SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
____
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended February 26, 1994
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 1-6403
WINNEBAGO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
IOWA 42-0802678
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
P. O. Box 152, Forest City, Iowa 50436
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (515) 582-3535
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 ____.
There were 25,210,988 shares of $.50 par value common stock outstanding
on April 6, 1994.
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
INDEX TO REPORT ON FORM 10-Q
Page Number
PART I.
FINANCIAL INFORMATION:
(Interim period information unaudited)
Consolidated Balance Sheets 1 & 2
Unaudited Consolidated Statements of Operations 3
Unaudited Consolidated Condensed Statements of Cash Flows 4
Unaudited Condensed Notes to Consolidated
Financial Statements 5 - 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8 - 10
PART II.OTHER INFORMATION 11 - 13
PART I FINANCIAL INFORMATION
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Dollars in thousands
ASSETS February 26, August 28,
1994 1993
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 562 $ 11,238
Marketable securities 2,829 2,309
Receivables, less allowance
for doubtful accounts
($2,202 and $2,798, respectively) 32,958 29,239
Dealer financing receivables
less allowance for doubtful
accounts ($287 and $290,
respectively) 6,985 6,742
Inventories 48,807 40,610
Prepaid expenses 3,858 3,636
Deferred income taxes 511 511
Total current assets 96,510 94,285
PROPERTY AND EQUIPMENT, at cost
Land 1,528 2,153
Buildings 40,469 38,373
Machinery and equipment 74,677 72,505
Transportation equipment 5,914 5,609
122,588 118,640
Less accumulated depreciation 83,757 81,012
Total property and equipment, net 38,831 37,628
LONG-TERM NOTES RECEIVABLE,
less allowances($1,785 and
$1,362, respectively) 3,849 4,203
INVESTMENT IN LIFE INSURANCE 13,356 11,853
DEFERRED INCOME TAXES 2,534 2,652
OTHER ASSETS 5,744 6,429
TOTAL ASSETS $160,824 $157,050
See Unaudited Condensed Notes to Consolidated Financial Statements
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Dollars in thousands
LIABILITIES AND
STOCKHOLDERS' EQUITY February 26, August 28,
1994 1993
(Unaudited)
CURRENT LIABILITIES
Current maturities of
long-term debt $ 2,072 $ 1,719
Notes payable 2,050 -
Accounts payable, trade 19,890 19,462
Accrued expenses:
Insurance 3,435 6,445
Vacation liability 3,106 2,864
Promotional 2,553 4,636
Other 9,169 10,399
Liability on product warranties 3,367 4,091
Total current liabilities 45,642 49,616
LONG-TERM DEBT AND
CAPITAL LEASE OBLIGATIONS 2,805 3,183
POSTRETIREMENT BENEFITS
OTHER THAN PENSIONS 41,439 18,766
DEFERRED INCOME TAXES 1,823 1,823
MINORITY INTEREST IN
CONSOLIDATED SUBSIDIARY 2,054 1,969
STOCKHOLDERS' EQUITY
Capital stock, common,
par value $.50; authorized
60,000,000 shares 12,914 12,908
Additional paid-in capital 24,379 24,811
Reinvested earnings 36,848 52,245
74,141 89,964
Less treasury stock, at cost 7,080 8,271
Total stockholders' equity 67,061 81,693
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $160,824 $157,050
See Unaudited Condensed Notes to Consolidated Financial Statements
<TABLE>
<CAPTION>
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
IN THOUSANDS EXCEPT PER SHARE DATA
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
February 26, February 27, February 26, February 27,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Revenues:
Manufactured products $94,251 $72,956 $193,840 $151,820
Services 4,750 4,506 9,717 9,058
Total net revenues 99,001 77,462 203,557 160,878
Costs and Expenses:
Cost of manufactured products 82,290 64,109 167,806 132,591
Cost of services 2,736 3,646 5,623 7,155
Selling and delivery 6,220 5,353 12,246 10,183
General and administrative 6,365 5,170 12,779 10,830
Other expense 94 78 170 189
Minority interest in net income (loss)
of consol. subsidiary 25 (177) 85 (292)
Total costs and expenses 97,730 78,179 198,709 160,656
Operating income (loss) 1,271 (717) 4,848 222
Financial income 10 37 175 215
Income (loss) from operations
before income taxes* 1,281 (680) 5,023 437
Provision (credit) for income taxes - (1,087) - (1,087)
Income from operations* 1,281 407 5,023 1,524
Cumulative effect of change
in accounting principle - - (20,420) -
Net income (loss) $ 1,281 $ 407 $ (15,397) $ 1,524
Income (loss) per common share:
Income from operations $0.05 $0.02 $0.20 $0.06
Cumulative effect of change
in accounting principle - - (0.81) -
Net income (loss) $0.05 $0.02 $(0.61) $0.06
Weighted average number of shares
of common stock outstanding 25,165 25,032 25,151 25,029
</TABLE>
* BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE.
SEE UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Dollars in thousands
Increase (decrease) in cash and
cash equivalents
TWENTY-SIX WEEKS ENDED
February 26, August 28,
1994 1993
Cash flows from operating activities:
Net income (loss) $(15,397) $ 1,524
Adjustments to reconcile net income (loss)
to net cash from operating activities:
Cumulative effect of change in
accounting principle 20,420 -
Depreciation and amortization 3,831 3,889
Employee stock bonus plan 437 -
Realized and unrealized gains
on investments, net (84) (215)
Postretirement benefits
other than pensions 2,253 -
Minority shareholders' portion of
consolidated subsidiary's gain (loss) 85 (292)
Other (58) 2,297
Change in assets and liabilities:
(Increase) decrease in accounts receivable (2,839) 3,519
Increase in inventories (7,915) (12,980)
Decrease in accounts payable
and accrued expenses (5,653) (4,010)
(Increase) decrease in
other categories, net (828) 288
Net cash used by operating activities (5,748) (5,980)
Cash flows from investing activities:
Investments in marketable securities (6,371) (5,005)
Proceeds from the sale of
marketable securities 5,935 5,559
Purchases of property and equipment (4,980) (3,266)
Investments in dealer receivables (18,112) (13,314)
Proceeds from dealer receivables 17,890 6,758
Investment in other assets and
notes receivable (2,040) (3,085)
Other 397 193
Net cash used by investing activities (7,281) (12,160)
Cash flows from financing activities and capital transactions:
Net increase in notes payable 2,050 9,000
Payments of long-term debt
and capital leases (802) (413)
Proceeds from issuance of long-term debt 777 463
Other 328 76
Net cash provided by financing activities and
capital transactions 2,353 9,126
Net decrease in cash and
cash equivalents (10,676) (9,014)
Cash and cash equivalents
- beginning of period 11,238 13,286
Cash and cash equivalents
- end of period $ 562 $ 4,272
SEE UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
WINNEBAGO INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
1. In the opinion of management, the accompanying unaudited
consolidated condensed
financial statements contain all adjustments necessary to present
fairly the consolidated
financial position as of February 26, 1994, and results of operations
and cash flows for
the 26 and 13 weeks ended February 26, 1994 and February 27, 1993.
2. The results of operations for the 26 weeks ended February 26, 1994,
are not
necessarily indicative of the results to be expected for the full year.
Service revenues,
in the Consolidated Statements of Operations, consist of revenues
generated by Cycle-Sat,
Inc. (Cycle-Sat), and Winnebago Acceptance Corporation (WAC),
subsidiaries of the Company.
Also during the 13 and 26 weeks ended February 27, 1993 service
revenues included revenues
generated by North Iowa Electronics, Inc. (NIE), a subsidiary of the
Company. NIE was
sold during fiscal 1993.
3. Inventories are valued at the lower of cost or market, with cost
being determined
under the last-in, first-out (LIFO) method and market defined as net
realizable value.
Inventories are composed of the following (dollars in thousands):
February 26, August 28,
1994 1993
Finished Goods...$22,530 $16,578
Work In Process...12,941 11,051
Raw Materials.... 27,205 26,614
62,676 54,243
LIFO Reserve......13,869 13,633
$48,807 $40,610
4. The Company entered into a $12,000,000 financing and security
agreement
with NationsCredit Corporation (NationsCredit) formerly Chrysler First
Commercial
Corporation. Terms of the agreement limit borrowings to the lesser of
$12,000,000 or
75% of eligible inventory (fully manufactured recreational vehicles
ready for
delivery to a dealer). Borrowings are secured by the Company's
receivables and
inventory. The agreement requires a graduated interest rate based upon
the bank's
reference rate as defined in the agreement. The line of credit is
available for a
term of one year and continues during successive one-year periods
unless either party
provides at least 90-days notice prior to the end of the one-year
period to the other
party that they wish to terminate the line of credit. The agreement
prohibits any
advances or loans to any subsidiary or affiliate or additional
guarantees of any
obligations of any subsidiary or affiliate, in either case in excess of
$5,000,000 or
$7,500,000 in the aggregate for all subsidiaries and affiliates from
the date of the
agreement. The agreement also includes certain restrictive covenants
(as defined)
including maintenance of minimum net worth, working capital, and debt
to equity
ratio. The Company is in compliance with this covenant. There was no
outstanding
balance under the line of credit at February 26, 1994.
The Company and Cycle-Sat entered into a $3,000,000 line of credit with
Firstar Bank Cedar Rapids dated February 24, 1994. Terms of the
agreement limit the
amount advanced to the lesser of $3,000,000 or the sum of the base of
75% of Cycle-Sat's
eligible accounts receivable and 50% of its inventory. The agreement
provides for a
graduated interest rate based on the tangible net worth of Cycle-Sat
and contains a
restrictive covenant related to the maintenance of a minimum tangible
net worth as
defined. The Company is in compliance with this covenant. Borrowings
under the line of
credit have been guaranteed by the Company. The line of credit has a
maturity date of
January 31, 1995. The outstanding balance under the line of credit at
February 26,
1994 was $1,800,000 with an interest rate of 7.25% per annum.
5. It is customary practice for companies in the
recreation vehicle industry to enter into repurchase agreements with
lending
institutions which have provided wholesale floor plan financing to
dealers. The
Company's agreements provide for the repurchase of its products from
the financing
institution in the event of repossession upon a dealer's default. The
Company was
contingently liable for approximately $103,654,000 and $101,445,000
under repurchase
agreements with the lending institutions as of February 26, 1994, and
August 28,
1993, respectively. Included in these contingent liabilities are
approximately
$39,818,000 and $27,758,000, respectively, of certain dealer
receivables subject to
recourse agreements with ITT Commercial Finance Corporation,
NationsCredit and John
Deere Credit, Inc.
6. Fiscal year-to-date the Company paid cash for the following
(dollars in thousands):
Twenty-Six Weeks Ended
February 26, February 27,
1994 1993
Interest $ 369 $198
Income Taxes 1,418 240
7. At February 26, 1994, Postretirement Benefits Other Than
Pensions included Deferred Compensation of $19,754,000 and
Postretirement Benefits
related to health care and other benefits of $21,685,000. Effective
August 29, 1993,
the Company adopted Statement of Financial Accounting Standards (SFAS)
No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions"
related to
health care and other benefits. SFAS No. 106 requires the Company to
accrue the
estimated cost of retiree benefit payments during the years the
employee provides
services. The Company previously expensed the cost of these benefits,
which are
principally health care, as claims were incurred. SFAS No. 106 allows
recognition of
the cumulative effect of the liability in the year of adoption or the
amortization of
the obligation over a period of up to 20 years. The Company has
elected to recognize
the cumulative effect of this obligation on the immediate recognition
basis. The
cumulative effect as of August 29, 1993 of adopting SFAS No. 106 was an
accrual of
postretirement health care costs of $20,420,000 and a decrease in net
earnings of
$20,420,000 ($.81 per share), which has been included in the Company's
consolidated
statement of operations for the 26 weeks ended February 26, 1994.
The effect of adopting SFAS No. 106 on income from operations
for the 26 weeks ended February 26, 1994 was a net decrease of
$1,265,000 ($.05 per
share).
The Company provides certain health care and other benefits
for certain retired employees who have fulfilled eligibility
requirements of age 55
with 15 years of service. In fiscal year 1993 and 1992, the Company
recognized on a
"pay-as-you-go" basis expense of $501,000 and $364,000 respectively,
for
postretirement health care benefits. The Company's postretirement
health care plan
is not funded. The status of the plan is as follows:
Accumulated postretirement benefit obligation at August 29, 1993:
Retirees $2,745,000
Fully eligible active plan participants 3,099,000
Other active plan participants 14,576,000
$20,420,000
Net postretirement benefit cost for the 13 and 26 weeks ended
February 26, 1994 consisted of the following components:
Thirteen Twenty-Six
Weeks Weeks
Service cost - benefits earned
during the quarter $369,000 $775,000
Interest cost on accumulated
postretirement benefit obligation 299,000 629,000
$668,000 $1,404,000
The assumed pre-65 and post-65 health care cost trend rates
used in measuring the accumulated postretirement benefit obligation as
of August 29,
1993 was 10.84% and 10.35%, respectively for 1993, decreasing each
successive year
until it reaches 5.5% in 2014 and 2019, respectively, after which it
remains
constant. A one-percentage-point increase in the assumed health care
cost trend rate
for each year would increase the accumulated postretirement benefit
obligation as of
August 29, 1993 and net postretirement health care cost by
approximately 27%. The
assumed discount rate used in determining the accumulated
postretirement benefit
obligation was 6.5%.
8. At February 26, 1994, the Company had a tax loss carryforwards
for financial reporting purposes of approximately $50,000,000 which
will, if unused,
expire at various times in fiscal years 2006 through 2008. The Company
has not
recognized the tax benefits of net operating loss carryforwards due to
the
uncertainty of future realization.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Thirteen Weeks Ended February 26, 1994 Compared to Thirteen Weeks Ended
February 27, 1993
Net revenues of manufactured products for the 13 weeks ended February
26, 1994 increased
$21,295,000 or 29.2 percent from the 13 week period ended February 27,
1993. Motor home
shipments increased by 271 units or 17.0 percent during the 13 weeks
ended February 26,
1994 when compared to the second quarter of fiscal 1993. The growth in
the Company's
revenues is attributed to an overall industry gain in motor home
volume, an increase in
the Company's market share and to a product mix change to larger more
expensive units.
The Company's outlook for the remainder of fiscal 1994 remains
optimistic.
Service revenues for the 13 weeks ended February 26, 1994 increased
$244,000 or 5.4
percent from the 13 weeks ended February 27, 1993. This increase can
be attributed to
increased revenues ($1,306,000 or 40 percent) by Cycle-Sat from
established customers and
new customers. This increase was partially offset by the absence of
revenues of NIE (an
electronic component assembly business), which was sold during August
1993.
Cost of manufactured products, as a percent of manufactured product
revenue, was 87.3
percent for the 13 weeks ended February 26, 1994 compared to 87.9
percent for the 13 weeks
ended February 27, 1993. This decrease can be attributed primarily to
the increase in
motor home volume and a favorable product mix.
Cost of services, as a percent of service revenues, decreased to 57.6
percent from 80.9
percent when comparing the 13 weeks ended February 26, 1994 to the 13
weeks ended February
27, 1993. This decrease can be attributed primarily to the increase in
revenues and due to
renegotiations of the satellite lease agreement, a reduction in lease
expense at Cycle-Sat
during the 13 weeks ended February 26, 1994.
Selling and delivery expenses increased by $867,000 but decreased to
6.3 percent of net
revenues from 6.9 percent of net revenues when comparing the 13 weeks
ended February 26,
1994 to the comparable period of fiscal 1993. The dollar increase can
be attributed
primarily to increases in advertising expenses and in reserves for
dealer receivables.
The decrease in percentage can be attributed primarily to the increase
in revenues.
General and administrative expenses increased by $1,195,000 but
decreased to 6.4 percent
of net revenues from 6.7 percent of net revenues when comparing the 13
weeks ended
February 26, 1994 to the comparable period of fiscal 1993. The
increase in dollars is
primarily attributed to the Company's adoption of FASB No. 106
"Employers' Accounting for
Postretirement Benefits Other Than Pensions" during fiscal 1994 which
requires the Company
to accrue the estimate cost of retiree benefits during the years the
employee provides
services. Also affecting the increase when comparing the two periods
was a reduction, in
fiscal 1993, in the Company's self-insurance reserves.
For the 13 weeks ended February 26, 1994, the Company realized net
income of $1,281,000 or
$.05 per share which included income of $99,000 from Cycle-Sat
operations. For the 13
weeks ended February 27, 1993, the Company realized net income of
$407,000 or $.02 per
share which included a loss of $706,000 ($.03 per share) from Cycle-Sat
operations.
Twenty-Six Weeks Ended February 26, 1994 Compared to Twenty-Six Weeks
Ended
February 27, 1993
Net revenues of manufactured products for the 26 weeks ended February
26, 1994 increased
$42,020,000 or 27.7 percent from the 26 weeks ended February 27, 1993.
Motor home
shipments increased by 616 or 18.6 percent during the 26 weeks ended
February 26, 1994
when compared to the first half of fiscal 1993. This growth in the
Company's revenues is
attributed to an overall industry gain in motor home volume, an
increase in the Company's
market share and to a product mix change to larger more expensive
units.
Service revenues for the 26 weeks ended February 26, 1994 increased
$659,000 or 7.3
percent from the 26 weeks ended February 27, 1993. This increase can
be attributed to
increased revenues ($2,263,000 or 32.1 percent) by Cycle-Sat from
established customers
and new customers. This increase was partially offset by the absence
of revenues of NIE,
which was sold during August 1993.
Cost of manufactured products, as a percentage of manufactured product
revenues, was 86.6
percent for the 26 weeks ended February 26, 1994 compared to 87.3
percent for the 26 weeks
ended February 27, 1993. This decrease can be attributed to the
increase in motor home
volume.
Cost of services, as a percent of service revenues, decreased to 57.9
percent from 79.0
percent when comparing the first half of fiscal 1994 to the first half
of fiscal 1993.
This decrease can be attributed primarily to the increase in revenues
and due to
renegotiations of the satellite lease agreements, a reduction in lease
expense at Cycle-
Sat during the first half of fiscal 1994.
Selling and delivery expenses increased to $12,246,000 from $10,183,000
when comparing the
26 weeks ended February 26, 1994 to the 26 weeks ended February 27,
1993, but decreased as
a percentage of net revenues to 6.0 percent from 6.3 percent. The
dollar increase can be
attributed primarily to increases in advertising expenses and reserves
for dealer
receivables. The decrease in percentage can be attributed primarily to
the increase in
revenues.
General and administrative expenses increased by $1,949,000 but
decreased to 6.3 percent
of net revenues from 6.7 percent of net revenues when comparing the 26
weeks ended
February 26, 1994 to the comparable period of fiscal 1993. The
increase in dollars can be
attributed primarily to the Company's adoption of FASB No. 106, in
fiscal 1994, which
requires the Company to accrue the estimate cost of retiree benefits
during the years the
employees provide services. Also affecting the increase when comparing
the two periods
was a reduction, in fiscal 1993, in the company's self-insurance
reserves.
For the 26 weeks ended February 26, 1994, the Company realized income
from operations of
$5,023,000 or $.20 per share which included income of $340,000 ($.01
per share) from
Cycle-Sat operations. For the 26 weeks ended February 27, 1993, the
Company realized net
income of $1,524,000 or $.06 per share which included a loss of
$1,166,000 ($.05 per
share) from Cycle-Sat operations.
On August 29, 1993, the Company was required to adopt FASB Statement
No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions" which
covers health care and
other benefits provided to retirees and which requires accruing such
benefits during the
years the employee provides services. This change in accounting
principle resulted in a
cumulative non-cash charge of $20,420,000 or $.81 per share. With the
adoption of FASB
No. 106, the 26 weeks ended February 26, 1994 net loss was $15,397,000
or $.61 per share.
LIQUIDITY AND FINANCIAL CONDITION
Presently, the Company meets its working capital and capital equipment
requirements and
cash requirements of subsidiaries with funds generated internally and
funds from
agreements with financial institutions.
At February 26, 1994, working capital was $50,868,000 an increase of
$6,199,000 from the
amount at August 28, 1993. The Company's principal sources and uses of
cash during the 26
weeks ended February 26, 1994 are set forth in the unaudited
consolidated condensed
statement of cash flows for that period.
Principal expected demands at February 26, 1994 on the Company's liquid
assets for the
remainder of fiscal 1994 include approximately $4,500,000 for capital
expenditures
consisting primarily of tooling, equipment replacement and new
equipment.
Based upon available cash, marketable securities and financing
resources(See Notes 4),
management believes that the Company has adequate sources of funds to
meet its remaining
fiscal 1994 cash requirements. However, any significant adverse events
in the market for
motor homes or in the economy could have a significant effect on the
Company's future cash
requirements.
Part II Other Information
Item 4 Submission of Matters to a Vote of Security Holders
(a) The annual meeting was held December 15, 1993.
(b) The election of eight directors was the only shareholder
business
transacted at the annual meeting.
The breakdown of the votes was as follows:
Votes Cast Votes Cast Votes
For Against Abstained
John K. Hanson 21,337,482 33,974 58,784
Gerald E. Boman 21,349,772 21,684 58,784
David G. Croonquist 21,349,206 22,250 58,784
Fred G. Dohrmann 21,359,919 11,537 58,784
Keith D. Elwick 21,360,681 10,775 58,784
Joseph M. Shuster 21,365,006 6,450 58,784
Frederick M. Zimmerman 21,362,986 8,470 58,784
Francis L. Zrostlik 21,353,488 17,968 58,784
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibit - See Exhibit Index on page 13.
(b) The Company did not file any reports on Form 8-K during the
period covered by this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the
registrant has duly caused this report to be signed on its behalf by
the undersigned
thereunto duly authorized.
WINNEBAGO
INDUSTRIES, INC.
(REGISTRANT)
/s/ Fred G. Dohrmann
Date April 6, 1994 Fred G. Dohrmann
President and Chief
Executive Officer
/s/ Ed. F. Barker
Date April 6, 1994 Ed. F. Barker
Vice President,
Controller and
Chief Financial Officer
EXHIBIT INDEX
4b. Amendment to Financing and Security Agreement between Winnebago
Industries, Inc. and
NationsCredit Corporation.
4c. Line of Credit Agreement dated February 24, 1994, among Winnebago
Industries, Inc.,
Cycle-Sat, and Firstar Bank Cedar Rapids.
SECOND AMENDED FINANCING AND SECURITY AGREEMENT
THIS AGREEMENT is made and entered into as of the 16th day of February
1994 between
NATIONSCREDIT COMMERCIAL CORPORATION ("NCC") (assignee of Chrysler
First Commercial
Corporation (Chrysler)), a North Carolina corporation, with its
principal place of
business at 1105 Hamilton Street, Allentown, Pennsylvania 18101
(hereinafter referred to
as "Secured Party"), and WINNEBAGO INDUSTRIES, INC., an Iowa
corporation, with its
principal place of business at 605 Crystal Lake Road, Forest City, Iowa
50436 (hereinafter
referred to as "Debtor").
RECITALS
A.WHEREAS, Winnebago Industries, Inc. and Chrysler entered into a
Financing and
Security Agreement dated March 26, 1992, pursuant to which Chrysler
agreed to
provide a revolving line of credit in the amount of $12MM to Winnebago
secured by
the collateral describes herein.
B.WHEREAS, Chrysler and Winnebago entered into an amendment dated July
1, 1993.
C.WHEREAS, all the assets of Chrysler were sold to NationsCredit on
February 1,
1993, and NationsCredit succeeded to the rights and obligations of
Chrysler under
the terms of the Agreement.
D.WHEREAS, NCC is agreeable to continue providing such financing and
other
credit services to Debtor pursuant to the terms and conditions set
forth in this
Agreement which replaces, amends and restates all other financing
security
agreements signed by Winnebago Industries, Inc. with Chrysler First
Commercial
Corporation and its predecessors.
NOW, THEREFORE, in consideration of the premises, and for other good
and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties
hereto intending to be legally bound do hereby mutually agree and
promise as follows:
Section 1. Definitions. The following terms when capitalized have the
meanings as
given in this Section 1 whenever used in this Agreement.
1.1 "Account Debtor" means an obligor on an Account Receivable.
1.2 "Accounts Receivable" or "Receivables" means all accounts,
contract rights,
instruments, documents, chattel paper, general intangibles (including,
without
limitation, chooses in action, tax refunds and insurance proceeds); any
other
obligations or indebtedness owed to Debtor from whatever source
arising.
1.3 "Average Daily Balance" or "ADB" means the average daily principal
balance of
an indebtedness over the period considered and, when determining
interest accrued,
shall include a reference to a monthly interest rate which shall be
determined on a
thirty (30) day month and a three hundred sixty (360) day year.
1.4 "Borrowing Base" means an amount equal to the lesser of Twelve
Million Dollars
($12,000,000.00) or seventy-five percent (75%) of Eligible Inventory;
all
calculations of the Borrowing Base shall be at the face value of the
supporting
invoice establishing Debtor's cost or market value of Inventory,
whichever is less.
1.5 "Business Day" means any day of the week, Monday through Friday,
on which
Secured Party is open for the regular conduct of business.
1.6 "Collateral" means all of Debtor's Accounts Receivable and
Inventory now owned
or hereafter acquired, including all proceeds and products thereof,
including, but
not limited to, proceeds cash, instruments, credits, chattel paper,
general
intangibles and accounts.
1.7 "Eligible Inventory" means fully manufactured recreational
vehicles ready for
delivery to a dealer.
1.8 "Inventory" means all goods, merchandise and other personal
property now owned
or hereafter acquired by Debtor, wherever located, which are held for
sale or lease,
or are furnished or to be furnished under any contract of service or
are raw
materials, work-in-process, finished goods, supplies or materials used
or consumed in
Debtor's business, and all products thereof, and all substitutions,
replacements,
additions or accessions therefor and thereto; all cash or non-cash
proceeds and
products of all of the foregoing, including insurance proceeds.
1.9 "Line of Credit" or "Credit Line" means the line of credit
established and
maintained under this Agreement.
1.10 "Month Period" or "Accounting Month" shall mean the period from
the last
Friday of a calendar month to and including the last Thursday of the
following
calendar month. If a calendar month ends on Thursday, then the
accounting month for
the next successive period shall be from the first Friday of a calendar
month to and
including the last Thursday of the same calendar month.
1.11 "Obligations" means all indebtedness, obligations and liabilities
of Debtor to
Secured Party of every kind and description, direct or indirect,
secured or
unsecured, joint or several, absolute or contingent, due or to become
due, whether
for payment or performance, now existing or hereafter arising,
regardless of how the
same arise or by what instrument, agreement or book account they may be
evidenced, or
whether evidenced by any instrument, agreement or book account,
including, without
limitation, all loans (including any loan by renewal or extension), all
indebtedness,
all undertakings to take or refrain from taking any action, all
indebtedness,
liabilities or obligations owing from Debtor to others which Secured
Party may have
obtained by purchase, negotiation, discount, assignment or otherwise,
and all
interest, taxes, fees, charges, expenses and attorney's fees chargeable
to Debtor or
incurred by Secured Party under this Agreement, or any other document
or instrument
delivered in connection herewith, and further including, without
limitation, all
obligations of Debtor to Secured Party pursuant to this Agreement and
the Inventory
Floor Plan Finance Agreement.
1.12 "Prime Rate" means the reference rate in effect at the Bank of
America NT & SA
at its office in San Francisco, California on the last day of an
Accounting Month
effective for outstanding balances in the successive Accounting Month.
When a change
in the Prime Rate is announced, a change will take effect as of the
first day of the
successive Accounting Month. The new Prime Rate will apply to new
advances as well
as to existing balances from the first day of the Accounting Month in
which the new
Prime Rate is effective. Notwithstanding the actual Prime Rate, for
purposes of
determining the rate of interest due under the Revolving Line Credit
Facility, the
Prime Rate shall be the actual Prime Rate or six percent (6%) per annum
if the actual
Prime Rate is less than six percent (6%) per annum.
Section 2. Agreement to Lend. Subject to all of the terms and
conditions herein
contained, Secured Party grants to Debtor a revolving line of credit in
favor of
Debtor in the amount of Twelve Million Dollars ($12,000,000.00) or so
much thereof as
may be advanced from time to time, for the financing of the Debtor's
Eligible
Inventory, which indebtedness is evidenced by a certain Promissory
Note, the form of
which is attached hereto as Exhibit A, dated of even date herewith in
the face amount
of up to $12,000,000.00 executed by Debtor and payable to the order of
Secured Party
(hereinafter the "Note").
Section 3. Term, Funding and Prepayment.
3.1 Term of Credit Line. The Line of Credit shall be available to
Debtor for an
initial term of one year, beginning on the date of this Agreement (the
"Initial
Term"); provided an event of default, as defined in section 16 of this
Agreement, has
not occurred during the Initial Term, the Line of Credit shall continue
to be
available during successive one (1) year periods (a "Renewal Term"),
with each
Renewal Term automatically arising unless either party provides notice
to the other
at least ninety (90) days in advance of the expiration of the Initial
Term or a
Renewal Term that the party giving notice wishes to terminate the Line
of Credit.
Upon expiration of the Initial Term or a Renewal Term without a new
Renewal Term
arising, the Line of Credit shall be terminated and all amounts due
under the Line of
Credit, and otherwise under this Agreement, shall immediately be due
and owing
without notice or demand.
3.2 Funding. Notwithstanding an earlier closing date, no credit will
be made
available or funded under the Line of Credit until Secured Party
confirms that all of
the requirements of subsection 11.2 of this Agreement have been met.
3.3 Prepayment. Notwithstanding the provisions of subsection 3.1 of
this
Agreement, Debtor may prepay all or any portion of the Credit
Facilities at any time;
provided, however, if Debtor prepays the entire amount due under the
Credit Line,
then the Credit Line shall be terminated and no longer available to
Debtor unless
Debtor continues to provide Secured Party with the financial
information required
hereby and is in continuing compliance with the financial covenants
herein.
Section 4. Advances.
4.1 As long as (a) Debtor is not in default under this Agreement, the
Note, or any
other documents executed and delivered to Secured Party pursuant to the
Credit Line
and (b) the credit and financial responsibility of Debtor are, in the
sole and
absolute discretion of Secured Party, satisfactory, Secured Party will
make advances
to Debtor under the Credit Line in such amounts as Debtor may request
but in no event
shall the advances exceed the Borrowing Base.
4.2 Debtor shall accompany all requests for advances with a Borrowing
Base
Certificate, in the form attached as Exhibit B to this Agreement
("Borrowing Base
Certificate"), and shall certify that the Borrowing Base, based on the
Eligible
Inventory on the date of the certificate, justifies available credit.
All advances
shall be by check or wire transfer and, if by wire transfer, a $12.50
wire transfer
fee shall be charged to Debtor for each transfer up to five (5)
transfers in one
calendar month and a $25.00 wire transfer fee shall be charged for each
transfer
beyond five (5) transfers in any one calendar month. Wire transfers to
Debtor's
operating account will be made by Secured Party the next Business Day
following
Secured Party's receipt of Debtor's request for an available advance.
4.3 The parties contemplate that Debtor will maintain an operating
account at the
Norwest Bank Iowa, N.A. into which draws from the Line of Credit will
be deposited.
Section 5. Interest Rates and Payments.
5.1 Interest Rates. All advances under the Credit Line shall bear
interest from
the date of an advance until paid at the following rates:
On that part of the principal
balance between: Interest Rate
$0 and $4,000,000 Prime Rate
$4,000,001 to $6,000,000 Prime + 0.5
$6,000,001 to $8,000,000 Prime + 1.0
$8,000,001 to $10,000,000 Prime + 1.5
$10,000,000 to $12,000,000 Prime + 2.0
5.2 Default Rate. Upon the occurrence of any event of default, as
defined in section 16
of this Agreement, interest under the Credit Line shall accrue at the
rate of six percent
(6%) per annum over the rate of interest that would be in effect
without the event of
default having occurred.
5.3 Lawful Rates. It being the intent of the parties that the rate of
interest and all
other charges to Debtor be lawful, if for any reason the payment of any
portion of
interest or charges as required by this Agreement would exceed the
limit established by
applicable law, then the obligation to pay interest or charges or any
other obligation of
Debtor or right of Secured Party, the enforcement of which would exceed
the limits, if
any, of applicable law, shall automatically be reduced to such limit
and if any amounts in
excess of such limits shall have been paid, then such amounts shall be
applied to the
unpaid principal amount of the Obligations of Debtor to Secured Party
or refunded so
that under no circumstances shall interest or charges required
hereunder exceed the
maximum rate allowed by law.
Section 6. Payment.
Debtor shall immediately pay to Secured Party:
A. Each week (in conjunction with the submission of the Borrowing Base
Certificate), the
amount necessary to reduce the principal amount outstanding under the
Credit Line to an
amount equal to the Borrowing Base.
B. On the earlier of the twentieth day of each month or upon receipt
of Secured
Party's statement, all accrued and unpaid interest as calculated under
the Note
for the preceding month; and
C. Upon the effective termination of the Credit Line under Section 3
of the
Agreement, the total outstanding principal indebtedness under the
Credit Line, all
accrued and unpaid interest, all amounts advanced and secured by the
Agreement and
all other amounts owed to Secured Party shall be due and payable
immediately.
D. Debtor agrees that the obligation to repay each advance made under
the Credit
Line, together with interest thereon, shall not be limited to any
specific fund
but shall be a direct and general liability of Debtor. Until checks
and other
instruments delivered to
Secured Party in payment or on account of Debtor's obligations are
actually
paid to Secured Party, Debtor agrees that such items constitute
conditional
payment only.
E. Secured Party is hereby authorized to charge the interest and other
charges
occurring under this Agreement to the Revolving Loan Account as of the
1st day of
each calendar month immediately following the Month Period the charge
was
incurred. All collections shall be applied first to payment of any
such unpaid
interest or expenses, then toward the satisfaction of the oldest unpaid
loan owing
by Debtor to Secured Party.
F. At least once each month during the term of this Agreement, Secured
Party shall render
to Debtor a statement of account for its Revolving Loan Account, which
statement shall be
considered correct and accepted by Debtor and conclusively binding upon
Debtor unless
Debtor notifies Secured Party to the contrary within fifteen (15) days
of the date on
which said statements were sent to Debtor.
Section 7. Security Interest.
7.1 Debtor hereby grants Secured Party a continuing security interest
in all of the
Collateral to secure to Secured Party the prompt and complete
performance of all and each
of the Obligations. Debtor shall execute and deliver to Secured Party
such financing
statements and other instruments and assurances as Secured Party may at
any time
reasonably request to perfect, further evidence, assure or enforce the
security interest
granted under and continued by this Agreement.
7.2 Affirmation of Security Interest
and Priority. Debtor hereby affirms its grant to Secured Party of a
continuing
security interest in the Collateral to secure to Secured Party the
prompt and
complete performance and payment of all and each of the Obligations.
Debtor
acknowledges and agrees that Secured Party's security interest is
subject to only
those liens listed on Schedule I and Secured Party's position in the
Collateral will
not change as funds are advanced by Secured Party to Debtor under this
Agreement.
Section 8. Special Provisions Relating to Inventory.
8.1 Secured Party's security interest in the Inventory shall continue
through all steps
of manufacture and sale and attach without further act to raw
materials, work in process,
finished goods, returned goods and to proceeds resulting from sale or
disposition of
Inventory. Until all Obligations of Debtor to Secured Party have been
satisfied, its
security interest in Inventory and in all proceeds thereof shall
continue in full force
and effect, and Secured Party shall have, in its disretion and at any
time after the
occurrence of an Event of Default, the right to take physical
possession of the Inventory
and to maintain the Inventory on Debtor's premises, in a public
warehouse, or at such
place as it may remove the Inventory or any part thereof. If Secured
Party exercises its
right to take possession of Inventory, Debtor will, upon demand, and at
Debtor's own
cost and expense assemble the Inventory and make it available to
Secured Party at a
place or places reasonably convenient to Secured Party.
8.2 All Inventory shall be maintained at Debtor's plant in Forest
City, Iowa. No
Inventory shall be removed therefrom, except for the purpose of sale or
finishing in the
ordinary course of Debtor's business, and except for such sales, Debtor
will not sell,
encumber, grant a security interest in, dispose of or permit the sale,
encumbrance, return
or disposal of any Inventory without Secured Party's prior written
consent.
8.3 Debtor will perform any and all steps that Secured Party may
request to perfect its
security interest in the Inventory, including, but without limitation,
leasing warehouses
to Secured Party or its designee, placing and maintaining signs,
appointing custodians,
executing and filing financing statements or continuations in form and
substance
satisfactory to Secured Party, maintaining stock records and
transferring of Inventory to
warehouses. A physical verification of all Inventory wherever located
will be taken by
Debtor at least every twelve (12) months and, in any case, as often as
reasonably required
by Secured Party, but not more than twice a year, (so long as there is
no Event of
Default) and a copy of such physical verification shall be submitted to
Secured
Party. Debtor shall also submit to Secured Party a copy of the annual
physical
Inventory as observed and tested by its public accountants in
accordance with
standard accounting principles.
8.4 Secured Party may examine and
inspect the Inventory, Equipment or other collateral and may examine,
inspect and
copy all books and records with respect thereto at any time during the
Borrower's
normal business hours. Borrower shall maintain full, accurate and
complete records
respecting Inventory, including a perpetual inventory, and all other
collateral at
all times.
Section 9. Financial Covenants.
9.1 Debtor shall deliver each of the
following financial reports ("Required Reports") to Secured Party,
all of which shall
be certified by a corporate officer to be true and correct:
(a) Monthly financial statements showing the current month
and year to date
cumulative figures, to be delivered within twenty (20)
days of the end of each
month;
(b) Monthly inventory reports;
(c) Quarterly inventory reports showing the value of
Inventory by categories
foreach manufacturer, and showing the aging of each
category of Inventory,
to be dated and current as of the same date of the month
the first
Borrowing Base Certificate is submitted to Secured Party
under Section 4.2
of this Agreement for purposes of an advance under the
Credit Line and to
be delivered to Secured Party within three (3) Business
Days of its date;
(d) Weekly (each Friday) Borrowing Base Certificates when
there is a balance
outstanding on the credit line;
( e) Any other reports deemed necessary by Secured Party.
All Required Reports may be internally prepared and shall be prepared
in accordance with
generally accepted accounting principles, consistently applied;
provided, however, if
discrepancies are noted from Secured Party's audits, conducted in
accordance with Section
10 of this Agreement during any two (2) consecutive audits which lead
Secured Party to
conclude that the preparation of Required Reports are materially
inaccurate, then at
Secured Party's request supported by an independent auditor's opinion
that material
inaccuracies exist in Debtor's internally prepared Required Reports,
all Required Reports
shall be prepared by an independent certified public accountant.
In addition to Required Reports, Debtor shall deliver twelve-month
projections of sales,
operating expenses and income for the upcoming fiscal year at least
thirty (30) days prior
to the end of each then current fiscal year, twelve-month projections
of sales, operating
expenses and income for the next twelve-month period within thirty (30)
days of Secured
Party's request (which are to be made no more frequently than once per
month), and fiscal
year end financial statements prepared and audited by an independent
certified public
accountant within ninety (90) days of the fiscal year end; provided,
however, Debtor shall
use its best efforts to expedite delivery of fiscal year end financial
statements. When
Debtor causes audited year end financial statements to be prepared by
an independent
certified public accountant (the "Auditor") as required under this
subsection, Debtor
shall also engage its Auditor to undertake to advise Secured Party of
any material change
in previously reported statements of accounts receivable, accounts
payable and inventory
made by Debtor as well as any adjustments made to accounts receivable,
accounts payable
and inventory by the Auditor.
Section 10. Inspection and Audit Rights.
10.1 Inspection. Debtor will maintain complete, accurate and current
records and
books of account covering all payments and collections on Accounts
Receivable. From
time to time during Debtor's normal business hours, Secured Party may
inspect without
notice Inventory and other Collateral and examine, audit and make
extracts from the
books and records, journals of account and other financial records of
Debtor;
provided, however, so long as no event of default, as defined in
section 16 of this
Agreement, has occurred, Secured Party shall give Debtor forty-eight
(48) hours
notice of inspection. Debtor hereby authorizes all duly constituted
federal, state
and municipal authorities to furnish to Secured Party copies of all tax
returns of
Debtor and all reports of examinations or other information of Debtor
which have been
made by them.
10.2 Audit. Secured Party shall conduct quarterly or more frequent
audits of
Debtor's books and records as Secured Party deems necessary. During
any Renewal Term
hereof Debtor shall pay Secured Party $250.00 for each quarterly audit
plus
reasonable per diem expenses of the employees of Secured party.
Section 11. Insurance. Debtor shall bear the full risk of loss from
any cause of any
nature whatsoever in respect to the Collateral. At Debtor's own cost
and expense, it
shall keep all Collateral fully insured, in amounts (including
deductible or coinsurance
provisions) to be agreed to by both parties, against the hazards of
fire, those hazards
covered by extended coverage insurance and such other hazards, as may
be required by
Secured Party.
A. All such insurance shall be in a form and with companies acceptable
to Secured
Party, shall provide at least thirty (30) days advance written notice
to Secured
Party of cancellation, change or modification in any term, condition or
amount of
protection provided therein, shall provide full breach of warranty
protection and
shall provide that the coverage is "primary coverage" for the
protection of Debtor
and Secured Party notwithstanding any other coverage carried by Debtor
or Secured
Party protecting against similar risks. Debtor shall cause to be
delivered to
Secured Party the insurance policies thereof or proper certificates
evidencing the
same. Such policies shall provide, in manner satisfactory to Secured
Party, that
any losses thereunder shall be payable first to Secured Party as its
interest may
appear. In the event of any loss thereunder, the carriers hereby are
directed by
Debtor to make payment for such loss to Secured Party and not to Debtor
and
Secured Party jointly. Debtor hereby appoints Secured Party as
Debtor's attorney-in-fact with full power and authority to do all
things, including, but
not limited to, making claims, receiving payments and endorsing
documents, checks or
drafts, necessary or advisable to secure payments due under any policy
contemplated
hereby on account of a casualty occurrence to the Collateral. All loss
recoveries
received by Secured Party upon any such insurance may be applied and
credited by Secured
Party to the amounts owing by Debtor under this Agreement and any other
agreement then
in effect between the parties hereto. Any surplus shall be paid by
Secured Party
to Debtor, provided Debtor is not in default in any of their
obligations to
Secured Party under this Agreement or otherwise. Any deficiency
thereon shall be
paid by Debtor to Secured Party, on demand.
Section 12. Warranties. Debtor covenants and warrants that each of
the following is at
the date of this Agreement, and will be at all times throughout the
duration of this
Agreement, true and correct in all respects:
A. Debtor is a corporation duly organized, validly existing and in
good standing
under the laws of the state of its formation and is duly qualified and
licensed to
do business in every state in which the nature of its business or the
location of
its properties requires it to be so qualified and licensed and Debtor
is in good
standing in every such state.
B. Debtor has full power and authority to execute, deliver and perform
all of
it's duties and obligations under this Agreement and that the execution
and
delivery of this Agreement by the officers of Debtor who are executing
and
delivering the same have been duly and lawfully authorized and that all
corporate
acts and proceedings necessary or proper in the premises have been duly
done,
performed and taken.
C. The execution and delivery of this Agreement and the performance by
Debtor of
any or all of the terms and provisions contained in this Agreement, or
in any
other agreement or instrument executed in conjunction with this
Agreement, does
not constitute a breach of any provision contained in any agreement to
which
Debtor is now a party or to which Debtor or its property is bound.
D. Debtor has the corporate power to carry on its business as
currently being
conducted.
E. Debtor is lawfully possessed and the sole owner of the Collateral
free of any
pledge, lien or encumbrance of any kind of character, legal or
equitable,
excepting the security interest created by this Agreement, the
interests of other
certain Secured Parties of Debtor which are subordinated to Secured
Party's
interest by a written subordination agreement satisfactory to Secured
Party and
otherwise only as consented to by Secured Party in writing by separate
agreement
and Debtor has authority to encumber and pledge the Collateral in the
manner and
form provided for in this Agreement.
F. There are no suits or proceedings, pending or threatened, before
any court or
administrative agency which will materially adversely affect the
financial
condition or operation of Debtor.
G. Debtor has duly filed all federal, state and other governmental tax
returns
which they are required by law to file, and all taxes and other sums
which may be
due from or against Debtor to the United States, any state or other
governmental
authority have been fully paid, and Debtor maintains reserves adequate
in amount
to fully pay all such tax liabilities as they accrue.
H. The Required Reports and other information furnished by Debtor to
Secured
Party pursuant to this Agreement are true, accurate and correct in all
respects.
I. All financial data which Debtor
furnishes to Secured Party will be taken from the books and records of
Debtor kept
in accordance with generally accepted accounting principles applicable
to the
industry in which Debtor is engaged, and the balance sheets and other
financial
statements so furnished will reflect accurately the financial condition
of Debtor
as of the dates and for the periods of them.
J. Debtor will maintain all books and records and all Inventory at its
existing
place of business at 605 Crystal Lake Road, Forest City, Iowa and shall
immediately notify Secured Party in writing of any change of such
addresses or of
any additional addresses.
Section 13. Affirmative Covenants. During the term of this Agreement
and as long as any
of the Obligations remain unpaid and until the terms and conditions of
this Agreement have
been fully performed, Debtor will:
A. Furnish to Secured Party Required Reports and other information as
and when required
by this Agreement;
B. Furnish such other financial information as Secured Party may from
time to time
request;
C. On request of Secured Party, execute and deliver to Secured Party
any and all
additional documents which Secured Party may from time to time
determine necessary or
convenient to evidence or effectuate this Agreement, or the advances
made hereunder or to
evidence and continue the security interest created hereby;
D. Comply with all applicable laws, statutes and governmental
regulations;
E. Pay and discharge, before any penalty attaches thereto. for
nonpayment thereof, all
taxes, assessments, fees and charges of any kind levied upon or
assessed against Debtor,
the Collateral, an income therefrom or upon the subject of the security
interest of
Secured Party hereunder; provided, however, that Debtor shall not be
required to pay any
such taxes, assessments, fees or charges as long as it shall in good
faith contest the
validity thereof and Debtor provides for the payment of the taxes,
assessments,
fees or governmental charges so contested in a manner reasonably
satisfactory to
Secured Party;
F. Perform in a timely manner all covenants, obligations and
agreements of Debtor under
each lease, mortgage, deed of trust or other encumbrance or agreement
relating to any
assets or property owned or leased by Debtor;
G. Notify Secured Party immediately of any information which Debtor
has or may
receive with regard to the Collateral which might in any way materially
adversely
affect the value of the same or the rights or remedies of Secured Party
in respect
thereto;
H. Pay to Secured Party all reasonable attorneys' fees and all proper
expenses
which may be expended or incurred by Secured Party in perfecting,
enforcing or
attempting to enforce any of its rights under this Agreement or with
respect to
any matter growing out of this Agreement;
I. On request of Secured Party, assign to and perfect for the benefit
of Secured Party,
any security interest or other lien Debtor may have in any of the
Collateral in the
possession of any party other than Debtor or Secured Party;
J. Indemnify and hold Secured Party harmless from and against any and
all actual or
threatened claims, suits or proceedings by or on behalf of any third
party arising out of
the operation of Debtor's business or Secured Party's execution and
performance of this
Agreement, including, by way of illustration and not limitation, the
security interest
created hereby and the exercise of Secured Party's rights with respect
to the Collateral
and any alleged failure by Debtor to comply with any federal or state
law or regulation in connection with the Collateral or Debtor's
business;
K. Furnish to Secured Party such other information concerning the
business
affairs, properties, financial condition and/or operation of Debtor's
business as
Secured Party may from time to time reasonably request;
L.Cause to be done all things necessary to preserve and maintain its
existence and
authority to do business in whatever states Debtor may now or in the
future do business
during the term of this Agreement;
M. Give Secured Party prompt notice of any defaults by Debtor under
loan
agreements or any commitment with other lenders;
N. Give Secured Party prompt notice of any material adverse change in
its
financial condition, of the occurrence of an event of default hereunder
or of the
filing of any suit or proceeding in which an adverse decision could
have a
material adverse effect upon it or its business;
O. Give Secured Party prompt notice in writing in advance of any name
or address
change and the effective date of such change before the change occurs;
P. Continue to maintain its principal place of business in the state
of Iowa:
Q. Maintain a debt to equity ratio of 1.5 to 1, or less, at all times;
as used in
this covenant, "debt" means all debt of the Debtor, excluding
contingent
liabilities which are not material and "equity" means shareholder
equity as
determined in accordance with generally accepted accounting principles;
R. Maintain a net working capital of not less than $25,000,000.00 (net
working
capital shall mean total current assets less total current liabilities)
as shown
on the books of Debtor in accordance with generally accepted accounting
principles; and
S.Maintain a net worth of at least $50,000,000.00 (net worth shall mean
book value of
issued and outstanding capital stock plus retained earnings).
Section 14. Negative Covenants. During the term of this Agreement and
as long as any of
the Obligations remain unpaid and until the terms and conditions of
this Agreement have
been fully performed, Debtor will not, without the prior written
consent of Secured Party:
A.Make any material change in the management of Debtor without Secured
Party's prior
written consent which Secured Party agrees will not be unreasonably
withheld.
B.Pledge, assign, encumber, transfer or permit, create or suffer any
lien to be placed
upon or against any of the Collateral except those liens listed on
Schedule I to or in
favor of any person, partnership, corporation or entity other than
Secured Party or other
than a transfer on the sale of Inventory (all proceeds of which shall
remain subject
hereto) in the ordinary course of business;
C.Make any material change in the type of business it now conducts or
enter any new line
of business; for purposes of this covenant, Debtor's business is
considered the sale,
manufacturing and marketing of Recreational Vehicles;
D.Make any advance, loan, contribution or payment of money (other than
reasonable
compensation for personal services), goods or credit to, or guarantee
any obligation of or
pay any pre-existing obligation to, any subsidiary, affiliate or parent
corporation, or
any officer, shareholder or employee, or cause or permit any such
advance loan,
contribution, payment or guarantee to be made by any subsidiary other
than
instruments executed in connection herewith in favor of Secured Party
in excess,
in the aggregate, of $7,500,000.00 or $5,000,000.00 for any one
subsidiary or
affiliate from the date of this agreement to the end of Debtor's fiscal
year
thereafter;
E.Merge or consolidate with any other corporation or purchase any
assets, in excess of
$150,000.00, of any other person, firm or corporation other than assets
used in the
ordinary course of business;
F. Purchase or otherwise acquire, hold or invest the greater of
$5,000,000.00 in the
aggregate, or more than five percent (5%) of the equity of Debtor
corporation in any one
entity or person, in the securities (evidencing equity investment) of
any person,
association, firm, entity or corporation for more than one hundred
eighty (180) days,
excepting those obligations of the United States of America or any
commercial bank bearing
maturities of two hundred seventy (270) days or less;
G. Sell, lease, transfer or otherwise dispose of any property or assets
of Debtor except
in
the ordinary course of business; and
J. Place any of the Collateral into the possession of any other person
or business entity.
Section 15. Events of Default.
This Agreement and the Obligations shall be in default upon the
occurrence of any of the
following (a "default" or "event of default"):
A. Debtor shall fail to make any payment required to be made under this
Agreement, or any
other financing agreement, security agreement or other agreement
between Debtor and
Secured Party relating to the Obligations and whether Secured Party is
an original party
or assignee;
B. Debtor shall fail to perform or observe any other covenant,
obligation or agreement in
this Agreement, or any other financing agreement, security agreement or
other agreement
between the Debtor and Secured Party relating to the Obligations or
otherwise and whether
Secured Party is an original party or assignee;
C. Any representation or warranty of Debtor or other information
whatsoever
provided by Debtor to Secured Party shall prove to have been untrue in
any
material respect when made or when in effect;
D. Any material adverse change in Debtor's financial condition or means
or ability to
repay, or the occurrence of any other event as a result of which
Secured Party deems
itself insecure;
E. Debtor shall become insolvent, be unable to pay its debts or cease
to do business
as a going concern;
F. By the order of a court of competent jurisdiction, a receiver,
custodian, liquidator or
trustee of Debtor or of a substantial part of the Collateral shall be
appointed, by decree
of court Debtor shall be sequestered, a tax lien shall be filed against
Debtor's property,
or an involuntary petition to reorganize or liquidate Debtor pursuant
to the
Federal Bankruptcy Code, as it now exists or as it may hereafter be
amended, or
pursuant to any other analogous statute applicable to Debtor now or
hereinafter in
effect, shall be filed against Debtor and such order or petition shall
not be
dismissed or stayed within sixty (60) days;
G. Debtor shall file a voluntary petition for bankruptcy under any
provision of any
bankruptcy law or a petition to take advantage of any insolvency act,
shall make an
assignment for the benefit of its creditors, shall admit in writing an
inability to pay
its debts generally as they become due, shall consent to the
appointment of a receiver or
receivers of all or any part of the Collateral or shall consent to the
filing of any
bankruptcy, arrangement or reorganization petition by or against it
under any
provision of any bankruptcy law;
H. A final judgment or order for the
payment of money rendered against Debtor which exceeds $10,000.00 which
is not
satisfied or bonded over within fifteen (15) days of the date the
judgment or
order enters;
I. This Agreement shall at any time for any reason cease to be in full
force and effect or
shall be declared to be null and void, or the validity or
enforceability thereof shall be
contested by Debtor, or Debtor shall deny that they have any further
liability or
obligation hereunder;
Section 16. Remedies.
Upon the happening of an event of default, Secured Party shall have all
of the rights and
remedies provided in this Agreement or any other agreement between
Debtor and Secured
Party, as well as those rights and remedies provided by any applicable
law, rule or
regulation, including the remedies of a secured party under the Iowa
Uniform Commercial
Code. In conjunction with and in addition to any of the foregoing
rights and remedies of
Secured Party, Secured Party may:
A. Declare the Line of Credit to be
terminated;
B. Declare all Obligations to Secured Party including, but not limited
to, all
indebtedness due under the Line of Credit, although otherwise unmatured
and contingent, to
be due and payable immediately without presentment, notice, demand or
protest, all of
which are hereby waived by Debtor;
C. Enforce its rights in or with respect to any Collateral;
D. Immediately take possession, with or without legal process, of any
or all of the
Collateral wherever it may be found, using self-help to do so, and for
that purpose
Secured Party, for itself or as agent of Debtor, may enter upon any
premises upon which
the Collateral is situated and remove the same therefrom, without such
entry constituting
a breach of the peace, or require Debtor to assemble the Collateral and
return it to
Secured Party at Debtor's expense at a place designated by Secured
Party, and
Debtor waives all claims of damages due to or arising from or connected
with any
such action; and
E.Lease, sell or otherwise dispose of all or any of the Collateral, in
its then condition,
at public or private sale or sales, with such notice as may be required
by law (it being
agreed by Debtor that, in the absence of any contrary requirement of
law, ten (10) days
prior notice of a public or private sale of Collateral shall be deemed
reasonable notice),
as Secured Party in its sale discretion, may deem advisable. Such
sales may be
adjourned from time to time with or without notice. Secured Party
shall have the
right to conduct such sales on Debtor's premises or elsewhere and shall
have the
right to use Debtor's premises without charge for such sales for such
time or
times as Secured Party may see fit. Secured Party is hereby granted a
license or
other right to use, without charge, Debtor's labels, patents,
copyrights, rights
of use of any name, trade secrets, trade names, trademarks and
advertising matter,
or any property of a similar nature, as it pertains to the Collateral,
in
advertising for sale and selling any Collateral, and Debtor's rights
under all
licenses and all franchise agreements shall inure to Secured Party's
benefit.
F.Secured Party may purchase all or any part of the Collateral at
public or, if permitted
by law, private sale and, in lieu of actual payment of such purchase
price, may set off
the amount of such price against the indebtedness due under the
Obligations. The proceeds
realized from the sale of any Collateral shall be applied first to the
costs, expenses and
attorneys' fees incurred by Secured Party for collection, acquisition,
completion,
protection, removal, storage, sale, other disposition and delivery of
the
Collateral; second, to any accrued and unpaid late charges or other
fees; third,
to any accrued and unpaid interest; and fourth, to any other sums
required to be
paid by Debtor to Secured Party under this Agreement or otherwise. If
any
deficiency shall arise, Debtor shall remain liable to Secured Party
thereof, with
interest.
Section 17. Applicable Law.
A. All acts, agreements, certificates, assignments, transactions
hereunder, and
all rights of parties hereto, shall be governed as to validity,
enforceability,
interpretation, construction, effect and in all other respects by the
laws and
decisions of the Commonwealth of Pennsylvania, including but not
limited to, laws
regulating interest, loan charges, commitment fees and brokerage
commissions. It
is acknowledged and agreed by Debtor and Secured Party that the loan
transaction
evidenced hereby bears a reasonable relationship to the Commonwealth of
Pennsylvania. To the extent any provision of this Agreement is not
enforceable
under applicable law, such provision shall be deemed null and void and
shall have
no effect on the remaining portions of this Agreement.
B. Each of the parties hereto hereby waives trial by jury in any court
in any
suit, action or proceeding arising on, out of, under, or by reason of,
or relating
in any way to, this Agreement or any security document, or pertaining
to any
collection or disposition of any Collateral or security held hereunder
or the
proceeds, products or evidence thereof or to any other controversy,
claim or
dispute of any kind arising between the parties hereto or their
respective
representatives, successors, assigns or assignors.
C. Debtor agrees that the courts of the Commonwealth of Pennsylvania,
including
the United States District Court for the Eastern District of
Pennsylvania, shall
have jurisdiction to hear and determine any claim, dispute or demand
pertaining to
this Agreement. Debtor expressly submits and consents to such
jurisdiction,
hereby waiving personal service of any Summons and Complaint or other
process to
be issued in any action or proceeding based upon any such claim,
dispute or
demand, and hereby agrees that service of such Summons and Complaint or
other
process, may be made by registered or certified mail to Debtor at the
address
appearing herein. Should Debtor fail to appear or answer any Summons,
Complaint,
or process so served, within Thirty (30) days after the mailing
thereof, Debtor
shall be deemed in default and Secured Party shall be entitled to enter
a judgment
or order as demanded or prayed for therein. Nothing herein shall
affect Secured
Party's right to serve process in any other manner provided by law, or
to commence
legal proceedings or otherwise proceed against Debtor in the state or
federal
courts of any other jurisdiction.
Section 18. Miscellaneous.
A.Notices. Whenever notice is given pursuant to this Agreement or
otherwise, it shall be
in writing and shall be deemed to have been given when delivered in
person, sent by
facsimile transmission or deposited in the United States mails, postage
prepaid, return
receipt requested, addressed to the person to whom the notice is given
at the following
facsimile telephone number or mailing address or at such other
facsimile telephone
number or mailing address as may hereafter be designated by a party
pursuant to
notice in writing:
Notice to Secured Party:
NATIONSCREDIT COMMERCIAL CORPORATION
1105 Hamilton Street
Allentown, PA 18101
Attention: R.C. Peters, Executive Vice President
Facsimile No: 215-437-8307
With a copy to:
John F. Costello
Vice President & Associate General Counsel
1105 Hamilton Street
Allentown, PA 18101
Facsimile No.: 215-437-8129
Notice to Debtor:
Winnebago Industries, Inc.
605 Crystal Lake Road
Forest City, Iowa
Attention: Fred G. Dohrmann,
President
Facsimile No: 515-582-6806
B. Entire Agreement and Modifications. The making, execution and
delivery of this
Agreement by the parties has been induced by no representations,
statements, warranties or
agreements other than those expressed in this Agreement. This
Agreement embodies the
entire understanding of the parties and there are no further or other
agreements or
understandings, written or oral, in effect between the parties relating
to its
subject matter unless expressly referred to in this Agreement.
Modification of
this Agreement by the parties may be made only in writing.
C. Estoppel and Waiver. No term or condition of this Agreement shall
be deemed to have
been waived, nor shall there by an estoppel against the enforcement of
any provision of
this Agreement, except by written instrument of the party charged with
such waiver or
estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically
stated therein and each such waiver shall operate only as to the
specific term or
condition waived and shall not constitute a waiver of such term or
condition for
the future or as to any act other than that specifically waived.
D. Relationship of parties. Nothing in this Agreement, including any
documents or
instruments entered into pursuant to them, as well as the parties'
operation of and
enforcement of the rights and remedies under them, shall be construed
to create any
partnership or joint venture agreement or relationship between Secured
Party and Debtor.
The relationship between Secured Party and Debtor is solely one of
creditor and debtor; no
fiduciary relationship exists between Secured Party and Debtor each
agreeing that
both parties' interests are best served when each party acts for its
own interests
and not on behalf of the other
E. Assignment and Delegation. No right arising under this Agreement
may be assigned nor
may any obligation imposed be delegated by Debtor without the express
written consent of
the Secured Party. Secured Party agrees that it will not assign any of
its rights nor
delegate any of its duties under this Agreement without the express
written consent of
Debtor; provided, however, Debtor's consent shall not be necessary and
Secured Party shall
be permitted to assign any of its rights and delegate any of its duties
under this
Agreement as part of: (a) the sale of all or any substantial portion
of its loan
portfolio or (b) the sale of all or a substantial portion of the loan
portfolio of
one of its internal divisions; the sale of the capital stock of or a
merger of
Secured Party to or with another person or entity or any other change
in or to
Secured Party occurring by operation of law shall not be deemed an
assignment of
any of Secured Party's rights or a delegation of any of Secured Party's
duties
under this Agreement.
F. Construction. The headings of sections and subsections in this
Agreement are included
solely for convenience of reference and shall not control the meaning
or interpretation of
any of the provisions of this Agreement. Whenever applicable, the
pronouns designating
the masculine and/or neuter shall equally apply to the feminine, neuter
and masculine
genders and the singular shall include the plural.
G. Expenses. In addition to all other obligations of Debtor under this
Agreement, Debtor
shall pay on demand to Secured Party any reasonable attorneys' fees and
expenses incurred
by Secured Party in connection with the enforcement of and the
collection of any amounts
due under this Agreement.
H. Governing Law. This Agreement and its validity, interpretation,
performances and
enforcements shall be governed by the laws of the Commonwealth of
Pennsylvania.
I. Counterparts. This Agreement may be executed in two or several
counterparts and all
counterparts so executed shall constitute one agreement binding on all
parties hereto,
notwithstanding that all the parties are not signatories to the
original or the same
counterpart.
J. Severability. The invalidity or unenforceability of any of the
provisions of the
Agreement shall not affect any other provision and this Agreement shall
be construed in
all respects as if such invalid or unenforceable provision were
omitted.
IN WITNESS WHEREOF, Debtor and Secured Party have caused this Agreement
to be executed on
their behalf by their respective duly authorized officers the date
first hereinabove
written.
NATIONSCREDIT COMMERCIAL
CORPORATION
Dated: By:
Executive Vice President
WINNEBAGO INDUSTRIES, INC.
Dated: By:
President
Attest:
Secretary
EXHIBITS
TO
FINANCING AND SECURITY AGREEMENT
A. Promissory Note
B. Collateral Report and Borrowing Certificate forms
C. Corporate Resolution
DEMAND REVOLVING CREDIT PROMISSORY NOTE
$12,000,000.00, ________________________ 19___
ON DEMAND, FOR VALUE RECEIVED, WINNEBAGO INDUSTRIES, INC., (hereinafter
referred to as
"Maker"), promises to pay to the order of NATIONSCREDIT COMMERCIAL
CORPORATION hereinafter
referred to as the "Lender") at the office of the Lender at 1105
Hamilton Street,
Allentown, PA 18101 or such other place as the Lender or any other
holder hereof may from
time to time designate in writing, in lawful money of the United States
of America, and in
immediately available funds, the principal sum of TWELVE MILLION AND
00/100 DOLLARS
($12,000,000.00), or the then outstanding and unpaid balance of the
sums advanced or
readvanced to Maker pursuant to the Agreement (as defined below),
together with interest
on the outstanding principal balance from time to time unpaid at the
interest rate set
forth in the Agreement until the payment of this Note in full as set
forth in the
Agreement. Accrued interest shall be due and payable monthly on the
20th day of each
month commencing on April 20, 1992 and continuing thereafter until this
Note and all
obligations under the Agreement, as defined hereinafter, shall be paid
in full.
This note is payable in accordance with, and secured by, a Financing
and Security
Agreement of even date between Maker and the Lender (hereinafter
referred to as the
"Agreement"), which encumbers certain collateral described therein
(hereinafter referred
to as "Collateral"). The advances under this Note shall be disbursed
to Maker by the
Lender pursuant to the terms of the Agreement. The terms, covenants,
conditions,
provisions, and stipulations of the Agreement are hereby made a part of
this Note to the
same extent and with the same effect as if they were fully set forth
herein, and Maker
does hereby covenant to abide by and to comply with each and every
term, covenant,
provision, stipulation, promise, agreement and condition set forth in
this Note and in the
Agreement.
Maker shall remain liable for the payment of this Note, including
interest,
notwithstanding any extension or extensions of time of payment or any
indulgence of any
kind or nature that the Lender may grant to Maker. The Lender shall
not be required to
look first to the Collateral for payment of this Note, but may proceed
against Maker in
such manner as it deems desirable.
Subject to the demand nature of this Note, upon Maker's failure to pay
the principal,
accrued interest or other charges when due or upon the occurrence of an
Event of Default
under the Agreement (as defined therein) or default in any other
obligation to Lender, as
defined in the Agreement, the Lender shall have all of the rights and
remedies provided in
this Note, the Agreement or any other agreement between Lender and
Maker, as well as those
rights and remedies provided by any other applicable law, rule or
regulation.
In conjunction with or in addition to the foregoing rights and remedies
of the Lender,
upon an Event of Default after any applicable grace period, if any, or
the failure of
Maker to promptly pay any principal, interest or other charges when due
hereunder or under
the Agreement, the Lender may declare all obligations of Maker to the
Lender, including
all principal, accrued interest and other charges, owing under this
Note and the
Agreement, although otherwise unmatured and contingent, to be due and
payable immediately
without notice or demand whatsoever, in the manner, upon the
conditions, and with the
effect provided for in the Agreement and hereunder.
In case this Note is referred to an attorney for collection, the Maker
agrees to pay all
costs and expenses incurred in the collection of this Note, including
reasonable
attorneys' fees.
The Lender shall not by any act of omission or commission be deemed to
waive any of its
rights or remedies hereunder unless such waiver be in writing and
signed by an authorized
officer of the Lender, and then only to the extent specifically set
forth therein. A
waiver on one occasion shall not be construed as continuing or as a bar
to or waiver of
such right or remedy on any other occasion. All remedies conferred upon
the Lender by this
Note, or any other instrument or agreement connected herewith or
related hereto, shall be
cumulative and none is exclusive, and such remedies may be exercised
concurrently or
consecutively at the Lender's option.
Maker, its successors or assigns, and each person or other entity at
any time liable for
payment of the indebtedness evidenced hereby, waives presentment for
payment, demand or
notice of nonpayment of this Note, protest and notice of protest, and
any other notice
relating to this Note and trial by jury in any litigation arising out
of, relating to, or
connected with this Note or the Agreement, and consents to any and all
renewals,
extensions, or modifications that might be made by the Lender from
time-to-time as to the
time of payment of this Note, and further agrees that the security for
this Note or any
portion thereof may from time-to-time be modified or released in whole
or in part without
affecting the liability of any party liable for the payment of this
Note.
Time is of the essence with respect to all of Maker's obligations and
agreements under
this Note.
This Note shall be governed by and construed in accordance with the
laws of the
Commonwealth of Pennsylvania and the Maker irrevocably consents to the
jurisdiction of the
courts of the Commonwealth of Pennsylvania and of any federal court
within the
Commonwealth of Pennsylvania in connection with any action or
proceeding arising out of or
relating to this Note.
Given under the hand and seal of the Maker by its officers duly
authorized.
WINNEBAGO
INDUSTRIES, INC.
By:
President
ATTEST:
By:
Secretary
(CORPORATE SEAL)
CERTIFIED COPY OF RESOLUTIONS
The undersigned does hereby certify that he is the duly elected,
qualified and acting
Secretary of Winnebago Industries, Inc., an Iowa corporation, having
its principal place
of business at 605 Crystal Lake Road, Forest City, Iowa; that at a duly
and properly
called meeting of the Board of Directors of said corporation held on
the ______ day of
______________, 1994, at which a quorum was present, the following
resolutions were
duly adopted as shown by the Minute Books of said corporation, to wit:
WHEREAS, this corporation desires to obtain loans of money upon the
security of certain of
its personal property from time to time hereafter, and
WHEREAS, negotiations therefore have been conducted with NATIONSCREDIT
COMMERCIAL
CORPORATION, a North Carolina corporation, having a business office at
1105 Hamilton
Street, Allentown, PA 18101, hereinafter referred to as
"NATIONSCREDIT," which corporation
has evidenced a willingness to loan monies to this corporation from
time to time hereafter
certain terms and conditions.
NOW, THEREFORE, BE IT RESOLVED, that the President, or any Vice
President, of this
corporation be and he is hereby authorized, directed and instructed for
and on behalf of
this corporation to execute and deliver to NATIONSCREDIT a Loan and
Security Agreement;
and such other instruments, statements, notices, and documents
aforementioned to be in
such form and to contain such instruments, statements, notices and
documents
aforementioned to be in such form and to contain such instruments,
statements, notices and
documents aforementioned to be in such form and to contain such terms,
conditions,
warranties, covenants and waivers as the said President or Vice
President in his sole
discretion deems necessary or desirable in the interest of this
corporation, and the
execution of such Agreement and any such instruments, statements,
notices and document
aforementioned by the said President or Vice President, shall be
conclusive proof of the
approval of all of the terms, conditions, warranties, covenants and
waivers thereof for
and on behalf of this corporation.
BE IT FURTHER RESOLVED, that the said President or any Vice President
of this corporation,
or any person designated by any officer of this corporation, is hereby
authorized and
empowered on behalf of this corporation to transact any and all
business with
NATIONSCREDIT which this corporation could in any way transact pursuant
to said Agreement,
including but not limited to the borrowings of such sums of money at
such rates of
interest and the giving of such security therefor as he, in his sole
discretion may deem
necessary or desirable in the interest of this corporation; and he is
further authorized
and empowered to execute, acknowledge and deliver and/or appoint
another to execute,
acknowledge and deliver on behalf of this corporation and in its name
to NATIONSCREDIT any
and all amendments to or supplements to said Agreement, and such
promissory notes,
Borrowing Certificates, assignments, endorsements, contracts, pledges,
certifications,
statements, notices, security agreements and schedules and any and all
other instruments
and documents which he may deem necessary or convenient in the
transaction of such
business of this corporation with NATIONSCREDIT.
BE IT FURTHER RESOLVED, that the Secretary of this corporation is
hereby authorized,
directed and instructed to seal and deliver to NATIONSCREDIT the
aforementioned Agreement,
and he is further authorized, directed and instructed to execute and
deliver to said
NATIONSCREDIT certified copies of the resolutions of this Board of
Directors adopted at
this meeting.
The undersigned further certifies that the foregoing resolutions are in
full force and
effect as of the date of this certificate and have not been modified or
rescinded.
The undersigned further certifies that the Financing and Security
Agreement dated
____________,
was duly executed and delivered pursuant to the foregoing Resolutions.
IN WITNESS WHEREOF, the undersigned has set his hand and seal of said
corporation
this _______ day of __________________________ , 1994.
Secretary
(Corporate Seal)
INVENTORY BORROWING BASE CERTIFICATE
TO: NationsCredit Commercial Corporation CERTIFICATE
NO.______
(Hereinafter Called Lender)
The Undersigned Borrower hereby certifies that:
A.As of the _____ day of ____________, 19__, the following is a
correct statement as to
merchandise subject to a security interest (inventory) in favor of
Lender and the
indebtedness secured thereby as disclosed upon the book of the
Undersigned, which
books Undersigned certifies are true and correct.
TYPE OF PERCENTAGE
MERCHANDISE ON HAND VALUE OF VALUE MAXIMUM
LOAN VALUE
(a) RV Finished
Goods Materials $______ (I) x ______% - +$_______________
(b) Unacceptable
Inventory $______ -$_______________
TOTAL VALUE (Max loan value of (a-b)
Borrowing Base:
1. Total maximum Loan Value $_______________
2. Credit Limit $_______________
(c) Loan Eligibility (Lesser of Line 1 or 2)
$_______________
(d) Amount of Advances Outstanding
$_______________
(e) Maximum amount available for borrowing (c minus d)
$_______________
(f) Amount of additional advance requested
$_______________
B. As of the date of this Certificate there is no event of default
under any Agreement
between the undersigned and Lender.
The additional advance requested on Line (f) above is made under the
terms of the Security
and Loan Agreement given you date February 16, 1994, and in
consideration of your making
such advance to the undersigned contemporaneously herewith, the
undersigned agrees to pay
you on demand the current balance of the Revolving Loan Account
referred to in Paragraph
6 of said Agreement, including the payment on demand of the advance
made pursuant to the
foregoing request.
Dated ___________________, 19____
Winnebago Industries, Inc.
BORROWER
BY:
TITLE
Jerome V. Clouse, Vice
President-Treasurer
(I) Lower of Cost or Current Market
NCC Approval Date
CREDIT AGREEMENT
(REVOLVING LINE OF CREDIT FACILITY)
This Credit Agreement dated as of February 24, 1994 (the "Agreement")
is between Cycle
Sat, Inc., a corporation duly organized and validly existing under the
laws of the State
of Iowa, (the "Borrower"); Winnebago Industries, Inc. (the
"Guarantor"); and Firstar Bank
Cedar Rapids, N.A., (the "Bank") and sets forth the agreement of the
parties as follows:
RECITALS
a. The Borrower and the Guarantor have requested that the Bank provide
the
Borrower with a line of credit in an aggregate principal amount at any
time not to
exceed the Borrowing Limit for working capital purposes.
b. The Guarantor owns stock of the Borrower.
c. The Borrower and Guarantor each individually perceive substantial
business
advantage from the transactions outlined herein, including those
transactions from
which the Guarantor will not receive any direct economic benefit.
d. As a condition to the extension of credit under this Agreement, the
Bank has
required that the Borrower and the Guarantor participate and that the
parties
execute the Agreement.
1. LINE OF CREDIT. The Borrower has requested that the Bank provide
the Borrower with
a line of credit in an aggregate principal amount at any time not to
exceed $3,000,000
for working capital purposes including repayment of intercompany
indebtedness. The
line of credit is evidenced by a promissory note (together with any
renewals or
substitutions the "Promissory Note").
2. COLLATERAL. The line of credit is secured by all existing and
future liens and
security interests created by security agreements, mortgages, or any
other collateral
documents between the Bank and the Borrower.
3. REVOLVING LINE OF CREDIT BORROWING LIMIT. Subject to the terms
and conditions of
this Agreement, Bank shall, in its sole discretion, lend to the
Borrower such amounts
as the Borrower may from time to time request, provided that the
aggregate principal
amount advanced is limited to the lesser of $3,000,000 or the sum of
the following
borrowing base:
75% of "Eligible Accounts Receivable"; and
50% of "Inventory"
4. ELIGIBLE ACCOUNTS RECEIVABLE. The Eligible Accounts Receivable
used in the
borrowing base formula means an Account Receivable which is acceptable
to the Bank in
its sole discretion, but at least is continuously in compliance with
all of the
following:
a. The Receivable is an account which arose in the ordinary course of
business of
the Borrower from or in connection with a bonafide sale of goods or
rendition of
services,
performed in accordance with an order or contract, oral or written,
wherein
all obligations of the Borrower regarding the shipment or delivery of
such goods to
the customer have been satisfied or the services have been performed
for the
customer;
b. The rights of the Borrower in and to the Receivable and the
proceeds thereof
are not subject to any assignment, claim, lien, security interest, or
other
encumbrance;
c. The Receivable is not disputed nor subject to offset, credit
allowance, contra
account or adjustment by customer, except discounts for prompt payment
disclosed to
Bank;
d. The Receivable has been due and payable for 90 days or less from
the invoice
date; and
e. The financial condition of the customer is satisfactory to Bank in
its sole
discretion.
5. INVENTORY. The Inventory used in the borrowing base formula shall
be the lower of
cost or fair market value.
6. REPRESENTATIONS. The Borrower represents, as to the date of
execution hereof by
such execution, and as to the date of each subsequent loan or advance
as to the date of
such activity as follows:
a.All the representations and warranties of the Borrower set forth
herein are
true and correct;
b. The Borrower is in full compliance with the terms and conditions
hereof and no
Event of Default shall have occurred and be continuing;
c. The Borrower shall have delivered to Bank, all in form and
substance such
documents or instruments as are required by the Bank and any documents
or
instruments as Bank shall request;
d. There are no actions, suits or proceedings pending or, to the
knowledge of the
Borrower threatened, before any court or by or before any governmental
instrumentality which if adversely determined, would have a material
adverse effect
on the financial conditions or business of the Borrower
7. AFFIRMATIVE COVENANTS. The Borrower and/or Guarantor shall,
unless the Bank agrees
otherwise in writing, perform and observe the following covenants:
a. Promptly, after the Borrower becomes aware of it, give notice to
the Bank of
(i) any material adverse change in their financial condition, (ii) the
occurrence of
any event which with notice or the passage of time, or both, might
become an Event
of Default under any agreement with the Bank, and (iii) the pendency or
threat of
any litigation or tax deficiency which, if decided adversely to the
Borrower, would
have a material and adverse effect in its business, properties or
financial
condition;
b. Maintain all the Borrower's primary depository accounts at the
Bank;
c. Provide to the Bank direct, unaudited financial statements within
15 days of
the Borrower's month end. In addition, provide the Bank within 120
days after the
end of each fiscal year, a copy of the Borrower's direct annual
financial
statements. All financial state
ments must be prepared in accordance with generally accepted accounting
principles applied in a consistent manner ("GAAP") except for the
absence of
explanatory notes;
d. Guarantor to provide the Bank within 120 days after the end of
each fiscal
year, a copy of Guarantor's annual financial audit and 10-K report
prepared by a
firm of independent certified public accountants. All financial
statements must be
prepared in accordance with GAAP applied in a consistent manner;
e. So long as the line of credit is in effect or the Bank will have
any commitment
under this Agreement.
(i) Minimum Tangible Net Worth. The Borrower will maintain, as of
fiscal year
end 1994, a tangible net worth of not less than $1,500,000. Tangible
Net Worth
shall mean the excess of total assets over total liabilities, total
assets and
total liabilities each to be determined in accordance with GAAP,
excluding,
however, from the determination of total assets (i) all assets which
would be
classified as intangible assets under GAAP, including, without
limitation,
organization fees and expenses, goodwill, patents, trademarks, trade
names,
copyrights, and franchises; (ii) all indebtedness to the Borrower from
any
shareholder, director, officer, or employee of the Borrower or from any
relative
of such party.
Exceptions to this definition shall relate to the inclusion of the
value of
the Flat Antenna License Agreements as TNW and the impact of the Non-
Cash Effects
of Cycle Sat, Inc.'s pending recognition of its FASB No. 106
liabilities for past
retirement healthcare benefits and deferred compensation liabilities or
the
non-cash effect of any new accounting standards to be implemented
hereafter.
TNW - NW - Intangibles + Flat Antenna License Agreement Value and the
Non-Cash
Effects of FASB No. 106 (per above) and any new accounting standards to
be
implemented hereafter.
f. Provide to the Bank a Borrowing Base Certificate in the form
attached as
Exhibit A by the 15th day of each month, accurate to the last day of
the preceding
month. Further, Borrower to provide current Borrowing Base Certificate
as of date
of loan closing.
8. GENERAL PROVISIONS.
a. No Waiver: The failure of Bank at any time or times hereafter to
require
strict performance by the Borrower of any of the provisions,
warranties, terms, and
conditions in this Agreement or in any other guaranty, note,
instrument, or document
now or at any time or times hereafter executed by the Borrower and
delivered to Bank
shall not waive, affect, or diminish any right of Bank at any time or
times
hereafter to demand strict performance thereof. No rights of Bank
hereunder shall
be deemed to have been waived by any act or knowledge of Bank, its
agents, officers
or employees, unless such waiver is contained in an instrument in
writing signed by
an officer of Bank. No waiver by Bank of any of its rights shall
operate as a
waiver of any other of its rights or any of its rights on a future
occasion.
b. Validity: Wherever possible, each provision of this Agreement
shall be
interpreted in such manner as to be effective and valid under
applicable law.
Should any portion of this Agreement be declared invalid for any reason
in any
jurisdiction, such declaration shall have no effect and the entirety of
this
Agreement shall continue in full force and effect in all other
jurisdictions and
said remaining portions of this Agreement shall continue to full force
and effect in
the subject jurisdiction as if this Agreement had been executed with
the invalid
portions thereof deleted.
c. Borrowers Waivers: If Bank seeks to take possession of any or all
of the
collateral by court process, the Borrower hereby irrevocably waives any
bonds and
any surety of security relating thereto required by any statute, court
rule or
otherwise as an incident to such possession, and waive any demand for
possession
prior to the commencement of any suit or action to recover with respect
thereto.
d. Governing Law: This Agreement shall be governed in all respects
by the laws of
the State of Iowa and any action to enforce, modify or construe this
Agreement shall
be brought in a court of competent jurisdiction in Linn County, Iowa.
e. Accounting Terms: All accounting terms and procedures, unless
otherwise
defined herein, shall be in accordance with generally accepted
accounting principles
consistently applied throughout the period involved.
f. Right to Release: Bank shall have the absolute unilateral right
to deem its
lien on any collateral released, before or after surrender, without
notice to the
Borrower or without further action
g. Miscellaneous: All covenants, agreements, representations and
warranties made
by the Borrower in any loan documents to Bank, whenever executed, shall
survive the
making by the Bank of the line of credit and the execution and delivery
of any
Notes, and shall continue in full force and effect during the term of
this
Agreement. All such covenants, agreements, representations and
warranties shall be
binding upon any successors and assigns of the Borrower, and shall
inure to the
benefit of the Bank, its successors and assigns and to any subsequent
holder of any
Notes issued hereunder. This Agreement shall not be modified except in
writing
signed by or on behalf of the parties hereto.
9. FEES. Borrower will reimburse Bank for all legal and filing fees
incurred in
preparation and execution of this document as well as other documents
related to
this credit facility. Further, Borrower to pay at closing a $10,000
commitment fee.
10. TERMINATION DATE. The line of credit termination date means the
maturity date on
the Promissory note as may be extended, amended, or renewed from time
to time at the
sole discretion of the Bank, or earlier upon the occurrence of an Event
of Default or
otherwise as provided herein.
11. TERM OF AGREEMENT. The term of this Agreement shall commence on
the Date of
Agreement and shall continue in full force and effect until the
Termination Date.
However, the duties of Borrower hereunder shall survive the termination
of the
Agreement and be binding upon Borrower until all obligations of the
Borrower shall have
been fully paid and satisfied No termination shall affect in any way
the duties of
Borrower hereunder or the security interest of Bank in the Collateral
so long as any of
Borrower's obligations are outstanding; and, notwithstanding such
termination, Bank
shall retain the security interest, lien and rights granted to it
hereunder until all
the Borrower's obligations are paid in full and satisfied
The undersigned hereby agree to all the terms, conditions, and
provisions contained herein
and acknowledge a Receipt of a copy of this Agreement.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE
READ CAREFULLY
BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR
ORAL PROMISES NOT
CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. YOU MAY
CHANGE THE TERMS OF
THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
Winnebago Industries, Inc.Cycle Sat, Inc.
By: By:
Jerome V. Clouse, Vice President Loren A. Swenson,
President
Treasurer, and International CEO/President
Development
Firstar Bank Cedar Rapids, N.A. By:
William B. Grandy
CFO/Vice President
Chief Financial
Officer
By:
Duane A. Amhof, Vice President
Exhibit A Borrowing Base Certificate
VARIABLE BALANCE PROMISSORY
NOTE
(Not a Consumer Credit
Transaction)
Br 2030
DAA
Maker Cycle-Sat. Inc.
Note No. (N) 1247441--9001
Note Date FEBRUARY 24,1994
Maturity DateJANUARY 31, 1995
MAXIMUM CREDIT AMOUNT: THREE MILLION AND NO/100($3,000,000.00)
Purpose to fund accounts receivable and inventory and to repay
intercompany debt.
FOR VALUE RECEIVED, the undersigned, jointly and severally, as
principals, promise to pay
to the order of FIRSTAR BANK CEDAR RAPIDS, N.A, Cedar Rapids, Iowa,
(hereinafter referred
to as "Bank") its successors and assigns; the Maximum Credit Amount, or
so much of the
Maximum Credit Amount as may be advanced under this Note by any holder
of this Note. with
interest thereon to be adjusted daily beginning 02/24/94 to be equal to
1.250 percentage
points above the Bank's Prime Rate, as the same may be on the dates of
adjustment; today's
Bank Prime is 6.00%;
per annum; said principal and interest to be paid as follows:
The principal shall accrue interest as set forth on schedule 1
attached.
Interest shall be due monthly beginning 04-01-94, and
thereafter on the 1st of
each month with the principal balance and any remaining
interest due at maturity.
Each such payment shall be applied first in payment of interest
due on the unpaid
balance and the remainder in reduction of the principal. All interest
shall be computed
for the actual number of days elapsed upon the actual principal balance
from time to time
outstanding on the basis of a year of 360 days.
The Maximum Credit Amount set forth above represents the total
amount which Bank has
agreed to advance from time to time to the undersigned. Except as
otherwise provided
below, the undersigned may, up to the Maximum Credit Amount, at any
time, and from time to
time prior to the Maturity Date of this note, borrow, repay, and
reborrow from Bank and
the liability of the undersigned hereunder shall be the principal
amount from time to time
outstanding pursuant to this note plus interest as provided above.
Bank's determination as to the outstanding balance owed by the
undersigned hereunder
shall be conclusive and Bank's documentation to support said
outstanding balance will be
sufficient to establish and sustain the undersigneds' obligation
hereunder. Advances may
be made by credit by Bank to the undersigneds' depository account.
Requests for advances
may be made to Bank at the request of any one of the undersigned and
such requests may be
in writing, orally, or by telephone. The undersigned agree to assume
full responsibility
for preserving evidence of payments until this note has been presented
to the undersigned,
marked paid.
Bank may require any and all documentation and additional
confirmation as to
authorization for any requested advance. Upon the failure of the
undersigned to provide
said data in a form satisfactory to Bank, or upon the occurrence of an
Event of Default
(has hereinafter defined), or upon the occurrence of any event which
would constitute an
Event of Default but for the requirement that notice be given or time
elapse or both, Bank
may, at its option, refuse to honor any request for an advance of
funds.
If referred to or used herein, the term "Prime Rate" (or any
similar reference) shall
mean that rate of interest described as the "Prime Rate" of Bank
announced from time to
time by Bank and determined at the sole discretion of Bank management
as part of its
internal procedures. No representation is made by Bank to the
undersigned that the "Prime
Rate" is the lowest, the best, or a favored rate.
This note is secured by all existing and future liens and security
interests created
by security agreements, mortgages, or any other collateral documents
now or hereafter
between Bank and the undersigned or now or hereafter between Bank and
any endorsers,
sureties, or guarantors of this note and payment may be accelerated
according to any of
said agreements and documents. The undersigned and all endorsers,
sureties, and
guarantors of this note are hereinafter collectively referred to as the
"Obligors." In
addition to Bank's common law rights of set off, the undersigned hereby
grant to Bank a
security interest and lien in any credit balance or other money now or
hereafter owed them
by Bank, and, in addition, the undersigned agree that Bank may, without
notice or demand,
set off against any such credit balance or other asset(s) any amount
unpaid under this
note, whether due or not.
The undersigned represent and warrant that the extension of credit
evidenced by this note
is for business, commercial, or agricultural purposes, or is to an
organization.
OTHER PROVISIONS:
see attached schedule "1"
The security document(s) by which this note is secured include, but not
limited to:
Security Agreement dated 2-24-94
Credit Agreement dated 2-24-94
THE ADDITIONAL TERMS AND CONDITIONS SET FORTH ON PAGE TWO OF THIS NOTE
ARE A PART OF THIS
NOTE. THE UNDERSIGNED HEREBY ACKNOWLEDGE THE RECEIPT OF A COPY OF THIS
NOTE.
119 John K. Hanson Drive
Forest City, IA 50436
Cycle-Sat, Inc.
By:
Loren A. Swenson,
CEO/President
By:
William B. Grandy,
CFO/V.P.
S.S.or Fed I.D. 42-1246889
CUSTOMER COPY Page 1 of 2
L025-1a Rev. 5/91
SCHEDULE 1
All unpaid principal shall accrue interest at the rate set forth below
depending upon the
Tangible Net Worth of the Borrower as such term is defined in the
Credit Agreement between
Borrower and Bank dated February 24, 1994. Such rate shall change as
and when the Prime
Rate changes or the Tangible Net Worth of Borrower moves from one level
to another. At
such times as the Tangible Net Worth is less than $2,000,000, the rate
of interest shall
be at the Prime Rate plus 1.25%. At such times as the Tangible Net
Worth is equal to or
greater than $2,000,000 but less than $4,000,000, the rate of interest
shall be at the
Prime Rate plus 1.00%. At such times as the Tangible Net Worth exceeds
$4,000,000, the
rate of interest shall be at the Prime Rate plus .50%.
With reference to the Events of Default described in Additional Terms
and Conditions,
Paragraph 2:
A.With respect to Section (iii), Obligors shall have a 20-day cure
period;
B.With respect to Section (v), there shall be no default if the
petition is dismissed
within 90 days after it has been filed;
C.With respect to section (vii), there shall be no default with respect
to any attachment
or lien that is being contested in good faith;
D.With respect to section (xii), there shall be no default with respect
to any immaterial
observance, lacks of performance, or breach.
Notwithstanding the provisions of paragraph 3 of the note, references
to four percent (4%)
in Paragraph 3 shall be deleted and replaced by "two percent (2%)."
Axhwsulw 1--1
FIRSTAR BANK CEDAR RAPIDS, N.A.
FEBRUARY 24, 1994
Firstar Bank Cedar Rapids, N.A.
222 Second Avenue SE
Cedar Rapids, IA 52401
RE: Account Name: Cycle-Sat, Inc.
Loan Dated: FEBRUARY 24, 1994
Loan Number: (N)1247441--9001
Principal Amount: $ 3,000,000 .00
To Whom It May Concern:
The following named individuals are authorized to make oral or written
requests for
advances under the above-referenced note. and all future renewals:
Name Title
Loren A. Swenson CEO/President
William B. Grandy CFO/Vice President
Firstar Bank Cedar Rapids, N.A. is entitled to rely upon the oral or
written requests for
advances of any one of the named individuals until the authority
granted herein is revoked
in writing.
Each of the undersigned acknowledges that a request made by any one of
the above-named
individuals shall be binding upon and consented to by remaining
signators.
Each of the undersigned acknowledge receipt of a copy of this document.
FEBRUARY 24, 1994
Date
Cycle-Sat. Inc.
By:
Loren A. Swenson,
CEO/President
By:
William B. Grandy,
CFO/V.P.
CUSTOMER COPY
L029-1 Rev. 5.91
EXHIBIT "1"
Int. Cl.: 9
Prior U.S. Cls.: 21 and 26
Reg. No. 1,771,244
United States Patent and Trademark Office
Registered May 18, 1993
TRADEMARK
PRINCIPAL REGISTER
CYCLECYPHER
CYCLE-SAT, INC. (IOWA CORPORATION)
FIRST USE 11-0-1987; IN COMMERCE
119 JOHN K. HANSON DRIVE 11-0-1987
FOREST CITY, IA 50436
FOR: SATELLITE SIGNAL RECEIVERS
SER. NO. 74-313,634, FILED 9-14-1992
AND DECODERS AND ADDRESSABLE DECODER -
CONTROLLERS TO DELIVER INFORMATION TO TV DOMINIC J.
FERRAUIUOLO,
STATIONS, IN CLASS 9 (U.S. CLS. 21 AND 26). EXAMINING ATTORNEY
EXHIBIT "2"
The United States of America
No. 1771244
CERTIFICATE OF REGISTRATION
This is to certify that the records of the Patent and Trademark Office
show that an
application was filed in said Office for registration of the Mark shown
herein, a copy of
said Mark and pertinent data from the Application being annexed hereto
and made a part
hereof,
And there having been due compliance with the requirements of the law
and with the
regulations prescribed by the Commissioner of Patents and Trademarks,
Upon examination it appeared that the applicant was entitled to have
said Mark
registered under the Trademark Act of 1946, as amended, and the said
Mark has been duly
registered this day in the Patent and Trademark Office on the
PRINCIPAL REGISTER
to the registrant named herein.
This registration shall remain in force for TEN years unless sooner
terminated as provided
by law.
In Testimony Whereof I have
hereunto set my hand
and caused the seal of the
Patent and
Trademark Office to be affixed
this eighteenth
day of May, 1993.
Acting Commissioner of Patents
and Trademarks
LIMITED GUARANTY
February 24, 1994
This Limited Guaranty is given by Winnebago Industries, Inc., an Iowa
corporation
("Guarantor") in favor of Firstar Bank Cedar Rapids, N.A. ("Bank") to
guaranty certain
obligations of Cycle-Sat, Inc., an Iowa corporation ("Borrower").
Borrower has requested Bank to enter into a Credit Agreement ("Credit
Agreement") dated
February 24, 1994 by and between Borrower and Bank, under which
Bank will loan to
Borrower up to $3,000,000 (the "Loan") for general working capital
purposes. Guarantor
owns 80% of the issued and outstanding stock of Borrower and Bank is
unwilling to enter
into the Credit Agreement and make the Loan unless the Guarantor
delivers this Guaranty to
lender.
In order to induce Bank to enter into the Credit Agreement and to make
the Loan to
Borrower subject to the terms and conditions of the Credit Agreement,
the Guarantor
unconditionally guarantees to Bank, its successors and assigns, subject
to the limitations
set out below, the due and punctual payment when due, whether by
acceleration or
otherwise, of the principal and interest on any and all sums payable
with respect to the
Loan of Borrower, including all interest, cost, expenses and fees for
which Borrower shall
be or become liable to Bank (the "Liabilities"). This Guaranty shall
relate to the
Liabilities of Borrower arising under successive transactions, that
either continue the
Loan or from time to time or renew it after it has been satisfied.
The amount of the principal of the Loan guaranteed by this Guaranty
shall be limited based
upon the amount of the Tangible Net Worth of Borrower as defined in the
Credit Agreement.
There is no limit on the amount of interest, costs, expenses and fees
being guaranteed.
At such times as the Tangible Net Worth, as defined in the Credit
Agreement, of the
Borrower is less than $2,000,000, the limit on the guaranteed amount of
principal shall be
$3,000,000. At such times as the Tangible Net Worth of the Borrower is
equal to or greater
than $2,000,000 but less than $4,000,000, the limit on the guaranteed
amount of principal
shall be $1,500,000. However, if the Tangible Net Worth of
Borrower at any time
exceeds $4,000,000, this Guaranty shall immediately become null and
void.
This Guaranty may be revoked only with respect to indebtedness of
Borrower incurred or
contracted by Borrower thirty days or more after the date on which
written notice of
revocation is actually received by Bank. No notice of revocation is
effective as to any
indebtedness of Borrower (a) existing at the date of receipt of such
notice; (b) incurred
or contracted by Borrower within thirty days after receipt of such
notice; (c) now
existing or later created under the Credit Agreement; or (d) renewals,
extensions,
consolidations and refinancings of the any of the above.
Guarantor authorizes Bank to do the following from time to time without
notice or demand
and without affecting Guarantor's liability: (a) renew, extend
(including extensions
beyond the original term), accelerate the time for payment, or
otherwise modify or
change the terms of any Liabilities of Borrower, including
decreasing or increasing
the rate of interest; (b) take and hold the security for the payment of
the Liabilities;
{c) exchange, consent to the transfer of, or release any security for
the payment of the
Liabilities or apply such security and direct the order or manner of
sale of such security
as Bank in its discretion may determine; (d) release (by operation
of law or
otherwise), discharge, settle, compromise or consolidate any
Liabilities. Bank may,
without notice, assign this Guaranty in whole or in part.
Guarantor waives (a) any right to require Bank to proceed against
Borrower, to proceed
against or exhaust any security held from Borrower, or to pursue any
other remedy in
Bank's power; (b) any defense of Borrower on the Liabilities;
and (c) all
presentments, demands, protest or notice of dishonor, nonpayment, or
other default with
respect to the Liabilities.
Guarantor agrees to pay Bank upon demand any and all costs, expenses
and fees (including
reasonable attorney fees) incurred in enforcing or attempting to
recover payment of the
amounts due under this Guaranty,
WINNEBAGO INDUSTRIES, INC.
BY:
Jerome V. Clouse, Vice
President,
Treasurer, and International
Development
BY:
Raymond M. Beebe, Vice
President
General Counsel and Secretary
