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EXHIBIT (4.2)
FIRST AMENDMENT TO LOAN AGREEMENT
This First Amendment to Loan Agreement is dated as of the 21 day of
December, 1998 by and between First Wisconsin National Bank Milwaukee now known
as Firstar Bank Milwaukee, N.A. (herein called the "BANK") and the Badger Meter
Employee Savings and Stock Ownership Plan and Trust (herein known as the
"ESSOP").
RECITALS
WHEREAS, the Bank has previously provided to the ESSOP a One Million
Dollar ($1,000,00.00) Revolving Loan pursuant to a Loan Agreement dated as of
December 1, 1995 (the "LOAN AGREEMENT") for the purpose of acquiring from time
to time the common stock of Badger Meter, Inc. for the benefit of the
participants of the ESSOP (the "LOAN"); and
WHEREAS, the Loan Agreement is guaranteed by Badger Meter, Inc. (herein
called the "GUARANTOR") pursuant to a Guaranty dated as of December 1, 1995 (the
"GUARANTOR"); and
WHEREAS, the ESSOP and Guarantor have requested the Bank to increase
the amount of the Loan from One Million Dollars ($1,000,000.00) to Two Million
Six Hundred Thousand Dollars ($2,600,000.00).
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Loan Agreement is hereby
amended and restated as follows:
1. The term "NOTE" shall mean the Revolving Credit Note attached
hereto as Exhibit A which amends and restates the existing
$1,000,000 Promissory Note dated as of December 1, 1995, issued
under the Loan Agreement.
2. The term "LIBOR RATE" shall mean the per annum offered rate for
deposits in United States dollars for one, two, three and six
month interest periods (the "INTEREST PERIODS") which appear on
the Bloomberg electronic rate terminals at the Bank's money
center, as of 11:00 AM, London time, each Banking Day. If the
appropriate Bloomberg Rate Screen is not accessible, the
applicable LIBOR Rate will be determined by the Lender on the
basis of other electronic information and other broker's quotes or
offered rates for deposits in United States dollars. As used
herein, "BANKING DAY" shall mean any day Bank's money center is
open for business.
3. Section 2.1 "Stock Acquisition Loan" shall be amended in its
entirety to read as follows:
"From time to time prior to December 31, 2005 (the "MATURITY
DATE") or the earlier termination of this Loan Agreement, the
ESSOP may borrow from the Bank for purposes of financing the
acquisition of Badger Meter, Inc. common stock for the benefit of
the participants of the ESSOP up to the aggregate principal amount
outstanding at any one time of Two Million Six Hundred Thousand
Dollar ($2,600,000.00) (the "LOAN AMOUNT"). All Loans hereunder
will be evidenced by a single promissory note of ESSOP payable to
the order the Bank in the principal amount of the Loan Amount (the
"NOTE") provided that ESSOP will be obligated to pay only the
amounts actually disbursed and outstanding thereunder, together
with accrued interest thereon, at the rates and dates specified
herein and therein. Notwithstanding the foregoing, the Loan Amount
will be automatically reduced by the amount of any principal
payments made by ESSOP on the Note at any time, and the face
amount of the Note shall be automatically reduced in an equal
amount on said date, without further amendment by the parties."
4. Section 2.2 "Interest", Subsection (a) shall be amended by
deleting the first three sentences thereof and inserting the
following:
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"The unpaid outstanding principal balance of the Note shall bear
interest at rate equal to, at ESSOP's option, one or more of the
following: (a) The prime rate of interest as announced and in
effect from time to time at the Bank, with the rate hereon
changing as and when such rate changes (such a loan a "PRIME RATE
LOAN" and such a rate a "PRIME RATE"); or (b) 1.50% per annum in
excess of the LIBOR Rate (such a loan a "EURODOLLAR LOAN" and such
a rate a "LIBOR RATE"). In the event that ESSOP fails to select a
LIBOR Rate at the end of any LIBOR Rate Interest Period, such loan
shall automatically convert to a Prime Rate Loan at the then
prevailing Prime Rate. No more than ten Eurodollar Loans may be in
effect at any one time and each Eurodollar Loan shall be at a
minimum principal amount of $100,000. Interest shall be computed
for the actual number of days principal is unpaid, using a daily
factor obtained by dividing the stated interest rate by 365."
5. Section 2.2 "Interest", Subsection (c) shall be amended in its
entirety as follows:
"The Note may be prepaid in whole or in part, at the option of the
ESSOP at any time, provided however, that the ESSOP shall give the
Bank at least one day prior written notice of any such prepayment.
Accrued interest on the amount prepaid shall also be paid on the
date of prepayment. In the event of prepayment of less than all of
the outstanding balance of such Note, such prepayment shall be in
the minimum principal amount of Five Thousand Dollars ($5,000.00)
or a multiple thereof. To the extent at the time of any prepayment
there exists both a Prime Rate Loan and a Eurodollar Loan, the
prepayment shall be applied to the Prime Rate Loan first, until
there is no outstanding principal balance thereon, and the
remainder, if any, applied to the oldest outstanding Eurodollar
Loan. There shall be no prepayment indemnity for any prepayment of
a Prime Rate Loan. In the event any Eurodollar Loan is prepaid
prior to the end of the Interest Period, the ESSOP hereby agrees
to indemnify the Bank against any funding loss or expense's which
the Bank may sustain or incur by reason of the liquidation or
re-employment of deposits or other funds acquired by the Bank to
fund or maintain any Eurodollar Loan as reasonably determined by
Bank."
6. The following are conditions precedent to the effectiveness of
this Amendment:
A. Bank's receipt of a Reaffirmation of Guaranty from Badger Meter,
Inc.;
B. Bank's receipt of an updated Borrowing Resolution from the ESSOP
evidencing its authority to borrow up to Two Million Six Hundred
Thousand Dollar ($2,600,000.00) from Bank;
C. An Updated legal opinion from the ESSOP's counsel that the ESSOP
is duly authorized to enter into this Loan Amendment, to borrow
the additional funds available thereunder, and to otherwise
perform its obligations hereunder;
D. Bank's receipt of a First Amendment to Pledge Agreement executed
by ESSOP; and
E. Payment to Bank by the Guarantor of a $2,000 closing fee (1/8 of
1% of $1,600,000).
7. Except as specifically amended hereby, the Loan Agreement shall
remain in full force and effect in accordance with its terms. All
warranties and representations contained therein are hereby
reconfirmed as of the date hereof. All collateral previously given
to secure the Loan Agreement continues as security and all
guarantees of the obligations under the Loan Agreement remain in
full force and effect. This is an amendment, not a novation.
8. This First Amendment shall not be construed as or be deemed to be
a waiver by the Bank of existing defaults by ESSOP, whether known
or undiscovered. All agreements, representations and warranties
made herein shall survive the execution of this Amendment.
9. Pursuant to the Guaranty, the Guarantor shall be responsible for
payment of all fees and out-of-pocket disbursements incurred by
the Bank in connection with the preparation, execution, delivery,
administration and enforcement of the Agreement, including all
costs of collection, and including, without limitation, the fees
and disbursements of counsel (including inside counsel) for the
Bank.
10. This First Amendment shall only become effective upon execution by
the ESSOP and the Bank, and approval by all guarantors and any
other third party required by the Bank.
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11. This First Amendment shall be governed by and construed in
accordance with the internal laws of the State of Wisconsin.
12. This First Amendment may be signed in any number of counterparts,
each of which shall be considered an original, but when taken
together, shall constitute one document.
13. The ESSOP represents and warrants that the execution, delivery and
performance of the Agreement and this First Amendment and the
documents referenced herein are within the authority of the ESSOP.
Dated as of the 21 day of December, 1998.
BADGER METER EMPLOYEE SAVINGS AND
STOCK OWNERSHIP PLAN AND TRUST
BY: XXXXXXXX & XXXXXX TRUST COMPANY,
SOLELY AS TRUSTEE
By:
----------------------------------------
Name and Title:
---------------------------
ATTESTED:
By:
----------------------------------------
Name and Title:
---------------------------
FIRSTAR BANK MILWAUKEE, N.A.
By:
----------------------------------------
Name and Title:
---------------------------
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FIRST AMENDMENT TO PLEDGE AGREEMENT
This First Amendment to Pledge Agreement is dated as of the 21 day of
December, 1998 by and between Firstar Bank Milwaukee, N.A. and Badger Meter
Employee Savings and Stock Ownership Plan and Trust (the "ESSOP").
RECITALS
WHEREAS, the Bank has previously provided to the ESSOP an One Million
Dollar ($1,000,000.00) Revolving Loan pursuant to a Loan Agreement dated as of
December 1, 1995 (the "LOAN AGREEMENT") for the purpose of acquiring from time
to time the common stock of Badger Meter, Inc. for the benefit of the
participants of the ESSOP (the "LOAN"); and
WHEREAS, the ESSOP has requested the Bank to increase the amount of the
Loan from One Million Dollars ($1,000,000.00) to Two Million Six Hundred
Thousand Dollar ($2,600,000.00).
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Pledge Agreement is hereby
amended as follows:
1. A new paragraph 1 shall be added as follows:
"Effective as of December 21, 1998, all common stock of Badger
Meter, Inc. acquired by the ESSOP with the proceeds from the Loan
as increased to $2,600,000 (the "ESSOP STOCK"), shall be deemed
Pledged Stock hereunder, and shall be subject to this Pledge
Agreement upon their acquisition. All ESSOP Stock shall be held as
Pledge Shares by Firstar Trust Company in a collateral pledge
account in the name of the Bank for the benefit of the ESSOP, and
shall be promptly delivered to Firstar Trust Company so as to
maintain their identity and status as Pledged Stock hereunder, and
to preserve Bank's rights vis-a-vis such Pledged Stock as proved
for herein. As such Pledged Stock is acquired, the original
certificates and a properly completed irrevocable stock power
shall be promptly delivered to Firstar Trust Company as provided
herein."
2. The remaining numbered paragraphs shall be renumbered starting
with (2), et seq.
In all other respects, the Pledge Agreement remains unchanged and
in full force and effect.
BADGER METER EMPLOYEE SAVINGS AND
STOCK OWNERSHIP PLAN AND TRUST
BY: XXXXXXXX & XXXXXX TRUST COMPANY,
SOLELY AS TRUSTEE
By:
----------------------------------------
Name and Title:
----------------------------
ATTESTED:
By:
----------------------------------------
Name and Title:
----------------------------
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ACKNOWLEDGMENT OF GUARANTOR
The undersigned acknowledges and agrees to all of the foregoing and
agree that its Guaranty of Specific Transaction dated December 1, 1995 continues
to guarantee the obligations of the Borrower to the Bank as amended hereby and
by any prior amendments.
Dated as of December 21, 1998.
BADGER METER, INC.
----------------------------------------
By:
-------------------------------------
Name and Title:
-------------------------
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AMENDED AND RESTATED
REVOLVING CREDIT NOTE
$2,600,000 December 21, 1998
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 Two Million Six Hundred
Thousand and 00/100 Dollars ($2,600,000.0), payable December 31, 2005 (the
"MATURITY DATE").
Interest. The unpaid outstanding principal balance of the Note shall
bear interest at rate equal to, at Borrower's option, one or more of the
following: (a) The prime rate of interest as announced and in effect from time
to time at the Bank, with the rate hereon changing as and when such rate changes
(such a loan a "PRIME RATE LOAN" and such a rate a "PRIME RATE"); or (b) 1.50%
per annum in excess of the LIBOR Rate (such a loan a "EURODOLLAR LOAN" and such
a rate a "LOAN RATE").
Interest on the outstanding principal amount of the Note shall be
payable per the Loan Agreement described below, with a final payment of any
accrued interest due at the Maturity Date, or the earlier termination of the
Loan Agreement.
Principal. The unpaid principal balance of this Note as may be
outstanding from time to time hereunder, may be paid in the Borrowers sole
discretion, at any time subject to the provisions of the Loan Agreement
described below, but in any event, the entire unpaid principal balance shall be
due and payable on December 31, 2005.
Interest shall 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.
In no event will the interest rate hereunder exceed that permitted by
applicable law. If any interest or other charge is finally determined by a court
of competent jurisdiction to exceed the maximum amount permitted by law, the
interest or charge shall be reduced to the maximum permitted by law, and the
Bank may credit any excess amount previously collected against the balance due
or refund the amount to the Borrower.
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 xxx any party liable on it.
This Amendment and Restated Revolving Credit Note constitutes the Note
issued under a certain Loan Agreement dated as of December 1, 1995 between the
Borrower and the Bank, to which Agreement reference is hereby made for a
statement of the terms and conditions under which loans evidenced hereby were or
may be 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.
This Revolving Credit Note is an amendment and restatement in its
entirety of that certain One Million Dollar ($1,000,000.00) Promissory Note
issued under the Loan Agreement (the "ORIGINAL LOAN"); and this Revolving Credit
Note is intended to evidence a continuation and restatement of that Original
Note, is not intended as a refinancing or substitution of such Original Note.
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BADGER METER EMPLOYEE SAVINGS AND
STOCK OWNERSHIP PLAN AND TRUST
BY: XXXXXXXX & XXXXXX TRUST COMPAY,
SOLELY AS TRUSTEE
By:
---------------------------------------
Name and Title:
---------------------------
ATTESTED:
By:
---------------------------------------
Name and Title:
---------------------------
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REAFFIRMATION OF GUARANTY
To: Firstar Bank Milwaukee, N.A. (THE "BANK")
The undersigned (the "GUARANTOR", whether one or more) has executed
Continuing Guarant(ies) (Unlimited), Continuing Guarant(ies) (Limited), or
Guarant(ies) of Specific Transaction dated December 1, 1995 (collectively the
"GUARANTY") guaranteeing all of the obligations of Badger Meter Employee Savings
and Stock Ownership Plan and Trust (the "BORROWER") to the Bank, whether
currently existing or arising in the future.
The Bank will be extending a new loan to the Borrower, or renewing,
restructuring or otherwise amending an existing loan to the Borrower, as
evidenced by the following documents, among others:
Amended and Restated Revolving Credit Note; First Amendment to Loan
Agreement
The Guarantor hereby confirms that the guaranty remains in full force
and effect, and the definition of "Obligations" in the Guaranty specifically
includes the obligations identified above, as well as any renewals, amendments
or refinancing thereto (including an increase in the principal amount of the
loan).
This Reaffirmation is not intended to affect or limit the continuing
and unlimited nature of the Guaranty, and the Guarantor reaffirms that consent
by the Guarantor to any additional loans, refinancings, amendments and other
changes in any agreements between the Bank and the Borrower is not necessary, as
described in the Guaranty. All collateral securing the Guaranty also continues
as security, and all other terms of the Guaranty are hereby reaffirmed.
The Guarantor represents that the Guarantor has reviewed the Borrower's
financial condition prior to executing this Reaffirmation; and the Guarantor
specifically relieves the Bank of any obligation to advise the Guarantor of the
Borrower's current financial condition, or any changes in the Borrower's
financial condition in the future.
The Guarantor hereby acknowledges the receipt of a copy of this Guaranty,
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR
ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED.
YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
THIS NOTICE SHALL ALSO BE EFFECTIVE WITH RESPECT TO ALL OTHER CREDIT AGREEMENTS
NOW IN EFFECT BETWEEN YOU AND THIS LENDER. A MODIFICATION OF ANY OTHER CREDIT
AGREEMENTS NOW IN EFFECT BETWEEN YOU AND THIS LENDER, WHICH OCCURS AFTER RECEIPT
BY YOU OF THIS NOTICE, MAY BE MADE ONLY BY ANOTHER WRITTEN INSTRUMENT. ORAL OR
IMPLIED MODIFICATIONS TO SUCH CREDIT AGREEMENTS ARE NOT ENFORCEABLE AND SHOULD
NOT BE RELIED UPON.
Dated as of: December 21, 1998
----------------------
(Individual Guarantor) Badger Meter, Inc.
-------------------------------------------
Guarantor Name (Corporation or Partnership)
(SEAL) a
---------------------------- ----------------------------------------
Guarantor Name By:
------------- ----------------------------------------
Name and Title:
----------------------------
(SEAL) By:
---------------------------- ----------------------------------------
Guarantor Name Name and Title:
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