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Exhibit 4.3
Loan Agreement
Between
Firstar Bank Milwaukee, N.A.
and
The Badger Meter Employee Savings and Stock Ownership Plan and Trust
Dated as of December 1, 1995
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Firstar Bank Milwaukee, N.A. (the "Bank") and the Badger Meter Employee
Savings and Stock Ownership Plan and Trust (the "ESSOP") as established under
that certain Trust Agreement effective January 1, 1991, between Badger Meter,
Inc. and ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Trust Company, as Trustee (the "Trustee'), agree as
follows:
1. Definitions. As used in this Agreement, the following terms shall have
the following meanings, whether or not they are hereinafter capitalized.
1.1 "Closing Date" means the date of the closing of this agreement by
and between the Bank and the ESSOP.
1.2 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.3 "Eurodollar Loans" shall mean loans under this Agreement in the
minimum amount of $100,000, the interest rates on which are determined on the
basis of the 30, 60, 90 or 180 day LIBOR Rate shown on the Dow ▇▇▇▇▇ Telerate
screen, page 3750 (or as reported by any comparable interest rate service
selected by the Bank) as quoted by the Bank and as agreed to by the ESSOP for
the corresponding Interest Period. LIBOR Rate quotes shall be subject to
availability to the Bank and the Bank retains the right to adjust the reported
LIBOR Rate to reflect reserve or insurance requirements which may be imposed by
any regulatory agency having jurisdiction over the Bank.
1.4 "Guarantor" means Badger Meter, Inc.
1.5 "Guaranty" means the unlimited obligation assumed by Badger Meter,
Inc. to guarantee the performance by the ESSOP of all the terms and conditions
under this loan agreement in the form of Exhibit A attached hereto.
1.6 "Interest Period" shall mean, with respect to any Eurodollar Loan,
each period commencing on the date such Eurodollar Loan is made or converted
from a Prime Rate Loan or the last day of the next preceding Interest Period
for such Loan and ending on the numerically corresponding day in the first,
second, third or sixth calendar month thereafter, as the ESSOP may select,
except that each Interest Period which commences on the last Business Day of a
calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month; provided, that (i)
if any Interest Period would otherwise end after the Termination Date, such
Interest Period shall end on the Termination Date, and (ii) each Interest
Period which would otherwise end on a day which is not a Business Day shall end
on the next succeeding Business Day or, if such next succeeding Business Day
falls in the next succeeding calendar month, on the next preceding Business
Day.
1.7 "Loan" means the loan described in Section 2.1 of this Agreement.
1.8 "Note" means the Promissory Note in the form of Exhibit B attached
hereto.
1.9 "Pledge Agreement" means the agreement by the ESSOP to pledge, as
collateral for the Loan, the Badger Meter, Inc. common stock and class B common
stock being acquired with the proceeds of the Loan in the form of Exhibit C
attached hereto.
1.10 "Prime Rate" shall mean the rate announced by the Bank as its prime
rate, with such rate changing as and when the Bank announces any change in its
prime rate. The Prime Rate is not the lowest rate of interest charged by the
Bank.
1.11 "Prime Rate Loans" shall mean loans under this Agreement,the
interest rate on which are determined on the basis of the Prime Rate.
2. The Loan
2.1 Stock Acquisition Loan. The Bank agrees to lend to the ESSOP,
subject to the terms and conditions hereof, the principal amount of $1,000,000
to be used by the ESSOP to refinance a prior loan from the Bank made to
finance the acquisition of Badger Meter, Inc. common stock for the benefit of
the participants of the ESSOP. The entire principal amount and accrued interest
shall be paid in full on or before December 1, 2001. The loan shall be
evidenced by the Note.
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2.2 Interest. (a) The ESSOP shall have the option of designating the
outstanding balance as a Prime Rate Loan or as a Eurodollar Loan. In the event
that the ESSOP and the Bank have not agreed upon the rate and interest period
for a Eurodollar Loan, then, prior to an event of default described in Section
6 below, the outstandings shall be deemed to be a Prime Rate Loan. The ESSOP
promises to pay to the Bank interest on the unpaid principal amount of
each loan for the period from and including the date of such loan to, but
excluding the date such loan shall be paid in full, (i) while such loan is a
Prime Rate Loan, at a rate per annum equal to the Prime Rate (as in effect from
time to time); (ii) while such loan is a Eurodollar Loan, for each Interest
Period relating thereto, at a rate per annum equal to the LIBOR Rate applicable
to such loan for such Interest Period, plus 1.50%. The ESSOP hereby delegates
authority to select interest rates and interest periods hereunder to the
Guarantor, and the Bank may rely on any such directions received from the
Guarantor.
(b) Notwithstanding the foregoing, the ESSOP will pay to the Bank on
demand interest at the rate of two percent in excess of the rate otherwise in
effect for any principal which shall not be paid in full when due (whether at
stated maturity, by acceleration or otherwise), for each day during the period
from and including the due date thereof to, but excluding the date the same is
paid in full.
(c) Accrued interest shall be payable (i) in 'the case of a Prime Rate
Loan, quarterly on the last day of each quarter, (ii) in the case of a
Eurodollar Loan, on the last day of each Interest Period therefor, and (iii) in
the case of any loan, upon the payment or mandatory or voluntary prepayment
thereof or the conversion of such loan to a loan of another type (but only on
the principal amount so paid, prepaid or converted).
(d) Prime Rate Loans may be prepaid by the ESSOP at any time without
penalty. Eurodollar Loans may be prepaid only if the ESSOP reimburses all of
the Bank's actual costs and penalties incurred as a result of such prepayment.
(e) The terms of individual Eurodollar Loans shall be agreed upon by
telephone calls between the Bank and the ESSOP, and may be confirmed in writing
from time to time by correspondence from the ESSOP to the Bank.
3. Representations and Warranties. In order to induce the Bank to make
the loan, the Guarantor represents and warrants to the Bank:
3.1 Valid Existence. The ESSOP is a duly qualified employee stock
ownership plan meeting the requirements of Sections 401(a) and 4975(e)(7) of
the Internal Revenue Code and complies with the applicable requirements
thereof, and with the requirements of any other applicable state or federal
law.
3.2 Execution and Delivery of Agreement, Note, and Pledge Agreement.
The execution and delivery of this Agreement, the Note, and the Pledge
Agreement, and the performance by the ESSOP of its obligations hereunder and
thereunder, are within the ESSOP's general powers, have been fully authorized
by all necessary and proper action under the terms of the applicable ESSOP
Trust documents, and do not (a) conflict with or result in a breach of any of
the provisions of the applicable Trust documents, (b) contravene any law, rule
or regulation of the State of Wisconsin, or the United States, or any order,
writ, judgment, injunction, decree, determination or award presently in effect
which affects or binds the ESSOP, (c) conflict with or result in a breach of or
default under any indenture or loan or credit agreement or any other agreement
or instrument to which the ESSOP is a party in respect of indebtedness for
money borrowed or (d) require the approval or consent of any governmental body,
agency or authority or any other person or entity. This Agreement, the Note,
and the Pledge Agreement, when executed and delivered, will constitute the
valid and binding obligations of the ESSOP enforceable in accordance with their
terms, in each case (a) except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforceability of creditors' rights generally, (b) subject to the
availability of equitable remedies for the enforcement of such obligations, and
(c) subject to applicable laws and equitable principles which may limit or
otherwise affect the remedies provided therein.
3.3 Use of Proceeds. The ESSOP will not use the loan proceeds for any
purpose other than to refinance the acquisition of Badger Meter, Inc. common
stock and class B common stock.
3.4 Other Loans. The ESSOP will not enter into any other loan agreements
without the prior written consent of the Bank, which consent will not be
unreasonably withheld.
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3.5 Investment Company. The ESSOP is not an "investment company" or a
company controlled by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
3.6 Litigation. There is no litigation or administrative or regulatory
proceeding pending or threatened against the ESSOP which might result in any
material adverse change in the financial condition of the ESSOP.
4. Conditions of Borrowing. The Bank's obligation to make the Loan is
subject to the satisfaction of the following conditions:
4.1 Opinion of Counsel. The Bank shall have received from counsel for
the ESSOP, a favorable opinion in form and substance satisfactory to the Bank
and dated as of the Closing Date as to (i) the matters referred to in Sections
3.1, 3.2, 3.5 and 3.6 hereof; and (ii) such other matters incident to the
matters herein contemplated as the Bank may reasonably request.
4.2 Guaranty. The Bank shall have received from the Guarantor the
Guaranty and a favorable opinion from counsel for the Guarantor in form and
substance satisfactory to the Bank and dated as of the Closing Date that (i)
the Guarantor is a legally organized, validly existing corporation and in good
standing under the laws of the State of Wisconsin; (ii) the execution and
delivery of the Guaranty, and the performance by the Guarantor of its
obligations under the Guaranty are within its corporate powers, have been duly
authorized by all necessary corporate action on the part of the Guarantor, and
do not (a) conflict with or result in a breach of any of the provisions of its
Articles of Incorporation or By-Laws, (b) contravene any law, rule, or
regulation of the State of Wisconsin, or of the United States, or any order,
writ, judgment, injunction, decree, determination or award presently in effect
which affects or binds it, (c) conflict with or result in a breach of or
default under any indenture or loan or credit agreement or any other agreement
or instrument to which it is a party in respect of indebtedness for money
borrowed or (d) require the approval or consent of any other person or entity;
(iii) the Guaranty, when executed and delivered, will constitute the valid and
binding obligation of the Guarantor enforceable in accordance with its terms,
in each case (a) except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforceability of creditors' rights generally, (b) subject to the
availability of equitable remedies for the enforcement of such obligations and
(c) subject to applicable laws and equitable principles which may limit or
otherwise affect the remedies provided, therein; and (iv) such other matters
incident to the matters herein contemplated as the Bank may reasonably request.
The Bank shall also have received copies, certified by the Secretary of the
Guarantor to be true and correct and in full force and effect on the Closing
Date, of (i) the Articles of Incorporation and By-Laws of the Guarantor; (ii)
resolutions of the Board of Directors of the Guarantor authorizing the
issuance, execution and delivery of the Guaranty and authorizing and directing
the Guarantor to make a stream of contribution payments to the ESSOP sufficient
to enable the ESSOP to repay the principal and interest as they come due on the
Note.
4.3 Pledge Agreement. The Bank shall have received from the ESSOP, the
duly executed Pledge Agreement in a form acceptable to the Bank.
4.4 Representations and Warranties True and Correct. The
representations and warranties contained in Section 3 hereof shall be true and
correct on and as of the Closing Date; there shall exist on the Closing Date no
conditions, event or act which would constitute a default hereunder and no
condition, event, act or omission shall have occurred which, with the giving of
notice or the passage of time, would constitute an event of default hereunder.
4.5 Proceedings Satisfactory to Bank. All proceedings taken in
connection with the transactions contemplated by this agreement and all
instruments, authorizations and other documents applicable thereto shall be
satisfactory in form and content to the Bank and the Bank shall have received
copies of all such documents reasonably required by it.
4.6 Closing Fee. The Bank shall have received a closing fee in the
amount of $3,750.
5. Affirmative Covenants. The Guarantor covenants that it will, while any
part of the Note remains unpaid, unless prior written waiver is granted by the
Bank:
5.1 Books and Records. Keep proper, complete and accurate books of
record and account and permit any representatives of the Bank to visit and
inspect any of the books and records of the ESSOP at any reasonable time and
as often as may reasonably be desired.
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5.2 Other Financial Information. Furnish to the Bank, as soon as
available, copies of such other financial information as the Bank may from
time to time reasonably request.
5.3 Maintenance of Valid Existence. The Guarantor agrees that the ESSOP
will maintain its valid existence and will neither dissolve nor institute any
proceedings for dissolution.
5.4 ERISA Notice and Certificate. As soon as possible upon the
occurrence of a reportable event under ERISA and in any event within thirty (30)
days after the Guarantor becomes aware of the same, the Guarantor shall
furnish a certificate setting forth the details as to such reportable event as
well as a copy of each notice thereof which is sent to the Department of Labor
in accordance with applicable regulations.
6. Events of Default. If any one or more of the following events of
default shall occur:
6.1 Failure to Pay Note. The ESSOP shall default in the due and
punctual payment of any installment of principal of or interest on the Note or
any other obligation to the Bank and such default shall continue uncured
for a period of five (5) days; or
6.2 Falsity of Representations and Warranties. Any representation or
warranty made by the ESSOP or Guarantor herein or in any writing furnished in
connection with or pursuant to this Agreement shall be false in any material
respect on the date as of which made or as of which the same is to be
effective; or
6.3 Default in Other Provisions. The ESSOP or Guarantor shall default
in the performance or observance of any other agreement herein contained and
such default shall continue for a period of 30 days after written notice to the
ESSOP or Guarantor from the holder of the Note; or
6.4 Default in Other Agreements. The Guarantor shall default in the
performance of the terms of any other evidence of indebtedness for borrowed
money issued or assumed by the Guarantor or in the terms of any agreement under
which such indebtedness is issued or secured and such default is not waived by
the creditor and shall continue beyond the period of grace, if any, therein
provided and which indebtedness is, in the reasonable judgment of the Bank,
material to the Guarantor; or
6.5 Entry of Final Judgments. A final judgment is entered against the
ESSOP and such judgment shall remain unsatisfied, unbonded or unstayed for a
period of sixty (60) days after the entry thereof; or
6.6 Insolvency, Failure to Pay Debts or Appointment of Receiver, Etc.
The taking of action by the ESSOP or Guarantor to authorize such organization to
become the subject of proceedings under the Federal Bankruptcy Code; or the
execution by the ESSOP or Guarantor of a petition to become a debtor under the
Federal Bankruptcy Code; or the filing of an involuntary petition against the
ESSOP or Guarantor under the Federal Bankruptcy Code which remains undismissed
for a period of sixty (60) days; or the entry of an order for relief under the
Federal Bankruptcy Code against the ESSOP or Guarantor.
Then and in any such event, as to the events described in Section
6.1 through 6.6, inclusive, the Bank may, at its option, declare the Note to be,
and the Note shall thereupon, become immediately due and payable, together with
accrued interest thereon. In the event of default, said Note shall bear
interest at a rate equal to two percent (2%) in excess of the rate otherwise
applicable. Presentment, demand, protest and notice of acceleration,
nonpayment and dishonor in such case are hereby expressly waived.
7. Miscellaneous.
7.1 Survival of Representations and Warranties. The ESSOP's
representations and warranties contained in this Agreement shall survive
closing and execution and delivery of the Note.
7.2 Notices. All notices provided for herein shall be sent by first
class mail and, if to the Bank, addressed to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of the Corporate Banking Division, and if
to the ESSOP, addressed to ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ Trust Company at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of the officer signing this
Agreement, with a copy to the Guarantor, addressed to ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ to the attention of the Vice
President-Finance or to such other address with respect to either party as such
party shall notify the other in writing; such notices shall be deemed given
when mailed.
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7.3 Non-Recourse To ESSOP. Notwithstanding any provisions herein to the
contrary, the Bank shall have no recourse against the ESSOP except as provided
in the Pledge Agreement and as to such other assets of the ESSOP as may be
permitted by law.
7.4 Titles. The titles of sections in this Agreement are for
convenience only and do not limit or construe the meaning of any section.
7.5 Parties Bound; Waiver. The provisions of this Agreement shall inure
to the benefit of and be binding upon any successor of any of the parties
hereto and shall extend and be available to any holder of the Note; provided
that the ESSOP's rights under this Agreement are not assignable. No delay on
the part of any holder of the Note in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, and no single or partial exercise
of any right, power or privilege hereunder shall preclude other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein specified are cumulative and not exclusive of any
rights or remedies which the holder of a Note would otherwise have.
7.6 Governing Law. This Agreement is being delivered and is intended to
be performed in the State of Wisconsin and shall be construed and enforced in
accordance with the internal laws of that state.
7.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute but one and the same instrument.
7.8 Severability. Should any portion of this Agreement be found to be
invalid or unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall remain in full force and effect.
7.9 Entire Agreement. This Agreement along with the Note, the Pledge
Agreement and the Guaranty shall constitute the entire agreement of the parties
pertaining to the subject matter hereof and supersede all prior or
contemporaneous agreements and understandings of the parties in connection
therewith.
IN WITNESS WHEREOF, the undersigned have executed this Loan Agreement as
of the date first set forth above.
FIRSTAR BANK MILWAUKEE, N.A.
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Commercial Banking Officer
BADGER METER EMPLOYEE SAVINGS
AND STOCK OWNERSHIP PLAN & TRUST
By:
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On behalf of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ Trust
Company, as Trustee
The undersigned Badger Meter, Inc. is signing below only to acknowledge the
representations, warranties and covenants set forth in sections 3 and 5 above.
BADGER METER, INC.
By:
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Title:
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PROMISSORY NOTE
$1,000,000 December 1, 1995
FOR VALUE RECEIVED, the undersigned borrower (the "BORROWER"), promises to
pay to the order of Firstar Bank Milwaukee, N.A. (the "BANK"), at its main
office in Milwaukee, Wisconsin, the principal sum of One Million Dollars
($1,000.000) on or before December 1, 2001.
The unpaid principal balance will bear interest and interest shall be
payable as set forth in the Loan Agreement between the Borrower and the Bank
dated of even date herewith (the "Loan Agreement").
Interest will be computed for the actual number of days principal is
unpaid, using a daily factor obtained by dividing the stated interest rate by
365. Principal and interest not paid when due shall bear interest from and
after the due date until paid at a rate of 2% per annum plus the rate otherwise
payable hereunder. If any payment is not made on or before 10 days after its
due date, the Bank may collect a delinquency charge of 5.0% of the unpaid
amount.
Without affecting the liability of any Borrower, endorser, surety or
guarantor, the Bank may, without notice, renew or extend the time for payment,
accept partial payments, release or impair any collateral security for the
payment of this Note, or agree not to ▇▇▇ any party liable on it.
This Note constitutes the Note issued under the Loan Agreement between the
Borrower and the Bank, to which Agreement reference is hereby made for a
statement of the terms under which the loan evidenced hereby was made and a
description of the terms and conditions upon which the maturity of this Note
may be accelerated, and for a description of the collateral securing this Note.
BADGER METER EMPLOYEE SAVINGS
AND STOCK OWNERSHIP PLAN & TRUST
By:
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On behalf of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ Trust
Company, as Trustee
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PLEDGE AGREEMENT
Agreement made December 1, 1995, between Firstar Bank Milwaukee, N.A.
("Bank") and Badger Meter Employee Savings and Stock Ownership Plan and Trust
("ESSOP") as established under that certain Trust Agreement effective January
1, 1991, by and between Badger Meter, Inc., and ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Trust
Company, as Trustee (the "Trustee").
WHEREAS, the Bank is concurrently making a loan to the ESSOP in the
principal amount of $1,000,000 as evidenced by the Loan Agreement dated
December 1, 1995 (the "Loan Agreement") and the Promissory Note dated December
1, 1995 (the "Note"), and
WHEREAS, the ESSOP has delivered to the Bank 57,145 shares of Badger
Meter, Inc. common stock and class B common stock (the "Pledged Stock"), as
security for the performance of its obligations under said Loan Agreement and
Note,
NOW, THEREFORE, in consideration of the foregoing premises, it is agreed
as follows:
1. The Bank's duty with reference to the Pledged Stock shall be solely to
use reasonable care in the custody and preservation of the Pledged Stock in its
possession, which shall not include any step necessary to preserve rights
against prior parties nor the duty to send notices, perform services, or take
any action in connection with the management of the Pledged Stock.
2. Shares of the Pledged Stock shall be released as security under this
Pledge Agreement upon payment of principal and interest outstanding under the
Loan Agreement and Note, determined as follows: The number of shares to be
released by the Bank shall be: (i) the total number of shares held by the Bank
immediately prior to the release for the plan year times (ii) a fraction, the
numerator of which is the amount of principal and interest paid on the Note for
the plan year and the denominator of which is the sum of principal and interest
on the Note paid for the plan year and the principal and interest on the Note
to be paid for all future plan years, computed by using the interest rate in
effect as of the end of the plan year. In any event, upon the full performance
by the ESSOP of its obligations under the Loan Agreement and Note, the Bank
shall release any and all Pledged Stock remaining as security hereunder and
shall redeliver same to the ESSOP.
3. In the event that the ESSOP defaults in the performance of its
obligations under the Loan Agreement and Note, the Bank shall have the
following rights and remedies under this Pledge Agreement: (a) the Bank (i) may
sell any or all of the Pledged Stock (other than class B common stock) at
public or private sale, by one or more contracts, in one or more parcels, at
the same or different times, for cash and/or credit, or upon any other terms,
at such places and times, and to such persons as the Bank deems best, (ii)
shall apply any cash proceeds actually received from any sale in the order and
subject to the conditions provided under Section 409.504 of the Wisconsin
Statutes, and (iii) shall pay any surplus to the ESSOP, (b) the ESSOP shall
take all action necessary to convert any class B common stock to common stock,
which action shall include the ESSOP first contacting Badger Meter, Inc. to
allow Badger Meter, Inc. to exchange shares of common stock for the shares of
class B common stock for delivery to the Bank,(c) if the ESSOP for any reason
fails or refuses to convert class B common stock to common stock then the Bank
is irrevocably appointed as the ESSOP's attorney-in-fact, authorized to execute
documents or take any other steps necessary to effect such conversion and (d)
the Bank shall have any other rights and remedies of a secured party under the
Wisconsin Uniform Commercial Code, all such rights and remedies being
cumulative, not exclusive, and enforceable alternatively, successively, or
concurrently.
4. At any time requested by the Bank, the ESSOP shall perform such other
acts and sign such other documents and instruments as may be necessary, proper,
or convenient in order to carry out the purposes and provisions of this Pledge
Agreement.
5. This Pledge Agreement shall be binding upon the parties, and their
successors and assigns.
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IN WITNESS WHEREOF, the parties have signed this Pledge Agreement as of
the day and year first above written.
BADGER METER EMPLOYEE SAVINGS
AND STOCK OWNERSHIP PLAN & TRUST
By:
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On Behalf of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ Trust
Company, as Trustee
FIRSTAR BANK MILWAUKEE, N.A.
By:
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Commercial Banking Officer
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[FIRSTAR BANK LOGO]
GUARANTY OF SPECIFIC TRANSACTION
1. GUARANTEE. For value received, and to induce Firstar Bank Milwaukee,
N.A (the "BANK") to extend or continue credit or other financial accommodations
now or in the future to Badger Meter Employee Savings and Stock Ownership Plan
& Trust (the "BORROWER"), the undersigned (the "GUARANTOR") hereby
unconditionally guarantees payment of and promises to pay or cause be paid to
the Bank the Obligations (as hereinafter defined), whether or not the
Obligations are valid and enforceable against the Borrower whenever the
Obligations become due, whether on demand, at maturity or by reason of
acceleration, or at the time the Borrower or the Guarantor shall become the
subject of any bankruptcy or insolvency proceeding.
As used herein, the term "OBLIGATIONS" shall mean all loans, drafts,
overdrafts, checks, notes and all other debts, liabilities and obligations of
every kind owing by the Borrower to the Bank under a promissory note payable to
the Bank, executed by the Borrower and dated December 1, 1995, in the original
principal amount of $1,000,000, including any extensions, renewals or deferrals
of such note, whether direct or indirect, absolute or contingent, liquidated or
unliquidated and whether existing now or in the future, including interest
thereon and all costs, expenses and reasonable attorneys' fees (including fees
of inside counsel) paid or incurred by the Bank at any time before or after
judgment in attempting to collect any of the foregoing, to realize on any
collateral securing any of the foregoing or this Guaranty, and to enforce this
Guaranty. The definition of "Obligations" also includes the amount of any
payments made to the Bank or another on behalf of the Borrower (including
payments resulting from liquidation of collateral) which are recovered from the
Bank by a trustee, receiver, creditor or other party pursuant to applicable
Federal or state law (the "SURRENDERED PAYMENTS"). In the event that the Bank
makes any Surrendered Payments (including pursuant to a negotiated settlement),
the Surrendered Payments shall immediately be reinstated as Obligations,
regardless of whether the Bank has surrendered or canceled this Guaranty prior
to returning the Surrendered Payments.
2. CONSENT TO BANK ACTIONS; NO DISCHARGE. The Guarantor agrees that the
Bank does not have to take any steps whatsoever to realize upon any collateral
securing the Obligations, or to proceed against the Borrower or any other
guarantor or surety for the Obligations either before or after proceeding
against the Guarantor; and the Guarantor waives any claim of marshaling of
assets against the Bank or any collateral. The Guarantor also agrees that the
Bank may do or refrain from doing any of the following without notice to, or
the consent of, the Guarantor, without reducing or discharging the Guarantor's
liability under this Guaranty: (i) renew, amend, modify, extend or release any
existing or future Obligations (including making additional advances, or
changing the amount, time or manner of payment of any Obligations), regardless
of when such modifications are made; (ii) amend, supplement and waive
compliance with any of the provisions of documents evidencing or related to any
of the Obligations; (iii) settle, modify, release, compromise or subordinate
any Obligation, any collateral securing any Obligation or this Guaranty, or the
liability of any other party responsible for payment of any Obligation; and
(iv) accept partial payments, and apply any payments and all other amounts
received from the Borrower, from liquidation of any collateral or from any
other guarantor to the Obligations (or any other amounts due to the Bank) in
any manner that the Bank elects. The Guarantor also expressly agrees that the
Guarantor's liability will not be reduced or discharged by the Bank's failure
or delay in perfecting (or to continue perfection of) any security interest,
mortgage or other lien on any collateral securing the Obligations or this
Guaranty, or to protect the value or condition of any such collateral. THE
GUARANTOR SPECIFICALLY ACKNOWLEDGES THAT THE BANK CAN COLLECT FROM THE
GUARANTOR WITHOUT FIRST TRYING TO COLLECT FROM THE BORROWER OR ANY OTHER
GUARANTOR.
3. WAIVERS; ▇▇▇▇▇▇▇▇ WAIVER. The Guarantor expressly waives all rights of
setoff and counterclaims, as well as diligence in collection or prosecution,
presentment, demand of payment or performance, protest, notice of dishonor,
nonpayment or nonperformance of any Obligation. The Guarantor also expressly
waives notice of acceptance of this Guaranty, and the right to receive all
other notices and demands of any kind relating to the Obligations or this
Guaranty. The Guarantor makes the following "▇▇▇▇▇▇▇▇" waiver: The Guarantor
shall not take, by assignment, subrogation or otherwise, any claim or
collateral which the Bank might have or obtain against or from the Borrower;
and the Guarantor irrevocably waives and releases, in addition to such claims,
any claim for unjust enrichment, indemnification, contribution or
reimbursement, and any and all other claims against the Borrower, whether by
statute or contract, by law or in equity, whether actual or contingent and
whether now or hereafter arising, except for claims by the Guarantor against
the Borrower, if any, for employee compensation and benefits, for repayment of
loans of the Guarantor to the Borrower and for any shareholder claims of the
Guarantor against the Borrower. With respect to any claims designated above
which
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the Guarantor is entitled to make against the Borrower, the Guarantor
hereby agrees that the Guarantor will not enforce or accept any payments on
such claims until the Obligations are paid in full.
4. FINANCIAL INFORMATION. The Guarantor warrants that all financial
information previously provided to the Bank was accurate when given, and that
no material adverse change has occurred in the Guarantor's financial status
since such information was given to the Bank. The Guarantor agrees to provide
to the Bank from time to time upon request any information regarding the
Guarantor's financial condition which the Bank reasonably requests; and
without; request, the Guarantor will provide annual audited financial
statements in form and content satisfactory to the Bank within 120 days of the
end of each year.*
5. BORROWER'S FINANCIAL CONDITION. The Guarantor warrants and represents
to the Bank that (i) the Guarantor is sufficiently knowledgeable and
experienced in financial and business matters to evaluate and understand the
risks assumed in connection with the execution of this Guaranty; (ii) the
Guarantor has had the opportunity to examine the records, reports, financial
statements, and other information relating to the financial condition of the
Borrower; (iii) the Guarantor has relied solely upon investigations of the
Borrower's financial condition conducted by the Guarantor or the Guarantor's
authorized representative in deciding to execute this Guaranty; and (iv) the
Guarantor, or its authorized representative, shall continue to independently
review, monitor and investigate the financial condition of the Borrower while
this Guaranty is in effect. THE GUARANTOR SPECIFICALLY RELIEVES THE BANK OF
ANY DUTY, OBLIGATION OR RESPONSIBILITY OF ANY NATURE WHATSOEVER TO ADVISE THE
GUARANTOR OF ANY CHANGE IN THE BORROWER'S FINANCIAL CONDITION.
6. COLLATERAL. The Guarantor hereby authorizes the Bank, without further
notice to anyone, to charge any account of the Guarantor for the amount of any
and all Obligations due under this Guaranty.
6(a) If the market value of the pledged shares of stock falls below
$17.50/share, or the Bank otherwise has a collateral coverage ratio of less
than 1 to 1, then the Guarantor agrees upon the request of the Bank to provide
such additional collateral as the Bank deems to be sufficient to cover such
shortfall.
7. DURATION OF GUARANTY. This Guaranty shall not be revoked by
dissolution, merger, bankruptcy or insolvency of the Guarantor with respect to
all Obligations, including any extensions, renewals or deferrals.
8. ACCELERATION OF OBLIGATIONS; SUCCESSORS; MULTIPLE GUARANTORS. If the
Guarantor shall become the subject of any bankruptcy or insolvency proceedings,
the Guarantor's liability hereunder to pay the Obligations shall become
immediately due and payable whether or not the Obligations are then due and
payable by the Borrower or any other guarantor. This Guaranty shall inure to
the benefit of the Bank, its successors and assigns and of the holder and owner
of any of the Obligations, and shall be binding on heirs, executors,
administrators, successors and assigns of the Guarantor. If there is more than
one Guarantor, the liability of the Guarantors shall be joint and several, and
the reference to the "Guarantor" shall be deemed to refer to all Guarantors.
* and Management-prepared financial statements within 45 days of the end of
each of the first three quarters of each year.
9. SEVERABILITY; PRIOR AGREEMENTS; AMENDMENT. Invalidity of any provision
of this Guaranty shall not affect the validity of any other provision. This
Guaranty, the collateral documents securing this Guaranty and the documents
evidencing the Obligations contain the entire agreement of the parties
regarding this matter; and any prior representations, promises or agreements
(whether oral or written) which are not a part of this Guaranty or the
documents described above are not enforceable. The terms of this Guaranty may
not be altered, amended or waived except by another written agreement signed by
the Guarantor and the Bank.
10. GOVERNING LAW; JURISDICTION. This Guaranty shall be governed by the
internal laws of the State of Wisconsin, except to the extent superseded by
Federal law. THE GUARANTOR HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF
ANY STATE OR FEDERAL COURT SITUATED IN THE COUNTY OR FEDERAL JURISDICTION WHERE
THE BANK'S MAIN OFFICE IS LOCATED, AND WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS, WITH REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS
RELATING TO THIS GUARANTY, THE COLLATERAL, ANY RELATED DOCUMENT, OR ANY
TRANSACTIONS ARISING THEREFROM, OR ENFORCEMENT AND/OR INTERPRETATION OF ANY OF
THE FOREGOING. Nothing herein shall affect the Bank's right to serve process
in any manner permitted by law, or limit the Bank's right to bring proceedings
against the Guarantor in the competent courts of any other jurisdiction or
jurisdictions.
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11. By its acceptance of this Guaranty, the Bank acknowledges that it
will, upon any event of default by the Borrower, notify Guarantor of such
default and unless prohibited from doing so by any applicable law, regular or
court order, make demand upon Guarantor, before liquidating collateral pledged
by the Borrower.
12. In addition to the costs of collection agreed to in Section 1 above,
the Guarantor agrees to pay the Bank's legal fees (including fees of in-house
counsel) incurred in the preparation of the Loan Agreement between the Borrower
and the Bank and all related documents.
Dated as of December 1, 1995
BADGER METER, INC.
By:
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Name and Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
President & Chief
Executive Officer
By:
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Name and Title: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Vice President-Controller