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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended
September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File Number 0-21461
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OMNIQUIP INTERNATIONAL, INC.
[Exact name of registrant as specified in its charter]
DELAWARE 43-1721419
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
222 East Main Street
Port Washington, Wisconsin 53074
(Address of principal (Zip code)
executive offices)
Registrant's telephone number, including area code: (414) 268-8965
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange
Title of each class on which registered
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None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock
(Title of class)
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Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes. X No.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
As of December 17, 1997, the aggregate market value of the common stock
held by non-affiliates (9,329,200 shares) of the registrant was $173,756,350
(based on the closing price, on such date, of $18.625 per share).
As of December 17, 1997, there were 14,250,000 shares of common stock,
$0.01 par value, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Proxy Statement dated on or about January 7, 1998 (portion) (Part III)
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OMNIQUIP INTERNATIONAL, INC.
INDEX TO FORM 10-K
Page
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Part I
Item 1. Business .................................................. 1
Item 2. Properties ................................................ 11
Item 3. Legal Proceedings ......................................... 11
Item 4. Submission of Matters to a Vote of Security Holders ....... 12
Part II
Item 5. Market for Registrant's Common Stock and Related Stockholder
Matters ................................................... 13
Item 6. Selected Consolidated Financial Data ...................... 14
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations ................................. 15
Item 8. Financial Statements and Supplementary Data ............... 20
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure .................................. 20
Part III
Item 10. Directors and Executive Officers of the Registrant ........ 21
Item 11. Executive Compensation .................................... 21
Item 12. Security Ownership of Certain Beneficial Owners and
Management ................................................ 21
Item 13. Certain Relationships and Related Transactions ............ 21
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K .............................................. 22
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PART I
Item 1. Business
General
OmniQuip International, Inc. (the "Company" or "OmniQuip") is the largest
North American manufacturer of telescopic material handlers and, as a result of
its recent acquisition of the Snorkel Division ("Snorkel") of Figgie
International Inc. ("Figgie"), one of the leading North American producers of
aerial work platforms. Other products manufactured by the Company include skid
steer loaders and a range of other material handling equipment. OmniQuip's
highly versatile products are used in a variety of applications for
construction, industrial, maintenance, military and agricultural markets. The
Company's principal products are marketed under the well-recognized and
highly-regarded SKY TRAK, LULL, SNORKELIFT and WILDCAT brand names.
Telescopic material handlers are especially useful in rough terrain
environments and congested job sites, where their maneuverability and ability to
raise, extend and lower payloads provide significant advantages over more
traditional material handling equipment, such as cranes, straightmast forklifts
and elevators. The Company's telescopic material handlers have a maximum lift
capacity of 5,000 pounds to 10,000 pounds and can position payloads from 28 feet
to 54 feet above the ground or 15 feet to 39 feet in front of the machine's
chassis. The versatility of these units allows users to lower overall costs by
substituting a single telescopic material handler for one or more other types of
material handling equipment, as well as for certain labor intensive material
handling tasks. The Company believes it manufactures the broadest product line
of telescopic material handlers in North America. Shipments of commercial
telescopic material handlers increased from approximately 950 units in calendar
1990 to approximately 2,900 units in 1996. Based upon industry reports, the
Company believes that its North American market share of 1996 shipments of
telescopic material handlers was approximately 40%. In addition, OmniQuip has
been the principal supplier since 1988 of telescopic material handlers to the
military. The Company has a contract to supply the Army with a new generation of
telescopic material handlers to support the logistics requirements of the Rapid
Deployment Forces. The Army has estimated that its requirements under the
contract could range up to a maximum of 1,200 ATLAS vehicles, or a maximum
contract value of $120 million. The Company believes that this contract will
enhance its ability to pursue sales to other branches of the United States armed
forces and to foreign military agencies.
Aerial work platforms are mobile, versatile units designed to position
workers and materials easily in elevated work locations. Such highly versatile
products allow users to increase productivity in certain labor intensive tasks
in an enhanced safety environment compared to equipment traditionally used to
reach elevated and difficult to reach positions such as scaffolding and ladders.
The Company's broad product line includes self-propelled telescoping and/or
articulating boom-type platforms, which have maximum elevation capabilities
ranging from 33 feet to 126 feet from ground to platform height and
self-propelled scissor-type platforms with maximum elevation capabilities
ranging from 15 feet to 40 feet from ground to platform height. The Company also
manufactures a small line of truck-mounted and trailer-mounted booms with
elevation capabilities ranging from 40 feet to 69 feet in height. Shipments of
aerial work platforms marketed under the SNORKELIFT and WILDCAT brand names
increased from approximately 3,200 units in 1990 to approximately 4,150 units in
1996.
OmniQuip sells and distributes its material handling and aerial work
platform products commercially through approximately 260 independent equipment
dealers and approximately 75 rental companies, including national rental fleets,
located in the United States and Canada. Internationally, OmniQuip markets and
distributes its products through a variety of arrangements with dealers and
distributors in approximately 50 countries. To facilitate the sale of its
material handling products, OmniQuip offers its independent equipment dealers
floor plan and rental fleet financing assistance in connection with the purchase
of the Company's products. Such assistance consists of limited, backup financing
guarantees and repurchase agreements which benefit dealers by providing them the
opportunity to obtain attractive financing terms on the Company's products,
which in turn allows dealers to stock more units for sale or rental.
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Industry Overview
OmniQuip competes principally in selected segments of the material handling
and light equipment markets which utilize engines of less than 130 horsepower.
With limited exceptions, competitors with leading market shares in these
segments typically are not large full-line construction equipment manufacturers.
North American shipments of construction and allied equipment grew from
$30.8 billion in 1990 to $43.1 billion in 1996, representing a nominal compound
annual growth rate of 5.8%. According to industry estimates, shipments of
telescopic material handlers in North America grew from approximately 2,400
units in 1990 to approximately 7,100 units in 1996, representing a real compound
annual growth rate of 19.8%, and shipments of aerial work platforms increased
from approximately 13,200 units in 1990 to approximately 40,400 units in 1996,
representing a real compound annual growth rate of 20.1%. For the twelve months
ended September 30, 1997, unit shipments of telescopic material handlers and
boom-type aerial work platforms grew approximately 31.6% and 19.4%,
respectively, and unit shipments of scissor-type aerial work platforms declined
by approximately 4.6%, each as compared to the twelve months ended September 30,
1996. The Company believes growth rates for telescopic material handlers and
aerial work platforms are attributable to a number of factors, including the
following:
Increased Productivity and Safety. Telescopic material handlers and
aerial work platforms enable users to reduce costs through increased labor
productivity compared to other methods using alternative equipment or
direct labor. Productivity enhancements include a reduction in the number
of indirect personnel required for material handling support to load,
transport and place building materials and to operate certain other types
of construction equipment. The versatility and variety of attachments
available for telescopic material handlers results in higher utilization
of the equipment and permits end users to increase inventory turnover at
job sites more rapidly by taking loads directly off delivery trucks and
placing them where they will be used. In addition, aerial work platforms
enable users to comply with increasingly stringent safety requirements on
a more cost effective basis relative to alternatives such as ladders and
scaffolding. Aerial work platforms provide distinct safety advantages over
alternative equipment and are increasingly attractive in light of federal
and state safety rules requiring the use of tethers and other safety
devices for workers in elevated work environments.
Product Versatility. Telescopic material handlers are more versatile
than other material handling equipment such as cranes, straightmast
forklifts and elevators. Telescopic material handlers can unload, carry
and place materials up to five stories high in rough terrain work
environments, eliminating the need for multiple pieces of more specialized
equipment and reducing the labor required to handle materials at the
worksite. In addition, using one or more of the approximately 40
Company-approved attachments, OmniQuip's telescopic material handlers can
be used in numerous applications. Attachments include forks and carriages,
grapples, buckets, augers, concrete hoppers and truss booms. The numerous
applications provided by such attachments used in conjunction with the
Company's telescopic material handlers allow customers to decrease
aggregate equipment costs and increase utilization of their material
handling equipment. Aerial work platforms also offer increased versatility
relative to more traditional devices such as ladders and scaffolding.
Highly mobile aerial work platforms are useful for reaching over machines
and other obstacles quickly and easily and for reaching elevated positions
not easily accessible by traditional people moving devices.
Growth of Equipment Rentals. The equipment rental industry serves a
wide variety of industrial, manufacturing, construction and governmental
markets. The equipment rental industry, including rental centers, national
rental fleets and independent dealers who offer equipment for either sale
or rental, has grown significantly. A survey conducted for an industry
trade association estimates that construction equipment rental revenues
were approximately $7.5 billion in 1990 and increased to approximately
$14.3 billion in 1994. The author of the survey further estimates that
such revenues increased to $15.1 billion in 1995 and $15.9 billion in
1996. Increased availability of rental construction equipment has
substantially broadened the group of potential end-users for the Company's
products. Equipment rentals provide end-users having limited needs or
resources with the ability to conveniently and economically rent material
handling equipment, as well as necessary attachments. Rental companies can
fulfill significant, but
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temporary, needs of large end-users, supplementing capacity during peak
activity periods. Additionally, rental companies can rent a single unit to
small contractors for short-term projects.
Growth of Non-Construction Applications. Historically, the primary
market for telescopic material handlers has been the construction market
while the principal markets for aerial work platforms have been the
construction and building maintenance markets. In recent years, however,
applications for each product line have emerged in other markets. For
example, since 1988, telescopic material handlers have been used by the
Army for munitions handling and, more recently, general logistics
purposes. Telescopic material handlers have also experienced increasing
acceptance in the industrial and agricultural markets where they are used,
among other applications, to transport and position bulk materials. Aerial
work platforms are increasingly used in the industrial and commercial
market by automobile and other manufacturers, airlines and ship builders,
among others.
Business Strategy
The Company's strategy is to grow primarily within selected segments of
the material handling and light equipment markets (i) which are growing faster
than the construction equipment industry generally, (ii) which typically utilize
local independent dealers for distribution rather than regional distributorships
primarily dedicated to products made by a single manufacturer, (iii) which
utilize engines of less than 130 horsepower, and (iv) which are not typically
dominated by full-line construction equipment manufacturers.
Key elements of the Company's business strategy include:
Providing superior products. The Company focuses on developing
innovative, high performance products with low life-cycle cost. By
introducing unique product features and enhancements, the Company believes
that it increases demand for the Company's products. Examples include the
pioneering introduction in 1994 of a SKY TRAK model capable of lifting and
positioning materials up to five stories above ground, the proprietary
sliding telescopic booms developed by one of the Company's wholly-owned
subsidiaries, Lull International, Inc. ("Lull"), which permit higher
precision, horizontal maneuvering of materials at various lift heights,
and Snorkel's introduction of industry-leading safety features, such as
envelope management, slope-level interlocks and pothole protection.
Recently, the Company introduced its first model of a new range of
telescopic material handlers designed to be used for expanded applications
in North America and to be competitive with products currently used in
international markets. These innovations, along with the Company's focus
on product quality and low life-cycle cost, highlight the Company's
continuing emphasis on developing superior products for its customers.
Pursuing a multiple brand distribution strategy. The Company is
pursuing a multiple brand strategy, maintaining essentially distinct
nationwide distribution channels for its brand name products. This
strategy provides more complete geographic coverage of the marketplace and
gives the Company the ability to selectively expand the number of dealers
carrying its products. At the same time this strategy affords the Company
the opportunity to realize economies of scale in providing parts supply,
attachments, dealer finance, component purchasing and manufacturing.
OmniQuip's multiple brand distribution strategy is designed to appeal to
customers' differing price, performance and support needs.
Acquiring complementary businesses. A key component of the Company's
growth strategy is the identification and completion of complementary
acquisitions. The Company's acquisition of Lull in August 1996 and Snorkel
in November 1997 reflects the Company's strategy of acquiring businesses
which utilize complementary distribution channels or which manufacture and
market products which complement the products currently manufactured and
sold by the Company. The Company has identified numerous potential
acquisition candidates in the relatively fragmented under 130 horsepower
market segment.
Achieving cost savings from the integration of acquired operations.
The Company believes that it can realize substantial additional cost
savings from the integration of acquired operations. For example, the
Company anticipates that it can increase purchasing efficiencies for
components and materials, eliminate
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duplicative overhead costs, streamline production processes and achieve
other economies of scale in areas such as parts supply, product design and
development and dealer finance.
Penetrating international markets. While the Company is the largest
North American manufacturer of telescopic material handlers, its sales of
such products outside North America are relatively modest. The Company is
in the process of "globalizing" its telescopic material handler products
to increase their appeal in international markets. The Company believes
that its acquisition of Snorkel will help it improve its distribution
networks outside North America to increase the availability of its
products in selected markets in the Far East, Europe and Latin America.
Products
The Company designs, manufactures and markets telescopic material handlers
and aerial work platforms as its principal product lines. In addition, the
Company manufactures and distributes a variety of other material handling
equipment and attachments and offers parts and service with respect to the
products it sells.
Pro Forma Net Sales by Product Category1
(in thousands)
Fiscal Year Ended Sept. 30,
1997 1996 1995 1994
---- ---- ---- ----
Telescopic material handlers .... $221,460 $166,041 $121,464 $ 75,245
Aerial work platforms ........... 142,889 146,780 103,998 70,400
Other2 .......................... 56,996 54,237 45,047 29,362
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Total ........................... $421,345 $367,058 $270,509 $175,007
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(1) The information in the foregoing table reflects the pro forma net sales by
product category of TRAK International, Inc. ("TRAK"), a wholly-owned
subsidiary of the Company, Lull and Snorkel for the applicable periods as if
the acquisitions of these companies had occurred on October 1, 1993.
(2) Includes parts and service, skid steer loaders and other miscellaneous
equipment lines and attachments.
Telescopic Material Handlers
Telescopic material handlers are rough terrain vehicles used to transport,
lift and position materials between ground locations, between vehicles and to
elevations up to five stories in height. This equipment is typically utilized in
North America by residential and non-residential building contractors to handle
a wide range of building materials and components, including bricks, concrete
blocks, open-wall panels, roof trusses, lumber, drywall sheets, structural steel
and roofing materials. In addition, by using one or more of the approximately 40
Company-approved attachments, the Company's telescopic material handlers can
also be used in nontraditional, specialized applications, such as steel building
construction or pole and post hole drilling. Available attachments include forks
and carriages, grapples, buckets, augers, concrete hoppers and truss booms.
End-users for the Company's telescopic material handlers currently include the
construction, military, agricultural, landscaping and industrial markets.
The Company currently manufactures 15 models of telescopic material
handlers marketed under the SKY TRAK and LULL brand names. These models have
rated load capacities of 5,000, 6,000, 8,000 and 10,000 pounds and possess the
capacity to place loads 28, 36, 37, 42 and 54 feet above the ground. Suggested
list prices for these products range from approximately $60,000 to approximately
$115,000 per unit. Four additional product offerings for use in the logging and
pipe handling industries are marketed under the DYNA LUGGER brand name, which
have rated load capacities up to 30,000 pounds and list prices of up to
$275,000.
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Each of the Company's two brands of telescopic handlers has unique
characteristics, which have contributed to strong competitive positions in the
market. The success of the SKY TRAK brand has been built on a reputation for
strong product performance and design innovation, with emphasis on design
simplicity and serviceability. The LULL brand has a long tradition associated
with its patented transfer carriage technology, which facilitates the precision
placement of palletized loads. LULL brand products enjoy a premium reputation
for their ease of operation, durability, and high resale value. The Company
believes the combination of its well-known SKY TRAK and LULL brand names, its
ability to offer the industry's broadest product line, and its dual-brand
distribution strategy, provide OmniQuip with competitive advantages in the
telescopic material handler market.
Since 1988, OmniQuip has been the primary supplier of telescopic material
handlers to the United States military. Such products are used by the United
States military for a variety of logistics requirements, including loading
certain types of rocket launchers, loading and unloading military equipment, and
for a variety of other military materials handling tasks. The U.S. military
exclusively used the Company's telescopic material handlers in Operation Desert
Storm. Substantially all of the Company's sales to the U.S. military were made
prior to fiscal 1994 pursuant to previous contracts. In May 1995, the Company
was awarded a fixed-price government contract to serve as sole supplier to the
Army of the ATLAS, the latest generation of the military version of the
Company's rough terrain telescopic material handler. ATLAS is designed as an
integral component of the Army's logistics support strategy for its Rapid
Deployment Forces. The contract provides for the supply of the Army's
requirements over a period of four years. The Army has estimated that its
requirements for ATLAS vehicles over this period could range up to a maximum of
1,200 units, or a maximum contract value of $120 million, although the Army is
not obligated to purchase any specified number of ATLAS vehicles. The contract
also affords the Army an option to order an additional 300 units above the 1,200
unit maximum. The Company believes that the award of the ATLAS contract also
will provide additional opportunities to market the ATLAS product directly and
through the Army to other branches of the United States armed forces and to
foreign military agencies.
Aerial Work Platforms
Aerial work platforms are mobile, versatile units designed to position
workers and materials easily in elevated work locations. These platforms are
used primarily by building contractors and commercial and industrial end-users
to enable workers to quickly and easily reach elevated work sites and to perform
tasks inside and outside of buildings at heights up to 126 feet. Aerial work
platforms compete with ladders and scaffolding, but provide superior flexibility
and improved safety features. For example, the Occupational Safety and Health
Administration mandates that individuals working above a certain height be
tethered to prevent potential accidents. Aerial work platforms allow such
workers to comply with the regulation while at the same time being highly mobile
and able to continuously work efficiently. The Company manufactures and markets
a full line of aerial work platforms, including boom-type telescoping units,
scissor-type aerial work platforms and a limited range of truck- and
trailer-mounted equipment.
The Company manufactures 18 models of boom-type aerial work platforms. The
Company's products include units with straight telescoping booms (with an
optional articulating jib) and units with articulating booms. Aerial work
platforms with straight telescoping booms can place work platforms from 37 feet
to 126 feet in height. Units with articulating telescoping booms and
articulating jibs can place work platforms from 33 feet to 60 feet in height.
List prices of the Company's boom-type aerial work platforms range from
approximately $40,000 to $270,000.
OmniQuip manufactures 11 scissor-type aerial work platforms.
Finished-surface ("slab") scissor-type aerial work platforms can lift platforms
15, 20 or 25 feet from ground to maximum platform extensions. Rough-terrain
scissor-type aerial work platforms have a maximum range of 25, 32 or 40 feet
from ground to platform. The list prices of the Company's scissor-type aerial
work platforms range from approximately $13,000 to $60,000.
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Other
The Company manufactures and markets skid steer loaders (under the SCAT
TRAK name), which are compact and versatile material handling machines used to
dig, lift and transport bulk materials, telescoping boom devices incorporated
into fire trucks, a limited range of masonry tenders and buggies and articulated
forklifts and loaders, all of which are used primarily in the masonry industry,
and markets a limited line of straightmast forklifts. The Company also provides
product service support to its distribution networks, and produces and sells
through its distributors a wide range of service parts to maintain the
operational performance of its end products throughout their useful lives. The
sale of service parts provides an important source of revenue and profitability,
as such sales are historically less sensitive to industry cycles and typically
generate higher gross margins than sales of original equipment. The Company
seeks to provide a high level of parts availability and timely shipments of
orders to maintain the production availability of its products on customer job
sites.
Marketing and Distribution
The Company sells its products to independent equipment dealers for retail
sale and rental and to equipment rental companies, including independent rental
centers and national rental fleets, for rental. The Company has a multiple brand
strategy, maintaining distinct nationwide distribution channels for its
principal brand name products. This strategy provides more complete geographic
coverage of the marketplace and greater flexibility in expanding the Company's
dealer network, while affording the Company the opportunity to realize economies
of scale in providing parts supply, service, attachments, dealer finance,
component purchasing and manufacturing. SKY TRAK and LULL brand telescopic
material handlers and SNORKELIFT and WILDCAT brand aerial work platforms are
marketed to a mix of independent retail dealers, rental centers and national
rental fleets.
Traditionally, independent dealers have focused their efforts on resale of
products to end users. In recent years, however, many independent dealers have
built their own rental fleets to augment their sales activities. Rental centers
are equipment rental dealers who focus exclusively on renting units on a daily,
weekly or monthly basis to customers whose needs do not require purchase and
full-time utilization of units, and national rental fleets are large equipment
rental companies which, through company-owned stores or franchises, carry out
rental activities nationwide.
The Company employs a sales force of approximately 36 field sales managers
and representatives. The Company supports the sales, service and rental
activities of its dealers with product advertising, sales literature, product
training and major trade show participation. OmniQuip seeks to promote end-user
acceptance and continued satisfactory performance of its products worldwide. The
Company pursues this goal in cooperation with a network of distributors who
provide for the maintenance and repair of all OmniQuip products for end-users.
The Company promotes a high level of customer support through programs which
closely monitor the performance of its products with rental fleets and with
end-users. This level of product support is maintained by a variety of programs
and procedures, including: a toll-free technical assistance program; on-site
service representative visits; factory training programs; organization of
product assessment teams facilitated by the service department; and continuing
interaction among distributors, end-users and major vendors for failure analysis
of products both in and out of warranty.
International sales represented approximately 12%, 12% and 10% of pro forma
consolidated net sales, including the acquisition of Lull and Snorkel, for the
fiscal years ended September 30, 1995, 1996 and 1997, respectively. All of the
Company's products are marketed internationally through dealers, except that the
LULL brand of telescopic material handlers is marketed internationally primarily
through an exclusive distribution agreement with a single United States
exporter. International sales represented approximately 18% of Snorkel's net
sales for calendar 1996. Most of Snorkel's international sales for such periods
were made through Snorkel's Australian subsidiary to Australian and other
customers principally located in the Far East.
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Financing
The Company offers its independent dealers conventional floor plan
financing and rental fleet financing to assist in the purchase of its products.
Under these financing arrangements, dealers borrow money from independent
lenders on a secured basis for up to five years. Where dealer financing is
provided directly by independent lenders, the Company assists the financing by
providing the independent lenders either a backup guarantee of a dealer's credit
or an undertaking to repurchase used equipment at a discounted price to market
at specified times or under specified circumstances.
At September 30, 1997, approximately $75.0 million of Company-assisted
floor plan and rental fleet financing arrangements were outstanding on a
consolidated basis. The Company's actual exposure under these financing
arrangements is significantly less than the nominal amount outstanding. With
respect to TRAK's dealers, who accounted for approximately $66.6 million of the
consolidated $75.0 million in dealer financing outstanding at September 30,
1997, substantially all of the Company's guarantee obligations for calendar year
1997, as well as losses incurred in connection with repurchase obligations
described below, are limited to the greater of $1.5 million and 5% of the
portfolio outstanding at the previous calendar year end (approximately $47.2
million at December 31, 1996). To the extent that independent lenders providing
financing for TRAK's dealers do not have (or do not exercise) direct recourse
against the Company under backup guarantees, the Company is committed to perform
its repurchase undertaking to reacquire equipment sold to a defaulting dealer at
a purchase price equal to amounts due the independent lender. The Company's
actual exposure under these repurchase arrangements is reduced by underlying
equipment values as well as careful portfolio management, by both the Company
and its lenders. At the present time, an active resale market exists for such
equipment. With respect to Lull's dealers, who accounted for approximately $8.4
million of the combined $75.0 million in dealer financing outstanding at
September 30, 1997, the Company's guarantee obligations are limited to
circumstances where the independent lender is unable to enforce its lien against
financed equipment (for example, if a dealer has fraudulently sold the equipment
out of trust to a bona fide purchaser for value) or where a dealer defaults on
its final, balloon installment payment (typically due 48 months from shipment).
Although dealer financing has not been material to the sale of Snorkel products
historically, the Company anticipates that it will place greater emphasis on
dealer financing for such products. At September 30, 1997, past due principal
and interest as a percentage of the total portfolio on a pro forma consolidated
basis was less than one-half of one percent. The Company's worst loss experience
in recent years occurred in 1991 when TRAK sustained expenses of approximately
$1.0 million as a result of its floor plan financing guarantees. Most of this
loss occurred as the result of dealer fraud, and the Company has taken steps
designed to mitigate future losses through better documentation and collection
techniques.
Manufacturing and Raw Materials
The Company fabricates, welds, machines and assembles the chassis,
telescopic booms, attachments and many component parts for its telescopic
material handlers and aerial work platforms. During the past three years, the
Company has made significant capital investments in its principal Port
Washington, Wisconsin facility to implement robotic welding and a five-station
wash, automatic prime and finish coat paint system and to complete a 25,000 sq.
ft. plant addition. In its St. Paul, Minnesota facility, the Company has
invested in machining centers and numerically controlled plasma punching
capability. These investments, along with numerous projects to improve
production flow and material handling, have provided the foundation for
continuing productivity improvements.
In 1995, the Company completed registration under ISO 9001 of its Port
Washington, Wisconsin quality systems, becoming the first telescopic material
handler manufacturer in North America to achieve this recognition. Snorkel is
undergoing the certification process for its Elwood, Kansas facilities.
Registration under ISO 9001 represents the achievement of an internationally
recognized standard of quality systems implementation and is important for
competing in markets with ISO requirements, such as Europe. In addition, the
United States Department of Defense has mandated the use of ISO 9001 for new
procurements, including the ATLAS contract. The Company expects to implement
similar quality system standards in its other facilities.
The Company is continuing to pursue opportunities to reduce costs of
purchased components through consolidation of vendor sources, improvements in
manufacturing methods and integration of operations. The
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Company also believes that opportunities exist to achieve manufacturing
economies in the production of telescopic material handlers by combining the
production of certain key components.
The principal raw materials and components used in the manufacturing of the
Company's products are steel, aluminum, engines, transmissions, axles, hydraulic
systems, wheels and tires and cabs. The Company procures its raw materials and
components from multiple vendors, although in the case of particular models it
typically purchases certain components from a single vendor. Although
alternative suppliers are available for all raw materials and components, the
Company could experience delays in obtaining components meeting the requisite
specifications from alternative suppliers in the event a principal supplier was
unable to supply a particular component. In the case of the ATLAS product
supplied to the Army, the governing contract specifies precisely the source of
key component parts utilized in the manufacture of the ATLAS product. In the
event of unavailability of any of these key components, the Company could be
precluded from completing production of ATLAS products in a timely fashion
unless the Army agreed to substitution of an alternative component. The Company
seeks to manage the risk of unavailability of key components and raw materials
by dealing only with substantial, financially responsible vendors and managing
closely its material requirements as well as its vendor relationships. To date,
the Company has not experienced a material delay in obtaining a satisfactory
supply of key components from vendors.
Product Development and Engineering
The Company maintains an active program of product development and
engineering activities designed to upgrade existing product lines and develop
new products. The Company employs approximately 70 employees with experience in
the design of products. On a pro forma basis, including the acquisition of Lull
and Snorkel, for the fiscal years ended September 30, 1995, 1996 and 1997, the
Company spent approximately $3.8 million, $5.2 million, and $5.8 million,
respectively, on product development and engineering activities. Since 1987, the
Company has invested in the computer systems and training of its engineering
staff to support the increasing use of computer-aided design. To decrease
product development time, reduce product development cost, and improve the
quality of its new products, the Company has further invested to implement
finite element analysis capability, three-dimensional solid design, and
concurrent engineering. The Company's product development and engineering
efforts during future periods are expected to emphasize continued product line
expansion, design modifications to expand the worldwide acceptance of its
products, and the expanded sourcing of attachments to improve access to more
end-user markets.
Warranty and Service
OmniQuip products are warranted for design, workmanship and material
quality. Warranty lengths vary depending on competitive standards within
individual markets. In general, warranties tend to be for one year and cover all
parts and labor for non-maintenance repairs, provided the repair was not
necessitated by operator abuse. Optional extended warranties, for one to two
years beyond the base period, are available for purchase. Warranty work is
performed only by authorized distributors. Distributors submit claims for
warranty reimbursement to the Company and are credited for the cost of repairs
so long as the repairs meet prescribed standards.
Trademarks and Patents
The Company owns and maintains U.S. trademark registrations for all of its
principal trademarks. The Company owns or otherwise has the right to use these
trademarks in other countries where a significant volume of its products are
sold and where such ownership or right to use is considered necessary to protect
the Company's proprietary rights.
The Company applies for and maintains patents in the United States and
elsewhere where the Company believes such patents are necessary to maintain the
Company's interest in its inventions. Currently, the Company possesses a patent
on three-stage telescopic booms used in the LULL brand of telescopic material
handlers, which expires in 2007. The Company believes this patent provides it
with a competitive advantage in selected markets, but does not believe that the
expiration of this patent would have a material adverse effect upon its business
or ability to compete.
8
<PAGE>
Competition
The markets for the Company's products are highly competitive. The
principal competitive factors include distribution, price, design features,
performance, product reliability and the availability of financing.
In the market for telescopic material handlers, the Company is the largest
North American manufacturer, with an estimated share of 1996 shipments of
telescopic material handlers of approximately 40%, and its principal competitors
include Gradall Industries, Inc. and JCB International Co., Ltd. Other
competitors in the North American market include Gehl Company, Pettibone
Corporation, Traverse Lift, Ingersoll-Rand Company, Manitou S.A. and Caterpillar
Inc. Competitors in this market outside the United States include JCB
International Co., Ltd., Manitou S.A., Merlo S.p.A., the Matbro division of
Powerscreen International PLC, Sanderson, FDI/Sambron and Caterpillar Inc. The
largest manufacturer of aerial work platforms is JLG Industries, Inc. Other
principal competitors include Genie Industries, Skyjack Inc., Grove Worldwide,
UpRight, Inc. and Terex Corporation.
Many of the Company's competitors are larger than the Company and possess
significantly greater financial, marketing and technical resources. There can be
no assurance that the Company will not experience significant competition in the
future from large global construction equipment manufacturers and other
competitors or that existing competitors will not take actions which could
adversely affect the Company's operating results.
Environmental and Safety Regulation
OmniQuip is subject to federal, state, local and foreign environmental
laws and regulations that impose limitations on the discharge of pollutants into
the environment and establish standards for the treatment, storage and disposal
of toxic and hazardous wastes. The Company is also subject to the Occupational
Safety and Health Act and similar state, local and foreign statutes. The Company
believes it is in material compliance with all applicable environmental laws and
regulations. The Company does not expect any material impact on future recurring
operating costs of compliance with currently enacted environmental regulations.
Under federal, state and local laws, including the federal Comprehensive
Environmental Response, Compensation, and Liability Act, a current owner or
operator of real property may be held liable for the costs of cleaning up
certain hazardous materials on the property. Similarly, persons who have
arranged for the disposal of hazardous materials on properties owned by third
parties may be held liable for cleanup costs for such properties. In each case,
liability may be imposed without regard to whether the person knew of or took
reasonable acts to prevent the contamination. Liability under such laws is often
joint and several, that is, any single liable person may be required to bear the
entire costs of the environmental cleanup. That person, however, may usually
seek contribution from other responsible persons, if there are any; and it is
typical for groups of responsible parties to apportion liability among
themselves.
The Company regularly conducts an environmental assessment consistent with
recognized standards of due diligence on properties and businesses which it
acquires. To date, these assessments have not identified contamination in
respect of acquired properties that would be reasonably likely to result in a
material adverse effect on the Company's business, results of operations or
financial condition. As a general rule, the Company intends to use such
assessments as part of the evaluation of proposed acquisitions. However, there
can be no assurance that environmental assessments have identified, or will in
the future identify, all material liabilities relating to the Company's
properties and businesses, that any indemnification agreements that can be
negotiated will cover all potential liabilities, or that changes in cleanup
requirements or subsequent events at the Company's properties or at off-site
locations will not result in significant costs to the Company.
Product Recall
From time to time, the Company discovers defects in product design for
existing products which require it to take steps to correct or retrofit, at the
Company's expense, previously sold products. During the year ended September 30,
1997, the Company substantially completed correcting a defect in its LULL brand
of telescopic material handlers. In 1995, prior to the acquisition by the
Company, Lull established reserves of approximately $2.9
9
<PAGE>
million for the cost of retrofitting such telescopic material handlers. As of
September 30, 1996, substantially all costs associated with this program have
been paid by the Company. The Company also had a reserve of approximately $0.9
million as of December 31, 1996 relating to corrective warranty work being
undertaken with respect to two models of skid steer loaders. As of September 30,
1997, the Company had substantially completed such work.
In connection with the acquisition of Snorkel, the Company assumed
responsibility for a recall program involving HUNTERLIFT scissor lifts
manufactured by Snorkel between 1979 and 1992. The recall was prompted by a
compliance issue with certain voluntary industry standards. The Company intends
to establish reserves related to the recall program. There can be no assurance,
however, that the ultimate cost of the HUNTERLIFT recall will not exceed the
amount of reserves to be established by the Company or that the defects will not
adversely affect the Company's reputation and result in a decline in sales of
the Company's products.
Employees
At September 30, 1997, the Company employed approximately 1,500 persons,
including approximately 750 employees employed by its recently acquired Snorkel
operation. Approximately 280 employees at the Company's Port Washington,
Wisconsin facility are covered under a collective bargaining agreement with the
International Association of Machinists and Aerospace Workers, which expires in
November 1998. This is the only collective bargaining agreement to which the
Company is a party. Substantially all of the approximately 265 employees at the
Company's St. Paul, Minnesota facility and the approximately 60 employees of the
Company's Oakes, North Dakota facility are employed pursuant to a lease
arrangement with CBM Industries, Inc., d/b/a RJ Associates. Under the terms of
such agreement, RJ Associates (which is not an affiliate of the Company) leases
employees to the Company and pays the employees' salaries and benefits. The
Company in turn pays RJ Associates a management fee and reimburses RJ Associates
for the employees' salaries and benefits. The agreement can be terminated by
either party upon short notice. The Company is obligated to hire the leased
employees if the Company terminates the arrangement but continues conducting the
operations in which the employees are engaged. The Company does not anticipate
any material disruption in its business in the event of a termination of this
agreement. The Company has not experienced any work stoppage during the past
five years and considers its relations with employees to be good.
10
<PAGE>
Item 2. Properties
The Company's headquarters are located in Port Washington, Wisconsin and
the Company maintains manufacturing facilities in Minnesota, North Dakota,
Kansas, Missouri and New Zealand. Set forth below is certain information with
respect to the Company's manufacturing facilities.
Square
Footage Owned/
Location (Approximately) Leased Activities/Products
- - -------------- --------------- ------ ---------------------------
Port Washington, 150,000 Owned Telescopic material handlers;
Wisconsin skid steer loader fabrication;
research and development
Port Washington, 35,000 Leased(1) Skid steer loader assembly
Wisconsin
Eagan, Minnesota 100,000 Owned Telescopic material handlers;
research and development
Oakes, North Dakota 30,000 Leased(2) Miscellaneous products and
component parts
Elwood, Kansas 77,000 Owned Aerial work platform assembly
Elwood, Kansas 182,000 Leased(3) Aerial work platform fabrication
Wathena, Kansas 50,000 Leased(4) Aerial work platform assembly
St. Joseph, 15,000 Leased(5) Fire service products
Missouri
Levin, New Zealand 15,000 Leased(6) Aerial work platforms
- - ---------------------
(1) The initial term of the lease expires on October 31, 1998. The Company has
the option to renew the lease for successive one-year terms, but the lessor
may terminate such option on thirty (30) days notice.
(2) The initial term of the lease expires on April 1, 2000 (the "Initial Term").
Upon expiration of the Initial Term, the Company has the option to purchase
the facility or to extend the lease for an additional 30 months (the
"Extended Term"). If the Company chooses to extend the lease term, lease
payments during the Extended Term will be applied to the purchase of the
facility.
(3) The initial term of the lease expires on February 1, 1999. The Company has
the option to renew the lease for three additional terms of five years.
(4) The lease expires on June 30, 2002.
(5) The lease expires on November 17, 2002.
(6) The lease expires on November 17, 2007.
The Company also maintains other leased office and warehouse space in Port
Washington, Wisconsin, St. Joseph, Missouri, Sydney and Melbourne, Australia and
Auckland, New Zealand. The Company anticipates no significant difficulty in
leasing alternative space at reasonable rates in the event of the expiration,
cancellation or termination of a lease relating to any of the Company's material
leased properties. The Company believes that its production facilities and
anticipated plant expansions will be adequate to meet projected manufacturing
volumes, including production of ATLAS telescopic material handlers, for the
foreseeable future.
Item 3. Legal Proceedings
Product liability and personal injury claims are asserted against the
Company from time to time for various injuries alleged to have resulted from
defects in the manufacture and/or design of the Company's products. The
acquisition of Snorkel is likely to increase significantly the number of product
liability and personal injury claims
11
<PAGE>
brought against the Company arising from the use of Snorkel products to lift and
position people in aerial work environments. Product liability and personal
injury claims are covered by the Company's comprehensive general liability
insurance policies, subject to certain deductible amounts and maximum coverage
limits. The Company has reserves for such deductible amounts, which it believes
to be adequate based on its previous claims experience. However, there can be no
assurance that resolution of product liability and personal injury claims in the
future will not have a material adverse effect on the Company.
In addition to product liability and personal injury claims, from time to
time, the Company is the subject of legal proceedings, including claims
involving employee matters, commercial matters and similar claims. Except as set
forth below, there are no such claims currently pending which the Company
believes to be material.
In connection with the acquisition of Snorkel, the Company has assumed
responsibility for a lawsuit relating to the recall of HUNTERLIFT scissor lifts
manufactured by Snorkel between 1979 and 1992. See "Business - Product Recall."
The lawsuit currently includes approximately 26 plaintiffs and alleges damages
in connection with the recall. The Company is currently in the process of
evaluating the allegations of the complaint and the Company's response thereto.
Consequently, the Company is unable to determine how this lawsuit will be
resolved and the potential impact of such resolution on the Company. The Company
intends to defend the lawsuit vigorously.
The Company maintains comprehensive general liability insurance which it
believes to be adequate for the continued operation of its business.
Item 4. Submission of Matters to a Vote of Security Holders
None.
12
<PAGE>
PART II
Item 5. Market For Registrant's Common Stock and Related Stockholder Matters
OmniQuip began trading on the NASDAQ National Market under the symbol OMQP
on March 21, 1997, following its initial public offering. As of December 17,
1997, there were 208 record owners of the Company's Common Stock. The following
tables summarize information with respect to the high and low bid prices for the
Company's Common Stock as listed on the NASDAQ National Market for each quarter
of fiscal 1997 since the Company's initial public offering, and dividends
declared per share for each quarter of fiscal 1997 since the Company's initial
public offering.
Common Stock Information Dividends Declared Per Share
1997 High Low 1997 Amount
- - ----------------------------------------- ------------------------------
Second quarter Second quarter
(beginning March 21, (beginning March 21,
1997).................... $14 5/8 $14 1/4 1997)................... --
Third quarter ........... 24 1/4 11 7/8 Third quarter .......... --
Fourth quarter .......... 25 3/8 18 1/8 Fourth quarter ......... $0.01
13
<PAGE>
Item 6. Selected Consolidated Financial Data
The following table sets forth consolidated financial data derived from the
consolidated financial statements of the Company or TRAK, as the predecessor to
the Company. The information contained in this table is qualified in its
entirety by reference to such financial statements and notes included therein.
<TABLE>
<CAPTION>
Company Predecessor(1)
------------------------------------ -----------------------------------
Fiscal Years Ended Aug. 17, 1995 Oct. 1, 1994 Fiscal Years Ended
September 30, through through September 30,
--------------------- ------------------
1997(2) 1996(3) Sept. 30, 1995 Aug. 16, 1995 1994 1993
------- ------- --------------- -------------- ------- ------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Net sales................... $264,213 $124,861 $ 12,723 $ 75,401 $ 60,973 $ 50,068
Cost of sales .............. 192,270 92,688 9,787 57,707 47,208 39,183
-------- -------- --------- --------- --------- ---------
Gross profit ............... 71,943 32,173 2,936 17,694 13,765 10,885
Selling, general and
administrative expenses.... 27,717 16,311 1,670 10,903 9,502 8,290
-------- -------- --------- ---------- --------- ---------
Operating income ........... 44,226 15,862 1,266 6,791 4,263 2,595
Interest expense ........... 6,106 3,434 353 1,379 1,363 1,140
Other finance charges ...... 2,182 2,012 269 1,121 699 570
-------- -------- --------- ---------- --------- ---------
Income before income taxes.. 35,938 10,416 644 4,291 2,201 885
Provision for income taxes.. 14,556 4,060 262 1,762 876 368
-------- -------- --------- ---------- --------- ---------
Income before extraordinary
credit and change in
accounting principles .... 21,382 6,356 382 2,529 1,325 517
Extraordinary item, net(4).. (782) (314) --- --- --- ---
Cumulative effect of change
in accounting principles.. --- --- --- (241)(5) --- 199(6)
-------- -------- --------- ---------- -------- ----------
Net income ................. $ 20,600 $ 6,042 $ 382 $ 2,288 $ 1,325 $ 716
======== ======== ========= ========== ======== ==========
Earnings per share: (7)(8)
Income before
extraordinary item(4).... $ 1.66 $ 0.56 $ 0.03
Extraordinary item(4).... (0.06) (0.03) ---
--------- -------- ---------
Net income .............. $ 1.60 $ 0.53 $ 0.03
========= ======== =========
</TABLE>
<TABLE>
<CAPTION>
Company Predecessor(1)
------------------------------------ --------------------------------
Fiscal Years Ended Fiscal Years Ended
September 30, September 30,
------------------------------------ --------------------------------
1997(2) 1996(3) 1995(9) 1994(9) 1993
------- ------- ------- --------- ----
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Balance Data Sheet:
Working capital ......... $ 14,402 $ 13,393 $ 10,699 $ 260 $ 1,111
Total assets ............ 144,298 139,580 48,332 28,651 24,706
Short-term debt ......... 8,625 3,875 540 9,436 8,608
Long-term debt .......... 25,609 84,566 23,781 2,966 4,721
Mandatorily redeemable
preferred stock ......... --- --- --- 3,262 3,000
Stockholders' equity .... 70,398 12,425 6,383 1,783 1,019
</TABLE>
- - ---------------------
(1) The Company was organized in 1995 for the purpose of acquiring TRAK, the
predecessor company.
(2) Amounts as of and for the fiscal year ended September 30, 1997 reflect the
effects of the Company's initial public offering of common shares on March
20, 1997.
(3) Amounts as of and for the fiscal year ended September 30, 1996 reflect the
acquisition of Lull on August 15, 1996.
14
<PAGE>
(4) Amounts in 1997 and 1996 reflect the write-off of deferred finance charges,
net of $521 and $200 of income tax benefits, respectively, in connection
with the refinancing of debt.
(5) In October 1994, TRAK adopted Statement of Financial Accounting
Standards, No. 106, "Employer's Accounting for Postretirement Benefits
Other Than Pensions" (SFAS 106). The cumulative effect of adopting SFAS
106 was to record a charge of $241, net of income tax benefits.
(6) In October 1992, TRAK adopted Statement of Financial Accounting
Standards, No. 109, "Accounting for Income Taxes" (SFAS 109). The
cumulative effect of adopting SFAS 109 was to record a net tax benefit
of $199.
(7) Earnings per share is based on weighted-average shares outstanding of
12,845,000 in 1997 and 11,250,000 in 1996 and 1995.
(8) Given the historical organization and capital structure of TRAK, as
predecessor to the Company, earnings per share information is not
considered meaningful for the predecessor.
(9) The changes in the balances as of September 30, 1995 versus September 30,
1994 primarily reflect the acquisition of TRAK by the Company on August 16,
1995 and the related financing thereof.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
The following discussion summarizes the significant factors affecting the
consolidated operating results and financial condition of the Company for the
year ended September 30, 1997 compared to the year ended September 30, 1996, and
September 30, 1996 as compared to results from the period October 1, 1994
through August 16, 1995 of TRAK (the Company's "Predecessor"). Also included
herein is a brief discussion of the results of operations of the Company from
August 17, 1995 through September 30, 1995. The discussion should be read in
conjunction with the consolidated financial statements referenced in Item 14(1)
herein.
Certain statements included herein are forward-looking statements
concerning the Company's operations, economic performance and financial
condition. Such statements are subject to various risks and uncertainties.
Actual results could differ materially from those currently anticipated due to a
number of factors, including cyclical fluctuations in demand, loss of, or
reduced orders under, the Company's contract for the sale of ATLAS vehicles, the
inability to make complementary acquisitions, or to integrate any such
acquisitions, and risks associated with the substantial borrowings that may be
necessary to finance acquisitions.
15
<PAGE>
Results of Operations
The following table sets forth for the periods indicated the percentage of
net sales represented by certain items reflected in the Company's or the
Predecessor's statement of income:
Company Predecessor
--------------------------- -----------
Period Period
from from
Year ended 8/17/95 10/1/94
Sept. 30, through through
1997 1996 9/30/95 8/16/95
--------- --------- -------- ---------
Net sales ..................... 100.0% 100.0% 100.0% 100.0%
Cost of sales ................. 72.8% 74.2% 76.9% 76.5%
----------------------------------------
Gross profit .................. 27.2% 25.8% 23.1% 23.5%
Selling, general and
administrative expenses ....... 10.5% 13.1% 13.1% 14.5%
----------------------------------------
Operating income .............. 16.7% 12.7% 10.0% 9.0%
Interest expense .............. 2.3% 2.8% 2.8% 1.8%
Other finance charges ......... 0.8% 1.6% 2.1% 1.5%
----------------------------------------
Income before income taxes and
extraordinary item .......... 13.6% 8.3% 5.1% 5.7%
Provision for income taxes .... 5.5% 3.2% 2.1% 2.3%
----------------------------------------
Income before extraordinary item 8.1% 5.1% 3.0% 3.4%
Extraordinary item ............ -0.3% -0.3% 0.0% 0.0%
----------------------------------------
Net income .................... 7.8% 4.8% 3.0% 3.4%
========================================
Fiscal Year Ended September 30, 1997 Compared to Fiscal Year Ended September
30, 1996
Net sales for fiscal year 1997 were $264.2 million, an increase of $139.4
million over net sales of $124.9 million for fiscal year 1996. Sales of
telescopic material handlers for fiscal year 1997 were $221.5 million, an
increase of $127.8 million over fiscal year 1996. Sales of skid steer loaders
for fiscal year 1997 were $18.1 million, up $0.2 million compared to fiscal year
1996. Sales of parts and attachments for fiscal year 1997 were $24.6 million, an
increase of $11.4 million over the 1996 period. Of the $127.8 million increase
in telescopic material handlers, $72.4 million was due to the acquisition of
Lull, $3.8 million was due to the start-up of sales under the U.S. Army ATLAS
contract, which had $0.7 million of prototype sales in the 1996 period, and the
remaining $51.6 million reflected continued strong growth in TRAK's commercial
telescopic business. Flat skid steer loader sales reflected increased demand in
North America and internationally outside of Europe offset by reduced shipments
to Europe due to the Company's European distributor being acquired by a
competitor. Of the $11.4 million increase in parts and attachments, $10.0
million resulted from the acquisition of Lull and the remaining $1.4 million
reflected increased demand for parts driven by the increased population of TRAK
units operating in the field.
Gross profit for fiscal year 1997 was $71.9 million, an increase of $39.8
million over gross profit of $32.2 million for fiscal year 1996. The increase in
gross profit primarily reflected the increase in net sales discussed above. The
gross margin increased to 27.2% for fiscal year 1997 from 25.8% for fiscal year
1996. The improvement in gross margin was due to improved manufacturing
efficiencies at all three Company plants, price increases that were implemented
in early 1997, economies due to higher volumes and increased mix of telescopic
material handlers which carry higher margins than other products. Partially
offsetting these improvements was the effect of the acquisition of Lull, whose
gross margin has historically been lower than that of TRAK.
Selling, general and administrative ("SG&A") expenses for fiscal year 1997
were $27.7 million, an increase of $11.4 million over SG&A expenses of $16.3
million for fiscal year 1996. Of the $11.4 million increase,
16
<PAGE>
$7.3 million resulted from the acquisition of Lull. SG&A expenses as a
percentage of net sales decreased to 10.5% for fiscal year 1997 from 13.1% for
fiscal year 1996. This decrease in the SG&A percentage primarily reflected the
effect of the acquisition of Lull, whose SG&A percentage has historically been
lower than that of TRAK.
Operating income for fiscal year 1997 was $44.2 million, an increase of
$28.4 million over operating income of $15.9 million for fiscal year 1996.
Operating margin increased to 16.7% for fiscal year 1997 from 12.7% for fiscal
year 1996. The improvements in operating income and operating margin reflected
the factors described above.
Interest expense for fiscal year 1997 was $6.1 million, an increase of $2.7
million over interest expense of $3.4 million for fiscal year 1996. The increase
in interest expense was due primarily to the increased debt incurred to finance
the August 1996 acquisition of Lull, partially offset by subsequent reduction of
debt with proceeds from the initial public offering in March 1997 and with cash
flow from operations.
Other finance charges, which are primarily comprised of dealer-related
finance charges, were $2.3 million for fiscal year 1997 compared to $2.0 million
for fiscal year 1996. The increase in finance charges was related to increased
financing activity at TRAK primarily resulting from increased sales volume.
Other finance charges as a percentage of net sales decreased from 1.6% to 0.9%.
The reduction in finance charges as a percentage of sales primarily reflected
the fact that Lull has not historically incurred such charges.
Provision for income taxes for fiscal year 1997 was $14.6 million compared
to $4.1 million for fiscal year 1996. The increase reflected the increase in
income before income taxes of $25.5 million and, to a lesser extent, an increase
in the effective tax rate between these periods. The Company's effective tax
rate was 40.5% for fiscal year 1997 compared to 39.0% for fiscal year 1996.
Income from continuing operations for fiscal year 1997 was $21.4 million,
an increase of $15.0 million over income from continuing operations of $6.4
million for fiscal year 1996, as a result of the factors described above.
In March 1997, in connection with the initial public offering and the
application of the proceeds therefrom to repay indebtedness, the Company
incurred an extraordinary charge of $0.8 million, net of $0.5 million of income
tax benefits, related to prepayment penalties and write-off of deferred
financing charges. In August 1996, in connection with refinancing of debt
associated with the Lull acquisition, the Company incurred an extraordinary
charge of $0.3 million, net of $0.2 million of income tax benefits, related to
write-off of deferred financing charges.
Net income for fiscal year 1997 was $20.6 million, an increase of $14.6
million from net income of $6.0 million for fiscal year 1996, as a result of the
factors described above.
Earnings per share for fiscal year 1997 were $1.60, an increase of $1.07
from earnings per share of $0.53 for fiscal year 1996 as a result of the
increase in net income described above partially offset by an increase in the
weighted average shares outstanding from 11.3 million to 12.8 million.
Fiscal Year Ended September 30, 1996 (New basis) Compared to Period from October
1, 1994 through August 16, 1995 (Predecessor basis)
Net sales for fiscal year ended September 30, 1996 were $124.9 million, an
increase of $49.5 million, or 65.6%, over net sales of $75.4 million for the ten
and one-half month period from October 1, 1994 through August 16, 1995 ("Stub
Period 1995"). Sales of telescopic material handlers for the fiscal year ended
September 30, 1996 were $94.1 million, an increase of $42.2 million, or 81.4%,
over Stub Period 1995. Sales of skid steer loaders for the fiscal year ended
September 30, 1996 were $18.0 million, an increase of $3.0 million, or 19.9%,
over Stub Period 1995. Sales of parts and attachments for the fiscal year ended
September 30, 1996 were $12.8 million, an increase of $4.2 million, or 49.7%,
over Stub Period 1995. The improvement in sales of telescopic material handlers
reflected continued strong market demand for such products and the effects of
the August 15, 1996 acquisition of Lull, which resulted in $12.7 million of
incremental sales in the fiscal year ended September 30, 1996. Of the 81.4%
17
<PAGE>
increase in net sales of telescopic material handlers, 67.6 percentage points
were attributable to an increase in the number of units sold, including the
incremental effects of Lull, and the remainder was primarily attributable to a
shift in the TRAK product mix towards larger size units and price increases. The
Company believes the increased demand for telescopic material handlers is
attributable to the expansion of rental fleets, the substitution of telescopic
material handlers for other construction and material handling equipment and
relatively strong conditions in the construction equipment industry. The
increase in sales of skid steer loaders reflects an increase in unit sales, a
shift in product mix towards larger size units and a price increase effective in
early 1996. Skid steer loader sales for the fiscal year ended September 30, 1996
were adversely affected by a temporary reduction in the rate of production and
shipments during early calendar 1996 while the Company incorporated corrective
product modifications and upgrades to its skid steer product line. Parts sales
continued to increase in support of the increased population of the Company's
units operating in the field, and sales of attachments increased primarily as a
result of new equipment sales.
Gross profit for the fiscal year ended September 30, 1996 was $32.2
million, an increase of $14.5 million, or 81.8%, over gross profit of $17.7
million for Stub Period 1995. The increase in gross profit primarily reflected
the increase in net sales discussed above. The gross margin increased to 25.8%
for the fiscal year ended September 30, 1996 from 23.5% for Stub Period 1995.
The increase in gross margin reflects the favorable change in product mix toward
higher margin telescopic material handlers, improved production efficiencies (in
part due to expanded use of robotics and a new paint system), as well as
economies associated with higher production volumes. Also contributing to the
gross margin improvement were purchasing programs that achieved price reductions
for certain components and materials.
SG&A expenses for the fiscal year ended September 30, 1996 were $16.3
million, an increase of $5.4 million, or 49.6%, over SG&A expenses of $10.9
million for Stub Period 1995. The increase in SG&A expenses for the fiscal year
ended September 30, 1996 reflected expenses associated with higher net sales in
1996, the incremental effect of SG&A expenses incurred by Lull subsequent to its
August 15, 1996 acquisition by the Company, approximately $0.7 million in
management fees paid to an affiliate of the Company's majority stockholder,
increased product development expenditures primarily related to telescopic
material handlers, systems consulting fees and amortization of goodwill in
fiscal year 1996 as a result of the application of purchase accounting beginning
in August 1995 in connection with the acquisition of TRAK and in August 1996 in
connection with the acquisition of Lull. SG&A expenses as a percentage of net
sales decreased to 13.1% for the fiscal year ended September 30, 1996 from 14.5%
for Stub Period 1995. The decrease in the SG&A percentage continued to reflect
the relatively fixed nature of certain SG&A expenses as well as the Company's
efforts to control general and administrative costs.
Operating income for the fiscal year ended September 30, 1996 was $15.9
million, an increase of $9.1 million, or 133.6%, over operating income of $6.8
million for Stub Period 1995. Operating margins increased to 12.7% for the
fiscal year ended September 30, 1996 from 9.0% for Stub Period 1995. The
improvements in operating income and margins reflected the factors described
above.
Interest expense for the fiscal year ended September 30, 1996 was $3.4
million, an increase of $2.0 million, or 149.0%, over interest expense of $1.4
million for Stub Period 1995. Interest expense as a percentage of net sales
increased to 2.8% for the fiscal year ended September 30, 1996 from 1.8% for
Stub Period 1995. The increase in interest expense primarily reflected the
effects of debt incurred to finance the August 1995 acquisition of TRAK and the
August 1996 acquisition of Lull, and higher weighted-average interest rates in
1996.
Other finance charges, which are primarily comprised of dealer-related
finance charges, for the fiscal year ended September 30, 1996 were $2.0 million,
an increase of $0.9 million, or 79.5%, over other finance charges of $1.1
million for Stub Period 1995. Other finance charges as a percentage of net sales
increased to 1.6% from 1.5%. The increase in other finance charges primarily
resulted from the greater utilization of the floor plan financing program due to
the increases in net sales as well as greater usage by dealers.
Provision for income taxes for the fiscal year ended September 30, 1996 was
$4.1 million compared to $1.8 million for Stub Period 1995. The increase
primarily reflected the increase in income before provision for
18
<PAGE>
income taxes of $6.1 million between these periods. The Company's effective tax
rate was 39.0% for the fiscal year ended September 30, 1996 and 41.1% for Stub
Period 1995.
Income from continuing operations for the fiscal year ended September 30,
1996 was $6.4 million, an increase of $3.9 million, or 151.3% over income from
continuing operations of $2.5 million for Stub Period 1995 as a result of the
factors described above.
In August 1996, in connection with the refinancing of debt, the Company
incurred an extraordinary charge of $0.3 million, net of $0.2 million of income
tax benefits, related to the write-off of deferred financing charges.
In October 1994, the Predecessor adopted SFAS 106, the cumulative effect of
which on net income was a charge of $0.4 million, less applicable income tax
benefits of $0.2 million.
Period from August 17, 1995 through September 30, 1995 (New basis)
Due to the relatively brief period involved, comprehensive comparative data
has not been presented or discussed below with respect to the period from August
17, 1995 through September 30, 1995 (the period from the date of acquisition of
TRAK and the application of purchase accounting through the date of the
Company's fiscal year end).
Net sales for the period from August 17, 1995 through September 30, 1995
(the "September 1995 Stub Period") were $12.7 million. Gross margin of 23.1% was
relatively consistent with gross margin for the period from October 1, 1994
through August 16, 1995. SG&A expenses as a percentage of net sales decreased to
13.1% as the Company continued to realize the benefits of its efforts to monitor
and control general and administrative costs. Other finance charges as a
percentage of net sales were 2.1%, reflecting the growth in the Company's
business and the dealer-related finance charges incurred by the Company. The
Company's effective tax rate for the September 1995 Stub Period was 40.7%.
Capital Resources and Liquidity
Net cash provided by operating activities of the Company was $21.6 million
for fiscal year 1997. Working capital (excluding the effects of changes in cash
and current portions of long-term debt) increased by $5.4 million in the period,
primarily reflecting increases in accounts receivable and inventories related to
growth in sales volume. Cash provided by operating activities of the Company for
the period was used primarily to finance capital expenditures of $3.0 million,
to make payments to former TRAK shareholders of $1.0 million tied to receipt of
orders under contracts with the U.S. Army and to repay existing indebtedness.
Net cash provided by operating activities of the Company was $8.6 million
for the fiscal year ended September 30, 1996. Working capital decreased by $1.4
million in the period which primarily reflected increases in accounts payable
and other current liabilities partially offset by increases in accounts
receivable and inventories. Cash provided by operating activities of the Company
for the period was used primarily to finance capital expenditures of $1.4
million, to make payments to former TRAK shareholders of $0.4 million tied to
receipt of orders under contracts with the U.S. Army and to repay existing
indebtedness. The aggregate purchase price paid by the Company for Lull in
August 1996 totaled approximately $69.0 million plus assumed liabilities of
$14.6 million. The acquisition was financed with additional borrowings under the
Company's amended credit facilities.
On March 20, 1997, the Company completed its initial public offering of
common stock, selling 3 million primary and 6.2 million secondary shares
(including shares issued upon exercise of the underwriters' overallotment
option) for $14 per share, before underwriting discounts and commissions.
Proceeds to the Company from the offering of $37.6 million (net of expenses of
the offering of $1.7 million) were used to repay $22.6 million of subordinated
debt (including accrued interest and prepayment fees) and $15.0 million of bank
term debt.
19
<PAGE>
The Company had borrowings under a revolving credit facility and two term
loans. The revolving credit facility provided for borrowings of up to the lesser
of $25.0 million or a borrowing base calculated on a percentage of eligible
receivables and inventories. Borrowings under this facility were due August 16,
2003 and bore interest either at the bank's corporate base rate plus 1.0% (9.50%
at June 30, 1997) or LIBOR plus 2.25% (7.91% at June 30, 1997). Amounts
outstanding under the revolving line of credit facility at September 30, 1997
were $3.1 million. In addition, the Company had $0.3 million in outstanding
letters of credit under this revolving line of credit facility. At September 30,
1997, the Company had unused borrowing capacity of $21.6 million under this
facility.
Borrowings under the term loans were due in quarterly installments ranging
from $0.5 million to $3.1 million, which commenced in October 1996 with a final
payment in August 2003. The term loans bore interest either at the bank's
corporate base rate plus 1.25% (9.75% at September 30, 1997) or LIBOR plus 2.5%
(8.16% at September 30, 1997). The Company was able to elect to convert
outstanding term loan balances between interest types at its discretion.
During November 1997 in connection with the acquisition of Snorkel, the
Company entered into a new credit facility which replaced the existing loan and
security agreement. The new agreement provides for a $165.0 million credit
facility consisting of a $40.0 million revolving credit facility and a $125.0
million term loan. The term loan requires quarterly principal payments ranging
from $2.5 million to $6.25 million commencing on February 28, 1998 with the
final maturity on November 30, 2004. Borrowings under the agreement bear
interest at prime or LIBOR plus 1.00%. In conjunction with entering into the new
credit facility, the Company recognized an extraordinary loss in November 1997
of $0.6 million attributable to the write-off of $0.9 million of unamortized
deferred financing fees, net of related tax benefits.
Based on its ability to generate funds from operations and the availability
of funds under its new credit facilities, the Company believes that it will have
sufficient funds available to meet its currently anticipated operating and
capital expenditure requirements for its existing and recently acquired
operations.
Backlog
The Company's backlog as of September 30, 1997 was $68.3 million, of which
$39.5 million relates to the ATLAS military contract. It is expected that
substantially all of the commercial backlog and approximately 60% of the
military backlog will be shipped before September 30, 1998.
Item 8. Financial Statements and Supplementary Data
The financial statements and supplementary data required by this item are
presented under Item 14 and incorporated herein by reference thereto.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
20
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
A definitive proxy statement is expected to be filed with the Securities
and Exchange Commission (the "Commission") on or about January 7, 1998. The
information required by this item is set forth under the caption "Election of
Directors", under the caption "Executive Officers" and under the caption
"Compliance with Section 16(a) of the Exchange Act" of the definitive proxy
statement, which information is incorporated herein by reference thereto.
Item 11. Executive Compensation
The information required by this item is set forth under the caption
"Executive Compensation" of the definitive proxy statement, which information is
incorporated herein by reference thereto.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by this item is set forth under the caption
"Security Ownership of Certain Beneficial Owners and Management" of the
definitive proxy statement, which information is incorporated herein by
reference thereto.
Item 13. Certain Relationships and Related Transactions
The information required by this item is set forth under the caption
"Certain Transactions" of the definitive proxy statement, which information is
incorporated herein by reference thereto.
21
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
1. Financial Statements
The following financial statements of the Company and of one of its
wholly-owned subsidiaries, TRAK International, Inc., and reports of independent
accountants, each included as Item 7 to the Company's Current Report on Form 8-K
dated December 1, 1997, as amended pursuant to the Amendment No. 1 to Current
Report on Form 8-K/A dated December 12, 1997, are incorporated herein by
reference thereto:
A. OmniQuip International, Inc.
Report of Independent Accountants
Consolidated Balance Sheets at September 30, 1997 and September 30,
1996
Consolidated Statements of Income for the fiscal years ended September
30, 1997 and September 30, 1996 and the period from August 17,
1995 to September 30, 1995
Consolidated Statements of Changes in Stockholders' Equity at
September 30, 1997, September 30, 1996 and September 30, 1995
Consolidated Statements of Cash Flows for the fiscal years ended
September 30, 1997 and September 30, 1996 and the period from
August 17, 1995 to September 30, 1995
Notes to Consolidated Financial Statements
B. TRAK International, Inc.
Report of Independent Accountants
Balance Sheet at September 30, 1994
Statements of Income for the period from October 1, 1994 to August 16,
1995 and the fiscal year ended September 30, 1994
Statements of Changes in Stockholders' Equity at August 16, 1995
and September 30, 1994
Statement of Cash Flows for the period from October 1, 1994 to August
16, 1995 and the fiscal year ended September 30, 1994
Notes to Financial Statements
2. Financial Statement Schedules
Report of Independent Accountants on Financial Statement Schedule S-1
Schedule II - Rule 12-09 Valuation and Qualifying Accounts
and Reserves for the Fiscal Year Ended September 30, 1997 S-2
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
22
<PAGE>
3. Exhibits
The exhibits listed on the accompanying Index to Exhibits are filed as part
of this Report.
4. Reports on Form 8-K
On July 28, 1997, a Current Report on Form 8-K was filed to report,
pursuant to Item 2 and Item 7 thereof, that the Company had executed an asset
purchase agreement pursuant to which the Company, subject to certain conditions,
agreed to acquire the Snorkel Division of Figgie International Inc.
23
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
2.1 Asset Purchase Agreement, dated as of July 19, 1997, by and among
Figgie International Inc., Figgie International Real Estate Inc.,
Figgie Properties Inc., Figgie Licensing Corporation, Figgie Risk
Management Co. and SKL Lift, Inc. (filed as Exhibit 2.1 to the
Company's Current Report on Form 8-K filed with the Commission on
December 2, 1997 (the "December 1997 8-K") and incorporated herein by
reference thereto)
2.2 Amendment, dated as of November 9, 1997, by and between Figgie
International Inc. and SKL Lift, Inc. (filed as Exhibit 2.2 to
the December 1997 8-K and incorporated herein by reference
thereto)
3.1 Restated Certificate of Incorporation of the Registrant (filed as
Exhibit 3.1 to the Company's Registration Statement on Form S-1
(Registration No. 333-13181), filed with the Commission on October 1,
1996, as amended on November 12, 1996 and February 20, 1997 (the
"Registration Statement") and incorporated herein by reference
thereto)
3.2 Amended By-laws of the Registrant (filed as Exhibit 3.2 to the
Registration Statement and incorporated herein by reference
thereto)
*10.1 Purchase and Stockholder Agreement, dated September 20, 1995, by and
between Uniquip Corporation and P. Enoch Stiff (filed as Exhibit 10.1
to the Registration Statement and incorporated herein by reference
thereto)
*10.2 Stock Pledge Agreement, dated September 20, 1995, by and between P.
Enoch Stiff and Uniquip Corporation (filed as Exhibit 10.2 to the
Registration Statement and incorporated herein by reference thereto)
*10.3 $126,859 Promissory Note, dated September 20, 1995, by P. Enoch Stiff
to Uniquip Corporation (filed as Exhibit 10.3 to the Registration
Statement and incorporated herein by reference thereto)
*10.4 Letter Agreement, dated September 20, 1995, by and between P. Enoch
Stiff and Uniquip Corporation (filed as Exhibit 10.4 to the
Registration Statement and incorporated herein by reference thereto)
*10.5 Amendment to Promissory Note and Stock Pledge Agreement, dated
September 30, 1996, by and between OmniQuip International, Inc.
and P. Enoch Stiff (filed as Exhibit 10.5 to the Registration
Statement and incorporated herein by reference thereto)
*10.6 Investment Agreement, dated August 16, 1995, by and between P.
Enoch Stiff and Harbour Group Investments III, L.P. (filed as
Exhibit 10.6 to the Registration Statement and incorporated
herein by reference thereto)
*10.7 Participation Agreement, dated August 16, 1995, by and between
P. Enoch Stiff and Harbour Group Investments III, L.P. (filed as
Exhibit 10.7 to the Registration Statement and incorporated
herein by reference thereto)
*10.8 Purchase and Stockholder Agreement, dated September 20, 1995, by and
between Uniquip Corporation and James H. Hook (filed as Exhibit 10.8
to the Registration Statement and incorporated herein by reference
thereto)
*10.9 Stock Pledge Agreement, dated September 20, 1995, by and between
James H. Hook and Uniquip Corporation (filed as Exhibit 10.9 to the
Registration Statement and incorporated herein by reference thereto)
*10.10 $47,572 Promissory Note, dated September 20, 1995, by James H. Hook
to Uniquip Corporation (filed as Exhibit 10.10 to the Registration
Statement and incorporated herein by reference thereto)
24
<PAGE>
*10.11 Letter Agreement, dated September 20, 1995, by and between James H.
Hook and Uniquip Corporation (filed as Exhibit 10.11 to the
Registration Statement and incorporated herein by reference thereto)
*10.12 Amendment to Promissory Note and Stock Pledge Agreement, dated
September 30, 1996, by and between OmniQuip International, Inc.
and James H. Hook (filed as Exhibit 10.12 to the Registration
Statement and incorporated herein by reference thereto)
*10.13 Purchase and Stockholder Agreement, dated September 20, 1995, by and
between Uniquip Corporation and Curtis J. Laetz (filed as Exhibit
10.13 to the Registration Statement and incorporated herein by
reference thereto)
*10.14 Stock Pledge Agreement, dated September 20, 1995, by and between
Curtis J. Laetz and Uniquip Corporation (filed as Exhibit 10.14 to
the Registration Statement and incorporated herein by reference
thereto)
*10.15 $47,572 Promissory Note, dated September 20, 1995, by Curtis J. Laetz
to Uniquip Corporation (filed as Exhibit 10.15 to the Registration
Statement and incorporated herein by reference thereto)
*10.16 Letter Agreement, dated September 20, 1995, by and between Curtis J.
Laetz and Uniquip Corporation (filed as Exhibit 10.16 to the
Registration Statement and incorporated herein by reference thereto)
*10.17 Amendment to Promissory Note and Stock Pledge Agreement, dated
September 30, 1996, by and between OmniQuip International, Inc.
and Curtis J. Laetz (filed as Exhibit 10.17 to the Registration
Statement and incorporated herein by reference thereto)
*10.18 Purchase and Stockholder Agreement, dated September 20, 1995, by and
between Uniquip Corporation and Robert D. Melin (filed as Exhibit
10.18 to the Registration Statement and incorporated herein by
reference thereto)
*10.19 Stock Pledge Agreement, dated September 20, 1995, by and between
Robert D. Melin and Uniquip Corporation (filed as Exhibit 10.19 to
the Registration Statement and incorporated herein by reference
thereto)
*10.20 $47,572 Promissory Note, dated September 20, 1995, by Robert D. Melin
to Uniquip Corporation (filed as Exhibit 10.20 to the Registration
Statement and incorporated herein by reference thereto)
*10.21 Letter Agreement, dated September 20, 1995, by and between Robert D.
Melin and Uniquip Corporation (filed as Exhibit 10.21 to the
Registration Statement and incorporated herein by reference thereto)
*10.22 Amendment to Promissory Note and Stock Pledge Agreement, dated
September 30, 1996, by and between OmniQuip International, Inc.
and Robert D. Melin (filed as Exhibit 10.22 to the Registration
Statement and incorporated herein by reference thereto)
*10.23 Purchase and Stockholder Agreement, dated September 20, 1995, by and
between Uniquip Corporation and Paul D. Roblee (filed as Exhibit
10.23 to the Registration Statement and incorporated herein by
reference thereto)
*10.24 Stock Pledge Agreement, dated September 20, 1995, by and between Paul
D. Roblee and Uniquip Corporation (filed as Exhibit 10.24 to the
Registration Statement and incorporated herein by reference thereto)
*10.25 $47,572 Promissory Note, dated September 20, 1995, by Paul D. Roblee
to Uniquip Corporation (filed as Exhibit 10.25 to the Registration
Statement and incorporated herein by reference thereto)
*10.26 Letter Agreement, dated September 20, 1995, by and between Paul D.
Roblee and Uniquip Corporation (filed as Exhibit 10.26 to the
Registration Statement and incorporated herein by reference thereto)
25
<PAGE>
*10.27 Amendment to Promissory Note and Stock Pledge Agreement, dated
September 30, 1996, by and between OmniQuip International, Inc.
and Paul D. Roblee (filed as Exhibit 10.27 to the Registration
Statement and incorporated herein by reference thereto)
*10.28 OmniQuip International, Inc. 1996 Executive Stock Option Plan
(filed as Exhibit 10.28 to the Registration Statement and
incorporated herein by reference thereto)
*10.29 Form of Option Agreement pursuant to the OmniQuip International,
Inc. 1996 Executive Stock Option Plan (filed as Exhibit 10.29 to
the Registration Statement and incorporated herein by reference
thereto)
*10.30 OmniQuip International, Inc. 1996 Long Term Incentive Plan
(filed as Exhibit 10.30 to the Registration Statement and
incorporated herein by reference thereto)
*10.31 OmniQuip International, Inc. 1996 Directors Non-Qualified Stock
Option Plan (filed as Exhibit 10.31 to the Registration
Statement and incorporated herein by reference thereto)
*10.32 Form of Option Agreement pursuant to the OmniQuip International,
Inc. 1996 Directors Non-Qualified Stock Option Plan (filed as
Exhibit 10.32 to the Registration Statement and incorporated
herein by reference thereto)
10.33 Amended and Restated Subordinated Note Agreement, dated August
16, 1996, by and between TRAK International, Inc. and Harbour
Group Investments III, L.P. (filed as Exhibit 10.33 to the
Registration Statement and incorporated herein by reference
thereto)
10.34 Subordinated Note Agreement, dated August 16, 1996, by and
between Uniquip Corporation and The Boatmen's National Bank of
St. Louis (filed as Exhibit 10.34 to the Registration Statement
and incorporated herein by reference thereto)
10.35 Loan Agreement, dated August 16, 1996, by and among The Boatmen's
National Bank of St. Louis, as agent, The Boatmen's National Bank of
St. Louis and the other lenders named therein, as lenders, TRAK
International, Inc. and Lull Lift Corporation (filed as Exhibit 10.35
to the Registration Statement and incorporated herein by reference
thereto)
10.36 Insurance Agreement, dated September 27, 1996, by and between
Harbour Group Ltd. and Uniquip Corporation (filed as Exhibit
10.39 to the Registration Statement and incorporated herein by
reference thereto)
10.37 Corporate Development Consulting and Advisory Services Letter
Agreement, dated September 30, 1996, by and between OmniQuip
International, Inc. and Harbour Group Industries, Inc. (filed as
Exhibit 10.40 to the Registration Statement and incorporated
herein by reference thereto)
10.38 Operations Consulting and Advisory Services Letter Agreement,
dated September 30, 1996, by and between OmniQuip International,
Inc. and Harbour Group Ltd. (filed as Exhibit 10.41 to the
Registration Statement and incorporated herein by reference
thereto)
10.39 Registration Rights Agreement, dated September 30, 1996, by and
among OmniQuip International, Inc., Uniquip-HGI Associates, L.P.
and Harbour Group Investments III, L.P. (filed as Exhibit 10.42
to the Registration Statement and incorporated herein by
reference thereto)
10.40 Stock Option Agreement, dated September 20, 1995, by and between
Uniquip Corporation and Harbour Group Investments III, L.P. (filed as
Exhibit 10.43 to the Registration Statement and incorporated herein
by reference thereto)
10.41 Termination of Option Agreement, dated September 30, 1996, by
and between OmniQuip International, Inc. and Harbour Group
Investments III, L.P. (filed as Exhibit 10.44 to the
Registration Statement and incorporated herein by reference
thereto)
10.42 Agreement and Plan of Merger, dated July 19, 1995, by and among
TRK Acquisition Corporation, TRAK International, Inc. and the
major stockholders of TRAK International, Inc. listed therein
(filed as Exhibit 10.45 to the Registration Statement and
incorporated herein by reference thereto)
26
<PAGE>
10.43 Indemnification and Escrow Agreement, dated August 16, 1995, by and
among TRAK International, Inc., the stockholders of TRAK
International, Inc. listed therein and The Boatmen's Trust Company,
as Escrow Agent (filed as Exhibit 10.46 to the Registration Statement
and incorporated herein by reference thereto)
10.44 Asset Purchase Agreement, dated August 15, 1996, by and among
Lull Lift Corporation, Lull Industries, Inc. and the
stockholders of Lull Industries, Inc. listed therein (filed as
Exhibit 10.47 to the Registration Statement and incorporated
herein by reference thereto)
10.45 Collective Bargaining Agreement, effective from November 1, 1994
to October 31, 1998, by and between TRAK International, Inc. and
Local 1430, District No. 10 International Association of
Machinists and Aerospace Workers (filed as Exhibit 10.48 to the
Registration Statement and incorporated herein by reference
thereto)
10.46 Contract No. DAAE0795DR012 between TRAK International, Inc. and
U.S. Army Tank-Automotive Command (filed as Exhibit 10.49P to
the Registration Statement and incorporated herein by reference
thereto)
10.47 Floorplan Repurchase Agreement, dated October 2, 1990, by and
between TRAK International, Inc. and Deutsche Financial Services
and Addendum to Floorplan Repurchase Agreement, dated June 14,
1993, by and between TRAK International, Inc. and Deutsche
Financial Services (Deutsche Financial Services as successor to
ITT Commercial Finance Corp. and ITT Commercial Finance, a
division of ITT Industries of Canada Ltd.) (filed as Exhibit
10.50 to the Registration Statement and incorporated herein by
reference thereto)
10.48 Letter Agreement, dated August 21, 1996, by and between TRAK
International, Inc. and Deutsche Financial Services (filed as
Exhibit 10.51 to the Registration Statement and incorporated
herein by reference thereto)
10.49 Agreement, dated January 19, 1995, between CBM Industries, Inc.,
d/b/a RJ Associates and Lull Industries, Inc. (filed as Exhibit 10.53
to the Registration Statement and incorporated herein by reference
thereto)
10.50 Industrial Park Lease, dated April 1, 1995, by and between the
City of Oakes and Lull Industries, Inc. (filed as Exhibit 10.54
to the Registration Statement and incorporated herein by
reference thereto)
10.51 Retail Finance Agreement, effective July 14, 1994, between Lull
Industries, Inc. and Deere Credit, Inc. (filed as Exhibit 10.55
to the Registration Statement and incorporated herein by
reference thereto)
10.52 Indemnification Agreement by and among OmniQuip International, Inc.,
Harbour Group Investments III, L.P. and Uniquip-HGI Associates, L.P.
(filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q
filed with the Commission on May 15, 1997 (the "May 1997 10-Q") and
incorporated herein by reference thereto)
10.53 Underwriting Agreement, dated March 20, 1997, by and among
OmniQuip International, Inc., Harbour Group Investments III,
L.P., Uniquip-HGI Associates, L.P., and Morgan Stanley & Co.
Incorporated, Credit Suisse First Boston Corporation, Schroder
Wertheim & Co. Incorporated and Robert W. Baird & Co.
Incorporated, as representatives of the several U.S.
underwriters, and Morgan Stanley & Co. International Limited,
Credit Suisse First Boston (Europe) Limited, J. Henry Schroder &
Co. Limited and Robert W. Baird & Co. Incorporated, as
representatives of the several international underwriters (filed
as Exhibit 10.1 to the May 1997 10-Q and incorporated herein by
reference thereto)
10.54 Credit Agreement, dated November 17, 1997, by and among OmniQuip
International, Inc., the certain lending institutions party thereto
from time to time, Morgan Stanley Senior Funding, Inc. as Syndication
Agent and Arranger, and First Union National Bank, as Administrative
Agent and Co-Arranger (filed as Exhibit 10 to the December 1997 8-K
and incorporated herein by reference thereto)
27
<PAGE>
10.55 Business Premises Lease Agreement, dated October 27, 1997, by and
between Garden Way Incorporated and TRAK International, Inc.
10.56 Lease Agreement, dated May 15, 1997, by and between B.M.S.
Management, Inc. and Snorkel, a division of Figgie International
Inc.
10.57 Lease Agreement, dated February 1, 1994, by and between SJ
Associates, L.P. and Snorkel-Economy, a division of Figgie
International Inc.
10.58 Land Lease, dated as of November 17, 1997, by and between SKL
Lift, Inc. and Figgie International Real Estate Inc.
10.59 Deed of Lease, dated as of November 17, 1997, by and between Snorkel
Elevating Work Platforms Limited and Figgie International Real Estate
Inc.
10.60 Agreement for Trademark Assignment and License-Back, dated as of
November 17, 1997, by and between Iveco Magirus Brandschutztechnik
GmbH, Figgie International Inc. and SKL Lift, Inc.
21 Subsidiaries of the Registrant
23 Consent of Price Waterhouse LLP
24 Powers of Attorney
27 Financial Data Schedule
* Management contract or compensatory plan or arrangement.
28
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
OMNIQUIP INTERNATIONAL, INC.
By: /s/ Philip G. Franklin
----------------------------------
Philip G. Franklin
Vice President-Finance, Chief
Financial Officer, Treasurer
and Secretary
December 24, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the registrant and in the capacities indicated on December 24, 1997.
* President, Chief Executive Officer
- - -------------------------- and Director (Principal executive officer)
P. Enoch Stiff
/s/ Philip G. Franklin Vice President - Finance, Chief Financial
- - --------------------------- Officer, Treasurer and Secretary (Principal
Philip G. Franklin financial and accounting officer)
* Director and Chairman of the Board
- - ---------------------------
Donald E. Nickelson
* Director
- - ---------------------------
Peter S. Finley
* Director
- - ---------------------------
Jeffrey L. Fox
* Director
- - ---------------------------
Samuel A. Hamacher
* Director
- - ---------------------------
Paul W. Jones
* Director
- - ---------------------------
Jerry E. Ritter
29
<PAGE>
* Director
- - ---------------------------
Joseph F. Shaughnessy
* Director
- - ---------------------------
Robert L. Virgil
By: /s/ Philip G. Franklin
------------------------
Philip G. Franklin
Attorney-in-Fact
- - ------------------
* Such signature has been affixed pursuant to the following Power of
Attorney:
30
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints P. Enoch Stiff and Philip G. Franklin, and each
of them, his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and in his name, place and stead, in any and all
capacities, to sign the 1997 Annual Report on Form 10-K of OmniQuip
International, Inc., and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary as fully to
all intents and purposes as he might or could do in person, and hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
31
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and
Stockholders of OmniQuip International, Inc.
Our audits of the consolidated financial statements of OmniQuip International,
Inc. (the "Company"), referred to in our report dated November 3, 1997,
appearing at Item 7 of the Company's Current Report on Form 8-K dated December
1, 1997, as amended pursuant to the Amendment No. 1 to Current Report on Form
8-K/A dated December 12, 1997 (which reports and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the Financial Statement Schedule of OmniQuip
International, Inc. listed at Item 14(2) of this Form 10-K. In our opinion, the
Financial Statement Schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements.
PRICE WATERHOUSE LLP
St. Louis, Missouri
November 3, 1997
S-1
<PAGE>
SCHEDULE II
OMNIQUIP INTERNATIONAL, INC.
Rule 12-09 Valuation and Qualifying Accounts and Reserves
for the Fiscal Year Ended September 30, 1997
(in thousands)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
- - --------------------------- -------- ---------------------- -------- --------
Additions
----------------------
Balance at
Beginning Charged to Charged to Balance at
of Costs and Other End of
Valuation and Reserve Accounts Period Expenses Accounts Deductions Period
- - ------------------------------ --------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Accounts receivable reserve... $ 351 $164 $ -- $ 11 $ 504
======= ==== ====== ===== =======
Excess and obsolete inventory
reserves...................... $2,482 $420 $ -- $629 $2,273
======= ==== ====== ==== ======
</TABLE>
S-2
BUSINESS PREMISES LEASE AGREEMENT
This Agreement was entered into on October 27th, 1997 between GARDEN
WAY INCORPORATED, a corporation organized under the laws of the State of New
York having its principal place of business at One Garden Way, City of
Rensselaer, County of Rensselaer, State of New York, referred to as Lessor, and
TRAK INTERNATIONAL, INC. a corporation organized under the laws of the State of
Delaware. having its principal place of business at 369 W. Western Avenue, City
of Port Washington, County of Ozaukee, State of Wisconsin, referred to as
Lessee.
In consideration of the mutual covenants contained in this Agreement,
the parties agree as follows:
SECTION ONE
DESCRIPTION OF PREMISES
Lessor leases to Lessee the premises located at 901 Sunset Road, City
of Port Washington, County of Ozaukee, State of Wisconsin,, hereinafter
"Premises", more particularly described as the following:
High Bay 26,600 Square Feet
Low Bay 6,400 Square Feet
Total Shop Area 32,000 Square Feet
Office Area 5,000 Square Feet
SECTION TWO
TERM
The Term is one (1) year, beginning on October 30, 1997, and
terminating on October 31, 1998 (hereinafter ("Term")). In the event that Lessor
enters into a purchase contract with a third party for the sale of the Premises
during the Term, Lessee agrees that it shall vacate the Premises on ninety (90)
days advance written notice from the Lessor.
SECTION THREE
RENT
A. The total rent under this lease agreement is One Hundred Thirty One
Thousand Dollars ($131,000) for the Term.
B. Lessee shall pay Lessor the above-specified amount in installments
of Ten Thousand Nine Hundred Seventeen Dollars ($10,917) each month, beginning
on October 30, 1997 with succeeding payments due on the first day of each month
thereafter during the Term of the lease agreement. All Rental payments shall be
forwarded to:
GARDEN WAY INCORPORATED
One Garden Way
Rensselaer, New York 12144
Attn: Nancy Roberts
<PAGE>
SECTION FOUR
USE OF PREMISES
The Premises are to be used for the purposes of office light
manufacturing and warehouse. Lessee shall restrict its use to such purposes, and
shall not use or permit the use of the Premises for any other purpose without
the prior express and written consent of Lessor, or Lessor's authorized agent.
SECTION FIVE
RESTRICTIONS ON USE
A. Lessee shall not use the Premises in any manner that will increase
risks covered by insurance on the Premises and result in an increase in the rate
of insurance or a cancellation of any insurance policy, even if such use may be
in furtherance of Lessee's business purposes.
B. Lessee shall not keep, use, or sell anything prohibited by any
policy of fire insurance covering the Premises, and shall comply with all
requirements of the insurers applicable to the Premises necessary to keep in
force the fire and liability insurance.
SECTION SIX
WASTE, NUISANCE, OR UNLAWFUL ACTIVITY
Lessee shall not allow any waste or nuisance on the Premises, or use or
allow the Premises to be used for any unlawful purpose.
SECTION SEVEN
UTILITIES, TAXES
Lessee shall arrange and pay for all utilities furnished to the
Premises for the Term, including, but not limited to, electricity, gas, water,
sewer, and telephone service, and security/fire alarm system. Additionally,
Lessee shall be responsible for payment of real property taxes on the Premises
during the terms thereof. Lessor agrees to forward the original tax bills to the
attention of Lessee within five (5) business days of Lessor' receipt. Lessee to
pay such bills by the referenced due date and will incur and be responsible for
any and all late charges and interest in the event of late payment by Lessee
except for charges caused by Lessor's failure to timely forward the bills to
Lessee..
SECTION EIGHT
REPAIRS AND MAINTENANCE
Lessor warrants that the Premises and related systems at the
commencement of the lease agreement are in good, structural, mechanical
condition, reasonable wear and tear excepted. Lessee shall maintain the Premises
and keep them in good repair at its expense, except that side and rear exterior
walls and the roof will be maintained in good condition by Lessor. Lessee shall
maintain and repair windows, doors, skylights, adjacent sidewalks, the building
front, and the interior walls. Lessee shall be responsible for snow removal and
maintenance of the grounds within the driveway perimeter. Lessor shall be
responsible for grounds maintenance outside the driveway perimeter.
2
<PAGE>
SECTION NINE
DELIVERY, ACCEPTANCE, AND SURRENDER OF PREMISES
A. Lessor represents that the Premises are in fit condition for use by
Lessee. Acceptance of the Premises by Lessee shall be construed as recognition
that the Premises are in a good state of repair and in sanitary condition.
B. Lessee shall surrender the Premises at the end of the lease Term, or
any renewal of such Term, in the same condition as when Lessee took possession,
allowing for reasonable use and wear, and damage by acts of God, including fires
and storms. Before delivery, Lessee shall remove all business signs placed in
the Premises by Lessee and restore the portion of the Premises on which they
were placed in the same condition as when received.
SECTION TEN
PARTIAL DESTRUCTION OF PREMISES
A. Partial destruction of the Premises shall not render this lease
agreement void or voidable, nor Terminate it except as specifically provided in
this lease agreement. If the Premises are partially destroyed during the Term,
Lessor shall repair them when such repairs can be made in conformity with
governmental laws and regulations. Rent will be reduced proportionately to the
extent to which the repair operations interfere with the business conducted on
the Premises by Lessee. If the repairs cannot be made within the time specified
above, Lessor shall have the option to make them within a reasonable time and
continue this lease agreement in effect with proportional rent abatement to
Lessee as provided for in this lease agreement If the repairs cannot be made
within ninety (90) days, and if Lessor does not elect to make them within a
reasonable time, either party shall have the option to Terminate this lease
agreement.
B. Disputes between Lessor and Lessee relating to provisions of this
section shall be arbitrated. The parties shall each select an arbitrator, and
the two arbitrators selected shall together select a third arbitrator. The three
arbitrators shall determine the dispute, and their decisions shall be binding on
the parties. The parties shall divide the costs of arbitration equally between
them.
SECTION ELEVEN
ENTRY ON PREMISES BY LESSOR
A. Lessor and its designated agents reserve the right to enter the
Premises at all reasonable times upon not less than six hours prior notice to
inspect them, show the Premises to interested third parties, perform required
maintenance and repairs, or to make additions, alterations, or modifications to
any part of the building in which the Premises are located, and Lessee shall
permit Lessor to do so provided same does not interfere with Lessee's business
operation.
B. Lessor may erect scaffolding, fences, and similar structures, post
relevant notices and place moveable equipment in connection with making
alterations, additions, or repairs, all without incurring liability to Lessee
for disturbance of quiet enjoyment of the Premises, or loss of occupation of the
Premises.
3
<PAGE>
SECTION TWELVE
SIGNS, AWNINGS, AND MARQUEES INSTALLED BY LESSEE
A. Lessee shall not construct or place signs, awnings, marquees, or
other structures projecting from the exterior of the Premises without the prior
express and written consent of Lessor.
B. Lessee shall remove signs, displays, advertisements, or decorations
it has placed on the premises that, in the opinion of Lessor, are offensive or
otherwise objectionable. If Lessee fails to remove such signs, displays,
advertisements, or decorations within ten (10) days after receiving written
notice from Lessor to remove them, Lessor reserves the right to enter the
Premises and remove them at the expense of Lessee.
SECTION THIRTEEN
BUSINESS SALE SIGNS
Lessee shall not conduct "Quitting Business," "Lost our Lease,"
"Bankruptcy," or other sales of that nature on the Premises without the written
consent of Lessor.
SECTION FOURTEEN
NONLIABILITY OF LESSOR FOR DAMAGES
Lessor shall not be liable for liability or damage claims for injury to
persons or property from any cause relating to the occupancy of the Premises by
Lessee, including those arising out of damages or losses occurring an sidewalks
and other areas adjacent to the Premises during the Term or any extension of
such Term. Lessee shall indemnify Lessor from any and all liability, loss, or
other damage claims or obligations resulting from any injuries or losses of this
nature.
SECTION FIFTEEN
LIABILITY INSURANCE
A. Lessee shall procure and maintain in force at its expense during the
Term and any extension of such Term general public liability insurance with
insurers and through brokers approved by Lessor. Such coverage shall be adequate
to protect against liability for damage claim through public use of or arising
out of accidents occurring in or around the Premises, in a minimum amount of Two
Million Dollars ($2,000,000) for bodily injury or death or any one person and
$2,000,000 for bodily injury or death to any number of persons in any one
occurrence, and Five Hundred ($500,000) for property damage, including water
damage and sprinkler leakage legal liability, fire and extended coverage. The
insurance certificate shall provide coverage for contingent liability of Lessor
on any claims or losses. The insurance policies shall be delivered to Lessor.
Lessee shall obtain a written obligation from the insurers to notify Lessor in
writing at least thirty (30) days prior to cancellation or refusal to renew any
policy.
B. If the insurance policies required by this section are not kept in
force during the entire Term of this lease agreement or any extension of such
Term, Lessor may procure the necessary insurance and pay the premium therefor,
and the premium shall be repaid to Lessor as an additional rent installment for
the month following the date on which the premiums were paid by Lessor.
4
<PAGE>
SECTION SIXTEEN
ASSIGNMENT, SUBLEASE, OR LICENSE
A. Lessee shall not assign or sublease the Premises, or any right or
privilege connected with the Premises, or allow any other person except agents
and employees of Lessee to occupy the Premises or any part of the Premises
without first obtaining the written consent of Lessor which shall not be
unreasonably withheld. A consent by Lessor shall not be a consent to a
subsequent assignment, sublease, or occupation by other persons.
B. An unauthorized assignment, sublease, or license to occupy by Lessee
shall be void and shall Terminate this lease agreement at the option of Lessor.
C. The interest of Lessee in this lease agreement is not assignable by
operation of law without the written consent of Lessor.
SECTION SEVENTEEN
BREACH
The appointment of a receiver to take possession of the assets of
Lessee, a general assignment for the benefit of the creditors of Lessee, any
action taken or allowed to be taken by Lessee under any bankruptcy act, or the
failure of Lessee to comply with each and every Term and condition of this lease
agreement shall constitute a breach of this lease agreement. Lessee shall have
ten (10) days after receipt of written notice from Lessor of any breach to
correct the conditions specified in the notice. If the corrections cannot be
made within the 10 day period, Lessee shall have a reasonable time to correct
the default if action is commenced by Lessee within thirty (30) days after
receipt of the notice.
SECTION EIGHTEEN
REMEDIES OF LESSOR FOR BREACH BY LESSEE
Lessor shall have the following remedies in addition to its other
rights and remedies in the event Lessee breaches this lease agreement and fails
to make corrections as set forth in Section Seventeen:
A. Lessor may reenter the Premises immediately and remove the property
and personnel of Lessee, store the property in a public warehouse or at a place
selected by Lessor, at the expense of Lessee.
B. After reentry, Lessor may Terminate this lease agreement on giving
thirty (30) days' written notice of Termination, to Lessee. Without such notice,
reentry will not Terminate this lease agreement. On Termination, Lessor may
recover from Lessee all damages proximately resulting from the breach,
including, but not limited to, the cost of recovering the Premises and the
balance of the rent payments remaining due and unpaid under this lease
agreement.
C. After reentering, Lessor may relet the Premises or any part of the
Premises for any Term without Terminating this lease agreement, at such rent and
on such Terms as it may choose. Lessor may make alterations and repairs to the
Premises. The duties and liabilities of the parties if the Premises are relet
shall be as follows:
5
<PAGE>
(1) In addition to Lessee's liability to Lessor for breach of this
lease agreement, Lessee shall be liable for all expenses of the reletting, for
the alterations and repair made, and for the difference the rent received by
Lessor under the new lease agreement and the rent installments that were due for
the same period under this lease agreement.
(2) Lessor at its option shall have the right to apply the rent
received from reletting the premises (a) to reduce Lessee's indebtedness to
Lessor under this lease agreement, not including indebtedness for rent (b) to
expenses of the reletting and alterations and repairs made, (e) to rent due
under this lease agreement, or (d) to payment of future rent under this lease
agreement as it becomes due.
If the new Lessee does not pay a rent installment promptly to Lessor,
and the rent installment has been credited in advance of payment to the
indebtedness of Lessee other than rent, or if rentals from the new Lessee have
been otherwise applied by Lessor as provided for in this section, and during any
rent installment period, are less than the rent payable for the corresponding
installment period under this lease agreement, Lessee shall pay Lessor the
deficiency, separately for each rent installment deficiency period, and before
the end of that period. Lessor may at any time after such reletting Terminate
this lease agreement for the breach on which Lessor based reentry and relet the
Premises.
SECTION NINETEEN
ATTORNEY FEES
If Lessor is successful in an action to enforce any agreement contained
in this lease agreement, or for breach of any covenant or condition, Lessee
shall pay Lessor reasonable attorney fees for the services of Lessor's attorney
in the action, all fees to be fixed by the court.
SECTION TWENTY
CONDEMNATION
Eminent domain proceedings resulting in the condemnation of a part of
the Premises, but leaving the remaining premises usable by Lessee for the
purposes of its business, will not Terminate this lease agreement unless Lessor,
at its option, Terminates this lease agreement by giving written notice of
Termination to Lessee. The effect of any condemnation, where the option to
Terminate is not exercised, will be to Terminate this lease agreement as to the
portion of the Premises condemned, and the lease of the remainder of the
Premises shall remain intact. The rental for the remainder of the lease Term
shall be reduced by the amount that the usefulness of the Premises has been
reduced for the business purposes of Lessee. Lessee hereby assigns and transfers
to Lessor any claim it may have to compensation for damages as a result of any
condemnation.
SECTION TWENTY-ONE
WAIVERS
Waiver by Lessor of any breach of any covenant or duty of Lessee under
this lease is not a waiver of a breach of any other covenant or duty of Lessee,
or of any subsequent breach of the same covenant or duty.
6
<PAGE>
SECTION TWENTY-TWO
GOVERNING LAW
It is agreed that this lease agreement shall be governed by, construed,
and enforced in accordance with the laws of the State of Wisconsin.
SECTION TWENTY-THREE
ENTIRE AGREEMENT
This lease agreement shall constitute the entire agreement between the
parties. Any prior understanding or representation of any kind preceding the
date of this lease agreement shall not be binding upon either party except to
the extent incorporated in this lease agreement.
SECTION TWENTY-FOUR
MODIFICATION OF AGREEMENT
Any modification of this lease agreement or additional obligation
assumed by either party in connection with this agreement shall be binding only
if evidenced in a writing signed by each party or an authorized representative
of each party.
SECTION TWENTY-FIVE
NOTICES
A. All notices, demands, or other writings in this lease agreement
provided to be given or made or sent, or which may be given or made or sent, by
either party to the other, shall be deemed to have been fully given or made or
sent when made in writing and faxed to the number indicated or deposited in the
United States mail registered and postage prepaid, and addressed as follows:
GARDEN WAY INCORPORATED
One Garden Way
Rensselaer, New York 12144
Attn: Legal Department
Facsimile Number: (518)391-7433
TRAK INTERNATIONAL, INC.
369 W. Western Avenue
Port Washington, Wisconsin
Attn: Tom Rice
Facsimile Number: (404) 268-8988
B. The address to which any notice, demand, or other writing may be
given or made or sent to any party as above provided may be changed by written
notice given by such party as above provided.
SECTION TWENTY-SIX
BINDING EFFECT
This lease agreement shall bind and inure to the benefit of the
respective heirs, personal representatives, successors, and assigns of the
parties.
7
<PAGE>
SECTION TWENTY-SEVEN
TIME OF THE ESSENCE
It is specifically declared and agreed that time is of the essence of
this lease agreement.
SECTION TWENTY-EIGHT
PARAGRAPH HEADINGS
The titles to the paragraph of this lease agreement are solely for the
convenience of the parties and shall not be used to explain, modify, simplify,
or aid in the interpretation of the provisions of this lease agreement.
SECTION TWENTY-NINE
LESSOR'S COVENANT OF QUIET EMPLOYMENT
So long as Lessee is not in default under the covenants and agreements of this
Lease, Lessee's quiet and peaceable enjoyment of the Premises shall not be
disturbed or interfered with by Lessor or by any person claiming by, through or
under Lessor, except that Lessor and its designated agents shall have the right
to show Premises as more fully described in Section 11.A.
SECTION THIRTY
ALTERATIONS AND IMPROVEMENTS
Upon the prior written consent and approval of Lessor, Lessee shall have the
right to make reasonable alterations, installations, modifications or other
improvements to the Premises in order to make the Premises appropriate for
Lessee's intended use as manufacturing and office facility, including moving
interior, non weight-bearing walls, installing overhead cranes, plumbing and
electrical wiring facilities (hereafter "Improvements"). Provided, however, that
such Improvements shall not disturb or in any way change any plumbing or wiring,
without in each and every of such cases the prior written consent of Lessor.
Lessors prior written approval of plans and specifications for Improvements
shall not constitute an assumption of the responsibility for the compliance of
such plans and specifications with applicable codes, regulations or statutes,
which responsibility shall be solely Lessee. All such improvements shall be made
at Lessee's sole cost and expense. All Improvements and all repairs required to
be made by Lessee shall be made in good and workmanlike manner and in compliance
with all governmental requirements and codes. Lessee shall hold Lessor harmless
and indemnified from all injury loss, claims or damage to any person or property
occasioned by, or in connection with the construction or installation of
Improvements. Lessee shall obtain all necessary permits from governmental
authorities. Lessee shall repair any damage and perform any necessary clean-up
to the Building or its contents resulting from any Improvements made by Lessee.
8
<PAGE>
SECTION THIRTY-ONE
TRADE FIXTURES
Upon the termination of this Lease Lessee may remove Lessee's trade fixtures and
all of Lessee's personal property and equipment provided that Lessee shall
repair any injury or damage to the Leased Premises that may result from such
removals.
SECTION THIRTY-TWO
OPTION TO RENEW
Lessee shall have the option to renew this lease for an additional 1 year terms
on the same terms and conditions, except as to negotiation of rental payments
applicable to each renewal Term for which Lessee exercises its option. Lessee
shall exercise its option by notice to Lessor in accordance with this agreement
and given at least one hundred and twenty (120) days prior to the expiration of
the then applicable Term of the Lease. Notwithstanding the above, Lessor
reserves the right to cancel this option at any time during the Term by giving
the Lessee thirty (30) days advance notice.
In witness whereof, each party to this lease agreement has caused it to
be executed at Port Washington on the date indicated below.
GARDEN WAY INCORPORATED TRAK INTERNATIONAL
By: /s/ Illegible Signature By: /s/ Tom Rice
------------------------------- ------------------------------------
Print: Illegible Print: Tom Rice
Title: President/CEO Title: Senior Director - Human Resources
--------------------------- ---------------------------------
Date: 10-27-97 Date: 10-27-97
9
LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into, in duplicate, this 15th day
of May 1997, by and between B.M.S. Management, Inc., a Missouri Corporation,
(hereinafter called "Lessor"), whose address is 615 Albemarle, St. Joseph, MO
64501, and Snorkel, a Division of Figgie International, Inc., a Delaware
corporation, (hereinafter called Lessee"), whose address is 400 Jules Street,
Suite 400, P.O. Box 1160, St. Joseph, MO 64502.
WITNESSETH:
1. LEASED PREMISES. Lessor hereby leases to Lessee and Lessee rents from
Lessor a portion of that real property in Doniphan County, Kansas, commonly
known and referred to as the "Pascoe" property, located on Groh Road, Wathena,
KS 66090, said leased area containing approximately 54,808 square feet of
building space, all as more fully described in Exhibit "A" attached hereto and
made a part hereof, together with all of the easements, rights, privileges, and
appurtenances thereunto belonging and together with all fixtures of every kind
whatsoever now or hereafter owned by the Lessor and used or procured for use in
connection with the operation and maintenance of the above referenced leased
premises, hereinafter referred to as "Premises".
2. TERM. The term of this Lease shall be for a
<PAGE>
base period of Five (5) years, commencing on July 1, 1997, and ending on June
30, 2002. Said five (5) year period is hereinafter referred to as "Term".
3. USE. Lessee agrees that it will use the leased premises for its
production and/or storage purposes and for any other lawful purposes, and that
it will use said premises in a safe, lawful and reasonable manner, and commit no
waste thereon.
4. RENT. Lessee agrees without demand to pay to Lessor at P.O. Box 458,
Elwood, Kansas 66024, or at such place as Lessor may from time to time designate
in writing, as rent for the Premises the sum of Eleven Thousand Six Hundred One
and 03/100 ($11,601.03) per month, in advance, upon the 1st day of each and
every calendar month during the term of this Lease. Lessee to pay, as additional
rent, its pro-rata share of Common Area Maintenance Expenses as estimated in
Exhibit "B" upon submission by Lessor of invoices reflecting the true and
correct amount of said expenses. A late payment penalty equal to five percent
(5%) of the monthly rental due shall be paid by Lessee any time a rental payment
is not paid on or before five (5) days after the rental due date.
5. TAXES. Lessee shall be responsible for and pay a pro-rated portion of
all real estate taxes relating to the "Pascoe" property and all improvements
thereon incidental to the building occupied by LESSEE. In addition
<PAGE>
to the monthly rental payment as hereinabove provided, Lessee shall pay 31.4% of
1/12th of the annual real estate taxes and assessments associated the "Pascoe"
property, the same being due and payable on the 1st day of each, and every,
month of the lease term. The pro-ration herein provided for shall be made on the
basis of the total tax liability for the preceding year. The amount of payment
shall be adjusted in January of each year to reflect any changes in the amount
of taxes and assessments but shall initially be the sum of Nine Hundred
Thirty-Nine Dollars and Sixty-Nine Cents ($939.69) per month based upon the 1996
tax statement, such being the last available tax statement. Any real estate tax
increase occasioned by improvements or additions made by Lessee to the Premises
shall be paid in full by Lessee and any real estate tax increases occasioned by
improvements or additions made by Lessor to any other portion of its property
shall be paid in full by Lessor.
6. ALTERATIONS AND INSTALLATIONS DURING TERM AND REMOVAL OF IMPROVEMENTS BY
LESSEE.
(a) Lessee shall have the right during the term of this Lease to make
such interior alterations, changes or improvements in the Premises, as may be
proper and necessary for the conduct of Lessee's business and for the full
beneficial use of said Premises, provided Lessee shall pay all costs and
expenses thereof, shall make such
<PAGE>
alterations, changes and improvements in a good and workmanlike manner and shall
comply with all applicable laws and building regulations. Lessee agrees to
completely and fully indemnify Lessor against any Mechanic's Lien or other lien
or claims in connection with the making of such alterations, changes and
improvements.
(b) The Leasehold improvements, furnishings and trade fixtures,
electrical panels, cranes and such other operating equipment installed in the
Premises by Lessee and paid for by the Lessee shall remain the property of the
Lessee and may be removed by Lessee upon the termination of this Lease, provided
that Lessee shall repair any damages caused by the removal of any of such
improvements as are affixed to the Premises and require severance.
7. REPAIRS AND MAINTENANCE.
(a) Lessee, at its sole cost and expense, shall be responsible for the
normal routine maintenance and minor repairs of the plumbing, electrical, and
heating systems presently located within the Premises; provided, however, in no
event shall Lessee be responsible for any capital or major repairs or
replacement of parts instant thereto, this responsibility being assumed by the
Lessor. For the purpose of applying this paragraph, any single repair costing
over $500.00 for labor and/or material shall be considered major. Additionally,
Lessor shall be responsible for all maintenance costs exceeding $1,000.00
<PAGE>
aggregate for labor and/or material for any one mechanical system or kind of
repair in any lease year, regardless of the single repair cost. Lessor covenants
to keep the Premises and sidewalks in a clean and orderly condition, free of
dirt, rubbish, snow and ice, and Lessee shall pay its pro-rata share of all
costs associated therewith as estimated in Exhibit "B" and upon the submission
of copies of invoices reflecting the true and correct amount expended therefore.
(b) Subject to Lessee paying its pro-rated share of those matters
addressed in Exhibit "B", Lessor will keep and maintain the parking lot,
landscaping, exterior structure, foundation, common areas, floor and roof areas
of the Premises in good condition and repair and will make any major repairs to
or replace any fixtures such a plumbing, electrical, and heating systems
situated in or upon the Premises on the date hereof or any extension.
(c) Notwithstanding any other terms or condition of this agreement,
Lessee specifically agrees to take all necessary and reasonable steps and
measures to not subject the balance of Lessor's property to exposure from smoke,
fumes, dust and other such substances, and to remain in compliance with
"Distribution Center Standards" which standards are attached hereto and made a
part hereof by reference.
8. INSURANCE.
<PAGE>
(a) Lessee, at its sole cost and expense, shall maintain General Public
Liability Insurance against claims for injury or wrongful death, occurring upon,
in, or about the leased premises in amounts not less than $1,000,000 combined in
respect to injury or wrongful death to any person and for all persons in any one
accident. Lessee shall deliver to Lessor, upon request, a certificate of
insurance to evidence that Lessee has obtained such insurance and that premiums
have been paid thereon.
(b) It is the intention of the parties hereto that the Lessor shall
assume the full risk of damages to the Premises and to any and all of its
fixtures, equipment or personal property in or upon the Premises, resulting from
any of the perils insured against in the Standard Fire and Extended Coverage
Insurance Policy or the Standard Sprinkler Leakage Insurance Policy, regardless
of cause or origin and that in the event of a loss Lessor shall be entitled to
any and all insurance payments made in connection therewith. Lessee shall be
responsible for and pay, thirty-one point four percent (31.4%) of the
aforementioned insurance premiums. Payment of said premiums shall be pro-rated
for the period that the Premises is occupied by Lessee and shall be payable on a
quarterly basis. Upon request by LESSEE, LESSOR shall evidence the existence of
the aforementioned insurance policies with premiums paid current. Lessee shall
be
<PAGE>
totally responsible for any and all insurance premium increases occasioned by or
attributable to its use or occupancy of the Premises or its operations and
activities thereon. Lessee shall also be totally responsible for any insurance
premium increases caused by or attributable to improvements which it has made to
the Premises. Lessor shall not be responsible for any loss or damage to Lessee's
property or the property of any third party which may be situated upon the
Premises and Lessee shall maintain such insurance coverage as it deems necessary
and appropriate to cover possible damage to or loss of said property. Further,
LESSEE shall not be responsible for increases in insurance premiums occasioned
by LESSOR or other occupants of LESSOR'S property.
9. UTILITIES. Lessee shall pay for all utilities and services used or
consumed by Lessee upon the Premises and shall pay any charges made for the
installation of new or additional connections or modifications in such services
made during the term hereof or made in order to meter the utilities used by
Lessee, or made in order to meter the utilities used/consumed by Lessee.
10. SIGNS. Lessee may place signs on the Premises advertising Lessee's
business or products; said sign(s) shall not interfere with Lessor' s existing
signage. Lessee agrees to remove such sign(s) upon termination of
<PAGE>
this Lease or any extension thereof, and to repair own expense, any damage to
the Premises caused removal and if the sign (s) be painted on a wall or surface,
to restore that wall or surface to its former condition. Lessee agrees to obtain
from Lessor written consent to display specific signage as may be required,
provided, however, that such consent shall not be unreasonably withheld or
delayed.
11. ASSIGNMENT AND SUBLETTING. Lessee agrees that without the prior written
consent of the Lessor, Lessee will not assign, sublet, or mortgage this lease or
any right or interest therein, provided, however, that such consent shall not be
unreasonably withheld or delayed and provided further that in any event the
Lessee shall have the right to sublet to any subsidiary corporation of Lessee,
or to any corporation which shall be the result of a merger, consolidation, or
reorganization with Lessee.
12. LESSOR'S RIGHT TO ENTER PREMISES. Lessee agrees to permit Lessor and
any authorized representative of the Lessor to enter the Premises at all
reasonable times during usual business hours or at any other time in case of
emergency, for the purpose of inspecting the same or for any other reasonable
purpose, including such maintenance and repair which are the obligation of the
Lessor under this Lease.
13. DAMAGE OR DESTRUCTION OF PREMISES. Lessor
<PAGE>
and Lessee agree that if, at any time during the continuance of this lease, the
Premises shall be destroyed, be damaged, or be in any condition so as to be
unfit for occupancy by LESSEE for LESSEE'S purposes (all hereinafter called
"Injury"), and such injury could reasonably be repaired within sixty (60) days
from the happening of such injury, then Lessee shall not be entitled to
surrender possession of the Premises; but in case of any such injury, Lessor
shall repair the Premises with all reasonable speed and shall complete such
repairs within sixty (60) days from the happening of such injury, and if not
completed within said sixty (60) days, Lessee shall have the option to terminate
this Lease immediately; and, if Lessee shall have been deprived of the occupancy
of any portion of the Premises during the aforementioned repair period, the rent
for the period of the repairs shall be abated. If the Premises be so injured
that such injury could not reasonably be repaired within sixty (60) days from
the happening of such injury, this Lease shall be considered terminated as of
the date of the happening of such injury or LESSEE may advise LESSOR that it
elects to extend the period for such repairs for an additional one hundred
twenty (120) days. In the event of such extension of the repair period, the rent
for such period shall be abated.
14. EMINENT DOMAIN. If, during the term of this Lease or any extension
thereof, proceedings shall be
<PAGE>
instituted under the power of Eminent Domain which shall result in the
termination of this Lease or action for possession, this Lease shall be void and
this Lease shall cease and. terminate; and if Lessee shall thereafter continue
in possession of the Premise or any part thereof, it shall be a lease from
month-to-month and for no longer term anything in this instrument to the
contrary notwithstanding; and the whole of any award payable by reason of any
condemnation proceedings shall be the sole property of and be payable to the
Lessor . The Lessee shall be entitled to seek its separate award for loss of
business and for removing and relocation of trade fixtures and machinery and
shall be entitled to the whole of any such reward.
15. NO IMPLIED WAIVER BY LESSOR OR LESSEE. No waiver of any of the terms,
covenants, provisions, conditions, rules and regulations required by this Lease,
and no waiver of any legal or equitable relief or remedy shall be implied by the
failure of Lessor or Lessee to assert any rights, or to declare any forfeiture,
and no waiver of any of said terms, provisions, covenants, rules and regulations
shall exist unless such be in writing signed by the Lessor or the Lessee.
16. VACATION OF PREMISES. Lessee shall deliver up and surrender to Lessor
possession of the Premises upon the termination of this lease in as good
<PAGE>
condition and repair as the same shall be at the commencement of said term
except for wear, tear, and decay; destruction or damage by the elements,
lightning, earthquake, acts of God, invasion, insurrection, riot, civil
commotion, military or usurped power, eminent domain, or other perils set forth
in this Lease; and except for Lessor's responsibility for repairs and
maintenance as set forth in Paragraph 7 of this lease. Upon the termination of
this lease and vacation of the Premises Lessee shall employ all reasonable
efforts to restore the Premises to "Distribution Center Standards" which
Standards are attached hereto and made a part hereof by reference.
17. HOLDING OVER. If, at the expiration of the Term, Lessee continues to
occupy the Premises, such holding over shall not constitute a renewal of this
lease, but Lessee shall be a tenant from month-to-month.
18. ENVIRONMENTAL MATTERS. Lessee shall conduct its operations in
compliance with all federal, state and local laws and regulations regarding
hazardous, dangerous or toxic materials or substances. Lessee shall be
responsible for cleaning up or otherwise properly rectifying any and all
environmental hazards or problems which it, its employees, its agents,
contractors, sub-contractors, licensees, or invitees may intentionally or
unintentionally create upon the Premises or upon any other portion of Lessor's
property during the Term, and
<PAGE>
shall fully indemnify Lessor with respect to any costs, expenses, penalties or
liabilities which Lessor may be subject to as a result thereof. A Phase I
environmental audit dated October 14, 1994 was conducted by Environmental Audit
Co., of Topeka, Kansas with respect to the "Pascoe" property and LESSOR
represents that no visual indications or records were found to suggest
mismanagement of chemicals or hazardous waste materials at this site. In the
event Lessor reasonably believes that any activity engaged in by Lessee, its
agents or invitees may have created an environmental problem upon its property
exposing LESSOR to the possibility of fines or penalties by local, State or
Federal governments Lessor shall, prior to the termination of this lease or any
renewal thereof, have the right to demand that LESSEE cause another
environmental audit be conducted by a qualified firm mutually agreed upon by the
parties hereto. The expense/cost of said audit shall be borne by Lessee should
the audit indicate an environmental problem or condition was created or caused
by Lessee, and shall be borne by LESSOR in the event the audit indicates that no
environmental problems or condition was caused by LESSEE.
19. REMEDIES ON DEFAULT. If Lessee at any time during the term of this
Lease:
(a) Shall default in the observance or performance of any of Lessee's
obligations hereunder,
<PAGE>
including the obligation to pay rent, and such default shall not have been cured
within twenty (20) days after Lessor shall have given to Lessee written notice
specifying such default, provided, however, that if the default complained of
shall be of such nature that the same cannot be completely remedied or cured
within such twenty (20) day period, then such default shall not be an
enforceable default against Lessee for the purposes of this paragraph if Lessee
shall have commenced to remedy the default complained of during such twenty (20)
day period and shall proceed with reasonable diligence and in good faith
therewith; or
(b) Shall finally and without further possibility of appeal or review,
(i) be adjudicated bankrupt or insolvent, or (ii) have a receiver or trustee
appointed for all or substantially all of its business or assets on the ground
of Lessee' s insolvency, or (iii) suffer an order to be entered approving a
petition filed by or against Lessee seeking reorganization of Lessee under the
Federal Bankruptcy Laws, or any other applicable law or statute of the United
States or any state thereof; or
(c) Shall make an assignment for the benefit of its creditors or file a
voluntary petition in bankruptcy, then in any such event; Lessor may, at its
option, terminate this Lease and re-enter Premises and remove all persons and
property therefrom using such forces as may be
<PAGE>
reasonably necessary. In the event of such re-entry by reason of Lessee's
default, the Lessor shall re-rent the Premises for such rent, for such term and
upon such other terms and provisions as Lessor may in good faith obtain; and if
this Lease has not been terminated in the above manner, the Lessee shall not be
released from its obligations for rent during the term hereof, provided,
however, that any surplus of funds received by the Lessor after such re-renting
which exceeds the rental to be paid by the Lessee hereunder shall be retained by
the Lessor.
20. NOTICES. Any notices or consent required to be given by or on behalf of
either party upon the other shall be in writing and shall be given by Certified
Mail addressed to the Lessor at such place last designated for the payment of
rent, and to the Lessees at the address shown above or at such other address or
addresses as may be specified from time to time, in writing, to the other party.
21. SEVERABILITY. Each covenant, agreement, or condition of this Lease
shall be valid and enforceable to the fullest extent permitted by law. If any
portion of this Lease or the application thereof in any circumstances shall to
any extent be invalid or unenforceable, the remainder of this lease or the
application of such portion to circumstances other than those as to which it is
invalid or unenforceable shall not be affected thereby.
<PAGE>
22. QUIET ENJOYMENT. Lessor hereby covenants and agrees that it is the
owner in fee simple of the Premises, and that if Lessee shall perform all of the
covenants and agreements herein stipulated to be performed on Lessee's part,
Lessee shall at all times during the continuance hereof have the peaceable and
quiet enjoyment and possession of the Premises without any manner of let or
hindrance from Lessor or any person or persons lawfully claiming the Premises,
except in the event of the taking of the Premises by public or quasi-public
authority, as provided for in Paragraph 16 hereinabove. Lessor shall have the
right, at any time or from time to time during the continuance of this Lease, to
mortgage or refinance a mortgage on the Premises or any part thereof, the lien
of which may, at the option of the Lessor, be prior to any interest of the
Lessee hereunder; but such encumbrance shall be subject to an limited by the
following express condition:
(a) The mortgage, trust deed, or other instruments creating such
encumbrance or a separate instrument establishing a binding obligation on the
lienor shall contain provisions under the terms of which the existence of this
Lease shall be recognized and shall provide the terms, covenants and conditions
in this Lease contained on its part to be kept and performed, neither the holder
of such encumbrance nor any holder or owner of the
<PAGE>
indebtedness secured thereby, nor any other person shall have any power to
impair, modify, abrogate, or adversely affect the rights of the Lessee under
this lease or any renewal thereof.
23. SUCCESSORS AND ASSIGNS. The terms, covenants and conditions contained
in this lease shall bind and inure to the benefit of Lessor and Lessee and,
except as otherwise provided herein, their legal representatives, successors,
distributees and permitted assigns.
24. CHOICE OF LAW. This lease shall be governed and construed in accordance
with the laws of the State of Kansas.
25. INDEMNIFICATION.
(a) Lessor hereby agrees to indemnify, hold harmless, and defend Lessee
of and from any and all liability, damage, costs, and charges which may be
imposed upon, incurred by, or asserted against Lessee by reason of any of the
following occurrences: (i) any breach of the covenants or obligations of the
agreement; (ii) any act, whether proper or improper, of Lessor; (iii) any
negligence on the part of Lessor or its employees, agents, contractors,
subcontractors, licenses or invitees; or (iv) any personal injury or property
damage occurring on or about the Premises as a result of Lessor's failure and/or
violations of any applicable statutes, laws or ordinances; (v) any claims or
demands asserted that may arise out of
<PAGE>
local state or federal laws, rules or regulations concerning environmental
matters that may have occurred prior to commencement of the term.
(b) Lessee hereby agrees to indemnify, hold harmless, and defend Lessor
of and from any and all liability, damage, costs, and charges which may be
imposed upon, incurred by, or asserted against Lessor by reason of any of the
following occurrences: (i) any breach of the covenants or obligations of this
Lease; (ii) any act, whether proper or improper, of Lessee; (iii) any negligence
on the part of Lessee or its employees, agents, contractors, subcontractors,
licenses or invitees; or (iv) any personal injury or property damage occurring
on or about the Premises as a result of Lessee's failure and/or violations of
any applicable statutes, laws or ordinances.
IN WITNESS WHEREOF, the parties hereto have signed this Lease as of the day
and year first above written.
B.M.S. Management, Inc.
By: /s/ Daniel E. Means
------------------------------------
Snorkel, a Division of
Figgie International Inc.
By: /s/ Richard A. Solon
------------------------------------
Richard Solon, President
STATE OF KANSAS, COUNTY OF DONIPHAN, SS:
The above and foregoing instrument was executed
<PAGE>
and acknowledged for and on behalf of B.M.S. Management, Inc. by Daniel E.
Means, Vice President/Secretary and was executed and acknowledged for and on
behalf of Snorkel, a division of Figgie International Inc. by Richard Solon,
President of Snorkel.
/s/ Jackie A. Wyatt
----------------------------------------
Notary Public
My Appointment Expires: 8/6/97
------------------
LEASE AGREEMENT
Existing Building
(Multi-Tenant)
STATE OF KANSAS )
)
COUNTY OF DONIPHAN )
This Lease Agreement ("this lease"), made and entered into by and
between SJ ASSOCIATES, L.P., a Texas limited partnership ("Landlord") and
Snorkel-Economy, a division of FIGGIE INTERNATIONAL, INC. ("Tenant");
1. Premises and Term. In consideration of the obligation of Tenant to
pay rent as provided in this lease, and in consideration of the other terms,
provisions, and covenants of this lease, Landlord hereby demises and leases to
Tenant, and Tenant hereby takes from Landlord that certain approximately 182,320
square feet of rentable area (the "Premises") described and delineated on the
demising plan contained in Exhibit A attached hereto and incorporated herein by
this reference, situated within a building (the "Building"), containing
approximately 283,609 square feet located on certain real property (the "Land")
within the above-named county and state and more particularly described on
Exhibit B attached hereto and incorporated herein by this reference.
To Have and to Hold the Premises, subject to the other terms and
provisions of this lease, for a term commencing on February 1, 1994 (subject to
Paragraph 25) and ending sixty (60) months thereafter. Tenant acknowledges that
it has inspected the Premises and accepts the Premises in their present
condition as suitable for the purpose for which the Premises are leased. Tenant
further acknowledges that no representations as to the repair of the Premises,
nor promises to alter, remodel, or improve the Premises, have been made by
Landlord.
2. Rent. Tenant agrees to pay to Landlord rent for the Premises,
without deduction, set off, or abatement, for the term hereof, the annual fixed
rental in the sum of $364,640.00, payable in equal installments of $30,386.67
per month. One such monthly installment shall be due and payable on the
commencement date recited above, and a like monthly installment shall be due and
payable in advance without demand on or before the same day of each succeeding
month during the hereby demised term. Notwithstanding anything contained in this
lease to the contrary, all amounts payable by Tenant to or on behalf of Landlord
under this lease, whether or not expressly denominated as rent, shall constitute
rent for the purposes of this lease and for purposes of Section 502(b)(7) (or
comparable provision of any future bankruptcy law) of the Federal Bankruptcy
Code, 11 U.S.C. Sections 101 et seq. (the "Bankruptcy Code").
<PAGE>
3. Disclaimer of Warranties. Except as expressly set forth in this
lease, neither Landlord nor any officer, partner, agent, employee, or
representative of Landlord, makes or has made any warranties or representations
of any kind or character, express or implied, with respect to the Premises, or
any portion thereof, its physical condition, income to be derived therefrom, or
expenses to be incurred with respect thereto, its fitness or suitability for any
particular use, its habitability, or any other matter or thing relating to or
affecting the same. There are no oral agreements, warranties, or representations
collateral to or affecting the Premises or any portion thereof, except as may
otherwise be expressly set forth in this lease. Landlord and Tenant each hereby
agree that the Premises are leased in an "as is" condition.
4. Use.
A. The Premises shall be used, to the extent permitted by applicable
law, and only for the purpose of receiving, storing, manufacturing, shipping,
and selling (other than retail) products, materials, and merchandise made and/or
distributed by Tenant and for such other lawful purposes as may be incidental
thereto. Tenant shall at its own cost and expense obtain and at all times
maintain any and all licenses and permits necessary for any such use. Tenant
shall comply with all governmental laws, ordinances, and regulations applicable
to the use of tile Premises and shall promptly comply with all governmental
orders and directives for the correction, prevention, and abatement of nuisances
in, upon, or connected with the Premises, all at Tenant's sole expense. Without
Landlord's prior written consent, Tenant shall not receive, store, or otherwise
handle any product, material, or merchandise which is explosive or highly
inflammable or any material which may be corrosive or otherwise damaging to the
Premises or any appurtenances thereto or any hazardous substance (as hereinafter
defined). Tenant will not, without Landlord's prior written approval, permit the
Premises to be used for any purpose which would render the insurance thereon
void or the insurance risk more hazardous or the premiums therefor more
expensive. In the event any such use of the Premises, or any part thereof,
whether approved by Landlord or not, shall ever cause the insurance rates for
policies carried by Landlord to increase, Tenant shall pay, as additional rent,
the full amount by which such insurance rates increase as a result of Tenant's
use, without regard to whether such policy covers areas other than the Premises
so long as such other covered areas are adjacent thereto or otherwise affected
by Tenant's hazardous use. Further, Tenant will not introduce into the Premises
or use therein any equipment or fixtures which might be reasonably expected, to
cause damage to the Premises or unreasonable interference with the occupants of
adjacent premises. Additionally, Tenant shall not store any products, materials,
or merchandise outside the exterior walls or interior demising walls of the
Premises without Landlord's prior written consent. Tenant shall indemnify,
defend and hold Landlord and Landlord's officers, stockholders, employees,
agents, invitees, and guests harmless from all damages, costs, losses, expenses
(including, but not limited to, reasonable attorneys' fees, engineering fees,
and clean-up costs) arising from or attributable to any breach by Tenant of its
obligations in this Paragraph 4. Tenant's obligations hereunder shall survive
the termination of this lease.
B. For all purposes herein, the term "Environmental Laws" means (i) the
Resources Conservation Recovery Act as amended by the Hazardous and Solid Waste
Amendments of 1984, as now or hereafter amended, 42 U.S.C. Sections 6901 et
seq., (ii) the Comprehensive Environmental Response, Compensation and Liability
Act as amended by the Superfund
<PAGE>
Amendments and Reauthorization Act of 1986, as now or hereafter amended, 42
U.S.C. Sections 9601 et seq., ("CERCLA") (iii) the Clean Water Act, as now or
hereafter amended, 33 U.S.C. Sections 1251 et seq., (iv) the Toxic Substances
and Control Act, as now or hereafter amended, 15 U.S.C. Sections 2601 et seq.,
(v) the Clean Air Act, as now or hereafter amended, 42 U.S.C. Sections 7401 et
seq., and (vi) every other applicable foreign, federal, state or local law,
rule, regulation, ordinance, binding determination of any governmental
authority, or order, each as amended from time to time, that govern or relate to
the protection of the environment and/or the health or safety of the public from
occupational hazards, soil, air or water pollution, or from spilled, deposited,
discharged or otherwise emplaced contamination.
C. For all purposes herein, the term "hazardous substance" shall mean
and include every substance or waste containing any "hazardous substance,"
"pollutant" or "contaminant," as those terms are defined in CERCLA, every
"hazardous chemical" as defined in the Occupational Safety and Health
Administration Hazard Communication Standard, 29 C.F.R. ss. 1910.1200 et seq.,
and every other substance or waste similarly defined or identified in any other
applicable foreign, federal, state or local law, rule, regulation or ordinance,
each as amended from time to time, governing or related to the manufacture,
import, use, handling, storage, processing, release or disposal of any
substances or wastes deemed hazardous, toxic, dangerous or injurious to public
health or safety or to the environment. Hazardous substance includes, but is not
limited to, asbestos, asbestos-containing materials, petroleum or any fraction
thereof, petroleum-based products, polychlorinated biphenyls (PCBs), urea
formaldehyde foam insulation, pesticides, fungicides, insecticides,
rodenticides, explosives, corrosive materials, flammable materials, radioactive
materials, infectious wastes, radon gas, lead paint, fumes that impair the
quality of the indoor air, and any other materials that may pose a danger to
public health or safety or to the environment, the Land, the Leased Premises,
the Building or to persons on or about the Leased Premises or the Building.
D. Landlord represents and warrants to Tenant that to the best of
Landlord's actual knowledge, but without any specific inquiry or testing,
that:
(i) there are no on-going releases of hazardous substances and
there is no ongoing treatment, storage or disposal of any
hazardous substances in, at, under or from the Land, the
Leased Premises or the Building other than minor amounts of
cleaning fluids, office supplies, pest control materials, and
similar items used by Landlord or tenants in the ordinary
course of business;
(ii) except as specified in clause (i) above, there are no
hazardous substances located in, at, under, on or about the
Leased Premises or the Building, including but not limited to
any hazardous substances in groundwater or surface waters,
contained in soil, tanks, sumps, ponds, lagoons, barrels,
3
<PAGE>
cans or other containers, structures or equipment, or
incorporated in any building, structure or improvement on or
in the Land, the Building or the Leased Premises, including
any building material containing asbestos;
(iii) there is no pending or threatened environmental litigation or
claim for damages, enforcement action, administrative order
or notice of violation relating to any Environmental Laws
concerning the Land, the Leased Premises or the Building; and
(iv) Landlord has not received any request for information, notice
of claim, demand or other notification that Landlord or any
other past or present owner or operator of the Land, the
Leased Premises or the Building may be potentially
responsible or liable for any actual or threatened release of
hazardous substances in, at, under, on or about the Land, the
Leased Premises or the Building.
E. Landlord agrees to defend, indemnify, and hold harmless Tenant and
Tenant's officers, stockholders, employees, agents, invitees and guests from and
against any and all claims, actions, demands, threats, obligations, obligations,
penalties, fines, liabilities, settlements, damages, costs, losses, and expenses
(including, without limitation, reasonable attorneys' fees and consultant fees,
court costs, litigation expenses and fees, and costs and expenses incurred in
enforcing this indemnity) of whatever kind or nature, known or unknown,
contingent or otherwise, arising out of or in any way related to:
(i) the presence, on the date hereof (but not hereafter) of any
hazardous substances in, under, on, or about the Land, the Leased
Premises, or the Building, and any personal or bodily injury
(including wrongful death) or property damages (real or personal)
arising out of or relating to any such presence of hazardous substance
on the date hereof (but not hereafter).
(ii) any violation of Environmental Laws existing on the date
hereof (but not hereafter) with respect to the Land, the Leased
Premises, or the Building.
(iii) any breach of the representations set out in subsection D.
above.
The provisions of this section shall be in addition to any other obligations
and/or liabilities Landlord may have to Tenant at law or in equity and shall
survive the transaction contemplated herein and the termination of this Lease.
F. If either Landlord or Tenant acquires any knowledge of or
receives any notice or other information regarding (i) the release or
threatened release of any hazardous substances,
4
<PAGE>
or (ii) any noncompliance with regard to any Environmental Laws affecting the
Land, the Leased Premises or the Building, the party so acquiring such knowledge
shall immediately notify the other party orally and promptly thereafter in
writing and provide to the other party copies of any written notice or other
information.
5. Taxes.
A. Subject to the provisions of Paragraph 5.B, Landlord agrees to pay
before they become delinquent all taxes, assessments (both general and special),
or governmental charges (hereinafter collectively referred to as "taxes")
lawfully levied or assessed against the Building or any part thereof; provided,
however, Landlord may, at its sole cost and expense (in its own name or in the
name of both Landlord and Tenant as it may deem appropriate) dispute and contest
the same, and in such case such disputed item need not be paid until finally
adjudged to be valid and any right to appeal has lapsed. At the conclusion of
such contest, Landlord shall pay the items contested to the extent that they are
held valid, together with all items, court costs, interest, and penalties
relating thereto. Tenant shall also have the right to contest the taxes in
Tenant's name and at Tenant's expense, and Landlord shall reasonably cooperate
with any such contest by Tenant.
B. Landlord shall notify Tenant of the amount of taxes actually paid by
Landlord for each tax year during the term hereof, which amount shall be
prorated between Tenant and all other tenants of the Building based on Tenant's
Share (hereinafter defined). Tenant shall pay to Landlord within thirty (30)
days of written notice by Landlord of the amount thereof as additional rent,
Tenant's Share of such amount; and the failure by Tenant to make such payment
when due shall be treated as a failure to make payment of rent when due. Any
payment to made pursuant to this Paragraph 5.B with respect to the real estate
tax year in which this lease commences or terminates shall bear the same ratio
to the payment which would be required to be made for the full tax year as that
part of such tax year covered by the term of this lease bears to a full tax
year. Landlord's real estate tax statements with respect to the Building shall
be made available for inspection by Tenant at Landlord's offices during
Landlord's business hours.
C. Notwithstanding anything contained in Paragraph 5.B above, Landlord
shall have the right to estimate the amount of taxes for each year during the
term of this lease and deliver written notice to Tenant of Tenant's Share
thereof, which Tenant shall pay to Landlord on a monthly basis as additional
rent in the same manner as that provided in Paragraphs 6.D and 6.E; and the
failure by Tenant to pay Tenant's Share of such amount each month shall be
treated in the same manner as a failure to make payments of rent when due.
6. Landlord's Repairs and Common Area Obligations.
5
<PAGE>
A. Landlord shall at its sole cost and expense maintain or replace, as
applicable, only the roof, foundation, and the structural soundness of the
exterior walls of the Building in good repair, reasonable wear and tear
excepted. In addition, Landlord shall replace the roof mounted air blowers when
repair is not economically feasible and replacement is required. Tenant shall
maintain such air blowers and repair them as needed so long as repair is
economically feasible. Tenant shall repair and pay for any damage caused by the
negligence or willful misconduct of Tenant, or Tenant's employees, agents, or
invitees, or caused by Tenant's default hereunder. The term "walls" as used
herein shall not include windows. Tenant shall immediately give Landlord written
notice of any defect or need for repairs, after which Landlord shall have a
reasonable opportunity to repair same or cure such defect. Landlord's liability
hereunder shall be limited to the cost of such repairs or curing such defect. In
addition, Landlord shall be responsible for any modifications to the structure
of the Building and/or any portions thereof (outside the Leased Premises
themselves) that may be required from time to time by applicable Law, to the
extent that such modifications (i) are such that Landlord's failure to make the
modifications in question would have a material adverse effect upon Tenant's use
of the Leased Premises, and (ii) the modifications in question are of general
application to structures of this type used for general light industrial
purposes, and are not necessitated by special requirements arising from the
particular use of the Leased Premises by Tenant.
B. Subject to the provisions of Paragraph 6.C, Landlord shall take
reasonable care of the grounds around the Building, including mowing of grass,
care of shrubs and trees, and general landscaping and will keep the parking
areas, driveways, and alleys in a reasonably clean, usable, and sanitary
condition.
C. In addition to and separate from the rent payable under Paragraph 2,
Tenant shall pay to Landlord Tenant's Share of Maintenance Charge (hereinafter
defined), as adjusted from time to time, pursuant to the provisions hereinafter
stated. For purposes of this lease, the following terms shall have the
hereinafter indicated meanings:
(i) The phrase "Maintenance Charge" shall mean, for each calendar
year (or portion thereof) during the term of this Lease, the aggregate of all
costs and expenses paid or incurred by Landlord in connection with insurance on
the Property, the performance of its obligations under Paragraph 6.B and all
reasonable expenses incurred by Landlord in connection with the management of
the Building. The amount used in computing the Maintenance Charge for any
particular service or expense shall not exceed the applicable market rate for
comparable services or deems applicable from third party providers. The
management fee included in the Maintenance Charge shall be based upon three
percent (3 %) of base rentals.
(ii) The term "Tenant's Share" shall refer to a fraction, the
numerator of which is the floor area (in square feet) of the Premises and the
denominator of which is the aggregate leasable floor area (in square feet) in
all buildings (including the Building) now or hereafter
6
<PAGE>
situated on the Land as of the first day of January for the relevant calendar
year; Landlord and Tenant hereby stipulate that Tenant's Share is
182,320/283,609 as of the commencement of the term hereof.
D. Monthly during the first year of the term of this lease, Tenant will
pay to Landlord Landlord's estimate of the annual Maintenance Charge, monthly in
advance, payable at the same time and place as the rent is payable; provided,
however, if the lease term does not begin on the first day of a calendar month,
Tenant shall pay a pro rata portion of such sum for such partial month; such
applicable amount being, herein referred to as the "Estimated Charge." Landlord
shall have the right to adjust such monthly estimate on an annual basis pursuant
to Paragraph 6.E hereof.
E. At the end of each calendar year occurring during the term of this
lease (and subsequent to the expiration or other termination of this lease if
such occurs on a date other than the last day of a calendar year), Landlord will
give Tenant notice of the total amount(s) paid by Tenant for the relevant
calendar year together with the actual amount of Tenant's Share of the
Maintenance Charge for such calendar year. If the actual amount of Tenant's
Share of the Maintenance Charge with respect to such period exceeds the
aggregate amount(s) previously paid by Tenant with respect thereto during such
period, Tenant shall pay to Landlord the deficiency within thirty (30) days
following notice from Landlord. However, if the aggregate amount(s) previously
paid by Tenant with respect thereto exceeds Tenant's Share of the Maintenance
Charge for such period, then such surplus (net of any amounts then owing by
Tenant to Landlord) shall be credited against the next ensuing installment of
the Maintenance Charge due hereunder by Tenant. Landlord shall be entitled to,
in its reasonable discretion, adjust the Estimated Charge, such adjusted
Estimated Charge to be payable on the first day of the calendar month
immediately following Landlord's notice of such adjustment and to remain in
effect until further notice from Landlord. Tenant shall have the right, upon
reasonable notice and at Tenant's sole expense, to examine Landlord's records
relating to the calculation of the Maintenance Charge.
7. Tenant's Repairs. Tenant shall, at its own cost and expense,
maintain all other parts of the Premises, including but not limited to, windows,
doors (including overhead doors), interior walls and finish work, floors and
floor covering, heating, ventilating and air-conditioning systems (subject to
Section 6.A relating to the roof-mounted air blowers), gutters, downspouts and
protective posts therefor, curbs, dock boards, dock bumpers, dock revelers,
steps and landings, plumbing work and fixtures, and gas, electric, water, and
other utility lines and shall take good care of the Premises and its fixtures
and suffer no waste. Tenant shall keep the Premises free of all pest
infestation, including, but not limited to, termites and rodents, and shall
maintain a regular pest control prevention program unless such program is
maintained by Landlord (in which case Tenant shall pay for Tenant's Share
thereof as part of the Maintenance Charge). Except as set forth in the last
sentence of this Paragraph 7, Tenant shall not be
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obligated to repair any damage caused by fire, tornado, or other casualty
covered by items set forth under the extended coverage provisions of Landlord's
fire insurance policy. Tenant shall not use the rail spur adjacent to the
Premises, and Tenant shall not be responsible for maintaining or reimbursing the
rail carrier for the maintenance of such spur track. Tenant shall also be
obligated to repair any damage to the Premises or any part thereof caused by the
negligent act or willful misconduct of Tenant, its agents, customers, employees,
or invitees regardless of whether Tenant would otherwise be obligated to make
such repair by the provisions hereof.
8. Alterations. Except for the initial improvements to be undertaken by
Tenant as provided in Section 25 hereof (which are hereby approved by Landlord),
Tenant shall not make any material alterations, additions, or improvements to
the Premises without the prior written consent of Landlord. Tenant may, without
the consent of Landlord, but at Tenant's own cost and expense and in a good,
workmanlike manner, make such minor alterations, additions, or improvements or
erect, remove, or alter such partitions, or erect such shelves, bins, machinery,
and trade fixtures as it may deem advisable, without altering the basic
character of the Building or improvements, without affecting the structural or
loadbearing elements of the Building or improvements, without overloading or
damaging such Building or improvements or any utility systems servicing same,
and without interference to the other occupants of the Building or any other of
Landlord's tenants, and in each case complying with all applicable governmental
laws, ordinances, regulations, and other requirements. At the termination of
this lease, Tenant shall, if Landlord, in its reasonable discretion, so elects,
and at Tenant's sole cost and expense, remove all alterations, additions,
improvements, and partitions erected by Tenant and restore the Premises to their
original condition; otherwise, such improvements shall be delivered to Landlord
with the Premises. Notwithstanding the above, Tenant shall not be required to
remove or restore the following: (i) exterior entrance ramp and overhead door
need not be removed, (ii) doors on the north wall need not be reopened, and
(iii) Tenant installed showers and restrooms need not be removed. All shelves,
bins, machinery, and trade fixtures installed by Tenant may be removed by Tenant
at the termination of this lease, if Tenant so elects, so long as no event of
default by Tenant is then in existence, and shall be removed if required by
Landlord. All such removals and restorations shall be accomplished in a good,
workmanlike manner so as not to damage the primary structure or structural
qualities of the Building and other improvements situated on the Premises. Any
fixtures installed in the Premises by Tenant other than shelves, bins,
machinery, and similar trade fixtures shall become the property of Landlord when
installed.
9. Signs. Tenant shall have the right to install signs upon the
exterior of the Building and other improvements situated on the Premises only
when first approved in writing by Landlord (which approval shall not be
unreasonably withheld or delayed) and subject to any applicable governmental
laws, ordinances, regulations, and other requirements and subject to
applicable restrictive covenants, if any. All of Tenant's existing signage,
if any, is hereby
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approved by Landlord. Tenant shall remove all such signs at the termination of
this lease. Such installations and removals shall be made in such manner as to
avoid injury or defacement of the Building and other improvements situated on
the Premises.
10. Inspection. Landlord and Landlord's agents and representatives
shall have the right to enter and inspect the Premises at any time during normal
business hours and without undue interruption to Tenant's business for the
purpose of ascertaining the condition of the Premises or in order to make such
repairs as may be required to be made by Landlord under the terms of this lease
and for the purpose of showing the Premises and the Building to prospective
mortgagees or purchasers. During the period that is six (6) months prior to the
end of the term hereof, Landlord and Landlord's agents and representatives shall
have the right to enter the Premises at any time during normal business hours
and without undue interruption to Tenant's business for the purpose of showing
the Premises to prospective tenants and shall have the right to erect on the
Premises a suitable sign indicating that the Premises are for sale or lease.
11. Utilities. Landlord agrees to provide such water, electricity,
telephone, and other utility service connections into the Premises as may be
presently in place. Tenant shall pay all charges incurred for any utility
services used on or from the Premises and any maintenance charges for utilities,
shall be responsible for any costs associated in any manner with any additional
utility connections to the Premises which Tenant may require, and shall furnish
all electric light bulbs and tubes. Payments for electricity and gas shall be
made directly to the supplier of such utility to the Premises, and payments for
water and sewer services shall be prorated and paid to Landlord as part of the
Maintenance Charge in accordance with separate meter readings for Tenant's
space. Landlord shall in no event be liable for any interruption or failure of
utility services on the Premises caused by circumstances not reasonably within
Landlord's control; but Landlord will use reasonable diligence to restore the
utilities as soon as reasonably possible.
12. Assignment and Subletting.
A. Tenant shall not assign this lease or sublet the whole or any part
of the Premises without the prior written consent of Landlord, which consent
shall not be unreasonably withheld or delayed. In any event Tenant shall have
the right to assign the lease or sublease the whole or any part of the Premises
to any subsidiary or affiliate of Tenant without Landlord's approval, so long as
Landlord is notified of any such assignment or sublease. Notwithstanding any
assignment or subletting, Tenant shall at all times remain fully responsible and
liable for the payment of the rent herein specified and for compliance with all
of the other obligations imposed on Tenant under the terms, provisions, and
covenants of this lease. Upon the occurrence of an "event of default" as
hereinafter defined, if the Premises or any part thereof are then assigned or
sublet, Landlord, in addition to any other remedies herein provided, or provided
by law, may at its option collect directly from such assignee or subtenant all
rents or payments becoming due
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to Tenant under such assignment or sublease and apply such rent or payment
against any sums due to Landlord by Tenant. No such collection shall be
construed to constitute a novation or a release of Tenant from the further
performance of its obligations under this lease. Landlord shall have the right
to assign any of its rights under this lease.
13. Fire and Casualty Damage.
A. If the Premises should be damaged or destroyed by fire, tornado, or
other casualty, Tenant shall give immediate written notice thereof to Landlord.
Landlord shall, within thirty (30) days after such notice from Tenant, notifying
Tenant of Landlord's intention to repair or rebuild.
B. If the Premises or the Building should be totally destroyed by fire,
tornado, or other casualty, or if either should be so damaged that rebuilding or
repairs cannot be completed within 120 days after the date upon which Landlord
is notified by Tenant of such damage, this lease shall terminate and the rent
shall be abated during the unexpired portion of this lease, effective upon the
date of the occurrence of such damage.
C. If the Premises or the Building should be damaged by fire, tornado,
or other casualty, but only to such extent that rebuilding or repairs can be
completed within 120 days after the date upon which Landlord is notified by
Tenant of such damage, this lease shall not terminate, but Landlord shall, at
its sole cost and expense, proceed with reasonable diligence to rebuild and
repair such Building to substantially the condition in which it existed prior to
such damage, except that (i) Landlord shall not be required to so rebuild or
repair if less than twelve (12) months remain in the term hereof after the
expiration of such 120-day period, and (ii) Landlord shall not be required to
rebuild, repair, or replace any part of the partitions, fixtures, and other
improvements which may have been placed on the Premises by Tenant. If the
Premises are untenantable in whole or in part following such damage, the rent
payable hereunder during the period the Premises are untenantable shall be
reduced in direct proportion to the usable space rendered untenantable. In the
event that Landlord should fail to complete such repairs and rebuilding within
120 days after the date upon which Landlord is notified by Tenant of such
damage, Tenant may, at its option, terminate this lease by delivering written
notice of termination to Landlord within thirty (30) days after the expiration
of such 120-day period, as Tenant's exclusive remedy, whereupon all rights and
obligations hereunder shall cease and determine.
D. Notwithstanding anything herein to the contrary, in the event the
holder of any indebtedness secured by a mortgage or deed of trust covering the
Premises requires that the insurance proceeds be applied to such indebtedness,
then Landlord shall have the right to terminate this lease by delivering written
notice of termination to Tenant, whereupon all rights and obligations hereunder
shall cease and determine.
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E. Any insurance which may be carried by Landlord or Tenant against
loss or damage to the buildings and other improvements situated on the Premises
shall be for the sole benefit of the party carrying such insurance and under its
sole control.
F. Each of Landlord and Tenant hereby releases the other from any and
all liability or responsibility to the other or anyone claiming through or under
them by way of subrogation or otherwise for any loss or damage to property
caused by fire or any of the extended coverage casualties covered or that would
be covered by standard extended coverage property policies (whether or not any
such policy is actually carried by the party sustaining the loss), even if such
fire or other casualty shall have been caused by the fault or negligence of the
other party, or anyone for whom such party may be responsible; provided,
however, that this release shall be applicable and in force and effect only with
respect to loss or damage occurring during such times as the releaser's policies
contain a clause or endorsement to the effect that any release shall not
adversely affect or impair said policies or prejudice the right of the releaser
to recover thereunder. Each of Landlord and Tenant agrees that it will request
its insurance carriers to include in its policies such a clause or endorsement.
G. Landlord covenants and agrees to maintain standard fire and extended
coverage insurance covering the Building (exclusive of any of Tenant's fixtures,
furnishings, and equipment attached thereto or located thereon) in an amount not
less than the replacement cost thereof (exclusive of grading, foundation, and
below grade facilities). Landlord may maintain such other or further insurance
coverage as Landlord deems necessary or appropriate. Landlord shall have. the
right to estimate the amount of the annual premium for Landlord's insurance
policies, and Tenant shall pay to Landlord on a monthly basis, as additional
rent, Tenant's Share of the amount of the annual premium for Landlord's
insurance policies which Tenant shall pay to Landlord on a monthly basis in the
same manner as that provided in Paragraph 6.D and 6.E; and the failure by Tenant
to pay Tenant's Share of such amount each month shall be treated in the same
manner as a failure to make payments of rent when due.
14. Liability.
A. Landlord shall not be liable to Tenant or Tenant's employees,
agents, patrons, or visitors, for any injury to person or damage to property on
or about the Premises and Building caused by the negligence or misconduct of
Tenant, its agents, servants, or employees, or caused by any improvements made
to the Building or Premises by Tenant and/or any portion of the Building or
Premises which are the responsibility of Tenant hereunder becoming out of
repair, or caused by leakage of gas, oil, water, or steam or by electricity
emanating from the Premises, and, subject to Section 13.F above, Tenant agrees
to indemnify Landlord and hold it harmless from any loss, expense, or claims,
including reasonable attorneys' fees, arising out of any such damage or injury.
Notwithstanding anything contained to the contrary in this Agreement, any injury
to person or damage to property caused by the negligence of Landlord or by the
failure
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of Landlord to repair and maintain that part of the Premises or Building which
Landlord is obligated to repair and maintain, including the maintenance,
replacement and repair of the foundation, exterior walls, sidewalk, roof and
roof mounted blower units (to the extent of Landlord's responsibilities
therefor) within a reasonable time after the receipt of written notice from
Tenant of needed repairs or defects shall be the liability of Landlord and not
of Tenant. Tenant shall procure and maintain throughout the term of this lease a
policy or policies of insurance, at its sole cost and expense, insuring both
Landlord and Tenant against all claims, demands or actions arising out of or in
connection with Tenant's use or occupancy of the Premises, or by the condition
of the Premises, the limits of such policy or policies to be in an amount not
less than $1,000,000.00 in respect of any one occurrence and in an amount not
less than $500,000.00 in respect of the property damaged or destroyed, and to be
written by insurance companies qualified to do business in the state in which
the Premises are located. Such policies or duly executed certificates of
insurance shall be promptly delivered to Landlord and renewals thereof as
required shall be delivered to Landlord at least ten (10) days prior to the
expiration of the respective policy terms. All such policies shall contain
provisions requiring that the insurer give Landlord not less than thirty (30)
days' prior written notice of the cancellation of such policies. Tenant shall be
deemed in compliance with its obligations to carry insurance under this
Paragraph 14 if it is insured under a blanket policy carried by an affiliated
company for the benefit of Tenant, and such policy meets the requirements of
this Paragraph 14, or if Tenant is insured under any other insurance meeting the
requirements of this Paragraph 14 whether carried by Tenant, or another entity
which may or may not be affiliated with Tenant.
B. Tenant shall not be liable to Landlord or Landlord's employees,
agents, patrons, or visitors for any injury to person or damage to property on
or about the Premises and Building caused b the negligence or misconduct of
Landlord, its agents, servants, or employees or caused by the portions of the
Building and/or Premises that are the Landlord's responsibility hereunder
becoming out of repair. Landlord agrees to indemnify Tenant and hold it harmless
from any loss, expense, or claims, including reasonable attorney's fees, arising
out of any such damage or injury caused by the negligence of Landlord or by the
failure of Landlord to repair and maintain that part of Premises or Building
which Landlord is obligated to repair, replace and maintain, including the
maintenance, repair and replacement of the foundation, exterior walls,
sidewalks, roof and roof mounted blower units (to the extent of Landlord's
responsibility therefor), within a reasonable time after receipt of written
notice from Tenant of needed repairs or defects.
15. Condemnation.
A. If the whole or any substantial part of the Premises or the Building
or Land upon which the Premises are located should be taken for any public or
quasi-public use under governmental law, ordinance, or regulation, or by right
of eminent domain, or by private purchase in lieu thereof, this lease shall
terminate and the rent shall be abated during the
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unexpired portion of this lease, effective when the physical taking of said
Premises shall occur. For the purposes hereof "substantial part of the Premises"
shall be deemed to mean such portion of the Premises the loss of which would, in
Landlord's reasonable opinion, materially lessen the usefulness of the Premises
to Tenant for the purposes for which Tenant is then using the Premises.
B. If less than a substantial part of the Premises or the Building or
Land upon which the Premises are located shall be taken for any public or
quasi-public use under any governmental law, ordinance, or regulation, or by
right of eminent domain, or by private purchase in lieu thereof, this lease
shall not terminate, but the rent payable hereunder during the unexpired portion
of this lease shall be reduced to such extent as may be fair and reasonable
under all of the circumstances.
C. In the event of any such taking, or private purchase in lieu
thereof, Landlord and Tenant shall each be entitled to receive and retain such
separate awards and/or portion of lump sum awards as may be allocated to their
respective interests in any condemnation proceedings; provided, however, that
"Tenant's interests" for purposes hereof shall be limited to Tenant's moving
expenses, trade fixtures, equipment, loss of business, and the like, and Tenant
shall have no right to any claim or award based on the value of the leasehold
estate or which would otherwise reduce the amount attributable to Landlord's fee
simple interest in the Building and Land.
16. Holding Over. Should Tenant, or any of its successors in interest,
hold over the Premises, or any part thereof, after the expiration of the term of
this lease, as may be renewed or extended, unless otherwise agreed in writing,
such holding over shall constitute and be construed as creating a tenancy at
will and sufferance only but otherwise on the same terms and conditions of this
lease, cancelable by Landlord on thirty (30) days written notice, at a rental
equal to 125% of the monthly rental provided for herein, payable in full on the
first day on which Tenant holds over and on the first day of each month
thereafter during such holdover period (prorated for partial months). The
inclusion of the preceding sentence shall not be construed as Landlord's
permission for Tenant to hold over.
17. Quiet Enjoyment. Landlord covenants that it now has, or will
acquire before Tenant takes possession of the Premises, good title to the
Premises, free and clear of all liens and encumbrances, excepting only the lien
for current taxes not yet due, such mortgage or mortgages as are permitted by
the terms of this lease, zoning ordinances, and other building and fire
ordinances and governmental regulations relating to the use of such property,
and easements, restrictions, and other conditions of record. Landlord represents
and warrants that it has full right and authority to enter into this lease and
that Tenant, upon paying the rental and performing its other covenants and
agreements under the terms of this lease, shall peaceably and quietly have,
hold, and enjoy the Premises for the term hereof without hindrance or
molestation
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from Landlord, or anyone claiming by, through, or under Landlord, but not
otherwise, subject to the terms and provisions of this lease.
18. Events of Default. The following events shall be deemed to be events
of default by Tenant under this lease:
(a) Tenant shall fail to pay any installment of the rent or
additional rent or shall fail to perform or discharge any other
obligation or liability of Tenant under this lease requiring the payment
of money within ten (10) days after any such payment is due.
(b) Tenant shall become insolvent, or shall make a transfer in
fraud of creditors, or shall make an assignment for the benefit of
creditors.
(c) Tenant shall file a petition under any section or chapter of
the Bankruptcy Code or under any present or future bankruptcy,
insolvency, or similar law or statute of the United States or any state
thereof heretofore or hereinafter enacted; or Tenant shall have such a
petition filed against it involuntarily and such petition is not
withdrawn or otherwise removed within sixty (60) days of its being
filed; or Tenant shall be adjudged bankrupt or insolvent in proceedings
filed against Tenant thereunder.
(d) A receiver, trustee, or custodian shall be appointed for, or
shall take possession of, all or substantially all of the assets of
Tenant.
(e) Tenant shall abandon any substantial portion of the
Premises.
(f) Tenant shall fail to comply with any term, provision, or
covenant of this lease or shall fail to discharge any obligation or
liability hereunder not involving the payment of money, and shall not
cure any such failure within thirty (30) days after written notice
thereof to Tenant, provided that if such default is not susceptible to
cure within thirty (30) days, Tenant shall be deemed to have cured such
default if Tenant has commenced efforts to cure such default within such
thirty (30) day period and diligently pursues and completes such
curative actions within a reasonably prompt period of time thereafter.
19. Remedies. Upon the occurrence of any of such events of default by
Tenant, except as may be otherwise provided by applicable law, Landlord shall
have the option to pursue any one or more of the following remedies without any
notice or demand whatsoever:
(a) Terminate this lease, in which event Tenant shall
immediately surrender the Premises to, Landlord without any payment
therefor, and if Tenant fails so to do, Landlord may, without prejudice
to any other remedy which it may have for possession
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or arrearages in rent, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be occupying
such Premises or any part thereof, by any lawful means, whether through
judicial process or otherwise, without being liable for prosecution or
any claim of damages therefor; and Tenant agrees to pay to Landlord on
demand the amount of all loss and damage which Landlord may suffer by
reason of such termination, whether through inability to relet the
Premises on satisfactory terms or otherwise.
(b) Enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying such Premises or
any part thereof, by any lawful means, whether through judicial process
or otherwise, without being liable for prosecution or any claim for
damages therefor, and relet the Premises, in the name of Landlord or
otherwise, for such term or terms (which may be greater or lesser than
the period which would otherwise have constituted the balance of the
term of this lease) and on such conditions (which may include
concessions or free rent) as Landlord, in its sole discretion, may
determine, and receive the rent therefor. In the event of any such
re-entry or dispossession, Tenant shall not thereby be relieved of its
liability and obligations under this lease, which shall survive any such
re-entry or dispossession, and in that event (i) the rent and other
charges required to be paid by Tenant up to the time of such re-entry or
dispossession shall become due and payable, together with such
reasonable expenses as Landlord may incur for reasonable attorneys'
fees, brokerage commissions, and/or expenses of putting the Premises in
such condition as the Tenant under the provisions hereof is required to
maintain, or for preparing the same for reletting and (ii) Tenant or the
legal representatives of Tenant shall also pay Landlord, as liquidated
damages for the failure of Tenant to observe and perform Tenant's
covenants herein contained, an amount equal to the sum of (A) the base
rental set forth in Paragraph 2 hereof and (B) all additional rental
payable by Tenant under the provisions hereof, as if this lease were
still in effect, less the net amount, if any, of the rents and all other
amounts collected on account of the lease or leases of the Premises for
each month of the period which would otherwise have constituted the
balance of the term of this lease as the same may theretofore have been
extended. In computing the amount of such liquidated damages there shall
be included such expenses as Landlord may incur in connection with
reletting, including reasonable attorneys' fees, brokerage commissions,
expenses of keeping the Premises in the condition Tenant is required to
maintain under the provisions of this lease, or expenses of preparing
the same for relenting. Any such liquidated damages shall be paid in
monthly installments by Tenant on the day specified hereunder, and any
suit brought to collect the amount of the deficiency of any mouth shall
not prejudice in any way the rights of Landlord to collect the
deficiency for any subsequent month by a similar proceeding.
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(c) Enter upon the Premises by any lawful means, whether through
judicial process or otherwise, without terminating this lease and
without being liable for prosecution or any claim for damages therefor,
and do whatever Tenant is obligated to do under the terms of this lease;
and Tenant agrees to reimburse Landlord on demand for any expenses which
Landlord may incur in thus effecting compliance with Tenant's
obligations under this lease, and Tenant further agrees that Landlord
shall not be liable for any damages resulting to Tenant from such
action, whether caused by the negligence of Landlord or otherwise.
In the event Tenant fails to pay any installment of rent or additional rent
hereunder as and when such installment is due, then to the extent permissible by
law Tenant shall pay to Landlord on demand a late charge in an amount equal to
five percent (5%) of such installment; and the failure to pay such amount within
ten (10) days after written demand therefor shall be an event of default
hereunder. The provision for such late charge shall be in addition to all of
Landlord's other rights and remedies hereunder or at law and shall not be
construed as liquidated damages or as limiting Landlord's remedies in any
manner.
Pursuit of any of the foregoing remedies shall not preclude pursuit of
any of the other remedies herein provided or any other remedies provided by law,
nor shall pursuit of any remedy herein provided constitute a forfeiture or
waiver of any rent due to Landlord hereunder or of any damages accruing to
Landlord by reason of the violation of any of the terms, provisions, and
covenants herein contained. No waiver by Landlord of any violation or breach of
any of the terms, provisions, and covenants herein contained shall be deemed or
construed to constitute a waiver of any other violation or breach of any of the
terms, provisions, and covenants herein contained. Landlord's acceptance of the
payment of rental or other payments hereunder after the occurrence of an event
of default shall not be construed as a waiver of such default, unless Landlord
so notifies Tenant in writing. Forbearance by Landlord to enforce one or more of
the remedies herein provided upon an event of default shall not be deemed or
construed to constitute a waiver of such default. If, on account of any breach
or default by Tenant in Tenant's obligations under the terms and conditions of
this lease, it shall become necessary or appropriate for Landlord to employ or
consult with an attorney concerning, or to enforce or defend, any of Landlord's
rights or remedies hereunder, Tenant agrees to pay any reasonable attorneys'
fees. No act or thing done by the Landlord or its agents during the term hereby
granted shall be deemed an acceptance of the surrender of the Premises and no
agreement to accept a surrender of said Premises shall be valid unless in
writing signed by Landlord. The receipt by Landlord of rent with knowledge of
the breach of any covenant or other provision contained in this lease shall not
be deemed or construed to constitute a waiver of any other violation or breach
of any of the terms, provisions, and covenants contained herein.
20. Mortgages. (a) Tenant accepts this lease subject and subordinate to
any mortgage(s) and/or deed(s) of trust now or at any time hereafter
constituting a lien or charge
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upon the Premises or the improvements situated thereon or any portion thereof.
Tenant shall at any time hereafter upon written notice execute any instruments,
releases or other documents which may be required by any mortgagee for the
purpose of subjecting and subordinating this lease to the lien of any such
mortgage. With respect to any mortgage(s) and/or deed(s) of trust at any time
hereafter created which constitute a lien or charge upon the Premises or the
improvements situated thereon, Landlord agrees to request the holder of such
mortgage to enter into a non-disturbance and attornment agreement with Tenant
providing for such lender to honor this lease and Tenant's interest in the
Premises so long as Tenant is not in default hereunder.
(b) The effectiveness of this Lease is expressly contingent upon the
approval of this Lease by Landlord's existing mortgagee, and the execution by
Landlord's mortgagee and Tenant of a non-disturbance agreement reasonably
acceptable to Tenant. If such mortgagee approval and non-disturbance agreement
are not obtained within fifteen (15) days of the date hereof, then either party
may terminate this Lease.
21. Mechanic's Liens. Tenant shall have no authority, express or
implied, to create or place any lien or encumbrance of any kind or nature
whatsoever upon, or in any manner to bind, the interest of Landlord in the
Premises or to charge the rentals payable hereunder for any claim in favor of
any person dealing with Tenant, including those who may furnish materials or
perform labor for any construction or repairs, and each such claim shall affect
and each such lien shall attach, if at all, only to the leasehold interest
granted to Tenant by this instrument. Tenant covenants and agrees that it will
pay or cause to be paid all sums legally due and payable by it on account of any
labor performed or materials furnished in connection with any work performed on
the Premises on which any lien is or can be valid and legally asserted against
its leasehold interest in the Premises or the improvements thereon and that it
will save and hold Landlord harmless from any and all loss, cost, or expense
based on or arising out of asserted claims or liens against the leasehold estate
or against the rights, titles, and interest of Landlord in the Premises or under
the terms of this lease. Further, Tenant agrees that it will remove and have
released any mechanics', materialmen's or similar lien which may become attached
to the Premises or any interest therein during the term hereof within thirty
(30) days after Tenant receives notice (whether from Landlord or otherwise) of
the existence of such lien.
22. Notices. Each provision of this instrument or of any applicable
governmental laws, ordinances, regulations, and other requirements with
reference to the sending, mailing, or delivery of any notice or the making of
any payment by Landlord to Tenant or with reference to the sending, mailing, or
delivery of any notice or the making of any payment by Tenant to Landlord shall
be deemed to be complied with when and if the following steps are taken:
A. All rent and other payments required to be made by Tenant to
Landlord hereunder shall be payable to Landlord at the address herein
below set forth or at such
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other address as Landlord may specify from time to time by written
notice delivered in accordance herewith.
B. All payments required to be made by Landlord to Tenant
hereunder shall be payable to Tenant at the address hereinbelow set
forth, or at such other address within the continental United States as
Tenant may specify from time to time by written notice delivered in
accordance herewith.
Any notice provided for by this lease and any other notice, demand or
communication which any party may wish to send to another (a "Notice")
concerning this lease shall be in writing and personally delivered or sent by
registered or certified mail, return receipt requested, in a properly sealed
envelope, postage prepaid, and addressed to the party for which such Notice is
intended at such party's address as set forth below:
If to Landlord: c/o Mr. Robert M. Petrucello,
5327 N. Central Expressway
Suite 306
Dallas, Texas 75205
with a copy to: Charles W. Morris, Esq.
Johnson & Gibbs, P.C.
A Professional Corporation
100 Founders Square
900 Jackson Street
Dallas, Texas 75202-4499
If to Tenant: Snorkel-Economy
P.O. Box 4065
St. Joseph, MO 64504
with a copy to: Figgie International, Inc.
4420 Sherwin Road
Willoughby, Ohio 44094
Attn: Real Estate Notice Enclosed
Any address or name specified above may be changed by a Notice given by the
addressee to the sender in accordance with the above. Any Notice shall be deemed
given and effective as of the date of personal delivery or of receipt set forth
on the return receipt. The inability to deliver because of changed address of
which no Notice was given, rejection, or any refusal to accept any Notice, shall
be deemed to be the receipt of the Notice, as of the date of such inability to
deliver, rejection, or refusal to accept.
18
<PAGE>
23. Miscellaneous.
A. Words of any gender used in this lease shall be held and construed
to include any other gender, and words in the singular number shall be held to
include the plural and vice versa, unless the context otherwise requires.
B. The terms, provisions, and covenants and conditions contained in
this lease shall apply to, inure to the benefit of, and be binding upon, the
parties hereto and upon their respective heirs, legal representatives,
successors, and permitted assigns, except as otherwise herein expressly
provided.
C. The captions are inserted in this lease for convenience only and in
no way define, limit, or describe the scope or intent of this lease, or any
provision hereof, nor in any way affect the interpretation of this lease.
D. Tenant agrees, within thirty (30) days after request of Landlord, to
deliver to Landlord, or Landlord's designee, an estoppel certificate stating
that this lease is in full force and effect, the date to which rent has been
paid, the unexpired term of this lease, and such other matters pertaining to
this lease as may be reasonably requested by Landlord.
E. This lease may not be altered, changed, or amended except by an
instrument in writing executed by Landlord and Tenant.
F. This instrument [including all Exhibits and Riders (signed or
initialled by Landlord and Tenant) which are attached hereto] constitutes the
entire agreement between Landlord and Tenant. No prior written or prior or
contemporaneous oral statements, promises, or representations shall be binding.
G. If any provision of this lease shall ever be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions of the lease, but such other provisions shall continue in full force
and effect.
H. This lease shall be construed and enforced in accordance with the
laws and judicial decisions of the State of Kansas.
I. Under no circumstances whatsoever shall Landlord ever be liable
hereunder for consequential damages or special damages; and all liability of
Landlord for damages for breach of any covenant, duty or obligation of Landlord
hereunder may be satisfied only out of the interest of Landlord in the Land and
Building existing at the time any such liability is finally adjudicated and all
rights to appeal have lapsed. The term "Landlord" means only the owner of the
Land, and in the event of the transfer by such owner of its interests in the
Land, such
19
<PAGE>
owner shall thereupon be released and discharged from all covenants and
obligations of Landlord thereafter accruing, but such covenants and obligations
shall be binding upon each new owner for the duration of such owner's ownership.
J. In the event of any act or omission by Landlord which would give
Tenant the right to damages from Landlord or the right to terminate this lease
by reason of a constructive or actual eviction from all or part of the Premises
or otherwise, Tenant shall not sue for such damages or exercise any such right
to terminate until (a) it shall have given written notice of such act or
omission to Landlord and to the holder(s) of the indebtedness or other
obligations secured by any first mortgage or first deed of trust affecting the
Premises, if the name and address of such holder(s) shall have previously been
furnished to Tenant; and (b) thirty (30) days for remedying such act or omission
shall have elapsed following the giving of such notice, during which time
Landlord and such holder(s) or either of them, their agents or employees, shall
be entitled to enter upon the Premises and do therein whatever may be necessary
to remedy such act or omission.
K. Whenever a period of time is herein prescribed for action to be
taken by Landlord or Tenant, other than actions relating to the payment of Rent
or other monthly sums, the obligated party shall not be liable or responsible
for, and there shall be excluded from the computation for any such period of
time, any delays due to strikes, riots, acts of God, shortages of labor or
materials, war, governmental laws, regulations or restrictions or any other
causes of any kind whatsoever which are beyond the reasonable control of such
party.
L. Abandoned Property. All of Tenant's furniture, moveable trade
fixtures and other personal property not removed by Tenant from the Premises
within ten (10) days after Landlord shall request such removal in writing after
this lease terminates whether by lapse of time or otherwise, shall be
conclusively presumed to have been abandoned by Tenant, and Landlord may, at its
option and election, thereafter take possession of such property and either (i)
declare same to be the property of Landlord or (ii) at the cost and expense of
Tenant, dispose of such property in any manner and for whatever consideration
Landlord in its sole discretion shall deem most advisable.
24. Return of Premises. At the end of the term covered by this lease,
or upon such earlier termination of this lease as provided herein, Tenant shall
surrender the Premises to Landlord in the same good order and condition as the
Premises were in prior to the beginning of the term hereof, reasonable wear and
tear excepted and subject to the provisions of Section 8 above; provided, that
in any case the Premises shall be surrendered to Landlord reasonably clean and
free of debris. At such time Tenant shall deliver all keys to the Premises to
Landlord any equipment, trade fixtures or other property of Tenant left on the
Premises after the end of this lease shall be deemed abandoned, unless Landlord
and Tenant have agreed otherwise, and same may be retained or disposed of by
Landlord in any manner that Landlord chooses without
20
<PAGE>
notice to Tenant. Tenant shall pay all removal, storage and other costs incurred
by Landlord in connection with such property.
25. Special Provisions. Additional provisions, if any, set forth on
Exhibits and Riders attached hereto and made a part hereof for all purposes are
incorporated herein as if fully set forth in this Paragraph. The attached
Exhibits and Riders are:
Exhibit A: The Premises
Exhibit B: Description of the Land
Exhibit C: Tenant's Improvements to Premises
Further, the following special provisions are set forth below and made
a part hereof for all purposes:
A. Tenant's Refitting of Premises. Landlord and Tenant agree that
Tenant shall have access to the Premises prior to the commencement date for the
purpose of carrying out, at Tenant's sole cost and expense, the improvements
described on Exhibit C and Tenant shall otherwise have the same responsibilities
with respect to the Premises as during the term of the lease. Landlord approves
the improvement work described on Exhibit C.
B. Options to Renew.
(i) Tenant shall have the option, by written notice of renewal
given not less than six months prior to the end of the
original term, to renew this Lease for an additional term of
five years on the same terms and conditions, except that the
fixed rental rate shall be $382,872.00 per annum (i.e. $2.10
per square foot). The renewal option may not be revoked after
it is given.
(ii) If Tenant exercises the first renewal term pursuant to clause
(a) above, Tenant shall also have the option, by written
notice of renewal given not less than twelve months prior to
the end of the first renewal term, to renew this lease for an
additional term of five years on the same terms and
conditions, except that the fixed rental rate shall be
$390,164.80 (i.e. $2.14 per square foot) in year 11,
$397,457.60 (i.e. $2.18 per square foot) in year 12,
$406,573.60 (i.e. $2.23 per square foot) in year 13,
$413,866.40 (i.e. $2.27 per square foot) in year 14, and
$422,982.40 (i.e. $2.32) in year 15. The renewal option may
not be revoked after it is given.
21
<PAGE>
(iii) If Tenant exercises the second renewal term pursuant to
clause (b) above, Tenant shall also have the option, by
written notice of renewal given not less than twelve months
prior to the end of the second renewal term, to renew this
lease for an additional term of five years on the same terms
and conditions except that the fixed rental rate shall be
$430,275.20 (i.e. $2.36 per square foot in year 16,
$439,391.20 (i.e. $2.41 per square foot) in year 17,
$448,507.20 (i.e. $2.46 per square foot) in year 18,
S457,623.20 (i.e. $2.51 per square foot) in year 19, and
$466,739.20 (i.e. $2.56 per square foot) in year 20. The
renewal option may not be revoked after it is given.
22
<PAGE>
EXECUTED the 1st day of February, 1994.
LANDLORD:
SJ ASSOCIATES, L. P.,
a Texas limited partnership
By: /s/ Robert M. Petrucello
-------------------------------------
Robert M. Petrucello,
General Partner
TENANT: Snorkel-Economy, a division of
FIGGIE INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ Richard A. Solon
-------------------------------------
Richard A. Solon
Its: President
-------------------------------------
23
LAND LEASE
THIS LAND LEASE, is hereby made and entered into as of the 17th day of
November, 1997, by and between Figgie International Real Estate Inc., a Delaware
corporation ("Lessor"), and SKL Lift, Inc., a Delaware corporation ("Lessee").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Asset Purchase Agreement between
Lessor, Lessee and the other parties named therein dated as of July 19, 1997, as
amended (the "Purchase Agreement"), Lessor has agreed to sell and Lessee has
agreed to purchase certain assets and the business, as a going concern (the
"Business"), of the Snorkel division of Figgie International, Inc., a Delaware
corporation and an affiliate of Lessor (the "Seller"); and
WHEREAS, in accordance with the terms of the Purchase Agreement, Lessor
has agreed to provide Lessee with the right to lease certain St. Joseph,
Missouri property for five (5) years with an option to purchase such property
pursuant to the terms set forth herein (the "Lease").
NOW, THEREFORE, in consideration of the covenants, conditions,
agreements and stipulations herein contained and in the Purchase Agreement, the
parties hereto agree as follows:
1. Lease and Term. Lessor does hereby lease unto Lessee the land
described on Schedule A attached hereto. To have and to hold such land,
together with all
<PAGE>
of Lessor's rights appurtenant thereto (the "Premises") for a term which
commences on the Closing Date (as defined in the Purchase Agreement) and ends on
the fifth (5th) anniversary of the Closing Date; provided, however, that Lessee
shall have the right to terminate this Lease at any time by providing Lessor
with sixty (60) days advance written notice of termination.
2. Lessee's Ownership of Buildings and Improvements. Lessor and Lessee
expressly acknowledge that the buildings and other improvements now or hereafter
erected on the Premises, the equipment located therein and all replacements
thereof are separately and independently owned by Lessee. Lessor expressly
acknowledges that it shall have no rights to such buildings and other
improvements, except those rights of ownership which may arise upon the
expiration or termination of this Lease in the manner contemplated by Section 6
hereof.
3. Quiet Enjoyment and Representations by Lessee. Lessor hereby
covenants not to interfere with and to permit Lessee full, complete and quiet
enjoyment of the Premises throughout the term of this Lease. In addition, Lessor
covenants that it will not take any actions which would restrict or impede its
ability to perform its obligation hereunder including, without limitation,
mortgaging or encumbering its title to the Premises. Lessor makes no other
representations and warranties (other than those made in the Purchase Agreement)
with respect to the Premises.
2
<PAGE>
4. Fixed Rent. Lessee, in consideration of its right to use and enjoy
the Premises as aforesaid, covenants and agrees to pay unto Lessor in lawful
currency of the United States of America, rent of One Thousand Two Hundred
Dollars ($1,200.00) per year ("Fixed Rent"), payable annually in advance on the
first day of each year throughout the term of this Lease.
5. Payment of Other Expenses. It is understood and agreed that this
Lease is a "triple net lease", and that, throughout the term of this Lease, in
addition to the Fixed Rent, Lessee will pay, or cause to be paid, all real
estate taxes and assessments and all costs and expenses incurred in connection
with or relating to the ownership or operation of the Premises, including but
not limited to all insurance and utility costs relating to the Premises. Lessee
shall have the right to pay all "triple net" expenses, including but not limited
to real estate taxes and assessments, directly to the supplier or governmental
entity or assessor, provided that upon request therefor, Lessee promptly
provides Lessor with proof of payment of all such "triple net" expenses. Upon
its receipt of any bills or notices relating to such expenses, including but not
limited to those regarding real estate taxes and assessments, the receiving
party shall promptly send copies of such bills and notices to the other party.
6. Maintenance, Alteration and Removal of Improvements. Lessee shall
maintain the Premises (except with respect to those environmental matters for
which Lessee is not providing Lessor with indemnification hereunder), including
any buildings or improvements now or hereinafter erected on the Premises, in
compliance with applicable
3
<PAGE>
laws in all material respects. In the event that Lessor notifies Lessee that
Lessee's use of the Premises will violate the terms of Lessor's credit
agreements (and Lessor represents that it has no present knowledge of any such
violation), Lessee and Lessor agree to reasonably cooperate with each other in
an effort to prevent the occurrence of any such violation; provided that, Lessee
shall not be obligated to incur any unreasonable expense or take any action
which could reasonably be expected to have a material adverse effect on its use
and operation of the Premises. Lessor shall have no obligation to maintain any
buildings or improvements now or hereinafter erected on the Premises. Lessee
shall have, and is hereby granted, the right to alter the interior of any
building and to demolish or otherwise modify the Premises as it sees fit;
provided that, with respect to structural alterations, demolitions or
modifications only, all plans and specifications in connection therewith are
provided to Lessor in advance and that all alterations, demolitions or
modifications are conducted in compliance with applicable law in all material
respects. Upon the expiration or termination of this Lease, Lessee may remove
any and all improvements and/or personal property located on or at the Premises;
provided that removal is conducted in compliance with applicable laws in all
material respects. Any improvements of Lessee not removed from the Premises at
the expiration of this Lease shall become the property of Lessor. All personal
property, such as machinery and operating equipment, located on the Premises and
owned by Lessee shall remain the property of Lessee and will be removed by it,
at its expense, within twenty (20) days following the expiration of this Lease.
Any personal property not removed from the Premises by Lessee within twenty (20)
days following the expiration of
4
<PAGE>
this Lease shall become the property of Lessor. For purposes of this Agreement,
the term "Holdover Period" shall mean the period of time following the
expiration of the Lease, not to exceed twenty days, in which any personal
property of the Lessee remains on the Premises. Lessee agrees that it will
continue to maintain, during the Holdover Period, those insurance policies
contemplated by Section 8 hereof.
7. Return of Premises. Lessee agrees that any improvements existing on
the Premises as of the date hereof and remaining on the Premises at the Lease
expiration or termination shall be returned to the condition such improvements
were in when Lessee's occupancy began, subject to deterioration and depreciation
of the Premises occasioned by the passage of time, wear and tear from reasonable
use and alterations made in accordance with the terms of Section 6 hereof; it
being expressly acknowledged that Lessee shall return the Premises to Lessor in
a condition that is in compliance with applicable laws in all material respects;
it also being expressly acknowledged that Lessee has no continuing obligation to
use or maintain the Premises, except to the extent necessary to comply with
applicable laws in all material respects.
8. Insurance.
(a) Lessee, at its sole cost and expense, will during the term of
this Lease keep any buildings and improvements on the Premises insured against
loss or damage by fire and against loss or damage by other risks now embraced by
"extended coverage" for
5
<PAGE>
an amount not less than eighty percent (80%) of the replacement value of the
improvements to be insured.
(b) Lessee shall, at its cost and expense, secure and maintain
General Liability Insurance written on a so called "Comprehensive" General
Liability Insurance Form, naming Lessor as an additional insured, covering the
Premises against claims on account of bodily injury and property damage incurred
upon or about the Premises, with such levels of coverage customary in the case
of premises of similar type or locale to the Premises.
(c) Lessee shall obtain such other insurance or such other amounts
against other insurable hazards which at the time are commonly insured against
in the case of premises of similar type or locale to the Premises.
(d) All insurance provided for herein shall be effected under valid
and enforceable policies issued by insurers of nationally recognized
responsibility. In addition, all insurance policies provided for herein shall
contain waiver of subrogation provisions to the extent available without
materially increasing Lessee's premium payments. In addition, upon request of
Lessor, Lessee shall promptly provide Lessor with proof of insurance policies
required hereunder and evidence of payment for premiums relating thereto.
9. Discharge of Liens. Lessee will not create or permit to be
created, and hereby covenants to discharge any lien, encumbrance or charge
upon the Premises, created during the term of this Lease as a result of
Lessee's actions or inactions, and Lessee will
6
<PAGE>
not suffer any matter or thing whereby Lessor's residual estate or the right,
title and interest of Lessor in the Premises is impaired. If, as a result of any
action or inaction taken by Lessee, any mechanic's, laborer's or materialmen's
lien shall at any time be filed against any part of the Premises, Lessee shall
cause the same to be discharged of record within forty-five (45) days after
notice to Lessee of the filing thereof.
10. Condemnation. Lessor and Lessee agree that if the Premises, or any
part thereof, shall be taken or condemned for public or quasi-public use or
purpose by any competent authority, Lessee shall have no claims against Lessor,
and in any such proceeding Lessee may make a claim for any and all compensation,
including the value of the trade fixtures, diminished utilization of the
Premises, and the value of the unexpired term and other rights of Lessee under
this Lease. The full amount of such award shall be retained by Lessee, free of
any claim by Lessor to any portion thereof. Notwithstanding the foregoing,
nothing herein shall preclude Lessor from making a separate claim against such
competent authority for compensation with respect to its loss attributable to
such condemnation; provided, that such claim shall not diminish the amount of
condemnation compensation to which Lessee is entitled.
11. Damage. If, during the term of this Lease, any portion of the
Premises is damaged or destroyed by fire or otherwise, Lessee shall be under no
obligation to rebuild or repair the same, except to the extent necessary to be
in compliance with applicable laws relating to the Premises in all material
respects. It is expressly acknowledged that all insurance proceeds received as a
result of any damage or casualty to any improvements shall
7
<PAGE>
be paid to Lessee and applied, to the extent necessary, to satisfy its
obligations set forth in this Section 11.
12. Assignment. Lessee may assign and/or sublet its rights and
interests under this Lease to any Affiliate (hereinafter defined) so long as
Lessee shall retain all of its obligations under this Lease. For purposes of
this Lease, an "Affiliate" of Lessee means any entity now or hereinafter
controlling, controlled by or under common control with Lessee.
13. Compliance with Laws. Lessee and its Affiliates may use the
Premises for the operation of the Business (as defined in the Purchase
Agreement) or for any other lawful purpose. During the term of this Lease,
Lessee will use and operate the Premises in compliance with all applicable laws,
rules, regulations, orders, ordinances, judgments and decrees of all
governmental authorities (federal, state, provincial and local) in all material
respects.
14. Indemnification. To the extent it may lawfully do so, Lessee shall
indemnify and hold harmless Lessor and Lessor's agents, directors, officers,
stockholders, employees, invitees, contractors, mortgagees, successors and
assigns from all claims, demands, liabilities, losses, costs, damages, or
expenses (including but not limited to attorney's fees) resulting or arising
from, (a) Lessee's use and operation of the Premises during the term of this
Lease, (b) injuries to persons and/or damage to property occurring during the
term of this Lease and (c) violations of any applicable law caused by Lessee
during the Holdover Period, except, in any case, if resulting (i) from Lessor's
gross
8
<PAGE>
negligence or willful misconduct, (ii) from any currently existing environmental
matters (other than such currently existing environmental matters disclosed on
that certain Phase I Environmental Assessment Report with respect to the
property located at 5224 Lake Avenue, St. Joseph, Missouri, dated August 12,
1996), or (iii) from other matters for which Lessor is responsible pursuant to
the Purchase Agreement. Notwithstanding anything herein to the contrary, the
Lessee's indemnification obligations with respect to this Section 14 shall
continue during any Holdover Period. This Section 14 shall survive the
expiration or termination of this Lease and expire at the end of the relevant
statute of limitations period.
15. Access to Premises. At all times during the term of this Lease,
upon reasonable advance notice, Lessor shall have the right (a) to inspect the
Premises (escorted by Lessee's personnel), and (b) to have access to the
Premises for the purpose of conducting environmental remediation, in either
case, at a reasonable hour and under reasonable conditions, and in a manner that
will not unreasonably interfere with Lessee's use and operation of the Premises.
16. Option to Purchase. Lessee shall have an exclusive option to
purchase the Premises (the "Purchase Option") during the term of this Lease;
provided that Lessee is not in breach of any of its indemnification obligations
hereunder. It being expressly understood that during the term of this Lease,
Lessor shall not sell the Premises to any third party. Lessee's option to
purchase the Premises shall be subject to the following terms:
9
<PAGE>
(a) Lessee shall give Lessor sixty (60) days advance written notice
of its election to exercise the purchase option.
(b) The purchase price or the Premises shall be the sum of One
Thousand Dollars ($1,000.00).
(c) The closing (the "Closing") of the purchase of the Premises
shall be at a location mutually agreed upon by the parties, and take place
within ninety (90) days of the notice of exercise.
(d) At the Closing, Lessor shall deliver to Lessee a quitclaim deed
that conveys to Lessee the Premises, together with any other documentation
reasonably requested by Lessee in connection with the transfer of title
including a certificate, signed by a duly authorized officer of Lessor, in
substantially the form as set forth on Schedule B attached hereto.
(e) Lessee shall be responsible for the payment of all transfer
taxes, deed stamps and recording fees and any and all other costs payable in
connection with the transfer of title to the Premises to Lessee, but shall not
be responsible for any attorneys' fees incurred by Lessor in connection with the
Closing. There shall be no closing adjustments because prior to and after the
transfer of title to Lessee of the Premises, all costs are to be borne by
Lessee.
10
<PAGE>
(f) Notwithstanding anything to the contrary herein, this Lease
shall terminate on the settlement date, and Lessee's rent obligation shall cease
as of that date.
(g) At such time as this Lease shall no longer be in force and
effect, Lessee shall have no right to exercise its option to purchase hereunder,
and Lessor and Lessee shall jointly execute and deliver an instrument, in
recordable form, stating that the option to purchase hereunder has terminated.
17. Right to Re-Enter and Take Possession. It is further agreed that in
the event of failure of Lessee to pay Fixed Rent within thirty (30) days after
the due date, or to comply with the other material terms of this Lease, subject
to compliance with applicable law Lessor shall have the right to enter into and
upon the Premises and take possession of the same, but only after giving notice
to Lessee of the condition or term Lessee has violated, and only if Lessee has
failed to cure such term or condition within thirty (30) days after receipt of
such notice (or such longer period as may be required provided Lessee diligently
pursues appropriate curing action). In addition to its right to re-enter and
take possession, Lessor shall also have the right to terminate this Lease upon
any default and exercise any and all other remedies available at law or in
equity as a result of default by Lessee under this Lease.
18. Notices. All notices, requests, consents and other
communications shall be given in the manner and to the addresses set forth in
of the Purchase Agreement.
11
<PAGE>
19. Estoppels. Upon the request of either Lessor or Lessee, each will
execute and deliver to the other an instrument stating, if the same be true,
that this Lease is a true and exact copy of the Lease between the parties
hereto, that there are no amendments hereof (or stating what amendments there
may be), that the same is then in full force and effect and that, to the best of
such party's knowledge, there are then no offsets, defenses or counterclaims
with respect to the payment of rent reserved hereunder or in the performance of
the other terms, covenants and conditions hereof on the part of such party to be
performed, and that as of such date no default has been declared hereunder by
either party hereto and that such party at the time has no knowledge of any
factor or circumstances which it might reasonably believe would give rise to a
default by either party.
20. Lessee's Sole Remedy. In the event of a default by Lessor hereunder
which remains uncured for thirty (30) days after written notice of default (or
such longer period as may be required if Lessee diligently pursues appropriate
curing action), Lessee shall be entitled to seek and pursue any and all other
remedies available at law or in equity; provided however, that the maximum
amount of Lessor's liability for damages or claims hereunder (except for gross
negligence or willful misconduct) shall be limited to the value of Lessor's
interest in the Premises and any improvement thereon.
21. Surrender of the Premises. Except as otherwise herein provided, at
the expiration of the term of this Lease, Lessee will peaceably yield up to
Lessor the Premises and any improvements thereon, in the condition required by
this Lease, and subject to no subtenancies.
12
<PAGE>
22. Lessor's Right to Perform Lessee's Covenants. In the event of any
default of Lessee's obligations herein, Lessor may, at its option but without
being obligated to do so, perform the same, and the cost thereof shall be
immediately due and payable from Lessee to Lessor.
23. Entire Agreement. This Lease, the Schedules attached hereto and
the Purchase Agreement contain the entire agreement between the parties hereto
with respect to the Premises and supersede all previous written or oral
negotiations, commitments, representations and agreements.
24. Severability. The provisions of this Lease are severable, and in
the event that any one or more provisions are deemed illegal or unenforceable,
the remaining provisions shall remain in full force and effect.
25. Binding Agreement. All covenants of the parties contained herein
shall be binding upon and inure to the benefit of their respective successors
and assigns.
26. No Third Party Beneficiary. This Lease is for the sole benefit of
the parties hereto and no other person, entity or political subdivision of any
federal, state or local government shall be entitled to rely upon or receive any
benefit from this Lease or any provision hereof.
13
<PAGE>
27. Captions. Captions or titles of the sections of this Lease are
inserted solely for convenience of reference and shall not constitute a part of
this Lease, nor shall they affect its meaning, construction or effect.
28. Execution in Counterparts. This Lease has been executed in one or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed the
foregoing.
Witness FIGGIE INTERNATIONAL REAL
ESTATE INC.
/s/ Michele Morris By: /s/ Jerome M. Ferstman
- - ---------------------------------- ---------------------------------
Jerome M. Ferstman, President
/s/ Illegible Signature By: /s/ William M. Goellner
- - ---------------------------------- ----------------------------------
Name: William M. Goellner
Title: Vice President
ATTEST: SKL LIFT, INC.
/s/ Allan J. Jablonsky By: /s/ Phil Franklin
------------------------------ ---------------------------------
Assistant Secretary Name: Philip G. Franklin
Title: Vice President - Finance
and Chief Financial
Officer
<PAGE>
STATE OF NEW YORK )
- - --------------------------
) SS:
COUNTY OF NEW YORK )
- - --------------------------
Before me, a Notary Public in and for the aforesaid jurisdiction,
personally appeared this date Jerome M. Ferstman and William M. Goellner
personally well known (or satisfactorily proven) to me to be the President and
Vice President, respectively, of Figgie International Real Estate Inc., a
Delaware corporation, Lessor in the foregoing Lease bearing date as of the 17th
day of November, 1997, who, being by me first duly sworn, did acknowledge that
he, being authorized so to do, executed said Lease in the name and on behalf of
said Corporation, as its free act and deed for the uses and purposes herein
contained.
WITNESS my hand and official seal this 17th day of November, 1997.
/s/ Jinhee Lee
---------------------------------------
Notary Public
[Notarial Seal] My Commission Expires: Notarial Stamp
Affixed
STATE OF NEW YORK )
- - ----------------------------
)SS:
COUNTY OF NEW YORK )
- - ----------------------------
Before me, a Notary Public in and for the aforesaid jurisdiction,
personally appeared this date Philip G. Franklin personally well known (or
satisfactorily proven) to me to be the Vice President - Finance and CFO of SKL
Lift, Inc., a Delaware corporation, Lessee in the foregoing Lease bearing date
as of the 17th day of November, 1997, who, being by me first duly sworn, did
acknowledge that he, being authorized so to do, executed said Lease in the name
and on behalf of said Corporation, as its free act and deed for the uses and
purposes herein contained.
WITNESS my hand and official seal this 17th day of November, 1997.
/s/ Jinhee Lee
----------------------------------------
Notary Public
[Notarial Seal] My Commission Expires: Notarial Stamp
Affixed
DEED OF LEASE
THIS DEED OF LEASE, is hereby made and entered into as of the 17th day
of November, 1997, by and between Figgie International Real Estate Inc., a
corporation registered in the State of Delaware in the United States of America
("Lessor"), and Snorkel Elevating Work Platforms Limited, a corporation having
its registered office in Levin, New Zealand ("Lessee").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Asset Purchase Agreement between
Lessor, Lessee and the other parties named therein dated as of July 19, 1997, as
amended (the "Purchase Agreement"), Lessor has agreed to sell and Lessee has
agreed to purchase certain assets and the business, as a going concern (the
"Business"), of the Snorkel division of Figgie International, Inc., a Delaware
corporation and an affiliate of Lessor (the "Seller"); and
WHEREAS, in accordance with the terms of the Purchase Agreement, Lessor
has agreed to provide Lessee with the right to lease certain Levin, New Zealand
property for ten (10) years with an option to purchase such property pursuant to
the terms set forth herein (the "Lease").
NOW, THEREFORE, in consideration of the covenants, conditions,
agreements and stipulations herein contained and in the Purchase Agreement, the
parties hereto agree as follows:
<PAGE>
1. Lease and Term. Lessor does hereby lease unto Lessee the premises
described on Schedule A attached hereto. To have and to hold such premises,
together with all of Lessor's rights and easements appurtenant thereto,
buildings and other improvements now or hereafter erected on the premises (the
"Premises") for a term which commences on the date hereof and ends on the tenth
(10th) anniversary of the date hereof; provided, however, that Lessee shall have
the right to terminate this Lease at any time by providing (a) Lessor with sixty
(60) days advance written notice of termination or (b) the Seller with thirty
(30) days advance written notice pursuant to Section 7.6(d) of the Purchase
Agreement.
2. Quiet Enjoyment and Representations by Lessee. Lessor hereby
covenants not to interfere with and to permit Lessee full, complete and quiet
enjoyment of the Premises throughout the term of this Lease. In addition, Lessor
covenants that it will not take any actions which would restrict or impede its
ability to perform its obligation hereunder including, without limitation,
mortgaging or encumbering its title to the Premises. Lessor makes no other
representations and warranties (other than those made in the Purchase Agreement)
with respect to the Premises.
3. Fixed Rent. Lessee, in consideration of its right to use and enjoy
the Premises as aforesaid, covenants and agrees to pay unto Lessor in lawful
currency of the United States of America, rent of One Thousand Two Hundred
Dollars ($1,200.00) per year ("Fixed Rent"), payable annually in advance on the
first day of each year throughout the term of this Lease.
2
<PAGE>
4. Payment of Other Expenses. It is understood and agreed that this
Lease is a "triple net lease", and that, throughout the term of this Lease, in
addition to the Fixed Rent, Lessee will pay, or cause to be paid, all real
estate taxes and assessments and all costs and expenses incurred in connection
with or relating to the ownership or operation of the Premises, including but
not limited to all insurance and utility costs relating to the Premises. Lessee
shall have the right to pay all "triple net" expenses, including but not limited
to real estate taxes and assessments, directly to the supplier or governmental
entity or assessor; provided that upon request therefor, Lessee promptly
provides Lessor with proof of payment of all such "triple net" expenses. Upon
its receipt of any bills or notices relating to such expenses, including but not
limited to those regarding real estate taxes and assessments, the receiving
party shall promptly send copies of such bills and notices to the other party.
5. Maintenance, Alterations and Ownership of Improvements. Lessee shall
maintain the Premises (except with respect to those environmental matters for
which Lessee is not providing Lessor with indemnification hereunder), including
any buildings or improvements now or hereinafter erected on the Premises, in
compliance with applicable laws in all material respects. In the event that
Lessor notifies Lessee that Lessee's use of the Premises will violate the terms
of Lessor's credit agreements (and Lessor represents that it has no present
knowledge of any such violation), Lessee and Lessor agree to reasonably
cooperate with each other in an effort to prevent the occurrence of any such
violation; provided that, Lessee shall not be obligated to incur any
unreasonable expense or take any
3
<PAGE>
action which could reasonably be expected to have a material adverse effect on
its use and operation of the Premises. Lessor shall have no obligation to
maintain any buildings or improvements now or hereinafter erected on the
Premises. Lessee shall have, and is hereby granted, the right to alter the
interior of any building and to demolish or otherwise modify the Premises as it
sees fit; provided that, with respect to structural alterations, demolitions or
modifications only, all plans and specifications in connection therewith are
provided to Lessor in advance and that all alterations, demolitions or
modifications are conducted in compliance with applicable law in all material
respects. Upon the expiration or termination of this Lease, any and all
improvements located on the Premises shall remain the sole property of Lessor.
All personal property, such as machinery and operating equipment, located on the
Premises and owned by Lessee shall remain the property of Lessee and will be
removed by it, at its expense, within twenty (20) days following the expiration
of this Lease. Lessee agrees that if it should remove any of its personal
property from the Premises that such removal will be conducted in compliance
with applicable laws in all material respects. Any such personal property not
removed from the Premises by Lessee within twenty (20) days following the
expiration of this Lease shall become the property of Lessor. For purposes of
this Agreement, the term "Holdover Period" shall mean the period of time
following the expiration of the Lease, not to exceed twenty days, in which any
personal property of the Lessee remains on the Premises. Lessee agrees that it
will continue to maintain, during the Holdover Period, those insurance policies
contemplated by Section 7 hereof.
4
<PAGE>
6. Return of Premises. Lessee agrees that any improvements existing on
the Premises as of the date hereof and remaining on the Premises at the Lease
expiration or termination shall be returned to the condition such improvements
were in when Lessee's occupancy began, subject to deterioration and depreciation
of the Premises occasioned by the passage of time, wear and tear from reasonable
use, and any alterations made in accordance with the terms of Section 5 hereof;
it being expressly acknowledged that Lessee shall return the Premises to Lessor
in a condition that is in compliance with applicable laws in all material
respects; it also being expressly acknowledged that Lessee has no continuing
obligation to use or maintain the Premises, except to the extent necessary to
comply with applicable laws in all material respects.
7. Insurance.
(a) Lessee, at its sole cost and expense, will during the term of
this Lease keep any buildings and improvements on the Premises insured against
loss or damage by fire and against loss or damage by other risks now embraced by
"extended coverage" for an amount not less than eighty percent (80%) of the
replacement value of the improvements to be insured.
(b) Lessee shall, at its cost and expense, secure and maintain
General Liability Insurance written on a so called "Comprehensive" General
Liability Insurance Form, naming Lessor as an additional insured, covering the
Premises against claims on account of bodily injury and property damage incurred
upon or about the Premises, with
5
<PAGE>
such levels of coverage customary in the case of premises of similar type or
locale to the Premises.
(c) Lessee shall obtain such other insurance or such other amounts
against other insurable hazards which at the time are commonly insured against
in the case of premises of similar type or locale to the Premises.
(d) All insurance provided for herein shall be effected under valid
and enforceable policies issued by insurers of nationally recognized
responsibility. In addition, all insurance policies provided for herein shall
contain waiver of subrogation provisions to the extent available without
materially increasing Lessee's premium payments. In addition, upon the request
of Lessor, Lessee shall promptly provide Lessor with proof of insurance policies
required hereunder and evidence of payment for premiums relating thereto.
8. Discharge of Liens. Lessee will not create or permit to be created,
and hereby covenants to discharge any lien, encumbrance or charge upon the
Premises, created during the term of this Lease as a result of Lessee's actions
or inactions, and Lessee will not suffer any matter or thing whereby Lessor's
residual estate or the right, title and interest of Lessor in the Premises is
impaired. If, as a result of any action or inaction taken by Lessee, any
mechanic's, laborer's or materialmen's lien shall at any time be filed against
any part of the Premises, Lessee shall cause the same to be discharged of record
within forty-five (45) days after notice to Lessee of the filing thereof.
6
<PAGE>
9. Condemnation. Lessor and Lessee agree that if the Premises, or any
part thereof, shall be taken or condemned for public or quasi-public use or
purpose by any competent authority, Lessee shall have no claims against Lessor,
and in any such proceeding Lessee may make a claim for any and all compensation,
including the value of the trade fixtures, diminished utilization of the
Premises, and the value of the unexpired term and other rights of Lessee under
this Lease. The full amount of such award shall be retained by Lessee, free of
any claim by Lessor to any portion thereof. Notwithstanding the foregoing,
nothing herein shall preclude Lessor from making a separate claim against such
competent authority for compensation with respect to its loss attributable to
such condemnation; provided, that such claim shall not diminish the amount of
condemnation compensation to which Lessee is entitled .
10. Damage. If, during the term of this Lease, any portion of the
Premises is damaged or destroyed by fire or otherwise, Lessee shall be under no
obligation to rebuild or repair the same, except to the extent necessary to be
in compliance with applicable laws relating to the Premises in all material
respects. It is expressly acknowledged that all insurance proceeds received as a
result of any damage or casualty to any improvements shall be paid to Lessee and
applied, to the extent necessary, to satisfy its obligations set forth in this
Section 10.
11. Assignment. Lessee may assign and/or sublet its rights and
interests under this Lease to any Affiliate (hereinafter defined) so long as
Lessee shall retain all of its
7
<PAGE>
obligations under this Lease. For purposes of this Lease, an "Affiliate" of
Lessee means any entity now or hereinafter controlling, controlled by or under
common control with Lessee.
12. Compliance with Laws. Lessee and its Affiliates may use the
Premises for the operation of the Business (as defined in the Purchase
Agreement) or for any other lawful purpose. During the term of this Lease,
Lessee will use and operate the Premises in compliance with all applicable laws,
rules, regulations, orders, ordinances, judgments and decrees of all
governmental authorities (federal, state, provincial and local) in all material
respects.
13. Indemnification. To the extent it may lawfully do so, Lessee shall
indemnify and hold harmless Lessor and Lessor's agents, directors, officers,
stockholders, employees, invitees, contractors, mortgagees, successors and
assigns from all claims, demands, liabilities, losses, costs, damages, or
expenses (including but not limited to attorney's fees) resulting or arising
from, (a) Lessee's use and operation of the Premises during the term of this
Lease, (b) injuries to persons and/or damage to property occurring during the
term of this Lease and (c) violations of any applicable law caused by Lessee
during the Holdover Period, except, in either case, if resulting (i) from
Lessor's gross negligence or willful misconduct, or (ii) from other matters for
which Lessor is responsible pursuant to the Purchase Agreement. Notwithstanding
anything herein to the contrary, the Lessee's indemnification obligations with
respect to this Section 13 shall continue during any Holdover Period. This
Section 13 shall survive the expiration or termination of this Lease and expire
at the end of the relevant statute of limitations period.
8
<PAGE>
14. Access to Premises. At all times during the term of this Lease,
upon reasonable advance notice, Lessor shall have the right (a) to inspect the
Premises (escorted by Lessee's personnel) and (b) to have access to the Premises
for the purpose of conducting environmental remediation, in either case, at a
reasonable hour and under reasonable conditions, and in a manner that will not
unreasonably interfere with Lessee's use and operation of the Premises (except
as contemplated in Section 7.6 of the Purchase Agreement).
15. Option to Purchase. Lessee shall have an exclusive option to
purchase the Premises (the "Purchase Option") for a period commencing from the
date hereof until the earlier to occur of (a) the tenth (10th) anniversary of
the Closing Date (as defined in the Purchase Agreement) or (b) ninety (90) days
after each discrete part of the Cleanup (as defined in the Purchase Agreement)
has been completed pursuant to the provisions of Section 7.6 of the Purchase
Agreement (such ninety (90) day period shall be referred to herein as the
"Completion Period"); provided that, Lessee is not in breach of any of its
indemnification obligations hereunder. It being expressly understood that from
the date hereof until the earlier to occur of (a) the tenth (10th) anniversary
of the Closing Date or (b) the expiration of the Completion Period, Lessor shall
not sell the Premises to any third party. In the event that Lessee has not
exercised its Purchase Option within the Completion Period, Lessor and Lessee
shall jointly execute and deliver an instrument, in recordable form, stating
that the Purchase Option has terminated and Lessor shall be free to sell its
rights and interest in the Premises to any third party; provided, however, that
(a)
9
<PAGE>
such third party shall acquire title to the Premises subject to the Lessee's
leasehold interest and other rights hereunder with the exception of the Purchase
Option, which shall terminate by its terms, and (b) Lessor shall remain
responsible for all of its obligations under this Lease unless the third party
acquiring the Premises has, at the time of such acquisition, and agrees, in
writing, with the Lessee, to maintain at all times during this Lease a net worth
of at least Fifteen Million New Zealand Dollars (NZ$15,000,000). Lessee's
Purchase Option shall be subject to the following terms:
(a) Lessee shall give Lessor sixty (60) days advance written notice
of its election to exercise the Purchase Option.
(b) The purchase price for the Premises shall be the sum of One
Thousand Dollars ($1,000.00).
(c) Settlement (the "Closing") of the purchase of the Premises shall
be at a location mutually agreed upon by the parties, and take place within
ninety (90) days of the notice of exercise.
(d) At the Closing, Lessor shall deliver to Lessee a validly
executed Transfer in registrable form that conveys to Lessee the Premises,
together with any other documentation reasonably requested by Lessee in
connection with the transfer of title, including a certificate, signed by a duly
authorized officer of Lessor, in substantially the form as set forth on Schedule
B attached hereto.
10
<PAGE>
(e) Lessee shall be responsible for the payment of all registration
and stamp duty recording fees and any and all other costs payable in connection
with the transfer of title to the Premises to Lessee, but shall not be
responsible for any attorneys' fees incurred by Lessor in connection with the
Closing. There shall be no closing adjustments because prior to and after the
transfer of title to Lessee of the Premises, all costs are to be borne by
Lessee.
(f) Notwithstanding anything to the contrary herein, this Lease
shall terminate on the settlement date, and Lessee's rent obligation shall cease
as of that date.
(g) At such time as this Lease shall no longer be in force and
effect, Lessee shall have no right to exercise its Purchase Option hereunder,
and Lessor and Lessee shall jointly execute and deliver an instrument, in
recordable form, stating that the Purchase Option hereunder has terminated.
16. Right to Re-Enter and Take Possession. It is further agreed that in
the event of failure of Lessee to pay Fixed Rent within thirty (30) days after
the due date, or to comply with the other material terms of this Lease, subject
to compliance with applicable law Lessor shall have the right to enter into and
upon the Premises and take possession of the same, but only after giving notice
to Lessee of the condition or term Lessee has violated, and only if Lessee has
failed to cure such term or condition within thirty (30) days after receipt of
such notice (or such longer period as may be required provided Lessee diligently
pursues appropriate curing action). In addition to its right to re-enter and
take
11
<PAGE>
possession, Lessor shall also have the right to terminate this Lease upon any
default and exercise any and all other remedies available at law or in equity as
a result of a default by Lessee under this Lease.
17. Notices. All notices, requests, consents and other communications
shall be given in the manner and to the addresses set forth in the Purchase
Agreement.
18. Estoppels. Upon the request of either Lessor or Lessee, each will
execute and deliver to the other an instrument stating, if the same be true,
that this Lease is a true and exact copy of the Lease between the parties
hereto, that there are no amendments hereof (or stating what amendments there
may be), that the same is then in full force and effect and that, to the best of
such party's knowledge, there are then no offsets, defenses or counterclaims
with respect to the payment of rent reserved hereunder or in the performance of
the other terms, covenants and conditions hereof on the part of such party to be
performed, and that as of such date no default has been declared hereunder by
either party hereto and that such party at the time has no knowledge of any
factor or circumstances which it might reasonably believe would give rise to a
default by either party.
19. Lessee's Sole Remedy. In the event of a default by Lessor hereunder
which remains uncured for thirty (30) days after written notice of default (or
such longer period as may be required if Lessee diligently pursues appropriate
curing action), Lessee shall be entitled to seek and pursue any and all other
remedies available at law or in equity; provided however, that the maximum
amount of Lessor's liability for damages or claims
12
<PAGE>
hereunder (except for gross negligence or willful misconduct) shall be limited
to the value of Lessor's interest in the Premises and any improvement thereon.
20. Surrender of the Premises. Except as otherwise herein provided, at
the expiration of the term of this Lease, Lessee will peaceably yield up to
Lessor the Premises and any improvements thereon, in the condition required by
this Lease, and subject to no subtenancies.
21. Lessor's Right to Perform Lessee's Covenants. In the event of any
default of Lessee's obligations herein, Lessor may, at its option but without
being obligated to do so, perform the same, and the cost thereof shall be
immediately due and payable from Lessee to Lessor.
22. Entire Agreement. This Lease, the Schedules attached hereto and the
Purchase Agreement contain the entire agreement between the parties hereto with
respect to the Premises and supersede all previous written or oral negotiations,
commitments, representations and agreements.
23. Severability. The provisions of this Lease are severable, and in
the event that any one or more provisions are deemed illegal or unenforceable,
the remaining provisions shall remain in full force and effect.
24. Binding Agreement. All covenants of the parties contained herein
shall be binding upon and inure to the benefit of their respective successors
and assigns.
13
<PAGE>
25. No Third Party Beneficiary. This Lease is for the sole benefit of
the parties hereto and no other person, entity or political subdivision of any
federal, state or local government shall be entitled to rely upon or receive any
benefit from this Lease or any provision hereof..
26. Captions. Captions or titles of the sections of this Lease are
inserted solely for convenience of reference and shall not constitute a part of
this Lease, nor shall they affect its meaning, construction or effect.
27. Execution in Counterparts. This Lease has been executed in one or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed the
foregoing.
Witness FIGGIE INTERNATIONAL REAL
ESTATE INC.
/s/ Michele Morris By: /s/ Jerome M. Ferstman
- - --------------------------------- ---------------------------------
Jerome M. Ferstman, President
/s/ Illegible Signature By: /s/ William M. Goellner
- - --------------------------------- ---------------------------------
Name: William M. Goellner
Title: Vice President
ATTEST: SNORKEL ELEVATING WORK
PLATFORMS LIMITED
/s/ P. Enoch Stiff By: /s/ Philip G. Franklin
- - --------------------------------- ---------------------------------
Director Name: Philip G. Franklin
Title: Director
<PAGE>
STATE OF NEW YORK )
- - ----------------------------
) SS:
COUNTY OF NEW YORK )
- - ----------------------------
Before me, a Notary Public in and for the aforesaid jurisdiction,
personally appeared this date Jerome M. Ferstman and William M. Goellner
personally well known (or satisfactorily proven) to me to be the President and
Vice President, respectively, of Figgie International Real Estate Inc.,
corporation registered in the State of Delaware in the United States of America,
Lessor in the foregoing Lease bearing date as of the 17th day of November, 1997,
who, being by me first duly sworn, did acknowledge that he, being authorized so
to do, executed said Lease in the name and on behalf of said Corporation, as its
free act and deed for the uses and purposes herein contained.
WITNESS my hand and official seal this 17th day of November, 1997.
/s/ Jinhee Lee
---------------------------------------
Notary Public
[Notarial Seal] My Commission Expires: Notarial Stamp
Affixed
STATE OF NEW YORK )
- - -----------------------------
) SS:
COUNTY OF NEW YORK )
- - -----------------------------
Before me, a Notary Public in and for the aforesaid jurisdiction,
personally appeared this date Philip G. Franklin personally well known (or
satisfactorily proven) to me to be the Vice President - Finance and CFO of
Snorkel Elevating Work Platforms Limited, a corporation having its registered
office in Levin, New Zealand, Lessee in the foregoing Lease bearing date as of
the 17th day of November, 1997, who, being by me first duly sworn, did
acknowledge that he, being authorized so to do, executed said Lease in the name
and on behalf of said Corporation, as its free act and deed for the uses and
purposes herein contained.
WITNESS my hand and official seal this 17th day of November, 1997.
/s/ Jinhee Lee
---------------------------------------
Notary Public
[Notarial Seal] My Commission Expires: Notarial Stamp
Affixed
AGREEMENT FOR
TRADEMARK ASSIGNMENT AND LICENSE-BACK
This AGREEMENT FOR TRADEMARK ASSIGNMENT AND LICENSE-BACK
("Agreement") is made and entered into as of this 17th day of November, 1997 by
and between Iveco Magirus Brandschutztechnik GmbH, a German corporation with
offices at Magirusstrasse 16, 89077 Ulm, Germany ("Assignor"), Figgie
International Inc., a Delaware corporation with offices at 4420 Sherwin Road,
Willoughby, Ohio 44094, U.S.A. ("FII"), and SKL Lift, Inc., a Delaware
corporation with offices at 369 West Western Avenue, Port Washington, Wisconsin
53074, U.S.A. ("SKL").
WHEREAS, Assignor is the owner of the rights to the trademark
"Snorkel" in numerous jurisdictions throughout the world (the "Assigned
Trademarks"), including without limitation the registrations and applications to
register set forth on Schedule A hereto; and
WHEREAS, Assignor acquired, among other things, its rights to the
Assigned Trademarks pursuant to an Agreement for the Acquisition of Specified
Assets Relating to the Simon Aerial Fire Platform Range, executed by and between
Assignor and Simon UK 1995 Limited on or about May 30, 1997 (the "Acquisition
Agreement"); and
WHEREAS, FII is the owner of the trademark "Snorkel" registered with
the United States Patent and Trademark Office as Registration Number 719,225 and
issued on August 1, 1961 (the "FII Trademark"); and
WHEREAS, the Snorkel division of FII's predecessor-in-interest,
A-T-O Inc., and Assignor's predecessor-in-interest, Simon Engineering Dudley
Limited, entered into an Agreement dated as of June 1, 1977 (together with any
amendments thereto, the "License Agreement") pursuant to which each party
granted to the other the license to use the "Snorkel" name in certain specified
countries in connection with the marketing of certain specified products,
subject to the terms and conditions thereof; and
WHEREAS, FII or its predecessor-in-interest has been using the
"Snorkel" name continuously in connection with the manufacture, marketing and
sale of elevating work platforms and aerial fire-fighting platform apparatus;
and
WHEREAS, Assignor or its predecessor-in-interest has been using the
"Snorkel" name continuously in connection with the manufacture, marketing and
sale of fire trucks and parts thereof, including aerial fire-fighting platform
apparatus; and
WHEREAS, Assignor and FII desire to terminate the License Agreement
and replace it with this Agreement to provide for the parties' continued use of
the "Snorkel" name pursuant to the terms and conditions hereof; and
<PAGE>
WHEREAS, FII and SKL (among others) have entered into an Asset
Purchase Agreement dated as of July 19, 1997 (the "Asset Purchase Agreement")
pursuant to which FII has agreed to sell to SKL and SKL has agreed to buy from
FII the business heretofore conducted by the Snorkel division of FII as a going
concern (the "Snorkel Business"); and
WHEREAS, pursuant to the Asset Purchase Agreement, FII has agreed to
assign to SKL, among other things, certain Intellectual Property (as defined in
the Asset Purchase Agreement) used in the Snorkel Business, including the FII
Trademark and such rights as FII possesses or acquires in the Assigned
Trademarks; and
WHEREAS, Assignor desires to sell, assign and transfer to FII, for
the benefit of and acquisition by SKL, Assignor's entire right, title and
interest in, to and under the Assigned Trademarks, in accordance with and
subject to the terms and conditions and as further set forth herein; and
WHEREAS, FII desires to purchase all of Assignor's right, title and
interest in, to and under the Assigned Trademarks for the benefit of and
acquisition by SKL, in accordance with and subject to the terms and conditions
and as further set forth herein;
NOW, THEREFORE, in consideration of the payments, representations,
warranties, covenants and other terms and conditions contained herein and in the
Asset Purchase Agreement, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
Termination and Release
Section 1.1. Termination and Release by Assignor. Assignor, for
itself and for all persons claiming through Assignor, including without
limitation any of its affiliates and subsidiaries and all directors, officers,
employees, agents, representatives, successors and assigns of any of the
foregoing, in each applicable case, whether direct or indirect (collectively,
the "Assignor Releasing Parties"), hereby (a) terminates the License Agreement
in its entirety as of the date first written above, which is the date upon which
the closing of the transactions contemplated by the Asset Purchase Agreement
takes place (the "Closing Date"), and (b) unconditionally and irrevocably
releases and forever discharges, from and after the Closing Date, FII, its
affiliates and subsidiaries and all of their respective directors, officers,
employees, agents, representatives, customers, predecessors, successors and
assigns, in each applicable case, whether direct or indirect (the "FII Released
Parties"), from any and all rights, claims, demands, judgments, obligations,
liabilities and damages, whether accrued or unaccrued, asserted or unasserted,
and whether known or unknown, which ever existed or now exist, including without
limitation claims for damages or injunctive relief, relating in any way to or
arising out of or in connection with the License Agreement or any of the FII
2
<PAGE>
Released Parties' use of the name "Snorkel" or "Snorkelift" or any variations or
derivations thereof anywhere in the world (each individually, a "Claim Against
FII Released Parties"). Assignor expressly intends that this release shall be
effective regardless of whether the basis for any Claim Against FII Released
Parties hereby released shall have been known to or anticipated by the Assignor
Releasing Parties. Assignor agrees that it will not, and it will cause each
other Assignor Releasing Party controlled by it not to, prosecute or otherwise
initiate any legal action with respect to any Claim Against FII Released Parties
against any of the FII Released Parties or be a party to or a participant in, or
voluntarily cooperate in, any Claim Against FII Released Parties by any third
party against any of the FII Released Parties.
Section 1.2 Termination and Release by FII. FII, for itself and for
all persons claiming through FII, including without limitation any of its
affiliates and subsidiaries and all directors, officers, employees, agents,
representatives, successors and assigns of any of the foregoing, in each
applicable case, whether direct or indirect (collectively, the "FII Releasing
Parties"), hereby (a) terminates the License Agreement in its entirety as of the
Closing Date, and (b) unconditionally and irrevocably releases and forever
discharges, from and after the Closing Date, Assignor, its affiliates and
subsidiaries and all of their respective directors, officers, employees, agents,
representatives, customers, predecessors, successors and assigns, in each
applicable case, whether direct or indirect (the "Assignor Released Parties"),
from any and all rights, claims, demands, judgments, obligations, liabilities
and damages, whether accrued or unaccrued, asserted or unasserted, and whether
known or unknown, which ever existed or now exist, including without limitation
claims for damages or injunctive relief, relating in any way to or arising out
of or in connection with the License Agreement or any of the Assignor Released
Parties' use of the name "Snorkel" or any variations or derivations thereof
anywhere in the world (each individually, a "Claim Against Assignor Released
Parties"). FII expressly intends that this release shall be effective regardless
of whether the basis for any Claim Against Assignor Released Parties hereby
released shall have been known to or anticipated by the FII Releasing Parties.
FII agrees that it will not, and it will cause each other FII Releasing Party
controlled by it not to, prosecute or otherwise initiate any legal action with
respect to any Claim Against Assignor Released Parties against any of the
Assignor Released Parties or be a party to or a participant in, or voluntarily
cooperate in, any Claim Against Assignor Released Parties by any third party
against any of the Assignor Released Parties.
ARTICLE II
Transfer of Assets
Section 2.1. Assets Transferred Hereunder. Upon the terms and
subject to the conditions set forth herein, effective as of the Closing Date,
Assignor hereby sells, assigns and transfers to SKL, and SKL hereby acquires,
assumes and receives from Assignor, all of Assignor's right, title and interest
in, to and under the Assigned Trademarks,
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together with the goodwill of the business connected with the use thereof and
symbolized thereby and all causes of action, claims and demands and other rights
for, or arising from, any infringement, including past infringement, of the
foregoing, and all rights corresponding thereto throughout the world.
Section 2.2. Record Ownership. The parties hereto acknowledge that,
as of the date hereof, record ownership of the registrations and applications
comprising the Assigned Trademarks has not yet been updated to reflect
Assignor's acquisition thereof pursuant to the Acquisition Agreement. The
parties agree to cooperate, in as expeditious and economical a fashion as is
reasonably possible, in taking all actions and executing all instruments,
including those described below in Sections 2.3 and 2.4, necessary to create an
accurate chain of title with respect to the record ownership of all
registrations and applications comprising the Assigned Trademarks.
Section 2.3. Delivery of Assignment Instruments Prepared by SKL. To
the extent such instruments are provided to Assignor by SKL prior to the Closing
Date, Assignor shall, within three (3) business days following the Closing Date,
deliver to SKL executed instruments confirming the assignment of the Assigned
Trademarks from Assignor to SKL pursuant to this Agreement, each in a form
satisfactory for the filing and recordal thereof in the appropriate trademark
offices in each country set forth on Schedule A hereto. FII shall bear all
reasonable costs of filing and recording such assignments.
Section 2.4. Delivery of Assignment Instruments Pursuant to
Acquisition Agreement. Assignor shall, as soon as reasonably possible after the
Closing Date, deliver to SKL executed instruments confirming the assignment of
the Assigned Trademarks to Assignor pursuant to the Acquisition Agreement, each
in a form approved by SKL and satisfactory for the filing and recordal thereof
in the appropriate trademark offices in each country set forth on Schedule A
hereto. Assignor shall bear all reasonable costs of filing and recording such
assignments.
ARTICLE III
Consideration
Section 3.1. Consideration. Within the later of three (3) business
days following the Closing Date or, to the extent any instruments are provided
to Assignor by SKL prior to the Closing Date pursuant to Section 2.3 hereof,
three (3) business days following receipt by SKL of executed copies of such
agreements, upon the terms and subject to the conditions set forth herein, in
consideration of the sale, assignment and transfer of the Assigned Trademarks
set forth under Article II hereof, FII shall pay to Assignor the sum of
US$100,000 by wire transfer of immediately available funds.
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ARTICLE IV
License-Back to Assignor
Section 4.1. Grant of License to Assignor. Subject to the terms and
conditions hereof, SKL hereby grants to Assignor and Assignor hereby accepts the
paid-up, royalty-free, irrevocable (except as set forth in Section 4.3 hereof),
exclusive (subject to the provisions of Section 4.5 below), perpetual license
(the "License") to use the Assigned Trademarks solely in connection with the
manufacture, marketing, sale, servicing and repair of aerial fire-fighting
platform apparatus (the "Products") within the Territory. As used herein, the
"Territory" shall include all countries throughout the world other than the
United States and Canada. This License includes the right to sublicense,
including without limitation such sublicense rights as are necessary for
Assignor to comply with sections 6.2 and 6.3 of the Acquisition Agreement.
Section 4.2. Registered User Appointments.
(a) SKL hereby agrees to appoint Assignor as a registered
user as the laws of the respective countries comprising the Territory may
require to enable Assignor to market the Products in each of such countries.
(b) SKL and Assignor hereby agree to perform all acts
necessary to give formal effect to the License and registered user appointments
agreed to hereunder. At its own expense, SKL shall submit to Assignor all
documentation which is necessary to give formal effect to any registered user
appointments. Assignor shall execute and return to SKL such documentation. SKL
shall then attend to the necessary recordal of such registered user
appointments.
Section 4.3. Quality Standards. Assignor acknowledges that the
Assigned Trademarks represent valuable goodwill among consumers and that it is
of great importance that the high standards and reputation previously
established in connection therewith be maintained. Accordingly, Assignor agrees
that the quality of any Products it manufactures, markets and sells under the
Assigned Trademarks will be consistent with the quality of Products currently
manufactured, marketed and sold by Assignor and its predecessors-in-interest.
SKL acknowledges that the Products currently manufactured, marketed and sold by
Assignor and its predecessors-in-interest satisfy the quality standards
hereunder.
Section 4.4. Protection of Assigned Trademarks. All use of the
Assigned Trademarks pursuant to this License, and the goodwill generated
thereby, shall inure to the benefit of SKL. Assignor shall not, during the term
of the License or thereafter: (i) challenge SKL's title or rights in and to the
Assigned Trademarks or the validity of the Assigned Trademarks in any
jurisdiction or challenge the validity of this License, or (ii) contest the fact
that Assignor's rights under this License are solely those of a licensee.
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Section 4.5. De Minimis Use. The License granted in Section 4.1
hereof is subject to the continued, non-exclusive right of SKL to use the
Assigned Trademarks in connection with a de minimis amount of sales of aerial
fire-fighting platform apparatus in the Territory, not to exceed a total of ten
(10) unit sales within the Territory per year; provided, however, that SKL will
not conduct any sales of aerial fire-fighting platform apparatus in the
Territory under the Assigned Trademarks without Assignor's prior written
consent, which shall not be unreasonably withheld, conditioned or delayed.
ARTICLE V
Simon-Snorkel Trademarks
Section 5.1. Ownership of Simon-Snorkel Trademarks. The parties
hereto agree and acknowledge that, as between the parties hereto, all rights of
ownership in and to the trademark "Simon-Snorkel" throughout the world,
including without limitation the registrations and applications to register set
forth on Schedule B hereto (the "Simon-Snorkel Trademarks"), shall remain with
Assignor. Notwithstanding the foregoing, Assignor hereby agrees that it will:
(i) immediately cease all use of the Simon-Snorkel Trademarks everywhere in the
world, other than in connection with aerial fire-fighting platform apparatus,
and (ii) as soon as reasonably possible after the date hereof, allow all
registrations and applications contained within the Simon-Snorkel Trademarks to
expire, lapse or become abandoned.
Section 5.2. Ownership of Snorkel Trademarks. The parties hereto
agree and acknowledge that, as between the parties hereto, all rights of
ownership in and to the trademark "Snorkel" throughout the world, including the
rights to secure registration thereof anywhere in the world, shall belong to
SKL. In light of the foregoing, Assignor hereby agrees that: (i) Assignor will
not oppose or otherwise inhibit SKL's attempted registration of the trademark
"Snorkel" anywhere in the world, (ii) in the event that SKL experiences any
problems in securing registration of the trademark "Snorkel" anywhere in the
world as a result of the existence of the Simon-Snorkel Trademarks or Assignor's
(or its predecessor's) use of any trademarks containing or comprising the word
"Snorkel," Assignor will cooperate with SKL, at SKL's expense, by taking any
actions and executing any instruments necessary to enable SKL to secure such
registration, and (iii) Assignor will refrain from applying for any additional
registrations for the trademark "Simon-Snorkel" or any other trademarks
containing or comprising the word "Snorkel" anywhere in the world.
Section 5.3. Release by Assignor. The Assignor Releasing Parties
hereby unconditionally and irrevocably release and forever discharge, from and
after the Closing Date, the FII Released Parties from any and all of the
Assignor Releasing Parties' rights, claims, demands, judgments, obligations,
liabilities and damages, whether accrued or unaccrued, asserted or unasserted,
and whether known or unknown, which ever existed, now
6
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exist or hereafter exist, including without limitation claims for damages or
injunctive relief, relating in any way to or arising out of or in connection
with any of the FII Released Parties' use of the name "Snorkel" or "Snorkelift"
or any variations or derivations thereof in any of the countries set forth on
Schedule B hereto or any other country in which Assignor owns or has rights to
use the trademark "Simon-Snorkel" (each individually, a "Schedule B Claim
Against FII Released Parties"). Assignor expressly intends that this release
shall be effective regardless of whether the basis for any Schedule B Claim
Against FII Released Parties hereby released shall have been known to or
anticipated by the Assignor Releasing Parties. Assignor agrees that it will not,
and it will cause each other Assignor Releasing Party controlled by it not to,
prosecute or otherwise initiate any legal action with respect to any Schedule B
Claim Against FII Released Parties against any of the FII Released Parties or be
a party to or a participant in, or voluntarily cooperate in, any Schedule B
Claim Against FII Released Parties by any third party against any of the FII
Released Parties.
ARTICLE VI
Representations and Warranties; Disclaimers
Section 6.1. Representations and Warranties of Assignor. Assignor
hereby represents to FII and SKL that:
(a) it is a corporation organized to do business, validly
existing and in good standing under the laws of its jurisdiction of
creation;
(b) it has full corporate power and authority to enter into
this Agreement and to perform its obligations hereunder;
(c) this Agreement has been duly executed and delivered by
it and is a legal, valid and binding obligation of it enforceable against
it in accordance with its terms;
(d) the execution, delivery and performance of this
Agreement does not (i) contravene or constitute a default under any
agreement or instrument to which Assignor is a party or to which it or any
of its assets is subject, or (ii) require the consent of any third party
which has not been obtained;
(e) to the best of Assignor's knowledge, except as otherwise
indicated on Schedule A hereto, all registrations and applications for the
registration of the Assigned Trademarks are valid and subsisting and all
fees necessary to secure and maintain such applications and registrations
have been paid;
(f) to the best of Assignor's knowledge, Schedule A and
Schedule B together constitute a complete and accurate list of all
registrations of or applications
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for the registration of the trademarks "Snorkel" or "Simon-Snorkel" or any
derivations or variations thereof owned by Assignor anywhere in the world;
(g) to the best of Assignor's knowledge, it is the sole and
exclusive owner of the Assigned Trademarks, free and clear of any security
interests, liens and encumbrances and, except for the agreements set forth
on Schedule C hereto (copies of which are appended thereto), free and clear
of any licenses to third parties, settlement agreements, consents to use or
other agreements relating to or restricting Assignor's rights in or to the
Assigned Trademarks;
(h) to the best of Assignor's knowledge, no person or entity
other than Assignor has any claim of ownership with respect to the Assigned
Trademarks; and
(i) to the best of Assignor's knowledge, there are no
outstanding claims, litigations or judgments, or any pending or threatened
claims or litigations, relating to the Assigned Trademarks.
Section 6.2. Representations and Warranties of FII. FII hereby
represents to Assignor and SKL that:
(a) it is a corporation organized to do business, validly
existing and in good standing under the laws of its jurisdiction of
creation;
(b) it has full corporate power and authority to enter into
this Agreement and to perform its obligations hereunder;
(c) this Agreement has been duly executed and delivered by
it and is a legal, valid and binding obligation of it enforceable against
it in accordance with its terms; and
(d) the execution, delivery and performance of this
Agreement does not contravene or constitute a default under any agreement
or instrument to which it is a party or to which it or any of its assets is
subject.
Section 6.3. Representations and Warranties of SKL. SKL hereby
represents to Assignor and FII that:
(a) it is a corporation organized to do business, validly
existing and in good standing under the laws of its jurisdiction of
creation;
(b) it has full corporate power and authority to enter into
this Agreement and to perform its obligations hereunder;
8
<PAGE>
(c) this Agreement has been duly executed and delivered by
it and is a legal, valid and binding obligation of it enforceable against
it in accordance with its terms; and
(d) the execution, delivery and performance of this
Agreement does not contravene or constitute a default under any agreement
or instrument to which it is a party or to which it or any of its assets is
subject.
Section 6.4. Disclaimers of Warranty. It is expressly acknowledged
by the parties hereto that neither FII nor SKL is making any representations or
warranties, express or implied, that Assignor's use of the Assigned Trademarks
pursuant to the License will not infringe upon the rights of any third parties.
ARTICLE VII
Indemnity
Section 7.1. Indemnity by Assignor. Assignor agrees to defend and to
indemnify and hold harmless each of FII and SKL from and against any claims,
demands, causes of action, suits, judgments, damages or losses (including
reasonable attorneys' fees and court costs) arising out of any breach or alleged
breach of any of Assignor's obligations, representations and warranties
contained in this Agreement, provided that FII or SKL, as the case may be, gives
Assignor prompt notice of the assertion of any such claim, demand, cause of
action or suit. Assignor agrees to defend and to indemnify and hold SKL harmless
from and against any claims, demands, causes of action, suits, judgments,
damages or losses (including reasonable attorneys' fees and court costs) arising
out of or resulting in any way from or in connection with Assignor's conduct of
its business or use of the Products under the Assigned Trademarks.
Section 7.2. Indemnity by FII. FII agrees to defend and to indemnify
and hold harmless each of Assignor and SKL from and against any claims, demands,
causes of action, suits, judgments, damages or losses (including reasonable
attorneys' fees and court costs) arising out of any breach or alleged breach of
any of FII's obligations, representations and warranties contained in this
Agreement, provided that Assignor or SKL, as the case may be, gives FII prompt
notice of the assertion of any such claim, demand, cause of action or suit.
Section 7.3. Indemnity by SKL. SKL agrees to defend and to indemnify
and hold harmless each of Assignor and FII from and against any claims, demands,
causes of action, suits, judgments, damages or losses (including reasonable
attorneys' fees and court costs) arising out of any breach or alleged breach of
any of SKL's obligations, representations and warranties contained in this
Agreement, provided that Assignor or FII, as the case may be, gives SKL prompt
notice of the assertion of any such claim, demand, cause
9
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of action or suit.
ARTICLE VIII
Miscellaneous
Section 8.1. Notices. All notices required to be given under this
Agreement shall be in writing and shall be sent by hand, by facsimile, by
certified or registered mail, return receipt requested, postage prepaid, or by
overnight courier, as follows:
If to FII: Figgie International Inc.
4420 Sherwin Road
Willoughby, Ohio 44094, U.S.A.
Fax: 216-953-2859
Attn: General Counsel
with copies to: Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022, U.S.A.
Fax: 212-735-2000
Attn: Lou R. Kling, Esq.
If to SKL: SKL Lift, Inc.
c/o Omniquip International, Inc.
369 West Western Avenue
Port Washington, Wisconsin 53074, U.S.A.
Fax: 414-284-4955
Attn: P. Enoch Stiff, President and CEO
with copies to: Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, D.C. 20037, U.S.A.
Fax: 202-887-0689
Attn: Ira H. Polon, Esq.
If to Assignor: Iveco Magirus Brandschutztechnik GmbH
Magirusstrasse 16
89077 Ulm, Germany
Fax: 49-731-408-2233
Attn: Jurgen Fischer, General Manager
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with copies to: Iveco SpA
Via Puglia 35
10156 Torino TO, Italy
Fax: 39-11-68-74555
Attn: Marco Bianchi, Assistant General Counsel
or to such other person or place as may be designated by notice of one party to
another, and all notices shall be deemed effective when received. The attorney
for any party may give notices under this Agreement on behalf of such party.
Section 8.2. Expenses. Whether or not the transactions contemplated
by this Agreement are consummated, each party shall pay its own expenses
incurred in connection with the negotiation, drafting, execution and performance
of this Agreement.
Section 8.3. Assignment. All the terms of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
Section 8.4. Schedules. The schedules referred to in this Agreement
are incorporated by reference herein and shall constitute a part of this
Agreement.
Section 8.5. No Third Party Beneficiaries. It is the intention of
the parties to this Agreement that no third party shall receive a benefit under
this Agreement nor be entitled to sue to enforce any part of this Agreement.
Section 8.6. Entire Agreement. This Agreement constitutes and
contains the entire agreement between the parties hereto and supersedes and
cancels any and all preexisting agreements and understandings between the
parties relating to the subject matter hereof.
Section 8.7. Interpretation. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement. The word "or" shall be deemed to be
inclusive unless the context otherwise requires. Unless otherwise indicated
herein or the context otherwise requires, the singular shall include the plural.
Section 8.8. Severability. In the event that any term, provision,
covenant or restriction of this Agreement is held to be invalid, illegal or
unenforceable by a competent court in any jurisdiction, then the validity,
legality and enforceability of the remaining terms, provisions, covenants or
restrictions, or of such term, provision, covenant or restriction in any other
jurisdiction, shall not in any way be affected or impaired thereby.
Section 8.9. Further Assurances. Each of the parties hereto agrees
to do any and all things, including the execution of any other documents,
necessary or appropriate in
11
<PAGE>
order to perform its obligations hereunder and to cause the transactions
contemplated hereby to be consummated.
Section 8.10. Amendments. Neither this Agreement nor any provision
hereof may be modified or amended except with the prior written consent of all
parties hereto.
Section 8.11. Governing Law. IT IS EXPRESSLY AGREED BY THE PARTIES
THAT THIS AGREEMENT, INCLUDING ITS CONSTRUCTION, INTERPRETATION AND PERFORMANCE,
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE CONFLICTS OF LAWS PROVISIONS THEREOF.
Section 8.12. Alternative Dispute Resolution. Any controversy, claim
or dispute arising out of or related to this Agreement or the breach or alleged
breach hereof which cannot be resolved by the parties (a "Dispute") will be
submitted by the parties for mediation in the City of New York, New York, United
States, by either the Judicial Arbitration and Mediation Service or another
mediation service mutually acceptable to the parties. By mutual agreement,
however, the parties may (i) postpone mediation until they have each completed
some specified but limited discovery regarding the Dispute, and/or (ii) replace
mediation with some other form of alternative dispute resolution ("ADR"), such
as neutral fact-finding or a mini-trial. Any Dispute which the parties cannot
resolve through mediation or another form of ADR within sixty (60) days will be
submitted to arbitration by the American Arbitration Association in the City of
New York, New York, United States, in accordance with the international
commercial arbitration rules then in effect of the American Arbitration
Association (the "AAA Rules") by three (3) arbitrators appointed in accordance
with the AAA Rules. The decision of the arbitrators shall be final and binding,
and judgment on the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof. The award rendered by the arbitration board
shall include costs of arbitration, reasonable attorneys' fees and reasonable
costs for expert and other witnesses. The parties shall be entitled to discovery
as provided in the AAA Rules. All proceedings shall be held in English and a
transcribed record of the proceedings shall be prepared in English; provided,
however, that each party shall be entitled to engage a translator, at such
party's expense, to participate in and translate at all proceedings of the
arbitration. Nothing in this Agreement shall prevent either party from seeking
injunctive relief (or any other provisional remedy or equitable relief) from any
court having jurisdiction over the parties and the subject matter of the dispute
to protect their respective intellectual property rights.
Section 8.13. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which taken
together shall constitute a single agreement.
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<PAGE>
IN WITNESS WHEREOF, each undersigned has caused this Agreement to be
duly executed by its respective authorized representative as of the date above
first written.
IVECO MAGIRUS
BRANDSCHUTZTECHNIK GMBH
("Assignor")
By /s/ Marco Bianchi
---------------------------------------
Name: Marco Bianchi
Title: Company Secretary
FIGGIE INTERNATIONAL INC.
("FII")
By /s/ Steve Siemborski
---------------------------------------
Name: Steve Siemborski
Title: Senior Vice President and CFO
SKL LIFT, INC.
("SKL")
By /s/ Phil Franklin
---------------------------------------
Name: Philip G. Franklin
Title: Vice President - Finance and
CFO
13
SUBSIDIARIES OF THE REGISTRANT
Subsidiary Jurisdiction of Incorporation
- - ---------- -----------------------------
TRAK International, Inc. Delaware
Lull International, Inc. Delaware
Snorkel International, Inc. Delaware
Subsidiaries of Snorkel International, Inc.:
Snorkel Elevating Work Platforms Pty Limited Australia
Snorkel Elevating Work Platforms Limited New Zealand
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (No. 333-24777, No. 333-24811 and No. 333-24827) of
OmniQuip International, Inc. (the "Company") of our report dated November 3,
1997, appearing in the Company's Current Report on Form 8-K dated December 1,
1997, as amended pursuant to the Amendment No. 1 to Current Report on Form 8-K/A
dated December 12, 1997 (collectively, the "Current Report"). Such Current
Report is incorporated by reference into this Annual Report on Form 10-K dated
December 24, 1997. We also consent to the incorporation by reference of our
report on the Financial Statement Schedule, which appears at Item 14(2) of this
Annual Report on Form 10-K.
PRICE WATERHOUSE LLP
St. Louis, Missouri
December 24, 1997
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints P. Enoch Stiff and Philip G. Franklin,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and all
capacities, to sign the 1997 Annual Report on Form 10-K of OmniQuip
International, Inc., and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary as fully to
all intents and purposes as he might or could do in person, and hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
/s/ Donald E. Nickelson
Dated: December 16, 1997 ----------------------------------
Donald E. Nickelson
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints P. Enoch Stiff and Philip G. Franklin,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and all
capacities, to sign the 1997 Annual Report on Form 10-K of OmniQuip
International, Inc., and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary as fully to
all intents and purposes as he might or could do in person, and hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
/s/ Peter S. Finley
Dated: December 16, 1997 ----------------------------------
Peter S. Finley
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints P. Enoch Stiff and Philip G. Franklin,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and all
capacities, to sign the 1997 Annual Report on Form 10-K of OmniQuip
International, Inc., and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary as fully to
all intents and purposes as he might or could do in person, and hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
/s/ Jeffrey L. Fox
Dated: December 16, 1997 ----------------------------------
Jeffrey L. Fox
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints P. Enoch Stiff and Philip G. Franklin,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and all
capacities, to sign the 1997 Annual Report on Form 10-K of OmniQuip
International, Inc., and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary as fully to
all intents and purposes as he might or could do in person, and hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
/s/ Samuel A. Hamacher
Dated: December 16, 1997 ----------------------------------
Samuel A. Hamacher
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints P. Enoch Stiff and Philip G. Franklin,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and all
capacities, to sign the 1997 Annual Report on Form 10-K of OmniQuip
International, Inc., and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary as fully to
all intents and purposes as he might or could do in person, and hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
/s/ Paul W. Jones
Dated: December 16, 1997 ----------------------------------
Paul W. Jones
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints P. Enoch Stiff and Philip G. Franklin,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and all
capacities, to sign the 1997 Annual Report on Form 10-K of OmniQuip
International, Inc., and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary as fully to
all intents and purposes as he might or could do in person, and hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
/s/ Jerry E. Ritter
Dated: December 16, 1997 ----------------------------------
Jerry E. Ritter
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints P. Enoch Stiff and Philip G. Franklin,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and all
capacities, to sign the 1997 Annual Report on Form 10-K of OmniQuip
International, Inc., and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary as fully to
all intents and purposes as he might or could do in person, and hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
/s/ Joseph F. Shaughnessy
Dated: December 16, 1997 ----------------------------------
Joseph F. Shaughnessy
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints P. Enoch Stiff and Philip G. Franklin,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and all
capacities, to sign the 1997 Annual Report on Form 10-K of OmniQuip
International, Inc., and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary as fully to
all intents and purposes as he might or could do in person, and hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
/s/ Robert L. Virgil
Dated: December 16, 1997 ----------------------------------
Robert L. Virgil
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints P. Enoch Stiff and Philip G. Franklin,
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and all
capacities, to sign the 1997 Annual Report on Form 10-K of OmniQuip
International, Inc., and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary as fully to
all intents and purposes as he might or could do in person, and hereby ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
/s/ P. Enoch Stiff
Dated: December 16, 1997 ----------------------------------
P. Enoch Stiff
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This document contains summary financial information (in thousands except per
share data) extracted from the Consolidated Balance Sheet at September 30, 1997
and the Consolidated Statement of Income for the fiscal year ended September 30,
1997 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 5
<SECURITIES> 0
<RECEIVABLES> 23,193
<ALLOWANCES> 504
<INVENTORY> 30,956
<CURRENT-ASSETS> 60,290
<PP&E> 20,344
<DEPRECIATION> 3,214
<TOTAL-ASSETS> 144,298
<CURRENT-LIABILITIES> 45,888
<BONDS> 25,609
0
0
<COMMON> 143
<OTHER-SE> 70,255
<TOTAL-LIABILITY-AND-EQUITY> 144,298
<SALES> 264,213
<TOTAL-REVENUES> 264,213
<CGS> 192,270
<TOTAL-COSTS> 219,987
<OTHER-EXPENSES> 2,182
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,106
<INCOME-PRETAX> 35,938
<INCOME-TAX> 14,556
<INCOME-CONTINUING> 21,382
<DISCONTINUED> 0
<EXTRAORDINARY> 782
<CHANGES> 0
<NET-INCOME> 20,600
<EPS-PRIMARY> 1.60
<EPS-DILUTED> 1.60
</TABLE>
