORE, SUPPLIER hereby appoints Honeywell B.V. to be the exclusive
organization for providing SERVICES in the TERRITORY described in Annex B
(except as limited in paragraph 2.04), as well as being the exclusive test and
repair service facility for IN-WARRANTY and OUT-OF-WARRANTY REPAIRS of the
PRODUCTS in the TERRITORY described in Annex B. The parties agree that
Honeywell B.V. shall perform the SERVICES and IN-WARRANTY and OUT-OF-WARRANTY
REPAIRS of the PRODUCTS on behalf of SUPPLIER, subject to the terms and
conditions which follow.
1. SCOPE
-----
1.01 Honeywell B.V. shall carry out IN-WARRANTY REPAIRS in accordance with
the provisions of this Annex E. OUT-OF-WARRANTY REPAIRS shall be
carried out by Honeywell B.V. in accordance with Honeywell B.V.'s
terms and conditions pertaining to such repairs which are agreed to
by SUPPLER. Testing and repairs by Honeywell B.V. shall specifically
exclude any PRODUCT-related software. Honeywell B.V. shall carry out
start-up and commissioning services in accordance with Honeywell
B.V.'s terms and conditions pertaining to such SERVICES which are
agreed to by SUPPLIER.
2. RESPONSIBILITIES OF HONEYWELL B.V.
----------------------------------
2.01 Honeywell B.V. shall, in the event of any repair, test incoming
PRODUCTS, identify the hardware defects, and repair or replace, as
applicable, in accordance with agreed test procedures to be
established between Honeywell B.V. and SUPPLIER. Honeywell B.V. shall
final test the PRODUCTS and, provided final testing is completed
successfully, shall return the repaired PRODUCTS to the appropriate
AFFILIATES(S).
2.02 If, after completion of the test procedure, final testing reveals
that a PRODUCT is still defective, Honeywell B.V. shall identify such
PRODUCT as being unrepairable, and notify SUPPLIER accordingly in
writing as soon as practicably possible. With respect to IN-WARRANTY
REPAIRS within the TERRITORY, unrepairable PRODUCTS shall be returned
to SUPPLIER and exchanged, as soon as possible thereafter, by
shipment of replacement PRODUCTS by SUPPLIER to Honeywell B.V. The
cost of shipment destinations outside the TERRITORY shall be borne by
Honeywell B.V.
Page 22
<PAGE>
2.03 Unless otherwise agreed to in writing between Honeywell B.V. and
SUPPLIER, defective Air Miser specific parts, as well as EAS specific
parts and those PRODUCTS with a U.S. LIST PRICE of less than $ 220.00
(two hundred twenty U.S.Dollars), shall not be repaired but shall be
corrected by replacement only. SUPPLIER shall bear all costs
associated with the supply and shipment of such PRODUCTS with respect
to IN-WARRANTY REPAIRS.
2.04 Honeywell B.V. will provide SERVICES on request of the AFFILIATES, or
of customers of the AFFILIATES, or of customers of SUPPLIER for
PRODUCTS installed in the TERRITORY. However, SUPPLIER may provide
SERVICES when requested by Honeywell B.V. or by customers. If
SUPPLIER provides SERVICES at the request of customers, SUPPLIER
shall provide notification of such to Honeywell B.V.
2.05 Honeywell B.V. warrants to provide the SERVICES with skilled and
trained personnel and with due diligence and care. The SERVICES will
be executed based on current practices as recommended by SUPPLIER.
2.06 Honeywell B.V. will provide customers with a configuration report, a
copy of which will be sent to SUPPLIER.
2.07 Honeywell B.V. will provide maintenance services if, upon request
from customers of AFFILIATES or of SUPPLIER, a maintenance agreement
is entered into between the customer of the AFFILIATES or of SUPPLIER
and Honeywell B.V.
3. TEST EQUIPMENT
--------------
3.01 In order to enable Honeywell B.V. to carry out its responsibilities
under Paragraph 2 above, SUPPLIER shall, within sixty (60) days from
the effective date of the Agreement, consign free of charge to
Honeywell B.V., for testing purposes only, such equipment ("TEST
EQUIPMENT") as is necessary for Honeywell B.V. to fulfil the
obligations set out herein.
3.02 Honeywell B.V. shall have the right to purchase the TEST EQUIPMENT at
the price in effect on the date of consignment, less forty percent
(40%) discount, less ten percent (10%) maximum annual depreciation.
SUPPLIER will be under no obligation to replace the test equipment
purchased under section 3.01 hereof.
3.03 The TEST EQUIPMENT shall remain the property of SUPPLIER until
purchased by Honeywell B.V. Up until and including the date of such
purchase, Honeywell B.V. will service the TEST EQUIPMENT to ensure
its good working order. If it appears at any time during this period
that the TEST EQUIPMENT does not meet SUPPLIER'S approved
specifications and that Honeywell B.V. is unable to correct the
underlying defect and/or malfunction, SUPPLIER will repair or replace
the TEST EQUIPMENT at no cost to Honeywell B.V. In all events,
SUPPLIER will ensure that the TEST EQUIPMENT includes SUPPLIER'S then
latest revisions at time of purchase by Honeywell B.V.
Page 23
<PAGE>
4. RESPONSIBILITY OF CCC
---------------------
4.01 SUPPLIER shall provide Honeywell B.V., free of charge, with
reasonable quantities of up-to-date and accurate technical
information and documentation as it becomes available, including
current updates and revisions to the TEST EQUIPMENT, as may be
necessary for Honeywell B.V. to properly test and repair the
PRODUCTS.
4.02 If so requested by Honeywell B.V., SUPPLIER shall provide reasonable
tuition-free training for designated Honeywell B.V. employees at a
mutually agreed location.
4.03 Upon the effective date of the Agreement, SUPPLIER shall consign to
Honeywell B.V. at no cost an initial recommended quantity of spare
parts (the "CONSIGNMENT STOCK"), sufficient to support the PRODUCTS
to be marketed in the TERRITORY. Honeywell B.V. shall maintain and
administer the CONSIGNMENT STOCK. SUPPLIER shall ensure that the
level of such CONSIGNMENT STOCK is maintain throughout the term of
the Agreement. Honeywell B.V. shall have the right to purchase all or
part of the CONSIGNMENT STOCK at any time at the SUPPLIER list price
in effect at the time of such purchase, less forty percent (40%).
Until such time as Honeywell B.V. has exercised such purchase option,
title to the CONSIGNMENT STOCK shall remain vested in SUPPLIER.
5. CHARGES AND PAYMENT TERMS FOR IN-WARRANTY REPAIRS
-------------------------------------------------
5.01 For the warranty repair services carried out in accordance with
Paragraph 2 above, Honeywell B.V. shall charge SUPPLIER for its time
and materials, limited to ten percent (10%) of the then current U.S.
LIST PRICE of the PRODUCT, or an amount of two hundred twenty U.S.
Dollars ($220.00), whichever is greater.
5.02 Payment shall be due sixty (60) days from date of invoice.
6. CONSEQUENCES OF TERMINATION
---------------------------
6.01 The REPAIR AND SERVICES TERMS AND CONDITIONS contained in this Annex
E, shall not survive termination of the Agreement, unless otherwise
mutually agreed in writing by the parties.
6.02 Upon termination of the REPAIR AND SERVICES TERMS AND CONDITIONS
contained in this Annex E, SUPPLIER agrees, subject to agreement by
Honeywell B.V., to interview, seriously consider, and select on
merit, upon mutually agreed conditions, various individuals in the
Honeywell B.V. organization which is providing the SERVICES.
6.03 Upon termination of the REPAIR AND SERVICES TERMS AND CONDITIONS
contained in this Annex E, Honeywell B.V. shall have the option
either to purchase or to return the CONSIGNMENT STOCK referred to in
Paragraph 4.03 above.
Page 24
<PAGE>
7. NOTICES
-------
7.01 Any notices relating to the terms and conditions herein shall be
given as provided in Article 23 of the Agreement, however, such
notices to SUPPLIER shall be sent to the attention of the Director
of Product Engineering, and such notices to Honeywell B.V. shall be
sent to the attention of the Manager of the Industrial Service
Business Unit.
Page 25
<PAGE>
ANNEX F
-------
TEST EQUIPMENT
--------------
2 Series 3+ 220 VAC Controller
1 Toolbox Software Version 2.20
1 Download Software Version 1.40
1 Test Software Version Test 202
1 Speed Test Software Version Test 300
1 Series 3+ Speed Board Revision B
1 Antisurge Series 3+ Software Version 751-002
1 Performance Series 3+ Software Version 951-002
1 Dual Loop Series 3+ Software Version 851-002
1 Speed Series 3+ Software Version 1053-002
Page 26
<PAGE>
TO SUPPLIER: COMPRESSOR CONTROLS CORPORATION
11359 Aurora Avenue
Des Moines, Iowa 50322
U.S.A.
Attn: M. Staroselsky
and
ROPER INDUSTRIES, INC.
160 Ben Burton Road
P.O. Box 550
Bogart, Georgia 30622
U.S.A.
Attn: D. Key
TO HONEYWELL INC. PROCESS AUTOMATION CENTRE EUROPE
1, Avenue du Bourget
1140 Brussels.
Belgium
Attn: L. Plattner
P. Schellakens
26. ENTIRE AGREEMENT
----------------
26.01 This Agreement is the entire agreement between the parties (and
AFFILIATES and DISTRIBUTORS and HSEs) and supersedes and shall be
substituted for each and every prior agreement or understanding with
respect to the PRODUCTS, whether written, oral or otherwise in
effect between HONEYWELL and SUPPLIER.
IN WITNESS WHEREOF, SUPPLIER and HONEYWELL have executed this Agreement.
COMPRESSOR CONTROLS CORPORATION HONEYWELL INC.
By John Hampel By /s/ Leopold Plattner
---------------------------- -----------------------------
Name JOHN HAMPEL Name LEOPOLD PLATTNER
-------------------------- ---------------------------
Title Executive Vice President Title V.P-INDUSTRIAL AUTOMATION AND
CONTROL
------------------------- ------------------------------
Date June 29, 1993 Date 17 JUNE 1993
-------------------------- ---------------------------
Page 14
<PAGE>
Exhibit B
---------
Compressor Controls Corporation extensively uses computer software pursuant to
license. Below is a partial list of computer software in use. It is indicative
of most of the major software applications in use, but it is not exhaustive and
does not claim to represent every software package, especially small utilities,
that may be used by every computer user within the company.
OPERATING SYSTEMS
MS-DOS
Macintosh System
Windows
OS/2
NetWare
INTEGRATED SOFTWARE
Microsoft Works
Lotus Works
Smartware
WORD PROCESSORS/EDITORS
WordPerfect
Microsoft Word
Wordstar
PC-Write
Brief
Qedit
SPREADSHEET
Mircosoft Excel
Quattro Pro
DATABASES
dBASE IV
FoxBase+
FoxPro
Filemaker
Reflex
R&R Report Writer
GRAPHICS
Micrographx Draw
Corel Draw
MacDraw
Harvard Graphics
Microsoft PowerPoint
-6-
<PAGE>
CAD
AutoCAD
Orcad
PROJECT MANAGEMENT
Microsoft Project
COMMUNICATIONS
Crosstalk.
Procomm Plus
Carbon Copy Plus
ELECTRONIC MAIL
cc:Mail
FORMS
PerFORM Pro
UTILITIES
Norton Utilities
PC Tools
Norton Desktop for Windows
MATHEMATICS
TK Solver
CONTRACT MANAGEMENT
ACT
BACKUP
Fastback Plus
Norton Backup
File Secure
LANGUAGES
Microsoft C++
Quick BASIC
Visual BASIC
Mircosoft Macro Assembler
Turbo Pascal
Clipper
ACCOUNTING
Open Systems General Ledger
HUMAN RESOURCES
Abra2000
-7-
<PAGE>
EXHIBIT C
---------
See Exhibit A to Schedule 9.12
<PAGE>
CREDIT AGREEMENT SCHEDULES -
EXHIBIT D
CONTROL SYSTEM SUPPLY AGREEMENT
This agreement (hereinafter "Agreement") is dated effective as of the date of
the last signature below and is by and between Honeywell Inc. ("HONEYWELL"),
acting through its Industrial Automation and Control Division located at 16404
North Black Canyon Highway, Phoenix, Arizona and Compressor Controls Corporation
("CCC"), located at 11359 Aurora Avenue, Des Moines, Iowa.
WITNESSETH:
----------
A. HONEYWELL manufactures and is a vendor of distributed control systems
("DCS"). For the purposes of this Agreement a DCS shall mean instrumentation and
control products used to control industrial processes, including robust
distributed control systems with continuous diagnostic capabilities allowing for
real-time control. DCS's manufactured by HONEYWELL include, without limitation,
HONEYWELL'S TDC 3000. Modular Systems and SCAN 3000 product lines.
B. HONEYWELL markets its DCS's and related services to several markets,
including, but not limited to, its process control system customers ("End
Users") in the U.S. domestic electric utility industry ("Electric Utility
Industry"), which industry includes the following market segments:
Investor Owned Public Utilities
Exempt Wholesale Generators as defined under PURPA
Independent Power Producers as defined under PURPA
Non-Utility Electric Power Generators
Contracting Engineer/Developers for the above.
C. HONEYWELL also has a large installed DCS base and markets its DCS's in
industrial markets other than the Electric Utility Industry. These other
industrial markets include applications in powerhouses of industrial plants and
facilities. For purposes of this Agreement, applications for turbines which
drive electric generators in powerhouses of plants and facilities in U.S.
domestic industries other than the Electric Utility Industry are referred to
hereinafter as "Other Industrial Markets".
D. CCC develops, manufactures and sell a line of turbine governor controls
which interface directly to speed pickups, servo drives, valve position
feedback, limit switches, solenoids and other sensors associated with monitoring
and controlling auxiliary and main steam turbines and combustion turbines
("turbine governor controls"). The instrumentation, products and services
comprising CCC's turbine governor controls are set forth more specifically on
Annex A. CCC markets its turbine governor controls in the U.S. principally to
Other Industrial Markets.
1
<PAGE>
E. HONEYWELL and CCC believe they can enhance their respective business
prospects in the Electric Utility Industry by offering HONEYWELL End Users
process control systems which integrate HONEYWELL'S DCSs and CCC's turbine
governor controls (the "Integrated Solution") in such a way as to offer End
Users the most efficient use of the parties complimentary products.
Therefore, Honeywell and CCC do hereby agree as follows:
1.0 INTEGRATED SOLUTION IN THE ELECTRIC UTILITY INDUSTRY
1.1 HONEYWELL agrees to make its reasonable best efforts to promote and market
the Integrated Solution within the U.S. to its customers identified in Annex B
("the Honeywell Customers") and to other End Users in the Electric Utility
Industry, and to purchase all of its requirements for turbine governor controls
for the Electric Utility Industry from CCC; provided, that HONEYWELL is not
required to integrate CCC turbine governor controls when (i) the Honeywell
Customers or other End Users request turbine governor controls of another
vendor, (ii) HONEYWELL has available and is marketing turbine governor controls
of its own manufacture and has so notified CCC, (iii) CCC fails, or notifies
HONEYWELL that it is unable, to deliver turbine governor controls by the
delivery dates established by the parties as provided hereunder or (iv) in the
event CCC fails to provide support for the Integrated Solution to HONEYWELL or
its customers as contemplated in Annex C hereto. CCC agrees to supply to
HONEYWELL all such requirements. The CCC turbine governor control products and
services to be supplied to HONEYWELL hereunder are more particularly described
in Annex A hereto, and shall include such other available CCC manufactured
products and services requested by HONEYWELL for Honeywell Customers or such
other end users and appropriate on a project-by-project basis.
1.2 In consideration of HONEYWELL's promotion of the Integrated Solution in the
Electric Utility Industry and its purchase of all of its requirements of turbine
governor controls as specified in paragraph 1.1, CCC agrees that during the term
of this Agreement (i) it will not offer its turbine governor controls to other
suppliers of DCSs for resale to End Users in the Electric Utility Industry, (ii)
it shall cooperate with HONEYWELL in the promotion of the Integrated Solution in
the Electric Utility Industry as provided for in greater detail hereinafter, and
(iii) in any instances where it gains knowledge that other End Users in the
Electric Utility Industry are considering the purchase of DCS products or
services, it will promote the Integrated Solution and refer such End Users to
HONEYWELL as appropriate, unless prohibited from doing so by agreement or law.
Notwithstanding the foregoing, nothing in this Agreement is intended to or shall
limit or restrict CCC's ability to market and sell its turbine governor controls
to any End Users on a Stand-alone basis.
2
<PAGE>
1.3 Unless HONEYWELL intends otherwise. HONEYWELL shall be the seller of the
Integrated Solution to all Honeywell Customers and other End Users in the
Electric Utility Industry who purchase the Integrated Solution during the term
of this Agreement, and CCC shall supply all required turbine governor controls
to HONEYWELL and to such End Users under the terms and conditions of this
Agreement.
2.0 INTEGRATED SOLUTION IN OTHER INDUSTRIAL MARKETS
2.1 HONEYWELL will make reasonable efforts to promote the Integrated Solution
among End Users in Other Industrial Markets who have installed HONEYWELL DCSs or
to whom HONEYWELL is promoting process control systems for new projects, and
HONERWELL shall purchase all of its requirements of turbine governor controls
for such End Users from CCC; provided that HONEYWELL shall not be required to
purchase CCC turbine governor controls in cases where (i) an End User request
turbine governor controls of another vendor or (ii) when HONEYWELL has available
turbine governor controls of its own manufacture and has so notified CCC. CCC
shall supply HONEYWELL all such requirements and HONEYWELL shall be the seller
of the Integrated Solution in such instances, unless it intends otherwise.
2.2 CCC will advise HONEYWELL of any CCC customer in Other Industrial Markets
which advised CCC that it is considering purchase of a DCS, unless prohibited
from doing so by agreement or law. In any such instance and unless it intends
otherwise, HONEYWELL shall be the seller of the Integrated Solution, except that
if a CCC customer reveals an interest in a HONEYWELL SCAN 3000 DCS, CCC will be
the seller of the Integrated Solution and shall purchase the DCS from HONEYWELL
at list prior a 20% discount and pursuant to HONEYWELL's other standard terms
and conditions.
3.0 CORPORATION IN SUPPORTING INTEGRATED SOLUTION
3.1 HONEYWELL will act as lead on all projects in the Electric Utility Industry
for which the Integrated Solution is being promoted during the sales cycle,
project implementation phase, and post-installation End User support phase. CCC
and HONEYWELL will cooperate to define and develop standard applications to
address the most frequently encountered customer configurations. It is
recognized that many projects will require some customization of the standards.
A separate document (Annex C - Working Agreement HONEYWELL PAC and CCC) outlines
procedures and working relationships used to implement Integrated Solution
projects. In cases where the parties will jointly develop intellectual
property, the parties will agree on ownership of such intellectual property in
writing prior to beginning such development.
3
<PAGE>
3.2 The parties have and will exchange certain DCS and turbine governor
controls equipment to facilitate the design of the Integrated Solution and
support thereof under this Agreement and not for resale. All such equipment
shall be delivered under the Terms of the Bailment Agreement attached as Annex
D. (Should either party decide to purchase such equipment from the owning party,
the purchasing party shall issue a purchase order governed by the owning party's
standard terms and conditions and at the owning party's product cost for the
equipment.)
3.3 Each of HONEYWELL and CCC will received equal promotional attention in
material utilized by either in marketing the Integrated Solution. Each of
HONEYWELL and CCC is the owner of valuable trademark rights in trademarks and in
other affiliated marks, designs, and logos used in conjunction with the products
and services. In promoting the Integrated Solution each party will make a good
faith effort to equally display and use the trademarks of the other party;
provided, that such usage of the other party's trademarks shall be in
conformance with the trademark usage guidelines provided by the other party.
4.0 TERMS AND CONDITIONS OF CCC SUPPLY OF TURBINE
GOVERNOR CONTROLS IN THE ELECTRIC UTILITY INDUSTRY
4.1 CCC will supply its turbine governor controls to HONEYWELL on the terms and
conditions contained herein, or as maybe subsequently supplemented or modified
on a case-by-case basis by agreement of the parties.
4.2 CCC will provide HONEYWELL with a U.S. price list for its turbine governor
controls. CCC will provide its turbine governor controls to HONEYWELL under this
Agreement at list less a discount of 20%. Associated services will be quoted on
a project specific basis, but HONEYWELL and CCC will make a good faith effort to
define project services in predetermined categories to be used as guidelines.
Additional discounts, for strategic purposes, shall be considered by the parties
on a project-by-project basis.
HONEYWELL will provide CCC and a U.S. price list for the SCAN 3000 DCS.
HONEYWELL will provide the SCAN 3000 DCS products to CCC at list less a discount
of 20%. HONEYWELL services will be quoted on a project specific basis.
Additional discounts for strategic purposes, shall be considered by the parties
on a project-by-project basis.
The discounts in Section 4.2 shall be reviewed annually to determine if
the volume of products and services purchased under this Agreement require
higher discount levels, but no change in the discounts stated herein shall
become effective unless agreed to in writing which amends this Agreement.
4
<PAGE>
4.3 Prices of CCC turbine governor controls and associated services shall be in
effect for one (1) calendar year commencing with January 1st of the year in
which this Agreement become effective. For future calendar years, one hundred
twenty (120) days prior written notice of any changes to list prices shall be
given before price changes become effective. Any increase in price shall apply
only to new orders issued on or after the effective date of such increases.
4.4 HONEYWELL shall issue to CCC a purchase order for any turbine governor
controls covered by this Agreement, which purchase order shall contains as a
minimum.
(a) Identity of equipment (by model number) or service desired.
(b) Quantity requested.
(c) Shipment instructions, including requested delivery dates of not less than
those dates agreed to in writing by the parties.
(d) Reference to the terms and conditions of this Agreement and Agreement
number.
(e) A proposed overall project schedule for consideration by CCC including
delivery dates for CCC turbine governor controls and such other milestones
of the particular project.
(f) Adequate definition of system requirements as outlined in Annex C.
A purchase order for CCC turbine governor controls shall be deemed accepted by
CCC unless CCC provides written notice to the contrary to HONEYWELL within five
(5) working days of receipt of the purchase order.
4.5 Unless otherwise agreed to by the parties, payments for CCC's turbine
governor controls shall be made in the United States currency to a bank or banks
designated by CCC. The total amount of invoices related to the products and
services sold hereunder shall be paid within sixty (60) days after the date of
the invoices, or after the shipment date stated on the bill of lading or airway
bill, whichever is later. In cases where HONEYWELL's contract with the End Users
includes progress payments, CCC will accept the same progress payment terms from
HONEYWELL.
4.6 Any products shipped by CCC will be delivered F.O.B. manufacturing site
freight prepaid per schedule as mutually agreed.
4.7 Title to equipment, exclusive of firmware and/or software, will pass to
HONEYWELL on the date equipment is shipped by CCC. CCC hereby grants to
HONEYWELL a nonexclusive, nontransferable license to use, sublicense and
distribute the firmware and/or software embedded in Object Code form in CCC's
turbine governor controls, and the right to appoint sub-distributors who may
use, distribute, and sublicense
5
<PAGE>
such embedded firmware and/or software. HONEYWELL agrees to notify End Users
that they are granted sublicenses to use the embedded firmware and/or software
solely for End User internal use at the End User facility described in the End
User order. HONEYWELL shall sublicense the firmware and/or software under
HONEYWELL'S standard license agreement or license terms approved by HONEYWELL in
writing prior to delivery to the End User.
4.8 HONEYWELL shall be responsible for securing proper training for HONEYWELL
employees in the installation and start-up of the CCC turbine governor controls
and the operation of the machinery being controlled, or as an alternative shall
contract with CCC for such services. CCC will make reasonable CCC turbine
governor controls training available to HONEYWELL tuition-free.
4.9 HONEYWELL shall have the right to make changes in the scope of a purchase
order. If any change causes an increase or decrease in the price of the order,
or in the time required for performance, an equitable adjustment shall be made
and the order shall be modified in writing accordingly.
4.10 In the event that CCC decides to discontinue support of the turbine
governor controls, CCC shall give HONEYWELL one (1) year's prior written notice
of such discontinuance. CCC shall maintain availability of spare parts for all
turbine governor controls supplied under this Agreement (on a functional
equivalent basis) for a period of ten (10) years following discontinuation of
such products.
4.11 It is understood that certain confidential and proprietary dates and
information of each of HONEYWELL and CCC will be provided to the other in the
performance of this Agreement. Accordingly, each of the parties agree to comply
with the Confidential Disclosure Provisions set forth in Annex B hereto.
5.0 WARRANTIES
5.1 CCC warrants to HONEYWELL that the CCC turbine governor controls delivered
hereunder shall be free from defects in design, material and workmanship and
shall conform to any associated CCC user manuals or jointly approved
installation specifications for a period of twelve (12) months following
installation or eighteen (18) months following shipment from CCC's factory,
whichever occurs earlier. THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED. INCLUDING BUT NOT LIMITED TO THE IMPLIED
WARRANTIES OR MERCHANT ABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
6
<PAGE>
5.2 If CCC (i) receives notice that a CCC product does not confirm to such
warranty and thereafter confirms the failure to so conform. CCC shall supply to
HONEYWELL free of charge, CIF, products or parts therefore to repair or replace
such product. Repair or replacement of CCC products after expiration of CCC's
warranty period shall be charged by CCC at CCC's list repair or replacement
prices, less discounts as outlined at 20%.
5.3 HONEYWELL will offer to sell to its End Users in the Electric Utility
Industry post-warranty support of the turbine governor controls under
HONEYWELL's then current support program. HONEYWELL may contract with CCC at
CCC's normal rates for engineering and support services.
5.4 Upon discontinuance of support of CCC turbine governor controls by CCC,
HONEYWELL shall have a nontransferable license to use, copy and modify the
source code of CCC turbine governor controls to enable HONEYWELL shall retain
all right, title and interest in any HONEYWELL modifications made to the source
code for such purpose. Further upon such discontinuance, HONEYWELL shall have
the right to disclose and deliver such source code to a contractor for the sole
purpose of maintaining CCC turbine governor controls licensed by HONEYWELL or
sublicensed by customers prior to the termination of support, but shall ensure
that the contractor is under confidentiality restrictions substantially similar
to those turbine governor controls of this Agreement.
5.5 CCC shall, at HONEYWELL's expense and within thirty (30) days following the
effective date, place a copy of CCC turbine governor controls in an escrow
account acceptable to HONEYWLL, with instructions to the escrow agent and an
escrow agreement to be agreed upon by HONEYWELL and CCC. CCC shall place updated
versions of the source code and related documentation in the escrow account at
every new release of the CCC turbine governor controls. The escrow agent's
instructions shall be to transfer all of that source code to HONEYWELL upon
written notice by HONEYWELL that CCC has failed to or has discontinued support
of CCC turbine governor controls as contemplated under this Agreement. Transfer
of a copy of the source code shall not pass title to the source code, but shall
effect only a perpetual, non-exclusive license from CCC to HONEYWELL to use,
copy, distribute and modify the source code for the sole purpose of maintaining
the CCC turbine governor controls sold by HONEYWELL. HONEYWELL shall retain all
right, title and interest in all modifications made by HONEYWELL to the source
code. In any case HONEYWELL will not deliver or disclose the source code to
third parties, except as noted in this Paragraph 5.
7
<PAGE>
6.0 LIMITATION OF LIABILITY
6.1 CCC agrees to indemnify and hold HONEYWELL harmless against any damages,
costs or expenses incurred as a result of any bodily injury or property damage
claims based on alleged defects in design, material or workmanship in CCC's
Turbine governor controls supplied under this Agreement. Such indemnification
shall include the reasonable expenses of the defense by HONEYWELL against any
such suit or claim, and shall include reasonable attorneys' fees expended in
such defense.
6.2 CCC shall at its own expense, defend any suit instituted against HONEYWELL
or End User which is based on an allegation that any products sold or
transferred by CCC hereunder constitute an infringement of patents, trademarks,
or copyrights. It shall indemnify HONEYWELL and its End Users against any costs
of settlement or any award of damages and costs, including attorneys fees, made
against them by a final judgment of a court of last resort, if it is determined
therein that any such products constitute an infringement of any patents,
trademarks or copyrights, provided that such parties give CCC immediate notice,
in writing, of any notice or claim of infringement and permit CCC, through CCC's
counsel, to defend the same, and give all available information, assistance and
authority pursuant to procedural requirements to enable CCC to assume such
defense.
CCC shall have control of the defense of any such suit, including appeals
from any judgment therein and any negotiations for the settlement or compromise
thereof with full authority to enter into a binding settlement or compromise.
In the event that such products are held to constitute infringement and their
use is enjoined CCC shall, at its option and expense.
(a) procure for HONEYWELL or its End Users the right to continue using such
products so that they no longer infringe, or
(b) modify such products, such that they are non-infringing, or
(c) accept the return of infringing products and refund all payments associated
therewith.
6.3 IN NO EVENT SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER FOR
ANY CLAIMS FOR INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES RELATING TO OR ARISING
OUT OF THIS AGREEMENT OR OF ITS SALE OF PRODUCTS OR SERVICES TO THE OTHER UNDER
THIS AGREEMENT. WHETHER BASED ON ANY BREACH OF PRODUCT WARRANTY. BREACH OF
DEFAULT UNDER THIS AGREEMENT, TORT LIABILITY OR ANY OTHER LEGAL THEORY.
8
<PAGE>
7.0 TERM AND TERMINATION
7.1 This Agreement shall become effective as of the date of the last signature
provided for below and shall run for a period of five (5) years thereafter,
unless earlier terminated in accordance with this Paragraph 7.
7.2 If either party to this Agreement should breach any material obligation
hereunder, the injured party may give written notice to the defaulting party
specifying the respect in which such party has breached the Agreement. If such
breach is not remedied within sixty (60) days after such notice, the injured
party may, by written notice to the defaulting party, terminate this Agreement,
effective immediately. Termination shall be in addition to and not in lieu of
any additional remedies in law or equity available to the parties in the event
of such a breach of any material obligation under this Agreement.
7.3 CCC may terminate this Agreement upon ninety (90) days written notice to
HONEYWELL in the event HONEYWELL decides to market turbine governor controls
other than those of CCC to End Users in the Electric Utility Industry.
7.4 Upon termination of this Agreement all uses of either party's trade names
and trademarks and all references to other party in written materials shall
cease immediately, unless continued written permission is granted on a
case-by-case basis. Each party shall destroy all documents utilizing the other's
trademark and referencing the other party and certify in writing that this has
been done.
7.5 Within ten (10) days after termination of this Agreement, each party shall
return to the other party all copies of software, documentation and confidential
information theretofore provided by the other party; however, HONEYWELL may
retain sufficient copies of such items required for the continuing support of
the products sublicensed to customers or licensed to HONEYWELL under this
Agreement.
7.6 Sublicense agreements entered into prior to the date of termination and
annual support agreements signed by HONEYWELL and customers relating to the
products shall survive termination of this Agreement.
7.7 Upon termination or expiration of this Agreement, for whatever reason, CCC
shall continue to supply spare parts to HONEYWELL in sufficient quantities to
allow HONEYWELL to fulfill warranty and maintenance obligations to its End
Users, at prices as outlined in section 4.2.
8.0 COMPETING PRODUCTS
8.1 During the Term of the Agreement, HONEYWELL agrees that its Industrial
Automation and Control Division shall not engage in the business of selling
products or applications in the Electric Utility Industry which would directly
compete with CCC's turbine governor controls unless such products or
applications are manufactured wholly
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or partially by HONEYWELL. Notwithstanding the above and subject to CCC's right
to terminate this Agreement as provided in Paragraph 7.3 hereof, nothing in this
Agreement shall be construed to prohibit or restrict HONEYWELL from engaging in:
(i) selling any products either manufactured by HONEYWELL or sourced
from another supplier where the products are specified by the End
User; or
(ii) selling any of its current products, including any modifications,
enhancements, improvements, or evolutions.
8.2 The provisions of this Paragraph 8 do not preclude HONEYWELL from making
any acquisition(s) which might include products competing with the CCC Solution,
subject to the following:
(i) HONEYWELL shall provide written notice to CCC of the acquisition
immediately following its completion.
(ii) If the acquisition includes a business which, at the time of the
acquisition, is selling or distributing a competing product or
competing application, HONEYWELL shall have the right to continue
such selling or distribution.
(iii) Upon CCC's receipt of notice of the acquisition, CCC may terminate
this Agreement upon thirty (30) days written notice to HONEYWELL.
9.0 PARTIES
9.1 No party may assign or delegate whether by agreement or operation of law,
the performance of part or all of its obligations under this Agreement without
prior written consent of the other party, such consent not to be unreasonably
withheld; provided, that such assignment or delegation shall not relieve the
assigning party of primary responsibility for performance of its obligations
under this Agreement.
9.2 In the event that either party is acquired by or merged with an independent
third party (not involving or arising out of insolvency), the party which is so
merged and/or acquired shall promptly notify the other party of such occurrence
or impending occurrence if it is able to do so. Should the notified party advise
within one (1) month of receipt of such notification that such merger and/or
acquisition is reasonably deemed by the notified party to create a conflict of
interest and/or to be in any way adverse to the interests of the notified party,
then the parties shall negotiate in good faith to seek an acceptable solution to
such situation within three (3) months. Should the parties fail to find an
acceptable solution within three (3) months from the commencement of their good
faith negotiations, the party claiming adverse impact or conflict of interest
may terminate this Agreement, subject to Article 7.7.
10
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10.0 GOVERNING LAW
10.1 The laws of the state of Minnesota shall govern in all respects as to the
validity, interpretation, construction and enforcement of this Agreement without
regard to conflicts of law provisions.
10.2 Nothing contained in this Agreement shall be construed to require either
party to, directly or indirectly, do any act or thing that will or could
constitute a violation of the laws of the United States, including but no
limited to, the U.S. Foreign Corrupt Practices Act of 1977, the U.S. export
control laws, and the U.S. anti-boycott laws.
10.3 The parties shall comply with all export control laws and regulations of
the United States and any other country having proper jurisdiction and shall
obtain all necessary export licenses in connection with any subsequent export,
re-export, transfer and use of all products, technology and software
(collectively "Products") sold or licensed under this Agreement. Neither party
shall sell, transfer, export or re-export any Products for use in activities
which involve the design, development production, use or stockpiling or nuclear,
chemical or biological weapons or missiles, nor use the Products in any facility
which engages in activities relating to such weapons.
11.0 ARBITRATION
11.1 All disputes, controversies, or differences which may arise between the
parties, out of or in connection with this Agreement, or for the breach thereof,
which cannot be resolved between or among the parties, shall be finally settled
by arbitration in accordance with the Rules of Conciliation and Arbitration of
the International Chamber of Commerce by three (3) arbitrators. Each party shall
appoint one arbitrator of its choosing, and the two arbitrators thus selected
shall appoint the third arbitrator. Such arbitration shall be held in the
English language in Des Moines, Iowa, if HONEYWELL is the demanding party, or in
Minneapolis, Minnesota, if CCC is the demanding party. Either party may seek
injunctive relief to maintain the status quo pending receipt of the arbitral
award.
11.2 In order to decide upon the validity, construction, performance or
termination of this Agreement, the arbitrators shall be bound by the contractual
obligations of the parties. The arbitrators will determine their jurisdiction
over persons and subject matter if such jurisdiction is challenged by one of the
parties.
11.3 The award of the arbitrators shall:
(i) be rendered in writing, state the ground of which the arbitrators
base it and determine how the cost of arbitration shall be borne;
the expenses of any party in the defense of its interest shall be
borne by such party;
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(ii) be dated and notified to the parties by registered mail, return of
receipt or requested, within eight (8) days form its date:
(iii) be carried out voluntarily and without delay, and failing this, be
made enforceable through either party resorting to a competent
court of any jurisdiction; and
(iv) be final and not subject to appeal before any court, nor other
jurisdiction nor any authority.
11.4 Judgment upon the award may be entered in any court having jurisdiction,
or application may be made to such court for a judicial acceptance of the award
and an order of enforcement as the case may be. The parties consent to the
personal and subject matter jurisdiction and the venue of any state or federal
court of the U.S.A. for purposes of such entry of judgement upon the award.
12.0 FORCE MAJEURE
12.1 Neither party shall be considered in default or performance of its
obligations under this Agreement to the extent that performance of such
obligations is delayed or prevented by force majeure. Force majeure shall mean
any event reasonably unavoidable or beyond the control of the parties hereto,
including but no limited to, wars (declared and undeclared), hostilities,
revolutions, riots, civil commotion, national emergency, strikes, lockouts,
epidemic, fire, flood, earthquake, force of nature, explosion, embargo, or any
other Act of God, or any law, proclamation, regulation, ordinance, or other act
of any government of governmental agency.
12.2 If either party to this Agreement is prevented from or delayed in
performing any of its material obligations hereunder by force majeure, it shall,
within thirty (30) calendar days after the occurrence of the event of force
majeure has become known, notify the other party of the circumstances
constituting force majeure and of the obligation which is delayed or prevented,
and the party giving the notice shall thereupon be excused of the performance of
such obligation for as long as the circumstances of force majeure may continue.
Notwithstanding Sections 8.1 and 8.2, HONEYWELL shall have the right to
distribute products competing with the CCC Solution during any circumstances of
force majeure which affect CCC's performance under this Agreement.
12.3 If, in the circumstances, the event of force majeure shall continue for a
period of six (6) months, either party shall have the right to terminate this
Agreement where performance has been so adversely affected.
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13.0 WAIVERS AND AMENDMENTS
13.1 No failure or delay by either party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, no shall any single or
partial waiver thereof include any other right, power or privilege.
13.2 This Agreement may not be amended, changed, discharged or terminated
except by a written document signed by duly authorized officers or the parties.
14.0 NOTICES
Any notice required or permitted to be given by either party to the other
shall be in writing. It shall be deemed to be effective only when delivered to
an officer of the other party at such party's address set forth below, or at
such other address designated later in writing, or when sent to such address by
certified mail, postpaid, or by telex. When a notice is given by any other
means, it shall be effective only upon actual receipt by an officer of the party
for which it is intended.
To Compressor Controls: Compressor Controls Corporation
11359 Aurora Avenue
Des Moines, Iowa 50322
Attn: John Hampel
and
Roper Industries, Inc.
160 Ben Burton Road
P.O. Box 550
Attn: Shanler D. Cronk
To Honeywell: Honeywell, Inc.
Industrial Automation and Control Division
16404 North Black Canyon Highway
Phoenix, Arizona 85023
Attn: /s/ C.J. (Cal) Phillips
----------------------------
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15.0 Entire Agreement
This Agreement is the entire agreement between the parties and supersedes
and shall be substituted for each and every prior agreement or understanding
with respect of the products and applications as outlined herein, whether
written, oral or otherwise in effect between HONEYWELL and CCC. This Agreement
shall have no effect upon the separate agreement between Compressor Controls and
HONEYWELL Process Automation Centre Europe.
Compressor Controls Corporation Honeywell, Inc.
Industrial Automation and Control
Division
By /s/ John Hampel By /s/ Craig A. Harting
-------------------------- ---------------------------
Name JOHN HAMPEL Name CRAIG A. HARTING
-------------------------- ---------------------------
Title EXECUTIVE VICE PRESIDENT Title VICE PRESIDENT MARKETING
-------------------------- ---------------------------
Date JUNE 27, 1995 Date 5 Ju 95
-------------------------- ---------------------------
<PAGE>
Annex A
-------
HONEYWELL PRODUCTS AND SERVICES:
- -------------------------------
The complete TDC 3000 system product line, Scan3000, Modular Systems, and any
Honeywell project or application services associated with such products.
CCC PRODUCTS AND SERVICES:
- -------------------------
The Series 4 Controlles, Series 3+ Controllers, hydralic equipment, mechanical
parts required as part of hydraulic modifications and upgrades, and any CCC
project or application services associated with such products.
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ANNEX B
-------
CONFIDENTIAL DISCLOSURE PROVISIONS
WHEREAS, HONEYWELL AND CCC, or their mutual benefit acknowledge that certain
confidential and proprietary information has been and will continue to be
disclosed to each other in connection with the joint pursuit of the turbine
controls business under the terms of this Agreement.
NOW, THEREFOR, both CCC and HONEYWELL agree that such confidential and
proprietary information received by one party from the other shall be governed
by the following terms and conditions:
DEFINITION
- ----------
"Proprietary Information" shall mean:
(i) that written information stated by the disclosing party in writing to be
considered as confidential and/or proprietary information and
(ii) that orally disclosed confidential and proprietary information that is
promptly reduced to writing and stated by the disclosing party in writing
to be considered as proprietary information. Such proprietary information
shall not included confidential and proprietary information which:
(a) was in possession of the receiving party prior to receiving it,
whether such receipt was before or after the date of the Agreement,
from the transmitting party or
(b) is or becomes part or the public knowledge or literature by acts other
than those of the receiving party after receiving it, or
(c) is or becomes available to the receiving party from a source other
than the disclosing party, or
(d) is or becomes available to a third party from the disclosing party on
an unrestricted basis, or
(e) is transmitted by a party after receiving notification in writing,
from the other party that it does not desire to receive any further
proprietary information, or
(f) if transmitted after the expiration of the Agreement.
HANDLING OF PROPRIETARY INFORMATION
- -----------------------------------
A party receiving Proprietary Information from the other agrees to treat such
Proprietary Information as confidential and proprietary during the term
(including any renewal or extension) of the Agreement and for a period of ten
(10) years following the termination of the Agreement, and will handle such
Proprietary Information with the same degree of care it uses to handle its owen
Proprietary Information. Proprietary Information consisting of software shall be
kept confidential perpetually. There shall be no restrictions on the handling of
technical information which is not Proprietary Information.
LIMITATION OF DISCLOSURE
- ------------------------
During the period referenced above, a party receiving Proprietary Information
from the other shall use its best efforts to ensure that neither it nor its
agents or employees divulge such Proprietary Information in whole or in part to
any of its agents or employees who do not need access to the Proprietary
Information for performance of this Agreement or to any third party, without the
prior written consent of the transmitting party.
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LIMITATION OF USE
- -----------------
During the period referenced above, a part receiving Proprietary Information
from the other shall make no commercial use, in whole or in part of any such
Proprietary Information without the prior written consent of the transmitting
party. The party receiving Proprietary Information may only use such Proprietary
Information for the purposes of this Agreement.
Mutual Disclaimers
- ------------------
No rights or obligation other than those expressly recited herein are to be
implied from this Agreement. In particular, no license is hereby granted
directly or indirectly under any patent now held by, or which may be obtained
by, or which may be obtained by, or which is or may be licensable by either
party.
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Annex C
-------
WORKING AGREEMENT
HONEYWELL PAC AND CCC
GENERAL SCOPE
The purpose of this addendum to the primary commercial agreement is to establish
an understanding of the technical and support relationship between the
HONEYWELL's Power Application Center (PAC) and Compressor Controls Corporation
(CCC) around the TDC3000/Series + Digital Turbine Control (DTC) solution
developed for the power generation market. The document covers any DTC solutions
provided for steam turbines that drive generators for power production. Included
are small steam turbines where the final drive element is part of a combustion
process where the steam production provides power production, i.e., auxiliary
steam turbine for pumps and fans. The document concentrates on the general
constraints and considerations that may have an impact on how the DTC
application product is designed, sold, implemented and supported. The general
requirements and responsibilities are intended to meet the following objectives:
A. Allow PAC to supply a complete application solution on completion of order
to the final End User.
B. Provide tools or capabilities to PAC engineers required to supply, modify,
support and fully test the application firmware and software revisions
before final installation.
C. Specification of all devices, measurements and their associated
requirements and connections to be supplied by PAC with all hydraulic
equipment and specialty devices to be provided by CCC.
D. Supply and installation of all additional field measurement devices and
equipment to be provided by HONEYWELL under PAC direction with consultation
with CCC.
E. Determine solution philosophy and limitations which are discussed and
disclosed to both parties.
F. Allow for full disclosure on CCC supplied components for control system
modifications.
G. Notification of any constraints that limit the capability of the Series 4
to provide the specified control for solutions in the field or under
current design.
H. Production of acceptable final project documentation provided to the End
User by PAC.
SOFTWARE DESIGN
The design of the present and future application software will be focused on
each given application and each party will have full disclosure to its
constructs and source.The interaction with operating environment and hardware
need only be disclosed to a point where application construction and diagnostics
can be performed and End User information requirements can be met. PAC currently
views the minimum requirements for operating firmware for this purpose to be
Series 4 linkable objects for the hardware interface (L/O links), inter
application communication, and standard regulatory functions. It is not the
intent to supplement or modify the standard product execution environment, but
PAC engineers full disclosure of the application software for commissioning and
startup. This requirement includes the ability to make data base, configuration
logic and control connection changes to the application solutions independent of
CCC personnel.
Each software solution will be under revision control based on the appropriate
requirements. This revision control is to include both firmware and hardware
that each installation requires. It also includes the maintenance updates (bug
fixes) to field installed solutions. Factory or field modifications will be
updated per this revision control and previous revisions will be recoverable.
FIELD SERVICES
The field equipment installation in general will be performed by HONEYWELL
provided with a complete description of the installation. On large DTC
solutions, CCC may be contracted by HONEYWELL for support services. On unique or
custom solutions and when hydraulic work is required CCC will be enlisted to
help finalize the field installation and if required to commission the
application. CCC services will be provided to PAC and charged directly to
HONEYWELL, not the End User. All information
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related to the CCC supplied services will be disclosed to the End User only with
appropriate approval from both organizations.
TESTING
All hardware supplied to PAC will be power on tested before shipment. This
testing should include some form of stress testing to insure consistent field
operation. The nature of test's results should be provided to PAC to provide
quality assurance information to the End User. All field failures of CCC
hardware will be shipped direct to the designated CCC personnel. A system of
reporting and following solution issues and failures will be developed and
followed by both parties.
PRODUCT MIGRATION
To allow PAC the ability to make sound recommendations on the direction and
possible modifications of the control strategy require a complete understanding
of the product. CCC should allow for product migration and modification
strategies to be disclosed to PAC in a timely manner. PAC should be notified of
any such occurrence that will have an impact on the application solution. No
field upgrades or changes should be made directly by CCC without notification to
the designated PAC personnel.
DOCUMENTATION
CCC will provide documentation to support PAC in ACAD, Microsoft Word, Excel or
ASCII file formats and should include:
* Board Configuration Drawings. Board pinning, L/O types, etc.
* System Configuration Drawings, MPM, IOM and chassis layout.
* Detailed Test Verification Sheets for each board (DTV)
* Field installation information when required
* Software module descriptions
* Database structures and descriptions
PAC will provide to CCC in the appropriate format the following:
* Process Configuration Description. This will provide the details of the
configuration of the process for a given solution i.e., load, flows, press.
Etc.
* Hardware specifications.
* Software specials when required.
* Field installation information when required.
* Final installation report with revision and hardware installation
information.
SALES SUPPORT
The PAC application center will be the primary interface to other HONEYWELL
organizations for the DTC solutions. CCC will coordinate all sales support for
these solutions through notification through PAC. This is to insure a consistent
presentation of the solution and the support requirements outlined in this
agreement. Quotation, ordering, and project coordination with CCC for the
hardware and software for this solution will be provided by PAC.
DESIGN AND IMPLEMENTATION SERVICES
The design and implementation services included in this agreement (but not
specifically identified as a deliverable function or document):
* Consultation on any required modifications or limitations on the
Series + product.
* Information on the design and development of solution direction and
interim cursory evaluation of each product development to understand
the impact to current solutions in the field.
* Incorporation of the field results into recommendations for further
testing, interim application fixes and recommendations to a long term
control solution.
* Collation and documentation of each system to meet the intent of the
End User's specification.
* Make field changes necessary to minimize commissioning and startup
efforts.
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GENERAL ASSUMPTIONS
CCC will designate personnel that will be made available to PAC engineers for
installation, testing, training, revision control, and warranty related issues.
There must be provision that HONEYWELL will be able to:
* Document and resolve field problems.
* Discuss field observed behaviors of the core Series 4 software or
hardware.
* Have CCC provide services related to the application solutions to PAC,
not the End User.
* Make field changes necessary to minimize commissioning and startup
efforts.
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ANNEX D
-------
BAILMENT AGREEMENT
------------------
This Agreement ("Agreement") is effective as of the date of the last
signature below and is by and between Honeywell Inc., Industrial Automation and
Control ("HONEYWELL") located at 16404 N. Black Canyon Hwy., Pheonix, Arizona
and COmpressor Controls Corporation ("CCC"), located at 11359 Aurora Avenue, Des
Moines, Iowa.
RECITALS
- --------
A. HONEYWELL manufactures and is a vendor of distributed control
systems ("DCS"). For purposes of this Agreement a DCS shall mean
instrumentation and control products used to control industrial
processes, including robust distributed control systems with
continuous diagnostic capabilities allowing for real-time control,
including without limitation HONEYWELL's TDC 3000, Modular Systems and
SCAN 3000 product lines.
B. CCC develops, manufactures and sells a line of turbine governor
controls which interface directly to speed pickups, servo drives,
valve position feedback, limit switches, solenoids and other sensors
adssociated with monitoring and controlling auxiliary and main steam
turbine and combustion turbines.
C. CCC and HONEYWELL have executed a Marketing Alliance Agreement of
even date herewith, under which HONEYWELL will act as distributor of
certain CCC products and CCC will act as a distributor of certain
HONEYWELL products.
D. As allowed under the paragraph 3.2 of the Marketing Alliance
Agreement, each party has or will license and deliver to the other
party certain products.
E. HONEYWELL and CCC wish to memorialize their respective rights in
Products.
F. The owner of Products delivered under this Agreement shall be
referred to as the "Bailor". The recipient of Products delivered under
this Agreement shall be referred to as the "Bailee."
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which the parties expressly acknowledge, the parties agree as follows:
1. SCOPE OF AGREEMENT.
1.1
Bailor shall deliver the Products to Bailee's site (the "Site"), and
Bailee shall keep the Products subject to the terms and conditions of
this Agreement. This Agreement does not constitute a sale or license
of the Products, but is rather a bailment of the Products.
1.2
The Products are provided for Bailee's use on a no-charge basis solely
for the purposes described in Recital D and Bailee shall not use the
Products for any other purpose.
1.3
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Bailee shall keep and maintain the Products with proper care so that
they shall be protected against loss, theft, damage or other casualty,
and Bailee assumes liability for all damage or loss to the Products
from any and all causes up to the replacement value of the Products.
1.4
Prior to shipment, Bailee shall prepare the Site in accordance with
Bailor's specifications or instructions. Bailor shall perform the
installation of the Products as mutually agreed by the parties, and
Bailee shall offer Bailor all assistance with such installation.
2. TERM.
The term of this Agreement shall be for an unlimited period, until
otherwise terminated pursuant to this Agreement.
3. LICENSE FOR PRODUCTS.
3.1
For the limited purposes of this Agreement, Bailor grants to Bailee a
non-exclusive, non-transferable license to use the Products.
3.2
Bailee agrees that the submission to Bailor of any suggestions,
changes or modifications for inclusion on the Products shall
constitute a grant to Bailor without charge of the right to publish
and use such suggestions, changes and modifications in any manner
whatsoever.
4. TITLE.
4.1
The Products are and will remain, and at all times shall be deemed to
be, the sole and exclusive property of Bailor. The Products shall not
be transferred, licensed or delivered by Bailee to any other person or
entity without the prior written consent or instruction of Bailor,
and neither this Agreement nor the bailment established by this
Agreement may be assigned by Bailee. Bailee agrees not to sell,
license, loan, lease, borrow against, pledge, mortgage or allow any
third party to take physical possession of the Products. Any violation
of this paragraph shall result in immediate termination of this
Agreement.
4.2
Bailee shall neither remove any markings from the Products, if
markings are present, nor represent to any person that the Products
are Bailee's own property or that of a third party.
4.3
Bailee shall not make any alterations in, or affix attachments to the
Products beyond those specified in any installation instructions or as
otherwise directed by Bailor without securing prior written permission
from Bailor.
4.4
Bailee shall not duplicate or allow any third to duplicate the
Products in any manner. If the Products are duplicated while in
Bailee's possession by Bailee or by any other party, Bailee shall be
liable to Bailor for any and all damages resulting from such
duplication. Violation of this paragraph shall result in immediate
termination of this Agreement.
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5. RISK OF LOSS.
For insurance purposes, risk of loss of the Products shall pass to Bailee upon
delivery of the Products to Bailee.
6. LIMITATION OF LIABILITY
6.1
Bailor does not warrant or guarantee the Products covered by this
Agreement: Bainee uses the Products at its own risk.
6.2
THERE ARE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE NOT
SPECIFIED HEREIN RESPECTING THIS AGREEMENT, THE PRODUCTS, OR OTHER
PRODUCTS, SERVICES OR DOCUMENTATION PROVIDED HEREUNDER.
6.3
Bailee shall indemnify and hold harmless Bailor from and against any
and all claims, demands, losses, costs or liabilities for death or
injury to any person or for loss of or damage to any property arising
out of Bailee's use of the Products.
6.4
Unless expressly set forth in this Agreement or the Marketing Alliance
Agreement, Bailor has no obligation to (i) install the Products, (ii)
issue updates, improvements or enhancements to the Products, (iii)
identify or correct errors or problems in the Products, or (iv)
compensate Bailee for Bailee's suggestions, charges or adaptations
which may be incorporated into the Products.
6.5
NEITHER PARTY SHALL BE RESPONSIBLE FOR ANY CONSEQUENTIAL, SPECIAL,
INCIDENTAL OR PUNITIVE DAMAGES OF ANY KIND AS A RESULT OF OR RELATED
IN ANY WAY TO THIS AGREEMENT INCLUDING WITHOUT LIMITATION DAMAGES
ARISING OUT OF BREACH OF CONTRACT OR NEGLIGENCE.
7. COST OF BAILMENT
Bailor shall pay all costs of shipment, insurance, taxes or other
costs associated with this Agreement.
8. TERMINATION
8.1
This Agreement shall be effective as long as the Marketing Alliance
Agreement is effective and shall terminate upon the termination of the
Marketing Alliance Agreement.
8.2
In the event that all or a substantial portion of the Products held by
Bailee are either lost or so physically damaged as to make repair or
maintenance impractical this Agreement shall be automatically
terminated as of the date of such loss or damage.
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8.3
This Agreement shall be automatically terminated upon failure of
Bailee to comply with its obligations under this Agreement, the
insolvency of Bailee or if a creditors' committee is appointed for the
business of Bailee: or if Bailee makes an assignment for the benefit
of creditors, or is adjudicated bankrupt, or if a petition in
bankruptcy or for reorganization or to effect a plan of arrangement
with creditors is filed by or against Bailee: or if Bailee applies for
or permits the appointment of a receiver or trustee for any of its
property or assets; or if any of the above actions or proceedings are
commenced by or against Bailee.
8.4
Upon termination of this Agreement, Bailee shall return to Bailor the
Products, including the originals, copies and updates, documentation
in any form, and Bailee shall pay all costs of shipment, insurance or
other costs resulting from the return of the Products, In the
alternative, Bailee may purchase the Products from Bailor at a to-be-
negotiated price and under Bailor's standard terms and conditions.
9. CONFIDENTIAL INFORMATION
Each party hereby reaffirms its obligations under Section 4.11 of the
Marketing Alliance Agreement.
10. FORCE MAJEURE
Neither party shall not be liable for failure of delay in performance
due to any cause beyond its control.
11. EXPORT CONTROL
Bailor's obligations under this Agreement are limited to the United
States. Bailee shall not export directly or indirectly any technical
data, information or items acquired under this Agreement to any
country for which the United States Government (or any agency thereof)
requires an export license or other approval without first obtaining
such written consent and shall incorporate in all export shipping
documents the applicable destination control statements.
12. MISCELLANEOUS
12.1
Waiver or modification of any right of either party under this
Agreement shall not be effective unless given in writing.
12.2
This Agreement constitutes the entire agreement between the parties
and may not be amended or terminated except in a writing signed by
both parties.
12.3
All notices, demands, consents, approvals and other communications
which may be required to be served or given under this Agreement shall
be sufficient if given in writing and sent by prepaid wire, facsimile
transmission or registered or certified mail, return receipt
requested, postage prepaid to the addresses of the parties specified
in the signatures below. Notices shall be deemed given when placed in
the mail.
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12.4
No term or provision of the Agreement is intended to be, nor shall any
such term or provision be construed to be, for the benefit of any
person, firm, corporation or other entity not a party to this
Agreement, and no such other person, firm, corporation or entity shall
have any right or cause of action hereunder.
12.5
The laws of the State of Arizona shall govern all actions under or
interpretations of this Agreement, without regard to conflicts of laws
provisions.
HONEYWELL INC., INDUSTRIAL COMPRESSOR CONTROLS
AUTOMATION AND CONTROL CORPORATION
16404 North Black Canyon Highway 11359 Aurora Avenue
Phoenix, Arizona 85023 Des Moines, Iowa
/s/ Craig A. Harting /s/ John Hampel
- --------------------------------- -------------------------------
Name: CRAIG A. HARTING Name: JOHN HAMPEL
---------------------------- --------------------------
Title: VICE PRESIDENT - MARKETING Title: EXECUTIVE VICE PRESIDENT
--------------------------- -------------------------
Date: 5 JUL 95 Date: JULY 10, 1995
---------------------------- --------------------------
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EXHIBIT D
LICENSE CONTRACT For HUS Screwcanal Pumps
- ------------------------------------------
Between
HUS Dickstoffpumpen AG
Hans-Ulrich Schneider
Espilibuck 5
Postfach 56
CH-8226 Schleitheim As Licenser
- -------------------
Short Named -HUS-
and
Cornell Pump Company
2323 Southeast Harvester Drive
Portland, Oregon 97222
USA As Licensee
- -----------------------
Short Named -Cornell-
The following mutual agreable, binding and irrevocable license contract is
negotiated:
1. HUS grants Cornell the license to manufacture screwcanal pumps "System HUS"
from the signing of the contract until the expiration dates of the patents.
2. Cornell can sell screwcanal pumps "System HUS" without restriction in the
USA and Canada. Other countries or continents will require written consent
from "HUS" before the start of sales activities.
3. For the manufacturing under license of screwcanal pumps "System HUS"
Cornell will receive the up to this date existing know-how about screwcanal
pumps from HUS, consisting of:
<PAGE>
3.1 All construction drawings for the production of the "HUS Hydraulics"
including the pattern drawings and the detail drawings of all hydraulic
detail parts (impeller, volute, suction cover and selling plate) covering
the following pump models:
<TABLE>
<S> <C> <C> <C>
S50-40 S100-100 S150.4-158 S200-200
S50.1-55 S100-190 S150.4-250 S200-300
S80.1-55 S100-225 S150.4-270 S200-115
S80-80 S100.1-140 S150.3-260
S80-180 S100-1-158 S150.3-110
S100-1-250 S150.3-280
S100.1-270
</TABLE>
3.2 Operating instruction for the models listed in Section 3.1.
3.3 Pump performance curves for the models listed in Section 3.1 with the
following data: capacity, head, efficiency and NPSH.
3.4 Application description (service-range) for the models listed in Section
3.1.
3.5 All available records about hydraulic stability, impeller-axial and
radial forces, vibration and noise level for the models listed in Section
3.1.
4. For the contribution according Section 1, 2, 3, Cornell will pay "HUS",
H.U. Schnieder, CH-8226 Schleithaim, a royalty of 7% of the net sales
price.
This royalty will be paid quarterly.
Mr Schneider of his legal representative will have the permission to
review our sales records once a year provided the confidentiality of this
information is guaranteed.
5. To promote the sale of HUS screwcanal pumps Cornell is obligated to:
<PAGE>
5.1 To publish yearly a minimum of 10 advertisements total in the following
trade magazines:
- Water Pollution Control Journal
- Pollution Equipment News
- Water and Wastewater Digest
These advertisements with a size 12 x 26 cm shall exclusively describe the
HUS screwcanal pumps.
5.2 To exhibit yearly the HUS screwcanal pump at the following shows:
- National Water Pollution Control Exhibit
- National Irrigation Association Trade Show
- Cornell Pump School
- Two Regional Shows
5.3 To make yearly 3000 verifiable personal contacts with dealers, customers
and potential customers.
5.4 To distribute 1500 flyers to announce the HUS screwcanal pumps.
5.5 To include all technical description and pertinent sales information in
the Cornell Catalog. (over 5000 in circulation)
6. After the signing of the contract Cornell may order pumps, parts or raw
castings from HUS at the customary sales conditions, at least until
Cornell's production is in full operation.
7. Cornell can purchase for its own use duplicate pattern from HUS. The
billing will be based on time and material per order with a payment
schedule of 14 days 2% discount. 30 days net, not packaged for F.O.B.
factory.
<PAGE>
For the Introduction and construction of the screwcanal pump "System HUS"
Cornell can demand the service of Mr. Schneider for three weeks after
prior negotiation of the dates and the payment of a sum of 14,000 SFR plus
all incurred expenses (food, lodging and transportation).
8. Cornell agrees to manufacture the HUS screwcanal pump only after signing
of the license agreement with HUS, not to license the screwcanal pumps to
third parties and to treat the information confidentially.
9. Both contract partners are obligated to respect the know-how of each other
and it is not permitted in the sales territory of the other partner
screwcanal pumps "System HUS" to offer or to sell. The sales organization
of the other will be mutually respected.
10. The common language of negotiation will be German or English, unless
explicit another language is agreed on.
11. Changes to the contract are only accepted after both parties have signed
an addendum in full, and concised wording.
12. Should serious contract violations occurs the court in Schaffhausen and
the Swiss law will be mutually respected.
S U P P L E M E N T A R Y A G R E E M E N T
- --------------------------------------------
a) Should the sales of screwcanal pumps by Cornell not reach a mutual
satisfactory return by the year 1997. Cornell or its legal successor
agree to return without compensation to HUS or its legal successor all
drawings and information by December 31, 2002 and to discontinue
manufacturing of screwcanal pumps by December 31, 2002.
<PAGE>
HUS has established, that an obtained yearly sales volume, by the year
1997 of minimum of 650,000 SFR (six hundred fifty thousand Swiss Franks),
by Cornell or its legal successor to be considered satisfactory.
b) Cornell or its legal successor acknowledges and agrees to pay royalties
according to contract Section 4, for all screwcanal pumps and pumps..
further developed from this concept, until April 28, 2003 to HUS or its
legal successor and assures under mutual confidence an uninterrupted sales
effort as basis for its royalty calculations. The payment of royalty will
be to a Swiss bank to be specified by HUS. Both contract partners will be
obligated to treat royalty payments and sales information with utmost
confidence and not to reveal sales volumes to third parties.
c) Cornell will pay by 1-31-1987 (30 days after billing) to HUS for the
copies and the shipping of the technical information according to contract
Section 3 a sum of 9,800 SFR.
Red and as correct acknowledges:
The Contract Partners:
The Licensee: The Licenser:
Cornell Pump Company HUS Dickstoffpumpen AG
2323 Southeast Harvester Drive Hans-Ulrich Schneider
Portland, Oregon 97222 / USA Espilibuck 5
----------------------------
CH-8226 Schleitheim
-------------------
/s/ Glenn Q. Tribe
------------------
Glenn Tribe, P.E. /s/ H.U. Schneider
President -------------------------
Dipl. ing. H.U. Schneider
/s/ Max Frey
------------------
Max Frey, P.E.
Vice President, Engineering
/s/ Gerald E. Turner
--------------------
Gerald E. Turner
Vice President, Administration
<PAGE>
EXHIBIT E
LICENSE AGREEMENT
-----------------
This agreement ("Agreement") is effective as of the 7th day of August, 1995
by and among Integrated Designs, Inc., a Delaware corporation (hereinafter
referred to as "LICENSOR"), and Tokyo Electron Limited, a company organized
under the laws of Japan ("TEL"), Tokyo Electron Kyushu Limited, a company
organized under the laws of Japan ("TEL Kyushu") (hereinafter referred to
collectively as "LICENSEES" and individually as "LICENSEE").
1. LICENSOR is the owner of all right, title and interest to United
States Parent # 5,316,181, entitled "Liquid Dispensing System" issued on May 31,
1994 and its continuation (the "Parent"), pursuant to which LICENSOR possesses
certain exclusive rights to the manufacture, sale and use in the U.S. of
on-demand liquid chemical dispensing products utilizing an out-gas or de-gas
method of removing vessel pressure after dispensing operations.
2. LICENSEES are affiliated companies engaged collectively in the
business of manufacturing, marketing and selling liquid chemical dispensing
products, and systems which incorporate such products, and which manufacturing,
marketing and selling does now and is expected to continue to occur in the U.S.;
3. LICENSEES wish to continue such business in the U.S. including
practice under the Patent, and LICENSOR is agreeable to such practice, but only
under the terms, provisions and conditions of this Agreement.
NOW THEREFORE, in consideration of the covenants and agreements hereinafter
expressed and other good and valuable consideration, receipt of which hereby is
acknowledged, the parties hereto agree as follows:
I. GRANT
-----
Subject to the terms, provisions and conditions of this Agreement, LICENSOR
hereby grants to LICENSEES for the term of this Agreement, the non-exclusive,
non-transferable and personal right under the Patent to manufacture, sell, lease
and use within the United States ("U.S.") on-demand liquid chemical dispense
products, either standing alone or as a component of other products or systems,
utilizing an out-gas or de-gas method of removing vessel pressure after
dispensing operations (the "Licensed Products"). Such non-exclusive,
non-transferable and personal right to manufacture, sell, lease and use in the
U.S. is referred to hereinafter as the "License". LICENSEES shall have no right
to grant sub-licenses to any affiliated or other third party without the prior
written agreement of LICENSOR.
<PAGE>
II. LICENSE FEE - ROYALTY
---------------------
2.1 In consideration of the granting of the License, LICENSEES shall pay
to LICENSOR a nonrefundable "License Issue Fee" of Three Hundred Seventy-Four
Thousand Four Hundred Dollars U.S. ($374,400.00) as royalty for 104 units
previously shipped by TEL to the U.S., which shall be due and payable within one
(1) month after the effective date of this Agreement.
2.2 Additionally, LICENSEES shall pay to LICENSOR a per unit royalty for
each additional Licensed Product manufactured or sold or leased or used by any
of them in the U.S. (but only one royalty payment per unit of Licensed Product)
in an amount equal to Three Thousand Six Hundred Dollars ($3,600) U.S. (the
"Royalty").
2.3 Royalty payments by LICENSEES shall be made by TEL, on or before the
last day of the first month of each calendar quarter for the royalty accrued
during the immediately preceding calendar quarter. Partial quarters, if any, at
the beginning of the term of this Agreement, or upon termination, shall be
treated as calendar quarters. Late payments of Royalties shall bear interest
at that rate which is LICENSOR's (or its parent's) corporate borrowing rate on
the payment due date.
2.4 The Royalty shall accrue upon invoicing to LICENSEES' customer. In
the event of a lease or installment sale, the entire Royalty shall accrue at
the time of entering into the lease or installment sale of such Licensed
Product. In the event a Licensed Product is placed in use for benefit of
LICENSEES or its related or affiliated companies in a profit-making activity,
other than for demonstration purposes, a Royalty shall accrue at the time of
such use in the same manner as stated for a lease or installment sale.
2.5 No Royalties shall be due on Licensed Products replacing other
Licensed Products returned by a customer to LICENSEES pursuant to written
product warranty obligations and on with respect to which LICENSEES have
previously paid Royalties.
2.6 Royalties paid for Licensed Products returned by a customer to a
LICENSEE within such a warranty period and not repaired, replaced or for credit,
may be credited by LICENSEES against future Royalties due LICENSOR under this
Agreement.
III. REPORTS
-------
LICENSEES shall maintain full and accurate accounts and records of all
transaction by and among them their customer as are relevant to the subject of
this Agreement, such that all amounts owing hereunder to LICENSOR may be readily
and accurately determined. LICENSEES shall deliver to LICENSOR with each
Royalty payment, a report indicating each manufacture, sale, lease or other
transaction on which Royalty was due during the time period covered by the
payment. In the event no such transactions occur during any given quarter, a
report indicating such shall be made within the associated time period Royalty
would have been paid. LICENSOR shall have the right from time-to-time during
the term of this Agreement (and for a reasonable period of
<PAGE>
time following any termination) upon at least thirty (30) day advance notice to
LICENSEES to have LICENSOR's agent, employee or representative inspect and audit
LICENSEES' books, accounts and records with respect to the determination of
Royalty and matters directly relating thereto; provided however, LICENSEES shall
have the right to require such inspection and audit be made by an independent
certified public accountant. If the audit establishes that LICENSEES' Royalty
payments equaled or exceeded the amount paid, all information shall be retained
confidential by such agent. If the LICENSEES' Royalty payments are less than the
amount due pursuant to the audit, LICENSEES may pay the deficit within thirty
(30) days and reimburse LICENSOR for the cost of the audit, in which case all
other information shall be retained confidential. If such deficit and costs of
the audit are not timely paid, LICENSOR shall have access to all information of
such audit. LICENSEES, through a corporate officer, shall annually verify the
accuracy of the Royalty payments for each calendar year. Such verification shall
accompany the Royalty report for the fourth calendar quarter of each year.
IV. NOTICES
-------
4.1 All notices and communications shall be delivered between LICENSOR
and TEL. The addresses of the parties hereto, for the purpose of notice,
payments, reports services of process and other communications provided for
herein, shall be as follows until a party gives the other written notice of
change:
LICENSOR: INTEGRATED DESIGNS, INC.
4950 Keller Springs Road, Suite 100
Dallas, TX 75248
Attn: President
LICENSEES: Tokyo Electron Limited
TBS Broadcast Center
3-6 Akasaka 5-chome
Minato-ku, Tokyo 107, Japan
Attn: Tom Tsuneishi
4.2 All notices, reports and other communications which shall or may be
given or required pursuant to this Agreement shall be deemed given as of the
date it is mailed in an envelope addressed to the other party at the address set
out above and supplied with proper postage.
V. TERM-EFFECTIVE DATE
-------------------
This License Agreement shall be effective as of the date first appearing
above and, unless earlier terminated in accordance with Article VI, shall expire
on May 31, 2012.
<PAGE>
VI. TERMINATION
---------------
6.1 LICENSEES shall have the right to terminate this Agreement at any
time on sixty (60) days written notice to LICENSOR, and upon payment of all
amounts due LICENSOR, through the effective date of termination.
6.2 If LICENSEES or any of them shall at any time default in the payment
of any Royalty or the making of any report hereunder, or shall commit any breach
of any representation, warranty or covenant (including but not limited to
failure to arbitrate in accordance with 8.6 below) herein contained, or shall
make any false report and shall fail to remedy any such default, breach, or
report within thirty (30) days after written notice thereof by LICENSOR,
LICENSOR may, at its option, terminate this Agreement and the License herein
granted by notice in writing to such effect.
6.3 Termination of this Agreement shall not affect the obligation of
LICENSEES to make any payments or perform obligations which shall have accrued
up to the date of such termination and to no failure or delay on the part of
LICENSOR to exercise its right of termination hereunder for any one or more
defaults shall be construed to prejudice its rights of termination for such or
for other or subsequent default.
6.4 Upon termination of this Agreement, LICENSEES will notify the
LICENSOR of the number of Licensed Products LICENSEES then has on hand and
LICENSEES will have the right to sell that amount of Licensed Products, but no
more. LICENSEES shall pay royalty on said Licensed Products on hand as herein
provided notwithstanding the fact that said Licensed Products may be invoiced
after the exclusive term.
6.5 Upon expiration of the Patent, the obligation to pay Royalty on
further activities shall terminate, but such expiration shall not cure, waive or
otherwise affect any past activities or obligations provided for herein.
VII. REPRESENTATION & WARRANTIES
--------------------------------
LICENSOR represents and warrants to each LICENSEE, and each LICENSEE
represents and warrants to LICENSOR, that:
(i) It is duly organized under the laws of the jurisdiction of its
organization and that possesses full corporate or other appropriate enterprise
authority to enter into and perform this Agreement.
(ii) Its officer evaluating and delivering this Agreement has been duly
appointed and elected to the office indicated below his signature, and such
officer has been duly authorized by it to execute and deliver this Agreement on
its behalf.
(iii) Neither its execution nor performance of the Agreement will
contravene, violate, or cause it to be in breach of or default under, any other
agreement to which it is a
<PAGE>
party of any of its articles of incorporation or organization, by-laws or other
governing documents or instruments.
ARTICLE VIII-MISCELLANEOUS
--------------------------
8.1 No warranties, express or implied, are made concerning the scope or
validity of the Patent of that the subject License assures that there will be
freedom form infringement of any third-party held patent.
8.2 The Royalty and other obligations of the LICENSEES provided for in
this Agreement shall be joint and several.
8.3 This Agreement, together with any schedules, exhibits or amendments
thereto, constitutes the sole agreement between the parties with respect to its
subject matter and merges all prior discussions and agreements among them. This
Agreement may not be modified or amended, except by written instrument executed
by and duly authorized representative of each party.
8.4 This Agreement has been executed and partially negotiated in the State
of Texas, U.S.A. The parties recognize and acknowledge that performance of this
Agreement will occur largely in the State of Texas and accordingly, the parties
agree that the validity, interpretations and enforcement of this Agreement shall
be governed by and construed in accordance with the laws and public policies of
the State of Texas applicable to contracts negotiated, made and duly to be
performed in such state. If any part of this Agreement is for any reason
determined to be invalid by any court of competent jurisdiction, the party
adversely affected shall have the option to have the remaining parts of this
Agreement continue in full force and effect.
8.5 LICENSEES shall not assign any of their rights or obligations
hereunder to any affiliated or other third party without the prior written
consent of LICENSOR.
8.6 Each Party covenants and agrees that, upon notice to all Parties as
provided in Article IV, any dispute concerning performance of any Party under
this Agreement, or for the breach thereof, which cannot be resolved between or
among the Parties, shall be submitted to arbitration in accordance with
Rules of Conciliation and Arbitration of the International Chamber of Commerce
by three (3) arbitrators. LICENSOR shall appoint one arbitrator of its choosing,
LICENSEES shall appoint one arbitrator of their choosing, and the two
arbitrators thus shall appoint the third arbitrator. Such arbitration shall be
held in the English Language in Austin, Texas, if LICENSOR is the initiating
party, or in Dallas, Texas, if LICENSEE is the initiating party. Either party
may seek injunctive relief to maintain the status quo pending receipt of the
arbitral award. In deciding upon the validity, construction, or performance of
this Agreement, the arbitrators shall be bound by the contractual obligations of
the Parties herein. Each party hereby consents to the jurisdiction of such
arbitration proceedings.
<PAGE>
8.7 No failure to exercise and no delay in exercising any right, power
or privilege under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or privilege hereunder
preclude the exercise of any other right, power or privilege (hereunder or
otherwise). No waiver of any breach in the performance of this Agreement shall
be deemed to be waiver of any preceding or succeeding breach of this Agreement.
No extension of time of performance of any obligations or other acts hereunder
shall be deemed to be an extension of time for the performance of any other
obligations or any other acts. The rights and remedies of the parties under this
Agreement are in addition to all of the rights and remedies, at law or in
equity, that they may have against the others.
8.8 This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together should constitute one and the same instrument.
8.9 The headings of the Articles and Sections of this Agreement are
inserted for convenience of reference only and not intended to be part of or to
affect the meaning or interpretation of this Agreement.
8.10 Upon execution of this Agreement, LICENSOR, together with TEL, shall
issue to each TEL's customer, whom LICENSOR's attorney in writing warned that
TEL and TEL America infringed LICENSOR's patent, a letter with signature of the
both LICENSOR and TEL that the dispute with regard to the Patent is resolved.
IN WITNESS WHEREOF, LICENSOR and LICENSEES have signed this Agreement
through their authorized representatives at the times and places set forth
below:
LICENSOR: INTEGRATED DESIGNS, INC.
By: /s/ Jem Phillips
--------------------------
Title: President
Date: August 7, 1995
------------------------
Place: [ILLEGIBLE]
-----------------------
LICENSEE: TOKYO ELECTRON LIMITED
By: [SIGNATURE ILLEGIBLE]
--------------------------
Title: Corporate Director
-----------------------
Date: Aug, 7, 1995
------------------------
Place: Tokyo, Japan
-----------------------
<PAGE>
LICENSEE: TOKYO ELECTRON KYUSHU LIMITED
By: [SIGNATURE ILLEGIBLE]
---------------------------
Title: President
------------------------
Date: August 18, 1995
-------------------------
Place: [ILLEGIBLE]
------------------------
<PAGE>
REVISED 4/30/96
---------------
SCHEDULE 9.13
-------------
ENVIRONMENTAL LAW MATTERS
-------------------------
In Section 5.0 of the September 14, 1992 report prepared at the
Agent's request by ESCM & Associates, Inc., several actual or potential
environmental problems relating to Borrower's Commerce, Georgia facilities were
identified. In Section 6.0 of such report, recommendations were made by ESCM &
Associates, Inc. with respect to the correction or avoidance of such problems.
Borrower has implemented the recommendations set forth in such Section 6.0.
In the September 19, 1992 report of Squier Associates prepared at the
request of the Agent with respect to Borrower's Milwaukie, Oregon facility,
certain actual or potential environmental problems were identified with respect
to this facility and certain recommendations were made with respect to the
correction or avoidance of such problems. The Borrower shall implement the
recommendations set forth in the Squier Associates report within the respective
time frames provided in that report for such actions.
On March 18, 1996, Borrower's Roper Pump Company unit received at its
Commerce, Georgia facility a "Section 104 Information Request" letter from the
U.S. Environmental Protection Agency requesting information in connection with
its prior shipments of waste material to the Cherokee Oil Company site in
Charlotte, North Carolina. The Information Request indicated the site had been
the subject of clean-up activities and the information requested was sought for
purposes of cost recovery. Borrower complied with such request and inquired into
the facts and circumstances of the site clean-up. Borrower believes that any
responsibility it ultimately may be determined to have for the costs of the
clean-up will not have a material adverse effect on the financial condition of
it and its subsidiaries taken as a whole.
<PAGE>
REVISED 4/30/96
---------------
SCHEDULES 11.01 AND 11.02
-------------------------
PERMITTED INDEBTEDNESS AND LIENS
--------------------------------
See attached copies of UCC filings giving notice of certain leasing or
other secured transactions involving Borrower and its Subsidiaries.
See also matters set forth as exceptions in (i) Schedule B-Section II
of Lawyers Title Insurance Corporation's commitments for title insurance cases
nos. 1-142-545P and 1-142-547P dated September 21, 1992; and (ii) Schedule B of
Lawyers Title Insurance Corporation's Title Report No. 114257 (LOS 18791) dated
September 11, 1992.
<PAGE>
<TABLE>
<CAPTION>
THE FINANCING STATEMENT IS [TEXT ILLEGIBLE] FOR FILING WILL REMAIN [TEXT ILLEGIBLE], WITH CERTAIN [TEXT ILLEGIBLE] OF FIVE YRS FROM
THE DATE OF [TEXT ILLEGIBLE], PURSUANT TO SECTION 9403 [TEXT ILLEGIBLE] CALIF UNIFORM [TEXT ILLEGIBLE] CODE.
This FINANCING STATEMENT is presented for filing pursuant to the California, Uniform Commercial Code.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
1. DEBTOR (LAST NAME FIRST IF AN INDIVIDUAL) 1A SOCIAL SECURITY OR FEDERAL TAX NO.
AMOT CONTROLS
- ------------------------------------------------------------------------------------------------------------------------------------
1B. MAILING ADDRESS 1C CITY STATE 1D ZIP CODE
P. O. BOX 1312 RICHMOND, CA 94802
- ------------------------------------------------------------------------------------------------------------------------------------
2 ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST IF AN INDIVIDUAL) 2A [TEXT ILLEGIBLE]
- ------------------------------------------------------------------------------------------------------------------------------------
2B MAILING ADDRESS 2C [TEXT ILLEGIBLE] 2D [TEXT ILLEGIBLE]
- ------------------------------------------------------------------------------------------------------------------------------------
3 DEBTOR'S TRADE NAMES ON STYLES (IF ANY) 3A FEDERAL TAX NUMBER
- ------------------------------------------------------------------------------------------------------------------------------------
4 SECURED PARTY 4A SOCIAL SECURITY [TEXT ILLEGIBLE]
NAME SELWAY MACHINE TOOL CO., INC.
MAILING ADDRESS 29250 UNION CITY BLVD 94-1716003
CITY UNION CITY STATE CA ZIP CODE 94587
- ------------------------------------------------------------------------------------------------------------------------------------
5 ASSIGNEE OF SECURED PARTY (IF ANY) 5A SOCIAL SECURITY NO. FEDERAL TAX
NAME NO. [TEXT ILLEGIBLE]
MAILING ADDRESS
CITY STATE ZIP CODE
- ------------------------------------------------------------------------------------------------------------------------------------
6 This FINANCING STATEMENTS covers the following types or items of property (include description of real property on which located
and owner of record when required by instruction 4).
SLANT 1B NAK CNC LATHE S/N: CQ4812
THIS DOCUMENT SHALL BE DEEMED A SECURITY AGREEMENT WHEREBY SELWAY MACHINE TOOL CO., INC. RETAINS A PURCHASE MONEY SECURITY
INTEREST IN THE COLLATERAL.
INCLUDES ALL TOOLING, ATTACHMENTS, REPLACEMENTS, PARTS, ACCESSORIES, SUBSTITUTIONS, AND ADDITIONS.
- ------------------------------------------------------------------------------------------------------------------------------------
CHECK [X] 7A [_] PRODUCTS OF COLLATERAL 7B DEBTOR(S) SIGNATURE NOT REQUIRED IN ACCORDANCE WITH
IF APPLICABLE ARE ALSO COVERED INSTRUCTIONS(A) ITEM
[_] (1) [_] (2) [_] (3) [_] (4)
- ------------------------------------------------------------------------------------------------------------------------------------
CHECK [X] [_] DEBTOR IS A "TRANSMITTING UTILITY IN ACCORDANCE WITH UCC & [TEXT ILLEGIBLE].
IF APPLICABLE
- ------------------------------------------------------------------------------------------------------------------------------------
DATE C 10. THIS SPACE FOR USE OF FILING OFFICER (DATE.
[SIGNATURE ILLEGIBLE] 14 MAY 1991 O (DATE, TIME, FILE NUMBER AND FILING OFFICER)
SIGNATURE OF DEBTOR(S) D
E
- ------------------------------------------------------------------------------
AMOT CONTROLS 1
TYPE OR PRINT NAME(S) OF DEBTOR(S) 2
- --------------------------------------------------------------------
3
SIGNATURE(S) OF SECURED PARTY(IES) 4
- --------------------------------------------------------------------
SELWAY MACHINE TOOL CO., INC. 5
TYPE OR PRINT NAME(S) OF SECURED PARTY(IES) 6
- --------------------------------------------------------------------
1. Return Copy to: 7
NAME [ SELWAY MACHINE TOOL CO., INC. ] 8
ADDRESS 29250 UNION CITY BLVD 9
CITY UNION CITY
STATE CA 0
ZIP CODE [ 94587 ]
- ------------------------------------------------------------------------------------------------------------------------------------
[TEXT ILLEGIBLE] FORM UCC 1- FILING FEE $5.00
APPROVED BY THE SECRETARY OF STATE
====================================================================================================================================
[TEXT ILLEGIBLE]
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
This FINANCING STATEMENT is presented to a Filing Officer for No. of Additional
filing pursuant to the Uniform Commercial Code. Sheets Presented: 87-29693
- ------------------------------------------------------------------------------------------------------- 10-26-87
<S> <C>
(1) Debtor(s) (Last Name First) and Address(ee): (2) Secured Party(ies) (Name(s) And Address(ee): 10:20 A.M.
Roper Industries, Inc. SOUTHERN NATIONAL LEASING CORP. Jackson County, Georgia
P.O. Box 269 P.O. Box 31273 Office of Dep. Clerk
Commerce, GA 30527 Charlotte, Nc 28231 of Superior Court.
UNIT 55001 /s/ Jane Perez, Dep.
- ------------------------------------------------------------------------------------------------------- For
(30 (a) [_] Collateral is or includes fixtures. (4) Assignee(s) of Secured Party, Address(ee): Filing
(b) [_] Timber, Minerals or Accounts Subject Officer
to G.S. 25.9.103(50 are covered
(c) [_] Crops Are Growing Or To Be Grown
On Real Property Described In Section (5).
If either block 3(a) or block 3(b) applies describe
best ????, including record owner(s) in section
(5).
- ------------------------------------------------------------------------------------------------------------------------------------
(5) This Financing Statement Covers the Following types (or items) of property.
A LEASE OF: Minolta RP 18-24 S/N 161703
Reader-printer with card feeder
[_] Products of the Collateral Are Also Covered.
- ------------------------------------------------------------------------------------------------------------------------------------
(6) Signatures: Debtor(s) Secured Party(ties) for Assignee(s)
Roper Industries, Inc. SOUTHERN NATIONAL LEASING CORP.
--------------------------------------- ---------------------------------------------------------------------
(By) [SIGNATURE ILLEGIBLE]
--------------------------------------------------------------
(By) [SIGNATURE ILLEGIBLE] Controller Signature of Secured Party Permitted in Lieu of Debtor's Signature:
----------------------------------- (1) Collateral is subject to Security Interest in Another
Standard Form Approved by N.C. Sec. of State Jurisdiction and [x]
[_] Collateral Is Brought Into This State
[_] Debtor's Location Changed To This State
(1) Filing Officer Copy - Numerical (2) For Other Situations See: G.S. 25-0-402 (2)
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
This FINANCING STATEMENT is presented to a filing officer for filing pursuant to
the Uniform Commerical Code 3. Maturity date (if any):
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Debtor(s) (Last Name First) and address (ee) 2. Secured Party (ies) and address (ee) For Filing Officer (Date, Time, Number,
and Filing Office) 88-30104
ROPER PUMP COMPANY APPLICON INCORPORATED 3-30-88
OLD MAYSVILLE ROAD 4251 Plymouth Road 2:30 p.m.
COMMERCE, GA. 30529 P.O. Box 986 JACKSON
Ann Arbor, MI 48106 [TEXT ILLEGIBLE]
- ------------------------------------------------------------------------------------------
4. This financing statement covers the following types (or items) of property:
This filing is made pursuant to UCC 9-408 for its local equivalent) and shall not be
deemed evidence that the rental agreement between the parties is intended to be
other than a "true lease." Items rented or to be rented are generally described as: ---------------------------------------
5. Assignee(s) of Served Party and
[TEXT ILLEGIBLE] Address(ee)
MONOCHROME UNIX WORKSTATION programming system including
software, computer, and peripherals.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
This statement is listed without the debtor's signature to perfect a
security interest in collateral, (check [x] if as)
[_] already subject to a security interest in or other jurisdiction
when it was bought into this state.
[_] which is proceeds of the original collateral described above in
which a security interest was perfected:
- -------------------------------------------------------------------------------
Check [x] if covered; [_] Proceeds of Collateral are also covered. [_] Products
of Collateral are also ????, No. of additional Shares presented:
- --------------------------------------------------------------------------------
Filed with :
- --------------------------------------------------------------------------------
Roper Pump Company APPLICON INCORPORATED
------------------------------- ----------------------------------------
By: x [SIGNATURE ILLEGIBLE] By: [SIGNATURE ILLEGIBLE]
---------------------------- -----------------------------------
Signature(s) of Debtor(s) Signature(s) of Security Party(ies)
(1) Filing Officer Copy - Alphabetical STANDARD FORM - FORM UCC-1.
<PAGE>
<TABLE>
<CAPTION>
This FINANCING STATEMENT is presented to a filing officer for filing pursuant to the Uniform Commercial Code.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. [TEXT ILLEGIBLE] and Mailing address 2. Secured Party(ies) Name and Address: 3. (For Filing Officer)
(Do not abbreviate) File Number: 888-30365
Industrial Welding and Tool Time: 8:00 a.m.
Roper Pump P O Box 311 Date: 6-8-88
P. O. Box 269 Athens GA 30601 [signature illegible]
Commerce GA 30529 ---------------------- County, Georgia
Jackson [TEXT ILLEGIBLE]
- ------------------------------------------------------------------------------------------------------------------------------------
4. Assignee of Secured Party(ies), if any, Name and Address: 5. If an applicable box is checked [TEXT ILLEGIBLE]
[_] The crops stated herein are growing or to be grown
on the real estate described herein.
- ----------------------------------------------------------------------
6. This Financing Statement covers the following types (or items) of [_] The goods stated herein are or are to become
property. NOTE: If collateral is crops, [TEXT ILLEGIBLE] minerals, [TEXT ILLEGIBLE] on the real estate described
[TEXT ILLEGIBLE] complete Item 5; proceeds derived from cash proceeds herein.
must be specifically described below)
[_] Text illegible
1) 902-424 Miller Syncrowave 300 $ 2763.00 [_] [TEXT ILLEGIBLE]
2) 041-148 Foot Control 148.00
3) 003-265 Pulse Control 182.00 The record owner or leasee of the rail estate to ___________
----------
[TEXT ILLEGIBLE] 3093.00 ____________________________________________________________
------------------------------------------------------------
8a. Describe real estate applicable to Item 5, if any,
[_] Check if products of the collateral are also covered.
- ------------------------------------------------------------------------------------------------------------------------------------
7. This Statement is signed by the Secured Party instead of the [TEXT ILLEGIBLE] to perfect security [TEXT ILLEGIBLE] (Check where
applicable, otherwise [TEXT ILLEGIBLE] is required to sign and Secured Party is not required to sign.
[_] already subject to a security interest is another ([SIGNATURE ILLEGIBLE]) it was brought into this State or when the
[SIGNATURE ILLEGIBLE] was changed to this State, or
[_] which is proceeds of the original collateral described above in which ------------------------------------------------------
a security interest was perfected, or IMPORTANT- COMPLETE THIS BOX
Maturity Date ________________________________________
[_] as to which the filing [TEXT ILLEGIBLE] [TEXT ILLEGIBLE]
------------------------------------------------------
[_] acquired after a change of name, identity or corporate structure of debtor.
Roper Pump
- ------------------------------------------------------------------------------------------------------------------------------------
[TEXT ILLEGIBLE]
By ------------------------------------------------------ -------------------------------------------------------------------------
Signature(s) of Debtor(s) Signature(s) of Secured Party(ies)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
This FINANCING STATEMENT is presented to a filing officer for filing pursuant to the Uniform Commercial Code:
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Debtor(s) (Last Name first) and address(es) 2. Secured Party(ies) and address(es) For Filing Officer (Date, time,
Number, and Filing Office)
AMOT CONTROLS CORPORATION
P.O. Box 1312, 1st & Nevin SIEMENS CREDIT CORPORATION
Richmond, CA 94802 2201 Corporate Blvd. N.W.
Boca Raton, FL 33431
- ---------------------------------------------------------------------------------------------- -----------------------------------
4. This financing statement covers the following types (or items) of property:
The equipment covered under equipment lease agreement # 09601941 between 5. [ TEXT ILLEGIBLE]
secured party and debtor, including the equipment described below, and all
accessories, attachments, replacements, substitutions, modifications, and
additions thereto,now or hereafter acquired, and all proceeds thereof
(including insurance proceeds).
Siemens Saturn I, Station Apparatus and Peripheral Equipment
This filing is made for informational purposes only, as the parties intend
this transaction to be a true lease.
- ------------------------------------------------------------------------------------------------------------------------------------
This statement is filed without the debtor's signature to perfect a security interest in collateral. (Check [x] if is) Filed with
[_] already subject to a security interest in another jurisdiction when it was brought into this state.
[_] which is proceeds of the original collateral described above in which a security interest was perfected.
- ------------------------------------------------------------------------------------------------------------------------------------
Check [x] if covered, [_] proceeds of California are also covered. [_] Products of Collateral are also covered, No. of additional
Sheets presented.
- ------------------------------------------------------------------------------------------------------------------------------------
AMOT CONTROLS CORPORATION SIEMENS CREDIT CORPORATION
- ------------------------------------------------------ ---------------------------------------------------------------------
By [SIGNATURE ILLEGIBLE] Buyer [SIGNATURE ILLEGIBLE] _________________________
----------------------------------- ------------ -------------------------------------- Title
Signature(s) of Debtor(s) Title Signature(s) of Secured Party(ies)
(1) Filing Officer Copy-[TEXT ILLEGIBLE] STANDARD FORM- FORM UCC-1. [TEXT ILLEGIBLE]
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
This FINANCING STATEMENT is presented for filing pursuant to the California Uniform Commercial Code.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. DEBTOR (LAST NAME FIRST (IF AN INDIVIDUAL) 1A. SOCIAL SECURITY
AMOT CONTROLS CORPORATION 94-129-0002
- ------------------------------------------------------------------------------------------------------------------------------------
2. MAILING ADDRESS 1C. CITY, STATE 1D. ZIP CODE
P.O. BOX 1312 RICHMOND, CALIFORNIA 94802
- ------------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST, IF AN INDIVIDUAL) 2A. SOCIAL SECURITY OR FEDERAL TAX NO.
- ------------------------------------------------------------------------------------------------------------------------------------
3. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
- ------------------------------------------------------------------------------------------------------------------------------------
4. DEBTOR'S TRADE NAMES OR STYLES (IF ANY) 3A. FEDERAL TAX NUMBER
- ------------------------------------------------------------------------------------------------------------------------------------
5. SECURED PARTY 4A. SOCIAL SECURITY NO., FEDERAL TAX NO.
OR [TEXT ILLEGIBLE]
NAME CLARKLIFT/OAKLAND, INC.
MAILING ADDRESS P.O. BOX 23605 94-2318982
CITY OAKLAND STATE CALIFORNIA ZIP CODE 94623
- ------------------------------------------------------------------------------------------------------------------------------------
6. ASSIGNEE OF SECURED PARTY (IF ANY) 5A. SOCIAL SECURITY NO., FEDERAL TAX NO.
OR [TEXT ILLEGIBLE]
NAME CLARK EQUIPMENT CREDIT CORPORATION
MAILING ADDRESS CIRCLE DRIVE 38-6052541
CITY BUCHANAN STATE MICHIGAN ZIP CODE 49107
- ------------------------------------------------------------------------------------------------------------------------------------
7. This FINANCING STATEMENT covers the following type: or items of property (include description of real property on which located
and owner of record when required by instruction 4).
ONE CLARK MODEL C500-50 LPG PCWERED LIFT 1982
SERIAL#355-0048-5120
188" TRIPLE STAGE
SIDE SHIFTER, 42" FORKS, CUSHION TIRES
LOAD BACK REST, DRIVER'S OVERHEAD GURAD
"PROCEEDS OF COLLATERAL ARE ALSO COVERED"
- ------------------------------------------------------------------------------------------------------------------------------------
7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN ACCORDANCE WITH
CHECK [X] 7A. PRODUCTS OF COLLATERAL INSTRUCTION 5(A) ITEM:
IF APPLICABLE [_] ARE ALSO COVERED [_] (1) [_] (2) [_] (3) [_] (4)
- ------------------------------------------------------------------------------------------------------------------------------------
CHECK [X] [_] DEBTOR'S A "TRANSMITTING UTILITY" N ACCORDANCE WITH UCC & [TEXT ILLEGIBLE}
IF APPLICABLE
- ------------------------------------------------------------------------------------------------------------------------------------
DATE: C 10. THIS SPACE FOR USE OF FILING OFFICE
[SIGNATURE ILLEGIBLE] 11-21-88 O (DATE, TIME, FILE NUMBER
SIGNATURE(S) OF DEBTOR(S) D AND FILING OFFICER)
E
- ------------------------------------------------------------------------------------
AMOT CONTROLS CORPORATION 1
[TEXT ILLEGIBLE] NAME(S) OF DEBTOR(S)
- ---------------------------------------------------------------------------- 2
/s/ SIGNATURE ILLEGIBLE 3
SIGNATURE(S) OF SECURED PARTY(TIES)
- ---------------------------------------------------------------------------- 4
CLARKLIFT/OAKLAND, INC. 5
[TEXT ILLEGIBLE]
- ---------------------------------------------------------------------------- 6
Return copy to:
7
NAME [ CLARK EQUIPMENT CREDIT CORPORATION ]
ADDRESS CIRCLE DRIVE 8
CITY BUCHANAN, MICHIGAN 49107
STATE 9
ZIP COD [ ]
============================================================================ 0
FILING OFFICER COPY FORM UCC. 1 FILING FEE $3.00
Approved by the Secretary of State
====================================================================================================================================
</TABLE>
<PAGE>
REVISED 4/30/96
---------------
SCHEDULE 11.03
--------------
PERMITTED GUARANTIES
--------------------
The Company as assignor remains liable for the obligations of its
wholly owned subsidiaries ISL International, Inc. and Uson Corporation under and
as set forth in the acquisition agreement by which each respective subsidiary
acquired its business.
The Company has guaranteed (i) the obligations of its wholly owned
subsidiary Integrated Designs, Inc., and its affiliate Integrated Designs L.P.,
under the March 1995 lease agreement by and between Integrated Designs, Inc. as
lessee, and Fremont Funding (Texas) Corp. as lessor, and (ii) the obligations of
its affiliated Metrix Instrument Co., L.P. under the September 29, 1995 Asset
Purchase Agreement and related agreements by and among the partnership, Metrix
Instrument Co., a Texas Corporation, and certain of the stockholders of Metrix
Instrument Co.
In May 1996, the Company intends to guarantee a bank overdraft facility
provided to its AMOT Controls Ltd. subsidiary in Bury St. Edmunds, England for
amounts not to exceed $1,000,000.
