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 March 30, 1996
or
( ) Transaction Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
for the Transition period from to
Commission File Number 0-13886
Oshkosh Truck Corporation
[Exact name of registrant as specified in its charter]
Wisconsin 39-0520270
[State of other jurisdiction of [I.R.S. Employer
incorporation or organization] Identification No.]
2307 Oregon Street, P.O. Box 2566, Oshkosh, Wisconsin 54903
[Address of principal executive offices] [Zip Code]
Registrant's telephone number, including area code (414) 235-9151
None
[Former name, former address and former fiscal year, if changed since
last report]
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) or the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X
No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class A Common Stock Outstanding as of April 30, 1996: 409,503
Class B Common Stock Outstanding as of April 30, 1996: 8,428,960
<PAGE>
OSHKOSH TRUCK CORPORATION
FORM 10-Q INDEX
FOR QUARTER ENDED 3/30/96
Page
PART I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Statements of Income . . . . . . 3
Condensed Consolidated Balance Sheets . . . . . . . . . 4
Condensed Consolidated Statement of
Shareholders' Equity . . . . . . . . . . . . . . . . . . 5
Condensed Consolidated Statements of
Cash Flows . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Condensed Consolidated
Financial Statements . . . . . . . . . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial
Condition . . . . . . . . . . . . . . . . . . . . . . . 8
PART II. Other Information . . . . . . . . . . . . . . . . . . . 11
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
<PAGE>
PART I. FINANCIAL INFORMATION
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
March 30, April 1, March 30, April 1,
1996 1995 1996 1995
(In thousands, except per share amounts)
Net sales $103,139 $107,440 $183,672 $202,857
Cost of sales 89,303 93,564 158,384 176,642
-------- -------- -------- --------
Gross income 13,836 13,876 25,288 26,215
Operating expenses:
Selling, general
and administrative 9,221 8,518 17,186 15,487
Engineering, research
and development 1,406 1,625 2,733 3,128
-------- -------- -------- --------
Total operating expenses 10,627 10,143 19,919 18,615
-------- -------- -------- --------
Income from continuing
operations 3,209 3,733 5,369 7,600
Other income (expense):
Interest expense (33) (229) (70) (279)
Interest income 306 137 788 383
Miscellaneous, net (52) (515) (100) (514)
-------- -------- -------- --------
221 (607) 618 (410)
-------- -------- -------- --------
Income from continuing
operations before taxes 3,430 3,126 5,987 7,190
Income taxes 1,200 1,364 2,185 2,929
-------- -------- -------- --------
Income from continuing
operations 2,230 1,762 3,802 4,261
Loss from discontinued
operations, net of
income tax benefit - (423) - (1,411)
-------- -------- -------- --------
Net income $ 2,230 $ 1,339 $ 3,802 $ 2,850
======== ======== ======== ========
Earnings per common share:
Income from continuing
operations $ 0.25 $ 0.21 $ 0.43 $ 0.50
Discontinued operations - (0.05) - (0.17)
-------- -------- -------- --------
Net income $ 0.25 $ 0.16 $ 0.43 $ 0.33
======== ======== ======== ========
Cash dividends per common
share:
Class A $0.10875 $0.10875 $0.21750 $0.21750
Class B $0.12500 $0.12500 $0.25000 $0.25000
<PAGE>
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 30, September 30,
1996 1995
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 18,236 $ 29,716
Receivables, net of allowance
for doubtful accounts 55,347 58,110
Inventories 65,508 45,781
Prepaid expenses 2,394 3,627
Deferred and refundable income taxes 5,399 4,681
Net current assets of discontinued
operations - 3,273
-------- -------
Total current assets 146,884 145,188
Deferred charges 2,728 2,978
Deferred income taxes 2,383 2,389
Other long-term assets 13,016 10,437
Property, plant, and equipment:
Land 5,853 5,522
Buildings 30,240 30,118
Machinery and equipment 68,088 68,630
-------- -------
104,181 104,270
Less accumulated depreciation (65,362) (64,346)
Net property, plant, and
equipment 38,819 39,924
-------- -------
Total assets $203,830 $200,916
========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 32,653 $ 28,266
Payroll-related obligations 6,267 5,526
Accrued warranty 2,138 3,084
Other current liabilities 14,742 16,535
-------- -------
Total current liabilities 55,800 53,411
Postretirement benefit obligations 9,268 8,839
Other long-term liabilities 5,245 5,026
Net long-term liabilities of
discontinued operations 310 227
Shareholders' equity:
Preferred stock - -
Common stock:
Class A 4 4
Class B 89 89
Paid-in capital 16,763 16,533
Retained earnings 123,297 121,697
-------- -------
140,153 138,323
Cost of Class B common stock
in treasury (5,439) (3,403)
Pension liability adjustment (1,507) (1,507)
-------- -------
Total shareholders' equity 133,207 133,413
-------- -------
Total liabilities and
shareholders' equity $203,830 $200,916
========= =========
<PAGE>
<TABLE>
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
SIX MONTHS ENDED MARCH 30, 1996
(Unaudited)
<CAPTION>
Pension
Common Paid-in Retained Treasury Liability
Stock Capital Earnings Stock Adjustment Total
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1995 $93 $16,533 $121,697 $(3,403) $(1,507) $133,413
Net income - - 3,802 - - 3,802
Cash dividends:
Class A common stock - - (87) - - (87)
Class B common stock - - (2,115) - - (2,115)
Purchase of treasury stock - - - (2,142) - (2,142)
Exercise of stock options - 15 - 106 - 121
Incentive compensation
awards - 215 - - - 215
------ ------- -------- ------- -------- --------
Balance at March 30, 1996 $93 $16,763 $123,297 $(5,439) $(1,507) $133,207
====== ======= ========= ======== ======== ========
</TABLE>
<PAGE>
OSHKOSH TRUCK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
March 30, April 1,
1996 1995
(In thousands)
Operating activities:
Net income from continuing operations $ 3,802 $ 4,261
Adjustments to reconcile net income
to net cash used by operating activities:
Depreciation and amortization 4,000 4,115
Deferred income taxes 6 (1,155)
Loss on disposal of property,
plant, and equipment 103 21
Changes in operating assets and
liabilities (13,894) (22,211)
------- -------
Total adjustments (9,785) (19,230)
------- -------
Net cash used by operating activities (5,983) (14,969)
------- -------
Investing activities:
Additions to property, plant, and
equipment (4,508) (2,532)
Proceeds from sale of property,
plant, and equipment 2,020 -
Increase in other long-term assets (3,089) (173)
------- -------
Net cash used by investing activities (5,577) (2,705)
------- -------
Net cash from discontinued operations 4,321 1,883
Financing activities:
Net borrowings on lines of credit - 2,463
Purchase of treasury stock and proceeds
from exercise of stock options, net (2,021) 36
Dividends paid (2,220) (2,163)
------- -------
Net cash provided from (used by)
financing activities (4,241) 336
------- -------
Decrease in cash and cash equivalents (11,480) (15,455)
Cash and cash equivalents at beginning of period 29,716 15,836
-------- --------
Cash and cash equivalents at end of period $18,236 $ 381
======== ========
Supplementary disclosures:
Cash paid for interest:
Continuing operations $ 70 $ 292
Discontinued operations - 512
Cash paid for income taxes 2,903 829
<PAGE>
OSHKOSH TRUCK CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The condensed consolidated financial statements included herein have been
prepared by the company without audit. However, the foregoing statements
contain all adjustments (consisting only of normal recurring adjustments)
which are, in the opinion of company management, necessary to present
fairly the condensed consolidated financial statements. Certain
reclassifications have been made to the 1995 condensed consolidated
financial statements to conform to the 1996 presentation.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules
and regulations of the Securities and Exchange Commission. It is
suggested that these consolidated financial statements be read in
conjunction with the financial statements and notes thereto included in
the company's 1995 annual report to shareholders.
2. INVENTORIES
Inventories consist of the following:
March 30, 1996 September 30, 1995
(In thousands)
Finished products $ 9,269 $ 3,368
Products in process 28,617 15,132
Raw materials 36,864 35,106
------- -------
Inventories at FIFO cost 74,750 53,606
Less:
Progress payments on U.S.
Government contracts 1,909 852
Allowance for reduction to
LIFO cost 7,333 6,973
------- --------
$65,508 $45,781
======= =======
Title to all inventories related to U.S. Government contracts which
provide for progress payments vests with the government to the extent of
unliquidated progress payments.
3. EARNINGS PER COMMON SHARE
Earnings per common share is computed by dividing net income by the
weighted average number of shares outstanding. The average number of
shares outstanding was 8,871,816 and 8,711,342, respectively, for the
three month periods and 8,902,703 and 8,710,239, respectively, for the
six month periods ended March 30,1996 and April 1, 1995. Stock options,
warrants and stock issuable under incentive compensation awards were not
dilutive in any of the periods presented.
<PAGE>
OSHKOSH TRUCK CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
Second Quarter 1996 Compared to 1995
Net income for the second quarter of the 1996 fiscal year was $2.2 million
or $.25 per share compared to net income of $1.3 million or $.16 per share
in 1995. Net income in the second quarter of the 1995 fiscal year was
reduced by a charge of $.4 million or $.05 per share related to
discontinued operations of the company's U.S. and Mexico chassis
businesses which were sold in June 1995.
Net sales for the current quarter were $103.1 million compared to $107.4
million in the quarter ended March 1995. Defense sales increased to $56.3
million in the second quarter of fiscal 1996 from $54.3 million in the
second quarter of the 1995 fiscal year. Commercial sales decreased to
$46.8 million in the second quarter of fiscal 1996 from $53.1 million in
the second quarter of fiscal 1995 due to a decline in trailer sales of
$11.4 million resulting from continuing softness in the trailer industry
partially offset by an increase in construction vehicle sales.
Gross income was $13.8 million or 13.4% of sales in the second quarter of
the 1996 fiscal year compared to $13.9 million or 12.9% of sales in the
1995 fiscal year. The improved margins are due to improved pricing,
continued productivity improvements, and material cost control on
commercial products.
Operating expenses totaled $10.6 million in the second quarter of the 1996
fiscal year compared to $10.1 million in the comparable period of the 1995
fiscal year. The increase is primarily attributable to higher marketing
and developments costs in support of international sales and the company's
entry into the rear discharge concrete mixer business.
Interest income (expense), net improved by $365,000 as a result of the
company's higher average investments in the 1996 fiscal year.
Miscellaneous expense declined by $463,000 largely due to the impact on
1995 results of $418,000 of expenses related to the company's equity
investment in a Mexican bus manufacturer.
The effective income tax rate declined to 35.0% in the second quarter of
the 1996 fiscal year from 43.6% in 1995. The 1995 rate was adversely
impacted by non-deductible losses related to the company's equity
investment in a Mexican bus manufacturer.
RESULTS OF OPERATIONS
First Six Months 1996 Compared to 1995
Net income for the first half of the 1996 fiscal year was $3.8 million or
$.43 per share compared to net income of $2.9 million or $.33 per share
in 1995. Net income in the 1995 fiscal year period was reduced by a
charge of $1.4 million or $.17 per share related to discontinued
operations of the company's U.S. and Mexico chassis businesses which were
sold in June 1995.
Net sales for the six months ended March 1996 were $183.7 million compared
to $202.9 million in the six months ended March 1995. Defense sales
totaled $114.1 million for the first six months of fiscal 1996,
substantially unchanged from $115.4 million in the first half of the 1995
fiscal year. Commercial sales decreased to $69.6 million in the first
half of fiscal 1996 from $87.5 million in the first half of fiscal 1995
largely due to a decline in trailer sales of $19.2 million.
Gross income was $25.3 million or 13.8% of sales in the first half of the
1996 fiscal year compared to $26.2 million or 12.9% of sales in the 1995
fiscal year. The improved margins are due to improved pricing, continued
productivity improvements, and material cost control on commercial
products.
Operating expenses totaled $19.9 million in the first six months of the
1996 fiscal year compared to $18.6 million in the comparable period of the
1995 fiscal year. The increase is primarily attributable to higher
marketing and development costs in support of international sales and the
company's entry into the rear discharge concrete mixer business.
Interest income (expense), net improved by $614,000 as a result of the
company's higher average investments in the 1996 fiscal year.
Miscellaneous expense declined by $414,000 largely due to the impact on
1995 results of $418,000 of expenses related to the company's equity
investment in a Mexican bus manufacturer.
The effective income tax rate declined to 36.5% in the first six months of
the 1996 fiscal year from 40.7% in the first half of the 1995 fiscal year.
The 1995 rate was adversely impacted by non-deductible losses related to
the company's equity investment in a Mexican bus manufacturer.
LIQUIDITY AND CAPITAL RESOURCES
During the first six months of fiscal 1996, cash and cash equivalents
decreased by $11.5 million. Cash of $6.0 million was used in operations
principally to fund a $19.7 million increase in inventories related to
customer orders scheduled to ship in the second half of fiscal 1996. The
increase in inventories was partially offset by earnings in the period, a
$4.4 million increase in accounts payable related to the inventory build
and the realization of $3.3 million of current assets of discontinued
operations. Working capital requirements are anticipated to remain at
high levels through the remainder of the 1996 fiscal year. Capital
additions and increases in other assets totaling $7.6 million during the
first six months of fiscal 1996 principally related to investments to
enter the rear discharge concrete mixer business. Dividends and stock
repurchases totaled $4.2 million in the first six months of fiscal 1996.
Partially offsetting these requirements was $2.0 million of cash proceeds
from the sale of property, plant, and equipment, principally related to
the sale of the company's airplane.
Effective March 13, 1996, the company re-negotiated its bank credit
agreement to increase its revolving credit facility from $45 million to
$55 million on substantially the same terms as the previous facility.
The company believes its internally generated cash flow, supplemented by
progress payments when available, and the existing credit facility will be
adequate to meet working capital and other operating and capital
requirements of the company in the foreseeable future.
BACKLOG
The backlog as of March 30, 1996 was $304 million compared to $350 million
at September 30, 1995. Major United States Department of Defense trucks
backlog consists of Palletized Load System (PLS) vehicles, Heavy Expanded
Mobility Tactical Trucks (HEMTT), including the start of a HEMTT rebuild
program, and Logistics Vehicle System (LVS) trucks.
STOCK BUY BACK
In July 1995, the company's board of directors authorized the repurchase
of up to 1,000,000 shares of Class B common stock. As of April 30, 1996,
the company has purchased 246,100 shares under this program at a cost of
$3.5 million or $14.29 per share.
ALLIANCE
Implementation of the Strategic Alliance with Freightliner Corporation
continued in the second quarter. The company had signed a Distribution
Agreement with Freightliner Corporation on December 13, 1995 under which
seven models of Oshkosh construction, refuse and other heavy duty trucks
will be sold through Freightliner dealers. Significant incremental
volumes are not expected to be achieved under the Distribution Agreement
during the 1996 fiscal year. The company expects to spend up to $2.0
million in the current fiscal year related to new product and market
development related to products to be distributed through Freightliner
dealers and other associated administrative activities.
Freightliner Corporation was awarded a $49.5 million defense contract for
269 U.S. Army M916 and M917 series of trucks. The company is currently
working with Freightliner Corporation to novate the U.S. Army M916 and
M917 contract to Oshkosh, in which case production would begin in Oshkosh
in the first quarter of the 1997 fiscal year.
<PAGE>
OSHKOSH TRUCK CORPORATION
PART II. OTHER INFORMATION
FORM 10-Q
March 30, 1996
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
At the annual meeting of shareholders held on January 22, 1996, all of the
persons nominated as directors were elected. The following table sets
forth certain information with respect to such election.
Shares Shares Other Shares
Name of Nominee Voted For Withholding Authority Not Voted
Class A Nominees
R.E. Goodson 386,372 0 23,911
S.P. Mosling 386,372 0 23,911
J.P. Mosling, Jr. 386,372 0 23,911
J.W. Andersen 386,372 0 23,911
M.W. Grebe 386,372 0 23,911
R.G. Bohn 386,372 0 23,911
Class B Nominees
D.T. Carroll 7,433,472 95,517 947,876
J.H. Hebe 7,407,961 121,028 947,876
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 4.1 - Credit Agreement by and among Oshkosh Truck
Corporation and Firstar Bank Milwaukee, N.A., Bank
One, Milwaukee, N.A., NationsBank, N.A., and Harris
Trust and Savings Bank, dated as of March 13, 1996.
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
The company was not required to file a report on Form 8-K during the
quarter ended March 30, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
OSHKOSH TRUCK CORPORATION
DATE: May 13, 1996 /s/ R. Eugene Goodson
R. Eugene Goodson
Chairman and Chief Executive
Officer
DATE: May 13, 1996 /s/ Charles L. Szews
Charles L. Szews
Vice President and Chief
Financial Officer (Principal
Financial Officer)
DATE: May 13, 1996 /s/ Peter F. Mueller
Corporate Controller
(Principal Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
4.1 Credit Agreement by and among Oshkosh Truck Corporation and
Firstar Bank Milwaukee, N.A., Bank One, Milwaukee, N.A.,
NationsBank, N.A., and Harris Trust and Savings Bank, dated
as of March 13, 1996.
27 Financial Data Schedule
$55,000,000
CREDIT AGREEMENT
by and among
OSHKOSH TRUCK CORPORATION
and
FIRSTAR BANK MILWAUKEE, N.A., BANK ONE,
MILWAUKEE, NATIONAL ASSOCIATION,
NATIONSBANK, N.A., and
HARRIS TRUST AND SAVINGS BANK
and
FIRSTAR BANK MILWAUKEE, N.A.
as Agent
Dated as of March 13, 1996
<PAGE>
TABLE OF CONTENTS
Page
Section 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . 1
1.2 Interpretation . . . . . . . . . . . . . . . . . . . . . . 12
Section 2. THE CREDIT FACILITY; FEES . . . . . . . . . . . . . . . . 12
2.1 Revolving Loans . . . . . . . . . . . . . . . . . . . . . . 12
2.2 Borrowing Procedure for Revolving Loans . . . . . . . . . . 13
2.3 Continuation and Conversion Procedure . . . . . . . . . . . 14
2.4 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.5 Reduction of Facility . . . . . . . . . . . . . . . . . . . 16
2.6 Interest Rate . . . . . . . . . . . . . . . . . . . . . . . 16
2.7 Payments . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.8 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . 17
2.9 Letters of Credit . . . . . . . . . . . . . . . . . . . . . 17
2.10 Commercial Paper . . . . . . . . . . . . . . . . . . . . . 20
2.11 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.12 Pro Rata Treatment; Sharing of Payments . . . . . . . . . . 21
2.13 Special Provisions . . . . . . . . . . . . . . . . . . . . 22
Section 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . 25
3.1 Organization; Subsidiaries; Corporate Power . . . . . . . . 25
3.2 Authorization and Binding Effect . . . . . . . . . . . . . 25
3.3 Financial Statements . . . . . . . . . . . . . . . . . . . 25
3.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . 26
3.5 Indebtedness; No Default . . . . . . . . . . . . . . . . . 26
3.6 Ownership of Properties; Liens and Encumbrances . . . . . . 26
3.7 Tax Returns Filed . . . . . . . . . . . . . . . . . . . . . 26
3.8 Margin Stock . . . . . . . . . . . . . . . . . . . . . . . 27
3.9 Investment Company . . . . . . . . . . . . . . . . . . . . 27
3.10 ERISA Liabilities . . . . . . . . . . . . . . . . . . . . . 27
3.11 No Burdensome Agreements . . . . . . . . . . . . . . . . . 27
3.12 Trademarks, Etc. . . . . . . . . . . . . . . . . . . . . . 28
3.13 Dump Sites . . . . . . . . . . . . . . . . . . . . . . . . 28
3.14 Tanks . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.15 Other Environmental Conditions . . . . . . . . . . . . . . 28
3.16 Changes in Laws . . . . . . . . . . . . . . . . . . . . . . 29
3.17 Environmental Judgments, Decrees and Orders . . . . . . . . 29
3.18 Environmental Permits and Licenses . . . . . . . . . . . . 29
3.19 Accuracy of Information . . . . . . . . . . . . . . . . . . 29
Section 4. CONDITIONS FOR BORROWING . . . . . . . . . . . . . . . . 29
4.1 On or Before the Closing Date . . . . . . . . . . . . . . . 29
4.2 On or Before Each Subsequent Borrowing Date . . . . . . . . 30
Section 5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . 31
5.1 Annual Financial Statement . . . . . . . . . . . . . . . . 31
5.2 Interim Financial Statements . . . . . . . . . . . . . . . 32
5.3 Other Financial Information . . . . . . . . . . . . . . . . 32
5.4 Books and Records . . . . . . . . . . . . . . . . . . . . . 32
5.5 Inspections . . . . . . . . . . . . . . . . . . . . . . . . 32
5.6 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.7 Condition of Property . . . . . . . . . . . . . . . . . . . 33
5.8 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . 33
5.9 Maintain Existence, Rights and Licenses . . . . . . . . . . 33
5.10 Compliance with Law . . . . . . . . . . . . . . . . . . . . 33
5.11 ERISA Certificate . . . . . . . . . . . . . . . . . . . . . 34
5.12 Compliance with Other Loan Documents . . . . . . . . . . . 34
5.13 Required Notices . . . . . . . . . . . . . . . . . . . . . 34
5.14 Compliance with all Contracts . . . . . . . . . . . . . . . 35
5.15 Notice of Material Adverse Changes . . . . . . . . . . . . 35
5.16 Subsidiary Guaranty . . . . . . . . . . . . . . . . . . . . 35
Section 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . 35
6.1 Limitations on Indebtedness . . . . . . . . . . . . . . . 35
6.2 Limitations on Guaranties . . . . . . . . . . . . . . . . . 36
6.3 Limitations on Liens and Encumbrances . . . . . . . . . . . 36
6.4 Limitations on Mergers, Etc . . . . . . . . . . . . . . . . 36
6.5 Limitations on Advances . . . . . . . . . . . . . . . . . . 37
6.6 Current Ratio . . . . . . . . . . . . . . . . . . . . . . . 37
6.7 Indebtedness to Tangible Net Worth Ratio . . . . . . . . . 37
6.8 Debt Service Coverage Ratio . . . . . . . . . . . . . . . . 37
Section 7. EVENTS OF DEFAULT; REMEDIES . . . . . . . . . . . . . . . 37
7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . 37
7.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 8. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . 40
8.1 Appointment and Duties of Agent . . . . . . . . . . . . . . 40
8.2 Discretion and Liability of the Agent . . . . . . . . . . . 40
8.3 Event of Default . . . . . . . . . . . . . . . . . . . . . 40
8.4 Consultation . . . . . . . . . . . . . . . . . . . . . . . 41
8.5 Communications To and From the Agent . . . . . . . . . . . 41
8.6 Limitations of Agency . . . . . . . . . . . . . . . . . . . 41
8.7 No Representation or Warranty . . . . . . . . . . . . . . . 41
8.8 Bank Credit Decision . . . . . . . . . . . . . . . . . . . 41
8.9 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.10 Resignation or Removal of Agent; Successor Agent . . . . . 42
Section 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 43
9.1 Survival of Representations and Warranties . . . . . . . . 43
9.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . 43
9.3 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.5 Confidentiality . . . . . . . . . . . . . . . . . . . . . . 44
9.6 Participations . . . . . . . . . . . . . . . . . . . . . . 45
9.7 Titles . . . . . . . . . . . . . . . . . . . . . . . . . . 45
9.8 Parties Bound; Waiver . . . . . . . . . . . . . . . . . . . 45
9.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 46
9.10 Submission to Jurisdiction; Service of Process . . . . . . 46
9.11 Entire Agreement . . . . . . . . . . . . . . . . . . . . . 46
9.12 Amendments . . . . . . . . . . . . . . . . . . . . . . . . 46
9.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 47
9.14 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . 47
9.15 Limitation of Liability . . . . . . . . . . . . . . . . . . 47
Exhibits
Exhibit A Note
Exhibit B Opinion of Counsel
Exhibit C Guaranty
Schedules
Schedule 1 Permitted Liens
Schedule 3.4 Litigation and Other Matters
<PAGE>
OSHKOSH TRUCK CORPORATION
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of this 13th day of March, 1996, is
made and entered by and between OSHKOSH TRUCK CORPORATION, a Wisconsin
corporation (the "Company"), FIRSTAR BANK MILWAUKEE, N.A., a national
banking association, BANK ONE, MILWAUKEE, NATIONAL ASSOCIATION, a national
banking association, NATIONSBANK, N.A., a national banking association,
and HARRIS TRUST AND SAVINGS BANK, an Illinois banking corporation
(individually, a "Bank" and, collectively, the "Banks"), and FIRSTAR BANK
MILWAUKEE, N.A., as agent for the Banks (the "Agent").
The Company has applied to the Banks for their several commitments,
subject to the terms and conditions hereof and on the basis of the
representations and warranties hereinafter set forth, to extend credit to
the Company in an aggregate principal amount not to exceed $55,000,000,
the Banks have severally agreed to extend such credit, and the Agent has
agreed to act as the agent for the Banks with respect thereto, all as more
fully hereinafter set forth. Accordingly, the parties hereto agree as
follows:
Section 1. Definitions
1.1 Certain Defined Terms. As used in this Agreement, the
following terms have the following meanings:
"Adjusted Libor Rate" means, with respect to the Loan Period for
a Libor Rate Loan, a rate per annum (rounded upward, if necessary, to the
nearest 1/16 of 1%) determined by the Agent pursuant to the following
formula:
Libor Rate
Adjusted Libor Rate = 100% - Libor Reserve Percentage
+ Libor Margin
"Affiliate" means (a) any person, corporation or other entity
directly or indirectly controlling, controlled by or under common control
with the Company and (b) any director or officer of the Company or any
Subsidiary. A Person shall be deemed to control another Person for the
purposes of this definition if such first Person possesses, directly or
indirectly, the power to direct, or cause the direction of, the management
and policies of the second Person, whether through the ownership of voting
securities, common directors, trustees or officers, by contract or
otherwise.
"Agreement" means this Credit Agreement, as amended, modified or
supplemented from time to time.
"Assessment Rate" means, with respect to calculating a CD Rate,
the assessment rate (rounded upwards, if necessary, to the nearest 1/100
of 1%) imposed by the Federal Deposit Insurance Corporation for insuring a
bank's liability for time deposits, as in effect from time to time.
"Borrowing Date" means each date on which a Revolving Loan is
made to the Company, on which any Type of Revolving Loan is converted to
another Type of Revolving Loan or continued, or on which a Letter of
Credit is issued by the Issuing Bank at the request of the Company.
"Business Day" means any day other than Saturday or Sunday on
which banks in the States of Wisconsin, Illinois, Pennsylvania and North
Carolina are open for the transaction of substantially all their banking
functions; provided, however, that for purposes of determining the
applicable Loan Period for a Libor Rate Loan, references to Business Day
shall include only those days on which dealings in Dollar deposits are
carried out by U.S. financial institutions in the London interbank market.
"Capitalized Lease" means any lease, the obligations under which
have been, or in accordance with GAAP are required to be, recorded as a
capital lease liability on the consolidated balance sheet of the Company
and its Consolidated Subsidiaries.
"Cash Collateral" means cash or cash equivalents satisfactory to
the Agent, held by the Agent for the ratable benefit of the Banks as
security for the Company's obligations under the Loan Documents.
"CD Base Rate" means, for any Loan Period for any CD Rate Loan,
except as provided below, the per annum rate of interest equal to the bid
rate in the secondary market for certificates of deposit having a maturity
approximately equal to the applicable Loan Period which appears on
Telerate Screen Page 5 (or such other page on which the appropriate
information may be displayed), on the electronic communications terminals
in the Agent's money center, as of approximately 11 a.m., Milwaukee time,
on the applicable Borrowing Date. If no bid rate appears for the
applicable Loan Period or if the appropriate screen is not accessible, the
applicable rate shall be determined by the Agent to be the arithmetic
average (rounded upward, if necessary, to the nearest 1/16 of 1%) of the
offered rates, on the applicable Borrowing Date, by the Banks, for the
sale at par of certificates of deposit having a maturity equal to the
applicable Loan Period and in an amount comparable to the principal amount
of the proposed CD Rate Loan to which such Loan Period applies.
"CD Margin" means the Libor Margin plus .25%.
"CD Rate" means, with respect to any Loan Period for any CD Rate
Loan, a rate per annum (rounded upward, if necessary, to the nearest 1/16
of 1%) determined pursuant to the following formula:
CD Base Rate
CD Rate = 100% - CD Reserve Percentage + Assessment Rate
+ CD Margin
"CD Rate Loan" means any Revolving Loan which bears interest at
or by reference to the CD Rate.
"CD Reserve Percentage" means, with respect to CD Rate Loans for
each Loan Period, the stated maximum rate, on the first day of such Loan
Period, of all reserve requirements (including all basic, supplemental,
marginal and other reserves and taking into account any transitional
adjustments or other scheduled changes in reserve requirements during such
Loan Period) specified under Regulation D of the Board of Governors of the
Federal Reserve System, or any other regulation of the Board of Governors
which prescribes reserve requirements applicable to nonpersonal time
deposits as presently defined in Regulation D, as then in effect, as
applicable to the class of banks of which the Agent is a member on
deposits of the type used as a reference in determining the CD Rate and
having a maturity approximately equal to such Loan Period.
"Closing Date" means the first Borrowing Date.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time and the regulations thereunder.
"Commercial Paper" means unsecured debt obligations issued by
the Company from time to time pursuant to commercial paper placement
agreements (or similar agreements) with one or more of the Banks.
"Consolidated Subsidiaries" means Subsidiaries whose financial
statements are consolidated with those of the Company in accordance with
GAAP.
"Controlled Group" means a group of trades or businesses
(whether or not incorporated) under common control, as defined in the
regulations issued pursuant to Section 414(c) of the Code or such other
regulations prescribed by the Pension Benefit Guaranty Corporation
pursuant to Section 4001(b)(1) of ERISA, of which the Company or a
Subsidiary is a part.
"Current Ratio" means the relationship, expressed as a numerical
ratio, between:
(a) the amount of all assets which, under GAAP, would appear as
current assets on the consolidated balance sheet of the Company and its
Consolidated Subsidiaries, and
(b) the amount of all liabilities which, under GAAP, would
appear as current liabilities on such balance sheet of the Company and its
Consolidated Subsidiaries, including all Indebtedness payable on demand or
maturing (whether by reason of specified maturity, fixed prepayments,
sinking funds or accruals of any kind, or otherwise) within 12 months or
less from the date of the relevant statement, all Capitalized Lease
obligations due in 12 months or less and customers' advances and progress
billings on contracts (exclusive of progress payments on Government
Contracts), but excluding the aggregate unpaid principal balance of the
Notes.
"Debt Service Coverage Ratio" means the relationship, expressed
as a numerical ratio, between:
(a) the sum of (i) Net Income, (ii) depreciation, amortization
and other noncash charges, to the extent that they have been deducted in
determining Net Income, and (iii) interest expense (including imputed
interest charges with respect to Capitalized Leases); and
(b) the sum of (i) interest expense (including imputed interest
charges with respect to Capitalized Leases), (ii) scheduled principal
payments with respect to Funded Debt (exclusive of the aggregate unpaid
principal balance of the Notes), and (iii) principal payments made with
respect to Capitalized Leases; all as determined without duplication in
accordance with GAAP for the Company and its Consolidated Subsidiaries for
the period consisting of the four fiscal quarters of the Company
immediately preceding the first day of any fiscal quarter.
"Default" means any act, event, condition or omission which,
with the giving of notice or lapse of time, would constitute an Event of
Default if uncured or unremedied.
"Default Rate" means the annual rate of interest equal to the
applicable rate specified in Section 2.6(a) hereof plus two percentage
points.
"Delinquent Bank" means any Bank that fails to make available to
the Agent its pro rata share of any Revolving Loan or fails to make a
payment to the Issuing Bank pursuant to Section 2.9(b) hereof as, when and
to the full extent required by the provisions of this Agreement, and such
Bank shall be deemed a Delinquent Bank until such time as such delinquency
is satisfied.
"Dollars" and "$" means lawful money of the United States.
"Environmental Laws" means all federal, state and local laws
including statutes, regulations, ordinances, codes, rules and other
governmental restrictions and requirements relating to the discharge of
air pollutants, water pollutants or process waste water or otherwise
relating to the environment or hazardous substances or toxic wastes
including, but not limited to, the Federal Solid Waste Disposal Act, the
Federal Clean Air Act, the Federal Clean Water Act, the Federal Resource
Conservation and Recovery Act of 1976, the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
regulations of the Environmental Protection Agency, regulations of the
Nuclear Regulatory Agency and regulations of any state department of
natural resources or state environmental protection agency now or at any
time hereafter in effect.
"ERISA" means, at any date, the Employee Retirement Income
Security Act of 1974, and the regulations thereunder, all as the same
shall be in effect at such date.
"Event of Default" means the occurrence of any of the events
described in Section 7.1 hereof.
"Extensions of Credit" means, with respect to a Bank, its
Revolving Loan Commitment, Revolving Loans, Letter of Credit Commitment
and Letter of Credit Exposure.
"Facility" means the aggregate of the Revolving Loan Commitments
and the Letter of Credit Commitments.
"Federal Funds Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight, Federal
funds transactions conducted by brokers in Federal funds, as published for
such day by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by it. In the
case of a day which is not a Business Day, the Federal Funds Rate for such
day shall be the Federal Funds Rate for the preceding Business Day.
"Fixed Rate Loan" means a CD Rate Loan or a Libor Rate Loan.
"Funded Debt" means Indebtedness which matures more than one
year from, or is directly or indirectly renewable or extendible at the
option of the debtor to a date more than one year from the date of
creation, including the current maturities thereof but excluding deferred
income taxes.
"GAAP" means generally accepted accounting principles currently
in effect in the United States as they may be changed or supplemented from
time to time.
"Government Contracts" means contracts between the Company and
the United States government under which the Company will manufacture
goods for the United States government.
"Guaranty" means any agreement, undertaking or arrangement
pursuant to which the Company or any Subsidiary guarantees, endorses or
otherwise becomes or is contingently liable for an obligation of any other
person or entity or any other liability which would be classified as
contingent in accordance with GAAP.
"Indebtedness" means (a) all items which, in accordance with
GAAP, would be classified as liabilities on the consolidated balance sheet
of the Company and its Consolidated Subsidiaries, including all
Capitalized Leases, and (b) indebtedness secured by any mortgage, lien,
pledge or security interest on property of the Company or a Consolidated
Subsidiary even though it has not assumed or otherwise become liable for
the payment thereof.
"Issuing Bank" means the Bank appointed by the Company, which
shall be one of the Banks and which shall have accepted such appointment,
which issues or will issue a Letter of Credit.
"Letter of Credit" means a letter of credit issued by the
Issuing Bank at the request of the Company pursuant to Section 2.9 hereof
and "Letters of Credit" means all such letters of credit.
"Letter of Credit Commitment" means, as to each Bank, such
Bank's Percentage of the aggregate amount of the Letter of Credit
Commitments. The aggregate amount of the Letter of Credit Commitments is
$55,000,000 less the sum of the amount of the aggregate outstanding
principal balances of the Notes and the aggregate outstanding principal
balances of Commercial Paper, and is subject to reduction from time to
time pursuant Section 2.5 hereof. The amount of the Letter of Credit
Exposure plus the sum of the aggregate outstanding balances of the Notes
and the aggregate outstanding principal balances of Commercial Paper may
not exceed $55,000,000 at any time. Each Bank's Revolving Loan Commitment
shall be reduced by an amount equal to such Bank's Percentage of the
Letter of Credit Exposure.
"Letter of Credit Exposure" means, at any time, the sum of (a)
the aggregate amount then available for drawing under all outstanding
Letters of Credit and (b) the Reimbursement Obligations.
"Libor Margin" means, at any time, (a) .50% if the sum of (i)
the aggregate outstanding principal balances of the Notes, (ii) the
aggregate outstanding principal balances of Commercial Paper, and (iii)
the amount of the Letter of Credit Exposure does not exceed $25,000,000,
or (b) .75% if such sum exceeds $25,000,000.
"Libor Rate" means, for any Loan Period for any Libor Rate Loan,
the per annum rate of interest determined by the Agent to be the
arithmetic average (rounded upward, if necessary to the nearest 1/16 of
1%) of the offered rates for deposits in Dollars for the applicable Loan
Period commencing on the applicable Borrowing Date which appear on the
Reuters Screen LIBO Page (or such other page on which the appropriate
information may be displayed), on the electronic communications terminals
in the Agent's money center, as of 11 a.m., London time, two Business Days
preceding the applicable Borrowing Date, except as provided below. If
fewer than two offered rates appear for the applicable Loan Period or if
the appropriate screen is not accessible, the applicable rate will be
determined on the basis of the rates at which deposits in Dollars are
offered by the Reference Banks at approximately 11 a.m., London time, two
Business Days preceding the applicable Borrowing Date to prime banks in
the London interbank market for the applicable Loan Period and in an
amount equal to the principal balance of the applicable Libor Rate Loan.
The Agent will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the applicable rate will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as
requested, the applicable rate will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Agent, at
approximately 11 a.m., New York City time, two Business Days preceding the
applicable Borrowing Date for loans in Dollars to leading European banks
for the applicable Loan Period and in an amount equal to the principal
balance of the applicable Libor Rate Loan.
"Libor Rate Loan" means any Revolving Loan which bears interest
at or by reference to the Adjusted Libor Rate.
"Libor Reserve Percentage" means, with respect to Libor Rate
Loans for each Loan Period, the stated maximum rate of all reserve
requirements (including all basic, supplemental, marginal and other
reserves and taking into account any transitional adjustments or other
scheduled changes in reserve requirements during such Loan Period) that is
specified on the first day of such Loan Period by the Board of Governors
of the Federal Reserve System for determining the maximum reserve
requirement with respect to eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of such Board of Governors)
applicable to the class of banks of which the Agent is a member.
"Loan Documents" means this Agreement, the Notes, all Letters of
Credit, all applications for Letters of Credit and all reimbursement
agreements between the Company and the Issuing Bank, and "Loan Document"
means any of the Loan Documents.
"Loan Period" means:
(a) with respect to each Fixed Rate Loan, the period commencing
on the applicable Borrowing Date and ending 1, 2, 3, 4 or 6 months
thereafter in the case of a Libor Rate Loan, and 30, 60, 90, 120 or 180
days thereafter in the case of a CD Rate Loan, as specified by the Company
in the related notice of borrowing pursuant to Section 2.2 hereof, and
with respect to a Reference Rate Loan converted to a Fixed Rate Loan, or
in the case of one Type of Fixed Rate Loan converted to another Type of
Fixed Rate Loan, or in the case of a continuation of a Fixed Rate Loan for
an additional Loan Period, the period commencing on the date of such
conversion or continuation and ending 1, 2, 3, 4 or 6 months thereafter in
the case of a conversion to or continuation of a Libor Rate Loan, and 30,
60, 90, 120 or 180 days thereafter in the case of a conversion to or
continuation of a CD Rate Loan, as specified by the Company in the related
notice pursuant to Section 2.3 hereof, provided that:
(i) any Loan Period which would otherwise end on a
day which is not a Business Day shall be extended to the next succeeding
Business Day unless in the case of a Libor Rate Loan such Business Day
falls in another calendar month, in which case such Loan Period shall end
on the next preceding Business Day;
(ii) any Loan Period which begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in a calendar month at the end of such Loan Period)
shall, subject to clause (iii) below, end on the last Business Day of a
calendar month; and
(iii) any Loan Period which would otherwise end after
the Maturity Date shall end on the Maturity Date.
(b) with respect to each Reference Rate Loan, the period
commencing on the Borrowing Date of such Reference Rate Loan, or in the
case of a Fixed Rate Loan converted to a Reference Rate Loan, the period
commencing on the date of such conversion and ending on the Maturity Date
or date of repayment of such Reference Rate Loan or date of conversion of
all or part of such Reference Rate Loan to a Fixed Rate Loan.
"Majority Banks" means the Banks whose aggregate Percentage is
greater than 50%.
"Maturity Date" means March 13, 1999 or such earlier date on
which (a) the Agent declares the Notes to be immediately due and payable
pursuant to Section 7.2 hereof, or (b) the Company permanently reduces the
Revolving Loan Commitments to zero pursuant to Section 2.5 hereof.
"Multiemployer Plan" means any pension benefit plan subject to
Title IV of ERISA as defined in Section 4001(a)(3) of ERISA, to which the
Company, any of its Subsidiaries or any member of the Controlled Group is
required to contribute on behalf of its employees.
"Net Income" means the excess of:
(a) all revenues and income derived from operations in the
ordinary course of business (including extraordinary gains and gains upon
the disposition of investments and fixed assets), over
(b) all expenses and other proper charges against income
(including payment or provision for all applicable income and other taxes,
and including extraordinary losses and losses upon the disposition of
investments and fixed assets);
all as determined in accordance with GAAP, applied on a consistent basis
to the Company and its Consolidated Subsidiaries.
"Note" means a promissory note of the Company in the form of
Exhibit A attached hereto, appropriately completed, payable to the order
of a Bank in an amount equal to such Bank's Revolving Loan Commitment,
such Note to evidence Revolving Loans made by a Bank to the Company, and
"Notes" means all such promissory notes.
"Percentage" means, for each Bank, the percentage, set forth
opposite its signature hereto.
"Permitted Liens" means (a) liens, charges or encumbrances
listed on Schedule 1 attached hereto, provided that the indebtedness
secured thereby shall not be increased; (b) liens for taxes, assessments
or governmental charges not delinquent or being contested in good faith by
appropriate proceedings diligently conducted by the Company or any
Subsidiary for which adequate reserves are established and maintained in
accordance with GAAP; (c) construction, mechanics, or other statutory lien
claims not delinquent; (d) purchase money security interests or liens on
any property acquired after the date hereof to be used by the Company or a
Subsidiary in the normal course of its business, and created or incurred
simultaneously with the acquisition of such property, if such security
interest or lien is limited to the property so acquired, the Indebtedness
secured by such security interest or lien does not exceed the purchase
price of such property and the aggregate Indebtedness secured by all
security interests and liens on all such property does not exceed
$10,000,000 at any time outstanding for the Company and all Consolidated
Subsidiaries; (e) liens or deposits in connection with worker's
compensation or other insurance or to secure the performance of bids,
trade contracts (other than for borrowed money), leases, public or
statutory obligations, surety or appeal bonds or other obligations of like
nature incurred in the ordinary course of business; (f) liens in favor of
the Agent for the benefit of the Banks; (g) liens in favor of the United
States government on goods being manufactured for the United States
government and on other property (as defined in the applicable Government
Contract) required to be delivered to the United States government under
such Government Contract to secure unliquidated progress payments on such
Government Contracts; and (h) easements, restrictions, minor title
irregularities and similar matters which have no material adverse effect
upon the ownership or use of its property by the Company or any
Consolidated Subsidiary; and (i) liens arising out of any lease (whether
or not recorded as a Capitalized Lease) if such lien is limited to the
property leased thereunder and secures only the amounts to be paid
thereunder.
"Plan" means any pension benefit plan subject to Title IV of
ERISA, including any Multiemployer Plan, maintained by the Company, any of
its Subsidiaries or any member of the Controlled Group or any such Plan to
which the Company, any of its Subsidiaries or any member of the Controlled
Group is required to contribute on behalf of its employees.
"Reference Banks" means four major banks in the London interbank
market, as selected by the Agent.
"Reference Rate" means the rate of interest announced by the
Agent from time to time as its reference or prime rate for interest rate
determinations. The Reference Rate may not be the lowest interest rate
charged by the Agent.
"Reference Rate Loan" means any Revolving Loan which bears
interest at or by reference to the Reference Rate.
"Regulatory Change" means any change enacted or issued after the
date of this Agreement of any (or the adoption after the date of this
Agreement of any new) federal or state law, regulation, interpretation,
direction, policy or guideline, or any court decision, which affects (or,
in the case of a court decision would, if the decision were applicable to
any Bank, affect) the treatment of any Extensions of Credit of such Bank.
"Reimbursement Obligations" means, at any time, the aggregate
amount of drafts honored under Letters of Credit for which the Agent has
not been paid pursuant to Section 2.9(c) hereof.
"Reportable Event" means a reportable event as that term is
defined in ERISA.
"Revolving Loan" means a loan made by the Banks to the Company
pursuant to Section 2.1 hereof.
"Revolving Loan Commitment" means, as to a Bank, the obligation
of such Bank to make its pro rata share of Revolving Loans to the Company.
The aggregate amount of the Revolving Loan Commitments is $55,000,000 less
the sum of the amount of the Letter of Credit Exposure and the aggregate
outstanding principal balances of Commercial Paper, and is subject to
reduction from time to time pursuant to Section 2.5 hereof. The aggregate
outstanding principal balances of the Notes plus the sum of the amount of
the Letter of Credit Exposure and the aggregate outstanding principal
balances of Commercial Paper may not exceed $55,000,000 at any time. The
Revolving Loan Commitment of each Bank is such Bank's Percentage of the
aggregate of the Revolving Loan Commitments.
"Subsidiary" means as of a particular date any corporation more
than 50% of whose outstanding stock having ordinary voting power for the
election of directors shall at the time be owned or controlled by the
Company or by one or more of its Subsidiaries.
"Tangible Net Worth" means the total of all assets which, under
GAAP, would appear on the consolidated balance sheet of the Company and
its Consolidated Subsidiaries, less the sum of the following:
(a) the book amount of all such assets which would be treated
as intangibles under GAAP, including, without limitation, all such items
as goodwill, noncompete agreements, trademarks, trademark rights, trade
names, trade name rights, brands, copyrights, patents, patent rights,
licenses, deferred charges and unamortized debt discount and expense;
(b) any net write-up in the book value of any such assets
resulting from a revaluation thereof subsequent to the date of the most
recent financial statement referred to in Section 3.3 hereof;
(c) all reserves, including reserves for depreciation,
obsolescence, depletion, insurance and inventory valuation, but excluding
contingency reserves not allocated for any particular purpose and not
deducted from assets;
(d) the amount, if any, at which any shares of stock of the
Company or any Subsidiary appear on the asset side of such consolidated
balance sheet;
(e) all liabilities of the Company and its Consolidated
Subsidiaries shown on such consolidated balance sheet; and
(f) all investments in foreign Affiliates and unconsolidated
domestic Affiliates.
"Type" means each type of loan, i.e., a Reference Rate Loan, a
CD Rate Loan or a Libor Rate Loan.
1.2 Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined.
Where the character or amount of any asset or liability or item of income
or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, it shall be done in accordance with GAAP except where such
principles are inconsistent with the specific provisions of this
Agreement. The words "hereof," "herein," and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement, and
terms defined in other sections of this Agreement shall have the meanings
set forth therein.
Section 2. The Credit Facility; Fees
2.1 Revolving Loans. Each Bank will make its pro rata share of
each Revolving Loan to the Company, subject to the terms and conditions
hereof, in an amount equal to such Bank's Percentage of the amount of the
Revolving Loan requested by the Company on the applicable Borrowing Date,
up to the maximum amount of such Bank's Revolving Loan Commitment, at any
time outstanding during the period from the date hereof to the Maturity
Date. Within such maximum amount, Revolving Loans may be made, repaid and
made again. The aggregate amount of Revolving Loans made on each
Borrowing Date shall be in a minimum amount of $250,000 and in integral
multiples of $250,000 above such minimum in the case of a Reference Rate
Loan, except for a Reference Rate Loan made pursuant to Section 2.9(c)
hereof, and in a minimum amount of $1,000,000 and in integral multiples of
$1,000,000 above such Minimum in the case of a Fixed Rate Loan. The
Revolving Loans made by a Bank shall be evidenced by a Note payable to the
order of such Bank, payable on the Maturity Date. Although each Note
shall be expressed to be payable in the amount of the payee Bank's initial
Revolving Loan Commitment, the Company shall be obligated to pay only the
amount of Revolving Loans actually disbursed to or for the account of the
Company by the payee Bank, together with interest on the unpaid balance of
the sums so disbursed, which remain outstanding from time to time as shown
on the records of the payee Bank absent manifest error.
2.2 Borrowing Procedure for Revolving Loans.
(a) The Company shall request Revolving Loans by written
notice, or by telephonic notice confirmed in writing mailed the same day
(which notice shall be irrevocable), to the Agent not later than 10:30
a.m., Milwaukee time, on the proposed Borrowing Date in the case of a
Reference Rate Loan, by 10:30 a.m., Milwaukee time, three Business Days
prior to the proposed Borrowing Date in the case of a Libor Rate Loan, or
by 10:30 a.m., Milwaukee time, one Business Day prior to the proposed
Borrowing Date in the case of a CD Rate Loan. In the event of any
inconsistency between the telephonic notice and the written confirmation
thereof, the telephonic notice shall control. Each such request shall be
effective upon receipt by the Agent and shall specify (i) the amount of
the requested Revolving Loan, (ii) the proposed Borrowing Date, (iii) the
Type of Revolving Loan and (iv) in the case of a Fixed Rate Loan, the Loan
Period therefor. Each such request for an advance shall constitute a
certification by the Company that the borrowing conditions specified in
Sections 4.2(b) and 4.2(c) hereof will be satisfied on the proposed
Borrowing Date. The Agent will promptly notify the Banks of the requested
Revolving Loan. On or before 1 p.m., Milwaukee time, on the Borrowing
Date each Bank shall, except as otherwise provided in Sections 2.12(b) or
(c) hereof, deposit its Percentage of the requested Revolving Loan with
the Agent in immediately available funds. Upon fulfillment of the
applicable borrowing conditions, the Agent shall deposit the Revolving
Loan, except as provided in Section 2.12(a) hereof with respect to
Reference Rate Loans made pursuant to Section 2.9(c) hereof, in the
Company's account maintained with the Agent or as the Company may
otherwise direct in writing. All advances of all Types of Revolving Loans
shall be pro rata among the Banks according to each Bank's Percentage of
such Revolving Loans.
(b) Unless the Agent shall have been notified by
telephone, confirmed promptly thereafter in writing, by a Bank not later
than 1 p.m., Milwaukee time, on a Borrowing Date that such Bank will not
make available to the Agent such Bank's Percentage of the requested
Revolving Loan, the Agent may assume that such Bank has made such amount
available to the Agent and, in reliance upon such assumption, make
available to the Company on such Borrowing Date a corresponding amount.
If and to the extent that such Bank, without giving such notice, shall not
have so made such amount available to the Agent, other than in accordance
with Sections 2.12(b) or (c) hereof, such Bank and the Company severally
agree to repay the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date the Agent made
such amount available to the Company to the date such amount is repaid to
the Agent, at (i) in the case of the Company, the interest rate specified
in Section 2.6(a) hereof and (ii) in the case of such Bank, the Federal
Funds Rate for each of the first three days (or fraction thereof) after
the date of demand and the interest rate specified in Section 2.6(a)
hereof for each day (or fraction thereof) thereafter.
(c) The failure of any Bank to make its pro rata share of
a Revolving Loan shall not relieve any other Bank of its obligation
hereunder to make its pro rata share of a Revolving Loan on the applicable
Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Revolving Loan to be made by such other Bank on the
applicable Borrowing Date.
2.3 Continuation and Conversion Procedure.
(a) The Company may elect from time to time, subject to
the terms and conditions of this Agreement, to convert all or a portion of
the outstanding Reference Rate Loans to Fixed Rate Loans, or to convert a
Type of Fixed Rate Loan to another Type of Fixed Rate Loan (in each case,
in a minimum amount of $1,000,000 and an integral multiple of $1,000,000
above such minimum) or to convert all or a portion of a Fixed Rate Loan to
a Reference Rate Loan; provided that any conversion of a Fixed Rate Loan
shall occur on the last day of the applicable Loan Period.
(b) A Reference Rate Loan shall continue as a Reference
Rate Loan unless and until converted to a Fixed Rate Loan. At the end of
the applicable Loan Period for a Fixed Rate Loan, such Fixed Rate Loan
shall automatically be converted into a Reference Rate Loan unless the
Company shall have given the Agent notice in accordance with Section
2.3(c) hereof requesting that, at the end of such Loan Period, all or a
portion of such Fixed Rate Loan be converted to another Type of Fixed Rate
Loan or continued as a Fixed Rate Loan of the same Type.
(c) The Company shall give the Agent irrevocable notice (a
Conversion/Continuation Notice) of each conversion of a Revolving Loan or
continuation of a Fixed Rate Loan not later than 10:30 a.m., Milwaukee
time, on the date of the requested conversion, in the case of a conversion
to a Reference Rate Loan, or, in the case of a conversion to or a
continuation of a Libor Rate Loan, three Business Days prior to the date
of the requested conversion or continuation, or, in the case of a
conversion to or continuation of a CD Rate Loan, one Business Day prior to
the date of the requested conversion or continuation, specifying (i) the
requested date (which shall be a Business Day) of such conversion or
continuation, (ii) the amount and Type of Revolving Loan to be converted
or continued and (iii) the amount and Type of the Revolving Loan into
which such Revolving Loan is to be converted or continued, and in the case
of a conversion to or continuation of a Fixed Rate Loan, the duration of
the Loan Period applicable thereto.
(d) Notwithstanding anything to the contrary contained in
this Section, no Revolving Loan may be converted into or continued as a
Fixed Rate Loan when any Default or Event of Default has occurred and is
continuing.
2.4 Fees.
(a) Commitment Fee. As consideration for each Bank's
making its pro rata share of the Facility available, the Company will pay
to the Agent, for the account of the Banks, on the last Business Day of
each fiscal quarter of the Company commencing with the quarter ending
March 31, 1996, and on the Maturity Date, a commitment fee equal to one-
eighth of 1% of the daily average unused amount of the Facility during the
preceding quarter or other applicable period; provided that for purposes
of computing the commitment fee due on March 31, 1996, the applicable
period shall be the date of this Agreement through March 31, 1996.
Commitment fees shall be calculated for the actual number of days elapsed
on the basis of a 360-day year. For the purposes of such calculation, the
unused amount of the Facility at any time shall be the amount of the
Facility less the aggregate amount then outstanding under all of the
Notes, and shall be determined without regard to the amount of the Letter
of Credit Exposure or the aggregate outstanding principal balances of
Commercial Paper.
(b) Agent's Fee. The Company agrees to pay to the Agent,
for the sole benefit of the Agent, an Agent's fee in such amounts, at such
times, and upon the terms and conditions as set forth in that certain
letter-form agreement, dated the date hereof, between the Company and the
Agent, as the same may be amended, modified or supplemented from time to
time.
(c) Letter of Credit Commission. The Company agrees to
pay to each Issuing Bank, for the ratable benefit of the Banks, on the
last Business Day of each fiscal quarter of the Company commencing with
the quarter ending March 31, 1996, and on the Maturity Date, a commission
at a rate per annum equal to the Libor Margin, in effect on such last
Business Day, times the daily average face amount of Letters of Credit
issued by such Bank at any time, but outstanding at any time during the
preceding quarter or other applicable period; provided that for purposes
of computing the commission due on March 31, 1996, the applicable period
shall be the date of this Agreement through March 31, 1996. Commissions
shall be calculated for the actual number of days elapsed on the basis of
a 360-day year.
(d) Issuing Bank Fees. The Company agrees to pay to the
Issuing Banks, for their own account, in connection with the issuance and
maintenance of the Letters of Credit hereunder, such fees as may be agreed
upon by the Company and Issuing Bank whether by way of letter agreement or
otherwise.
2.5 Reduction of Facility. The Company may, upon one Business
Day's prior written notice to the Agent, permanently reduce the aggregate
amount of the Facility; provided that no such reduction shall reduce the
aggregate amount of the Facility to an amount less than the aggregate
unpaid principal balance of the Notes, plus the sum of the Letter of
Credit Exposure and the aggregate outstanding principal balances of
Commercial Paper, on the effective date of such reduction. Each reduction
in the Facility shall be in a minimum amount of $1,000,000 and in integral
multiples of $1,000,000 above such minimum. Each reduction in the
Facility shall ratably reduce each Bank's Revolving Loan Commitment and
Letter of Credit Commitment.
2.6 Interest Rate.
(a) The unpaid principal balance of the Revolving Loans
outstanding from time to time shall bear interest for the period
commencing on the Borrowing Date of such Revolving Loan until such
Revolving Loan is paid in full. Each Reference Rate Loan shall bear
interest at the Reference Rate, each CD Rate Loan shall bear interest at
the applicable CD Rate, and each Libor Rate Loan shall bear interest at
the applicable Adjusted Libor Rate. In the case of a Reference Rate Loan,
accrued interest shall be due on the last Business Day of each month,
commencing March 31, 1996, and on the Maturity Date. In the case of a
Fixed Rate Loan, accrued interest shall be due on the last day of the
applicable Loan Period.
(b) Notwithstanding the provisions of Section 2.6(a)
above, after 15 days' notice from the Agent to the Company of the
occurrence and during the continuance of an Event of Default, other than
an Event of Default described in Section 7.1 (a) hereof, the unpaid
principal balance of each Note shall bear interest at the Default Rate.
Upon the occurrence and during the continuance of an Event of Default
described in Section 7.1(a) hereof, the unpaid principal balance of each
Note shall bear interest at the Default Rate. On and after the Maturity
Date, the unpaid principal balance of the Notes and all accrued interest
thereon shall bear interest at the Default Rate until paid.
(c) Interest shall be calculated for the actual number of
days elapsed on the basis of a 360-day year.
2.7 Payments. Except as otherwise provided in this Agreement,
all payments of principal and interest on the Notes, the Reimbursement
Obligations and all fees due hereunder shall be made at the office of the
Agent, for the account of the Banks, in immediately available funds not
later than 11 a.m., Milwaukee time, on the date due; funds received after
that time shall be deemed to have been received on the next Business Day.
The Agent may charge the Company's Account No. 111501414 at the Agent for
any payment due under the Notes, the Reimbursement Obligations or any fee
or expense payable hereunder, on or after the date due, but the inadequacy
of such deposit shall not impair or affect the Company's obligation to pay
such interest, which is absolute and unconditional. The Agent shall
forward to each Bank, promptly after receipt, such Bank's share of such
payments received by the Agent. Whenever any payment to be made shall
otherwise be due on a day which is not a Business Day, such payment shall
be made on the next succeeding Business Day, except that if such payment
is in connection with a Libor Rate Loan, such payment shall be made on the
next preceding Business Day, and such extension or reduction of time shall
be included in computing interest and fees, if any, in connection with
such payment.
2.8 Prepayments. Reference Rate Loans may be prepaid, in whole
or in part, at any time without premium or penalty. Each Fixed Rate Loan
is payable at the end of the applicable Loan Period and may not be
prepaid. Any prepayment of a Reference Rate Loan shall be made in
accordance with the provisions of Section 2.7 hereof. Each prepayment
shall be in a minimum amount of $500,000 and in integral multiples of
$500,000 above such minimum.
2.9 Letters of Credit.
(a) Issuance. The Issuing Bank will issue Letters of
Credit which it may lawfully issue, in Dollars, for the account of the
Company, subject to the terms and conditions hereof, at any time during
the period from the Closing Date to the Maturity Date; provided that the
amount available for drawing under all Letters of Credit, plus the Letter
of Credit Exposure as of the applicable Borrowing Date, shall not exceed
the aggregate Letter of Credit Commitments and, provided further, that no
Letter of Credit shall have an initial expiry date later than the Maturity
Date, except that Letters of Credit in an aggregate face amount not
exceeding $5,000,000 at any time outstanding may have an initial expiry
date not later than 12 months after the Maturity Date. By 12 p.m.,
Milwaukee time, at least one Business Day prior to the proposed Borrowing
Date of a Letter of Credit, the Company shall deliver to the Issuing Bank
a duly executed application and agreement for such Letter of Credit, in
form and content satisfactory to the Issuing Bank; provided, however, one
Business Day's notice will not be required if a properly completed, duly
executed application and agreement and one of the forms of letters of
credit, in such form and content as is satisfactory to the Issuing Bank,
is delivered to the Issuing Bank not later than 10:30 a.m., Milwaukee
time, on the proposed Borrowing Date. No Letter of Credit shall be issued
hereunder unless on the proposed Borrowing Date all of the conditions
precedent specified in Section 4.2 hereof shall have been satisfied as
fully as if the issuance of such Letter of Credit were a Revolving Loan,
but each Letter of Credit, which was issued by one of the Banks prior to
the date hereof, and which is outstanding on the date hereof, shall be,
for the purposes of this Agreement, deemed to have been issued under the
terms and conditions of this Agreement (except no further fee for the
issuance thereof shall be payable hereunder), but shall remain subject to
the application and agreement with the Issuing Bank for each such
outstanding Letter of Credit. The Issuing Bank shall promptly upon the
issuance of each Letter of Credit notify each Bank of the type and amount
of the Letter of Credit, and the beneficiary and expiration date of each
such Letter of Credit.
(b) Participations. Effective upon the issuance of each
Letter of Credit, the Issuing Bank sells to the other Banks and the other
Banks purchase from the Issuing Bank an undivided fractional interest in
the liability of the Issuing Bank represented by such Letter of Credit and
the obligations of the Company with respect thereto (except for the
amounts owing to the Issuing Bank pursuant to Section 2.9(d) hereof) as
evidenced by the Loan Documents. The undivided fractional interest
acquired by each Bank shall equal such Bank's Percentage. Upon receipt of
a draft presented under a Letter of Credit, the Issuing Bank shall notify
the Company, the Agent and the Banks of the amount of such draft and the
date on which it will honor such draft. On the Business Day following the
date any draft under a Letter of Credit is honored by the Issuing Bank,
unless the Company has received a Reference Rate Loan for the amount of
such draft or has timely paid to the Agent the amount of such draft
pursuant to Section 2.9(c) hereof, each Bank shall pay to the Issuing Bank
an amount equal to its Percentage of the amount of such draft. If the
Company requests a Reference Rate Loan pursuant to Section 2.9(c) hereof,
each Bank shall make its Percentage of such Reference Rate Loan available
to the Agent in accordance with the provisions of Section 2.2(b) hereof.
(c) Reimbursement Obligation. The notice from the Issuing
Bank, pursuant to Section 2.9(b) hereof, to the Company, the Agent and the
Banks, of its intent to honor a draft presented under a Letter of Credit,
shall constitute a request by the Company pursuant to Section 2.2(a)
hereof for a Reference Rate Loan equal to the amount of the draft to be
honored, to be made on the date the Issuing Bank honors the draft, and
shall constitute a certification by the Company that the borrowing
conditions specified in Sections 4.2(b) and 4.2(c) hereof will be
satisfied on the proposed Borrowing Date; provided, however, if the
Company can not satisfy the borrowing conditions specified in Sections
4.2(b) and 4.2(c) hereof, it shall promptly so notify the Agent and the
Banks. If the Company cannot satisfy the borrowing conditions specified
in Sections 4.2(b) and 4.2(c) hereof or if the amount of such requested
Reference Rate Loan, together with the aggregate amount of all Revolving
Loans then outstanding, exceeds the aggregate Revolving Loan Commitments
of the Banks, the Company agrees to pay to the Agent the amount of the
draft honored by the Issuing Bank, on the date such draft is honored, with
interest (based on actual days elapsed and a 360-day year) upon such
amount at the Default Rate from the date such draft is paid by the Issuing
Bank to the date when the Company pays the amount of the draft in full.
The obligation of the Company to pay to the Agent the amount of any
payment made by the Issuing Bank under any Letter of Credit shall be
absolute, unconditional and irrevocable and shall remain in full force and
effect until all amounts owed by the Company to the Banks hereunder and
under any Loan Document shall have been paid in full and such obligation
of the Company shall not be affected, modified or impaired upon the
happening, of any event, including, without limitation, any of the
following, whether or not with notice to, or the consent of, the Company:
(i) any lack of validity or enforceability of any
Letter of Credit or any Loan Document;
(ii) any amendment, modification, waiver, consent, or
any substitution, exchange or release of or failure to perfect any
interest in collateral or security, with respect to any Loan Document;
(iii) the existence of any claim, setoff, defense or
other right which the Company may have at any time against any beneficiary
or any transferee of any Letter of Credit (or any persons for whom any
such beneficiary or any such transferee may be acting);
(iv) any draft or other statement or document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(v) payment by the Issuing Bank to the beneficiary
under any Letter of Credit against presentation of documents which do not
strictly comply with the terms of the Letter of Credit, including failure
of any documents to bear any reference or adequate reference to such
Letter of Credit; and
(vi) any failure, omission, delay or lack on the part
of the Issuing Bank or any party to any Loan Document to enforce, assert
or exercise any right, power or remedy conferred upon the Issuing Bank or
any such other party;
provided in each case that the Company shall be obligated to pay such
amount only if the draft and other documents presented reasonably appear
to comply with the terms of such Letter of Credit.
(d) Issuance and Negotiation Fees and Expenses. The
Company shall pay to the Issuing Bank, on demand, the issuance and
negotiation fees of the Issuing Bank which the Company and the Issuing
Bank have agreed upon and all out-of-pocket fees and expenses paid or
incurred by the Issuing Bank in connection with the issuance, amendment or
administration of each Letter of Credit and the honoring of drafts
presented thereunder.
(e) Cash Collateral. If on the Maturity Date any Letter
of Credit remains outstanding, the Company shall either make arrangements
satisfactory to the Majority Banks for the assumption of liabilities
created by any such issued and unexpired Letter of Credit or, in the
absence of such satisfactory arrangements, the Company shall deliver to
the Agent, for the benefit of the Banks, Cash Collateral in an aggregate
principal amount equal to 110% of the Letter of Credit Exposure. The
unapplied balance of such Cash Collateral shall be paid by the Agent to
the Banks to reimburse the Banks for any amounts paid by them to the
Issuing Bank for drafts honored by the Issuing Bank under the unexpired
Letters of Credit and any excess shall be returned to the Company on and
to the extent the Letters of Credit expire without draw.
2.10 Commercial Paper.
(a) The Company may issue Commercial Paper from time to
time through one or more of the Banks. The aggregate face amount of all
outstanding Commercial Paper shall not at any time exceed $25,000,000, and
no Commercial Paper shall have a term to maturity greater than 100 days.
(b) The Company shall pay a Commercial Paper placement fee
in respect of Commercial Paper placed by any of the Banks computed at a
rate of one-quarter of one percent (1/4%) per annum of the aggregate face
amount of such Commercial Paper, payable at the time such Commercial paper
is issued as follows: (i) one-eighth of one percent (1/8%) to the Bank
acting as placement agent for the sale of such Commercial paper, for its
own account, and (ii) one-eighth of one percent (1/8%) to the Agent for
the ratable benefit of the Banks.
(c) The Company will give written notice to the Agent on
each Business Day on which there is any change in the aggregate
outstanding face amount of Commercial Paper, setting forth the aggregate
principal amount of all Commercial Paper then outstanding after giving
effect to the issuance or repayment of Commercial Paper taking place on
such Business Day.
(d) In the event the Company fails to pay any Commercial
paper in full upon the maturity thereof, then the amount not so paid shall
be automatically converted into (and the Company shall be deemed to have
given notice requesting) a Reference Rate Loan, the proceeds of which
shall be used solely to pay such amount.
(e) If on the Maturity Date any Commercial Paper remains
outstanding, the Company shall either make arrangements satisfactory to
the Bank which acted as the placement agent for the sale of such
Commercial Paper for the payment of any such outstanding Commercial Paper
or, in the absence of such satisfactory arrangements, the Company shall
deliver to such Banks Cash Collateral in an aggregate principal amount
equal to 100% of the amount to be paid upon the maturity thereof.
2.11 Setoff. Each Bank shall have the right, upon a declaration
of the Agent pursuant to Section 7.2(b) hereof, to apply to the payment of
the Note held by such Bank (whether or not then due) and such Bank's
Percentage of the Reimbursement Obligations, any and all balances,
credits, deposits, accounts or monies of the Company then or thereafter
maintained with such Bank. Each Bank agrees to notify the Company and the
Agent after any such setoff and application made by such Bank; provided,
however, that the failure to give such notice shall not affect the
validity of such setoff and application.
2.12 Pro Rata Treatment; Sharing of Payments.
(a) Except as otherwise provided in this Agreement, upon
receipt by the Agent of payments of principal, interest, Reimbursement
Obligations, fees and expenses, the Agent shall promptly distribute to
each Bank or holder of a Note the amount of such payment received by the
Agent for the ratable account of that Bank or holder. The proceeds of any
Reference Rate Loan made pursuant to Section 2.9(c) hereof, shall be
distributed by the Agent to the Issuing Bank prior to 3 p.m., Milwaukee
time, on the applicable Borrowing Date. Any payment to the Agent received
by 11 a.m., Milwaukee time, for the ratable account of a Bank or holder of
a Note shall constitute a payment by the Company to such Bank or holder of
the amount so paid to the Agent, and any Notes or portions thereof or
Reimbursement Obligations so paid shall not be considered outstanding for
any purpose after the date of such payment to the Agent. If any Bank
shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of setoff or otherwise) in excess of its pro
rata share of payments then or therewith obtained by all Banks, such Bank
shall immediately purchase, without recourse and for cash, from the other
Banks, such participations in the Notes and Letter of Credit Exposure of
such other Banks so that each Bank shall thereafter have a percentage
interest in all of such obligations equal to such Bank's Percentage;
provided, however, that if any payment so received shall be recovered in
whole or in part from such purchasing Bank, the purchase shall be
rescinded and the purchase price restored to the extent of any such
recovery, but without interest. The Company agrees that any Bank so
purchasing a participation from another Bank pursuant to this Section may,
to the fullest extent permitted by law, exercise all of its rights of
payment (including its right of setoff) with respect to such participation
as if such Bank were the direct creditor of the Company in the amount of
such participation.
(b) A Delinquent Bank shall be deemed to have assigned any
and all payments due to it from the Company to the nondelinquent Banks for
application to, and reduction of, their respective pro rata shares of all
outstanding Revolving Loans and Letters of Credit. The Delinquent Bank
hereby authorizes the Agent to distribute such payments to the
nondelinquent Banks in proportion to their respective pro rata shares of
all outstanding Revolving Loans and Letters of Credit. A Delinquent Bank
shall be deemed to have satisfied in full a delinquency when and if, as a
result of application of the assigned payment to the nondelinquent Banks,
the Banks' respective pro rata shares of all outstanding Revolving Loans
and Letter of Credit Exposure shall return to those in effect immediately
prior to such delinquency.
2.13 Special Provisions.
(a) If any Regulatory Change,
(i) shall subject any Bank to any tax, duty or other
charge with respect to any of its Extensions of Credit, or shall change
the basis of taxation of payments to any Bank of the principal of or
interest on its Extensions of Credit, or any other amounts due under this
Agreement in respect of its Extensions of Credit, or its obligation to
make Extensions of Credit (except for changes in the rate of tax on the
overall net income of such Bank);
(ii) shall impose, modify or make applicable any
reserve (including, without limitation any reserve imposed by the Board of
Governors of the Federal Reserve System, but excluding any reserve
included in the determination of interest rates on Extensions of Credit),
special deposit or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Bank; or
(iii) shall impose on any Bank any other condition
affecting its Extensions of Credit;
and the result of any of the foregoing is to increase the cost to (or in
the case of Regulation D or any other analogous law, rule or regulation,
to impose a cost on) such Bank of making or maintaining any Extensions of
Credit or to reduce the amount of any sum received or receivable by such
Bank under any Loan Document, then after 15 days' notice from such Bank
(which notice shall be sent to the Agent and the Company and shall be
accompanied by a statement setting forth the basis of such notice), the
Company shall pay directly to such Bank, on demand, such additional amount
or amounts as will compensate such Bank for such increased cost or such
reduction incurred on or after the date of the giving of such notice to
the Agent and the Company, provided that similar compensation is also
customarily demanded by such Bank from other borrowers similarly situated
and under similar circumstances.
(b) Basis for Determining Interest Rate Inadequate or Unfair.
If with respect to the Loan Period for any Fixed Rate Loan:
(i) the Agent determines in good faith (which
determination shall be binding and conclusive on all parties) that by
reason of circumstances affecting the London interbank market adequate and
reasonable means do not exist for ascertaining the applicable Libor Rate;
or
(ii) the Agent reasonably determines (which
determination shall be binding and conclusive on all parties) that the CD
Rate or the Adjusted Libor Rate will not adequately and fairly reflect the
cost of maintaining or funding such Fixed Rate Loan for such Loan Period,
or that the making or funding of CD Rate Loans or Adjusted Libor Rate
Loans has become impracticable as a result of an event occurring after the
date of this Agreement which in the opinion of the Agent materially
affects such Fixed Rate Loan;
then, (a) the Agent shall promptly notify the other parties thereof, and
(b) so long as such circumstances shall continue, no Bank shall be under
any obligation to make the Type of Fixed Rate Loan so affected.
(c) Changes in Law Rendering Certain Loans Unlawful. In the
event that any Regulatory Change should make it (or, in the good faith
judgment of a Bank, should raise substantial questions as to whether it
is) unlawful for a Bank to make, maintain or fund a Type of Fixed Rate
Loan, then (i) such Bank shall promptly notify each of the other parties
hereto, (ii) the obligation of all Banks to make such Type of Fixed Rate
Loan shall, upon the effectiveness of such event, be suspended for the
duration of such unlawfulness, and (iii) upon such notice, any outstanding
Revolving Loan of the Type made unlawful to maintain shall automatically
convert to a Reference Rate Loan.
(d) Funding Losses. The Company hereby agrees that upon demand
by any Bank (which demand shall be sent to the Agent and the Company and
shall be accompanied by a statement setting forth the basis for the
calculations of the amount being claimed) the Company will indemnify such
Bank against any net loss or expense which such Bank may sustain or incur
(including, without limitation, any net loss or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by
such Bank to fund or maintain Fixed Rate Loans), as reasonably determined
by such Bank, as a result of (i) any payment, prepayment or conversion of
any Fixed Rate Loan of such Bank on a date other than the last day of a
Loan Period for such Loan whether or not required by any other provision
of this Agreement, or (ii) any failure of the Company to borrow any loans
on a date specified therefor in a notice of borrowing pursuant to this
Agreement. All notices of borrowing to the Agent pursuant to this
Agreement with respect to Fixed Rate Loans shall be deemed to be
irrevocable.
(e) Discretion of Banks as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, each Bank
shall be entitled to fund and maintain its funding of all or any part of
its Revolving Loans in any manner it sees fit.
(f) Capital Adequacy. If any Regulatory Change affects the
treatment of any Extensions of Credit of a Bank as an asset or other item
included for the purpose of calculating the appropriate amount of capital
to be maintained by such Bank or any corporation controlling such Bank and
has the effect of reducing the rate of return on such Bank's or such
corporation's capital as a consequence of the loans or commitments of such
Bank hereunder to a level below that which such Bank or such corporation
could have achieved but for such Regulatory Change (taking into account
such Bank's or such corporation's policies with respect to capital
adequacy) by an amount deemed in good faith by such Bank to be material,
then after 15 days' notice from such Bank to the Company and the Agent of
such Regulatory Change, the Company shall pay to such Bank, on demand,
such additional amount or amounts as will compensate such Bank or such
corporation, as the case may be, for such reduction incurred on or after
the date of the giving of such notice to the Agent and the Company,
provided that similar compensation is also customarily demanded by such
Bank from other borrowers similarly situated and under similar
circumstances. Such Bank shall submit, to the Agent and the Company, a
statement as to the amount of such compensation, prepared in good faith
and in reasonable detail.
(g) Conclusiveness of Statements; Survival of Provisions.
Determinations and statements of any Bank pursuant to Sections 2.13(a),
(b), (c), (d) and (f) hereof shall be conclusive absent manifest error.
The provisions of Section 2.13(a), (d) and (f) hereof shall survive the
obligation of the Banks to extend credit under this Agreement.
Section 3. Representations and Warranties
3. Representations and Warranties. In order to induce the Banks to
extend credit hereunder, the Company represents and warrants to the Banks:
3.1 Organization; Subsidiaries; Corporate Power. The Company
is a corporation validly existing under the laws of the State of Wisconsin
and (a) has, during its most recently completed report year, filed the
required annual report, (b) is not the subject of a proceeding to cause
its administrative dissolution nor do grounds exist for such action, (c)
is not subject to a filing with respect to a judicial decree of
dissolution, and (d) has not adopted articles of dissolution. The Company
is not required to qualify as a foreign corporation in any state, other
than in those states in which the Company is qualified as a foreign
corporation to do business, where the failure to so qualify would have a
material adverse effect on the financial condition or operations of the
Company. The Company has no Subsidiaries other than Oshkosh Truck Foreign
Sales Corp., Inc. and Summit Performance Systems, Inc. The Company has
the corporate power to own its properties and carry on its business as
currently being conducted.
3.2 Authorization and Binding Effect. The execution and
delivery of the Loan Documents to which it is a party, and the performance
by the Company of its obligations thereunder, are within its corporate
power, have been duly authorized by proper corporate action on the part of
the Company, are not in violation of any existing law, rule or regulation
of any governmental agency or authority, any order or decision of any
court, the Articles of Incorporation or By-Laws of the Company or the
terms of any agreement, restriction or undertaking to which the Company is
a party or by which it is bound, and do not require the approval or
consent of the shareholders of the Company, any governmental body, agency
or authority or any other person or entity. The Loan Documents to which
the Company is a party, when executed and delivered, will constitute the
valid and binding obligations of the Company enforceable in accordance
with their terms, except as limited by bankruptcy, insolvency or similar
laws of general application affecting the enforcement of creditors' rights
and except to the extent that general principles of equity might affect
the enforcement of such Loan Documents.
3.3 Financial Statements. The Company has furnished to the
Banks (a) the consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of September 30, 1995, and related statements
of income and retained earnings and cash flows for the year ended on that
date, certified by Ernst & Young, and (b) the unaudited consolidated
balance sheet of the Company and its Consolidated Subsidiaries as of
December 30, 1995 and related statements of income and retained earnings
and cash flows for the period ended on such date, prepared by the Company.
Such financial statements were prepared in accordance with GAAP
consistently applied throughout the periods involved, are correct and
complete and fairly present the consolidated financial condition of the
Company and such Subsidiaries as of such dates and the results of their
operations for the periods ended on such dates, subject, in the case of
the unaudited interim statements, to normal year-end adjustments. There
has been no material adverse change in the financial condition or
operations of the Company and its Consolidated Subsidiaries taken as a
whole since December 30, 1995.
3.4 Litigation. Except for the matters described on Schedule
3.4, there is no litigation or administrative proceeding pending or, to
the knowledge of the Company, threatened against or affecting the Company
or the properties of the Company which, to the knowledge of the Company
can be reasonably expected to result in a liability of the Company, net of
insurance proceeds and financial reserves, in excess of $1,000,000.
3.5 Indebtedness; No Default. The Company has no outstanding
Indebtedness or Guaranties, except those permitted under Sections 6.1 and
6.2 hereof. There exists no default nor has any act or omission occurred
which, with the giving of notice or the passage of time, would constitute
a default under the provisions of any instrument evidencing such
Indebtedness or Guaranty or any agreement relating thereto, under which
the Company's liability exceeds $1,000,000.
3.6 Ownership of Properties; Liens and Encumbrances. The
Company has good and marketable title to all property, real and personal,
reflected on the most recent financial statement of the Company furnished
to the Banks, and all property purported to have been acquired since the
date of such financial statement, except property sold or otherwise
disposed of in the ordinary course of business subsequent to such date;
and all such property is free of any lien, security interest, mortgage,
encumbrance or charge of any kind or any agreement not to grant a security
interest, mortgage or lien, except Permitted Liens. All owned and leased
buildings and equipment of the Company are in good operating condition,
repair and working order and, to the Company's knowledge, conform to all
applicable laws, ordinances and regulations.
3.7 Tax Returns Filed. Except as specifically disclosed in
Schedule 3.4, the Company has filed when due all federal and state income
and other tax returns which are required to be filed. The Company has
paid or made provision for all taxes shown on said returns and on all
assessments received by it to the extent that such taxes have become due
except any such taxes which are being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
GAAP have been established. The Company has no knowledge of any
liabilities which may be asserted against it upon audit of its federal or
state tax returns.
3.8 Margin Stock. The Company will not use, directly or
indirectly, any part of the proceeds of any Extensions of Credit for the
purpose of purchasing or carrying or to extend credit to others for the
purpose of purchasing or carrying, any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System, or
any amendments thereto if such use would involve a violation of Section 7
of the Securities Exchange Act of 1934, as amended, or any regulation of
the Board of Governors of the Federal Reserve System. The Company is not
engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying
margin stock.
3.9 Investment Company. The Company is not an "investment
company" or a company controlled by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
3.10 ERISA Liabilities. The Company has no knowledge of the
occurrence of any event with respect to any Plan which could reasonably be
expected to result in a material liability of the Company or any member of
the Controlled Group to any Plan, the Internal Revenue Service or the
Pension Benefit Guaranty Corporation, other than the payment of
contributions in the normal course or premiums (but not a late payment
charge) pursuant to Section 4007 of ERISA. With respect to any Plan there
is no (a) accumulated funding deficiency within the meaning of Section
412(a) of the Code; (b) nondeductible contribution to any Plan within the
meaning of Section 4972 of the Code; (c) excess contribution within the
meaning of Section 4979(c) of the Code which would result in tax under
Section 4979(a) of the Code; (d) prohibited transaction within the meaning
of ERISA section 406 which is not exempt under ERISA Section 408; (e)
failure to make required contributions to any Multiemployer Plan; or (f)
withdrawal or partial withdrawal from any Multiemployer Plan within the
meaning of ERISA Sections 4203 and 4205; which would, either singularly or
in the aggregate, have a material adverse effect on the financial
condition or operations of the Company and its Consolidated Subsidiaries
taken as a whole.
3.11 No Burdensome Agreements. The Company is not a party to or
is bound by any agreement, instrument or undertaking, or subject to any
other restriction (a) which materially adversely affects or in the future
could reasonably be expected to so affect the property, financial
condition or business operations of the Company, or (b) under or pursuant
to which the Company is or will be required to place (or under which any
other person may place) a lien upon any of its properties securing
Indebtedness either upon demand or upon the happening of a condition, with
or without such demand.
3.12 Trademarks, Etc. The Company possesses adequate
trademarks, trade names, copyrights, patents, permits, service marks and
licenses, or rights thereto, for the present and
planned future conduct of its business substantially as now conducted,
without any known conflict with the rights of others which might result in
a material adverse effect on the financial condition or operations of the
Company and its Consolidated Subsidiaries taken as a whole.
3.13 Dump Sites. With respect to the period during which the
Company owned or occupied its real estate, and to the Company's knowledge
after reasonable investigation, with respect to the time before the
Company owned or occupied its real estate, except as described on Schedule
3.4, no person or entity has caused or permitted materials to be stored,
deposited, treated, recycled or disposed of on, under or at any real
estate owned or occupied by the Company, which materials, if known to be
present, would require cleanup, removal or some other remedial action
under Environmental Laws and which would have a material adverse effect on
the financial condition or operations of the Company and its Consolidated
Subisidaries taken as a whole.
3.14 Tanks. Except as described on Schedule 3.4, there are not
now, nor, to the Company's knowledge after reasonable investigation, have
there ever been tanks or other facilities on, under, or at any real estate
owned or occupied by the Company which contained materials which, if known
to be present in soils or ground water, would require cleanup, removal or
some other remedial action under Environmental Laws and which would have a
material adverse effect on the financial condition or operations of the
Company and its Consolidated Subsidiaries taken as a whole.
3.15 Other Environmental Conditions. Except as described on
Schedule 3.4, to the Company's knowledge after reasonable investigation
there are no conditions existing currently or likely to exist during the
term of this Agreement which would subject the Company to damages,
penalties, injunctive relief or cleanup costs under any Environmental Laws
or which require or are likely to require a cleanup, removal, remedial
action or other response pursuant to Environmental Laws by the Company
which would, in either case, have a material adverse effect on the
financial condition or operations of the Company and its Consolidated
Subsidiaries taken as a whole.
3.16 Changes in Laws. To the Company's knowledge there are no
proposed or pending changes in Environmental Laws which would have a
material adverse effect on the Company and its Consolidated Subsidiaries
taken as a whole.
3.17 Environmental Judgments, Decrees and Orders. Except as
described on Schedule 3.4, the Company is not subject to any judgment,
decree, order or citation related to or arising out of Environmental Laws
or has been named as a potentially responsible party by a governmental
body or agency in a matter arising under any Environmental Laws and which
would have a material adverse effect on the financial condition or
operations of the Company and its Consolidated Subsidiaries taken as a
whole.
3.18 Environmental Permits and Licenses. Except as disclosed on
Schedule 3.4, the Company has all permits, licenses and approvals required
under Environmental Laws where the failure to obtain the same would have a
material adverse effect on the financial condition or operations of the
Company and its Consolidated Subsidiaries taken as a whole.
3.19 Accuracy of Information. All information furnished by the
Company to the Banks is correct and complete in all material respects as
of the date furnished and does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make such
information not misleading.
Section 4. Conditions for Borrowing
4. Conditions for Borrowing. The Banks' obligations to make any
loan and the Issuing Bank's obligation to issue any Letter of Credit is
subject to the satisfaction, on or before the following Borrowing Dates,
of the following conditions:
4.1 On or Before the Closing Date. The Agent shall have
received the following, all in form, detail and content satisfactory to
the Agent:
(a) Notes. A Note payable to the order of each Bank, duly
executed by the Company.
(b) Certified Articles of Incorporation. A copy for each
Bank of the Articles of Incorporation of the Company, certified as of a
recent date by the Wisconsin Secretary of State.
(c) Certificate of Status. A certificate of status or
certificates of good standing with respect to the Company issued as of a
recent date by the Wisconsin Secretary of State and the Secretary of State
of each state in which the Company is qualified to transact business as a
foreign corporation.
(d) Closing Certificate. Copies for each Bank, certified
by the Secretary or any Assistant Secretary of the Company to be correct
and complete and in full force and effect on the Closing Date, of (i) the
By-Laws of the Company; (ii) resolutions of the Board of Directors of the
Company authorizing the execution and delivery of the Loan Documents to
which the Company is a party; and (iii) a statement containing the names
and titles of the officer or officers of the Company authorized to sign
such Loan Documents, together with true signatures of such officers.
(e) Personal Property Searches. Searches of the
appropriate public offices demonstrating that no security interest on the
personal property of the Company (other than fixtures) is of record
affecting the Company or its properties except those which are acceptable
to the Banks.
(f) No Default Certificate. The representations and
warranties contained in Section 3 hereof shall be true and correct on and
as of the Closing Date; there shall exist on the Closing Date no Default
or Event of Default, and the Agent shall have received a certificate for
each Bank to those effects, signed by any officer of the Company.
(g) Opinion of Counsel. An opinion from Foley & Lardner,
counsel to the Company, in the form of Exhibit B attached hereto addressed
to the Agent and the Banks.
(h) Proceedings Satisfactory. Such other documents as the
Agent or the Banks may reasonably request; and all proceedings taken in
connection with the transactions contemplated by this Agreement, and all
instruments, authorizations and other documents applicable thereto, shall
be satisfactory to the Agent and the Banks.
4.2 On or Before Each Subsequent Borrowing Date
(a) Borrowing Procedure. The Company shall have complied
with the borrowing procedure specified in Section 2.2 hereof and the
requirements for the issuance of Letters of Credit specified in Section
2.9 hereof, if applicable.
(b) Representations and Warranties True and Correct. The
representations and warranties contained in Section 3 hereof shall be true
and correct on and as of the relevant Borrowing Date except (i) that the
representations and warranties contained in Section 3.3 hereof shall apply
to the most recent financial statements delivered pursuant to Sections 5.1
and 5.2 hereof and (ii) for changes permitted by this Agreement,
including, without limitation, the creation of new Subsidiaries.
(c) No Default. There shall exist on that Borrowing Date
no Default or Event of Default.
(d) Proceedings and Documentation. The Agent shall have
received such instruments and other documents as it or the Banks may
reasonably request in connection with the making of such Extension of
Credit, and all such instruments and documents shall be in form and
content reasonably satisfactory to the Agent and in the case of Letters of
Credit, to the Issuing Bank and the Agent.
Section 5. Affirmative Covenants
5. Affirmative Covenants. The Company covenants that it will,
until all of the Revolving Loan Commitments and the Letter of Credit
Commitments have terminated or expired, all Letters of Credit have expired
(or the Company has delivered the Cash Collateral required under Section
2.9(e) and Section 2.10(e) hereof) and all obligations hereunder and under
the Loan Documents of the Company to the Agent and the Banks, have been
paid in full:
5.1 Annual Financial Statement. Furnish to the Agent within 90
days after the end of each fiscal year of the Company a copy for each Bank
of a balance sheet of the Company as of the close of such fiscal year and
related statements of income, retained earnings and cash flows for such
year, setting forth in each case in comparative form corresponding figures
from the preceding annual audit, prepared in accordance with GAAP applied
on a consistent basis, audited by a nationally recognized firm of
independent certified public accountants selected by the Company, and
accompanied by an unqualified opinion thereon by such accountants to the
effect that such financial statements present fairly, in all material
respects, the financial position of the Company and all Consolidated
Subsidiaries as of the end of such fiscal year, and the results of their
operations and their cash flows for such fiscal year, in accordance with
GAAP, and that such audit was conducted in accordance with generally
accepted auditing practices. Each such annual statement shall be
accompanied by a written statement from the accountants stating whether or
not the Company is in compliance with the financial covenants contained in
Section 6 hereof and certifying that in making the examination necessary
for their certification of such financial statement, they obtained no
knowledge of any Default or Event of Default or, if such accountants shall
have obtained knowledge of any Default or Event of Default, they shall
disclose in such statement the Default or Event of Default. Each such
annual statement shall be accompanied by a certificate of an authorized
financial officer of the Company containing the calculations demonstrating
the Company's compliance or noncompliance with the financial covenants
contained in Section 6 hereof. The Company will furnish to the Agent
within 90 days after the end of each fiscal year of the Company a copy for
each Bank of a statement of income, including statements of revenues and
expenses for each of the Company's business units and corporate charges.
The Company will furnish to the Agent within 60 days after the end of each
fiscal year of the Company a copy for each Bank of a preliminary income
statement. All such financial statements, and the financial statements
referred to in Section 5.2 hereof, except as provided herein, shall be
furnished in consolidated form for the Company and all Consolidated
Subsidiaries which it may at the time have.
5.2 Interim Financial Statements. Furnish to the Agent within
45 days after the end of each of the first three quarters of each fiscal
year of the Company a copy for each Bank of a balance sheet of the Company
and its Consolidated Subsidiaries as of the end of each such quarter and
related statements of income (including a statement of revenues and
expenses for each of the Company's business units and corporate charges),
retained earnings and cash flows for the period from the beginning of the
fiscal year to the end of such quarter, prepared in the manner set forth
in Section 5.1 hereof for the annual statements, certified to be accurate
and complete by an authorized financial officer of the Company, subject to
audit and normal year-end adjustments, and accompanied by the certificate
of such officer (i) to the effect that there exists no Default or Event of
Default or, if any Default or Event of Default exists, specifying the
nature thereof, the period of existence thereof and what action the
Company proposes to take with respect thereto, and (ii) containing the
calculations demonstrating the Company's compliance or noncompliance with
the financial covenants contained in Section 6 hereof.
5.3 Other Financial Information. Furnish to the Agent, (a)
contemporaneously with the filing or mailing thereof, copies for each Bank
of all material of a financial nature filed with the Securities Exchange
Commission or sent to the shareholders of the Company, (b) prior to the
end of the first fiscal quarter of each fiscal year of the Company,
budgets and financial projections, prepared by the Company for such fiscal
year, and (c) such other financial information as any Bank may from time
to time reasonably request.
5.4 Books and Records. Keep and cause each Subsidiary to keep
proper, complete and accurate books of record and account.
5.5 Inspections. Permit representatives of the Agent or any
Bank to visit and inspect any of the properties and examine and copy any
of the books and records of the Company or any Subsidiary at any
reasonable time and at reasonable intervals.
5.6 Insurance. Maintain and cause each Subsidiary to maintain
insurance coverage as may be required by law but in any event not less
than insurance coverage in the forms, amounts and with companies, which
would be carried by prudent management in connection with similar
properties and businesses. Without limiting the foregoing, the Company
will and will cause each Subsidiary to (a) keep all its physical property
insured against fire and extended coverage risks in amounts and with
deductibles not more than those generally maintained by businesses engaged
in similar activities in similar geographic areas; (b) maintain all such
worker's compensation and similar insurance as may be required by law; and
(c) maintain, in amounts and with deductibles not more than those
generally maintained by prudent management of businesses engaged in
similar activities in similar geographic areas, general public liability
insurance against claims for bodily injury, death or property damage,
occurring on, in or about the properties of the Company or such
Subsidiary, business interruption insurance and product liability
insurance.
5.7 Condition of Property. Keep and cause each Subsidiary to
keep its properties (whether owned or leased) in good operating condition,
repair and working order.
5.8 Payment of Taxes. Pay and discharge, and cause each
Subsidiary to pay and discharge, all taxes, assessments and governmental
charges upon it or against its properties prior to the date on which
penalties are attached thereto, unless and to the extent only that the
same shall be contested in good faith and by appropriate proceedings
diligently conducted by the Company or the appropriate Subsidiary and
appropriate reserves with respect thereto are established and maintained
in accordance with GAAP.
5.9 Maintain Existence, Rights and Licenses. Do and, except as
permitted under Section 6.4 hereof, cause each Subsidiary to do all things
necessary to (a) maintain its corporate existence in good standing in its
state of incorporation and in any other state where the ownership of
property or the conduct of business make qualification necessary and where
the failure to so qualify would have a material adverse effect upon its
business, operations or financial condition and (b) preserve and keep in
full force and effect its legal and contractual rights and licenses
necessary to continue its business.
5.10 Compliance with Law. Comply and cause each Subsidiary to
comply, in all material respects, with all applicable laws, regulations
and ordinances, including all applicable Environmental Laws, the failure
to comply with which would have a material adverse effect on the financial
condition or operations of the Company and its Consolidated Subsidiaries
taken as a whole.
5.11 ERISA Certificate. Comply and cause each Subsidiary to
comply with all applicable requirements of ERISA for each Plan, the
failure to comply with which would have a material adverse effect on the
financial condition or operations of the Company and its Consolidated
Subsidiaries taken as a whole, and furnish to the Agent, as soon as
possible and in any event within 30 days after the Company shall have
obtained knowledge that a Reportable Event has occurred with respect to
any Plan, a certificate of an officer of the Company setting forth the
details as to such Reportable Event and the action which the Company
proposes to take with respect thereto, and a copy of each notice of a
Reportable Event sent to the Pension Benefit Guaranty corporation by the
Company and, with respect to a Multiemployer Plan, furnish to the Agent as
soon as possible after the Company receives notice or obtains knowledge
that the Company or any member of the Controlled Group may be subject to
withdrawal liability, or required to post a bond to avoid such liability,
to a Multiemployer Plan, a certificate of an officer of the Company
setting forth the details as to such event and the actions which the
Company plans to take with respect thereto.
5.12 Compliance with Other Loan Documents. Timely comply with
all of its obligations under the other Loan Documents.
5.13 Required Notices. Furnish to the Agent (a) immediately
upon becoming aware of any Default or Event of Default, a written notice
specifying the nature and period of existence thereof and what action the
Company is taking or proposes to take with respect thereto; and (b)
immediately upon becoming aware that the holder of any other Indebtedness
issued or assumed by the Company or any Subsidiary, or the lessor under
any lease as to which the Company or any Subsidiary is the lessee, has
given notice or has taken any action with respect to a claimed default
thereunder, or under any agreement under which any such Indebtedness was
issued or secured, a written notice specifying the notice given or action
taken, the nature of the claimed default and what action the Company is
taking or proposes to take with respect thereto; (c) immediately upon
receipt, copies of any correspondence, notice, pleading, citation,
indictment, complaint, order, decree or other document from any source
asserting or alleging a circumstance or condition which requires or may
reasonably be expected to require a financial contribution by the Company
or any Consolidated Subsidiary exceeding $1,000,000 or a cleanup, removal,
remedial action or other response by or on the part of the Company or any
Consolidated Subsidiary under Environmental Laws which may reasonably be
expected to cost the Company or any Consolidated Subsidiary in excess of
$1,000,000 or which seeks damages or civil, criminal or punitive penalties
from the Company or any Consolidated Subsidiary for an alleged violation
of Environmental Laws in excess of $1,000,000; (d) written notice of any
condition or event which would make any warranty contained in Section 3
hereof inaccurate, as soon as the Company becomes aware of such condition
or event; (e) immediately upon obtaining knowledge thereof, written notice
of any material adverse change in or default under or intended termination
of, or receipt of any stop work order which the Company reasonably
believes may result in a termination of, any Government Contract where
such termination would result in a loss of revenue in excess of
$20,000,000.
5.14 Compliance with all Contracts. Comply and cause each
Consolidated Subsidiary to comply, with the provisions of the Company's
existing contracts and all contracts entered subsequent to the date of
this Agreement, the termination or cancellation of which would have a
material adverse effect upon the Company and its Consolidated Subsidiaries
taken as a whole.
5.15 Notice of Material Adverse Changes. Furnish promptly to
the Agent written notice of any material adverse effect on the financial
condition or operations of the Company and its Consolidated Subsidiaries
taken as a whole.
5.16 Subsidiary Guaranty. Cause each Subsidiary to execute and
deliver to the Agent, for the ratable benefit of the Banks, a guaranty, in
the form of Exhibit C attached hereto, appropriately completed, of all of
the obligations of the Company hereunder and under the Loan Documents
whenever the amount of loans and advances by the Company to such
Subsidiary, investments by the Company in such Subsidiary, and Guaranties
by the Company of the obligations of such Subsidiary, exceed, in the
aggregate, $5,000,000.
Section 6. Negative Covenants
6. Negative Covenants. The Company covenants that, without the
prior written consent of the Majority Banks, it will not, and will not
permit any Subsidiary to, until all Revolving Loan Commitments and the
Letter of Credit Commitments have terminated or expired, all Letters of
Credit have expired (or the Company has delivered the Cash Collateral
required under Section 2.9(e) hereof and Section 3.10(e) hereof) and all
obligations hereunder and under the Loan Documents of the Company to the
Agent and the Banks, have been paid in full:
6.1 Limitations on Indebtedness. Create, incur, assume or
permit to exist any Indebtedness except (a) Indebtedness owed to the Banks
under this Agreement; (b) Indebtedness secured by Permitted Liens; (c)
Indebtedness for borrowed funds (other than Commercial Paper) not to
exceed $2,000,000, in the aggregate, at any time outstanding; (d)
Indebtedness permitted under Section 6.5 hereof; (e) other current
Indebtedness not for borrowed funds or the deferred purchase price of
property; (f) deferred taxes; (g) unfunded obligations with respect to
Plans but only to the extent they are permitted to remain unfunded under
applicable law; (h) wages or other compensation due to employees and
agents for services actually performed; (i) Indebtedness arising out of
foreign exchange contracts not to exceed $2,500,000, in the aggregate
principal amount, at any time outstanding; (j) Indebtedness arising out of
the issuance of Commercial Paper not to exceed $25,000,000, in the
aggregate, at any time outstanding; (k) Indebtedness, the payment of which
is fully subordinated, in a manner satisfactory to the Banks, to the prior
payment of the Notes and the Company's other obligations under this
Agreement and the Loan Documents; and (l) Indebtedness arising out of the
acquisition of any other business, or partnership or joint venture
interest, not to exceed $5,000,000, in the aggregate, at any time
outstanding.
6.2 Limitations on Guaranties. Create, incur, assume or permit
to exist any Guaranties except for (a) the endorsement of negotiable or
nonnegotiable instruments for collection in the ordinary course of
business, (b) Guaranties in favor of the Banks, (c) that certain Steeltech
Manufacturing, Inc./Lease Investment Partnership I Guaranty in the amount
of $1,700,000, (d) Guaranties of the obligations of the Company's
customers under third-party wholesale/retail finance arrangements,
consistent with past practices of the Company; (e) Guaranties of the
obligations of the Company's vendors, or suppliers to such vendors, to
enable such vendors or suppliers to purchase goods or parts to be
processed and sold to the Company; provided, however, the aggregate
liability of the Company under such Guaranties, together with the
aggregate amount of outstanding advances permitted under Section 6.5(d)
hereof, shall not exceed $5,000,000, in the aggregate, at any time
outstanding; (f) Guaranties of the obligations of any Subsidiary or
Subsidiaries of the Company; and (g) Guaranties, other than the foregoing
Guaranties, under which the liability of the Company shall not exceed
$5,000,000, in the aggregate, at any time outstanding.
6.3 Limitations on Liens and Encumbrances. Create, assume or
permit to exist any mortgage, security interest, lien or charge of any
kind, including any restriction against mortgages, security interests,
liens or charges upon any of its property or assets, whether now owned or
hereafter acquired, except Permitted Liens.
6.4 Limitations on Mergers, Etc. Merge or consolidate with or
into any other corporation or entity or sell, lease, transfer or otherwise
dispose of in a single transaction or a series of transactions, all or a
substantial part of its assets (other than sales made in the ordinary
course of business and the sale of stock of any Subsidiary), except that
any Subsidiary may merge into, or transfer all or a substantial part of
its assets to, the Company, or to any other Subsidiary.
6.5 Limitations on Advances. Make any loans, advances or
extensions of credit to any person or entity except (a) extensions of
credit to customers in the usual course of business of the Company or any
Subsidiary; (b) loans, advances or extensions of credit by the Company to
wholly-owned Subsidiaries of the Company and by any Subsidiary to the
Company or to another Subsidiary; (c) loans and advances to employees and
agents in the ordinary course of business for travel and entertainment
expenses and similar items; (d) advances to the Company's vendors (which
may include Steeltech Manufacturing, Inc.), or suppliers to such vendors,
to enable such vendors or suppliers to purchase goods or parts to be
processed and sold to the Company; provided, however, the aggregate of
such advances, and the liability of the Company under Guaranties permitted
under Section 6.2(e) hereof, shall not exceed $5,000,000 at any time
outstanding; and (e) loans, advances or extensions of credit (including
accounts receivable) to Chasises Y Autopartes Oshmex S.A. de C.V., a
Mexico corporation, not to exceed an aggregate amount of $5,000,000 at any
time outstanding.
6.6 Current Ratio. Permit the Current Ratio to be less than
1.75 to 1 at the end of any fiscal quarter of the Company.
6.7 Indebtedness to Tangible Net Worth Ratio. Permit the ratio
of Indebtedness to Tangible Net Worth to be greater than 1.5 to 1 at the
end of any fiscal quarter of the Company.
6.8 Debt Service Coverage Ratio. Permit the Debt Service
Coverage Ratio to be less than 3 to 1 at the end of any fiscal quarter of
the Company.
Section 7. Events of Default; Remedies
7.1 Events of Default. The occurrence of any of the following
shall constitute an Event of Default:
(a) Failure to Pay Note. The Company fails to pay (i)
principal on any Note when the same becomes due and payable, whether at a
stated payment date, or a date fixed by the Company for prepayment or by
acceleration, (ii) the Reimbursement Obligations on the date such
Reimbursement Obligations arose, or (iii) interest or any fee payable
hereunder, when the same becomes payable and such failure to pay such
interest or fee continues uncured for a period of five days.
(b) Falsity of Representations and Warranties. Any
representation or warranty made in any Loan Document or in any certificate
issued pursuant thereto is false in any material respect on the date as of
which made or as of which the same is to be effective.
(c) Breach of Certain Covenants and Provisions. The
Company fails to comply with any term, covenant or agreement contained in
Sections 5.4, 5.7 or 5.10 hereof or in Sections 9.2 or 9.3 hereof and such
failure continues for a period of 15 days after the Agent, at the request
of the Majority Banks, has given written notice thereof to the Company.
(d) Breach of Other Covenants. The Company fails to
comply with any term, covenant or agreement contained in any other
subsection of Section 5 or in Section 6 hereof.
(e) Breach of Other Provisions. The Company fails to
comply with any other agreement contained herein or in any other Loan
Document and such default continues for a period of 30 days after the
Agent, at the request of the Majority Banks, has given written notice
thereof to the Company.
(f) Default Under Other Agreements. The Company fails to
pay when due any other Indebtedness issued or assumed by the Company in an
aggregate amount of $5,000,000 or more or fails to comply with the terms
of any agreement under which such Indebtedness was created and such
default continues beyond the period of grace, if any, therein provided.
(g) Entry of Judgments. A judgment is entered against the
Company or any Subsidiary which, together with all unsatisfied judgments
entered against the Company and all Subsidiaries, exceeds the sum of
$1,000,000, and such judgment is neither satisfied nor stayed within 60
days after the entry thereof.
(h) ERISA Liability. Any event in relation to any Plan
which the Majority Banks reasonably determine in good faith could
reasonably be expected to result in any of the occurrences set forth in
Section 3.10 hereof.
(i) Insolvency, Failure to Pay Debts or Appointment of
Receiver. The Company or any Subsidiary, having assets in excess of
$5,000,000 on a book value basis (without taking into account any write-
down or write-off thereof), becomes insolvent or the subject of state
insolvency proceedings, fails generally to pay its debts as they become
due or makes an assignment for the benefit of creditors; or a receiver,
trustee, custodian or other similar official is appointed for, or takes
possession of any substantial part of the property of, the Company or any
such Subsidiary.
(j) Cancellation of Government Contracts. The
termination, other than by the United States government for its
convenience (as provided for in 48 C.F.R. Part 49) of any Government
Contracts where such termination would result, with any other such
termination, in a loss of revenue in excess of $50,000,000 in any fiscal
year of the Company.
(k) Subject of United States Bankruptcy Proceedings. The
taking of corporate action by the Company or any Subsidiary to authorize
such organization to become the subject of proceedings under the United
States Bankruptcy Code; or the execution by the Company or any Subsidiary
of a petition to become a debtor under the United States Bankruptcy Code;
or the filing of an involuntary petition against the Company or any
Subsidiary under the United States Bankruptcy Code which remains
undismissed for a period of 60 days; or the entry of an order for relief
under the United States Bankruptcy Code against the Company or any
Subsidiary.
7.2 Remedies. Upon the occurrence and continuance of any of
the events described in Sections 7.1(a) through 7.1(j) hereof inclusive,
the Agent shall, at the direction of the Majority Banks, at the same or
different times, take any or all of the following actions:
(a) Declare the Revolving Loan Commitments and the Letter
of Credit Commitments to be terminated, whereupon the Banks' Revolving
Loan Commitments and the Letter of Credit Commitments shall immediately
terminate; or
(b) Declare the Notes, and all accrued interest thereon,
and an amount equal to the then existing Letter of Credit Exposure to be
immediately due and payable, whereupon the Notes, the Letter of Credit
Exposure and all accrued interest thereon shall be immediately due and
payable without presentment, demand, protest or notice of any kind, all of
which are expressly waived by the Company; provided, however, as to any
Event of Default other than an Event of Default under Section 7.1(a) or
Section 7.1(k) hereof and at any time thereafter, and in each case, such
action may only be taken, if any Commercial Paper is then outstanding,
with the written consent of each Bank which acted as a placement agent for
such Commercial Paper.
Promptly following the making of such declaration, the Agent
shall give notice thereof to the Company and each Bank but the failure to
give such notice shall not impair any of the effects of such declaration.
Upon the occurrence of any of the events described in Section 7.1(k)
hereof, the Revolving Loan Commitments and the Letter of Credit
Commitments shall forthwith terminate and all the Notes and an amount
equal to the then existing Letter of Credit Exposure, together with
accrued interest thereon, shall be immediately due and payable without
presentment, demand, protest or notice of any kind, all of which are
expressly waived by the Company.
Section 8. The Agent
8.1 Appointment and Duties of Agent. The Banks hereby appoint
Firstar Bank Milwaukee, N.A., subject to the terms and conditions of this
Section 8, as the Agent for the Banks under and for purposes of this
Agreement and the other Loan Documents. Each of the Banks hereby
irrevocably authorizes and directs the Agent to take such action on its
behalf and to exercise such powers hereunder as are delegated to the Agent
herein, together with such powers as are reasonably incidental thereto, in
connection with the administration of and enforcement of any rights or
remedies with respect to this Agreement and the other Loan Documents. The
Agent shall use reasonable diligence to examine the face of each document
received by it hereunder to determine whether such document, on its face,
appears to be what it purports to be. However, the Agent shall not be
under any duty to examine into or pass upon the validity or genuineness of
any documents received by it hereunder and the Agent shall be entitled to
assume that any of the same which appears regular on its face is genuine
and valid and what it purports to be.
8.2 Discretion and Liability of the Agent. Subject to Sections
8.3 and 8.5 hereof and in accordance with prudent banking practice, the
Agent shall be entitled to use its discretion with respect to exercising
or refraining from exercising any rights which may be vested in it by, or
with respect to, taking or refraining from taking any action or actions
which it may be able to take under or in respect of this Agreement and the
other Loan Documents. Neither the Agent nor any of its directors,
officers, employees, agents or representatives shall be liable for any
action taken or not taken by them hereunder or under any other Loan
Document unless such action or failure to act results from his, her or its
gross negligence or willful misconduct.
8.3 Event of Default. The Agent shall be entitled to assume
that no Default or Event of Default has occurred and is continuing unless
the Agent has actual knowledge of such facts or has received notice from a
Bank in writing that such Bank considers that a Default or Event of
Default has occurred and is continuing and which specifies the nature
thereof.
If the Agent shall acquire actual knowledge of or receive notice
from a Bank that a Default or Event of Default has occurred, the Agent
shall, by telephonic notice confirmed in writing, promptly notify the
Banks and the Company of such Default or Event of Default.
8.4 Consultation. The Agent in good faith may consult with
legal counsel or an accountant selected by it and shall be entitled to
fully rely in good faith upon any opinion of such counsel or accountant in
connection with any action taken or not taken by the Agent in accordance
with such opinion.
8.5 Communications To and From the Agent. Upon any occasion
requiring or permitting an approval, consent, waiver, election or other
action on the part of the Banks, unless action by the Agent alone is
expressly permitted hereunder, action shall be taken by the Agent for and
on behalf or for the benefit of the Banks upon the direction of the
Majority Banks. The Company may rely upon any communication from the
Agent hereunder and need not inquire into the propriety of or
authorization for such communication. Upon receipt by the Agent from the
Company or any Bank of any communication calling for an action on the part
of the Banks, the Agent will, in turn, promptly inform the other Banks in
writing of the nature of such communication. The Agent shall promptly
forward to each of the Banks all financial statements, notices and other
information received by it from the Company under Sections 5.1, 5.2, 5.3,
5.11, 5.13 and 5.15 hereof.
8.6 Limitations of Agency. Notwithstanding anything in this
Agreement or any of the other Loan Documents, express or implied, it is
agreed by the parties hereto that the Agent will act hereunder and under
the other Loan Documents, solely for the Banks and only to the extent
specifically set forth herein and will, under no circumstances, be
considered to be a fiduciary of any nature whatsoever in respect of any
other person. The relationship between the Agent and the Banks is that of
agent and principal only and the Agent shall not be deemed to be trustee
or fiduciary for any Bank. The Agent may generally engage in any kind of
banking or trust business with the Company as if it were not the Agent.
8.7 No Representation or Warranty. No Bank (including the
Agent) makes to any other Bank any representation or warranty, express or
implied, or assumes any responsibility with respect to the execution,
validity or enforceability of this Agreement or the other Loan Documents.
8.8 Bank Credit Decision. Each Bank acknowledges that it has,
independent of and without reliance upon any other Bank (including the
Agent) or any information provided by any other Bank (including the Agent)
and based upon the financial statements of the Company and such other
documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independent of and without reliance upon any
other Bank (including the Agent) and based upon such documents and
information as it shall deem appropriate at that time, continue to make
its own credit decision in taking or not taking action under this
Agreement and any other Loan Documents.
8.9 Indemnity. Each Bank hereby indemnifies (which indemnity
shall survive any termination of this Agreement) the Agent, pro rata
according to such Bank's Percentage, from and against any and all
liabilities, obligations, losses, damages, claims, costs, or expenses of
any kind or nature whatsoever which may at any time be imposed on,
incurred by, or asserted against, the Agent in any way related to or
arising out of this Agreement or the other Loan Documents, including
reasonable attorneys' fees, and as to which the Agent is not reimbursed by
the Company; provided, however, that no Bank shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
claims, costs or expenses which are determined by a court of competent
jurisdiction in a final proceeding to have resulted from the Agent's gross
negligence or willful misconduct. The Agent shall not be required to take
any action hereunder or under any other Loan Document, or to prosecute or
defend any suit in respect of the transactions contemplated hereby, unless
it is indemnified hereunder to its satisfaction. If any indemnity in
favor of the Agent shall be or become, in the Agent's good faith
determination, inadequate, the Agent may call for additional
indemnification from the Banks and cease to do the acts indemnified
against hereunder until such additional indemnity is given.
8.10 Resignation or Removal of Agent; Successor Agent. The
Agent may resign as such at any time upon at least 30 days' prior notice
to the Company and all Banks. The Agent may be removed at any time by the
Majority Banks upon at least 30 days' prior notice by the Majority Banks
to the Company and the Agent but only for cause consisting of its gross
negligence or willful misconduct or following a declaration of insolvency
by appropriate regulators. If the Agent at any time shall resign or be
removed, the Majority Banks, with the prior written approval of the
Company (which approval shall not be unreasonably withheld, and shall not
be required upon the occurrence and during the continuance of an Event of
Default), may appoint another Bank as a successor Agent which shall
thereupon become the Agent hereunder. If no successor Agent shall have
been so appointed by the Majority Banks, and shall have accepted such
appointment, within 30 days after the retiring Agent has given notice of
resignation, then the retiring Agent may, with the prior written approval
of the Company (which approval shall not be unreasonably withheld, and
shall not be required upon the occurrence and during the continuance of an
Event of Default) and on behalf of the Banks, appoint the successor Agent,
which shall be one of the Banks. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor Agent shall be
entitled to receive from the retiring Agent such documents of transfer and
such assignments as such successor Agent may reasonably request, and shall
thereupon succeed to and become vested with all rights, powers, privileges
and duties of the retiring Agent and the retiring Agent shall be
discharged from its duties and obligations as Agent under this Agreement.
The successor Agent shall be entitled to negotiate its own fee structure
with the Company, but in any event shall be entitled to receive as
compensation an amount not less than the amount the retiring Agent would
have been entitled to receive.
Section 9. Miscellaneous
9.1 Survival of Representations and Warranties. The Company's
representations and warranties contained in Section 3 hereof shall survive
closing and execution and delivery of the Notes.
9.2 Indemnification. The Company agrees to defend, indemnify
and hold harmless the Agent, the Banks and their respective directors,
officers, employees and agents from and against any and all loss, cost,
expense or liability (including reasonable attorneys' fees) incurred in
connection with any and all claims or proceedings (whether brought by a
private party or governmental agency) as a result of, or arising out of or
relating to:
(a) bodily injury, property damage, abatement or
remediation, environmental damage or impairment or any other injury or
damage resulting from or relating to any hazardous or toxic substance or
contaminated material (as determined under Environmental Laws) located on
or migrating into, from or through property previously, now or hereafter
owned or occupied by the Company, which the Agent or any Bank may incur
due to the making of the loans provided for in Section 2 or otherwise;
(b) any transaction financed or to be financed, in whole
or in part, directly or indirectly, with the proceeds of any Extension of
Credit;
(c) the entering into, performance of and exercise of its
rights pursuant to this Agreement (other than a dispute between the Banks)
or any other Loan Document by the Agent and the Banks.
This indemnity will survive the repayment of the Notes and
reimbursement for amounts drawn under the Letters of Credit.
Notwithstanding the foregoing, the Company shall not be liable under this
section to any of the foregoing indemnities for any loss, cost, expense or
liability incurred by any such indemnitees which is caused by (a) a breach
by such indemnitee of any of his, her or its obligations under this
Agreement, or (b) the gross negligence or willful misconduct of such
indemnitee.
9.3 Expenses. The Company agrees, whether or not the
transaction hereby contemplated shall be consummated, to pay on demand (a)
all out-of-pocket expenses incurred by the Agent in connection with the
negotiation, preparation, execution, administration, amendment or
enforcement of this Agreement and the other Loan Documents, including
attorneys' fees and expenses, (b) out-of-pocket expenses, including
attorneys' fees, incurred by a Bank in connection with the negotiation,
preparation and execution of this Agreement, not to exceed $2,500.00 for
each Bank, and reasonable expenses, including attorneys' fees, in
connection with any future amendments or modifications hereto, (c) any
taxes (including any interest and penalties relating thereto) payable by
any Bank (other than taxes based upon such Bank's net income) on or with
respect to the transactions contemplated by this Agreement (the Company
hereby agreeing to indemnify each Bank with respect thereto) and (d) all
out-of-pocket expenses, including attorneys' fees and expenses, incurred
by the Agent or any Bank in connection with any litigation, proceeding or
dispute in any way related to the Agent's and the Banks' relationships
with the Company arising hereunder or under any future amendment or
modification hereto (other than a dispute between the Banks); provided
that the expenses of the Agent or any Bank described in subclause (d)
shall not include those incurred in connection with any litigation,
proceeding or dispute in which the Agent or such Bank was finally
determined to have breached its obligations under this Agreement, or to
have been guilty of gross negligence or willful misconduct. The
obligations of the Company under this section will survive payment of the
Notes and Reimbursement Obligations.
9.4 Notices. Except as otherwise provided in Section 2.2
hereof, all notices provided for herein shall be in writing and shall be
(a) hand-delivered; (b) sent by express mail; or (c) sent by facsimile
transmission and confirmed in writing provided to the recipient in a
manner described in (a) or (b), and, addressed, if to the Agent or a Bank,
to it at the address set forth below its signature, and if to the Company,
to it at P.O. Box 2566, Oshkosh, Wisconsin, 54903-2566 Facsimile No. 414-
233-9459, or to such other address with respect to any party as such party
shall notify the others in writing; such notices shall be deemed given
when delivered or mailed or so transmitted.
9.5 Confidentiality. The Agent and each Bank shall hold in
confidence any material nonpublic information delivered or made available
to them by the Company. Notwithstanding the foregoing, nothing herein
shall prevent any Bank from disclosing any information delivered or made
available to it by the Company (a) to any other Bank, (b) upon the order
of any court or administrative agency, (c) upon the request or demand of
any regulatory agency or authority, (d) which has been publicly disclosed
other than as a result of a disclosure by the Agent or any Bank which is
not permitted by this Agreement, (e) to the extent reasonably required in
connection with any litigation to which the Agent, any Bank, or any of
their respective affiliates may be a party, along with the Company, any
Subsidiary or any of their respective Affiliates, (f) to the extent
reasonably required in connection with the exercise of any right or remedy
under this Agreement, (g) to such Bank's legal counsel and financial
consultants and independent auditors, and (h) to any actual or proposed
participant or assignee of all or part of its rights under this Agreement
provided the Company consents to such disclosure (except that no such
consent shall be required in the case of any participation under Section
9.6 hereof) and such participant or assignee agrees in writing to be bound
by the duty of confidentiality under this Section to the same extent as if
it were a Bank hereunder.
9.6 Participations. The Company agrees that each Bank may, at
its option, sell to another financial institution or institutions,
directly or indirectly controlling, controlled by or under common control
with such Bank, all or part of its interests in the Note payable to such
Bank and, in connection with each such sale, and thereafter, disclose to
the purchaser or prospective purchaser of each such interest financial and
other information concerning the Company. The Bank shall promptly notify
the Company of any such sale. The Company agrees that if amounts
outstanding under this Agreement or any Note are due and unpaid, or shall
have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each such purchaser shall be deemed to
have, to the extent permitted by applicable law, the right of setoff in
respect of its participating interest in amounts owing under this
Agreement and such Note to the same extent as if the amount of its
participating interest were owed directly to it. The Company further
agrees that each such purchaser shall be entitled to the benefits of
Section 2.13 with respect to its participation in the selling Bank's
Revolving Loan Commitment; provided that no such purchaser shall be
entitled to receive any greater amount pursuant to that section than the
Bank would have been entitled to receive if no such sale had occurred.
9.7 Titles. The titles of sections in this Agreement are for
convenience only and do not limit or construe the meaning of any section.
9.8 Parties Bound; Waiver. The provisions of this Agreement
shall inure to the benefit of and be binding upon any successor of any of
the parties hereto and shall extend and be available to any holder of a
Note; provided that the parties' rights under this Agreement are not
assignable. No delay on the part of any holder of a Note in exercising
any right, power or privilege hereunder shall operate as a waiver thereof,
and no single or partial exercise of any right, power or privilege
hereunder shall preclude other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein
specified are cumulative and not exclusive of any rights or remedies which
the holder of a Note would otherwise have.
9.9 Governing Law. This Agreement is being delivered in and
shall be deemed to be a contract governed by the laws of the State of
Wisconsin and shall be interpreted and enforced in accordance with the
laws of that state without regard to the principles of conflicts of laws.
9.10 Submission to Jurisdiction; Service of Process. As a
material inducement to the Agent and the Banks to enter into this
Agreement:
THE COMPANY AGREES THAT ALL ACTIONS OR PROCEEDINGS IN ANY
MANNER RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS MAY BE BROUGHT ONLY IN COURTS OF THE STATE OF WISCONSIN LOCATED
IN MILWAUKEE OR THE FEDERAL COURT FOR THE EASTERN DISTRICT OF WISCONSIN
AND THE COMPANY CONSENTS TO THE JURISDICTION OF SUCH COURTS. THE COMPANY
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
COURT AND ANY RIGHT IT MAY NOW OR HEREAFTER HAVE TO CLAIM THAT ANY SUCH
ACTION OR PROCEEDING IS IN AN INCONVENIENT COURT.
9.11 Entire Agreement. This Agreement and the other Loan
Documents shall constitute the entire agreement of the parties pertaining
to the subject matter hereof and supersede all prior or contemporaneous
agreements and understandings of the parties in connection therewith.
9.12 Amendments. No provision of this Agreement or the other
Loan Documents may be amended, modified, supplemented, changed, waived,
discharged or terminated unless the consent of the Majority Banks and the
Company is obtained in writing; provided, however, that no such amendment,
modification or waiver which would:
(a) modify any requirement hereunder that any particular
action be taken by all the Banks or by the Majority Banks shall be
effective unless consented to by each Bank;
(b) modify this Section 9.12, change the definition of
"Majority Banks," increase any Revolving Loan Commitment, Letter of Credit
Commitment or the Percentage of any Bank, or reduce any interest or fees
payable hereunder, shall be effective unless consented to by each Bank;
(c) extend the scheduled due date for the payment of
principal or interest on any Note (or reduce the principal amount of or
rate of interest on any Note) shall be made without the consent of the
holder of such Note;
(d) extend the time for reimbursement by the Company of
the Reimbursement Obligations, or reduce the interest rate payable
thereon, shall be made without the consent of each Bank; or
(e) adversely affect the interest, rights, or obligations
of the Agent as the Agent shall be made without the consent of the Agent.
9.13 Counterparts. This Agreement and any amendment hereof may
be executed in several counterparts, each of which shall be executed by
the Agent and the Company and be deemed to be an original and all of which
together shall constitute one instrument. This Agreement shall become
effective when counterparts hereof executed on behalf of the Company, the
Agent and each Bank shall have been received by the Agent and notice
thereof shall have been given by the Agent to the Company and each Bank.
9.14 Waiver of Jury Trial. THE COMPANY, THE AGENT AND THE
BANKS HEREBY KNOWINGLY AND VOLUNTARILY WAIVE THE RIGHT EACH OF THEM MAY
HAVE TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM BASED ON OR
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ANY OTHER ACTION OF ANY PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT TO THE AGENT AND THE BANKS TO ENTER INTO THIS
AGREEMENT.
9.15 Limitation of Liability. THE COMPANY, THE AGENT AND THE
BANKS HEREBY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO CLAIM OR RECOVER FROM
THE OTHER PARTY ANY EXEMPLARY OR PUNITIVE DAMAGES AND, IN THE CASE OF
DAMAGES ARISING FROM THE ISSUANCE OR FAILURE TO ISSUE ANY LETTER OF CREDIT
OR THE HONORING OR FAILURE TO HONOR ANY DRAFT PRESENTED UNDER ANY LETTER
OF CREDIT, ANY CONSEQUENTIAL DAMAGES.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.
OSHKOSH TRUCK CORPORATION
By:
R. Eugene Goodson, Chairman and
Chief Executive Officer
Percentage
45.4546 FIRSTAR BANK MILWAUKEE, N.A.,
as Agent and a Bank
By:
Stephen E. Carlton, Vice
President
Address: 777 East Wisconsin Avenue
Milwaukee, WI 53202
Attn: Stephen E. Carlton
Facsimile No.: (414) 765-5062
18.1818 BANK ONE, MILWAUKEE, NATIONAL
ASSOCIATION
By:
Anthony F. Maggiore, Vice President
Address: 111 East Wisconsin Avenue
Milwaukee, WI 53202
Attn: Anthony F. Maggiore
Facsimile No.: (414) 765-2176
18.1818 NATIONSBANK, N.A.
By:
Stephen K. Foutch, Vice President
Address: 233 South Wacker Drive
Suite #2800
Chicago, Illinois 60606
Attn: Stephen K. Foutch
Facsimile No.: (312) 234-5601
18.1818 HARRIS TRUST AND SAVINGS BANK
100.00%
By:
George Dluhy, Vice President
Address: 111 W. Monroe Street
Second Floor West
Chicago, IL 60603
Attn: George Dluhy
Facsimile No.: (312) 461-2591
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF OSHKOSH TRUCK CORPORATION
AS OF AND FOR THE QUARTER ENDED MARCH 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-28-1996
<PERIOD-START> DEC-31-1995
<PERIOD-END> MAR-30-1996
<CASH> 18,236
<SECURITIES> 0
<RECEIVABLES> 55,821
<ALLOWANCES> 474
<INVENTORY> 65,508
<CURRENT-ASSETS> 146,884
<PP&E> 104,181
<DEPRECIATION> 65,362
<TOTAL-ASSETS> 203,830
<CURRENT-LIABILITIES> 55,800
<BONDS> 0
0
0
<COMMON> 93
<OTHER-SE> 133,114
<TOTAL-LIABILITY-AND-EQUITY> 203,830
<SALES> 183,672
<TOTAL-REVENUES> 183,672
<CGS> 158,384
<TOTAL-COSTS> 158,384
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 89
<INTEREST-EXPENSE> 70
<INCOME-PRETAX> 5,987
<INCOME-TAX> 2,185
<INCOME-CONTINUING> 3,802
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,802
<EPS-PRIMARY> 0.43
<EPS-DILUTED> 0.43
</TABLE>
