<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
-------------------------
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): FEBRUARY 26, 1998
OSHKOSH TRUCK CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
WISCONSIN 0-13886 39-0520270
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification
incorporation) No.)
P. O. BOX 2566, OSHKOSH, WISCONSIN 54903-2556
(Address of principal executive offices, including zip code)
(414) 235-9151
(Registrant's telephone number)
</TABLE>
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On February 26, 1998, Oshkosh Truck Corporation ("Oshkosh") acquired all of
the issued and outstanding capital stock of McNeilus Companies, Inc.
("McNeilus") (the "Acquisition") pursuant to a Stock Purchase Agreement dated
December 8, 1997, by and among McNeilus, the shareholders of McNeilus and
Oshkosh. The aggregate acquisition price paid for the stock of McNeilus and
related non-compete and ancillary agreements was $250.0 million. As a result of
cash acquired and the prepayment of certain notes and purchase of selected
assets of McNeilus by the selling stockholders of McNeilus, the effective cost
to Oshkosh in connection with the Acquisition was approximately $216.2 million.
The purchase price paid by Oshkosh was determined on the basis of arm's length
negotiations between the parties. There is no material relationship between the
shareholders of McNeilus and Oshkosh or any of its affiliates, directors or
officers or any of their associates.
McNeilus is a leader in the refuse truck body and concrete mixer
industries. McNeilus' product line includes refuse and recycling truck bodies,
rear-discharge concrete mixers and ready-mix batch plants. Oshkosh intends to
operate the business of McNeilus at its present locations and to conduct the
business of McNeilus in substantially the same manner as it had been conducted
prior to the Acquisition.
The Acquisition was financed by a $325.0 million senior credit facility
(the "Senior Credit Facility") syndicated by Bank of America National Trust and
Savings Association, as agent, and the issuance of $100.0 million of 8 3/4%
Senior Subordinated Notes due 2008. The Senior Credit Facility is comprised of a
multi-tranche term loan facility aggregating $225.0 million and a $100.0 million
revolving credit facility. Approximately $13.0 million was drawn under the
revolving credit facility in connection with the closing of the Acquisition.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
The financial statements of McNeilus Companies, Inc. are included as
follows:
(i) Report of Larson, Allen, Weishair and Co., LLP, Independent
Auditors
(ii) Consolidated Balance Sheets as of February 28, 1997 and February
29, 1996, and as of November 30, 1997 (unaudited)
(iii) Consolidated Statements of Income for each of the three fiscal
years in the period ended February 28, 1997, and for the nine month periods
ended November 30, 1997 and 1996 (unaudited)
(iv) Consolidated Statements of Stockholders' Equity for each of the
three fiscal years in the period ended February 28, 1997, and for the nine
month period ended November 30, 1997 (unaudited)
(v) Consolidated Statements of Cash Flows for each of the three fiscal
years in the period ended February 28, 1997, and for the nine month periods
ended November 30, 1997 and 1996 (unaudited)
(vi) Notes to Consolidated Financial Statements
(b) Pro Forma Financial Information.
(i) Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
December 31, 1997
(ii) Unaudited Pro Forma Condensed Consolidated Statement of Income
for the twelve months ended December 31, 1997
(iii) Unaudited Pro Forma Condensed Consolidated Statement of Income
for the fiscal year ended September 30, 1997
(iv) Unaudited Pro Forma Condensed Consolidated Statement of Income
for the three months ended December 31, 1997
(v) Notes to Unaudited Pro Forma Condensed Consolidated Financial
Statements
2
<PAGE> 3
(c) Exhibits.
The exhibits listed in the accompanying Exhibit Index are filed as part of
this Current Report on Form 8-K.
3
<PAGE> 4
INDEPENDENT AUDITOR'S REPORT
Board of Directors
McNeilus Companies, Inc.
We have audited the accompanying consolidated balance sheets of McNeilus
Companies, Inc. and Subsidiaries, as of February 28, 1997 and February 29, 1996,
and the related consolidated statements of income, stockholders' equity and cash
flows for each of the three years in the period ended February 28, 1997. These
consolidated financial statements are the responsibility of the Companies'
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of McNeilus
Companies, Inc. and Subsidiaries as of February 28, 1997 and February 29, 1996,
and the results of their operations and their cash flows for each of the three
years in the period ended February 28, 1997, in conformity with generally
accepted accounting principles.
LARSON, ALLEN, WEISHAIR & CO., LLP
Austin, Minnesota
April 23, 1997, except for Notes 2 and 13, as to
which the date is December 8, 1997.
F-1
<PAGE> 5
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
FEBRUARY 28, 1997, FEBRUARY 29, 1996
AND NOVEMBER 30, 1997
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents................................. $ 24,743 $ 16,005 $ 20,159
Accounts Receivable, Net.................................. 9,432 11,203 12,259
Net Investment in Sales-Type Leases -- Current............ 32,009 25,710 35,108
Prepaids and Miscellaneous Receivables.................... 1,134 2,258 6,099
Short-Term Investments.................................... 2,425 2,350 1,436
Inventories............................................... 87,194 99,006 59,189
Deferred Income Taxes..................................... 4,334 2,452 4,213
-------- -------- --------
Total Current Assets................................. 161,271 158,984 138,463
-------- -------- --------
NET ASSETS OF DISCONTINUED OPERATIONS....................... 6,856 6,583 6,988
-------- -------- --------
NET INVESTMENT IN SALES-TYPE LEASES......................... 101,870 95,237 86,536
-------- -------- --------
LONG-TERM RECEIVABLES AND INVESTMENTS....................... 5,695 2,908 14,513
-------- -------- --------
PROPERTY AND EQUIPMENT
Property and Equipment.................................... 58,955 56,490 59,219
Less Accumulated Depreciation............................. 30,524 26,807 31,323
-------- -------- --------
Net Property and Equipment........................... 28,431 29,683 27,896
-------- -------- --------
INTANGIBLE ASSETS........................................... 97 -- 324
-------- -------- --------
Total Assets......................................... $304,220 $293,395 $274,720
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable -- Trade................................. $ 9,470 $ 10,097 $ 10,324
Accrued Expenses and Other Liabilities.................... 20,871 14,758 17,042
Dividends Payable......................................... 119 92 --
Revolving Line-Of-Credit.................................. 5,200 10,100 --
Floor Plan Notes Payable.................................. 39,515 56,981 17,194
Current Maturities of Leasing Long-Term Debt.............. 32,703 26,126 35,787
Current Maturities of Other Long-Term Debt................ 1,341 2,044 286
-------- -------- --------
Total Current Liabilities............................ 109,219 120,198 80,633
-------- -------- --------
LONG-TERM DEBT -- LEASING................................... 88,867 81,538 77,852
-------- -------- --------
OTHER LONG-TERM DEBT........................................ 6,400 11,425 2,598
-------- -------- --------
DEFERRED INCOME TAXES....................................... 22,632 18,575 23,079
-------- -------- --------
STOCKHOLDERS' EQUITY
Common Stock, No Par Value
Class A, Voting, Authorized 100,000 Shares
76,061 Shares Issued and Outstanding................. 234 23,596 234
Class B, Nonvoting, Authorized 9,900,000 Shares
7,380,264, -0-, 7,380,264 Shares Issued and
Outstanding, Respectively............................ 22,668 -- 22,668
Retained Earnings......................................... 54,200 38,063 67,656
-------- -------- --------
Total Stockholders' Equity........................... 77,102 61,659 90,558
-------- -------- --------
Total Liabilities and Stockholders' Equity.................. $304,220 $293,395 $274,720
======== ======== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
F-2
<PAGE> 6
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED FEBRUARY 28, 1997
FEBRUARY 29, 1996, AND FEBRUARY 28, 1995
AND THE NINE MONTHS ENDED NOVEMBER 30, 1997 AND 1996
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, NOVEMBER 30, NOVEMBER 30,
1997 1996 1995 1997 1996
------------ ------------ ------------ ------------ ------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
NET SALES.......................... $312,999 $331,359 $305,730 $246,774 $233,221
Cost of Sales...................... 257,163 281,790 259,437 203,690 191,930
-------- -------- -------- -------- --------
GROSS PROFIT....................... 55,836 49,569 46,293 43,084 41,291
-------- -------- -------- -------- --------
OPERATING EXPENSES
Selling.......................... 12,286 10,823 9,339 9,868 9,804
General and Administrative....... 16,806 16,634 19,980 15,976 15,049
-------- -------- -------- -------- --------
Total Operating Expenses.... 29,092 27,457 29,319 25,844 24,853
-------- -------- -------- -------- --------
INCOME FROM OPERATIONS............. 26,744 22,112 16,974 17,240 16,438
-------- -------- -------- -------- --------
OTHER INCOME (EXPENSE) Interest
Income -- Leasing................ 12,474 10,492 7,594 9,229 9,321
Interest Expense -- Leasing...... (9,903) (8,241) (5,528) (7,356) (7,413)
Interest Expense................. (2,752) (1,944) (1,801) (1,054) (2,090)
Miscellaneous Income............. 2,305 2,642 1,734 2,218 1,942
-------- -------- -------- -------- --------
Total Other Income
(Expense)................ 2,124 2,949 1,999 3,037 1,760
-------- -------- -------- -------- --------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES.............. 28,868 25,061 18,973 20,277 18,198
INCOME TAX PROVISION............... 10,920 9,503 8,923 7,423 7,013
-------- -------- -------- -------- --------
INCOME FROM CONTINUING
OPERATIONS....................... 17,948 15,558 10,050 12,854 11,185
INCOME FROM DISCONTINUED OPERATIONS
(NET OF INCOME TAXES)............ 117 271 849 602 421
-------- -------- -------- -------- --------
NET INCOME......................... $ 18,065 $ 15,829 $ 10,899 $ 13,456 $ 11,606
======== ======== ======== ======== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
F-3
<PAGE> 7
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED FEBRUARY 28, 1997
FEBRUARY 29, 1996, AND FEBRUARY 28, 1995
AND THE NINE MONTHS ENDED NOVEMBER 30, 1997
<TABLE>
<CAPTION>
COMMON STOCK
-----------------------------------------
CLASS A CLASS B
----------------- -------------------- RETAINED
SHARES AMOUNT SHARES AMOUNT TOTAL EARNINGS
------ ------ ------ ------ ----- --------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
BALANCE, FEBRUARY 28, 1994............ 86,572 $26,856 -- $ -- $26,856 $18,332
Retirement of 1,761 Shares of
Common Stock..................... (1,761) (546) -- -- (546) (853)
Net Income.......................... -- -- -- -- -- 10,899
Dividends........................... -- -- -- -- -- (106)
------ ------- --------- ------- ------- -------
BALANCE, FEBRUARY 28, 1995............ 84,811 26,310 -- -- 26,310 28,272
Retirement of 8,750 Shares of
Common Stock..................... (8,750) (2,714) -- -- (2,714) (5,946)
Net Income.......................... -- -- -- -- -- 15,829
Dividends........................... -- -- -- -- -- (92)
------ ------- --------- ------- ------- -------
BALANCE, FEBRUARY 29, 1996............ 76,061 23,596 -- -- 23,596 38,063
Stock Dividend Issued............... -- (23,362) 7,606,100 23,362 -- --
Retirement of 225,836 Shares of
Common Stock..................... -- -- (225,836) (694) (694) (1,806)
Net Income.......................... -- -- -- -- -- 18,065
Dividends........................... -- -- -- -- -- (122)
------ ------- --------- ------- ------- -------
BALANCE, FEBRUARY 28, 1997............ 76,061 234 7,380,264 22,668 22,902 54,200
Net Income.......................... -- -- -- -- -- 13,456
------ ------- --------- ------- ------- -------
BALANCE, NOVEMBER 30, 1997
(UNAUDITED)......................... 76,061 $ 234 7,380,264 $22,668 $22,902 $67,656
====== ======= ========= ======= ======= =======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
F-4
<PAGE> 8
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED FEBRUARY 28, 1997
FEBRUARY 29, 1996, AND FEBRUARY 28, 1995
AND THE NINE MONTHS ENDED NOVEMBER 30, 1997 AND 1996
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, NOVEMBER 30, NOVEMBER 30,
1997 1996 1995 1997 1996
------------ ------------ ------------ ------------ ------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income....................................... $ 18,065 $ 15,829 $ 10,899 $ 13,456 $ 11,606
-------- -------- -------- -------- --------
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Gain on Sale of Leased Equipment, Property and
Equipment...................................... (568) (317) (160) (330) (365)
Loss on Sale of Investment....................... 48 29 28 28 28
Depreciation..................................... 4,074 4,129 3,393 2,786 3,005
Amortization..................................... 3 157 6 26 --
Deferred Income Taxes............................ 2,174 3,951 3,589 568 1,824
Earnings of Discontinued Operations.............. (117) (271) (849) (602) (421)
Change in Assets and Liabilities:
(Increase) Decrease In:
Accounts Receivable.......................... 1,771 (1,064) (425) (2,829) 4,087
Prepaids and Miscellaneous Receivables....... 700 395 (831) (4,964) 7
Inventories.................................. 11,811 (20,232) (24,120) 28,005 12,223
Increase (Decrease) In:
Accounts Payable -- Trade.................... (626) (3,507) 2,268 852 (2,121)
Accrued Expenses and Other Liabilities....... 6,112 1,593 4,355 (3,829) 2,269
Floor Plan Notes Payable..................... (17,466) 16,631 11,649 (22,321) (16,951)
-------- -------- -------- -------- --------
Total Adjustments.......................... 7,916 1,494 (1,097) (2,610) 3,585
-------- -------- -------- -------- --------
Net Cash Provided by Operating
Activities............................... 25,981 17,323 9,802 10,846 15,191
-------- -------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Property and Equipment............ (2,922) (5,427) (9,977) (2,621) (2,495)
Proceeds from Sale of Property and Equipment..... 18 589 94 344 18
Purchase of Investments.......................... (2,425) (2,350) (1,200) (1,436) (1,705)
Proceeds From Sale of Investments................ 2,350 1,200 1,000 2,425 2,350
Issuance of Long-Term Receivables and Other
Assets......................................... (12,435) (8,316) (5,325) (9,509) (12,278)
Proceeds from Long-Term Receivables and Other
Assets......................................... 9,895 8,074 6,273 903 794
Proceeds from Early Retirement and Disposals of
Leased Equipment............................... 11,185 5,700 5,115 7,897 7,834
Issuance of Leases Receivable.................... (52,406) (61,074) (47,169) (22,376) (38,493)
Proceeds from Receipt on Leases Receivable....... 28,941 23,251 18,485 27,070 23,610
-------- -------- -------- -------- --------
Net Cash Provided (Used) by Investing
Activities............................... (17,799) (38,353) (32,704) 2,697 (20,365)
-------- -------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Long-Term Debt..................... 63,613 59,336 39,112 25,286 43,358
Payments on Long-Term Debt....................... (55,562) (34,129) (23,884) (38,094) (32,717)
Payments for Retirement of Common Stock.......... (2,500) (700) (1,400) -- --
Payment of Dividends............................. (95) (106) (87) (119) (55)
Increase (Decrease) in Revolving Line of
Credit......................................... (4,900) 1,600 8,500 (5,200) (10,100)
-------- -------- -------- -------- --------
Net Cash Provided (Used) By Financing
Activities............................... 556 26,001 22,241 (18,127) 486
-------- -------- -------- -------- --------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS...................................... 8,738 4,971 (661) (4,584) (4,688)
Cash and Cash Equivalents -- Beginning............. 16,005 11,034 11,695 24,743 16,005
-------- -------- -------- -------- --------
CASH AND CASH EQUIVALENTS -- ENDING................ $ 24,743 $ 16,005 $ 11,034 $ 20,159 $ 11,317
======== ======== ======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash Payment For:
Interest Expense -- Leasing.................... $ 9,904 $ 8,241 $ 5,415 $ 7,413 $ 7,356
Interest Expense -- Other...................... 2,935 1,842 2,014 1,048 2,290
Taxes.......................................... 4,258 5,380 4,509 11,038 3,771
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
F-5
<PAGE> 9
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE YEARS ENDED FEBRUARY 28, 1997 (IN THOUSANDS)
(INFORMATION PERTAINING TO NOVEMBER 30, 1997 AND 1996 IS UNAUDITED)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of McNeilus
Companies, Inc. and its wholly-owned subsidiaries (the Companies).
All significant intercompany transactions and accounts of the companies
included in these consolidated financial statements have been eliminated.
Lines of Business
McNeilus Truck and Manufacturing, Inc., a wholly-owned subsidiary of
McNeilus Companies, Inc. manufactures products used primarily by the ready-mix
and refuse industries in the United States and abroad. McNeilus Truck and
Manufacturing, Inc. has entered into a marketing agreement with its wholly-owned
subsidiary, McNeilus Financial, Inc., to sell and market its products. Under
this agreement, McNeilus Financial, Inc. makes all final destination sales and
provides branch facility services.
Leases of manufactured equipment are made through McNeilus Financial
Services, Inc., a wholly-owned subsidiary of McNeilus Companies, Inc.
Substantially all leases have an initial term of five years, and are accounted
for as sales-type leases. Unearned finance income is recognized over the life of
the leases in decreasing amounts which produce a constant rate of return on the
unrecovered investment in the leases.
McIntire Fabricators, Inc., Iowa Contract Fabricators, Inc. and Kensett
Fabricators, Inc., all wholly-owned subsidiaries of McNeilus Companies, Inc.,
provide component fabrication services to McNeilus Truck and Manufacturing, Inc.
The Companies insure for automobile, workers' compensation and employer's
liability, and general liability risks through Nation's Casualty Insurance,
Inc., a wholly-owned subsidiary. Nation's Casualty Insurance, Inc. insures only
for members of the McNeilus group of companies. Aggregate and excess losses are
subject to outside insurance coverages. For the fiscal years ended 1997, 1996,
1995 and the nine months ended November 30, 1997 and 1996 expenses incurred,
before income taxes, included in the consolidated statements of income was
approximately $2,484, $1,695, $1,815, $1,668 and $1,754, respectively.
Use of Estimates
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions. Actual results may vary from those estimates. Areas impacted
through this process include the allowance for doubtful accounts and leases
receivable, residual values of leased equipment, current and long-term
classification of notes receivable and payable, useful lives of property and
equipment, accrued warranty and insurance reserves, and income taxes.
Cash and Cash Equivalents
Cash and cash equivalents include cash in checking and savings accounts.
Accounts and Leases Receivable
Accounts receivable are reflected net of an allowance for doubtful accounts
of $177, $341 and $172 as of February 28, 1997, February 29, 1996 and November
30, 1997, respectively. The Companies also use the reserve method in accounting
for doubtful leases. Net investment in sales-type leases are reflected net of an
F-6
<PAGE> 10
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
allowance for doubtful leases of $0, $0 and $20 as of February 28, 1997,
February 29, 1996 and November 30, 1997, respectively.
Lease Accounting Policies
Leasing activities consist of the leasing of ready mix equipment and plants
and refuse equipment. For financial reporting, these leases are accounted for as
sales-type leases, with profit on the sale recognized at lease inception. Cost
consists of the equipment's book value, less the present value of its residual.
The present value of both the future minimum lease payments and the residual
value are recorded as assets.
Residual values, representing the estimated net present value of the
equipment at the termination of the lease, are recorded at the inception of the
lease based on amounts estimated by management based upon its experience and
judgment.
Unearned income is the amount by which total rentals and estimated residual
value of equipment exceeds the cost of the equipment. Unearned income is
amortized over the lease term so as to produce a constant periodic rate of
return on the net investment in the lease.
Short-Term Investments
Short-term investments consist of deposits which are restricted through
statutory or trust agreements for the insurance operations of Nations Casualty
Insurance, Inc. These deposits consist primarily of certificates of deposit,
stated at cost, which mature within one year, as well as deposits in a
non-interest bearing account.
Inventories
The Companies utilize the LIFO (last-in, first-out) method of pricing
inventories for truck chassis, manufactured mixers, ready-mix plants,
replacement drums, and replacement parts. All other inventory is stated at FIFO
(first-in, first-out) cost.
Revenue Recognition
Sales are recorded when the goods or services are billable at time of
shipment or delivery.
Depreciation
Depreciation is provided for financial reporting by annual charges to
income calculated by use of the straight-line, 150% declining balance and 200%
declining balance methods to amortize the cost of depreciable assets over their
estimated useful lives. Depreciation is provided based upon the following useful
lives:
<TABLE>
<S> <C>
Buildings................................................... 10-35 years
Shop and Office Equipment................................... 3-10 years
Transportation Equipment.................................... 3-7 years
</TABLE>
Depreciation deducted in tax returns differs from depreciation for
financial reporting purposes due to the use of accelerated methods for tax
versus straight-line for financial reporting on certain assets.
Product Warranty
The Companies use the reserve method in accounting for warranty costs. A
warranty reserve of approximately $1,400 is recorded as of February 28, 1997 and
February 29, 1996 and November 30, 1997, respectively. For the fiscal years
ended 1997, 1996 and 1995 and the nine months ended November 30, 1997 and 1996
amounts expensed included in the consolidated statements of income were
approximately $1,189, $2,427, $2,209, $170 and $1,157, respectively.
F-7
<PAGE> 11
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Deferred Income Taxes
Deferred income taxes are provided on temporary differences between
financial reporting and income tax reporting of certain income and expense
items, as well as the accounting for the leasing activities of McNeilus
Financial Services, Inc. as sales-type leases for financial reporting and
operating leases for income tax reporting.
Advertising Costs
Advertising costs are expensed when incurred. For the fiscal years ended
1997, 1996 and 1995 and the nine months ended November 30, 1997 and 1996
advertising expense was approximately $1,458, $822, $694, $701 and $1,165,
respectively.
Pension and Profit Sharing Plans
The Companies offer to its employees a qualified salary reduction
retirement plan under Sec. 401(k)of the Internal Revenue Code. The members of
the consolidated group provide a limited matching of contributions as an
incentive for employees to participate in the plan. For the fiscal years ended
1997, 1996 and 1995 and the nine months ended November 30, 1997 and 1996
contribution expense included in the consolidated statements of income was
approximately $278, $303, $289, $248 and $171, respectively.
Research and Development Costs
Research and development costs are expensed when incurred. For the fiscal
years ended 1997, 1996 and 1995 and the nine months ended November 30, 1997 and
1996 research and development costs charged to expense were approximately $667,
$985, $607, $313 and $338, respectively.
New Accounting Standards
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share," which is
required to be adopted effective for both interim and annual financial
statements for periods ending after December 15, 1997. Among other provisions,
the dilutive effect of stock options must be excluded under the new requirements
for calculating basic earnings per share, which will replace primary earnings
per share. This change will not impact the Companies' earnings per share
calculations.
In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income." SFAS No. 130 establishes the standards for
reporting and displaying comprehensive income and its components (revenues,
expenses, gains, and losses) as part of a full set of financial statements. This
statement requires that all elements of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. The statement is effective for fiscal years beginning
after December 15, 1997. Since this statement applies only to the presentation
of comprehensive income, it will not have any impact on the Companies' results
of operations, financial position or cash flows.
In June 1997, the Financial Accounting Standards Board also issued SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information," SFAS
No. 131 establishes the standards for the manner in which public enterprises are
required to report financial and descriptive information about their operating
segments. The statement defines operating segments as components of an
enterprise for which separate financial information is available and evaluated
regularly as a means for assessing segment performance and allocating resources
to segments. A measure of profit or loss, total assets, and other related
information are required to be disclosed for each operating segment. In
addition, this statement requires the annual disclosure of information
concerning revenues derived from the enterprise's products or services,
countries in which it earns revenue or holds assets, and major customers. The
statement is also effective for fiscal years beginning
F-8
<PAGE> 12
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
after December 15, 1997. The adoption of SFAS No. 131 will not affect the
Companies' results of operations or financial position, but will affect the
disclosure of segment information.
Reclassification of Financial Statement Data
Investments in Unconsolidated Subsidiaries, and the earnings from those
subsidiaries, presented as a separate line in the 1996 and 1995 balance sheets
and income statements have been reclassified to discontinued operation lines
within those statements to conform with their presentation in the 1997 financial
statements.
NOTE 2 DISCONTINUED OPERATIONS
In December, 1997 the Company entered into an agreement with a minority
stockholder to sell its 92% interest in ready mix operations, Ready Mix Holding,
Inc. and Subsidiaries. The sale price, which will be determined by independent
appraisal, has yet to be determined.
In December, 1997 the Company entered into an agreement with a minority
stockholder to sell its wholly-owned credit life insurance subsidiary, McNeilus
Fidelity Life Insurance Company. The sale price, which will be determined by
independent appraisal, has yet to be determined.
In December, 1997 the Company entered into an agreement with an unrelated
party to sell its wholly-owned subsidiary, Sterling Travel of Austin, Inc., for
$300.
The disposals of these companies are being accounted for as discontinued
operations. Net assets of these companies at February 28, 1997, February 29,
1996 and November 30, 1997 are summarized as follows:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Cash and Short-Term Investments............ $1,869 $1,776 $ 2,009
Accounts Receivable, Net................... 534 474 1,392
Inventories................................ 608 662 788
Long-Term Receivables...................... 1,924 2,220 1,927
Property and Equipment, Net................ 2,324 2,631 2,011
Other Assets............................... 1,321 1,279 819
Accounts Payable and Accrued Expenses...... (425) (254) (1,118)
Other Current Liabilities.................. (498) (877) (485)
Long-Term Debt, Less Current Portion....... (801) (1,328) (355)
------ ------ -------
$6,856 $6,583 $ 6,988
====== ====== =======
</TABLE>
These entities had the following revenues for the fiscal years ended 1997,
1996 and 1995:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Ready Mix Holding, Inc. and Subsidiaries.... $9,154 $8,604 $10,053
McNeilus Fidelity Life Insurance Company.... 95 88 64
Sterling Travel of Austin, Inc.............. 910 990 1,086
</TABLE>
F-9
<PAGE> 13
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 3 MINIMUM LEASE PAYMENTS RECEIVABLE AND NET INVESTMENT IN LEASES
The components of the net investment in sales-type leases are as follows at
February 28, 1997, February 29, 1996 and November 30, 1997:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Minimum Lease Payments Receivable.......... $122,619 $115,699 $105,327
Less: Allowance for Credit Losses.......... 0 0 20
Add: Residual Value........................ 38,768 32,932 39,345
Less: Unearned Income...................... 27,508 27,684 23,008
-------- -------- --------
Net Investment in Leases.............. 133,879 120,947 121,644
Less: Current Portion...................... 32,009 25,710 35,108
-------- -------- --------
Non-Current Portion................... $101,870 $ 95,237 $ 86,536
======== ======== ========
</TABLE>
The approximate maturities of minimum lease payments receivable are
estimated to be as follows for the respective years ending February 28: 1998 --
$40,926; 1999 -- $35,177; 2000 -- $26,810; 2001 -- $15,181; 2002 -- $4,156; 2003
- -- $369.
NOTE 4 INVENTORIES
Inventories at February 28, 1997, February 29, 1996 and November 30, 1997
consist of the following:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Trucks..................................... $49,780 $60,650 $25,354
Mixers..................................... 9,863 9,367 6,607
Refuse Bodies.............................. 5,942 7,548 5,130
Ready-Mix Plants........................... 1,391 768 325
Drums...................................... 818 597 672
Parts Held for Sale........................ 12,750 13,016 11,111
Manufacturing Raw Material and Parts....... 14,300 14,338 17,858
Collateral Held for Sale................... 0 78 0
------- ------- -------
Inventories at FIFO Cost.............. 94,844 106,362 67,057
Excess of FIFO Cost Over LIFO Cost......... (7,650) (7,356) (7,868)
------- ------- -------
$87,194 $99,006 $59,189
======= ======= =======
</TABLE>
F-10
<PAGE> 14
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 5 LONG-TERM RECEIVABLES AND INVESTMENTS
Long-term receivables and investments consist of the following at February
28, 1997, February 29, 1996 and November 30, 1997:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29 NOVEMBER 30
1997 1996 1997
------------ ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Miscellaneous Notes Receivable............. $2,485 $ 653 $ 5,245
Related Party Notes Receivable............. 899 944 6,814
Conditional Sales Contracts................ 619 1,043 3,068
Marketable Equity Securities at Cost, Which
Approximates Market...................... 940 940 940
Other Investments at Cost.................. 1,298 323 1,406
------ ------ -------
Totals................................ 6,241 3,903 17,473
Less Current Portion (Included in Prepaids
and Miscellaneous Receivables)........... 546 995 2,960
------ ------ -------
$5,695 $2,908 $14,513
====== ====== =======
</TABLE>
Maturities for the next five years on all long-term notes receivable are
estimated to be as follows for the respective years ending February 28:
<TABLE>
<S> <C>
1998........................................................ $ 546
1999........................................................ 2,654
2000........................................................ 122
2001........................................................ 110
2002........................................................ 104
</TABLE>
The aggregate carrying value of the long-term notes receivable and
investments approximates the fair market value at February 28, 1997.
NOTE 6 PROPERTY AND EQUIPMENT
Property and equipment, stated at cost, is composed as follows at February
28, 1997, February 29, 1996 and November 30, 1997:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29 NOVEMBER 30
1997 1996 1997
------------ ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Land and Improvements...................... $ 1,684 $ 1,737 $ 1,975
Buildings.................................. 27,860 26,310 28,313
Shop and Office Equipment.................. 24,563 23,211 24,373
Transportation Equipment................... 4,575 4,289 4,536
Construction in Progress................... 273 943 22
------- ------- -------
Total................................. 58,955 56,490 59,219
Less Accumulated Depreciation.............. 30,524 26,807 31,323
------- ------- -------
Net Property and Equipment............ $28,431 $29,683 $27,896
======= ======= =======
</TABLE>
F-11
<PAGE> 15
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 7 ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other liabilities are composed as follows at February
28, 1997, February 29, 1996 and November 30, 1997:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Insurance Reserves........................................ $ 3,940 $ 2,779 $ 4,983
Miscellaneous............................................. 16,931 11,979 12,059
-------- -------- --------
$ 20,871 $ 14,758 $ 17,042
======== ======== ========
</TABLE>
NOTE 8 DEBT
Line of Credit
McNeilus Truck and Manufacturing, Inc., has a bank line-of-credit which
contains several interest rate options, which approximate or are below the prime
rate. The following is a summary of the availability and transactions as of and
for the periods ending February 28, 1997, February 29, 1996 and November 30,
1997:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Dollar Amount Available................................... $ 12,000 $ 12,000 $ 12,000
Outstanding at Respective Date............................ 5,200 10,100 0
Highest Dollar Amount Outstanding During the Period....... 11,800 10,100 5,200
Average Month-End Balance for Those Month-Ends With
Outstanding Balances.................................... 4,400 5,980 0
</TABLE>
Floor Plan Notes
Floor plan notes are secured by truck chassis inventory of McNeilus Truck
and Manufacturing, Inc. Interest rates on the floor plan notes approximate the
prime rate after free days of floor plan ranging up to 120 days as negotiated
with each financial institution.
Long-Term Debt -- Leasing
The leasing retail installment contracts have various fixed interest rates
and are due on varying dates. The leased assets are security for the installment
contracts. The fixed interest rates originated from these commitments are
generally below the prime rate existing at the time the funds were advanced.
Leasing long-term debt is comprised as follows:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Total Leasing Long-Term Debt.............................. $121,570 $107,664 $113,639
Less Current Maturities................................. 32,703 26,126 35,787
-------- -------- --------
Total Leasing Long-Term Debt Less Current Maturities...... $ 88,867 $ 81,538 $ 77,852
======== ======== ========
</TABLE>
The estimated fair value of retail installment contracts as of February 28,
1997 is $122,541. The estimated fair value is the present value of estimated
future principal and interest payments discounted at the current interest rate.
F-12
<PAGE> 16
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Other Long-Term Debt
Other Long-term debt obligations of the Companies consist of the following
at February 28, 1997, February 29, 1996 and November 30, 1997:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, NOVEMBER 30,
1997 1996 1997
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Note payable to bank. Tiered interest rate varying from
6.18% to 7.55%. Monthly principal payments of $82, plus
interest through February, 1999. All bank debt is
guaranteed by majority stockholder. (Note was paid off
in September, 1997.).................................... $4,537 $ 5,525 $ 0
Notes payable to prior stockholders. Interest rates
ranging from 5.7% to 8% with annual principal and
interest payments ranging from $3 to $250 with
maturities through February, 2033. Unsecured............ 2,861 7,591 2,590
Other notes payable to corporations and individuals. Notes
are unsecured or secured by property.................... 343 353 294
------ ------- ------
Total Long-Term Debt................................. 7,741 13,469 2,884
Less Current Maturities................................... 1,341 2,044 286
------ ------- ------
Total Other Long-Term Debt........................... $6,400 $11,425 $2,598
====== ======= ======
</TABLE>
The aggregate carrying value of floor plan notes and other long-term debt
approximates the fair market value at February 28, 1997.
Approximate aggregate maturities of all long-term debt are as follows for
the respective years ending February 28: 1998 -- $34,044; 1999 -- $36,164; 2000
- -- $27,286; 2001 -- $20,545; 2002 -- $9,748.
NOTE 9 OPERATING LEASES
The Companies lease computer and manufacturing equipment under long-term
operating lease arrangements. In addition, the Companies throughout the year
rent various equipment as needed under short-term arrangements. For the fiscal
years ended 1997, 1996 and 1995 and the nine months ended November 30, 1997 and
1996 rent expense included in the consolidated statements of income was
approximately $434, $641, $250, $104 and $114, respectively.
Future minimum rentals payable on significant operating leases are
estimated to be as follows for the respective years ending February 28: 1998,
$355; 1999, $210.
NOTE 10 INCOME TAX MATTERS
McNeilus Companies, Inc. and its subsidiaries file a consolidated federal
income tax return. The consolidated federal tax liability is initially allocated
to the members of the consolidated group based on the "taxable income method."
If a member's separate incurred tax liability exceed the amount so allocated, an
additional allocation is made equal to 100 percent of the excess. The
corresponding reduction in tax liability is allocated proportionately to the
members whose losses or credits were used to decrease the tax liability of the
group.
State tax expense is based on estimated state liabilities from filings made
under separate, combined, consolidated, or unitary filings as required by the
various taxing jurisdictions. McNeilus Truck and Manufacturing, Inc. reimburses
all other subsidiaries of McNeilus Companies, Inc. for excessive state tax
liabilities (in excess of 10% of taxable income) resulting from combined or
unitary filings.
F-13
<PAGE> 17
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Prepaids and miscellaneous receivables include income tax refunds
receivable of approximately $-0-, $715 and $1,631 as of February 28, 1997,
February 29, 1996 and November 30, 1997, respectively.
The provision for income tax consists of the following at February 28,
1997, February 29, 1996 and February 28, 1995:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28,
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Current
Federal.................................. $ 7,426 $5,043 $4,252
State.................................... 1,320 508 1,082
Deferred
Federal.................................. 1,611 3,295 $3,183
State.................................... 563 657 406
------- ------ ------
$10,920 $9,503 $8,923
======= ====== ======
</TABLE>
Net current deferred tax assets arise primarily from accrued liabilities
which are not currently deductible for income tax purposes, as well as
allowances for doubtful accounts receivable and inventory reserves. The net
current deferred tax assets at February 28, 1997 and February 29, 1996 are
comprised as follows:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29,
1997 1996
------------ ------------
<S> <C> <C>
Treatment of Lease
Origination Costs.................................... $ 310 $ 278
Insurance Reserves..................................... 1,379 973
Investment Loss Reserve................................ 350 0
Inventory Valuation Reserves........................... 1,466 455
Warranty Reserves...................................... 490 490
Accounts Receivable Allowance.......................... 62 120
Contribution and State Loss Carryovers................. 1,430 1,616
Valuation Allowances -- Carryover...................... (1,430) (1,616)
Other.................................................. 277 136
-------- --------
$ 4,334 $ 2,452
======== ========
</TABLE>
Contribution carryovers available to the extent of ten percent of taxable
income over the next five years approximate $2,800 as of February 28, 1997.
State loss carryovers available to the extent of future taxable income as
provided by the respective taxing jurisdictions are estimated to be
approximately $7,500 as of February 28, 1997. A valuation allowance is provided
for both of these carryovers as there is no guarantee that they will be utilized
to decrease future taxable income.
Net noncurrent deferred income tax liabilities arise primarily from the
recording of McNeilus Financial Services, Inc.'s leasing activities as
sales-type leases for financial reporting and as operating leases for income tax
reporting. State deferred income taxes are provided on this difference at a 6%
rate.
Deferred tax liabilities are also provided on the difference between
depreciation for financial reporting and income tax reporting, and the deferral
of the intercompany gain on the sale of equipment to McNeilus
F-14
<PAGE> 18
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Financial Services, Inc. for leasing purposes. The net deferred tax liabilities
at February 28, 1997 and February 29, 1996 are comprised as follows:
<TABLE>
<CAPTION>
FEBRUARY 28, FEBRUARY 29,
1997 1996
------------ ------------
<S> <C> <C>
Treatment of Leases.................................... $18,096 $14,359
Intercompany Profit on Sales to McNeilus Financial
Services, Inc., Net of Amortization.................. 4,245 3,925
Depreciation........................................... 291 291
------- -------
Total........................................... $22,632 $18,575
======= =======
</TABLE>
The provision for income taxes varies from the amount of income tax
determined by applying the U.S. statutory income tax rate to pre-tax income as a
result of the following differences at February 28, 1997, February 29, 1996 and
February 28, 1995:
<TABLE>
<CAPTION>
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
U.S. Statutory Rate........................................ 35.0% 35.0% 35.0%
State Tax Deduction........................................ (2.3) (1.6) (2.7)
Non-deductible contributions............................... 0.0 0.0 8.1
Other, Net................................................. (1.4) (0.2) (1.3)
---- ---- ----
Effective Federal Tax Rate................................. 31.3 33.2 39.1
Effective State Tax Rates.................................. 6.5 4.7 7.8
---- ---- ----
Combined Effective Tax Rate................................ 37.8% 37.9% 46.9%
==== ==== ====
</TABLE>
NOTE 11 COMMITMENTS AND CONTINGENCIES
Purchase Commitments
McNeilus Truck and Manufacturing, Inc. orders truck chassis for future
delivery based on anticipated sales and production volume. Deliveries to be
received in the fiscal year ending February 28, 1998 are expected to approximate
demand.
LITIGATION
McNeilus Truck and Manufacturing, Inc. is currently a defendant in several
product liability and other lawsuits. Management does not believe that the final
outcome of these cases will have a significant adverse effect upon the financial
position or results of operations of the Companies.
NOTE 12 CASH FLOW INFORMATION
Kensett Fabricators, Inc. was formed during the year ending February 29,
1996, The company is wholly owned by McNeilus Companies, Inc. The primary
investment was in the form of property, net of a long-term note assumed, for a
net investment of $100.
McNeilus Companies, Inc. repurchased 8,750 shares of outstanding common
stock for $8,660 during the year ending February 29, 1996. Of this, $700 was
paid in cash and a long-term note was issued for $7,960.
McIntire Fabricators, Inc. and Iowa Contract Fabricators, Inc. were formed
during the year ending February 28, 1995. The companies are wholly owned by
McNeilus Companies, Inc. The primary investment was in the form of property with
a book value of approximately $1,305.
F-15
<PAGE> 19
MCNEILUS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
NOTE 13 SUBSEQUENT EVENT
On December 8, 1997, the stockholders entered into an agreement to sell all
the outstanding common stock of the Companies to Oshkosh Truck Corporation. The
acquisition price, including amounts for non-compete agreements, is $250,000.
Under certain conditions, if the acquisition is not consummated, the
Companies may be required to pay Oshkosh a fee of $10 million, and conversely
Oshkosh may be required to pay a $10 million fee to the Companies.
F-16
<PAGE> 20
INDEX TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OSHKOSH TRUCK CORPORATION AND MCNEILUS COMPANIES, INC.
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Unaudited Pro Forma Condensed Consolidated Balance Sheet as
of December 31, 1997...................................... P-3
Unaudited Pro Forma Condensed Consolidated Statement of
Income for the twelve months ended December 31, 1997...... P-4
Unaudited Pro Forma Condensed Consolidated Statement of
Income for the fiscal year ended September 30, 1997....... P-5
Unaudited Pro Forma Condensed Consolidated Statement of
Income for the three months ended December 31, 1997....... P-6
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements...................................... P-7
</TABLE>
P-1
<PAGE> 21
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated statements of
income and condensed consolidated balance sheet (collectively, the "Pro Forma
Statements") have been derived by the application of pro forma adjustments,
which give effect to the acquisition by Oshkosh Truck Corporation ("Oshkosh") of
all of the issued and outstanding common stock of McNeilus Companies, Inc.
("McNeilus") (the "Acquisition"), the issuance by Oshkosh of $100 million Senior
Subordinated Notes (the "Debt Issuance"), the consummation of a $325 million
Senior Credit Facility ("Senior Credit Facility"), the prepayment of outstanding
term loans and borrowings under a revolving credit facility (the "Debt
Repayment") and the establishment of a lease financing partnership (the "Lease
Financing") (collectively referred to as the "Transactions") to the historical
financial statements of Oshkosh and McNeilus as if the Transactions had been
consummated for balance sheet purposes as of December 31, 1997, and for
statement of income purposes as of the beginning of the periods presented. For
purposes of the Pro Forma Statements, the Transactions are assumed to have
occurred simultaneously.
THE PRO FORMA STATEMENTS DO NOT PURPORT TO REPRESENT WHAT OSHKOSH'S
FINANCIAL POSITION OR RESULTS OF OPERATIONS WOULD ACTUALLY HAVE BEEN HAD THE
TRANSACTIONS IN FACT OCCURRED ON THE ASSUMED DATES OR TO PROJECT OSHKOSH'S
FINANCIAL POSITION OR RESULTS OF OPERATIONS FOR ANY FUTURE DATE OR FUTURE
PERIOD. THE PRO FORMA STATEMENTS SHOULD BE READ IN CONJUNCTION WITH THE
HISTORICAL FINANCIAL STATEMENTS AND RELATED NOTES OF OSHKOSH AND MCNEILUS.
The pro forma adjustments, as described in the accompanying notes to the
Pro Forma Statements, are based on available information and certain assumptions
that management believes are reasonable.
The Acquisition has been accounted for under the purchase method of
accounting. The purchase price for McNeilus has been allocated to the tangible
and intangible assets and liabilities of McNeilus based on preliminary estimates
of their fair values. The allocation of the purchase price is subject to
revision when additional information concerning certain asset and liability
valuations is obtained.
Oshkosh and McNeilus have different fiscal year ends -- September 30 for
Oshkosh and the last day of February for McNeilus -- and as a result, amounts
for McNeilus as of November 30, 1997 have been combined with amounts of Oshkosh
as of December 31, 1997 for the Unaudited Pro Forma Condensed Consolidated
Balance Sheet. The unaudited condensed consolidated statement of income for
Oshkosh for the twelve month period ended September 30, 1997 and for the twelve
month period ended December 31, 1997 have been combined with the unaudited
condensed consolidated statement of income for McNeilus for the twelve month
period ended November 30, 1997. The unaudited condensed consolidated statement
of income of Oshkosh for the three months ended December 31, 1997 have been
combined with the unaudited condensed consolidated statement of income for
McNeilus for the three months ended November 30, 1997. Statement of income
information of McNeilus for the three month period ended November 30, 1997 is
therefore included in both the interim and the annual Pro Forma Statements.
The application of the pro forma adjustments to the historical results of
operations of Oshkosh for the twelve months ended December 31, 1997 and
September 30, 1997, results in the pro forma income from continuing operations
being greater than the historical income from continuing operations of Oshkosh.
Net sales of Oshkosh for the first quarter of each fiscal year (the three months
ended December 31) and net sales of McNeilus for the third quarter of each
fiscal year (the three months ended November 30) represent the lowest quarter of
shipments for each company during their respective fiscal years. Accordingly,
the application of the pro forma adjustments to the historical results of
operations of Oshkosh for the three months ended December 31, 1997, results in
the pro forma income from continuing operations being less than the historical
income from continuing operations of Oshkosh.
P-2
<PAGE> 22
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
---------------------------
DEBT ISSUANCE,
AS REPORTED DEBT REPAYMENT,
------------------------------------- ACQUISITION
OSHKOSH MCNEILUS AND LEASE PRO FORMA
DECEMBER 31, 1997 NOVEMBER 30, 1997 FINANCING VALUATION CONSOLIDATED
----------------- ----------------- --------------- --------- ------------
(A) (B)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents............. $ 198 $ 20,159 $(17,659) $ -- $ 2,698
Receivables, net.......... 54,215 12,259 -- -- 66,474
Net investment in
sales-type leases....... -- 35,108 (35,108) -- --
Inventories............... 86,744 59,189 -- 7,868 153,801
Prepaid expenses and
other................... 3,905 7,535 -- -- 11,440
Deferred income taxes..... 9,169 4,213 -- -- 13,382
-------- -------- -------- --------- --------
Total current
assets............. 154,231 138,463 (52,767) 7,868 247,795
Net assets of discontinued
operations................ -- 6,988 (2,840) (4,148) --
Investment in unconsolidated
partnership............... -- -- 8,005 -- 8,005
Net investment in sales-type
leases.................... -- 86,536 (86,536) -- --
Other long-term assets...... 8,248 14,513 (4,699) (1,000) 17,062
Property, plant and
equipment, net............ 55,340 27,896 (400) 7,500 90,336
Purchase cost............... -- -- 256,000 (256,000) --
Goodwill and other
intangibles, net.......... 163,639 324 -- 169,829 333,792
-------- -------- -------- --------- --------
Total assets................ $381,458 $274,720 $116,763 $ (75,951) $696,990
======== ======== ======== ========= ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable.......... $ 40,556 $ 10,324 $ -- $ -- $ 50,880
Floor plan notes
payable................. -- 17,194 -- -- 17,194
Customer advances......... 35,261 -- -- -- 35,261
Other current
liabilities............. 41,342 17,042 (483) -- 57,901
Current maturities of
senior term loans,
revolving credit
facility and other
long-term debt.......... 7,820 36,073 (35,169) -- 8,724
-------- -------- -------- --------- --------
Total current
liabilities........ 124,979 80,633 (35,652) -- 169,960
Senior revolving credit
facility.................. -- -- 13,048 -- 13,048
Senior term loans........... -- -- 216,562 -- 216,562
Senior subordinated notes... -- -- 100,000 -- 100,000
Other long-term debt........ 95,000 80,450 (172,852) -- 2,598
Other long-term
liabilities............... 15,031 -- -- -- 15,031
Deferred income taxes....... 22,701 23,079 (3,588) 14,607 56,799
Total shareholders'
equity.................... 123,747 90,558 (755) (90,558) 122,992
-------- -------- -------- --------- --------
Total liabilities and
shareholders' equity...... $381,458 $274,720 $116,763 $ (75,951) $696,990
======== ======== ======== ========= ========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
P-3
<PAGE> 23
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AS REPORTED PRO FORMA
------------------------------------- -----------------
OSHKOSH MCNEILUS TWELVE MONTHS
TWELVE MONTHS TWELVE MONTHS ENDED
ENDED ENDED PRO FORMA DECEMBER 31, 1997
DECEMBER 31, 1997 NOVEMBER 30, 1997 ADJUSTMENTS CONSOLIDATED
----------------- ----------------- ----------- -----------------
<S> <C> <C> <C> <C>
Net sales....................... $684,715 $326,552 $ -- $1,011,267
-- -- (699)(h) --
(1,048)(g)
Cost of sales................... 593,147 268,923 1,764(c) 862,087
-------- -------- -------- ----------
Gross income............. 91,568 57,629 (17) 149,180
Operating expenses:
Selling, general and
administrative............. 49,393 30,083 (1,461)(c) 76,172
-- -- (1,843)(g) --
Engineering, research and
development................ 7,997 -- 699(h) 8,696
Amortization of goodwill and
intangibles................ 4,464 -- 6,642(d) 11,106
-------- -------- -------- ----------
Total operating
expenses.............. 61,854 30,083(k) 4,037 95,974(k)
-------- -------- -------- ----------
Income from operations.......... 29,714 27,546 (4,054) 53,206
Other income (expense):
Interest expense.............. (11,668) (11,562) 9,846(e) (30,693)
-- -- (17,309)(f) --
Interest income............... 676 12,382 (12,382)(e) 676
-- -- (609)(e) --
Other -- net.................. (197) 2,581 (1,765)(i) 10
-------- -------- -------- ----------
(11,189) 3,401 (22,219) (30,007)
-------- -------- -------- ----------
Income from continuing
operations before income taxes
and equity in income of
unconsolidated partnership.... 18,525 30,947 (26,273) 23,199
Provision (credit) for income
taxes......................... 7,003 11,330 (9,186)(j) 9,147
-------- -------- -------- ----------
11,522 19,617 (17,087) 14,052
Equity in income of
unconsolidated partnership
(net of income taxes of
$1,227)....................... -- -- 1,918(e) 1,918
-------- -------- -------- ----------
Income from continuing
operations.................... $ 11,522 $ 19,617 $(15,169) $ 15,970
======== ======== ======== ==========
Earnings per common share from
continuing operations:
Basic......................... $ 1.37 $ 1.90
======== ==========
Diluted....................... $ 1.36 $ 1.88
======== ==========
Shares used in calculation:
Basic......................... 8,425 8,425
======== ==========
Diluted....................... 8,485 8,485
======== ==========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
P-4
<PAGE> 24
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AS REPORTED PRO FORMA
------------------------------------- -----------------
OSHKOSH TWELVE MONTHS
FISCAL YEAR MCNEILUS ENDED
ENDED TWELVE MONTHS SEPTEMBER 30,
SEPTEMBER 30, ENDED PRO FORMA 1997
1997 NOVEMBER 30, 1997 ADJUSTMENTS CONSOLIDATED
------------- ----------------- ----------- -------------
<S> <C> <C> <C> <C>
Net sales....................... $683,234 $326,552 $ -- $1,009,786
-- -- (699)(h) --
(1,048)(g)
Cost of sales................... 594,390 268,923 1,764(c) 863,330
-------- -------- -------- ----------
Gross income............. 88,844 57,629 (17) 146,456
Operating expenses:
Selling, general and
administrative............. 47,742 30,083 (1,461)(c) 74,521
-- -- (1,843)(g) --
Engineering, research and
development................ 7,847 -- 699(h) 8,546
Amortization of goodwill and
intangibles................ 4,470 -- 6,642(d) 11,112
-------- -------- -------- ----------
Total operating
expenses.............. 60,059 30,083(k) 4,037 94,179(k)
-------- -------- -------- ----------
Income from operations.......... 28,785 27,546 (4,054) 52,277
Other income (expense):
Interest expense.............. (12,722) (11,562) 9,846(e) (30,697)
-- -- (16,259)(f) --
Interest income............... 717 12,382 (12,382)(e) 717
-- -- (609)(e) --
Other -- net.................. (278) 2,581 (1,765)(i) (71)
-------- -------- -------- ----------
(12,283) 3,401 (21,169) (30,051)
-------- -------- -------- ----------
Income from continuing
operations before income taxes
and equity in income of
unconsolidated partnership.... 16,502 30,947 (25,223) 22,226
Provision for income taxes...... 6,496 11,330 (8,777)(j) 9,049
-------- -------- -------- ----------
10,006 19,617 (16,446) 13,177
Equity in income of
unconsolidated partnership
(net of income taxes of
$1,227)....................... -- -- 1,918(e) 1,918
-------- -------- -------- ----------
Income from continuing
operations.................... $ 10,006 $ 19,617 $(14,528) $ 15,095
======== ======== ======== ==========
Earnings per common share from
continuing operations:
Basic......................... $ 1.18 $ 1.78
======== ==========
Diluted....................... $ 1.17 $ 1.77
======== ==========
Shares used in calculation:
Basic......................... 8,502 8,502
======== ==========
Diluted....................... 8,546 8,546
======== ==========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
P-5
<PAGE> 25
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AS REPORTED
---------------------------
OSHKOSH MCNEILUS PRO FORMA
------------ ------------ ------------------
THREE MONTHS ENDED THREE MONTHS
--------------------------- ENDED
DECEMBER 31, NOVEMBER 30, PRO FORMA DECEMBER 31, 1997
1997 1997 ADJUSTMENTS CONSOLIDATED
------------ ------------ ------------ ------------------
<S> <C> <C> <C> <C>
Net sales.......................... $151,801 $67,295 $ -- $219,096
-- -- (114)(h) --
(166)(g)
Cost of sales...................... 129,494 55,419 472(c) 185,105
-------- ------- ------- --------
Gross income.................. 22,307 11,876 (192) 33,991
Operating expenses:
Selling, general and
administrative................ 11,676 7,847 (380)(c) 18,883
-- -- (260)(g) --
Engineering, research and
development................... 2,143 -- 114(h) 2,257
Amortization of goodwill and
intangibles................... 1,126 -- 1,660(d) 2,786
-------- ------- ------- --------
Total operating expenses.... 14,945 7,847(k) 1,134 23,926(k)
-------- ------- ------- --------
Income from operations............. 7,362 4,029 (1,326) 10,065
Other income (expense):
Interest expense.............. (2,504) (2,500) 2,364(e) (7,555)
-- -- (4,915)(f) --
Interest income.......... 165 2,955 (2,955)(e) 165
-- -- (149)(e) --
Other -- net............. 72 682 (356)(i) 249
-------- ------- ------- --------
(2,267) 1,137 (6,011) (7,141)
-------- ------- ------- --------
Income from continuing operations
before income taxes and equity
in income of unconsolidated
partnership................... 5,095 5,166 (7,337) 2,924
Provision for income taxes....... 1,955 1,891 (2,596) (h) 1,250
-------- ------- ------- --------
3,140 3,275 (4,741) 1,674
Equity in income of
unconsolidated partnership
(net of income taxes of
$289)......................... -- -- 451(e) 451
-------- ------- ------- --------
Income from continuing
operations.................... $ 3,140 $ 3,275 $(4,290) $ 2,125
======== ======= ======= ========
Earnings per common share from
continuing operations:
Basic......................... $0.38 $0.25
======== ========
Diluted....................... $0.37 $0.25
======== ========
Shares used in calculation:
Basic......................... 8,341 8,341
======== ========
Diluted....................... 8,437 8,437
======== ========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
P-6
<PAGE> 26
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(IN THOUSANDS)
(a) Pro forma adjustments related to the Debt Issuance, the Debt Repayment,
the Acquisition and the Lease Financing are summarized in the following table:
<TABLE>
<CAPTION>
DEBT ISSUANCE AND LEASE
FEES DEBT REPAYMENT ACQUISITION FINANCING TOTALS
---- ----------------- ----------- --------- ------
(1) (2) (3) (4)
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents............. $(15,424) $ 235,228 $(233,875) $ (3,588) $ (17,659)
Net investment in sales-type leases... -- -- -- (35,108) (35,108)
Net assets of discontinued
operations.......................... -- -- (2,840) -- (2,840)
Investment in unconsolidated
partnership......................... -- -- -- 8,005 8,005
Net investment in sales-type leases --
long-term........................... -- -- -- (86,536) (86,536)
Other long-term assets................ 9,424 (1,238) (12,885) -- (4,699)
Property, plant and equipment, net.... -- -- (400) -- (400)
Purchase cost......................... 6,000 -- 250,000 -- 256,000
Other current liabilities............. -- (483) -- -- (483)
Current maturities of long-term
debt................................ -- 618 -- (35,787) (35,169)
Senior revolving credit facility...... -- 13,048 -- -- 13,048
Senior term loans -- less current
portion............................. -- 216,562 -- -- 216,562
Senior subordinated notes payable..... -- 100,000 -- -- 100,000
Long-term debt........................ -- (95,000) -- (77,852) (172,852)
Deferred income taxes -- long-term.... -- -- (3,588) (3,588)
Shareholders' equity.................. -- (755) -- -- (755)
</TABLE>
- -------------------------
(1) Fees and expenses totaling $16,000 for legal, financial and other
professional fees due at closing associated with the Senior Credit Facility
and the Debt Issuance ($8,500), the Acquisition ($6,000) and the Lease
Financing ($1,500), less $576 prepaid at December 31, 1997.
(2) Issuance of aggregate debt of $338,048, repayment of existing long-term debt
of $95,000 and borrowings under the revolving credit facility of $7,820 and
write-off of deferred debt issuance costs of $1,238, less tax benefit of
$483, or $755.
(3) Aggregate cash purchase price of $250,000 due at closing less transactions
prior to or concurrent with closing, including $16,025 in cash to be
received from McNeilus shareholders (repayment of notes of $10,592, sale of
certain assets of $4,094 and intercompany payments of $1,339), and $100
received from third parties from the sale of a discontinued operation.
(4) To reflect contribution of the net investment in sales-type leases to the
unconsolidated lease financing partnership and recognition of gain for
income tax purposes on these sales-type leases which was previously deferred
for income tax purposes. It is anticipated that each general partner in the
lease financing partnership will participate equally in the principal
operating and financial decision making activities of the lease financing
partnership.
P-7
<PAGE> 27
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)
(b) The Acquisition has been accounted for by Oshkosh using the purchase
method of accounting. The total purchase cost has been allocated first to the
assets and liabilities of McNeilus based upon their respective fair values with
the remainder allocated to costs in excess of net assets acquired. The
historical shareholders' equity of McNeilus has been eliminated. The aggregate
purchase cost and the preliminary allocation of the purchase cost to the assets
and liabilities of McNeilus are as follows:
<TABLE>
<S> <C>
Purchase cost, including related fees:
Acquisition of 100% of the issued and outstanding common
stock of McNeilus...................................... $250,000
Fees and expenses incurred in connection with the
Acquisition............................................ 6,000
--------
Total acquisition cost............................ $256,000
========
Preliminary allocation of acquisition cost(1):
Net assets acquired at historical cost.................... $ 90,558
Add (deduct):
Permitted pre-close dividend to shareholders of certain
discontinued operations................................ (4,148)
Revaluation of McNeilus property, plant and equipment,
inventories and investment in foreign subsidiaries to
estimated fair values.................................. 14,368
Valuation of identified intangible assets:
Non-compete agreements................................. 38,000
Other.................................................. 23,085
Deferred income tax provision associated with the
revaluation of McNeilus assets and liabilities......... (14,607)
Cost in excess of net assets acquired..................... 108,744
--------
Total purchase cost............................... $256,000
========
</TABLE>
- -------------------------
(1) The allocation of the purchase cost reflects the revaluation of McNeilus'
assets and liabilities to their estimated fair values based on preliminary
estimates. The preliminary allocation may differ from the final allocation.
(c) Adjustment to reflect depreciation expense based on the new basis and
remaining economic useful lives of McNeilus property, plant and equipment. New
basis depreciation is computed using the straight line method over the remaining
useful lives.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED THREE MONTHS ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1997
------------------------- -------------------------
SELLING, SELLING,
COST OF GENERAL AND COST OF GENERAL AND
SALES ADMINISTRATIVE SALES ADMINISTRATIVE
------- -------------- ------- --------------
<S> <C> <C> <C> <C>
Eliminate historical depreciation.................. $(1,020) $(2,835) $(224) $(723)
New basis depreciation............................. 2,784 1,374 696 343
------- ------- ----- -----
$ 1,764 $(1,461) $ 472 $(380)
======= ======= ===== =====
</TABLE>
P-8
<PAGE> 28
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)
(d) Adjustment to record the amortization of goodwill and other intangible
assets over the indicated periods.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED THREE MONTHS ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1997
------------------- ------------------
<S> <C> <C> <C>
Non-compete agreements(1)..... 10-15 yrs $2,633 $ 658
Other(2)...................... 5-30 yrs 1,290 322
Goodwill(2)................... 40 yrs 2,719 680
------ ------
$6,642 $1,660
====== ======
</TABLE>
- -------------------------
(1) Amortized over the terms of the respective agreements on the straight-line
method.
(2) Amortized over the estimated useful lives on a straight-line method.
(e) Reclassify interest income, interest expense and gain on sale of leased
equipment of the leasing operation to "Equity in Income of Unconsolidated
Partnership" to reflect the contribution of sales-type leases from McNeilus to
the lease financing partnership and to record amortization of costs to establish
the lease financing partnership.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED THREE MONTHS ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1997
------------------- ------------------
<S> <C> <C>
Interest income-leasing................... $12,382 $ 2,955
Interest expense-leasing.................. (9,846) (2,364)
Gains on sales of leased equipment........ 609 149
------- -------
3,145 740
Income taxes at 39%....................... (1,227) (289)
------- -------
$ 1,918 $ 451
======= =======
</TABLE>
P-9
<PAGE> 29
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)
(f) Adjustment to record interest expense and amortization of deferred debt
issuance cost on the debt incurred to finance the Acquisition and repayment of
certain existing indebtedness of Oshkosh, based upon pro forma consolidated debt
of Oshkosh following consummation of the Transactions using the interest rates
as shown (as if the Transactions had been consummated as of the beginning of the
periods presented):
<TABLE>
<CAPTION>
TWELVE MONTHS TWELVE MONTHS THREE MONTHS
ENDED ENDED ENDED
INTEREST DECEMBER 31, SEPTEMBER 30, DECEMBER 31,
RATE 1997 1997 1997
-------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
Eliminate historical expense:
Interest on debt repaid..................... $(11,243) $(12,293) $(2,227)
Amortization of debt issuance costs......... (216) (218) (54)
Financing fees and other expenses........... (207) (205) (48)
-------- -------- -------
Total historical expense.................... (11,666) (12,716) (2,329)
Interest on new debt:(1)(3)
Revolving Credit Facility................... 7.625% 995 995 249
$100,000 Senior Subordinated Notes.......... 8.750% 8,750 8,750 2,187
$100,000 Term A............................. 7.625% 7,625 7,625 1,906
$62,500 Term B.............................. 7.875% 4,922 4,922 1,230
$62,500 Term C.............................. 8.125% 5,078 5,078 1,270
-------- -------- -------
27,370 27,370 6,842
Amortization of debt issuance costs(2)...... 1,226 1,226 307
Financing fees and other expenses........... 379 379 95
-------- -------- -------
Total interest on new debt.......... 28,975 28,975 7,244
-------- -------- -------
Net adjustment...................... $ 17,309 $ 16,259 $ 4,915
======== ======== =======
</TABLE>
- -------------------------
(1) Borrowings under the Revolving Credit Facility at closing ($13,048) are
assumed to be outstanding for the entire period.
(2) Debt issuance costs are amortized over the life of the related debt, ranging
from 6 to 10 years using the interest method. The Unaudited Pro Forma
Condensed Consolidated Statements of Income do not include an extraordinary
charge of approximately $755 which represents the write-off of unamortized
debt issuance costs, net of income taxes associated with the Debt Repayment.
(3) An increase in the interest rate of 1/8% would change interest expense and
income from continuing operations by:
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED TWELVE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, 1997 SEPTEMBER 30, 1997 DECEMBER 31, 1997
------------------- ------------------- ------------------
<S> <C> <C> <C>
Interest expense......... $423 $423 $106
==== ==== ====
Income from continuing
operations............. $258 $258 $ 64
==== ==== ====
</TABLE>
P-10
<PAGE> 30
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)
(g) Adjust amount of historical salaries paid to management in excess of
amounts per employment agreements included as part of the Transactions.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED THREE MONTHS ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1997
------------------------------- -------------------------------
SELLING, SELLING,
GENERAL AND GENERAL AND
COST OF SALES ADMINISTRATIVE COST OF SALES ADMINISTRATIVE
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Salaries and wages:
Historical................................ $(1,348) $(2,343) $(241) $(385)
Per employment agreements................. 300 500 75 125
------- ------- ----- -----
$(1,048) $(1,843) $(166) $(260)
======= ======= ===== =====
</TABLE>
(h) Reclassify engineering, research and development expenses of McNeilus
to conform with the Oshkosh presentation.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED THREE MONTHS ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1997
------------------- ------------------
<S> <C> <C>
Cost of goods sold........................ $(699) $(114)
===== =====
Engineering, research and development
expense................................. $ 699 $ 114
===== =====
</TABLE>
(i) Remove non-leasing interest income from McNeilus historical operating
results due to net borrowing position after consummation of the Transactions and
as a result of repayment of notes receivable from shareholders.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED THREE MONTHS ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1997
------------------- ------------------
<S> <C> <C>
Miscellaneous income...................... $(1,765) $(356)
======= =====
</TABLE>
(j) Adjustment to record the tax effect on the above adjustments using
Oshkosh's marginal effective income tax rate of 39%. All adjustments were
tax-effected except for goodwill amortization.
(k) Included in historical and pro forma operating expense for McNeilus are
charitable contributions (including charitable contributions to national
organizations) of $1,109 and $284 for the twelve month and three month periods
ended November 30, 1997, respectively. While no pro forma reductions of these
expenses have been reflected in the pro forma statements of income, Oshkosh's
policy is to focus charitable contributions on needs of the communities in which
it operates. Management expects that annual charitable contribution levels for
the McNeilus entity would approximate $100.
P-11
<PAGE> 31
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS)
(l) Historical and pro forma depreciation and amortization.
<TABLE>
<CAPTION>
AS REPORTED PRO FORMA
- -------------------------------------- ------------------
OSHKOSH MCNEILUS TWELVE MONTHS
TWELVE MONTHS TWELVE MONTHS ENDED
ENDED ENDED PRO FORMA DECEMBER 31, 1997
DECEMBER 31, 1997 NOVEMBER 30, 1997 ADJUSTMENTS CONSOLIDATED
- ----------------- ----------------- ----------- -----------------
<S> <C> <C> <C>
$13,797 $3,884 $ 303(c) $25,636
6,642(d)
1,226(f)
(216)(f)
</TABLE>
<TABLE>
<CAPTION>
AS REPORTED PRO FORMA
- -------------------------------------- ------------------
OSHKOSH MCNEILUS TWELVE MONTHS
FISCAL YEAR TWELVE MONTHS ENDED
ENDED ENDED PRO FORMA SEPTEMBER 30, 1997
SEPTEMBER 30, 1997 NOVEMBER 30, 1997 ADJUSTMENTS CONSOLIDATED
- ------------------ ----------------- ----------- ------------------
<S> <C> <C> <C>
$14,070 $3,884 $ 303(c) $25,907
6,642(d)
1,226(f)
(218)(f)
</TABLE>
<TABLE>
<CAPTION>
AS REPORTED PRO FORMA
- ------------------------------------- ------------------
OSHKOSH MCNEILUS
- ----------------- ----------------- THREE MONTHS
THREE MONTHS ENDED ENDED
- ------------------------------------- PRO FORMA DECEMBER 31, 1997
DECEMBER 31, 1997 NOVEMBER 30, 1997 ADJUSTMENTS CONSOLIDATED
- ----------------- ----------------- ----------- -----------------
<S> <C> <C> <C>
$3,283 $952 $ 92(c) $6,240
1,660(d)
307(f)
(54)(f)
</TABLE>
P-12
<PAGE> 32
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OSHKOSH TRUCK CORPORATION
By: /s/ Charles L. Szews
------------------------------------
Charles L. Szews
Executive Vice President and Chief
Financial Officer
Date: March 10, 1998
S-1
<PAGE> 33
OSHKOSH TRUCK CORPORATION
EXHIBIT INDEX TO FORM 8-K
DATED FEBRUARY 26, 1998
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<C> <S>
(2.1) Stock Purchase Agreement dated December 8, 1997, by and
among McNeilus Companies, Inc., the shareholders of McNeilus
Companies, Inc. and Oshkosh Truck Corporation (incorporated
by reference to Exhibit 2.1 to the Company's Annual Report
on Form 10-K for the year ended September 30, 1997) (File
No. 0-13886). Schedules and exhibits to the Stock Purchase
Agreement have not been filed herewith. The Company agrees
to furnish a copy of any omitted schedule or exhibit to the
Commission upon request.
(2.2) First Amendment to Stock Purchase Agreement dated February
26, 1998, by and among McNeilus Companies, Inc., the
shareholders of McNeilus Companies, Inc. and Oshkosh Truck
Corporation.
(4.1) Credit Agreement dated February 26, 1998, among Oshkosh
Truck Corporation, Bank of America National Trust and
Savings Association, as Agent and as Swing Line Lender, and
certain other financial institutions.
(4.2) Indenture dated February 26, 1998, among Oshkosh Truck
Corporation, the Subsidiary Guarantors and Firstar Trust
Company.
(23) Consent of Larson, Allen, Weishair and Co., LLP
</TABLE>
E-1
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
This First Amendment to Stock Purchase Agreement (the
"Amendment") is made and entered into as of February 26, 1998, by and
among McNeilus Companies, Inc., a Minnesota corporation (the "Company"),
all of the shareholders of the Company listed on the signature page
(collectively, the "Shareholders") and Oshkosh Truck Corporation, a
Wisconsin corporation (the "Buyer").
RECITALS
A. The parties entered into the Stock Purchase Agreement by
and among Buyer, the Company and shareholders dated December 8, 1997 (the
"Agreement"); and
B. The parties desire to amend the Agreement as described
herein.
NOW, THEREFORE, in consideration of the foregoing premises and
of the mutual covenants herein contained, the parties agree as follows:
1. Section 2.1 shall be deleted, and replaced as follows:
2.1 Purchase Price. The purchase price (the "Purchase
Price") payable for the Shares shall be Two Hundred Eleven
Million Five Hundred Thousand Dollars ($211,500,000). The
Purchase Price has been reduced by Five Hundred Thousand Dollars
($500,000), which reduction shall be deducted solely from the
proceeds paid to Garwin McNeilus under Section 2.2.(b) below.
2. Section 2.2.(b) shall be deleted, and replaced as follows:
2.2.(b) Cash to Shareholders. At the Closing, Buyer
shall deliver to Shareholders the sum of Two Hundred Eleven
Million Five Hundred Thousand Dollars ($211,500,000), less the
amount paid to the Escrow Agent pursuant to subsection 2.2.(a)
above.
3. Except as modified by this Amendment, the Agreement shall remain
in full force and effect.
4. This Amendment may be executed in one or more original or
facsimile counterparts, all of which shall be considered but one and the
same agreement, and shall become effective when one or more such
counterparts have been executed by each of the parties and delivered to
the other parties.
IN WITNESS WHEREOF, the parties have executed this Amendment as
of the date first written above.
OSHKOSH TRUCK CORPORATION McNEILUS COMPANIES, INC.
("Buyer") ("Company")
By: /s/ Robert Bohn By: /s/ Denzil McNeilus
Robert Bohn Denzil McNeilus
Chief Executive Officer President
SHAREHOLDERS
/s/ Garwin McNeilus
Garwin McNeilus
/s/ Denzil McNeilus
Denzil McNeilus
/s/ Brandon McNeilus
Brandon McNeilus
/s/ Marilee McNeilus
Marilee McNeilus
General Conference Of the Seventh Day
Adventist Church
By: /s/ Philip Follett
Name: Philip Follett
Vice President
EXECUTION COPY
CREDIT AGREEMENT
Dated as of February 26, 1998
among
OSHKOSH TRUCK CORPORATION,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
and
as Swing Line Lender,
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
Arranged by
BANCAMERICA ROBERTSON STEPHENS
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . . . . . . 1
1.02 Other Interpretive Provisions . . . . . . . . . . . . . . 28
1.03 Accounting Principles . . . . . . . . . . . . . . . . . . 29
1.04 Currency Equivalents Generally . . . . . . . . . . . . . . 30
ARTICLE II THE CREDITS . . . . . . . . . . . . . . . . . . . . . 30
2.01 Amounts and Terms of Commitments . . . . . . . . . . . . . 30
(a) Term Loan A . . . . . . . . . . . . . . . . . . . . . 30
(b) Term Loan B . . . . . . . . . . . . . . . . . . . . . 30
(c) Term Loan C . . . . . . . . . . . . . . . . . . . . . 30
(d) The Revolving Credit . . . . . . . . . . . . . . . . . 30
2.02 Loan Accounts . . . . . . . . . . . . . . . . . . . . . . 31
2.03 Procedure for Borrowing . . . . . . . . . . . . . . . . . 31
2.04 Conversion and Continuation Elections . . . . . . . . . . 32
2.05 The Swing Line Loans . . . . . . . . . . . . . . . . . . . 33
2.06 Procedure for Swing Line Loans. . . . . . . . . . . . . . 34
2.07 Voluntary Termination or Reduction of Revolving Loan
Commitments . . . . . . . . . . . . . . . . . . . . . . . . 35
2.08 Optional Prepayments . . . . . . . . . . . . . . . . . . . 36
2.09 Mandatory Prepayments of Loans . . . . . . . . . . . . . . 36
2.10 Repayment . . . . . . . . . . . . . . . . . . . . . . . . 38
(a) Term Loans . . . . . . . . . . . . . . . . . . . . . . 38
(b) The Revolving Credit . . . . . . . . . . . . . . . . . 40
2.11 Interest . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.12 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(a) Arrangement, Agency Fees . . . . . . . . . . . . . . . 41
(b) Commitment Fees . . . . . . . . . . . . . . . . . . . 41
2.13 Computation of Fees and Interest . . . . . . . . . . . . . 41
2.14 Payments by the Company . . . . . . . . . . . . . . . . . 41
2.15 Payments by the Lenders to the Agent . . . . . . . . . . . 42
2.16 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . 43
2.17 Security and Subsidiary Guaranty . . . . . . . . . . . . . 43
ARTICLE III THE LETTERS OF CREDIT . . . . . . . . . . . . . . . . 43
3.01 The Letter of Credit Subfacility. . . . . . . . . . . . . 43
3.02 Issuance, Amendment and Renewal of Letters of Credit . . . 45
3.03 Risk Participations, Drawings and Reimbursements . . . . . 46
3.04 Repayment of Participations . . . . . . . . . . . . . . . 48
3.05 Role of the Issuer . . . . . . . . . . . . . . . . . . . . 48
3.06 Obligations Absolute . . . . . . . . . . . . . . . . . . . 49
3.07 Cash Collateral Pledge . . . . . . . . . . . . . . . . . . 50
3.08 Letter of Credit Fees . . . . . . . . . . . . . . . . . . 50
3.09 Uniform Customs and Practice . . . . . . . . . . . . . . . 50
3.10 Utilization of Offshore Currencies . . . . . . . . . . . . 50
3.11 Currency Exchange Fluctuations . . . . . . . . . . . . . . 51
ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY . . . . . . . . 51
4.01 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.02 Illegality . . . . . . . . . . . . . . . . . . . . . . . . 52
4.03 Increased Costs and Reduction of Return . . . . . . . . . 53
4.04 Funding Losses . . . . . . . . . . . . . . . . . . . . . . 53
4.05 Inability to Determine Rates . . . . . . . . . . . . . . . 54
4.06 Certificates of Lenders . . . . . . . . . . . . . . . . . 54
4.07 Substitution of Banks. . . . . . . . . . . . . . . . . . . 54
4.08 Survival . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE V CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . 55
5.01 Conditions of Initial Credit Extensions . . . . . . . . . 55
(a) Credit Agreement and Notes . . . . . . . . . . . . . . 55
(b) Resolutions; Incumbency . . . . . . . . . . . . . . . 55
(c) Organization Documents; Good Standing . . . . . . . . 55
(d) Legal Opinions . . . . . . . . . . . . . . . . . . . . 56
(e) Payment of Fees . . . . . . . . . . . . . . . . . . . 56
(f) Certificate . . . . . . . . . . . . . . . . . . . . . 56
(g) Consummation of the McNeilus Acquisition . . . . . . . 56
(h) Approvals and Consents . . . . . . . . . . . . . . . . 56
(i) Senior Subordinated Notes . . . . . . . . . . . . . . 57
(j) Collateral Documents . . . . . . . . . . . . . . . . . 57
(k) Insurance Policies . . . . . . . . . . . . . . . . . . 58
(l) Environmental Review . . . . . . . . . . . . . . . . . 58
(m) Repayment of Prior Indebtedness. . . . . . . . . . . . 58
(n) Other Documents . . . . . . . . . . . . . . . . . . . 58
5.02 Conditions to All Credit Extensions . . . . . . . . . . . 58
(a) Notice, Application . . . . . . . . . . . . . . . . . 58
(b) Continuation of Representations and Warranties . . . . 58
(c) No Existing Default . . . . . . . . . . . . . . . . . 58
ARTICLE VI REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . 59
6.01 Corporate Existence and Power . . . . . . . . . . . . . . 59
6.02 Corporate Authorization; No Contravention . . . . . . . . 59
6.03 Governmental Authorization . . . . . . . . . . . . . . . . 60
6.04 Binding Effect . . . . . . . . . . . . . . . . . . . . . . 60
6.05 Litigation . . . . . . . . . . . . . . . . . . . . . . . . 60
6.06 No Default . . . . . . . . . . . . . . . . . . . . . . . . 60
6.07 ERISA Compliance . . . . . . . . . . . . . . . . . . . . . 60
6.08 Use of Proceeds; Margin Regulations . . . . . . . . . . . 61
6.09 Title to Properties . . . . . . . . . . . . . . . . . . . 61
6.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.11 Financial Condition . . . . . . . . . . . . . . . . . . . 61
6.12 Environmental Matters . . . . . . . . . . . . . . . . . . 62
6.13 Collateral Documents. . . . . . . . . . . . . . . . . . . 63
6.14 Regulated Entities . . . . . . . . . . . . . . . . . . . . 63
6.15 No Burdensome Restrictions . . . . . . . . . . . . . . . . 63
6.16 Copyrights, Patents, Trademarks and Licenses, etc. . . . . 64
6.17 Capitalization; Subsidiaries . . . . . . . . . . . . . . . 64
6.18 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 64
6.19 Swap Obligations . . . . . . . . . . . . . . . . . . . . . 64
6.20 Acquisition Documents . . . . . . . . . . . . . . . . . . 64
6.21 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.22 Subordination Provisions . . . . . . . . . . . . . . . . . 65
6.23 Year 2000 Compliance. . . . . . . . . . . . . . . . . . . 65
6.24 Full Disclosure . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE VII AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . 65
7.01 Financial Statements . . . . . . . . . . . . . . . . . . . 65
7.02 Certificates; Other Information . . . . . . . . . . . . . 66
7.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 66
7.04 Preservation of Corporate Existence, Etc . . . . . . . . . 68
7.05 Maintenance of Property . . . . . . . . . . . . . . . . . 68
7.06 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 68
7.07 Payment of Obligations . . . . . . . . . . . . . . . . . . 69
7.08 Compliance with Laws . . . . . . . . . . . . . . . . . . . 69
7.09 Compliance with ERISA . . . . . . . . . . . . . . . . . . 69
7.10 Inspection of Property and Books and Records . . . . . . . 69
7.11 Environmental Laws . . . . . . . . . . . . . . . . . . . . 69
7.12 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 70
7.13 Further Assurances . . . . . . . . . . . . . . . . . . . . 70
7.14 Additional Guaranties and Personal Property Pledge . . . . 70
7.15 Additional Real Property . . . . . . . . . . . . . . . . . 71
7.16 Additional Pledge. . . . . . . . . . . . . . . . . . . . . 71
ARTICLE VIII NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . 71
8.01 Limitation on Liens . . . . . . . . . . . . . . . . . . . 72
8.02 Disposition of Assets . . . . . . . . . . . . . . . . . . 73
8.03 Consolidations and Mergers . . . . . . . . . . . . . . . . 74
8.04 Loans and Investments . . . . . . . . . . . . . . . . . . 75
8.05 Limitation on Indebtedness . . . . . . . . . . . . . . . . 76
8.06 Transactions with Affiliates . . . . . . . . . . . . . . . 77
8.07 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 78
8.08 Contingent Obligations . . . . . . . . . . . . . . . . . . 78
8.09 Joint Ventures . . . . . . . . . . . . . . . . . . . . . . 78
8.10 Lease Obligations . . . . . . . . . . . . . . . . . . . . 78
8.11 Restricted Payments . . . . . . . . . . . . . . . . . . . 79
8.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 79
8.13 Change in Business . . . . . . . . . . . . . . . . . . . . 80
8.14 Accounting Changes . . . . . . . . . . . . . . . . . . . . 80
8.15 Amendments to Charter and Agreements; Subordinated
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 80
8.16 Net Worth . . . . . . . . . . . . . . . . . . . . . . . . 80
8.17 Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . 80
8.18 Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . 81
8.19 Capital Expenditures . . . . . . . . . . . . . . . . . . . 81
8.20 Restrictive Agreements. . . . . . . . . . . . . . . . . . 81
ARTICLE IX EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . 81
9.01 Event of Default . . . . . . . . . . . . . . . . . . . . . 81
(a) Non-Payment . . . . . . . . . . . . . . . . . . . . . 81
(b) Representation or Warranty . . . . . . . . . . . . . . 81
(c) Specific Defaults . . . . . . . . . . . . . . . . . . 81
(d) Other Defaults . . . . . . . . . . . . . . . . . . . . 82
(e) Cross-Default . . . . . . . . . . . . . . . . . . . . 82
(f) Insolvency; Voluntary Proceedings . . . . . . . . . . 82
(g) Involuntary Proceedings . . . . . . . . . . . . . . . 82
(h) ERISA . . . . . . . . . . . . . . . . . . . . . . . . 83
(i) Monetary Judgments . . . . . . . . . . . . . . . . . . 83
(j) Non-Monetary Judgments . . . . . . . . . . . . . . . . 83
(k) Change of Control . . . . . . . . . . . . . . . . . . 83
(l) Loss of Licenses . . . . . . . . . . . . . . . . . . . 83
(m) Guarantor Defaults . . . . . . . . . . . . . . . . . . 83
(n) Invalidity of Subordination Provisions . . . . . . . . 84
(o) Collateral . . . . . . . . . . . . . . . . . . . . . . 84
9.02 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 84
9.03 Rights Not Exclusive . . . . . . . . . . . . . . . . . . . 85
ARTICLE X THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . 85
10.01 Appointment and Authorization; "Agent" . . . . . . . . . 85
10.02 Delegation of Duties . . . . . . . . . . . . . . . . . . 85
10.03 Liability of Agent . . . . . . . . . . . . . . . . . . . 85
10.04 Reliance by Agent . . . . . . . . . . . . . . . . . . . . 86
10.05 Notice of Default . . . . . . . . . . . . . . . . . . . . 86
10.06 Credit Decision . . . . . . . . . . . . . . . . . . . . . 86
10.07 Indemnification of Agent . . . . . . . . . . . . . . . . 87
10.08 Agent in Individual Capacity . . . . . . . . . . . . . . 87
10.09 Successor Agent . . . . . . . . . . . . . . . . . . . . . 87
10.10 Withholding Tax . . . . . . . . . . . . . . . . . . . . . 88
10.11 Collateral Matters . . . . . . . . . . . . . . . . . . . 89
ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 90
11.01 Amendments and Waivers . . . . . . . . . . . . . . . . . 90
11.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 91
11.03 No Waiver; Cumulative Remedies . . . . . . . . . . . . . 92
11.04 Costs and Expenses . . . . . . . . . . . . . . . . . . . 92
11.05 Company Indemnification . . . . . . . . . . . . . . . . . 93
11.06 Marshalling; Payments Set Aside . . . . . . . . . . . . . 94
11.07 Successors and Assigns . . . . . . . . . . . . . . . . . 94
11.08 Assignments, Participations, etc. . . . . . . . . . . . . 94
11.09 Confidentiality . . . . . . . . . . . . . . . . . . . . . 96
11.10 Set-off . . . . . . . . . . . . . . . . . . . . . . . . . 97
11.11 Automatic Debits of Fees . . . . . . . . . . . . . . . . 97
11.12 Notification of Addresses, Lending Offices, Etc. . . . . 97
11.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . 97
11.14 Severability . . . . . . . . . . . . . . . . . . . . . . 97
11.15 No Third Parties Benefited . . . . . . . . . . . . . . . 98
11.16 Governing Law and Jurisdiction . . . . . . . . . . . . . 98
11.17 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . 98
11.18 Judgment . . . . . . . . . . . . . . . . . . . . . . . . 99
11.19 Entire Agreement . . . . . . . . . . . . . . . . . . . . 99
SCHEDULES
Schedule 1.01 Existing Letters of Credit
Schedule 2.01 Commitments
Schedule 6.07 ERISA
Schedule 6.11 Pro Forma
Schedule 6.12 Environmental Matters
Schedule 6.17 Capitalization; Subsidiaries and Minority
Interests
Schedule 6.18 Insurance Matters
Schedule 8.01 Permitted Liens
Schedule 8.04 Investments
Schedule 8.05 Permitted Indebtedness
Schedule 8.08 Contingent Obligations
Schedule 11.02 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Promissory Note
Exhibit F Form of Swing Line Note
<PAGE>
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of February 26, 1998,
among Oshkosh Truck Corporation, a Wisconsin corporation (the "Company"),
the several financial institutions from time to time party to this
Agreement (collectively, the "Lenders"; individually, a "Lender"), and
Bank of America National Trust and Savings Association, as Swing Line
Lender and as agent for the Lenders.
WHEREAS, the Lenders have agreed to make available to the Company
secured term loans and a secured revolving credit facility with a letter
of credit subfacility and a swing line subfacility upon the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. The following terms have the
following meanings:
"Acquisition" means any transaction or series of related
transactions for the purpose of or resulting, directly or
indirectly, in (a) the acquisition of all or substantially all of
the assets of a Person, or of any business or division of a Person,
(b) the acquisition of in excess of 50% of the capital stock,
partnership interests, membership interests or equity of any
Person, or otherwise causing any Person to become a Subsidiary, or
(c) a merger or consolidation or any other combination with another
Person (other than a Person that is a Subsidiary) provided that the
Company or the Subsidiary is the surviving entity.
"Acquisition Documents" means the Stock Purchase Agreement and
the other documents, certificates and agreements delivered in
connection with the McNeilus Acquisition.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. A Person shall be deemed to
control another Person if the controlling Person possesses,
directly or indirectly, the power to direct or cause the direction
of the management and policies of the other Person, whether through
the ownership of voting securities, membership interests, by
contract, or otherwise.
"Agent" means BofA in its capacity as agent for the Lenders
hereunder, and any successor agent arising under Section 10.09.
"Agent-Related Persons" means BofA and any successor agent
arising under Section 10.09 and any successor letter of credit
issuing bank hereunder, together with their respective Affiliates
(including, in the case of BofA, the Arranger), and the officers,
directors, employees, agents and attorneys-in-fact of such Persons
and Affiliates.
"Agent's Payment Office" means the address for payments set
forth on Schedule 11.02 or such other address as the Agent may from
time to time specify.
"Aggregate Commitment" means the sum of (a) the Aggregate
Revolving Loan Commitment and (b) the Aggregate Term Loan
Commitment.
"Aggregate Revolving Loan Commitment" means the aggregate
Revolving Loan Commitments of the Lenders.
"Aggregate Term Loan A Commitment" means the aggregate Term
Loan A Commitments of the Lenders, equal to One Hundred Million
Dollars ($100,000,000).
"Aggregate Term Loan B Commitment" means the aggregate Term
Loan B Commitments of the Lenders equal to Sixty-Two Million Five
Hundred Thousand Dollars ($62,500,000).
"Aggregate Term Loan C Commitment" means the aggregate Term
Loan C Commitments of the Lenders equal to Sixty-Two Million Five
Hundred Thousand Dollars ($62,500,000).
"Aggregate Term Loan Commitment" means the aggregate Term Loan
Commitments of the Lenders, equal to Two Hundred Twenty-Five
Million Dollars ($225,000,000).
"Agreement" means this Credit Agreement.
"Agreement Currency" has the meaning specified in subsection
11.18.
"Applicable Base Rate Margin" means, subject to the last
sentence of this definition, for any period, the applicable of the
following percentages in effect with respect to such period as the
Senior Debt to EBITDA Ratio of the Company shall fall within the
indicated ranges:
Applicable Base
Senior Debt to EBITDA Ratio Rate Margin
(in basis points)
Less Greater Than Revolving Term Term Term
Than or Equal to Loan Loan A Loan B Loan C
1. 2.0:1.0 ---- 0 0 100 125
2. 2.5:1.0 2.0:1.0 25 25 100 125
3. 3.0:1.0 2.5:1.0 50 50 100 125
4. 3.5:1.0 3.0:1.0 75 75 100 125
5. ---- 3.5:1.0 100 100 125 150
The Senior Debt to EBITDA Ratio shall be calculated by the Company
as of the end of each fiscal quarter, commencing with the fiscal
quarter ending June 30, 1998, and shall be reported to the Agent
pursuant to a Compliance Certificate executed by a Responsible
Officer of the Company and delivered pursuant to subsection 7.02(b)
hereof. The Applicable Base Rate Margin shall be adjusted, if
necessary, on the third Business Day after the delivery of such
certificate; provided, that if such certificate, together with the
financial statements to which such certificate relates, is not
delivered to the Agent by the fifth Business Day after the date on
which the related financial statements are due to be delivered to
the Agent pursuant to subsection 7.01(a) or (b), then, from such
fifth Business Day until the third Business Day after delivery of
such certificate, the Applicable Base Rate Margin shall be equal to
100 basis points for Revolving Loans and Term Loan A, 125 basis
points for Term Loan B and 150 basis points for Term Loan C. From
the Closing Date until adjusted as described above, the Applicable
Base Rate Margin shall be equal to 75 basis points for Revolving
Loans and Term Loan A, 100 basis points for Term Loan B and 125
basis points for Term Loan C.
"Applicable Commitment Fee Percentage" means, subject to the
last sentence of this definition, for any period, the applicable of
the following percentages in effect with respect to such period as
the Senior Debt to EBITDA Ratio of the Company shall fall within
the indicated ranges:
Applicable Commitment
Fee Percentage
Senior Debt to EBITDA Ratio (in basis points)
Less Greater Than
Than or Equal to
1. 2.0:1.0 ---- 20
2. 2.5:1.0 2.0:1.0 25
3. 3.0:1.0 2.5:1.0 30
4. 3.5:1.0 3.0:1.0 35
5. ---- 3.5:1.0 40
The Senior Debt to EBITDA Ratio shall be calculated by the Company
as of the end of each fiscal quarter, commencing with the fiscal
quarter ending June 30, 1998, and shall be reported to the Agent
pursuant to a Compliance Certificate executed by a Responsible
Officer of the Company and delivered pursuant to subsection 7.02(b)
hereof. The Applicable Commitment Fee Percentage shall be
adjusted, if necessary, on the third Business Day after the
delivery of such certificate; provided, that if such certificate,
together with the financial statements to which such certificate
relates, is not delivered to the Agent by the fifth Business Day
after the date on which the related financial statements are due to
be delivered to the Agent pursuant to subsection 7.01(a) or (b),
then, from such fifth Business Day until the third Business Day
after delivery of such certificate, the Applicable Commitment Fee
Percentage shall be equal to 40 basis points. From the Closing
Date until adjusted as described above, the Applicable Commitment
Fee Percentage shall be equal to 35 basis points.
"Applicable Currency" means, as to any particular Letter of
Credit, Dollars or the Offshore Currency in which it is denominated
or payable.
"Applicable Offshore Rate Margin" means, subject to the last
sentence of this definition, for any period, the applicable of the
following percentages in effect with respect to such period as the
Senior Debt to EBITDA Ratio of the Company shall fall within the
indicated ranges:
Applicable Offshore
Rate Margin
Senior Debt to EBITDA Ratio (in basis points)
Less Greater Than Revolving Term Term Term
Than or Equal to Loan Loan A Loan B Loan C
1. 2.0:1.0 ---- 125 125 225 250
2. 2.5:1.0 2.0:1.0 150 150 225 250
3. 3.0:1.0 2.5:1.0 175 175 225 250
4. 3.5:1.0 3.0:1.0 200 200 225 250
5. ---- 3.5:1.0 225 225 250 275
The Senior Debt to EBITDA Ratio shall be calculated by the Company
as of the end of each fiscal quarter, commencing with the fiscal
quarter ending June 30, 1998, and shall be reported to the Agent
pursuant to a Compliance Certificate executed by a Responsible
Officer of the Company and delivered pursuant to subsection 7.02(b)
hereof. The Applicable Offshore Rate Margin shall be adjusted, if
necessary, on the third Business Day after the delivery of such
certificate, with such adjustment to apply to all Interest Periods
then outstanding and beginning thereafter until the next adjustment
date; provided, that if such certificate, together with the
financial statements to which such certificate relates, is not
delivered to the Agent by the fifth Business Day after the date on
which the related financial statements are due to be delivered to
the Agent pursuant to subsection 7.01(a) or (b), then, from such
fifth Business Day until the third Business Day after delivery of
such certificate, the Applicable Offshore Rate Margin shall be
equal to 225 basis points for Revolving Loans and Term Loan A, 250
basis points for Term Loan B and 275 basis points for Term Loan C.
From the Closing Date until adjusted as described above, the
Applicable Offshore Rate Margin shall be equal to 200 basis points
for Revolving Loans and Term Loan A, 225 basis points for Term Loan
B and 250 basis points for Term Loan C.
"Approved Fund" means, with respect to any Lender that is a
fund that invests in bank loans, any other fund that invests in
bank loans and is advised or managed by the same investment advisor
as such Lender or by an Affiliate of such investment advisor.
"Arranger" means BancAmerica Robertson Stephens, a Delaware
corporation.
"Asset Disposition" has the meaning specified in Section 8.02.
"Assignee" has the meaning specified in subsection 11.08(a).
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the
allocated cost of internal legal services and all disbursements of
internal counsel.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C. Section 101, et seq.).
"Base Rate" means, for any day, the higher of: (a) 0.50% per
annum above the latest Federal Funds Rate; and (b) the rate of
interest in effect for such day as publicly announced from time to
time by BofA in San Francisco, California, as its "reference rate."
(The "reference rate" is a rate set by BofA based upon various
factors including BofA's costs and desired return, general economic
conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such
announced rate.)
Any change in the reference rate announced by BofA shall take
effect at the opening of business on the day specified in the
public announcement of such change.
"Base Rate Loan" means a Loan or an L/C Advance that bears
interest based on the Base Rate.
"basis point" means one one-hundredth of one percent.
"BofA" means Bank of America National Trust and Savings
Association, a national banking association.
"Borrowing" means a borrowing hereunder consisting of
Revolving Loans or Term Loans of the same Type made to the Company
on the same day by the Lenders under Article II, and, in the case
of Offshore Rate Loans, having the same Interest Period. The
making of a Swing Line Loan shall not constitute a Borrowing.
"Borrowing Date" means any date on which a Borrowing occurs
under Section 2.03.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City, Chicago or
San Francisco are authorized or required by law to close and, if
the applicable Business Day relates to any Offshore Rate Loan,
means such a day on which dealings are carried on in the applicable
offshore dollar interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or
any other law, rule or regulation, whether or not having the force
of law, in each case, regarding capital adequacy of any bank or of
any corporation controlling a bank.
"Capital Stock" means (a) in the case of a corporation,
corporate stock, (b) in the case of an association or business
entity, any and all shares, interests, participations, rights or
other equivalents (however designated) of corporate stock, (c) in
the case of a partnership or limited liability company, partnership
or membership interests (whether general or limited) and (d) any
other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions
of assets of, the issuing Person.
"Cash Collateralize" means to pledge and deposit with or
deliver to the Agent, for the benefit of the Agent, the Issuers and
the Lenders, as additional collateral for the L/C Obligations, cash
or deposit account balances pursuant to documentation in form and
substance reasonably satisfactory to the Agent and the Issuers
(which documents are hereby consented to by the Lenders).
Derivatives of such term shall have corresponding meanings. The
Company hereby grants the Agent, for the benefit of the Agent, the
Issuers and the Lenders, a security interest in all such cash and
deposit account balances. Cash collateral shall be maintained in
blocked, non-interest bearing deposit accounts at BofA while an
Event of Default is continuing and shall be transferred to an
interest bearing account as soon as practicable after the
termination of such Event of Default.
"CERCLA" has the meaning specified in the definition of
"Environmental Laws."
"Change of Control" means the occurrence of any of the
following: (a) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one
or a series of related transactions, of all or substantially all of
the assets of the Company and its Subsidiaries taken as a whole to
any "person" (as such term is used in Section 13(d)(3) of the
Exchange Act); (b) the adoption of a plan relating to the
liquidation or dissolution of the Company; (c) the consummation of
any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as defined
above), other than the Principals and their Related Parties,
becomes the "beneficial owner" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all securities
that such person has the right to acquire, whether such right is
currently exercisable or is exercisable only upon the occurrence of
a subsequent condition), directly or indirectly of more than 30% of
the Voting Stock of the Company (measured by voting power rather
than number of shares); (d) the Company consolidates with, or
merges with or into, any Person, or any Person consolidates with,
or merges with or into, the Company in any such event pursuant to a
transaction in which any of the outstanding Voting Stock of the
Company is converted into or exchanged for cash, securities or
other property, other than any such transaction where the Voting
Stock of the Company outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock of the
surviving or transferee Person constituting a majority of the
outstanding shares of such Voting Stock of such surviving or
transferee Person (immediately after giving effect to such
issuance); or (e) during any period of 25 consecutive calendar
months, commencing on the date of this Agreement, the ceasing of
those individuals (the "Continuing Directors") who (i) were
directors of the Company on the first day of each such period or
(ii) subsequently became directors of the Company and whose actual
election or initial nomination for election subsequent to that date
was approved by a majority of the Continuing Directors then on the
board of directors of the Company, to constitute a majority of the
board of directors of the Company.
"Closing Date" means the date on which all conditions
precedent set forth in Section 5.01 are satisfied or waived by all
Lenders (or, in the case of subsection 5.01(e), waived by the
Person entitled to receive such payment).
"Code" means the Internal Revenue Code of 1986, and
regulations promulgated thereunder.
"Collateral" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by the Company or
any Guarantor and their respective Subsidiaries in or upon which a
Lien now or hereafter exists in favor of the Lenders, or the Agent
on behalf of the Lenders, whether under this Agreement, under the
Collateral Documents or under any other documents executed by any
such Person and delivered to the Agent or the Lenders.
"Collateral Documents" means, collectively, (a) the Security
Agreement, the Mortgages, the Pledge Agreement and all other
security agreements, mortgages, deeds of trust, patent and
trademark assignments, lease assignments, guarantees and other
similar agreements between the Company or any Subsidiary or any
Guarantor and the Lenders or the Agent for the benefit of the
Lenders now or hereafter delivered to the Lenders or the Agent
pursuant to or in connection with the transactions contemplated
hereby, and all financing statements (or comparable documents now
or hereafter filed in accordance with the Uniform Commercial Code
or comparable law) against the Company or any Subsidiary or any
Guarantor as debtor in favor of the Lenders or the Agent for the
benefit of the Lenders as secured party, and (b) any amendments,
supplements, modifications, renewals, replacements, consolidations,
substitutions and extensions of any of the foregoing.
"Commitment", as to each Lender, means (a) such Lender's Term
Commitment, plus (b) such Lender's Revolving Loan Commitment.
"Company" has the meaning specified in the introductory clause
hereto.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit C.
"Computation Date" has the meaning specified in subsection
3.10.
"Contingent Obligation" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with
or without recourse, (a) with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary
obligations") of another Person (the "primary obligor"), including
any obligation of that Person (i) to purchase, repurchase or
otherwise acquire such primary obligations or any security
therefor, (ii) to advance or provide funds for the payment or
discharge of any such primary obligation, or to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose
of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation,
or (iv) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof (each, a
"Guaranty Obligation"); (b) with respect to any Surety Instrument
issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments; (c) to
purchase any materials, supplies or other property from, or to
obtain the services of, another Person if the relevant contract or
other related document or obligation requires that payment for such
materials, supplies or other property, or for such services, shall
be made regardless of whether delivery of such materials, supplies
or other property is ever made or tendered, or such services are
ever performed or tendered; or (d) in respect of any Swap Contract;
provided, that obligations arising under the Letter Agreements
shall not be treated as Contingent Obligations or Guaranty
Obligations at any time at which MFSI's tangible net worth
(determined in accordance with GAAP) is greater than $1,000,000.
The amount of any Contingent Obligation, (w) in the case of
Guaranty Obligations, shall be deemed equal to the lesser of (i)
the stated or determinable amount of the primary obligation in
respect of which such Guaranty Obligation is made or, if not stated
or if indeterminable, the maximum reasonably anticipated liability
in respect thereof, and (ii) the stated amount of the guaranty, (x)
in the case of Contingent Obligations in respect of Swap Contracts,
shall be deemed equal to the aggregate Swap Termination Value of
such Swap Contracts, (y) in the case of Contingent Obligations in
respect of Surety Instruments other than Non-Surety L/C's, shall be
deemed equal to the probable amount of the expected liability
thereunder, and (z) in the case of Contingent Obligations in
respect of Non-Surety L/C's, shall be deemed equal to (i) the face
amount of outstanding Non-Surety L/C's which are not Letters of
Credit and (ii) the outstanding amount of L/C Obligations in
respect of Non-Surety L/C's which are Letters of Credit.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any
agreement, undertaking, contract, indenture, mortgage, deed of
trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its property is bound.
"Conversion/Continuation Date" means any date on which, under
Section 2.04, the Company (a) converts Loans of one Type to another
Type, or (b) continues as Loans of the same Type, but with a new
Interest Period, Loans having Interest Periods expiring on such
date.
"Credit Extension" means and includes (a) the making of any
Loans hereunder, and (b) the Issuance of any Letters of Credit
hereunder.
"Current Assets" means all assets of the Company, on a
consolidated basis, which should, in accordance with GAAP, be
classified as current assets.
"Current Liabilities" means all liabilities of the Company, on
a consolidated basis, which should, in accordance with GAAP, be
classified as current liabilities, other than current maturities in
respect of the Loans.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured
or otherwise remedied during such time) constitute an Event of
Default.
"Dividend Supplement Amount" means, as at any date of
determination, an amount equal to (a) the lesser of (1) $5,000,000
and (2) the cumulative excess of (A) Restricted Equity Payments
which the Company was permitted by Section 8.11(c) (but without
giving effect to Section 8.11(c)(i)(A)(2) thereof) to pay during
the period commencing on October 1, 1998 and ending on the date of
determination over (B) the amount of Restricted Equity Payments
actually paid by the Company during such period minus (b) the
aggregate amount of incremental Restricted Equity Payments
previously designated by the Company pursuant to Section
8.11(c)(i)(A)(2).
"Dollars", "dollars" and "$" each mean lawful money of the
United States.
"Dollar Equivalent" means, at any time, (a) as to any amount
denominated in Dollars, the amount thereof at such time, and (b) as
to any amount denominated in an Offshore Currency, the equivalent
amount in Dollars as determined by the Agent at such time on the
basis of the Spot Rate for the purchase of Dollars with such
Offshore Currency on the most recent Computation Date provided for
in subsection 3.10.
"Domestic Subsidiary" means a Subsidiary organized under the
laws of the United States or any political subdivision or any
agency, department or instrumentality thereof.
"EBITDA" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, determined in accordance with
GAAP, the sum of (a) the net income (or net loss) for such period,
plus (b) all amounts treated as expenses for depreciation and
interest and the amortization of intangibles of any kind to the
extent included in the determination of such net income (or loss),
plus (c) all accrued taxes on or measured by income to the extent
included in the determination of such net income (or net loss),
plus (d) all charges (or less any credits) in such period arising
from LIFO valuation, plus (or less, if negative) (e) the amount of
post-retirement health benefits accrued in such period less the
amount of post-retirement health benefits paid in such period, in
an amount of up to $1,000,000 in any period, plus (f) all charges
arising from the write down of fixed assets, severance payments and
relocation expenses taken after the Closing Date and on or prior to
September 30, 1999, in an amount not to exceed $5,000,000 in the
aggregate after the date hereof, plus (g) all charges (or less any
credits) arising from the write-off of intangible assets (without
duplication of any amounts set forth in clause (b)); provided,
however, that net income (or net loss) shall be computed (i)
without giving effect to extraordinary losses or extraordinary
gains, (ii) without regard to the net income (or net loss) of
Leasing Subsidiaries or to the carrying value of the equity
interest of the Company and its Subsidiaries in Leasing
Subsidiaries, and (iii) without giving effect to any dividends or
other distributions received by the Company and its Subsidiaries
from Leasing Subsidiaries or any equity contributions made by the
Company and its Subsidiaries to Leasing Subsidiaries; provided,
further, that for any measurement which relates back to a period
prior to the date hereof, EBITDA shall be determined by adding (x)
the EBITDA of the Company and its Subsidiaries for such period to
(y) the EBITDA of McNeilus and its Subsidiaries for such period,
which for the purposes of clause (y) shall be determined without
regard to (A) any interest expenses or earnings of MFSI in such
period, (B) an aggregate amount not to exceed $2,800,000 in
compensation paid to the former shareholders of McNeilus prior to
the date hereof at a rate in excess of $800,000 per year or (C) an
aggregate amount not to exceed $1,100,000 in charitable
contributions made by McNeilus and its Subsidiaries prior to the
date hereof at a rate in excess of $100,000 per year; and provided,
further, that the amounts determined pursuant to clauses (a)
through (g) above shall not include amounts attributable to Nations
Casualty Insurance, Inc.
"Effective Amount" means (a) with respect to any Revolving
Loans, Swing Line Loans and Term Loans on any date, the aggregate
outstanding principal amount thereof after giving effect to any
Borrowings and prepayments or repayments of Revolving Loans, Swing
Line Loans and Term Loans occurring on such date; and (b) with
respect to any outstanding L/C Obligations on any date, the amount
of such L/C Obligations on such date after giving effect to any
Issuances of Letters of Credit occurring on such date and any other
changes in the aggregate amount of the L/C Obligations as of such
date, including as a result of any reimbursements of outstanding
unpaid drawings under any Letters of Credit or any reductions in
the maximum amount available for drawing under Letters of Credit
taking effect on such date. For purposes of subsection 2.07(a) the
Effective Amount shall be determined without giving effect to any
mandatory prepayments to be made under subsection 2.07(b).
"Eligible Assignee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and
having a combined capital and surplus of at least $100,000,000; (b)
a commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus of at least
$100,000,000, provided that such bank is acting through a branch or
agency located in the United States; (c) a Person that is primarily
engaged in the business of commercial banking and that is (i) a
Subsidiary of a Lender, (ii) a Subsidiary of a Person of which a
Lender is a Subsidiary, or (iii) a Person of which a Lender is a
Subsidiary; (d) as to the Term Loans, (i) an "accredited investor",
as such term is defined in Rule 501(a) of Regulation D under the
Securities Act of 1933, as amended (other than the Company or an
Affiliate of the Company) or (ii) a finance company, insurance
company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is primarily
engaged in the business of making, purchasing or otherwise
investing in commercial loans; and (e) any other entity approved by
the Company and the Agent.
"Environmental Claims" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential
liability or responsibility for violation of any Environmental Law,
or for release or injury to the environment or threat to public
health, personal injury (including sickness, disease or death),
property damage, natural resources damage, or otherwise alleging
liability or responsibility for damages (punitive or otherwise),
investigation, cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or
other type of relief, resulting from or based upon the presence,
placements, discharge, emission or release (including intentional
and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental, placements, spills,
leaks, discharges, emissions or releases) of any Hazardous Material
at, in, or from any property, whether or not owned by the Company
or any Subsidiary or taken as collateral, or in connection with any
operations of the Company.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and
codes, together with all administrative orders, directed duties,
requests, licenses, authorizations and permits of, and agreements
with, any Governmental Authorities, in each case relating to
environmental, health, safety and land use matters, including
without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Clean Air
Act, the Federal Water Pollution Control Act of 1972, the Solid
Waste Disposal Act, the Federal Resource Conservation and Recovery
Act, the Toxic Substances Control Act, and the Emergency Planning
and Community Right-to-Know Act.
"Environmental Permits" has the meaning specified in
subsection 6.12(b).
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Company within the
meaning of Section 414(b) or (c) of the Code (and Sections 414(m)
and (o) of the Code for purposes of provisions relating to Section
412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Company or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer (as
defined in Section 4001(a)(2) of ERISA) or a cessation of
operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by the
Company or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d)
the filing of a notice of intent to terminate, the treatment of a
Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate
a Pension Plan or Multiemployer Plan; (e) an event or condition
which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Pension Plan or Multiemployer Plan; or
(f) the imposition of any liability under Title IV of ERISA, other
than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Company or any ERISA Affiliate.
"Eurodollar Reserve Percentage" has the meaning specified in
the definition of "Offshore Rate".
"Event of Default" means any of the events or circumstances
specified in Section 9.01.
"Event of Loss" means, with respect to any property, any of
the following: (a) any loss, destruction or damage of such
property; (b) any institution of any proceedings for the
condemnation or seizure of such property or for the exercise of any
right of eminent domain; or (c) any actual condemnation, seizure or
taking, by exercise of the power of eminent domain or otherwise, of
such property, or confiscation of such property or the requisition
of the use of such property.
"Exchange Act" means the Securities Exchange Act of 1934 and
the regulations promulgated thereunder.
"Excess Cash Flow" means for any fiscal year, (a) the
consolidated pretax net income of the Company and its Subsidiaries
for such fiscal year, as determined in accordance with GAAP (but
without regard to the net income (or net loss) of Leasing
Subsidiaries or to the carrying value of the equity interest of the
Company and its Subsidiaries in Leasing Subsidiaries), plus (b) all
amounts treated as expenses for depreciation and the amortization
of intangibles of any kind to the extent included in the
determination of such net income, less (c) the sum of (i)
principal payments to the Lenders in such fiscal year in respect of
the Term Loan and in respect of the Revolving Loan on the Revolving
Termination Date, plus (ii) dividends paid by the Company in such
fiscal year in accordance with the terms of this Agreement, plus
(iii) capital expenditures actually made by the Company and its
Subsidiaries in such fiscal year, but only to the extent permitted
by Section 8.19, plus (iv) increases (or less decreases) in Working
Capital in such fiscal year, plus (or less, if negative) (v)
mandatory cash equity contributions by the Company or any
Subsidiary in such fiscal year to any Leasing Subsidiary to the
extent permitted by the Credit Agreement, net of cash distributions
to the Company or any Subsidiary from any Leasing Subsidiary in
such fiscal year, plus (vi) cash taxes paid in such fiscal year by
the Company or any Subsidiary, plus (vii) cash interest paid in
such fiscal year by the Company or any Subsidiary, less (viii) non-
cash charges (or plus non-cash credits) taken by the Company or any
Subsidiary in such fiscal year; provided, that net income (or net
loss) shall be computed without giving effect to increases or
decreases in net income (or net loss) arising from changes in
equity in the income of Leasing Subsidiaries; provided, further,
that for the purpose of determining Excess Cash Flow for the
payment due on January 15, 1999, changes in Working Capital shall
be determined by reference to the Company's Working Capital as of
September 30, 1997, determined on a pro forma basis after giving
effect to the transactions occurring on the Closing Date.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal
functions.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of New
York (including any such successor, "H.15(519)") on the preceding
Business Day opposite the caption "Federal Funds (Effective)"; or,
if for any relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00
a.m. (Chicago time) on that day by each of three leading brokers of
Federal funds transactions in Chicago selected by the Agent.
"Fee Letter" has the meaning specified in subsection 2.10(a).
"Fixed Charges" means, with respect to the Company and its
Subsidiaries on a consolidated basis, as of any date of
determination, (a) interest expenses paid or accrued on outstanding
Indebtedness for the period of four fiscal quarters ending on the
date of determination, and (b) principal payments on Indebtedness
required to be made in such period; provided, that for the purposes
of all measurements through December 31, 1998, the amount
determined by reference to clauses (a) and (b) shall be calculated
by aggregating interest expenses and required principal payments
for the period from March 1, 1998 through the date of
determination, dividing such amount by the number of months in such
period and multiplying such result by 12.
"Floor Plan Financing Facility" means any facility entered or
to be entered into by the Company or any Subsidiary pursuant to
which such person may (a) incur Indebtedness to purchase vehicles
and/or related equipment from certain vendors for the prompt resale
to customers in the ordinary course of business and (b) grant a
security interest in such vehicles and/or related equipment to
secure such borrowings.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
"Further Taxes" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees,
withholdings or similar charges (including, without limitation, net
income taxes and franchise taxes), and all liabilities with respect
thereto, imposed by any jurisdiction on account of amounts payable
or paid pursuant to Section 4.01.
"FX Trading Office" means the Foreign Exchange Trading Center,
Chicago, Illinois, of BofA, or such other of BofA's offices as the
Agent may designate from time to time.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board (or agencies with similar
functions of comparable stature and authority within the U.S.
accounting profession), which are applicable to the circumstances
as of the date of determination.
"Governmental Authority" means (a) any nation or government,
any state or other political subdivision thereof, any central bank
(or similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing, and (b)
the National Association of Insurance Commissioners.
"Guarantors" means each of the Subsidiaries of the Company
from time to time party to the Subsidiary Guaranty.
"Guaranty Obligation" has the meaning specified in the
definition of "Contingent Obligation."
"Hazardous Materials" means all those substances that are
regulated by, or which may form the basis of liability or a
standard of conduct under, any Environmental Law, including any
substance identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste,
hazardous substance, hazardous material, or toxic substance, or
petroleum or petroleum-derived substance or waste.
"Honor Date" has the meaning specified in subsection 3.03(b).
"Indebtedness" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations issued,
undertaken or assumed as the deferred purchase price of property or
services (other than trade payables entered into in the ordinary
course of business on ordinary terms); (c) all Contingent
Obligations with respect to Surety Instruments; (d) all obligations
evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the
acquisition of property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with
respect to property acquired by the Person (even though the rights
and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such
property); (f) all obligations with respect to capital leases; (g)
all indebtedness referred to in clauses (a) through (f) above
secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien
upon or in property (including accounts and contract rights) owned
by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness; and (h) all Guaranty
Obligations in respect of indebtedness or obligations of others of
the kinds referred to in clauses (a) through (g) above; provided,
that "Indebtedness" shall not include any indebtedness incurred by
the Company or any Subsidiary pursuant to any Floor Plan Financing
Facility to the extent that it shall be non-interest bearing. For
all purposes of this Agreement, the Indebtedness of any Person
shall include all recourse Indebtedness of any partnership or joint
venture or limited liability company in which such Person is a
general partner or a joint venturer or a member and as to which
such Person is or may become directly liable.
"Indemnified Liabilities" has the meaning specified in Section
11.05.
"Indemnified Person" has the meaning specified in Section
11.05.
"Independent Auditor" has the meaning specified in subsection
7.01(a).
"Insolvency Proceeding" means, with respect to any Person, (a)
any case, action or proceeding with respect to such Person before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for
the benefit of creditors, composition, marshalling of assets for
creditors, or other, similar arrangement in respect of its
creditors generally or any substantial portion of its creditors; in
each case, undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code.
"Interest Payment Date" means, as to any Offshore Rate Loan,
the last day of each Interest Period applicable to such Loan and,
as to any Base Rate Loan, the last Business Day of each calendar
quarter; provided, however, that if any Interest Period for an
Offshore Rate Loan exceeds three months, the date that falls three
months after the beginning of such Interest Period and after each
Interest Payment Date thereafter is also an Interest Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one,
two, three or six months thereafter as selected by the Company in
its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(a) if any Interest Period would otherwise end on a day
that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless the result of
such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period
shall end on the preceding Business Day;
(b) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period;
(c) no Interest Period for any Term Loan shall extend
beyond the maturity date of such Term Loan and no Interest
Period for any Revolving Loan shall extend beyond February 26,
2004; and
(d) no Interest Period applicable to a Term Loan or
portion thereof shall extend beyond any date upon which is due
any scheduled principal payment in respect of the Term Loans
unless the aggregate principal amount of Term Loans
represented by Base Rate Loans, or by Offshore Rate Loans
having Interest Periods that will expire on or before such
date, equals or exceeds the amount of such principal payment.
"Investments" has the meaning specified in Section 8.04.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the
Code.
"Issuance Date" has the meaning specified in subsection
3.01(a).
"Issue" means, with respect to any Letter of Credit, to issue
or to extend the expiry of, or to renew or increase the amount of,
such Letter of Credit; and the terms "Issued," "Issuing" and
"Issuance" have corresponding meanings.
"Issuer" means, in respect of each Letter of Credit, BofA or
such other Revolving Lender selected by the Company which has
agreed to act as issuer of such Letter of Credit hereunder.
"Joint Venture" means a single-purpose corporation,
partnership, limited liability company, joint venture or other
similar legal arrangement (whether created by contract or conducted
through a separate legal entity) now or hereafter formed by the
Company or any of its Subsidiaries with another Person in order to
conduct a common venture or enterprise with such Person.
"Judgment Currency" has the meaning specified in subsection
11.18.
"L/C Advance" means each Revolving Lender's participation in
any L/C Borrowing in accordance with its Pro Rata Share.
"L/C Amendment Application" means an application form for
amendment of outstanding standby or commercial documentary letters
of credit as shall at any time be in use at the applicable Issuer,
as such Issuer shall request.
"L/C Application" means an application form for issuances of
standby or commercial documentary letters of credit as shall at any
time be in use at the applicable Issuer, as such Issuer shall
request.
"L/C Borrowing" means an extension of credit resulting from a
drawing under any Letter of Credit which shall not have been
reimbursed on the date when made nor converted into a Borrowing of
Revolving Loans under subsection 3.03(c).
"L/C Commitment" means the commitment of the Issuers to Issue,
and the commitment of the Revolving Lenders severally to
participate in, Letters of Credit from time to time Issued or
outstanding under Article III, in an aggregate amount not to exceed
on any date (a) the Aggregate Revolving Loan Commitment less (b)
the aggregate principal amount of Revolving Loans and Swing Line
Loans then outstanding; provided that the L/C Commitment is a part
of the Aggregate Revolving Credit Commitment, rather than a
separate, independent commitment.
"L/C Obligations" means at any time the sum of (a) the
aggregate undrawn amount of all Letters of Credit then outstanding,
plus (b) the amount of all unreimbursed drawings under all Letters
of Credit, including all outstanding L/C Borrowings.
"L/C-Related Documents" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document
relating to any Letter of Credit, including any standard form
documents used by any Issuer for letter of credit issuances.
"Lease Assets" means, with respect to any lease, all of the
following property and interests in property whether now existing
or existing in the future or hereafter acquired or arising: (a) all
vehicles or equipment manufactured or refurbished by the Company or
any of its Subsidiaries (and truck chassis, cement block boom
trucks and similar vehicles manufactured or refurbished by third
parties) and acquired by a Leasing Subsidiary in connection with
such assets being contemporaneously leased to a third party; (b)
all leases and other contracts or agreements relating to the lease
financing by a customer of vehicles or equipment manufactured or
refurbished by the Company or any of its Subsidiaries; (c) all
accounts receivable and other obligations incurred by lessees in
connection with the foregoing, no matter how evidenced; (d) all
rights to any vehicles or equipment subject to any of the foregoing
after or in connection with creation of the foregoing, including,
without limitation, returned or repossessed goods; (e) all reserves
and credit balances with respect to any such lease contracts or
agreements or lessees; (f) all letters of credit, security or
guarantees for any of the foregoing; (g) all insurance policies or
reports relating to any of the foregoing; and (h) all books and
records relating to any of the foregoing.
"Leasing Subsidiary" means MFSI, Oshkosh/McNeilus Financial
Services, Inc., Oshkosh/McNeilus Financial Services Partnership and
any other Subsidiary that is designated by the Board of Directors
of the Company as a Leasing Subsidiary and that is exclusively
engaged in Leasing Transactions and activities related thereto. If
at any time any Leasing Subsidiary should engage in a material
transaction or activity other than those described above, it shall
thereafter cease to be a Leasing Subsidiary hereunder.
"Leasing Transaction" means (a) the formation of Leasing
Subsidiaries (whether in one or a series of related transactions);
(b) the sale or other disposition to a third party of Lease Assets
or an interest therein; (c) the borrowing of money secured by Lease
Assets; or (d) the sale or other disposition of Lease Assets or an
interest therein to a Leasing Subsidiary followed by a financing
transaction in connection with such sale or disposition of such
Lease Assets (whether such financing transaction is effected by
such Leasing Subsidiary or by a third party to whom such Leasing
Subsidiary sells such Lease Assets or interest therein); provided,
that in each of the foregoing, the Company or its Subsidiaries
receive or have received in cash at least 95% of the aggregate sale
price attributed to the vehicles and equipment that underlie the
leases financed in such transaction.
"Lender" has the meaning specified in the introductory clause
hereto. References to the "Lenders" shall include BofA, including
in its capacity as an Issuer and as Swing Line Lender; for purposes
of clarification only, to the extent that BofA may have any rights
or obligations in addition to those of the Lenders due to its
status as an Issuer or as Swing Line Lender, its status as such
will be specifically referenced.
"Lending Office" means, as to any Lender, the office or
offices of such Lender specified as its "Lending Office" or
"Domestic Lending Office" or "Offshore Lending Office", as the case
may be, on Schedule 11.02, or such other office or offices as such
Lender may from time to time notify the Company and the Agent.
"Letter Agreements" means the letter agreements set forth in
clause (iii) of Schedule 3.6(b) to the Stock Purchase Agreement and
in place on the date of this Agreement concerning the maintenance
by McNeilus of a minimum tangible net worth of MFSI for the benefit
of the lenders to MFSI immediately prior to the date of this
Agreement.
"Letters of Credit" means any letters of credit (whether
standby letters of credit or commercial documentary letters of
credit) Issued by the Issuers pursuant to Article III, including
without limitation the existing letters of credit set forth on
Schedule 1.01 hereto.
"Leverage Ratio" means, as of any date of determination, the
ratio of (a) all Indebtedness of the Company and its Subsidiaries
determined on a consolidated basis as of such date, to (b) EBITDA
for the period of four fiscal quarters ending on such date.
"Lien" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or similar interest of any
kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional
sale or other title retention agreement, the interest of a lessor
under a capital lease, any financing lease having substantially the
same economic effect as any of the foregoing, or the filing of any
financing statement naming the owner of the asset to which such
lien relates as debtor, under the Uniform Commercial Code or any
comparable law) and any contingent or other agreement to provide
any of the foregoing, but not including the interest of a lessor
under an operating lease.
"Loan" means an extension of credit by a Lender to the Company
under Article II or Article III in the form of a Revolving Loan,
Term Loan, Swing Line Loan or L/C Advance.
"Loan Documents" means this Agreement, any Notes, the Fee
Letters, the L/C-Related Documents, the Collateral Documents, the
Rate Swap Documents and all other documents delivered to the Agent
or any Lender in connection herewith.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business,
properties or condition (financial or otherwise) of the Company or
the Company and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of the Company or any Subsidiary to
perform under any Loan Document and to avoid any Event of Default;
or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability against the Company or any
Subsidiary of any Loan Document.
"Material Subsidiary" means, at any time, any Subsidiary
having at such time either (a) total (gross) revenues for the
preceding four fiscal quarter period in excess of 1% of the total
(gross) revenues of the Company and its Subsidiaries for such
period or (b) a shareholder's equity, as of the last day of the
preceding fiscal quarter, with a book value in excess of 1% of Net
Worth, based in each case, to the extent applicable, upon the
Company's most recent annual or quarterly financial statements
delivered to the Agent pursuant to Section 7.01.
"McNeilus" means McNeilus Companies, Inc., a Minnesota
corporation.
"McNeilus Acquisition" means the acquisition by the Company of
all of the issued and outstanding capital stock of McNeilus,
pursuant to the terms and conditions of the Stock Purchase
Agreement.
"MFSI" means McNeilus Financial Services, Inc., a Minnesota
corporation.
"Mortgage" means any deed of trust, mortgage, leasehold
mortgage, assignment of rents or other document creating a Lien on
real property or any interest in real property.
"Mortgaged Property" means all property subject to a Lien
pursuant to a Mortgage.
"Multiemployer Plan" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which the Company or any
ERISA Affiliate makes, is making, or is obligated to make
contributions or, during the preceding three calendar years, has
made, or been obligated to make, contributions.
"Net Proceeds" means (a) with respect to any Asset
Disposition, the sum of cash or readily marketable cash equivalents
received (including by way of a cash generating sale or discounting
of a note or receivable, but excluding any other consideration
received in the form of assumption by the acquiring Person of debt
or other obligations relating to the properties or assets so
disposed of or received in any other non-cash form) therefrom,
whether at the time of such disposition or subsequent thereto, or
(b) with respect to any sale or issuance of equity securities of
the Company or any Subsidiary, cash or readily marketable cash
equivalents received (but excluding any other non-cash form)
therefrom, whether at the time of such disposition, sale or
issuance or subsequent thereto, net, in either case, of all legal,
title and recording tax expenses, commissions and other fees and
all costs and expenses incurred and all federal, state, local and
other taxes required to be accrued as a liability as a consequence
of such transactions and, in the case of an Asset Disposition, net
of all payments made by the Company or any of its Subsidiaries on
any Indebtedness which is secured by such assets pursuant to a
Permitted Lien upon or with respect to such assets or which must by
the terms of such Lien, or in order to obtain a necessary consent
to such Asset Disposition, or by applicable law be repaid out of
the proceeds from such Asset Disposition.
"Net Worth" means the shareholders' equity of the Company as
determined in accordance with GAAP, but excluding any portion
thereof in excess of $23,000,000 attributable to the equity
interest of the Company and its Subsidiaries in Leasing
Subsidiaries.
"Non-Surety L/C's" means letters of credit which are not
Surety L/C's.
"Note" means a promissory note executed by the Company in
favor of a Lender pursuant to subsection 2.02(b), in substantially
the form of Exhibit E.
"Notice of Borrowing" means a notice in substantially the form
of Exhibit A.
"Notice of Conversion/Continuation" means a notice in
substantially the form of Exhibit B.
"Obligations" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan Document
owing by the Company to any Lender, the Agent, or any Indemnified
Person, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now
existing or hereafter arising.
"Offshore Currency" means at any time, any currency that, in
the opinion of the Agent and the applicable Issuer, is at such time
freely traded in the offshore interbank foreign exchange markets
and is freely transferable and freely convertible into Dollars.
"Offshore Rate" means, for any Interest Period, with respect
to Offshore Rate Loans comprising part of the same Borrowing, the
rate of interest per annum (rounded upward to the next 1/16th of
1%) determined by the Agent as follows:
Offshore Rate = IBOR
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect
on such day (whether or not applicable to any Lender) under
regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"); and
"IBOR" means the rate of interest per annum determined by
the Agent as the rate at which dollar deposits in the
approximate amount of BofA's Offshore Rate Loan for such
Interest Period would be offered by BofA's Grand Cayman
Branch, Grand Cayman B.W.I. (or such other office as may be
designated for such purpose by BofA), to major banks in the
offshore dollar interbank market at their request at
approximately 11:00 a.m. (Chicago time) two Business Days
prior to the commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as to
all Offshore Rate Loans then outstanding as of the effective
date of any change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on
the Offshore Rate.
"Organization Documents" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any
certificate of determination or instrument relating to the rights
of preferred shareholders of such corporation, any shareholder
rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation.
"Other Taxes" means any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from
the execution, delivery, performance, enforcement or registration
of, or otherwise with respect to, this Agreement or any other Loan
Documents.
"Participant" has the meaning specified in subsection
11.08(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which the Company or
any ERISA Affiliate sponsors, maintains, or to which it makes, is
making, or is obligated to make contributions, or otherwise has any
liability, or in the case of a multiple employer plan (as described
in Section 4064(a) of ERISA) has made contributions at any time
during the immediately preceding five (5) plan years.
"Permitted Liens" has the meaning specified in Section 8.01.
"Permitted Swap Obligations" means all obligations (contingent
or otherwise) of the Company or any Subsidiary existing or arising
under Swap Contracts, provided that each of the following criteria
is satisfied: (a) such obligations are (or were) entered into by
such Person in the ordinary course of business for the purpose of
directly mitigating risks associated with liabilities, commitments
or assets held or reasonably anticipated by such Person, or changes
in the value of securities issued by such Person in conjunction
with a securities repurchase program not otherwise prohibited
hereunder, and not for purposes of speculation or taking a "market
view"; and (b) such Swap Contracts do not contain any provision
("walk-away" provision) exonerating the non-defaulting party from
its obligation to make payments on outstanding transactions to the
defaulting party.
"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company,
trust, unincorporated association, joint venture or Governmental
Authority.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Company or any ERISA Affiliate sponsors or
maintains or to which the Company or any ERISA Affiliate makes, is
making, or is obligated to make contributions or otherwise has any
liability and includes any Pension Plan.
"Pledge Agreement" means that certain Stock and Note Pledge
Agreement dated as of the date hereof between the Company and the
Agent.
"Pledged Collateral" has the meaning specified in the Pledge
Agreement.
"Principal" means (a) J. Peter Mosling, Jr., (b) Stephen P.
Mosling and (c) Cadence Company, as long as a majority of its
economic interest is held by J. Peter Mosling, Jr., Stephen P.
Mosling and their Related Parties.
"Pro Forma" has the meaning ascribed thereto in Section 6.11.
"Pro Rata Revolving Share" means, as to any Revolving Lender,
(a) at any time at which the Aggregate Revolving Loan Commitment
remains outstanding, the percentage equivalent (expressed as a
decimal rounded to the ninth decimal place) at such time of such
Lender's Revolving Loan Commitment divided by the Aggregate
Revolving Loan Commitment, and (b) after the termination of the
Aggregate Revolving Loan Commitment, the percentage equivalent
(expressed as a decimal, rounded to the ninth decimal place) at
such time of the principal amount of such Lender's outstanding
Revolving Loans (other than Swing Line Loans) divided by the
aggregate principal amount of the outstanding Revolving Loans
(other than Swing Line Loans) of all the Lenders.
"Pro Rata Share" means, as to any Lender, (a) in respect of a
particular Loan and/or Commitment, (i) at any time at which the
Commitments in respect of such Loan remain outstanding, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) at such time of such Lender's Commitment in respect
of such Loan divided by the combined Commitments in respect of such
Loan, and (ii) after the termination of the Commitments in respect
of such Loan, the percentage equivalent (expressed as a decimal,
rounded to the ninth decimal place) at such time of the principal
amount outstanding of such Loans held by such Lender divided by the
aggregate principal amount outstanding of such Loans held by all
Lenders, and (b) in respect of all Loans and/or Commitments, (i) at
any time at which the Aggregate Commitment (or any portion thereof)
remains outstanding, the percentage equivalent (expressed as a
decimal, rounded to the ninth decimal place) at such time of such
Lender's Commitments in respect of all Loans (and if any Term Loans
are outstanding, with the Term Loan Commitment deemed to be
outstanding to the extent of the principal amount of the related
Term Loan which is then outstanding) divided by the Aggregate
Commitment, and (b) after the termination of the Aggregate
Commitment, the percentage equivalent (expressed as a decimal,
rounded to the ninth decimal place) at such time of the principal
amount of such Lender's outstanding Loans (including such Lender's
ratable share of outstanding Swing Line Loans and L/C Obligations)
divided by the aggregate principal amount of the outstanding Loans
and L/C Obligations of all of the Lenders.
"Rate Swap Documents" means, collectively, all Swap Contracts
entered into between the Company and any Lender in respect of any
portion of the Obligations.
"Related Parties" means, with respect to any Principal, (a)
any 70% (or more) owned Subsidiary or spouse or immediate family
member (in the case of an individual) of such Principal, or (b) any
trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons holding a 70% or more
controlling interest of which consist of such Principal and/or such
other Persons referred to in the immediately preceding clause (a).
"Remarketing Agreements" means agreements guaranteeing the
residual or future resale value of products manufactured and sold
or leased by the Company or any Subsidiary.
"Reportable Event" means, any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than
any such event for which the 30-day notice requirement under ERISA
has been waived in regulations issued by the PBGC.
"Required Lenders" means at any time Lenders then holding at
least 51% of the sum of (a) the then aggregate unpaid principal
amount of the Term Loans, plus (b) the amount of the Aggregate
Revolving Loan Commitment (or if the Revolving Loan Commitment has
been terminated, then the aggregate principal amount outstanding of
Revolving Loans and Swing Line Loans, plus the outstanding amount
of L/C Obligations); provided, that, if no principal amount of any
Loan is then outstanding, then "Required Lenders" shall mean
Lenders then having at least 51% of the Aggregate Revolving Loan
Commitment.
"Required Revolving Lenders" means at any time Revolving
Lenders then holding at least 51% of the then aggregate unpaid
principal amount of the Revolving Loans (other than Swing Line
Loans), or, if no such principal amount is then outstanding,
Revolving Lenders then having at least 51% of the Aggregate
Revolving Loan Commitment.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination
of an arbitrator or of a Governmental Authority, in each case
applicable to or binding upon the Person or any of its property or
to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, the
president, the chief financial officer, the treasurer or the
corporate controller of the Company, or any other officer having
substantially the same authority and responsibility.
"Revolving Lender" means any Lender having a Revolving Loan
Commitment.
"Revolving Loan" has the meaning specified in
subsection 2.01(d).
"Revolving Loan Commitment", as to each Revolving Lender, has
the meaning specified in subsection 2.01(d).
"Revolving Termination Date" means the earlier to occur of:
(a) February 26, 2004; and
(b) the date on which the Aggregate Revolving Loan
Commitment terminates in accordance with the provisions of
this Agreement.
"Same Day Funds" means (a) with respect to disbursements and
payments in Dollars, immediately available funds, and (b) with
respect to disbursements and payments in an Offshore Currency, same
day or other funds as may be determined by the Agent to be
customary in the place of disbursement or payment for the
settlement of international banking transactions in the relevant
Offshore Currency.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal
functions.
"Security Agreement" means that certain Security Agreement
dated as of the date hereof between the Company and the Agent.
"Senior Debt to EBITDA Ratio" means, as of any date, the ratio
of (a) all Indebtedness of the Company and its Subsidiaries which
is not contractually subordinated to other Indebtedness or
obligations of such Persons, on a consolidated basis, as of the
date of determination, to (b) EBITDA for the period of four fiscal
quarters ending on the date of determination.
"Senior Subordinated Debt Documents" means the Senior
Subordinated Indenture, the Senior Subordinated Notes and the other
documents and instruments executed and delivered in connection
therewith.
"Senior Subordinated Indenture" means that certain Indenture
dated as of February 26, 1998 between the Company and the
subsidiary guarantors party thereto and Firstar Trust Company.
"Senior Subordinated Notes" means those certain $100,000,000
8.75% Senior Subordinated Notes of the Company due 2008.
"Solvent" means, as to any Person at any time, that (a) the
fair value of the property of such Person is greater than the
amount of such Person's liabilities (including disputed, contingent
and unliquidated liabilities) as such value is established and
liabilities evaluated for purposes of Section 101(31) of the
Bankruptcy Code and, in the alternative, for purposes of the
Illinois Uniform Fraudulent Transfer Act; (b) the present fair
saleable value of the property of such Person is not less than the
amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such
Person is able to realize upon its property and pay its debts and
other liabilities (including disputed, contingent and unliquidated
liabilities, but applying the reasonably anticipated liability,
after giving effect to payments under insurance policies and
indemnity agreements which such Person reasonably expects to
receive) as they mature in the normal course of business; (d) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature; and (e) such Person is not engaged in
business or a transaction, and is not about to engage in business
or a transaction, for which such Person's property would constitute
unreasonably small capital.
"Spot Rate" for a currency means the rate quoted by BofA as
the spot rate for the purchase by BofA of such currency with
another currency through its FX Trading Office at approximately
10:30 a.m. (Chicago time) on the date two Business Days prior to
the date as of which the foreign exchange computation is made.
"Stated Amount" means the stated or face amount of a Letter of
Credit to the extent available at the time for drawing (subject to
presentment of all requested documents), as the same may be
increased or decreased from time to time in accordance with the
terms of such Letter of Credit.
"Stock Purchase Agreement" means that certain Stock Purchase
Agreement dated as of December 8, 1997 and amended as of February
26, 1998 by and among McNeilus, the shareholders of McNeilus and
the Company.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other
business entity of which more than 50% of the voting stock,
membership interests or other equity interests (in the case of
Persons other than corporations), is owned or controlled directly
or indirectly by the Person, or one or more of the Subsidiaries of
the Person, or a combination thereof; provided, that for the
purposes of Articles VII and VIII hereof (and any definitions
incorporated therein) and of calculating the Senior Debt to EBITDA
Ratio, the Leverage Ratio, Net Worth and Excess Cash Flow,
"Subsidiary" shall exclude all Leasing Subsidiaries. Unless the
context otherwise clearly requires, references herein to a
"Subsidiary" refer to a Subsidiary of the Company.
"Subsidiary Guaranty" means that certain Subsidiary Guaranty
dated as of the date hereof by certain of the Subsidiaries in favor
of the Agent and the Lenders.
"Subsidiary Security Agreement" means that certain Subsidiary
Security Agreement dated as of the date hereof between certain of
the Subsidiaries and the Agent.
"Surety Bonds" means all bonds issued for the account of the
Company or any Subsidiary to assure the performance thereby (or to
the extent issued in the ordinary course of business, any other
Person) under any contract entered into in the ordinary course of
business.
"Surety Instruments" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties,
shipside bonds, performance bonds, Surety Bonds, Remarketing
Agreements and similar instruments.
"Surety L/C's" means letters of credit which are issued for
the account of the Company or any Subsidiary to provide credit
support, in the ordinary course of business, for (a) a contract bid
by any such Person, (b) the performance by any such Person under
any contract, (c) any warranty extended by any such Person and (d)
the repayment of advance payments made to any such Person.
"Swap Contract" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis
swap, forward rate transaction, commodity swap, commodity option,
equity or equity index swap or option, bond, note or bill option,
interest rate option, forward foreign exchange transaction, cap,
collar or floor transaction, currency swap, cross-currency rate
swap, swaption, currency option or any other, similar transaction
(including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise
clearly requires, any master agreement relating to or governing any
or all of the foregoing.
"Swap Termination Value" means, in respect of any one or more
Swap Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Swap Contracts, (a)
for any date on or after the date such Swap Contracts have been
closed out and termination value(s) determined in accordance
therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined by
the Company based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap
Contracts (which may include any Lender).
"Swing Line Commitment" means at any time, the obligation of
the Swing Line Lender to make Swing Line Loans pursuant to Section
2.05.
"Swing Line Lender" means BofA, in its capacity as provider of
the Swing Line Loans.
"Swing Line Loan" means a Loan made by the Swing Line Lender.
"Swing Line Note" means a promissory note in substantially the
form of Exhibit F.
"Swing Line Rate" means, at any time, for each Swing Line
Loan, (a) the Offshore Rate in effect as of the Business Day of the
making of a Swing Line Loan (or if extended, the date of such
extension), assuming an Interest Period of one month, plus (b) the
Applicable Offshore Rate Margin in respect of Revolving Loans then
in effect, plus (c) 50 basis points per annum.
"Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or
similar charges, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, respectively,
taxes imposed on or measured by its net income by the jurisdiction
(or any political subdivision thereof) under the laws of which such
Lender or the Agent, as the case may be, is organized or maintains
a lending office.
"Term Loan" means, collectively, Term Loan A, Term Loan B and
Term Loan C.
"Term Loan A Commitment" means, as to each Lender, such
Lender's Term Loan A Commitment, as specified on Schedule 2.01.
"Term Loan B Commitment" means, as to each Lender, such
Lender's Term Loan B Commitment, as specified on Schedule 2.01.
"Term Loan C Commitment" means, as to each Lender, such
Lender's Term Loan C Commitment, as specified on Schedule 2.01.
"Term Loan Commitment" means, as to each Lender, the aggregate
amount of such Lender's Term Loan A Commitment, Term Loan B
Commitment and Term Loan C Commitment.
"Term Loan A" has the meaning specified in subsection 2.01(a).
"Term Loan B" has the meaning specified in subsection 2.01(b).
"Term Loan C" has the meaning specified in subsection 2.01(c).
"Transaction Documents" means the Loan Documents, the
Acquisition Documents and the Senior Subordinated Debt Documents.
A "Type" of Loan means its status as either a Base Rate Loan
or an Offshore Rate Loan.
"UCC" means the Uniform Commercial Code as in effect in the
State of Illinois.
"Unfunded Pension Liability" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Plan's assets, determined in accordance with
the assumptions used for funding the Pension Plan pursuant to
Section 412 of the Code for the applicable plan year.
"United States" and "U.S." each means the United States of
America.
"Voting Stock" of any Person as of any date means the Capital
Stock of such Person that is entitled to vote in the election of
the board of directors (or other governing body) of such Person.
"Waivable Term Loan B Prepayment" has the meaning specified in
subsection 2.09(d).
"Waivable Term Loan C Prepayment" has the meaning specified in
subsection 2.09(e).
"Wholly-Owned Subsidiary" means any corporation in which
(other than directors' qualifying shares required by law) 100% of
the capital stock of each class having ordinary voting power, and
100% of the capital stock of every other class, in each case (or,
in the case of Persons other than corporations, membership
interests or other equity interests), at the time as of which any
determination is being made, is owned, beneficially and of record,
by the Company, or by one or more of the other Wholly-Owned
Subsidiaries, or both.
"Working Capital" means (a) Current Assets, less (b) Current
Liabilities.
1.02 Other Interpretive Provisions. (a) The meanings of defined
terms are equally applicable to the singular and plural forms of the
defined terms.
(b) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular
provision of this Agreement; and subsection, Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures,
notices and other writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means
"from and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including."
(iv) The term "property" includes any kind of
property or asset, real, personal or mixed, tangible or intangible.
(d) Unless otherwise expressly provided herein, (i)
references to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and
(ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of
this Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are
cumulative and shall each be performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the
result of negotiations among and have been reviewed by counsel to the
Agent, the Company and the other parties, and are the products of all
parties. Accordingly, they shall not be construed against the Lenders or
the Agent merely because of the Agent's or Lenders' involvement in their
preparation.
1.03 Accounting Principles. (a) Unless the context otherwise
clearly requires, all accounting terms not expressly defined herein shall
be construed, and all financial computations required under this Agreement
shall be made, in accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Company.
(c) In the event that any changes in GAAP occur after the
date of this Agreement and such changes result in a material variation in
the method of calculation of financial covenants or other terms of this
Agreement, then the Company, the Agent and the Lenders agree to amend such
provisions of this Agreement so as to equitably reflect such changes so
that the criteria for evaluating the Company's financial condition will be
the same after such changes as if such changes had not occurred.
1.04 Currency Equivalents Generally. For all purposes of this
Agreement (but not for purposes of the preparation of any financial
statements delivered pursuant hereto), the equivalent in any Offshore
Currency or other currency of an amount in Dollars, and the equivalent in
Dollars of an amount in any Offshore Currency or other currency, shall be
determined at the Spot Rate.
ARTICLE II
THE CREDITS
2.01 Amounts and Terms of Commitments. (a) Term Loan A. Each
Lender severally agrees, on the terms and conditions set forth herein, to
make a single loan to the Company (each such loan, a "Term Loan A") on the
Closing Date in an amount not to exceed such Lender's Term Loan A
Commitment as set forth on Schedule 2.01. Amounts borrowed as a Term Loan
A which are repaid or prepaid by the Company may not be reborrowed.
(b) Term Loan B. Each Lender severally agrees, on the terms
and conditions set forth herein, to make a single loan to the Company
(each such loan, a "Term Loan B") on the Closing Date in an amount not to
exceed such Lender's Term Loan B Commitment as set forth on Schedule 2.01.
Amounts borrowed as a Term Loan B which are repaid or prepaid by the
Company may not be reborrowed.
(c) Term Loan C. Each Lender severally agrees, on the terms
and conditions set forth herein, to make a single loan to the Company
(each such loan, a "Term Loan C") on the Closing Date in an amount not to
exceed such Lender's Term Loan C Commitment as set forth on Schedule 2.01.
Amounts borrowed as a Term Loan C which are repaid or prepaid by the
Company may not be reborrowed.
(d) The Revolving Credit. Each Revolving Lender severally
agrees, on the terms and conditions set forth herein, to make loans to the
Company (each such loan, a "Revolving Loan") from time to time on any
Business Day during the period from the Closing Date to the Revolving
Termination Date, in an aggregate amount not to exceed at any time
outstanding the amount set forth on Schedule 2.01 (such amount, as the
same may be reduced under Section 2.07 or as a result of one or more
assignments under Section 11.08, the Revolving Lender's "Revolving Loan
Commitment"); provided, however, that, after giving effect to any
Borrowing of Revolving Loans, the Effective Amount of all outstanding
Revolving Loans, together with all Term Loans and Swing Line Loans
outstanding at such time, and the Dollar Equivalent of the Effective
Amount of all L/C Obligations, shall not at any time exceed the Aggregate
Commitment; and provided further, that the Effective Amount of the
Revolving Loans of any Revolving Lender plus the participation of such
Revolving Lender in the Dollar Equivalent of the Effective Amount of all
L/C Obligations and such Revolving Lender's Pro Rata Revolving Share of
any outstanding Swing Line Loans shall not at any time exceed such
Revolving Lender's Revolving Loan Commitment. Within the limits of each
Revolving Lender's Commitment, and subject to the other terms and
conditions hereof, the Company may borrow under this subsection 2.01(d),
prepay under Section 2.08 and reborrow under this subsection 2.01(d).
2.02 Loan Accounts. (a) The Loans made by each Lender and the
Letters of Credit Issued by the Issuers shall be evidenced by one or more
accounts or records maintained by such Lender or Issuers, as the case may
be, in the ordinary course of business. The accounts or records
maintained by the Agent, the Issuers and each Lender shall be conclusive
absent manifest error of the amount of the Loans made by the Lenders to
the Company and the Letters of Credit Issued for the account of the
Company, and the interest and payments thereon. Any failure so to record
or any error in doing so shall not, however, limit or otherwise affect the
obligation of the Company hereunder to pay any amount owing with respect
to the Loans or any Letter of Credit.
(b) The Company shall issue to each Lender notes in the form
of Exhibit E ("Notes") to evidence such Lender's Loans (or, in the case of
Swing Line Loans, in the form of Exhibit F). Each Lender may, instead of
or in addition to maintaining a loan account, endorse on the schedule
annexed to its Note(s) the date, amount and maturity of each Loan made by
it and the amount of each payment of principal made by the Company with
respect thereto. Each such Lender is irrevocably authorized by the
Company to endorse its Note(s) or Swing Line Note, as applicable, and each
Lender's record shall be conclusive absent manifest error; provided,
however, that the failure of a Lender to make, or an error in making, a
notation thereon with respect to any Loan shall not limit or otherwise
affect the obligations of the Company hereunder or under any such Note or
Swing Line Note to such Lender.
2.03 Procedure for Borrowing. (a) Each Borrowing shall be made
upon the Company's irrevocable notice delivered to the Agent in the form
of a Notice of Borrowing (which notice must be received by the Agent prior
to 10:30 a.m. (Chicago time) (i) two Business Days prior to the requested
Borrowing Date, in the case of Offshore Rate Loans; and (ii) on the
requested Borrowing Date, in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall be in
an aggregate minimum amount of $3,000,000 or any multiple of
$250,000 in excess thereof;
(B) the requested Borrowing Date, which shall be a
Business Day;
(C) the Type of Loans comprising the Borrowing; and
(D) with respect to Offshore Rate Loans, the
duration of the Interest Period applicable to such Loans
included in such notice. If the Notice of Borrowing fails to
specify the duration of the Interest Period for any Borrowing
comprised of Offshore Rate Loans, such Interest Period shall
be three months;
provided, however, that with respect to the Borrowing to be made on the
Closing Date, such Borrowing will consist of Base Rate Loans only; and
further provided that if the Agent has determined in its sole discretion
that syndication of the Loans has not been completed, then all Borrowings
during the first 30 days following the Closing Date shall have the same
Interest Period and shall be Base Rate Loans or Offshore Rate Loans for
Interest Periods no longer than one month; provided, further, that with
the consent of each applicable Lender, Loans made during such 30 day
period may have interest periods of less than one month.
(b) The Agent will promptly notify each applicable Lender of
its receipt of any Notice of Borrowing and, in respect of Borrowings of
Revolving Loans, of the amount of such Revolving Lender's Pro Rata
Revolving Share of that Borrowing.
(c) Each Lender will make the amount of its Pro Rata Share of
each Borrowing available to the Agent for the account of the Company at
the Agent's Payment Office by 1:00 p.m. (Chicago time) on the Borrowing
Date requested by the Company in funds immediately available to the Agent.
The proceeds of all such Loans will then be made available to the Company
by the Agent at such office by crediting the account of the Company on the
books of BofA with the aggregate of the amounts made available to the
Agent by the Lenders and in like funds as received by the Agent.
(d) After giving effect to any Borrowing, unless the Agent
shall otherwise consent, there may not be more than 10 different Interest
Periods in effect.
(e) The Company hereby authorizes the Lenders and the Agent
to accept Notices of Borrowing based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be
acting on behalf of the Company. The Company agrees to deliver promptly
to the Agent a written confirmation of each telephonic notice, signed by a
Responsible Officer or an authorized designee. If the written
confirmation differs in any material respect from the action taken by the
Agent and the Lenders, the records of the Agent and the Lenders shall
govern absent manifest error.
2.04 Conversion and Continuation Elections. (a) The Company may,
upon irrevocable notice to the Agent in accordance with subsection
2.04(b):
(i) elect, as of any Business Day, in the case of Base
Rate Loans, or as of the last day of the applicable Interest
Period, in the case of any other Type of Revolving Loans or Term
Loans, to convert any such Loans (or any part thereof in an amount
not less than $3,000,000 or that is in an integral multiple of
$250,000 in excess thereof) into Loans of any other Type; or
(ii) elect as of the last day of the applicable
Interest Period, to continue any Revolving Loans or Term Loans
having Interest Periods expiring on such day (or any part thereof
in an amount not less than $3,000,000, or that is in an integral
multiple of $250,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans
in respect of any Borrowing is reduced, by payment, prepayment, or
conversion of part thereof to be less than $3,000,000 such Offshore Rate
Loans may, upon written notice by the Company delivered to the Agent and
the Swing Line Lender concurrent with its notice of prepayment and
compliance with Section 2.06, be converted into Swing Line Loans, or, in
the absence of such a conversion, shall automatically convert into Base
Rate Loans, and on and after such date the right of the Company to
continue such Loans as, and convert such Loans into, Offshore Rate Loans
shall terminate.
(b) The Company shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than 10:30
a.m. (Chicago time) at least (i) two Business Days in advance of the
Conversion/Continuation Date, if the Loans are to be converted into or
continued as Offshore Rate Loans; and (ii) on the Conversion/Continuation
Date, if the Loans are to be converted into Base Rate Loans, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted
or continued;
(C) the Type of Loans resulting from the proposed
conversion or continuation; and
(D) other than in the case of conversions into Base
Rate Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable
to Offshore Rate Loans, the Company has failed to select timely a new
Interest Period to be applicable to such Offshore Rate Loans, as the case
may be, or if any Default or Event of Default then exists, the Company
shall be deemed to have elected to convert such Offshore Rate Loans into
Base Rate Loans effective as of the expiration date of such Interest
Period.
(d) The Agent will promptly notify each applicable Lender of
its receipt of a Notice of Conversion/Continuation, or, if no timely
notice is provided by the Company, the Agent will promptly notify each
applicable Lender of the details of any automatic conversion. All
conversions and continuations shall be made ratably according to the
respective outstanding principal amounts of the Loans with respect to
which the notice was given held by each Lender.
(e) Unless the Required Lenders otherwise consent, during the
existence of a Default or Event of Default, the Company may not elect to
have a Loan converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of
Loans, unless the Agent shall otherwise consent, there may not be more
than 10 different Interest Periods in effect.
(g) The Company hereby authorizes the Lenders and the Agent
to accept Notices of Conversion/Continuation based on telephonic notices
made by any person or persons the Agent or any Lender in good faith
believes to be acting on behalf of the Company. The Company agrees to
deliver promptly to the Agent a written confirmation of each telephonic
notice, signed by a Responsible Officer. If the written confirmation
differs in any material respect from the action taken by the Agent and the
Lenders, the records of the Agent and the Lenders shall govern absent
manifest error.
2.05 The Swing Line Loans. Subject to the terms and conditions
hereof, the Swing Line Lender agrees to make Swing Line Loans to the
Company from time to time prior to the Revolving Termination Date in an
aggregate principal amount at any one time outstanding not to exceed
$15,000,000; provided, that after giving effect to any such Swing Line
Loan, the Effective Amount of all Revolving Loans, Swing Line Loans and
L/C Obligations at such time would not exceed the Aggregate Revolving Loan
Commitment at such time. Prior to the Revolving Termination Date, the
Company may use the Swing Line Commitment by borrowing, prepaying the
Swing Line Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof. All Swing Line Loans shall bear
interest at the Swing Line Rate and shall not be entitled to be converted
into Loans that bear interest at any other rate.
2.06 Procedure for Swing Line Loans. (a) The Company may borrow
under the Swing Line Commitment on any Business Day until the Revolving
Termination Date; provided, that the Company shall give the Swing Line
Lender irrevocable written notice signed by a Responsible Officer or an
authorized designee (which notice must be received by the Swing Line
Lender prior to 11:00 a.m. (Chicago time)) with a copy to the Agent
specifying the amount of the requested Swing Line Loan, which shall be in
a minimum amount of $100,000 or a whole multiple of $100,000 in excess
thereof. The proceeds of the Swing Line Loan will be made available by
the Swing Line Lender to the Company in immediately available funds at the
office of the Swing Line Lender by 1:00 p.m. (Chicago time) on the date of
such notice. The Company may at any time and from time to time, prepay
the Swing Line Loans, in whole or in part, without premium or penalty, by
notifying the Swing Line Lender prior to 11:00 a.m. (Chicago time) on any
Business Day of the date and amount of prepayment with a copy to the
Agent. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein. Partial
prepayments shall be in an aggregate principal amount of $100,000 or a
whole multiple of $100,000 in excess thereof.
(b) If any Swing Line Loan shall remain outstanding at 11:00
a.m. (Chicago time) on the fifth Business Day following the date of such
Swing Line Loan and if by such time on such fifth Business Day the Agent
shall have received neither (i) a Notice of Borrowing delivered by the
Company pursuant to Section 2.03 requesting that Revolving Loans be made
pursuant to subsection 2.01(d) on the immediately succeeding Business Day
in an amount at least equal to the principal amount of such Swing Line
Loan nor (ii) any other notice satisfactory to the Agent indicating the
Company's intent to repay such Swing Line Loan on or before the
immediately succeeding Business Day with funds obtained from other
sources, then on such Business Day the Swing Line Lender shall (and on any
Business Day the Swing Line Lender in its sole discretion may), on behalf
of the Company (which hereby irrevocably directs the Swing Line Lender to
act on its behalf) request the Agent to notify each Revolving Lender to
make a Base Rate Loan in an amount equal to such Revolving Lender's Pro
Rata Revolving Share of (A) in the case of such a request which is
required to be made, the amount of the relevant Swing Line Loan and (B) in
the case of such a discretionary request, the aggregate principal amount
of the Swing Line Loans outstanding on the date such notice is given;
provided, that absent notice by the Company to the contrary by such time
on such fifth Business Day, the Company shall be deemed to have requested,
at the end of such five Business Day period, that each outstanding Swing
Line Loan be extended for an additional period of five Business Days, so
long as the conditions specified in Section 5.02 would be satisfied at the
beginning of each such additional period, treating each such extension as
if it were the making of a new Loan. Unless any of the events described
in subsection 9.01(f) or (g) shall have occurred with respect to the
Company (in which event the procedures of paragraph (d) of this Section
2.06 shall apply) each Revolving Lender shall make the proceeds of its
Revolving Loan available to the Agent for the account of the Swing Line
Lender at the Agent's Payment Office in funds immediately available prior
to 1:00 p.m. (Chicago time) on the Business Day next succeeding the date
such notice is given. The proceeds of such Revolving Loans shall be
immediately applied to repay the outstanding Swing Line Loans. Effective
on the day such Revolving Loans are made, the portion of the Swing Line
Loans so paid shall no longer be outstanding as Swing Line Loans and shall
no longer be due under the Swing Line Note. The Company shall pay to the
Swing Line Lender, promptly following the Swing Line Lender's demand, the
amount of its outstanding Swing Line Loans to the extent amounts received
from the Revolving Lenders are not sufficient to repay in full such
outstanding Swing Line Loans.
(c) Notwithstanding anything herein to the contrary, the
Swing Line Lender (i) shall not be obligated to make any Swing Line Loan
if the conditions set forth in Article V have not been satisfied and (ii)
shall not make any requested Swing Line Loan if, prior to 11:00 a.m.
(Chicago time) on the date of such requested Swing Line Loan, it has
received a written notice from the Agent or any Revolving Lender directing
it not to make further Swing Line Loans because one or more of the
conditions specified in Article V are not then satisfied.
(d) If prior to the making of a Revolving Loan required to be
made by subsection 2.06(b) an Event of Default described in subsection
9.01(f) or 9.01(g) shall have occurred and be continuing with respect to
the Company, each Revolving Lender will, on the date such Revolving Loan
was to have been made pursuant to the notice described in subsection
2.06(b), purchase an undivided participating interest in the outstanding
Swing Line Loans in an amount equal to its Pro Rata Revolving Share of the
aggregate principal amount of Swing Line Loans then outstanding. Each
Revolving Lender will immediately transfer to the Agent for the benefit of
the Swing Line Lender, in immediately available funds, the amount of its
participation.
(e) Whenever, at any time after a Revolving Lender has
purchased a participating interest in a Swing Line Loan, the Swing Line
Lender receives any payment on account thereof, the Swing Line Lender will
distribute to the Agent for delivery to each Revolving Lender its
participating interest in such amount (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such
Revolving Lender's participating interest was outstanding and funded);
provided, however, that in the event that such payment received by the
Swing Line Lender is required to be returned, such Revolving Lender will
return to the Agent for delivery to the Swing Line Lender any portion
thereof previously distributed by the Swing Line Lender to it.
(f) Each Lender's obligation to make the Revolving Loans
referred to in subsection 2.06(b) and to purchase participating interests
pursuant to subsection 2.06(d) shall be absolute and unconditional and
shall not be affected by any circumstance, including, without limitation,
(i) any set-off, counterclaim, recoupment, defense or other right which
such Revolving Lender or the Company may have against the Swing Line
Lender, the Company or any other Person for any reason whatsoever, (ii)
the occurrence or continuance of a Default or an Event of Default, (iii)
any adverse change in the condition (financial or otherwise) of the
Company, (iv) any breach of this Agreement or any other Loan Document by
the Company, any Subsidiary or any other Lender, or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.
2.07 Voluntary Termination or Reduction of Revolving Loan
Commitments. (a) The Company may, upon not less than five Business Days'
prior notice to the Agent, terminate the Revolving Loan Commitments, or
permanently reduce the Revolving Loan Commitments by an aggregate minimum
amount of $10,000,000 or any multiple of $1,000,000 in excess thereof;
unless, after giving effect thereto and to any prepayments of Loans made
on the effective date thereof, (a) the Effective Amount of all Revolving
Loans, Swing Line Loans and L/C Obligations together would exceed the
amount of the Aggregate Revolving Loan Commitment then in effect, or (b)
the Effective Amount of all L/C Obligations then outstanding would exceed
the L/C Commitment. Once reduced in accordance with this Section, the
Revolving Loan Commitments may not be increased. Any reduction of the
Revolving Loan Commitments shall be applied to each Revolving Lender
according to its Pro Rata Revolving Share. All accrued commitment and
letter of credit fees to, but not including, the effective date of any
reduction or termination of Revolving Loan Commitments, shall be paid on
the effective date of such reduction or termination.
(b) At no time shall the Swing Line Commitment exceed the
Aggregate Revolving Loan Commitment, and any reduction of the Aggregate
Revolving Loan Commitment which reduces the Aggregate Revolving Loan
Commitment below the then-current amount of the Swing Line Commitment
shall result in an automatic corresponding reduction of the Swing Line
Commitment to the amount of the Aggregate Revolving Loan Commitment, as so
reduced, without any action on the part of the Swing Line Lender. At no
time shall the Swing Line Commitment exceed the Revolving Loan Commitment
of the Swing Line Lender, and any reduction of the Aggregate Revolving
Loan Commitment which reduces the Revolving Loan Commitment of the Swing
Line Lender below the then-current amount of the Swing Line Commitment
shall result in an automatic corresponding reduction of the Swing Line
Commitment to the amount of the Revolving Loan Commitment of the Swing
Line Lender, as so reduced, without any action on the part of the Swing
Line Lender.
2.08 Optional Prepayments. Subject to Section 4.04, the Company
may, at any time or from time to time, upon not less than two (2) Business
Days' irrevocable notice to the Agent, in respect of Offshore Rate Loans,
and in respect of Base Rate Loans, by not later than 10:30 a.m. (Chicago
time) on the prepayment date, prepay Loans in whole or in part, in minimum
amounts of $3,000,000 or any multiple of $250,000 in excess thereof. Such
notice of prepayment shall specify the date and amount of such prepayment,
which Loans are to be prepaid and the Type(s) of such Loans to be prepaid.
The Agent will promptly notify each Lender of its receipt of any such
notice, and of such Lender's Pro Rata Share of such prepayment. If such
notice is given by the Company, the Company shall make such prepayment and
the payment amount specified in such notice shall be due and payable on
the date specified therein, together, in the case of Offshore Rate Loans,
with accrued interest to each such date on the amount prepaid and any
amounts required pursuant to Section 4.04. Optional prepayments of any
Term Loan shall be applied first, in the order of maturity, to payments
due on such Term Loan in the next 12 months, and then ratably to all
remaining payments on such Term Loan.
2.09 Mandatory Prepayments of Loans. (a) If on any date the
Effective Amount of L/C Obligations exceeds the L/C Commitment, the
Company shall Cash Collateralize on such date the outstanding Letters of
Credit in an amount equal to the excess of the maximum amount then
available to be drawn under the Letters of Credit over the Aggregate L/C
Commitment. Subject to Section 4.04, if on any date after giving effect
to any Cash Collateralization made on such date pursuant to the preceding
sentence, the Effective Amount of all Revolving Loans, Swing Line Loans
and Term Loans then outstanding plus the Effective Amount of all L/C
Obligations exceeds the Aggregate Commitment, the Company shall
immediately, and without notice or demand, prepay the outstanding
principal amount of the Revolving Loans and L/C Advances by an amount
equal to the applicable excess.
(b) On each January 15, beginning January 15, 1999, the
Company shall prepay the Term Loans in an amount equal to fifty percent
(50%) of the Excess Cash Flow, if any, generated by the Company and its
Subsidiaries during the immediately preceding fiscal year of the Company;
provided, that with respect to the payment to be made on January 15, 1999,
Excess Cash Flow shall be measured for the seven month period beginning on
March 1, 1998. The amount of such prepayment shall be applied (i) subject
to paragraphs (d) and (e) below, on a ratable basis among the then
outstanding Term Loans, and (ii) (A) to the extent paid in respect of
fiscal years 1998, 1999 and 2000, on a ratable basis among all remaining
payments in each such Term Loan, and (B) thereafter, 50% to the payments
due on such Term Loan, in the order of maturity, in the next 12 months (to
the extent required), with all remaining amounts to be applied on a
ratable basis among all remaining payments in each such Term Loan. Such
proceeds shall be applied first, to the extent possible, to prepay Base
Rate Loans and then to prepay Offshore Rate Loans. The Company shall use
its best efforts to notify the Agent and each Lender holding a Term Loan
of the amount of any required prepayment at least three (3) Business Days
before it is made.
(c) Within five (5) Business Days after the end of each
fiscal quarter, the Company shall prepay the Term Loans in an amount equal
to 100% of the sum of (a) the Net Proceeds realized upon all Asset
Dispositions made by the Company or any Subsidiary in such fiscal quarter,
(b) the insurance proceeds received by the Company or any Subsidiary in
such fiscal quarter following a casualty involving such Person's Property
and (c) the payments received by the Company or any Subsidiary in such
fiscal quarter from a condemnation of such Person's Property, aggregating
in excess of $250,000, to the extent not applied (or committed to be
applied) within 90 days after the consummation or receipt thereof, as
applicable, to the purchase of other assets that are not classified as
current assets under GAAP and are used or useful in the business of the
Company and its Subsidiaries. The amount of such prepayment shall be
applied (i) subject to paragraphs (d) and (e) below, on a ratable basis
among the then outstanding Term Loans, and (ii) on a ratable basis among
all remaining payments in each such Term Loan with such proceeds to be
applied first, to the extent possible, to prepay Base Rate Loans and then
to prepay Offshore Rate Loans. The Company shall use its best efforts to
notify the Agent and each Lender holding a Term Loan of the amount of any
required prepayment at least three (3) Business Days before it is made.
(d) Waiver of Certain Mandatory Prepayments by Term B
Lenders. Notwithstanding anything to the contrary contained in this
Section 2.09 or elsewhere in this Agreement, any Lender with an
outstanding Term Loan B shall have the option to waive a mandatory
prepayment of such Term Loan pursuant to subsection 2.09(b) or (c) (each
such prepayment, a "Waivable Mandatory Term Loan B Prepayment") upon the
terms and provisions set forth in this subsection 2.09(d). In the event
any such Lender desires to waive such Lender's right to receive any such
Waivable Mandatory Term Loan B Prepayment in whole or in part, such Lender
shall so advise the Agent no later than the close of business two (2)
Business Days prior to the date on which such prepayment is to occur,
which notice shall also include the amount such Lender desires to receive
in respect of such prepayment. If any such Lender does not provide such
notice by such date, it will be deemed not to have waived any part of such
prepayment. If any such Lender does not specify an amount it wishes to
receive, it will be deemed to have accepted one hundred percent (100%) of
the total payment. In the event that any such Lender waives all or part
of such right to receive any such Waivable Mandatory Term Loan B
Prepayment, the Agent shall apply one hundred percent (100%) of the amount
so waived by such Lender to Term Loan A in accordance with Section 2.09;
provided, that if the aggregate amount of the applicable prepayment
requested to be waived by such Lenders and by Lenders with an outstanding
Term Loan C would exceed the amount required to prepay Term Loan A in
full, then such requested waived amounts shall be allocated ratably among
the waiving Term Loan B Lenders and Term Loan C Lenders, based upon the
amounts of the requested waivers; provided, further, that no such waiver
requests shall be honored following the prepayment in full of Term Loan A.
(e) Waiver of Certain Mandatory Prepayments by Term C
Lenders. Notwithstanding anything to the contrary contained in this
Section 2.09 or elsewhere in this Agreement, any Lender with an
outstanding Term Loan C shall have the option to waive a mandatory
prepayment of such Term Loan pursuant to subsection 2.09(b) or (c) (each
such prepayment, a "Waivable Mandatory Term Loan C Prepayment") upon the
terms and provisions set forth in this subsection 2.09(d). In the event
any such Lender desires to waive such Lender's right to receive any such
Waivable Mandatory Term Loan C Prepayment in whole or in part, such Lender
shall so advise the Agent no later than the close of business two (2)
Business Days prior to the date on which such prepayment is to occur,
which notice shall also include the amount such Lender desires to receive
in respect of such prepayment. If any such Lender does not provide such
notice by such date, it will be deemed not to have waived any part of such
prepayment. If any such Lender does not specify an amount it wishes to
receive, it will be deemed to have accepted one hundred percent (100%) of
the total payment. In the event that any such Lender waives all or part
of such right to receive any such Waivable Mandatory Term Loan C
Prepayment, the Agent shall apply one hundred percent (100%) of the amount
so waived by such Lender to Term Loan A in accordance with Section 2.09;
provided, that if Term Loan A has been paid in full, or would be paid in
full after giving effect to all pending waiver requests, then any excess
waived amounts shall be applied to prepay Term Loan B; provided, further,
that if the aggregate amount requested to be waived by such Lenders and by
Lenders with an outstanding Term Loan B would exceed the amount required
to prepay Term Loan A (and following the prepayment in full of Term Loan
A, Term Loan B) in full, then such requested waived amounts shall be
allocated ratably among the waiving Term Loan B Lenders (to the extent
applicable) and Term Loan C Lenders, based upon the amounts of the
requested waivers; and provided, further, that no such waiver requests
shall be honored following the prepayment in full of Term Loan A and Term
Loan B.
2.10 Repayment. (a) Term Loans. The Company shall repay the Term
Loans on each date set forth below as follows (each a "Principal Payment
Date"):
Term Loan A Term Loan B Term Loan C Total
Date Payment Payment Payment Payment
6/30/98 $2,500,000 $156,250 $156,250 $2,812,500
9/30/98 $2,500,000 $156,250 $156,250 $2,812,500
12/31/98 $2,500,000 $156,250 $156,250 $2,812,500
3/31/99 $2,500,000 $156,250 $156,250 $2,812,500
6/30/99 $3,000,000 $156,250 $156,250 $3,312,500
9/30/99 $3,000,000 $156,250 $156,250 $3,312,500
12/31/99 $3,000,000 $156,250 $156,250 $3,312,500
3/31/00 $3,000,000 $156,250 $156,250 $3,312,500
6/30/00 $3,750,000 $156,250 $156,250 $4,062,500
9/30/00 $3,750,000 $156,250 $156,250 $4,062,500
12/31/00 $3,750,000 $156,250 $156,250 $4,062,500
3/31/01 $3,750,000 $156,250 $156,250 $4,062,500
6/30/01 $3,750,000 $156,250 $156,250 $4,062,500
9/30/01 $3,750,000 $156,250 $156,250 $4,062,500
12/31/01 $3,750,000 $156,250 $156,250 $4,062,500
3/31/02 $3,750,000 $156,250 $156,250 $4,062,500
6/30/02 $6,000,000 $156,250 $156,250 $6,312,500
9/30/02 $6,000,000 $156,250 $156,250 $6,312,500
12/31/02 $6,000,000 $156,250 $156,250 $6,312,500
3/31/03 $6,000,000 $156,250 $156,250 $6,312,500
6/30/03 $6,000,000 $156,250 $156,250 $6,312,500
9/30/03 $6,000,000 $156,250 $156,250 $6,312,500
12/31/03 $6,000,000 $156,250 $156,250 $6,312,500
3/31/04 $6,000,000 $156,250 $156,250 $6,312,500
or such
other amount
as shall
then be
outstanding
6/30/04 $14,687,500 $156,250 $14,843,750
9/30/04 $14,687,500 $156,250 $14,843,750
12/31/04 $14,687,500 $156,250 $14,843,750
3/31/05 $14,687,500 $156,250 $14,843,750
or such
other amount
as shall
then be
outstanding
6/30/05 $14,531,250 $14,531,250
9/30/05 $14,531,250 $14,531,250
12/31/05 $14,531,250 $14,531,250
3/31/06 $14,531,250 $14,531,250
or such other
amount as
shall then be
outstanding
======== =========== =========== ============ ============
Total $100,000,000 $62,500,000 $62,500,000 $225,000,000
(b) The Revolving Credit. The Company shall repay to the
Lenders on the Revolving Termination Date the aggregate principal amount
of Revolving Loans outstanding on such date.
2.11 Interest. (a) Each Revolving Loan and Term Loan shall bear
interest on the outstanding principal amount thereof from the applicable
Borrowing Date at a rate per annum equal to the Offshore Rate or the Base
Rate, as the case may be (and subject to the Company's right to convert to
other Types of Loans under Section 2.04), plus the Applicable Offshore
Rate Margin or the Applicable Base Rate Margin, as applicable.
(b) Interest on each Revolving Loan and Term Loan shall be
paid in arrears on each Interest Payment Date. Interest on Base Rate
Loans shall also be paid on the date of any payment (including prepayment)
in full thereof. Interest on Offshore Rate Loans shall also be paid on
the date of any prepayment of Loans under Section 2.08 or 2.09 for the
portion of the Loans so prepaid and upon payment (including prepayment) in
full thereof. During the existence of any Event of Default, interest on
all Loans shall be paid on demand of the Agent at the request or with the
consent of the Required Lenders.
(c) Notwithstanding subsection (a) of this Section, if any
amount of principal of or interest on any Loan, or any other amount
payable hereunder or under any other Loan Document is not paid in full
when due (whether at stated maturity, by acceleration, demand or
otherwise), the Company agrees to pay interest on such unpaid principal or
other amount, from the date such amount becomes due until the date such
amount is paid in full, and after as well as before any entry of judgment
thereon to the extent permitted by law, payable on demand, at a
fluctuating rate per annum equal to the Base Rate, plus the Applicable
Base Rate Margin, plus two percent (2.0%).
(d) Anything herein to the contrary notwithstanding, the
obligations of the Company to any Lender hereunder shall be subject to the
limitation that payments of interest shall not be required for any period
for which interest is computed hereunder, to the extent (but only to the
extent) that contracting for or receiving such payment by such Lender
would be contrary to the provisions of any law applicable to such Lender
limiting the highest rate of interest that may be lawfully contracted for,
charged or received by such Lender, and in such event the Company shall
pay such Lender interest at the highest rate permitted by applicable law.
2.12 Fees. In addition to certain fees described in Section 3.08:
(a) Arrangement, Agency Fees. The Company shall pay such
fees to the Agent and the Arranger as are required by the letter agreement
("Fee Letter") between the Company and the Arranger and Agent dated
November 21, 1997.
(b) Commitment Fees. The Company shall pay to the Agent for
the account of each Revolving Lender a commitment fee on the average daily
unused portion of such Revolving Lender's Loan Commitment, computed on a
quarterly basis in arrears on the last Business Day of each calendar
quarter based upon the daily utilization for that quarter as calculated by
the Agent, equal to the Applicable Commitment Fee Percentage. For
purposes of calculating utilization under this subsection, the Revolving
Loan Commitments shall be deemed used to the extent of the Effective
Amount of Revolving Loans then outstanding (excluding any outstanding
Swing Line Loans), plus the Effective Amount of L/C Obligations then
outstanding. Such commitment fee shall accrue from the date hereof to the
Revolving Termination Date and shall be due and payable quarterly in
arrears on the last Business Day of each calendar quarter commencing on
March 31, 1998 through the Revolving Termination Date, with the final
payment to be made on the Revolving Termination Date; provided that, in
connection with any reduction or termination of Revolving Loan Commitments
under Section 2.05 or Section 2.07, the accrued commitment fee calculated
for the period ending on such date shall also be paid on the date of such
reduction or termination, with the following quarterly payment being
calculated on the basis of the period from such reduction or termination
date to such quarterly payment date. The commitment fees provided in this
subsection shall accrue at all times after the above-mentioned
commencement date, including at any time during which one or more
conditions in Article V are not met.
2.13 Computation of Fees and Interest. (a) All computations of
interest for Base Rate Loans when the Base Rate is determined by BofA's
"reference rate" shall be made on the basis of a year of 365 or 366 days,
as the case may be, and actual days elapsed. All other computations of
fees and interest shall be made on the basis of a 360-day year and actual
days elapsed (which results in more interest being paid than if computed
on the basis of a 365-day year). Interest and fees shall accrue during
each period during which interest or such fees are computed from the first
day thereof to the last day thereof.
(b) Each determination of an interest rate by the Agent shall
be conclusive and binding on the Company and the Lenders in the absence of
manifest error.
2.14 Payments by the Company. (a) All payments to be made by the
Company shall be made without set-off, recoupment or counterclaim. Except
as otherwise expressly provided herein, all payments by the Company shall
be made to the Agent for the account of the Lenders at the Agent's Payment
Office, and shall be made in dollars and in immediately available funds,
no later than 11:00 a.m. (Chicago time) on the date specified herein. The
Agent will promptly distribute to each Lender its applicable share of such
payment in like funds as received which, except as otherwise expressly
provided herein, shall be based upon such Lender's Pro Rata Share of the
Loans in respect of which such prepayment has been made. Any payment
received by the Agent later than 1:00 p.m. (Chicago time) shall be deemed
to have been received on the following Business Day and any applicable
interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than
a Business Day, such payment shall be made on the following Business Day,
and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.
(c) Unless the Agent receives notice from the Company prior
to the date on which any payment is due to the Lenders that the Company
will not make such payment in full as and when required, the Agent may
assume that the Company has made such payment in full to the Agent on such
date in immediately available funds and the Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each Lender on
such due date an amount equal to the amount then due such Lender. If and
to the extent the Company has not made such payment in full to the Agent,
each Lender shall repay to the Agent on demand such amount distributed to
such Lender, together with interest thereon at the Federal Funds Rate for
each day from the date such amount is distributed to such Lender until the
date repaid.
2.15 Payments by the Lenders to the Agent. (a) Unless the Agent
receives notice from a Lender on or prior to the Closing Date or, with
respect to any Borrowing after the Closing Date, at least one Business Day
prior to the date of such Borrowing, that such Lender will not make
available as and when required hereunder to the Agent for the account of
the Company the amount of that Lender's Pro Rata Share of the Borrowing,
the Agent may assume that each Lender has made such amount available to
the Agent in immediately available funds on the Borrowing Date and the
Agent may (but shall not be so required), in reliance upon such
assumption, make available to the Company on such date a corresponding
amount. If and to the extent any Lender shall not have made its full
amount available to the Agent in immediately available funds and the Agent
in such circumstances has made available to the Company such amount, that
Lender shall on the Business Day following such Borrowing Date make such
amount available to the Agent, together with interest at the Federal Funds
Rate for each day during such period. A notice of the Agent submitted to
any Lender with respect to amounts owing under this subsection (a) shall
be conclusive, absent manifest error. If such amount is so made
available, such payment to the Agent shall constitute such Lender's Loan
on the date of Borrowing for all purposes of this Agreement. If such
amount is not made available to the Agent on the Business Day following
the Borrowing Date, the Agent will notify the Company of such failure to
fund and, upon demand by the Agent, the Company shall pay such amount to
the Agent for the Agent's account, together with interest thereon for each
day elapsed since the date of such Borrowing, at a rate per annum equal to
the interest rate applicable at the time to the Loans comprising such
Borrowing.
(b) The failure of any Lender to make any Loan on any
Borrowing Date shall not relieve any other Lender of any obligation
hereunder to make a Loan on such Borrowing Date, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on any Borrowing Date.
2.16 Sharing of Payments, Etc. If, other than as expressly
provided elsewhere herein, any Lender shall obtain on account of the Loans
made by it any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) in excess of its ratable
share (or other share contemplated hereunder), such Lender shall
immediately (a) notify the Agent of such fact, and (b) purchase from the
other Lenders such participations in the Loans made by them as shall be
necessary to cause such purchasing Lender to share the excess payment pro
rata with each of them; provided, however, that if all or any portion of
such excess payment is thereafter recovered from the purchasing Lender,
such purchase shall to that extent be rescinded and each other Lender
shall repay to the purchasing Lender the purchase price paid therefor,
together with an amount equal to such paying Lender's ratable share
(according to the proportion of (i) the amount of such paying Lender's
required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The
Company agrees that any Lender so purchasing a participation from another
Lender may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off, but subject to Section
11.10) with respect to such participation as fully as if such Lender were
the direct creditor of the Company in the amount of such participation.
The Agent will keep records (which shall be conclusive and binding in the
absence of manifest error) of participations purchased under this Section
and will in each case notify the Lenders following any such purchases or
repayments.
2.17 Security and Subsidiary Guaranty. (a) All obligations of
the Company and the Guarantors under this Agreement, the Notes and all
other Loan Documents shall be secured in accordance with the Collateral
Documents.
(b) All obligations of the Company under this Agreement, each
of the Notes and all other Loan Documents shall be unconditionally
guaranteed by the Guarantors pursuant to the Subsidiary Guaranty.
ARTICLE III
THE LETTERS OF CREDIT
3.01 The Letter of Credit Subfacility. (a) On the terms and
conditions set forth herein (i) the Issuer agrees, (A) from time to time
on any Business Day, during the period from the Closing Date to the day
which is five days prior to the Revolving Termination Date, to issue
Letters of Credit for the account of the Company in an aggregate Stated
Amount in Dollars or any Offshore Currency at any one time that, the
Dollar Equivalent of which, together with the aggregate Dollar Equivalent
of the Stated Amount of all other outstanding Letters of Credit issued
pursuant hereto, does not exceed the L/C Commitment, and to amend or renew
Letters of Credit previously issued by it, in accordance with subsections
3.02(c) and 3.02(d), and (B) to honor drafts under the Letters of Credit;
and (ii) the Lenders severally agree to participate in Letters of Credit
Issued for the account of the Company; provided, that the Issuer shall not
be obligated to Issue, and no Revolving Lender shall be obligated to
participate in, any Letter of Credit if as of the date of Issuance of such
Letter of Credit (the "Issuance Date") (1) the Dollar Equivalent of the
Effective Amount of all L/C Obligations plus the Effective Amount of all
Revolving Loans and of all Swing Line Loans exceeds the Aggregate
Revolving Loan Commitment, (2) the participation of any Lender in the
Dollar Equivalent of the Effective Amount of all L/C Obligations plus the
Effective Amount of the Revolving Loans of such Lender and such Revolving
Lender's Pro Rata Revolving Share of any outstanding Swing Line Loans
exceeds such Lender's Commitment, or (3) the Effective Amount of L/C
Obligations exceeds the L/C Commitment. Within the foregoing limits, and
subject to the other terms and conditions hereof, the Company's ability to
obtain Letters of Credit shall be fully revolving, and, accordingly, the
Company may, during the foregoing period, obtain Letters of Credit to
replace Letters of Credit which have expired or which have been drawn upon
and reimbursed.
(b) The Issuer is under no obligation to, and shall not,
Issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or
restrain the Issuer from Issuing such Letter of Credit, or any
Requirement of Law applicable to the Issuer or any request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuer shall
prohibit, or request that the Issuer refrain from, the Issuance of
letters of credit generally or such Letter of Credit in particular
or shall impose upon the Issuer with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which
the Issuer is not otherwise compensated hereunder) not in effect on
the Closing Date, or shall impose upon the Issuer any unreimbursed
loss, cost or expense which was not applicable on the Closing Date
and which the Issuer in good faith deems material to it;
(ii) the Issuer has received written notice from any
Revolving Lender, the Agent or the Company, on or prior to the
Business Day prior to the requested date of Issuance of such Letter
of Credit, that one or more of the applicable conditions contained
in Article V is not then satisfied;
(iii) the expiry date of any requested Letter of
Credit is (A) more than 720 days after the date of Issuance, unless
the Required Revolving Lenders have approved such expiry date in
writing, or (B) after the date which is five days prior to the
Revolving Termination Date, unless all of the Revolving Lenders
have approved such expiry date in writing;
(iv) the expiry date of any requested Letter of
Credit is prior to the maturity date of any financial obligation to
be supported by the requested Letter of Credit;
(v) any requested Letter of Credit does not provide for
drafts, or is not otherwise in form and substance acceptable to the
Issuer, or the Issuance of a Letter of Credit shall violate any
applicable policies of the Issuer; or
(vi) such Letter of Credit is to be denominated in a
currency other than Dollars or any Offshore Currency.
3.02 Issuance, Amendment and Renewal of Letters of Credit. (a)
Each Letter of Credit shall be issued upon the irrevocable written request
of the Company received by the Issuer (with a copy sent by the Company to
the Agent) at least three days (or such shorter time as the Issuer may
agree in a particular instance in its sole discretion) prior to the
proposed date of issuance; provided, that five days' prior notice (or such
shorter time as the Issuer may agree in a particular instance in its sole
discretion) shall be required in respect of each Letter of Credit to be
denominated in an Offshore Currency. Each such request for issuance of a
Letter of Credit shall be by facsimile, confirmed immediately in an
original writing, in the form of an L/C Application (or such other form as
shall be acceptable to the Issuer), and shall specify in form and detail
satisfactory to the Issuer: (i) the proposed date of issuance of the
Letter of Credit (which shall be a Business Day); (ii) the face amount of
the Letter of Credit; (iii) the expiry date of the Letter of Credit; (iv)
the name and address of the beneficiary thereof; (v) the documents to be
presented by the beneficiary of the Letter of Credit in case of any
drawing thereunder; (vi) the full text of any certificate to be presented
by the beneficiary in case of any drawing thereunder; (vii) the currency
in which such Letter of Credit is to be denominated, which shall be
Dollars or an Offshore Currency; and (viii) such other matters as the
Issuer may require.
(b) At least two Business Days prior to the Issuance of any
Letter of Credit (or such shorter time as the Agent may agree in a
particular instance in its sole discretion), the Issuer will confirm with
the Agent (by telephone or in writing) that the Agent has received a copy
of the L/C Application or L/C Amendment Application from the Company and,
if not, the Issuer will provide the Agent with a copy thereof. Unless the
Issuer has received notice on or before the Business Day immediately
preceding the date the Issuer is to issue a requested Letter of Credit
from the Agent (A) directing the Issuer not to issue such Letter of Credit
because such issuance is not then permitted under subsection 3.01(a) as a
result of the limitations set forth in clauses (1) through (3) thereof or
subsection 3.01(b)(ii); or (B) that one or more conditions specified in
Article V are not then satisfied; then, subject to the terms and
conditions hereof, the Issuer shall, on the requested date, issue a Letter
of Credit for the account of the Company in accordance with the Issuer's
usual and customary business practices.
(c) From time to time while a Letter of Credit is outstanding
and prior to the Revolving Termination Date, the Issuer will, upon the
written request of the Company received by the Issuer (with a copy sent by
the Company to the Agent) at least three days (or such shorter time as the
Issuer may agree in a particular instance in its sole discretion) prior to
the proposed date of amendment, amend any Letter of Credit issued by it.
Each such request for amendment of a Letter of Credit shall be made by
facsimile, confirmed immediately in an original writing, made in the form
of an L/C Amendment Application and shall specify in form and detail
satisfactory to the Issuer: (i) the Letter of Credit to be amended; (ii)
the proposed date of amendment of the Letter of Credit (which shall be a
Business Day); (iii) the nature of the proposed amendment; and (iv) such
other matters as the Issuer may require. The Issuer shall be under no
obligation to amend any Letter of Credit if: (A) the Issuer would have no
obligation at such time to issue such Letter of Credit in its amended form
under the terms of this Agreement; or (B) the beneficiary of any such
letter of Credit does not accept the proposed amendment to the Letter of
Credit. The Agent will promptly notify the Revolving Lenders of the
receipt by it of any L/C Application or L/C Amendment Application.
(d) The Issuer and the Lenders agree that, while a Letter of
Credit is outstanding and prior to the Revolving Termination Date, at the
option of the Company and upon the written request of the Company received
by the Issuer (with a copy sent by the Company to the Agent) at least
three days (or such shorter time as the Issuer may agree in a particular
instance in its sole discretion) prior to the proposed date of
notification of renewal, the Issuer shall be entitled to authorize the
automatic renewal of any Letter of Credit issued by it. Each such request
for renewal of a Letter of Credit shall be made by facsimile, confirmed
immediately in an original writing, in the form of an L/C Amendment
Application, and shall specify in form and detail satisfactory to the
Issuer: (i) the Letter of Credit to be renewed; (ii) the proposed date of
notification of renewal of the Letter of Credit (which shall be a Business
Day); (iii) the revised expiry date of the Letter of Credit; and (iv) such
other matters as the Issuer may require. The Issuer shall be under no
obligation so to renew any Letter of Credit if: (A) the Issuer would have
no obligation at such time to issue or amend such Letter of Credit in its
renewed form under the terms of this Agreement; or (B) the beneficiary of
any such Letter of Credit does not accept the proposed renewal of the
Letter of Credit. If any outstanding Letter of Credit shall provide that
it shall be automatically renewed unless the beneficiary thereof receives
notice from the Issuer that such Letter of Credit shall not be renewed,
and if at the time of renewal the Issuer would be entitled to authorize
the automatic renewal of such Letter of Credit in accordance with this
subsection 3.02(e) upon the request of the Company but the Issuer shall
not have received any L/C Amendment Application from the Company with
respect to such renewal or other written direction by the Company with
respect thereto, the Issuer shall nonetheless be permitted to allow such
Letter of Credit to renew, and the Company and the Lenders hereby
authorize such renewal, and, accordingly, the Issuer shall be deemed to
have received an L/C Amendment Application from the Company requesting
such renewal.
(e) The Issuer may, at its election (or as required by the
Agent at the direction of the Required Revolving Lenders), deliver any
notices of termination or other communications to any Letter of Credit
beneficiary or transferee, and take any other action as necessary or
appropriate, at any time and from time to time, in order to cause the
expiry date of such Letter of Credit to be a date not later than the date
which is five days prior to the Revolving Termination Date.
(f) This Agreement shall control in the event of any conflict
with any L/C-Related Document (other than any Letter of Credit).
(g) The Issuer will also deliver to the Agent,
concurrently or promptly following its delivery of a Letter of Credit, or
amendment to or renewal of a Letter of Credit, to an advising bank or a
beneficiary, a true and complete copy of each such Letter of Credit or
amendment to or renewal of a Letter of Credit.
3.03 Risk Participations, Drawings and Reimbursements. (a)
Immediately upon the Issuance of each Letter of Credit, each Revolving
Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Issuer a participation in such Letter of
Credit and each drawing thereunder in an amount equal to the product of
(i) the Pro Rata Revolving Share of such Revolving Lender, times (ii) the
Dollar Equivalent of the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively. For
purposes of subsection 2.01(d), each Issuance of a Letter of Credit shall
be deemed to utilize the Revolving Loan Commitment of each Revolving
Lender by an amount equal to the amount of such participation.
(b) In the event of any request for a drawing under a Letter
of Credit by the beneficiary or transferee thereof, the Issuer will
promptly notify the Company. The Company shall reimburse the Issuer prior
to 11:00 a.m. (Chicago time), on each date that any amount is paid by the
Issuer under any Letter of Credit (each such date, an "Honor Date"), in an
amount in Dollars equal to the Dollar Equivalent of the amount so paid by
the Issuer. In the event the Company fails to reimburse the Issuer in
Dollars for the Dollar Equivalent of the full amount of any drawing under
any Letter of Credit by 11:00 a.m. (Chicago time) on the Honor Date, the
Issuer will promptly notify the Agent and the Agent will promptly notify
each Lender thereof, and the Company shall be deemed to have requested
that Base Rate Loans in an amount equal to such unreimbursed amount be
made by the Revolving Lenders to be disbursed on the Honor Date under such
Letter of Credit, subject to the amount of the unutilized portion of the
Aggregate Revolving Loan Commitment and subject to the conditions set
forth in Section 5.02. Any notice given by the Issuer or the Agent
pursuant to this subsection 3.03(b) may be oral if immediately confirmed
in writing (including by facsimile); provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding
effect of such notice.
(c) Each Revolving Lender shall upon any notice pursuant to
subsection 3.03(b) make available to the Agent for the account of the
relevant Issuer an amount in Dollars and in immediately available funds
equal to its Pro Rata Revolving Share of the Dollar Equivalent of the
amount of the drawing, whereupon the participating Revolving Lenders shall
(subject to subsection 3.03(d)) each be deemed to have made a Revolving
Loan consisting of a Base Rate Loan to the Company in that amount. If any
Revolving Lender so notified fails to make available to the Agent for the
account of the Issuer the amount of such Revolving Lender's Pro Rata Share
of the Dollar Equivalent of the amount of the drawing by no later than
12:00 noon (Chicago time) on the Honor Date, then interest shall accrue on
such Revolving Lender's obligation to make such payment, from the Honor
Date to the date such Revolving Lender makes such payment, at a rate per
annum equal to the Federal Funds Rate in effect from time to time during
such period. The Agent will promptly give notice of the occurrence of the
Honor Date, but failure of the Agent to give any such notice on the Honor
Date or in sufficient time to enable any Revolving Lender to effect such
payment on such date shall not relieve such Revolving Lender from its
obligations under this Section 3.03.
(d) With respect to any unreimbursed drawing that is not
converted into Revolving Loans consisting of Base Rate Loans to the
Company in whole or in part, because of the Company's failure to satisfy
the conditions set forth in Section 5.02 or for any other reason, the
Company shall be deemed to have incurred from the Issuer an L/C Borrowing
in the Dollar Equivalent of the amount of such drawing, which L/C
Borrowing shall be due and payable on demand (together with interest) and
shall bear interest at a rate per annum equal to the Base Rate, plus the
Applicable Base Rate Margin, plus 2.0% per annum, and each Revolving
Lender's payment to the Issuer pursuant to subsection 3.03(c) shall be
deemed payment in respect of its participation in such L/C Borrowing and
shall constitute an L/C Advance from such Revolving Lender in satisfaction
of its participation obligation under this Section 3.03.
(e) Each Revolving Lender's obligation in accordance
with this Agreement to make the Revolving Loans or L/C Advances, as
contemplated by this Section 3.03, as a result of a drawing under a Letter
of Credit, shall be absolute and unconditional and without recourse to the
Issuer and shall not be affected by any circumstance, including (i) any
set-off, counterclaim, recoupment, defense or other right which such
Revolving Lender may have against the Issuer, the Company or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default, an Event of Default or a Material Adverse Effect; or (iii) any
other circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing; provided, however, that each Revolving Lender's
obligation to make Revolving Loans under this Section 3.03 is subject to
the conditions set forth in Section 5.02.
3.04 Repayment of Participations. (a) Upon (and only upon)
receipt by the Agent for the account of the Issuer of immediately
available funds in Dollars from the Company (i) in reimbursement of any
payment made by the Issuer under the Letter of Credit with respect to
which any Revolving Lender has paid the Agent for the account of the
Issuer for such Revolving Lender's participation in the Letter of Credit
pursuant to Section 3.03 or (ii) in payment of interest thereon, the Agent
will promptly pay to each Revolving Lender, in the same funds as those
received by the Agent for the account of the Issuer, the amount of such
Revolving Lender's Pro Rata Revolving Share of such funds, and the Issuer
shall receive the amount of the Pro Rata Revolving Share of such funds of
any Revolving Lender that did not so pay the Agent for the account of the
Issuer.
(b) If the Agent or the Issuer is required at any time to
return to the Company, or to a trustee, receiver, liquidator, custodian,
or any official in any Insolvency Proceeding, any portion of the payments
made by the Company to the Agent for the account of the Issuer pursuant to
subsection 3.04(a) in reimbursement of a payment made under the Letter of
Credit or interest or fee thereon, each Revolving Lender shall, on demand
of the Agent, forthwith return to the Agent or the Issuer the amount of
its Pro Rata Revolving Share of any amounts so returned by the Agent or
the Issuer plus interest thereon from the date such demand is made to the
date such amounts are returned by such Revolving Lender to the Agent or
the Issuer, at a rate per annum equal to the Federal Funds Rate in effect
from time to time.
3.05 Role of the Issuer. (a) Each Lender and the Company agree
that, in paying any drawing under a Letter of Credit, the Issuer shall not
have any responsibility to obtain any document (other than any sight draft
and certificates expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document
or the authority of the Person executing or delivering any such document.
(b) No Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuer shall be liable to
any Lender for: (i) any action taken or omitted in connection herewith at
the request or with the approval of the Lenders (including the Required
Lenders or Required Revolving Lenders, as applicable); (ii) any action
taken or omitted in the absence of gross negligence or willful misconduct;
or (iii) the due execution, effectiveness, validity or enforceability of
any L/C-Related Document.
(c) The Company hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended
to, and shall not, preclude the Company's pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or
under any other agreement. No Agent-Related Person, nor any of the
respective correspondents, participants or assignees of the Issuer, shall
be liable or responsible for any of the matters described in clauses (i)
through (vii) of Section 3.06; provided, however, anything in such clauses
to the contrary notwithstanding, that the Company may have a claim against
the Issuer, and the Issuer may be liable to the Company, to the extent,
but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Company which the Company proves were
caused by the Issuer's willful misconduct or gross negligence or the
Issuer's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit.
In furtherance and not in limitation of the foregoing: (i) the Issuer may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuer shall not be responsible
for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason.
3.06 Obligations Absolute. The obligations of the Company under
this Agreement and any L/C-Related Document to reimburse the Issuer for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any
drawing under a Letter of Credit converted into Revolving Loans, shall be
unconditional and irrevocable, and shall be paid strictly in accordance
with the terms of this Agreement and each such other L/C-Related Document
under all circumstances, including the following:
(i) any lack of validity or enforceability of this
Agreement or any L/C-Related Document;
(ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the obligations
of the Company in respect of any Letter of Credit or any other
amendment or waiver of or any consent to departure from all or any
of the L/C-Related Documents;
(iii) the existence of any claim, set-off, defense or
other right that the Company may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be
acting), the Issuer or any other Person, whether in connection with
this Agreement, the transactions contemplated hereby or by the L/C-
Related Documents or any unrelated transaction;
(iv) any draft, demand, certificate or other
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; or any loss or
delay in the transmission or otherwise of any document required in
order to make a drawing under any Letter of Credit;
(v) any payment by the Issuer under any Letter of Credit
against presentation of a draft or certificate that does not
strictly comply with the terms of any Letter of Credit; or any
payment made by the Issuer under any Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee for the benefit of creditors, liquidator, receiver or
other representative of or successor to any beneficiary or any
transferee of any Letter of Credit, including any arising in
connection with any Insolvency Proceeding;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any other guarantee, for all or any of the
obligations of the Company in respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available
to, or a discharge of, the Company or a guarantor.
3.07 Cash Collateral Pledge. Upon (i) the request of the Agent,
(A) if the Issuer has honored any full or partial drawing request on any
Letter of Credit and such drawing has resulted in an L/C Borrowing
hereunder, or (B) if, as of the Revolving Termination Date, any Letters of
Credit may for any reason remain outstanding and partially or wholly
undrawn, (ii) the occurrence of the circumstances described in subsection
2.09(a) requiring the Company to Cash Collateralize Letters of Credit, or
(iii) the termination of the Aggregate Commitment, then, the Company shall
immediately Cash Collateralize the L/C Obligations in an amount in Dollars
equal to the Dollar Equivalent of the L/C Obligations.
3.08 Letter of Credit Fees. (a) The Company shall pay to the
Agent for the account of each of the Revolving Lenders a letter of credit
fee with respect to the Letters of Credit equal to the Applicable Offshore
Rate Margin for Revolving Loans times the Dollar Equivalent of the average
daily maximum amount available to be drawn of the outstanding Letters of
Credit, computed on a quarterly basis in arrears on the last Business Day
of each calendar quarter based upon Letters of Credit outstanding for that
quarter as calculated by the Agent. Such letter of credit fees shall be
due and payable quarterly in arrears on the last Business Day of each
calendar quarter during which Letters of Credit are outstanding,
commencing on the first such quarterly date to occur after the Closing
Date, through the Revolving Termination Date (or such later date upon
which the outstanding Letters of Credit shall expire), with the final
payment to be made on the Revolving Termination Date (or such later
expiration date).
(b) The Company shall pay to the Issuer an annual letter
of credit fronting fee for each Letter of Credit in an amount to be agreed
by the Company and the applicable Issuer. Such Letter of Credit fronting
fee shall be due and payable on each date of Issuance of a Letter of
Credit.
(c) The Company shall pay to the applicable Issuer from
time to time on demand the normal issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of such
Issuer relating to letters of credit as from time to time in effect.
3.09 Uniform Customs and Practice. The Uniform Customs and
Practice for Documentary Credits as published by the International Chamber
of Commerce most recently at the time of issuance of any Letter of Credit
shall (unless otherwise expressly provided in the Letters of Credit) apply
to the Letters of Credit.
3.10 Utilization of Offshore Currencies. (a) The Agent will
determine the Dollar Equivalent amount with respect to (i) any Letter of
Credit denominated in an Offshore Currency as of the requested issuance
date, and (ii) outstanding Letters of Credit denominated in an Offshore
Currency as of the last Business Day of each month (each such date under
clauses (i) and (ii) a "Computation Date"). The Agent will provide the
Company with the amount determined pursuant to clause (ii) promptly
following the end of each month.
(b) In the case of a proposed Issuance of a Letter of Credit
denominated in an Offshore Currency, the applicable Issuer shall be under
no obligation to issue such Letter of Credit if the applicable Issuer
cannot issue Letters of Credit denominated in the requested Offshore
Currency, in which event the Issuer will give notice to the Company no
later than 10:30 a.m. (Chicago time) on the third Business Day prior to
the date of such issuance that the Issuance in the requested Offshore
Currency is not then available. If the applicable Issuer shall have so
notified the Company that any such Issuance in a requested Offshore
Currency is not then available, the Company may, by notice to the
applicable Issuer not later than 5:00 p.m. (Chicago time) three Business
Days prior to the requested date of such Issuance, withdraw the L/C
Application relating to such proposed Issuance. If the Company does so
withdraw such L/C Application, the Issuance requested therein shall not
occur. If the Company does not so withdraw such L/C Application, the L/C
Application shall be deemed to be an L/C Application for a Letter of
Credit denominated in Dollars in an equivalent aggregate amount.
3.11 Currency Exchange Fluctuations. If on any Computation Date
the Agent shall have determined that the aggregate Dollar Equivalent
principal amount of all Revolving Loans then outstanding plus the
aggregate amount of outstanding L/C Obligations exceeds the Aggregate
Revolving Credit Commitment, due to a change in applicable rates of
exchange between Dollars and Offshore Currencies, then the Agent shall
give notice to the Company that a prepayment is required under this
Section, and the Company agrees thereupon to make prepayments of Revolving
Loans, subject to Section 4.04, such that, after giving effect to such
prepayment, the aggregate Dollar Equivalent amount of all Revolving Loans
plus the aggregate amount of outstanding L/C Obligations does not exceed
the Aggregate Revolving Credit Commitment.
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
4.01 Taxes. (a) Any and all payments by the Company to each
Lender or the Agent under this Agreement and any other Loan Document shall
be made free and clear of, and without deduction or withholding for, any
Taxes. In addition, the Company shall pay all Other Taxes.
(b) If the Company shall be required by law to deduct or
withhold any Taxes, Other Taxes or Further Taxes from or in respect of any
sum payable hereunder to any Lender or the Agent, then:
(i) the sum payable shall be increased as necessary so
that, after making all required deductions and withholdings
(including deductions and withholdings applicable to additional
sums payable under this Section), such Lender or the Agent, as the
case may be, receives and retains an amount equal to the sum it
would have received and retained had no such deductions or
withholdings been made;
(ii) the Company shall make such deductions and
withholdings;
(iii) the Company shall pay the full amount deducted
or withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) the Company shall also pay to each Lender or
the Agent for the account of such Lender, at the time interest is
paid, Further Taxes in the amount that the respective Lender
specifies as necessary to preserve the after-tax yield the Lender
would have received if such Taxes, Other Taxes or Further Taxes had
not been imposed.
(c) The Company agrees to indemnify and hold harmless each
Lender and the Agent for the full amount of (i) Taxes, (ii) Other Taxes,
and (iii) Further Taxes in the amount that the respective Lender specifies
as necessary to preserve the after-tax yield the Lender would have
received if such Taxes, Other Taxes or Further Taxes had not been imposed,
and any liability (including penalties (except to the extent arising from
the gross negligence or willful misconduct of the Agent or such Lender),
interest, additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes, Other Taxes or Further Taxes were
correctly or legally asserted. Payment under this indemnification shall
be made within 30 days after the date the Lender or the Agent makes
written demand therefor.
(d) Within 30 days after the date of any payment by the
Company of Taxes, Other Taxes or Further Taxes, the Company shall furnish
to each Lender or the Agent the original or a certified copy of a receipt
evidencing payment thereof, or other evidence of payment satisfactory to
such Lender or the Agent.
(e) If the Company is required to pay any amount to any
Lender or the Agent pursuant to subsection (b) or (c) of this Section,
then such Lender shall use reasonable efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its Lending Office
so as to eliminate any such additional payment by the Company which may
thereafter accrue, if such change in the sole judgment of such Lender is
not otherwise disadvantageous to such Lender.
4.02 Illegality. (a) If any Lender determines that the
introduction of any Requirement of Law, or any change in any Requirement
of Law, or in the interpretation or administration of any Requirement of
Law, has made it unlawful, or that any central bank or other Governmental
Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make Offshore Rate Loans, then, on notice
thereof by the Lender to the Company through the Agent, any obligation of
that Lender to make Offshore Rate Loans shall be suspended until the
Lender notifies the Agent and the Company that the circumstances giving
rise to such determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain
any Offshore Rate Loan, the Company shall, upon its receipt of notice of
such fact and demand from such Lender (with a copy to the Agent), prepay
in full such Offshore Rate Loans of that Lender then outstanding, together
with interest accrued thereon and amounts required under Section 4.04,
either on the last day of the Interest Period thereof, if the Lender may
lawfully continue to maintain such Offshore Rate Loans to such day, or
immediately, if the Lender may not lawfully continue to maintain such
Offshore Rate Loan. If the Company is required to so prepay any Offshore
Rate Loan, then concurrently with such prepayment, the Company shall
borrow from the affected Lender, in the amount of such repayment, a Base
Rate Loan.
(c) If the obligation of any Lender to make or maintain
Offshore Rate Loans has been so terminated or suspended, the Company may
elect, by giving notice to the Lender through the Agent that all Loans
which would otherwise be made by the Lender as Offshore Rate Loans shall
be instead Base Rate Loans.
(d) Before giving any notice to the Agent under this Section,
the affected Lender shall designate a different Lending Office with
respect to its Offshore Rate Loans if such designation will avoid the need
for giving such notice or making such demand and will not, in the judgment
of the Lender, be illegal or otherwise disadvantageous to the Lender.
4.03 Increased Costs and Reduction of Return. (a) If any Lender
determines that, due to either (i) the introduction of or any change
(other than any change by way of imposition of or increase in reserve
requirements included in the calculation of the Offshore Rate) in or in
the interpretation of any law or regulation or (ii) the compliance by that
Lender with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to such Lender of agreeing to make or
making, funding or maintaining any Offshore Rate Loans or participating in
Letters of Credit, or, in the case of the Issuer, any increase in the cost
to the Issuer of agreeing to issue, issuing or maintaining any Letter of
Credit or of agreeing to make or making, funding or maintaining any unpaid
drawing under any Letter of Credit, then the Company shall be liable for,
and shall from time to time, upon demand (with a copy of such demand to be
sent to the Agent), pay to the Agent for the account of such Lender,
additional amounts as are sufficient to compensate such Lender for such
increased costs.
(b) If any Lender shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or
other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance by the Lender (or its Lending
Office) or any corporation controlling the Lender with any Capital
Adequacy Regulation, affects or would affect the amount of capital
required or expected to be maintained by the Lender or any corporation
controlling the Lender and (taking into consideration such Lender's or
such corporation's policies with respect to capital adequacy and such
Lender's desired return on capital) determines that the amount of such
capital is increased as a consequence of its Commitment, loans, credits or
obligations under this Agreement, then, upon demand of such Lender to the
Company through the Agent, the Company shall pay to the Lender, from time
to time as specified by the Lender, additional amounts sufficient to
compensate the Lender for such increase.
4.04 Funding Losses. The Company shall reimburse each Lender and
hold each Lender harmless from any loss or expense which the Lender may
sustain or incur as a consequence of:
(a) the failure of the Company to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(b) the failure of the Company to borrow, continue or convert
a Loan after the Company has given (or is deemed to have given) a Notice
of Borrowing or a Notice of Conversion/ Continuation;
(c) the failure of the Company to make any prepayment in
accordance with any notice delivered under Section 2.08;
(d) the prepayment (including pursuant to Section 2.09) or
other payment (including after acceleration thereof) of an Offshore Rate
Loan on a day that is not the last day of the relevant Interest Period; or
(e) the automatic conversion under Section 2.04 of any
Offshore Rate Loan to a Base Rate Loan on a day that is not the last day
of the relevant Interest Period;
including any such loss or expense arising from the liquidation or
reemployment of funds obtained by it to maintain its Offshore Rate Loans
or from fees payable to terminate the deposits from which such funds were
obtained. For purposes of calculating amounts payable by the Company to
the Lenders under this Section and under subsection 4.03(a), each Offshore
Rate Loan made by a Lender (and each related reserve, special deposit or
similar requirement) shall be conclusively deemed to have been funded at
the IBOR used in determining the Offshore Rate for such Offshore Rate Loan
by a matching deposit or other borrowing in the interbank eurodollar
market for a comparable amount and for a comparable period, whether or not
such Offshore Rate Loan is in fact so funded.
4.05 Inability to Determine Rates. If the Agent determines that
for any reason adequate and reasonable means do not exist for determining
the Offshore Rate for any requested Interest Period with respect to a
proposed Offshore Rate Loan, or that the Offshore Rate applicable pursuant
to subsection 2.11(a) for any requested Interest Period with respect to a
proposed Offshore Rate Loan does not adequately and fairly reflect the
cost to the Lenders of funding such Loan, the Agent will promptly so
notify the Company and each Lender. Thereafter, the obligation of the
Lenders to make or maintain Offshore Rate Loans hereunder shall be
suspended until the Agent revokes such notice in writing. Upon receipt of
such notice, the Company may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the Company does not
revoke such Notice, the Lenders shall make, convert or continue the Loans,
as proposed by the Company, in the amount specified in the applicable
notice submitted by the Company, but such Loans shall be made, converted
or continued as Base Rate Loans instead of Offshore Rate Loans, as the
case may be.
4.06 Certificates of Lenders. Any Lender claiming reimbursement
or compensation under this Article IV shall deliver to the Company (with a
copy to the Agent) contemporaneously with the demand in payment a
certificate setting forth in reasonable detail the amount payable to the
Lender hereunder and such certificate shall be conclusive and binding on
the Company in the absence of manifest error.
4.07 Substitution of Banks. Upon the receipt by the Company from
any Lender (an "Affected Lender") of a claim for compensation under
Section 4.04, of notice that it cannot make Offshore Rate Loans under
Section 4.02, or of a claim for Taxes or Further Taxes under Section 4.01,
then the Agent, at the Company's direction, shall: (i) request the
Affected Lender to use good faith efforts to obtain a replacement bank or
financial institution satisfactory to the Company to acquire and assume
all or a ratable part of all of such Affected Lender's Loans and
Commitments at the face amount thereof (a "Replacement Lender"); (ii)
request one more of the other Lenders to acquire and assume all or part of
such Affected Lender's Loans and Commitments; or (iii) designate a
Replacement Lender. Any such designation of a Replacement Lender under
clause (i) or (iii) shall be subject to the prior written consent of the
Agent (which consent shall not be unreasonably withheld).
4.08 Survival. The agreements and obligations of the Company in
this Article IV shall survive the payment of all other Obligations, and
the Company will have no obligation to pay any amount hereunder unless a
demand is made within 180 days after the date upon which the Agent's or
applicable Lender's right to reimbursement arises.
ARTICLE V
CONDITIONS PRECEDENT
5.01 Conditions of Initial Credit Extensions. The obligation of
each Lender to make its initial Credit Extension hereunder is subject to
the condition that the Agent shall have received on or before the date of
the initial Credit Extension all of the following, in form and substance
satisfactory to the Agent and each Lender, and in sufficient copies for
each Lender:
(a) Credit Agreement and Notes. This Agreement and the Notes
and the Swing Line Note executed by each party thereto;
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of directors
of the Company and each Subsidiary party to a Loan Document
authorizing the transactions contemplated hereby, certified as of
the Closing Date by the Secretary or an Assistant Secretary of such
Person; and
(ii) A certificate of the Secretary or Assistant
Secretary of the Company and each Subsidiary party to a Loan
Document certifying the names and true signatures of the officers
of the Company or such Subsidiary authorized to execute, deliver
and perform, as applicable, this Agreement, and all other Loan
Documents to be delivered by it hereunder;
(c) Organization Documents; Good Standing. Each of the
following documents:
(i) the articles or certificate of incorporation and the
bylaws of the Company and each Subsidiary party to any Loan
Document as in effect on the Closing Date, certified by the
Secretary or Assistant Secretary of the Company or such Subsidiary
as of the Closing Date; and
(ii) a good standing certificate or certificate of
status for the Company and each Subsidiary party to any Loan
Document from the Secretary of State (or similar, applicable
Governmental Authority) of its state of incorporation and such
other states as shall be reasonably requested by Agent;
(d) Legal Opinions.
(i) an opinion of Foley & Lardner, counsel to the
Company and addressed to the Agent and the Lenders;
(ii) an opinion of such local counsel to the Company as
shall be requested by the Agent and addressed to the Agent and the
Lenders; and
(iii) confirmation from counsel to each party to the
Stock Purchase Agreement that the Agent and the Lenders may rely
upon its opinion delivered pursuant to the Stock Purchase
Agreement;
(e) Payment of Fees. Evidence of payment by the Company of
all accrued and unpaid fees, costs and expenses to the extent then due and
payable on the Closing Date, together with Attorney Costs of BofA to the
extent invoiced prior to or on the Closing Date, plus such additional
amounts of Attorney Costs as shall constitute BofA's reasonable estimate
of Attorney Costs incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude
final settling of accounts between the Company and BofA); including any
such costs, fees and expenses arising under or referenced in Sections 2.12
and 11.04;
(f) Certificate. A certificate signed by a Responsible
Officer, dated as of the Closing Date, stating that:
(i) the representations and warranties contained in
Article VI are true and correct on and as of such date, as though
made on and as of such date;
(ii) no Default or Event of Default exists or would
result from the Credit Extension; and
(iii) there has occurred since September 30, 1997, no
event or circumstance that has resulted or could reasonably be
expected to result in a Material Adverse Effect;
(g) Consummation of the McNeilus Acquisition. The McNeilus
Acquisition has been or is being consummated substantially simultaneously
herewith in accordance with the Stock Purchase Agreement and all
applicable Requirements of Law for a net cash purchase price not in excess
of $225 million, no material conditions to closing set forth therein have
been waived and the final financial results of McNeilus shall be
substantially in accordance with the financial projections previously
provided to the Agent and the Lenders;
(h) Approvals and Consents. All requisite or necessary
Governmental Authorities and third parties shall have approved or
consented to the McNeilus Acquisition to the extent required and/or all
applicable waiting periods shall have expired, all such approvals and
consents shall remain in effect and there shall be no governmental or
judicial action, actual or threatened, that has a reasonable likelihood of
restraining, preventing or imposing burdensome conditions on the McNeilus
Acquisition;
(i) Senior Subordinated Notes. The Senior Subordinated Notes
shall be issued substantially simultaneously herewith in accordance with
the terms of the Senior Subordinated Debt Documents and the Company shall
have received at least $100 million in gross proceeds therefrom;
(j) Collateral Documents. The Collateral Documents, executed
by the Company and the Subsidiaries, in appropriate form for recording,
where necessary, together with:
(i) copies of all UCC-l financing statements to be
filed, registered or recorded to perfect the security interests of
the Agent for the benefit of the Lenders, and other filings,
registrations and recordings necessary and advisable to perfect the
Liens of the Agent for the benefit of the Lenders in accordance
with applicable law;
(ii) written advice relating to such Lien and judgment
searches as the Agent shall have requested, and such termination
statements or other documents as may be necessary to confirm that
the Collateral is subject to no other Liens in favor of any Persons
(other than Permitted Liens);
(iii) all certificates and instruments representing
the Pledged Collateral and stock and note transfer powers executed
in blank with signatures guaranteed as the Agent may specify;
(iv) to the extent requested by the Agent, funds
sufficient to pay any filing or recording tax or fee in connection
with any and all UCC-1 financing statements and the Mortgages;
(v) with respect to the Mortgaged Property, an A.L.T.A.
Form B (or other form acceptable to the Agent and the Lenders)
mortgagee policy of title insurance or a binder issued by a title
insurance company satisfactory to the Agent insuring (or
undertaking to insure, in the case of a binder) that the Mortgages
create and constitute a valid first Lien against the Mortgaged
Property in favor of the Agent, subject only to exceptions
acceptable to the Agent, with such endorsements and affirmative
insurance as the Agent may reasonably request;
(vi) evidence that the Agent has been named as loss payee
under all policies of casualty insurance, and as additional insured
under all policies of liability insurance, required by the
Mortgage;
(vii) flood insurance and earthquake insurance, to
the extent applicable, on terms satisfactory to the Agent;
(viii) current ALTA surveys and surveyor's
certification as to all Mortgaged Property to the extent
reasonably required by the Agent, each in form and substance
satisfactory to the Agent;
(ix) proof of payment (or arrangements therefor
satisfactory to the Agent) of all title insurance premiums,
documentary stamp or intangible taxes, recording fees and mortgage
taxes payable in connection with the recording of any Mortgage or
the issuance of the title insurance policies (whether due on the
Closing Date or in the future) including sums due in connection
with any future advances;
(x) such consents, estoppels, subordination agreements,
waivers and other documents and instruments executed by landlords,
tenants, bailees, warehousemen and other Persons party to material
contracts relating to any Collateral as to which the Agent shall be
granted a Lien for the benefit of the Lenders, as requested by the
Agent; and
(xi) evidence that all other actions necessary or, in the
opinion of the Agent, desirable to perfect and protect the first
priority Lien created by the Collateral Documents, and to enhance
the Agent's ability to preserve and protect its interests in and
access to the Collateral, have been taken (or arrangements therefor
satisfactory to the Agent have been made);
(k) Insurance Policies. Standard lenders' payable
endorsements with respect to the insurance policies or other instruments
or documents evidencing insurance coverage on the properties of the
Company in accordance with Section 6.18;
(l) Environmental Review. Such environmental site
assessments with respect to the real property of the Company and its
Subsidiaries as shall be requested by the Agent;
(m) Repayment of Prior Indebtedness. All outstanding
Indebtedness of the Company or any Subsidiary not specified on Schedule
8.05 or otherwise permitted by Section 8.05 shall have been paid in full
and all Liens securing such Indebtedness shall have been terminated; and
(n) Other Documents. Such other approvals, opinions,
documents or materials as the Agent or any Lender may request.
5.02 Conditions to All Credit Extensions. The obligation of each
Revolving Lender to make any Revolving Loan to be made by it (including
its initial Revolving Loan) and the obligation of the Issuer to Issue any
Letter of Credit (including the initial Letter of Credit) is subject to
the satisfaction of the following conditions precedent on the relevant
Borrowing Date or Issuance Date:
(a) Notice, Application. The Agent shall have received a
Notice of Borrowing or in the case of any Issuance of any Letter of
Credit, the Issuer and the Agent shall have received an L/C Application or
L/C Amendment Application, as required under Section 3.02;
(b) Continuation of Representations and Warranties. The
representations and warranties in Article V shall be true and correct in
all material respects on and as of such Borrowing Date or Issuance Date
with the same effect as if made on and as of such Borrowing Date or
Issuance Date (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be true and
correct as of such earlier date); and
(c) No Existing Default. No Default or Event of Default
shall exist or shall result from such Borrowing or Issuance.
Each Notice of Borrowing and L/C Application or L/C Amendment Application
submitted by the Company hereunder shall constitute a representation and
warranty by the Company hereunder, as of the date of each such notice and
as of each Borrowing Date or Issuance Date, as applicable, that the
conditions in this Section 5.02 are satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Lender
that both before and after giving effect to the consummation of the
transactions contemplated by the Transaction Documents:
6.01 Corporate Existence and Power. The Company and each of its
Material Subsidiaries:
(a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental
licenses, authorizations, consents and approvals to own its assets, to
carry on its business in all material respects and to execute, deliver,
and perform its obligations under the Transaction Documents to which it is
a party;
(c) is duly qualified as a foreign corporation and is
licensed and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its
business requires such qualification or license; and
(d) is in compliance with all Requirements of Law; except, in
each case referred to in clause (c) or clause (d), to the extent that the
failure to do so could not reasonably be expected to have a Material
Adverse Effect.
6.02 Corporate Authorization; No Contravention. The execution,
delivery and performance by the Company and its Subsidiaries of this
Agreement and each other Transaction Document to which such Person is
party, have been duly authorized by all necessary corporate action, and do
not and will not:
(a) contravene the terms of any of that Person's Organization
Documents;
(b) conflict with or result in any breach or contravention
of, or the creation of any Lien under, any document evidencing any
material Contractual Obligation to which such Person is a party or any
order, injunction, writ or decree of any Governmental Authority to which
such Person or its property is subject; or
(c) violate any Requirement of Law.
6.03 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except those that have been obtained and remain in
effect and for recordings or filings in connection with the Liens granted
to the Agent under the Collateral Documents) is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Company or any of its Subsidiaries of the Agreement or any
other Transaction Document.
6.04 Binding Effect. This Agreement and each other Loan Document
to which the Company or any of its Subsidiaries is a party constitute the
legal, valid and binding obligations of the Company and any of its
Subsidiaries to the extent it is a party thereto, enforceable against such
Person in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws
affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
6.05 Litigation. There are no actions, suits, proceedings, claims
or disputes pending, or to the best knowledge of the Company, threatened
or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, against the Company, or its Subsidiaries or any of
their respective properties:
(a) which purport to affect or pertain to this Agreement or
any other Transaction Document, or any of the transactions contemplated
hereby or thereby; or
(b) as to which there exists a substantial likelihood of an
adverse determination, which determination could reasonably be expected to
have a Material Adverse Effect. No injunction, writ, temporary
restraining order or any order of any nature has been issued by any court
or other Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any other
Transaction Document, or directing that the transactions provided for
herein or therein not be consummated as herein or therein provided.
6.06 No Default. No Default or Event of Default exists or would
result from the incurring of any Obligations by the Company or from the
grant or perfection of the Liens of the Agent and the Lenders on the
Collateral. As of the Closing Date, neither the Company nor any
Subsidiary is in default under or with respect to any Contractual
Obligation in any respect which, individually or together with all such
defaults, could reasonably be expected to have a Material Adverse Effect,
or that would, if such default had occurred after the Closing Date, create
an Event of Default under subsection 9.01(e).
6.07 ERISA Compliance. Except as specifically disclosed in
Schedule 6.07:
(a) Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other federal or state
law. Each Plan which is intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the IRS and to the
best knowledge of the Company, nothing has occurred which would cause the
loss of such qualification. The Company and each ERISA Affiliate has made
all required contributions to any Plan subject to Section 412 of the Code,
and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.
(b) There are no pending or, to the best knowledge of
Company, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan which has resulted or
could reasonably be expected to result in a Material Adverse Effect.
There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected
to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii)
neither the Company nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability under Title IV of ERISA with respect to
any Pension Plan (other than premiums due and not delinquent under Section
4007 of ERISA); (iv) neither the Company nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Section 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and (v) neither the Company nor any ERISA
Affiliate has engaged in a transaction that could be subject to Section
4069 or 4212(c) of ERISA.
6.08 Use of Proceeds; Margin Regulations. The proceeds of the
Loans are to be used solely for the purposes set forth in and permitted by
Section 7.12 and Section 8.07. Neither the Company nor any Subsidiary is
generally engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
6.09 Title to Properties. The Company and each Material
Subsidiary have good record and marketable title in fee simple to, or
valid leasehold interests in, all real property necessary or used in the
ordinary conduct of their respective businesses, except for such defects
in title as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. As of the Closing Date, the
property of the Company and its Subsidiaries is subject to no Liens, other
than Permitted Liens.
6.10 Taxes. The Company and its Subsidiaries have filed all
Federal and other material tax returns and reports required to be filed,
and have paid all Federal and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their
properties, income or assets otherwise due and payable, except those which
are being contested in good faith by appropriate proceedings and for which
adequate reserves have been provided in accordance with GAAP. There is no
proposed tax assessment against the Company or any Subsidiary that would,
if made, have a Material Adverse Effect.
6.11 Financial Condition. (a) Each of (i) the audited
consolidated financial statements of the Company and its Subsidiaries
dated September 30, 1997, and the related consolidated statements of
income or operations, shareholders' equity and cash flows for the fiscal
year ended on that date, (ii) the unaudited consolidated financial
statements of the Company and its Subsidiaries dated December 31, 1997,
and the related consolidated statements of income or operations,
shareholders' equity and cash flows for the three months ended on that
date, (iii) the audited consolidated financial statements of McNeilus and
its Subsidiaries dated February 29, 1997, and the related consolidated
statements of income or operations, shareholders' equity and cash flows
for the fiscal year ended on that date, and (iv) the unaudited
consolidated financial statements of McNeilus and its Subsidiaries dated
November 30, 1997, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for the nine months ended
on that date:
(x) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except for the
absence of footnotes and as otherwise expressly noted therein,
subject, in the case of such unaudited financial statements, to
ordinary, good faith year end audit adjustments;
(y) fairly present the financial condition of the
Company and its Subsidiaries or McNeilus and its Subsidiaries, as
applicable, as of the date thereof and results of operations for
the period covered thereby; and
(z) except as specifically disclosed in Schedule 6.11,
show all material indebtedness and other liabilities, direct or
contingent, of the Company and its Subsidiaries or McNeilus and its
Subsidiaries, as applicable, as of the date thereof.
(b) The unaudited pro forma financial statements at September
30, 1997 or December 31, 1997, as applicable, and for the periods then
ended of the Company and its Subsidiaries (the "Pro Forma") are attached
hereto as Schedule 6.11. As of the date of the Agreement, the Pro Forma
is complete and accurate and fairly represents the Company's and the
Subsidiaries' assets, liabilities, financial condition and results of
operations on a consolidated basis in accordance with GAAP (except for the
absence of footnotes and statements of cash flow), consistently applied
and taking into account the transactions contemplated by the Transaction
Documents.
(c) Since September 30, 1997, there has been no Material
Adverse Effect.
6.12 Environmental Matters. (a) Except as specifically disclosed
in Schedule 6.12, the on-going operations of the Company and each of its
Subsidiaries comply in all respects with all Environmental Laws, except
such non-compliance which would not (if enforced in accordance with
applicable law) result in liability in excess of $2,000,000 in the
aggregate (exclusive of amounts payable under insurance policies and
indemnity agreements which the Company or such Subsidiary reasonably
expects to receive).
(b) Except as specifically disclosed in Schedule 6.12, the
Company and each of its Subsidiaries have obtained all licenses, permits,
authorizations and registrations required under any Environmental Law
("Environmental Permits") and necessary for their respective ordinary
course operations, all such Environmental Permits are in good standing,
and the Company and each of its Subsidiaries are in compliance with all
material terms and conditions of such Environmental Permits.
(c) Except as specifically disclosed in Schedule 6.12, none
of the Company, any of its Subsidiaries or any of their respective present
property or operations, is subject to any outstanding written order from
or agreement with any Governmental Authority, nor subject to (i) any
judicial or docketed administrative proceeding, respecting any
Environmental Law, Environmental Claim or Hazardous Material or (ii) to
the extent that it could reasonably be expected to have a Material Adverse
Effect, any claim, proceeding or written notice from any Person regarding
any Environmental Law, Environmental Claim or Hazardous Material.
(d) Except as specifically disclosed in Schedule 6.12, there
are no Hazardous Materials or other conditions or circumstances existing
with respect to any property of the Company or any Subsidiary, or arising
from operations prior to the Closing Date, of the Company or any of its
Subsidiaries that would reasonably be expected to give rise to
Environmental Claims with a potential liability of the Company and its
Subsidiaries in excess of $2,000,000 in the aggregate for all such
conditions, circumstances and properties (exclusive of amounts payable
under insurance policies and indemnity agreements which the Company or
such Subsidiary reasonably expects to receive). In addition, (i) neither
the Company nor any Subsidiary has any underground storage tanks (x) that
are not properly registered or permitted under applicable Environmental
Laws, or (y) that are leaking or disposing of Hazardous Materials
off-site, which in any such case could reasonably be expected to have a
Material Adverse Effect, and (ii) the Company and its Subsidiaries have
met all material notification requirements under applicable Environmental
Laws.
6.13 Collateral Documents. (a) The provisions of each of the
Collateral Documents are effective to create in favor of the Agent for the
benefit of the Lenders, a legal, valid and enforceable first priority
security interest in all right, title and interest of the Company and its
Subsidiaries in the collateral described therein, subject only to any
Permitted Liens.
(b) Each Mortgage when delivered will be effective to grant
to the Agent for the benefit of the Lenders a legal, valid and enforceable
lien on all the right, title and interest of the mortgagor under such
Mortgage in the mortgaged property described therein. When each such
Mortgage is duly recorded in the offices listed on the schedule to such
Mortgage and the mortgage recording fees and taxes in respect thereof are
paid and compliance is otherwise had with the formal requirements of state
law applicable to the recording of real estate mortgages generally, each
such mortgaged property, subject to the encumbrances and exceptions to
title set forth therein and any Permitted Liens and except as noted in the
title policies delivered to the Agent pursuant to Section 5.01, is subject
to a legal, valid, enforceable and perfected first priority lien; and when
financing statements have been filed in the offices specified in such
Mortgage, such Mortgage also creates a legal, valid, enforceable and
perfected first lien on, and security interest in, all right, title and
interest of the Company or such Subsidiary under such Mortgage in all
personal property and fixtures covered by such Mortgage, subject to no
other Liens, except the encumbrances and exceptions to title set forth
therein and except as noted in the title policies delivered to the Agent
pursuant to Section 5.01, and Permitted Liens.
(c) All representations and warranties of the Company and any
of its Subsidiaries party thereto contained in the Collateral Documents
are true and correct.
6.14 Regulated Entities. None of the Company, any Person
controlling the Company, or any Subsidiary, is an "Investment Company"
within the meaning of the Investment Company Act of 1940. The Company is
not subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce Act, any state public
utilities code, or any other Federal or state statute or regulation
limiting its ability to incur Indebtedness.
6.15 No Burdensome Restrictions. Neither the Company nor any
Subsidiary is a party to or bound by any Contractual Obligation, or
subject to any restriction in any Organization Document, or any
Requirement of Law, which could reasonably be expected to have a Material
Adverse Effect.
6.16 Copyrights, Patents, Trademarks and Licenses, etc. The
Company and its Material Subsidiaries own or are licensed or otherwise
have the right to use all of the patents, trademarks, service marks, trade
names, copyrights, contractual franchises, authorizations and other rights
that are reasonably necessary for the operation of their respective
businesses, without conflict with the rights of any other Person. To the
best knowledge of the Company, no slogan or other advertising device,
product, process, method, substance, part or other material now employed,
or now contemplated to be employed, by the Company or any Subsidiary
infringes upon any rights held by any other Person, which infringement
could reasonably be expected to have a Material Adverse Effect. Except as
specifically disclosed in Schedule 6.05, no claim or litigation regarding
any of the foregoing is pending or threatened, and no patent, invention,
device, application, principle or any statute, law, rule, regulation,
standard or code is pending or, to the knowledge of the Company, proposed,
which, in either case, could reasonably be expected to have a Material
Adverse Effect.
6.17 Capitalization; Subsidiaries. As of the Closing Date, after
giving effect to the consummation of the transactions contemplated by the
Transaction Documents, the Company has no Subsidiaries other than those
specifically disclosed in part (a) of Schedule 6.17 hereto and has no
equity investments in any other corporation or entity other than those
specifically disclosed in part (b) of Schedule 6.17. The capitalization
of the Company and its Subsidiaries as of the Closing Date is as set forth
on part (a) of Schedule 6.17.
6.18 Insurance. Except as specifically disclosed in Schedule
6.18, the properties of the Company and its Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of the
Company (other than Nations Casualty Insurance, Inc.), in such amounts,
with such deductibles and covering such risks as are customarily carried
by companies engaged in similar businesses and are similarly situated.
6.19 Swap Obligations. Neither the Company nor any of its
Subsidiaries has incurred any outstanding obligations under any Swap
Contracts, other than Permitted Swap Obligations. The Company has
undertaken its own independent assessment of its consolidated assets,
liabilities and commitments and has considered appropriate means of
mitigating and managing risks associated with such matters and has not
relied on any swap counterparty or any Affiliate of any swap counterparty
in determining whether to enter into any Swap Contract.
6.20 Acquisition Documents. The Company has delivered to the
Agent true, complete and correct copies of the Acquisition Documents
(including all schedules, exhibits, annexes, amendments, supplements,
modifications and all other documents delivered pursuant thereto or in
connection therewith). The Acquisition Documents as originally executed
and delivered by the parties thereto have not been amended, waived,
supplemented or modified without the consent of the Agent. The
representations and warranties of the parties set forth therein are true
and correct in all material respects as of the date thereof. On the date
of this Agreement, neither the Company nor any other party to any of the
Acquisition Documents is in default in the performance of or compliance
with any provisions under the Acquisition Documents. The McNeilus
Acquisition is being consummated contemporaneously with the initial
Borrowing Date in accordance with applicable laws and regulations.
6.21 Solvency. The Company and each of its Material Subsidiaries
are Solvent.
6.22 Subordination Provisions. The subordination provisions
contained in the Senior Subordinated Debt Documents are enforceable
against the Company and the holders thereof, and the Loans are within the
definition of "Senior Debt" included in such provisions.
6.23 Year 2000 Compliance. The Company and its Subsidiaries have
conducted a comprehensive review and assessment of its computer
applications, and have made inquiry of their material suppliers, vendors
and customers, with respect to any defect in computer software, data
bases, hardware, controls and peripherals related to the occurrence of the
year 2000 or the use of any date after December 31, 1999 in connection
therewith. Based on the foregoing review, assessment and inquiry, the
Company believes that no such defect could reasonably be expected to have
a Material Adverse Effect.
6.24 Full Disclosure. None of the representations or warranties
made by the Company or any Subsidiary in the Loan Documents as of the date
such representations and warranties are made or deemed made, and none of
the statements contained in any exhibit, report, statement or certificate
furnished by or on behalf of the Company or any Subsidiary in connection
with the Loan Documents (including the offering and disclosure materials
delivered by or on behalf of the Company to the Lenders prior to the
Closing Date), contains any untrue statement of a material fact or omits
any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they
are made, not misleading as of the time when made or delivered.
ARTICLE VII
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any
Loan or other Obligation shall remain unpaid or unsatisfied, or any Letter
of Credit shall remain outstanding, unless the Required Lenders waive
compliance in writing:
7.01 Financial Statements. The Company shall deliver to the
Agent, in form and detail satisfactory to the Agent and the Required
Lenders, with sufficient copies for each Lender:
(a) as soon as available, but not later than the earlier of
(i) five days after the filing thereof with the SEC and (ii) 105 days
after the end of each fiscal year (commencing with the fiscal year ended
September 30, 1998), a copy of the audited consolidated balance sheet of
the Company and its Subsidiaries as at the end of such year and the
related consolidated statements of income, shareholders' equity and cash
flows for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied by the opinion of
Ernst & Young LLP or another nationally-recognized independent public
accounting firm ("Independent Auditor") which report shall state that such
consolidated financial statements present fairly the financial position
for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years. Such opinion shall not be qualified or
limited because of a restricted or limited examination by the Independent
Auditor of any material portion of the Company's or any Subsidiary's
records;
(b) as soon as available, but not later than the earlier of
(i) five days after the filing thereof with the SEC and (ii) 45 days after
the end of each of the first three fiscal quarters of each fiscal year
(commencing with the fiscal quarter ended March 31, 1998), a copy of the
unaudited consolidated balance sheet of the Company and its Subsidiaries
as of the end of such fiscal quarter and the related consolidated
statements of income, shareholders' equity and cash flows for the period
commencing on the first day and ending on the last day of such fiscal
quarter, together with a consolidating income statement for such period,
and certified by a Responsible Officer as fairly presenting, in accordance
with GAAP (subject to ordinary, good faith year-end audit adjustments and
the absence of footnotes), the financial position and the results of
operations of the Company and the Subsidiaries; and
(c) as soon as available, but not later than 45 days after
the end of each month through February 1999 and 30 days after the end of
each month thereafter, a copy of the unaudited consolidated balance sheet
of the Company and its Subsidiaries as of the end of such month and the
related consolidated statements of income, shareholders' equity and cash
flows for the period commencing on the first day and ending on the last
day of such month, and certified by a Responsible Officer as fairly
presenting, in accordance with GAAP (subject to ordinary, good faith year-
end audit adjustments and the absence of footnotes), the financial
position and the results of operations of the Company and the
Subsidiaries.
7.02 Certificates; Other Information. The Company shall furnish
to the Agent, with sufficient copies for each Lender:
(a) concurrently with the delivery of the financial
statements referred to in subsection 7.01(a), a certificate of the
Independent Auditor stating that in making the examination necessary
therefor no knowledge was obtained of any Default or Event of Default,
except as specified in such certificate;
(b) concurrently with the delivery of the financial
statements referred to in subsections 7.01(a) and (b), a Compliance
Certificate executed by a Responsible Officer;
(c) concurrently with the delivery of the financial
statements referred to in subsection 7.01(a), (i) a consolidating balance
sheet and income statement for such year (which need not be audited) and,
in the case of such income statement, setting forth in comparative form
the figures for the previous fiscal year, and (ii) a budget for the next
succeeding fiscal year;
(d) promptly, copies of all financial statements and reports
that the Company sends to its shareholders, and copies of all financial
statements and regular, periodic or special reports (including Forms 10K,
10Q and 8K) that the Company or any Subsidiary may make to, or file with,
the SEC; and
(e) promptly, such additional information regarding the
business, financial or corporate affairs of the Company or any Subsidiary
as the Agent, at the request of any Lender, may from time to time
reasonably request.
7.03 Notices. The Company shall promptly notify the Agent and
each Lender:
(a) of the occurrence of any Default or Event of Default, and
of the occurrence or existence of any event or circumstance that
foreseeably will become a Default or Event of Default;
(b) of any matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect, including, to the extent
so applicable, (i) any breach or non-performance of, or any default under,
a Contractual Obligation of the Company or any Subsidiary; (ii) any
dispute, litigation, investigation, proceeding or suspension between the
Company or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or
proceeding affecting the Company or any Subsidiary; including pursuant to
any applicable Environmental Laws;
(c) of the occurrence of any of the following events
affecting the Company or any ERISA Affiliate (but in no event more than 10
days after such event becomes known to an officer of the Company or any
Subsidiary), and deliver to the Agent and each Lender a copy of any notice
with respect to such event that is filed with a Governmental Authority and
any notice delivered by a Governmental Authority to the Company or any
ERISA Affiliate with respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(iii) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the Code by
the Company or any ERISA Affiliate resulting in a material
contribution obligation; or
(iv) the adoption of any amendment to a Plan subject
to Section 412 of the Code, if such amendment results in a material
increase in contributions or Unfunded Pension Liability.
(d) of any material change in accounting policies or
financial reporting practices by the Company or any of its consolidated
Subsidiaries; and
(e) upon, but in no event later than 15 days after, any
officer of the Company or any Subsidiary becoming aware of (i) any and all
enforcement, investigation, cleanup, removal or other governmental or
regulatory actions instituted, completed or threatened against the Company
or any Subsidiary or any of their respective properties pursuant to any
applicable Environmental Laws which could reasonably be expected to have a
Material Adverse Effect, (ii) all other material Environmental Claims, and
(iii) any environmental or similar condition on any real property
adjoining or in the vicinity of the property of the Company or any
Subsidiary that could reasonably be anticipated to cause such property of
the Company or such Subsidiary or any part thereof to be subject to any
material restrictions on the ownership, occupancy, transferability or use
of such property under any Environmental Laws.
Each notice under this Section shall be accompanied by a
written statement by a Responsible Officer setting forth details of the
occurrence referred to therein, and stating what action the Company or any
affected Subsidiary proposes to take with respect thereto and at what
time. Each notice under subsection 7.03(a) shall describe with
particularity any and all clauses or provisions of this Agreement or other
Loan Document that have been (or foreseeably will be) breached or
violated.
7.04 Preservation of Corporate Existence, Etc. The Company shall,
and shall cause each Subsidiary to:
(a) preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its state or
jurisdiction of incorporation, except to the extent otherwise expressly
permitted herein;
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business
except in connection with transactions permitted by Section 8.03 and sales
of assets permitted by Section 8.02;
(c) use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill except to the
extent otherwise expressly permitted herein; and
(d) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which
could reasonably be expected to have a Material Adverse Effect.
The Company shall cause each Subsidiary which is a Wholly-Owned Subsidiary
as of the date hereof to continue to exist as a Wholly-Owned Subsidiary so
long as it shall be a Subsidiary.
7.05 Maintenance of Property. The Company shall maintain, and
shall cause each Subsidiary to maintain, and preserve all its property
which is used or useful in its business in good working order and
condition, ordinary wear and tear excepted, and make all necessary repairs
thereto and renewals and replacements thereof except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect.
7.06 Insurance. In addition to insurance requirements set forth
in the Collateral Documents, the Company shall maintain, and shall cause
each Subsidiary to maintain, with financially sound and reputable
independent insurers, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against
by Persons engaged in the same or similar business, of such types and in
such amounts as are customarily carried under similar circumstances by
such other Persons; including workers' compensation insurance, public
liability and property and casualty insurance which amount shall not be
materially reduced by the Company in the absence of 30 days' prior written
notice to the Agent. All casualty insurance maintained by the Company
shall name the Agent as loss payee and all liability insurance shall name
the Agent as additional insured for the benefit of the Lenders, as their
interests may appear. Upon request of the Agent or any Lender, the Company
shall furnish the Agent, with sufficient copies for each Lender, at
reasonable intervals (but not more than once per calendar year) a
certificate of a Responsible Officer of the Company (and, if requested by
the Agent, any insurance broker of the Company) setting forth the nature
and extent of all insurance maintained by the Company and its Subsidiaries
in accordance with this Section or any Collateral Documents (and which, in
the case of a certificate of a broker, were placed through such broker).
7.07 Payment of Obligations. The Company shall, and shall cause
each Subsidiary to, pay and discharge as the same shall become due and
payable, all their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges
or levies upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings and adequate reserves
in accordance with GAAP are being maintained by the Company or such
Subsidiary; and
(b) all material lawful claims which, if unpaid, would by law
become a Lien upon its property in violation of Section 8.01.
7.08 Compliance with Laws. The Company shall comply, and shall
cause each Subsidiary to comply, in all material respects with all
material Requirements of Law of any Governmental Authority having
jurisdiction over it or its business (including the Federal Fair Labor
Standards Act), except such as may be contested in good faith or as to
which a bona fide dispute may exist.
7.09 Compliance with ERISA. The Company shall, and shall cause
each of its ERISA Affiliates to: (a) maintain each Plan in compliance in
all material respects with the applicable provisions of ERISA, the Code
and other federal or state law; (b) cause each Plan which is qualified
under Section 401(a) of the Code to maintain such qualification; and (c)
make all required contributions to any Plan subject to Section 412 of the
Code; to the extent that any failure to comply with any such provision
could reasonably be expected to result in liabilities in excess of
$1,000,000 for all such failures in the aggregate.
7.10 Inspection of Property and Books and Records. The Company
shall maintain and shall cause each Subsidiary to maintain proper books of
record and account, in which full, true and correct entries in conformity
with GAAP consistently applied shall be made of all financial transactions
and matters involving the assets and business of the Company and such
Subsidiary. The Company shall permit, and shall cause each Subsidiary to
permit, representatives and independent contractors of the Agent or any
Lender to visit and inspect any of their respective properties, to examine
their respective corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective directors, officers,
and independent public accountants, all at such reasonable times during
normal business hours and as often as may be reasonably desired, upon
reasonable advance notice to the Company; provided, however, when an Event
of Default exists the Agent or any Lender may do any of the foregoing at
the expense of the Company at any time during normal business hours and
without advance notice; provided, further, that neither the Agent nor any
Lender shall conduct any environmental testing of any owned or leased
facility of the Company or any Subsidiary without the prior written
consent of the Company, which shall not unreasonably be withheld.
7.11 Environmental Laws. (a) The Company shall, and shall cause
each Subsidiary to, conduct its operations and keep and maintain its
property in compliance with all Environmental Laws, the violation of which
could reasonably be expected to result in liability to the Company and its
Subsidiaries in excess of $2,000,000 in the aggregate (net of any payments
under insurance policies or indemnity agreements which the Company or such
Subsidiary reasonably expects to receive).
(b) Upon the written request of the Agent or any Lender, the
Company shall submit and cause each of its Subsidiaries to submit, to the
Agent with sufficient copies for each Lender, at the Company's sole cost
and expense, at reasonable intervals, a report providing an update of the
status of any environmental, health or safety compliance, hazard or
liability issue identified in any notice or report required pursuant to
subsection 7.03(e), that could, individually or in the aggregate, result
in liability in excess of $2,000,000 (net of any payments under insurance
policies or indemnity agreements which the Company or such Subsidiary
reasonably expects to receive).
7.12 Use of Proceeds. The Company shall use the proceeds of the
Loans (a) to finance in part the McNeilus Acquisition and to pay certain
fees and expenses related thereto, (b) to refinance existing Indebtedness
of the Company and its Subsidiaries and of McNeilus and (c) for working
capital and other general corporate purposes not in contravention of any
Requirement of Law or of any Loan Document.
7.13 Further Assurances. (a) The Company shall ensure that all
written information, exhibits and reports furnished to the Agent or the
Lenders do not and will not contain any untrue statement of a material
fact and do not and will not omit to state any material fact or any fact
necessary to make the statements contained therein not misleading in light
of the circumstances in which made, and will promptly disclose to the
Agent and the Lenders and correct any defect or error that may be
discovered therein or in any Loan Document or in the execution,
acknowledgment or recordation thereof.
(b) Promptly upon request by the Agent or the Required
Lenders, the Company shall (and shall cause any of its Subsidiaries to)
do, execute, acknowledge, deliver, record, re-record, file, re-file,
register and re-register, any and all such further acts, deeds,
conveyances, security agreements, mortgages, assignments, estoppel
certificates, financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates, assurances and
other instruments the Agent or such Lenders, as the case may be, may
reasonably require from time to time in order (i) to carry out more
effectively the purposes of this Agreement or any other Loan Document,
(ii) to subject to the Liens created by any of the Collateral Documents
any of the properties, rights or interests covered by any of the
Collateral Documents, (iii) to perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and the
Liens intended to be created thereby, and (iv) to better assure, convey,
grant, assign, transfer, preserve, protect and confirm to the Agent and
Lenders the rights granted or now or hereafter intended to be granted to
the Lenders under any Loan Document or under any other document executed
in connection therewith.
7.14 Additional Guaranties and Personal Property Pledge.
Effective upon any Person (a) becoming a Domestic Subsidiary (other than
(x) any Domestic Subsidiary with less than 1.0% of the total assets of the
Company and its Subsidiaries (other than Leasing Subsidiaries) and (y) any
Leasing Subsidiary) or (b) becoming or being required to become a
"Subsidiary Guarantor" under the Senior Subordinated Indenture or a
guarantor of any other subordinated Indebtedness of the Company or any
Domestic Subsidiary, such Person shall (i) join as a guarantor under the
Subsidiary Guaranty and the Subsidiary Security Agreement pursuant to
amendments thereto in form and substance acceptable to the Agent and (ii)
provide an intercompany note to the Company which shall be pledged to the
Agent pursuant to the Pledge Agreement; provided, that any Domestic
Subsidiary which does not become a party to the Subsidiary Guaranty and
the Subsidiary Security Agreement because it does not satisfy the
requirement in clause (x) above shall execute the Subsidiary Guaranty and
the Subsidiary Security Agreement if it subsequently acquires sufficient
assets to satisfy such requirement; provided, further, that if all
Domestic Subsidiaries (other than Leasing Subsidiaries) which are not
party to the Subsidiary Guaranty and the Subsidiary Security Agreement
hold 2.0% or more of the total assets of the Company and its Subsidiaries
(other than Leasing Subsidiaries), then such Domestic Subsidiaries shall
promptly execute the Subsidiary Guaranty and the Subsidiary Security
Agreement so that, upon such execution, such 2.0% threshold is no longer
exceeded. The Company shall promptly notify the Agent at any time at
which, in accordance with this Section 7.14, any Subsidiary shall be
required to join as a guarantor under the Subsidiary Guaranty and the
Subsidiary Security Agreement.
7.15 Additional Real Property. Concurrent with (a) the
acquisition by the Company or any Domestic Subsidiary of any parcel of
property which has a value in excess of $500,000 or (b) the acquisition
or lease by the Company or any Domestic Subsidiary of any parcel of
property which, in the Agent's determination, is otherwise of significant
value to the operations of the Company and its Subsidiaries, unless the
Required Lenders shall otherwise direct, the Company shall, or shall cause
such Domestic Subsidiary to, execute and deliver to the Agent a Mortgage
on such parcel or leasehold substantially in the form of the applicable
Mortgages executed and delivered on the date hereof, together with such
other of the items specified in subsection 5.01(j) as shall be applicable
thereto, in each case in form and substance acceptable to the Agent.
7.16 Additional Pledge. Effective upon any Person becoming a
Subsidiary (including without limitation any Leasing Subsidiary), the
shareholder or shareholders thereof, of the Company or any Subsidiaries,
shall pledge the stock or other equity interests thereof to the Agent
pursuant to documentation reasonably acceptable to the Agent; provided,
that the equity interests of MFSI and its Subsidiaries shall not be
required to be pledged to the Agent until promptly following the
termination of the Letter Agreements, other than the equity interests of
Oshkosh/McNeilus Financial Services Partnership, which need not be pledged
at any time; provided, further, that such shareholder shall only be
required to pledge 65% of the equity interests of any Subsidiary which is
not a Domestic Subsidiary.
ARTICLE VIII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any
Loan or other Obligation shall remain unpaid or unsatisfied, or any Letter
of Credit shall remain outstanding, unless the Required Lenders waive
compliance in writing:
8.01 Limitation on Liens. The Company shall not, and shall not
suffer or permit any Subsidiary to, directly or indirectly, make, create,
incur, assume or suffer to exist any Lien upon or with respect to any part
of its property, whether now owned or hereafter acquired, other than the
following ("Permitted Liens"):
(a) any Lien existing on property of the Company or any
Subsidiary on the Closing Date and set forth in Schedule 8.01 securing
Indebtedness outstanding on such date;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental
charges which are not delinquent or remain payable without penalty, or to
the extent that non-payment thereof is permitted by Section 7.07, provided
that no notice of lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary
course of business which are not delinquent or remain payable without
penalty or which are being contested in good faith and by appropriate
proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting
of pledges or deposits required in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security legislation;
(f) Liens on the property of the Company or its Subsidiaries
securing (i) the non-delinquent performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, (ii)
Contingent Obligations in connection with performance bonds, Surety Bonds
and appeal bonds, and (iii) other non-delinquent obligations of a like
nature, in each case, incurred in the ordinary course of business;
provided that all such Liens in the aggregate could not (taking into
account the probable likelihood of their being enforced) reasonably be
expected to cause a Material Adverse Effect;
(g) Liens consisting of judgment or judicial attachment
liens, provided that the enforcement of such Liens is effectively stayed
and the obligations secured by all such Liens in the aggregate at any time
outstanding for the Company and its Subsidiaries do not exceed $2,000,000;
(h) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the businesses of the Company and
its Subsidiaries;
(i) Liens on assets of corporations which become Subsidiaries
after the date of this Agreement, provided, however, that such Liens
existed at the time the respective corporations became Subsidiaries and
were not created in anticipation thereof and the obligations secured by
all such Liens in the aggregate at any time outstanding do not exceed (i)
$10,000,000, less (ii) amounts outstanding under paragraphs (j) and (n);
(j) purchase money security interests on any property
acquired or held by the Company or its Subsidiaries, securing Indebtedness
incurred or assumed for the purpose of financing all or any part of the
cost of acquiring such property; provided that (i) any such Lien attaches
to such property concurrently with or within 20 days after the acquisition
thereof, (ii) such Lien attaches solely to the property so acquired in
such transaction and other like assets in respect of which financing was
provided by the same lender to the obligor of such Indebtedness, (iii) the
principal amount of the debt secured thereby does not exceed 100% of the
cost of such property, and (iv) the principal amount of the Indebtedness
secured by any and all such purchase money security interests shall not at
any time exceed, together with Indebtedness permitted under subsection
8.05(d), (i) $10,000,000, less (ii) amounts outstanding under paragraphs
(i) and (n);
(k) Liens securing obligations in respect of capital leases
on assets subject to such leases, provided that such capital leases are
otherwise permitted hereunder;
(l) Liens arising solely by virtue of any statutory or common
law provision relating to banker's liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with
a creditor depository institution; provided that (i) such deposit account
is not a dedicated cash collateral account and is not subject to
restrictions against access by the Company or any Subsidiary in excess of
those set forth by regulations promulgated by the FRB, and (ii) such
deposit account is not intended by the Company or any Subsidiary to
provide collateral to the depository institution;
(m) Liens on vehicles or related property securing
obligations under any Floor Plan Financing Facility incurred in the
ordinary course of business; provided, that the aggregate principal amount
of all obligations at any time outstanding under all Floor Plan Financing
Facilities after giving effect to such incurrence does not exceed the
total cost of the vehicles and equipment securing such obligations; and
(n) Liens securing other obligations of the Company and its
Subsidiaries not to exceed in the aggregate at any one time outstanding
(i) $10,000,000 less (ii) amounts outstanding under paragraphs (i) and
(j).
8.02 Disposition of Assets. The Company shall not, and shall not
suffer or permit any Subsidiary to, directly or indirectly, (x) issue any
equity interests of any Subsidiary to any Person which is not the Company
or a Subsidiary or (y) sell, assign, lease, convey, transfer or otherwise
dispose of (whether in one or a series of transactions) any property,
including accounts and notes receivable, with or without recourse (each,
an "Asset Disposition"), or enter into any agreement to do any of the
foregoing, except:
(a) dispositions of inventory, or used, worn-out or surplus
equipment, all in the ordinary course of business;
(b) the sale of equipment to the extent that such equipment
is exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to
the purchase price of such replacement equipment;
(c) Asset Dispositions by any Subsidiary to any Wholly-Owned
Subsidiary that is party to the Subsidiary Guaranty;
(d) sale/leaseback transactions involving an aggregate
consideration not to exceed $10,000,000 after the date hereof;
(e) the transfer of Lease Assets to Leasing Subsidiaries
solely in connection with Leasing Transactions;
(f) the sale or other disposition of the assets or stock of
Summit Performance Systems, Inc. in exchange for cash or a promissory
note; provided, that any such promissory note is pledged to the Agent
pursuant to the Pledge Agreement;
(g) the sale of Nations Casualty Insurance, Inc.; and
(h) dispositions not otherwise permitted hereunder which are
made for fair market value; provided, that (i) at the time of any
disposition, no Event of Default shall exist or shall result from such
disposition, (ii) at least 75% of the aggregate sales price from such
dispositions shall be paid in cash, and (iii) the aggregate value of all
assets so sold by the Company and its Subsidiaries after the date hereof,
together, shall not (x) represent more than 10% of Net Worth, as would be
shown in the consolidated financial statements of the Company and its
Subsidiaries as at the end of the fiscal quarter next preceding the date
on which such determination is made, or (y) be responsible for more than
10% of the consolidated net revenues or consolidated net income of the
Company and its Subsidiaries for the 12-month period ending as of the end
of the fiscal quarter next preceding the date of determination.
8.03 Consolidations and Mergers. The Company shall not, and shall
not suffer or permit any Subsidiary to, merge, consolidate with or into,
or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of
its assets (whether now owned or hereafter acquired) to or in favor of any
Person, except:
(a) any Subsidiary may merge with the Company, provided that
(i) the Company shall be the continuing or surviving corporation, or with
any one or more Subsidiaries, and (ii) if any transaction shall be between
a Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary
shall be the continuing or surviving corporation;
(b) another Person organized under the laws of any state of
the United States may merge with or consolidate into the Company or any
Subsidiary so long as (i) no Default or Event of Default shall have
occurred and be continuing either before or after giving effect to such
transaction (determined in respect of Sections 8.16, 8.17 and 8.18 on a
pro forma basis as of the last day of the prior fiscal quarter), (ii) the
Company or such Subsidiary is the surviving Person, and (iii) all
applicable legal requirements have been satisfied;
(c) any Subsidiary may sell all or substantially all of its
assets (upon voluntary liquidation or otherwise), to the Company or
another Wholly-Owned Subsidiary; and
(d) the Company may merge with a corporation organized under
the laws of any state of the United States solely for the purpose of
reincorporating in such other state so long as (i) the surviving Person
assumes the Company's Obligations under the Loan Documents pursuant to a
written instrument reasonably satisfactory to the Agent and (ii) no
Default has occurred and is continuing or would occur after giving effect
thereto.
8.04 Loans and Investments. The Company shall not purchase or
acquire, or suffer or permit any Subsidiary to purchase or acquire, or
make any commitment therefor, any capital stock, equity interest, or any
obligations or other securities of, or any interest in, any Person, or
make or commit to make any Acquisitions, or make or commit to make any
advance, loan, extension of credit or capital contribution to or any other
investment in, any Person including any Affiliate of the Company
(together, "Investments"), except for:
(a) Investments held by the Company or Subsidiary in the form
of cash equivalents or short term marketable securities;
(b) extensions of credit in the nature of accounts receivable
or notes receivable arising from the sale or lease of goods or services in
the ordinary course of business;
(c) Investments by the Company or any Subsidiary in
Wholly-Owned Subsidiaries party to the Subsidiary Guaranty or unsecured
loans made by any Subsidiary to the Company;
(d) Investments incurred in order to consummate Acquisitions
otherwise permitted herein, provided that (i) the cash consideration for
Acquisitions undertaken by the Company and its Subsidiaries shall not
exceed $15,000,000 in the aggregate in any fiscal year of the Company or
$30,000,000 in the aggregate for all such Acquisitions consummated after
the Closing Date, (ii) such Acquisitions are undertaken in accordance with
all applicable Requirements of Law, (iii) the prior, effective written
consent or approval to such Acquisition of the board of directors or
equivalent governing body of the acquiree is obtained, (iv) the Company
provides the Agent and the Lenders with a certificate at least ten days
prior to the consummation of such Acquisition evidencing that, after
giving effect to such Acquisition, its Leverage Ratio would be at least
.25 less than that required pursuant to Section 8.17 as of such date (as
determined on a pro forma basis as of the last day of the preceding fiscal
quarter), (v) the Person or business which is the subject of such
Acquisition is in the same or similar line of business as the Company and
its Subsidiaries, and (vi) such Acquisition consists exclusively of (A)
assets located in the United States or (b) a Person organized under the
laws of the United States or any state thereof;
(e) Investments in Joint Ventures (other than Leasing
Subsidiaries) not exceeding $12,000,000 in the aggregate after the Closing
Date;
(f) Investments constituting Permitted Swap Obligations or
payments or advances under Swap Contracts relating to Permitted Swap
Obligations;
(g) advances to vendors of the Company and its Subsidiaries,
or suppliers to such vendors, to enable such vendors and suppliers to
purchase goods or parts to be processed and sold to the Company and its
Subsidiaries in the ordinary course of business and consistent with past
practices;
(h) loans and advances to officers, directors and employees
of the Company and its Subsidiaries not to exceed $1,000,000 in the
aggregate at any one time outstanding;
(i) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course of
business;
(j) loans and advances to sales representatives of the
Company or its Subsidiaries in the ordinary course of business and
consistent with past practices;
(k) Investments (i) by the Company or any Subsidiary in
Subsidiaries to the extent not permitted under clause (c) above and (ii)
incurred in order to consummate Acquisitions of (x) assets located outside
the United States or (y) Persons which are not organized under the laws of
the United States or any state thereof; provided, that the aggregate cash
consideration paid therefor after the date hereof shall not exceed
$5,000,000 or more than $2,500,000 in any fiscal year; provided, further,
that any such Investment made in order to consummate an Acquisition shall
be made in compliance with clauses (ii), (iii), (iv) and (v) of paragraph
(d) above;
(l) Cash Investments required to form Oshkosh/McNeilus
Financial Services Partnership in an amount not to exceed $1,500,000 in
the aggregate after the date hereof, Investments in Leasing Subsidiaries
consisting exclusively of Lease Assets solely in connection with the
consummation of Leasing Transactions and additional Investments in Leasing
Subsidiaries consisting of cash and other property in an amount not to
exceed $15,000,000 in the aggregate after the date hereof or $5,000,000 in
any fiscal year;
(m) Investments in Nations Casualty Insurance, Inc. in an
aggregate amount not to exceed the amount distributed thereby as a
dividend after the date hereof, so long as no Default or Event of Default
has occurred and is continuing before or after giving effect thereto; and
(n) Investments of a nature not contemplated by the foregoing
clauses hereof that are outstanding as of the Closing Date and set forth
in Schedule 8.04 hereto.
8.05 Limitation on Indebtedness. The Company shall not, and shall
not suffer or permit any Subsidiary to, create, incur, assume, suffer to
exist, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations
permitted pursuant to Section 8.08;
(c) Indebtedness existing on the Closing Date and set forth
in Schedule 8.05;
(d) Indebtedness incurred in connection with leases permitted
pursuant to Section 8.10;
(e) (i) unsecured Indebtedness owed to the Company by any
Subsidiary so long as it is (A) evidenced by a note pledged to the Agent
and (B) incurred in accordance with Section 8.04, (ii) unsecured
Indebtedness owed by the Company or any Subsidiary to a Subsidiary so long
as it is incurred in accordance with Section 8.04 and (iii) unsecured
Indebtedness owed by the Company to any Leasing Subsidiary to the extent
of funds advanced to the Company in connection with the Company's cash
pooling arrangements.
(f) Indebtedness evidenced by the Senior Subordinated Notes;
(g) unsecured Indebtedness owed to former McNeilus
shareholders in an aggregate principal amount not to exceed $3,300,000 at
any one time outstanding; and
(h) other Indebtedness with an aggregate principal amount not
to exceed $20,000,000 at any time outstanding.
In addition, the Company shall not permit MFSI to incur any Indebtedness
while any Letter Agreement shall remain in effect.
8.06 Transactions with Affiliates. The Company shall not, and
shall not suffer or permit any Subsidiary to, enter into any transaction
with any Affiliate of the Company, except upon fair and reasonable terms
no less favorable to the Company or such Subsidiary than would obtain in a
comparable arm's-length transaction with a Person not an Affiliate of the
Company or such Subsidiary and except for the following:
(a) any employment or severance agreement and any amendment
thereto entered into by the Company or any of its Subsidiaries in the
ordinary course of business;
(b) transactions between or among the Company and/or its
Subsidiaries and transactions between or among the Company or any
Subsidiary and any Leasing Subsidiary (including the contribution of
overhead costs consistent with past practice) in the ordinary course of
business;
(c) the payment of reasonable directors' fees and benefits,
provided that the amount of such fees and benefits paid to any Affiliate
does not exceed the amount of such fees and benefits paid to any Person
who is not otherwise an Affiliate of the Company;
(d) payments permitted pursuant to Section 8.11 and
transactions permitted pursuant to Section 8.04 or Section 8.08;
(e) the provision of officers' and directors' indemnification
and insurance in the ordinary course of business to the extent permitted
by applicable law;
(f) the payment of employee salaries, bonuses and employee
benefits in the ordinary course of business (including the payment of
commissions on behalf of any Leasing Subsidiary by the Company or any of
its Subsidiaries consistent with past practices and in the ordinary course
of business); and
(g) the payment of amounts owing under the existing lease
between the Company and Cadence Company and under any amendment or
extension thereof so long as any such amendment or extension is not
disadvantageous to the Lenders in any material respect.
8.07 Use of Proceeds. The Company shall not, and shall not suffer
or permit any Subsidiary to, use any portion of the proceeds of any Loan
or any Letter of Credit, directly or indirectly, (i) to purchase or carry
Margin Stock, (ii) to repay or otherwise refinance indebtedness of the
Company or others incurred to purchase or carry Margin Stock, (iii) to
extend credit for the purpose of purchasing or carrying any Margin Stock,
or (iv) to acquire any security in any transaction that is subject to
Section 13 or 14 of the Exchange Act.
8.08 Contingent Obligations. The Company shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume or suffer to
exist any Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary
course of business;
(b) Permitted Swap Obligations;
(c) Contingent Obligations of the Company and its
Subsidiaries existing as of the Closing Date and listed in Schedule 8.08;
(d) Contingent Obligations with respect to Indebtedness of
the Company's Wholly-Owned Subsidiaries permitted pursuant to Section
8.05;
(e) Contingent Obligations with respect to Surety Instruments
incurred by the Company and its Subsidiaries (including on behalf of third
parties) in the ordinary course of business;
(f) Contingent Obligations of the Company in respect of the
Bank One leasing program in an amount not to exceed $1,000,000 at any one
time outstanding; and
(g) other Contingent Obligations (except in respect of
obligations of Leasing Subsidiaries) not exceeding at any time $5,000,000
in the aggregate in respect of the Company and its Subsidiaries together.
8.09 Joint Ventures. The Company shall not, and shall not suffer
or permit any Subsidiary to enter into any Joint Venture, other than (a)
in the ordinary course of business and (b) in compliance with subsection
8.04(e) and (l).
8.10 Lease Obligations. The Company shall not, and shall not
suffer or permit any Subsidiary to, create or suffer to exist any
obligations for the payment of rent for any property under lease or
agreement to lease, except for:
(a) leases of the Company and of Subsidiaries in existence on
the Closing Date and any renewal, extension or refinancing thereof;
(b) operating leases entered into by the Company or any
Subsidiary after the Closing Date in the ordinary course of business;
(c) leases entered into by the Company or any Subsidiary
after the Closing Date pursuant to sale-leaseback transactions permitted
under subsection 8.05; and
(d) capital leases other than those permitted under clauses
(a) and (c) of this Section, entered into by the Company or any Subsidiary
after the Closing Date to finance the acquisition of equipment.
8.11 Restricted Payments. The Company shall not, and shall not
suffer or permit any Subsidiary to, declare or make any dividend payment
or other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of its capital stock, or
purchase, redeem or otherwise acquire for value any shares of its capital
stock or any warrants, rights or options to acquire such shares, now or
hereafter outstanding (collectively, "Restricted Equity Payments"); except
that any Subsidiary may declare and make dividend payments and other
distributions to its shareholders on a pro rata basis and the Company may:
(a) declare and make dividend payments or other distributions
payable solely in its common stock;
(b) purchase, redeem or otherwise acquire shares of its
common stock or warrants or options to acquire any such shares with the
proceeds received from the substantially concurrent issue of new shares of
its common stock; and
(c) declare or pay cash dividends to its stockholders and
purchase, redeem or otherwise acquire shares of its capital stock or
warrants, rights or options to acquire any such shares for cash and
computed on a cumulative consolidated basis; provided, that, (i) all such
payments made in any period of four fiscal quarters (ending with the
fiscal quarter in which any such payment is made) shall not exceed the
lesser of (A) the sum of (1) the Company's consolidated net income for the
period of four fiscal quarters ending with the second preceding fiscal
quarter prior to the fiscal quarter in which such payment is made (if
positive), plus (2) only to the extent necessary to permit the payment of
up to $5,000,000 in Restricted Equity Payments during any fiscal year, an
amount equal to all or any portion of the Dividend Supplement Amount as
designated in writing to the Agent by the Company at least five Business
Days prior to the payment of such incremental amount, and (B) the sum of
(1) $5,000,000, plus (2) 5% of the Company's consolidated net income for
the period specified in clause (A), and (ii) immediately after giving
effect to such proposed action, no Default or Event of Default would exist
(determined with respect to Sections 8.16, 8.17 and 8.18 on a pro forma
basis as of the last day of the previous fiscal quarter); provided,
further, that the Company may pay dividends in its 1998 fiscal year in an
aggregate amount not to exceed $4,400,000 so long as no Default or Event
of Default has occurred and is continuing or would occur after giving
effect thereto (determined, in respect of Sections 8.16, 8.17 and 8.18 on
a pro forma basis as of the last day of the immediately preceding fiscal
quarter).
8.12 ERISA. The Company shall not, and shall not suffer or permit
any of its ERISA Affiliates to: (a) engage in a prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan
which has resulted or could reasonably expected to result in liability of
the Company in an aggregate amount in excess of $1,000,000; or (b) engage
in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA.
8.13 Change in Business. The Company shall not, and shall not
suffer or permit any Subsidiary to, engage in any material line of
business substantially different from those lines of business carried on
by the Company and its Subsidiaries on the date hereof.
8.14 Accounting Changes. The Company shall not, and shall not
suffer or permit any Subsidiary to, (a) make any significant change in
accounting treatment or reporting practices, except (i) as required by
GAAP, (ii) a change in the depreciation method employed thereby to
straight line depreciation and (iii) any other change which does not
affect the calculations required to determine compliance with Section
8.16, 8.17 or 8.18, or (b) change the fiscal year of the Company or of any
Subsidiary.
8.15 Amendments to Charter and Agreements; Subordinated
Indebtedness. The Company will not, nor will it permit any Subsidiary to,
(a) make any amendment or modification to any indenture, notes or other
agreement evidencing or governing any subordinated Indebtedness, including
without limitation the Indebtedness evidenced by the Senior Subordinated
Notes, (b) directly or indirectly prepay, defease or in substance defease,
purchase, redeem, retire or otherwise acquire, any such Indebtedness,
except that (i) the Company may pay the Senior Subordinated Notes on the
scheduled maturity date therefor in accordance with the terms thereof
(including without limitation the terms of subordination set forth
therein) as in effect on the date of this Agreement and (ii) the Company
may apply an amount equal to 25% of the Net Proceeds realized upon any
issuance of equity securities by the Company to the prepayment or
repurchase of the Senior Subordinated Notes so long as (A) after giving
effect thereto, the Company's Senior Debt to EBITDA Ratio is less than 2.0
to 1.0 and (B) no Event of Default or Default has occurred and is
continuing or would occur after giving effect thereto, determined in the
case of clauses (A) and (B) (in respect of Sections 8.16, 8.17, and 8.18)
on a pro forma basis as of the last day of the immediately preceding
fiscal quarter, (c) make any amendment or modification to any terms or
provisions of its Certificate or Articles of Incorporation or bylaws which
is materially adverse to the Agent or the Lenders without the prior
written consent of the Required Lenders or (d) issue any preferred stock.
The Company shall not, and shall not permit any Subsidiary to, amend,
waive, modify or terminate any material portion of any Acquisition
Document. The Company will not designate any Indebtedness as "Designated
Senior Indebtedness" under the Senior Subordinated Indenture.
8.16 Net Worth. The Company shall not permit its consolidated Net
Worth at any time to be less than the sum of (a) $110,000,000, plus (b)
the aggregate Net Proceeds of all offerings and sales of equity securities
by the Company or any Subsidiary after the Closing Date.
8.17 Leverage Ratio. The Company shall not permit its Leverage
Ratio as determined as of the last day of each fiscal quarter in any
period set forth below to be greater than the ratio set forth below for
such period:
Period Ratio
4/1/98 through 9/29/98 5.35:1.0
9/30/98 through 3/30/99 5.00:1.0
3/31/99 through 9/29/99 4.75:1.0
9/30/99 through 3/30/00 4.50:1.0
3/31/00 through 9/29/00 4.25:1.0
9/30/00 and thereafter 4.00:1.0
8.18 Fixed Charge Coverage Ratio. The Company shall not, as of the
last day of any fiscal quarter beginning after March 31, 1998, permit its
ratio of (a) EBITDA for the period of four fiscal quarters then ending to
(b) Fixed Charges for such four fiscal quarter period to be less than 1.4
to 1.0.
8.19 Capital Expenditures. The Company and its Subsidiaries shall
not make or commit to make Capital Expenditures in an aggregate amount not
to exceed $17,000,000 in any fiscal year; provided, that any such amount
not applied in any fiscal year may be applied in the next succeeding
fiscal year; provided, further, that the Company and its Subsidiaries may
make up to $5,000,000 of additional Capital Expenditures after the date
hereof.
8.20 Restrictive Agreements. The Company shall not, nor shall it
permit any of its Subsidiaries to, enter into any indenture, agreement,
instrument or other arrangement which directly or indirectly prohibits or
restrains, or has the effect of prohibiting or restraining, or imposes
materially adverse conditions upon, the ability of any Subsidiary to (a)
pay dividends or make other distributions (i) on its Capital Stock or (ii)
with respect to any other interest or participation in, or measured by,
its profits, (b) make loans or advances to the Company or any Subsidiary,
(c) repay loans or advances from the Company or any Subsidiary or (d)
transfer any of its properties or assets to the Company or any Subsidiary.
ARTICLE IX
EVENTS OF DEFAULT
9.01 Event of Default. Any of the following shall constitute an
"Event of Default":
(a) Non-Payment. The Company fails to pay, (i) when and as
required to be paid herein, any amount of principal of any Loan or of any
L/C Obligation, or (ii) within five (5) days after the same becomes due,
any interest, fee or any other amount payable hereunder or under any other
Loan Document; or
(b) Representation or Warranty. Any representation or
warranty by the Company or any Subsidiary made or deemed made herein or in
any other Loan Document, or contained in any certificate, document or
financial or other statement by the Company, any Subsidiary, or any
Responsible Officer, furnished at any time under this Agreement, or in or
under any other Loan Document, is incorrect in any material respect on or
as of the date made or deemed made; or
(c) Specific Defaults. The Company fails to perform or
observe any term, covenant or agreement contained in any of Section 7.01,
7.02, 7.03 or 7.09 or in Article VIII; or
(d) Other Defaults. The Company or any Subsidiary party
thereto fails to perform or observe any other term or covenant contained
in this Agreement or any other Loan Document, and such default shall
continue unremedied for a period of 30 days after the date upon which
written notice thereof is given to the Company by the Agent or any Lender;
or
(e) Cross-Default. (i) The Company or any Subsidiary
(A) fails to make any payment in respect of any Indebtedness or Contingent
Obligation (other than in respect of Swap Contracts), having an aggregate
principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than $5,000,000 when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) and
such failure continues after the applicable grace or notice period, if
any, specified in the relevant document on the date of such failure; or
(B) fails to perform or observe any other condition or covenant, or any
other event shall occur or condition exist, under any agreement or
instrument relating to any such Indebtedness or Contingent Obligation, and
such failure continues after the applicable grace or notice period, if
any, specified in the relevant document on the date of such failure if the
effect of such failure, event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of
such Indebtedness (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause such Indebtedness to be
declared to be due and payable, or to be required to be repurchased,
prior to its stated maturity, or such Contingent Obligation to become
payable or cash collateral in respect thereof to be demanded; (ii) there
occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (1) any event of default under such
Swap Contract as to which the Company or any Subsidiary is the Defaulting
Party (as defined in such Swap Contract) or (2) any Termination Event (as
so defined) arising due to a "Tax Event Upon Merger" or a "Credit Event
Upon Merger" as to which the Company or any Subsidiary is an Affected
Party (as so defined) and, in either event, the Swap Termination Value
owed by the Company or such Subsidiary as a result thereof is greater than
$5,000,000; or (iii) the Company or any Subsidiary fails to perform or
observe any condition or covenant under any contract providing for the
issuance of, or reimbursement of amounts in respect of, Surety Instruments
(other than Non-Surety L/C's), which in such event requires the making of
payments in excess of $5,000,000 in the aggregate, net of the proceeds of
insurance policies and indemnity agreements in favor of the Company or any
Subsidiary and received or reasonably expected to be received thereby.
(f) Insolvency; Voluntary Proceedings. The Company or any
Material Subsidiary (i) ceases or fails to be solvent, or generally fails
to pay, or admits in writing its inability to pay, its debts as they
become due, subject to applicable grace periods, if any, whether at stated
maturity or otherwise; (ii) voluntarily ceases to conduct its business in
the ordinary course; (iii) commences any Insolvency Proceeding with
respect to itself; or (iv) takes any action to effectuate or authorize any
of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Company or any Subsidiary, or
any writ, judgment, warrant of attachment, execution or similar process,
is issued or levied against a substantial part of the Company's or any
Subsidiary's properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 60
days after commencement, filing or levy; (ii) the Company or any
Subsidiary admits the material allegations of a petition against it in any
Insolvency Proceeding, or an order for relief (or similar order under non-
U.S. law) is ordered in any Insolvency Proceeding; or (iii) the Company or
any Subsidiary acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of
its property or business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably
be expected to result in liability of the Company or any ERISA Affiliate
under Title IV of ERISA to such Pension Plan or Multiemployer Plan or to
the PBGC in an aggregate amount for all such Pension Plans and
Multiemployer Plans in excess of $2,000,000; (ii) the aggregate amount of
Unfunded Pension Liability among all Pension Plans and Multiemployer Plans
at any time exceeds $2,000,000 (determined, in respect of Multiemployer
Plans, by reference to the Unfunded Person Liability for which the Company
or any ERISA Affiliate may be liable); or (iii) the Company or any ERISA
Affiliate shall fail to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its
withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $2,000,000; or
(i) Monetary Judgments. One or more non-interlocutory
judgments, non-interlocutory orders, decrees or arbitration awards is
entered against the Company or any Subsidiary involving in the aggregate a
liability (to the extent not covered by independent third-party insurance
as to which the insurer does not dispute coverage) as to any single or
related series of transactions, incidents or conditions, of $2,500,000 or
more, and the same shall remain unsatisfied, unvacated and unstayed
pending appeal for a period of 10 days after the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order
or decree is entered against the Company or any Subsidiary which does or
would reasonably be expected to have a Material Adverse Effect, and there
shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(k) Change of Control. There occurs any Change of Control;
or
(l) Loss of Licenses. Any Governmental Authority revokes or
fails to renew any material license, permit or franchise of the Company or
any Material Subsidiary, or the Company or any Material Subsidiary for any
reason loses any material license, permit or franchise, or the Company or
any Material Subsidiary suffers the imposition of any restraining order,
escrow, suspension or impound of funds in connection with any proceeding
(judicial or administrative) with respect to any material license, permit
or franchise; or
(m) Guarantor Defaults. Any Guarantor fails in any material
respect to perform or observe any term, covenant or agreement in the
Subsidiary Guaranty; or the Subsidiary Guaranty is for any reason
partially (including with respect to future advances) or wholly revoked or
invalidated, or otherwise ceases to be in full force and effect, or any
Guarantor or any other Person contests in any manner the validity or
enforceability thereof or denies that it has any further liability or
obligation thereunder; or any event described at subsections (f) or (g) of
this Section occurs with respect to any Guarantor; or
(n) Invalidity of Subordination Provisions. The
subordination provisions of the Senior Subordinated Debt Documents or any
agreement or instrument governing any other subordinated debt with an
outstanding principal amount of $5,000,000 or more are for any reason
revoked or invalidated, or otherwise cease to be in full force and effect,
any Person contests in any manner the validity or enforceability thereof,
or the Indebtedness hereunder is for any reason subordinated or does not
have the priority contemplated by this Agreement or such subordination
provisions; or
(o) Collateral.
(i) any provision of any Collateral Document shall
for any reason cease to be valid and binding on or enforceable
against the Company or any Subsidiary party thereto or the Company
or any Subsidiary shall so state in writing or bring an action to
limit its obligations or liabilities thereunder; or
(ii) any Collateral Document shall for any reason
(other than pursuant to the terms thereof) cease to create a valid
security interest in the Collateral purported to be covered thereby
or such security interest shall for any reason cease to be a
perfected and first priority security interest subject only to
Permitted Liens.
9.02 Remedies. If any Event of Default has occurred and is
continuing, the Agent shall, at the request of, or may, with the consent
of, the Required Lenders,
(a) declare the Commitment of each Lender to make Loans and
any obligation of the Issuer to Issue Letters of Credit to be terminated,
whereupon such Commitments and obligation shall be terminated;
(b) declare an amount equal to the Dollar Equivalent of the
maximum aggregate amount that is or at any time thereafter may become
available for drawing under any outstanding Letters of Credit (whether or
not any beneficiary shall have presented, or shall be entitled at such
time to present, the drafts or other documents required to draw under such
Letters of Credit) to be immediately due and payable, and declare the
unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under
any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Lenders all rights
and remedies available to it and the Lenders under the Loan Documents or
applicable law;
provided, however, that upon the occurrence of any event specified in
subsection (f) or (g) of Section 9.01 (in the case of clause (i) of
subsection (g) upon the expiration of the 60-day period mentioned
therein), the obligation of each Lender to make Loans and any obligation
of the Issuer to Issue Letters of Credit shall automatically terminate and
the unpaid principal amount of all outstanding Loans and all interest and
other amounts as aforesaid shall automatically become due and payable
without further act of the Agent, the Issuer or any Lender.
9.03 Rights Not Exclusive. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not
exclusive of any other rights, powers, privileges or remedies provided by
law or in equity, or under any other instrument, document or agreement now
existing or hereafter arising.
ARTICLE X
THE AGENT
10.01 Appointment and Authorization; "Agent". (a) Each Lender
hereby irrevocably (subject to Section 10.09) appoints, designates and
authorizes the Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise
such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Agent have or be deemed to have any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other
Loan Document or otherwise exist against the Agent. Without limiting the
generality of the foregoing sentence, the use of the term "agent" in this
Agreement with reference to the Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.
(b) Each Issuer shall act on behalf of the Lenders with
respect to any Letters of Credit Issued by it and the documents associated
therewith until such time and except for so long as the Agent may agree at
the request of the Required Lenders to act for such Issuer with respect
thereto; provided, however, that such Issuer shall have all of the
benefits and immunities (i) provided to the Agent in this Article X with
respect to any acts taken or omissions suffered by the Issuer in
connection with Letters of Credit Issued by it or proposed to be Issued by
it and the application and agreements for letters of credit pertaining to
the Letters of Credit as fully as if the term "Agent", as used in this
Article X, included such Issuer with respect to such acts or omissions,
and (ii) as additionally provided in this Agreement with respect to such
Issuer.
10.02 Delegation of Duties. The Agent may execute any of its
duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
10.03 Liability of Agent. None of the Agent-Related Persons shall
(a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or
the transactions contemplated hereby (except for its own gross negligence
or willful misconduct), or (b) be responsible in any manner to any of the
Lenders for any recital, statement, representation or warranty made by the
Company or any Subsidiary or Affiliate of the Company, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in
any certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection with,
this Agreement or any other Loan Document, or for the value of or title to
any Collateral, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Company or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the properties, books or records of the
Company or any of the Company's Subsidiaries or Affiliates.
10.04 Reliance by Agent. (a) The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telegram, facsimile,
telex or telephone message, statement or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or
made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Company), independent accountants
and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall
in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a
request or consent of the Required Lenders and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.
(b) For purposes of determining compliance with the
conditions specified in Section 5.01, each Lender that has executed this
Agreement shall be deemed to have consented to, approved or accepted or to
be satisfied with, each document or other matter either sent by the Agent
to such Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Lender.
10.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and
fees required to be paid to the Agent for the account of the Lenders,
unless the Agent shall have received written notice from a Lender or the
Company referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". The Agent
will notify the Lenders of its receipt of any such notice. The Agent
shall take such action with respect to such Default or Event of Default as
may be requested by the Required Lenders in accordance with Article IX;
provided, however, that unless and until the Agent has received any such
request, the Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event
of Default as it shall deem advisable or in the best interest of the
Lenders.
10.06 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and
that no act by the Agent hereinafter taken, including any review of the
affairs of the Company and its Subsidiaries, shall be deemed to constitute
any representation or warranty by any Agent-Related Person to any Lender.
Each Lender represents to the Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of the Company and its
Subsidiaries, the value of and title to any Collateral, and all applicable
bank regulatory laws relating to the transactions contemplated hereby, and
made its own decision to enter into this Agreement and to extend credit to
the Company hereunder. Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan
Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and
other condition and creditworthiness of the Company. Except for notices,
reports and other documents expressly herein required to be furnished to
the Lenders by the Agent, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and
other condition or creditworthiness of the Company which may come into the
possession of any of the Agent-Related Persons.
10.07 Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon
demand the Agent-Related Persons (to the extent not reimbursed by or on
behalf of the Company and without limiting the obligation of the Company
to do so), in accordance with such Lender's Pro Rata Share of all Loans
and Commitments, from and against any and all Indemnified Liabilities;
provided, however, that no Lender shall be liable for the payment to the
Agent-Related Persons of any portion of such Indemnified Liabilities
resulting from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender shall reimburse the Agent
upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment
or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities
under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Company. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
10.08 Agent in Individual Capacity. BofA and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with
the Company and its Subsidiaries and Affiliates as though BofA were not
the Agent or an Issuer hereunder and without notice to or consent of the
Lenders. The Lenders acknowledge that, pursuant to such activities, BofA
or its Affiliates may receive information regarding the Company or its
Affiliates (including information that may be subject to confidentiality
obligations in favor of the Company or such Subsidiary) and acknowledge
that the Agent shall be under no obligation to provide such information to
them. With respect to its Loans, BofA shall have the same rights and
powers under this Agreement as any other Lender and may exercise the same
as though it were not the Agent or an Issuer.
10.09 Successor Agent. The Agent may, and at the request of the
Required Lenders shall, resign as Agent upon 30 days' notice to the
Lenders. If the Agent resigns under this Agreement, the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders
subject, so long as no Event of Default has occurred and is then
continuing, to the consent of the Company, which shall not be unreasonably
withheld or delayed. If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent may appoint,
after consulting with the Lenders and the Company, a successor agent from
among the Lenders. Upon the acceptance of its appointment as successor
agent hereunder, such successor agent shall succeed to all the rights,
powers and duties of the retiring Agent and the term "Agent" shall mean
such successor agent and the retiring Agent's appointment, powers and
duties as Agent shall be terminated. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article X and
Sections 11.04 and 11.05 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the
date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become
effective and the Lenders shall perform all of the duties of the Agent
hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. Notwithstanding the foregoing,
however, BofA may not be removed as the Agent at the request of the
Required Lenders unless BofA shall also simultaneously be replaced as an
"Issuer" (if any letters of credit Issued by BofA are then outstanding)
hereunder pursuant to documentation in form and substance reasonably
satisfactory to BofA.
10.10 Withholding Tax. (a) (i) If any Lender is a "foreign
corporation, partnership or trust" within the meaning of the Code and such
Lender claims exemption from, or a reduction of, U.S. withholding tax
under Sections 1441 or 1442 of the Code, such Lender agrees with and in
favor of the Agent and the Company, to deliver to the Agent and the
Company:
(A) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty, two
properly completed and executed copies of IRS Form 1001 before the
payment of any interest in the first calendar year and before the
payment of any interest in each third succeeding calendar year
during which interest may be paid under this Agreement;
(B) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it
is effectively connected with a United States trade or business of
such Lender, two properly completed and executed copies of IRS Form
4224 before the payment of any interest is due in the first taxable
year of such Lender and in each succeeding taxable year of such
Lender during which interest may be paid under this Agreement; and
(C) such other form or forms as may be required under
the Code or other laws of the United States as a condition to
exemption from, or reduction of, United States withholding tax.
Such Lender agrees to promptly notify the Agent and the Company of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(ii) If any foreign Lender claims exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", such Lender agrees with and in favor of
the Agent and the Company to deliver to the Agent and the Company a Form
W-8, or any subsequent versions thereof or successors thereto (and, if
such Lender delivers a Form W-8, a certificate representing that such
Lender is not a "bank" for purposes of Section 881(c) of the Code, is not
a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of
the Code) of the Company and is not a controlled foreign corporation
related to the Company (within the meaning of Section 864(d)(4) of the
Code)).
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form
1001 and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations of the Company to such
Lender, such Lender agrees to notify the Agent of the percentage amount in
which it is no longer the beneficial owner of Obligations of the Company
to such Lender. To the extent of such percentage amount, the Agent will
treat such Lender's IRS Form 1001 as no longer valid.
(c) If any Lender claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns,
grants a participation in, or otherwise transfers all or part of the
Obligations of the Company to such Lender, such Lender agrees to undertake
sole responsibility for complying with the withholding tax requirements
imposed by Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the
applicable withholding tax, the Agent may withhold from any interest
payment to such Lender an amount equivalent to the applicable withholding
tax after taking into account such reduction. However, if the forms or
other documentation required by subsection (a) of this Section are not
delivered to the Agent, then the Agent may withhold from any interest
payment to such Lender not providing such forms or other documentation an
amount equivalent to the applicable withholding tax imposed by Sections
1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any
Lender (because the appropriate form was not delivered or was not properly
executed, or because such Lender failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Lender shall
indemnify the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses
(including Attorney Costs). The obligation of the Lenders under this
subsection shall survive the payment of all Obligations and the
resignation or replacement of the Agent.
10.11 Collateral Matters. (a) The Agent is authorized on
behalf of all the Lenders, without the necessity of any notice to or
further consent from the Lenders, from time to time to take any action
with respect to any Collateral or the Collateral Documents which may be
necessary to perfect and maintain perfected the security interest in and
Liens upon the Collateral granted pursuant to the Collateral Documents.
(b) The Lenders irrevocably authorize the Agent, at its
option and in its discretion, to release any Lien granted to or held by
the Agent upon any Collateral (i) upon termination of the Commitments and
payment in full of all Loans and all other Obligations known to the Agent
and payable under this Agreement or any other Loan Document;
(ii) constituting property sold or to be sold or disposed of as part of or
in connection with any disposition permitted hereunder; (iii) constituting
property in which the Company or any Subsidiary owned no interest at the
time the Lien was granted or at any time thereafter; (iv) constituting
property leased to the Company or any Subsidiary under a lease which has
expired or been terminated in a transaction permitted under this Agreement
or is about to expire and which has not been, and is not intended by the
Company or such Subsidiary to be, renewed or extended; (v) consisting of
an instrument evidencing Indebtedness or other debt instrument, if the
indebtedness evidenced thereby has been paid in full; or (vi) if approved,
authorized or ratified in writing by the Required Lenders or all the
Lenders, as the case may be, as provided in subsection 11.01(f). Upon
request by the Agent at any time, the Lenders will confirm in writing the
Agent's authority to release particular types or items of Collateral
pursuant to this subsection 10.11(b), provided that the absence of any
such confirmation for whatever reason shall not affect the Agent's rights
under this Section 10.11.
(c) Each Lender agrees with and in favor of each other (which
agreement shall not be for the benefit of the Company or any Subsidiary)
that the Company's obligation to such Lender under this Agreement and the
other Loan Documents is not and shall not be secured by any real property
collateral now or hereafter acquired by such Lender other than the real
property described in the Mortgages.
(c) While an Event of Default has occurred and is continuing,
the Agent shall deliver a "Payment Blockage Notice" (as defined in the
Senior Subordinated Indenture) to the Trustee under the Senior
Subordinated Indenture at the direction or with the consent of the
Required Lenders.
ARTICLE XI
MISCELLANEOUS
11.01 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent
with respect to any departure by the Company or any applicable Subsidiary
therefrom, shall be effective unless the same shall be in writing and
signed by the Required Lenders (or by the Agent at the written request of
the Required Lenders) and the Company and acknowledged by the Agent, and
then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however,
that no such waiver, amendment, or consent shall, unless in writing and
signed by all the Lenders and the Company and acknowledged by the Agent,
do any of the following:
(a) increase or extend the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to Section 9.02);
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other
Loan Document including without limitation any mandatory prepayment
required pursuant to subsection 2.07(b);
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or (subject to clause (iii) below) any fees
or other amounts payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the
Lenders or any of them to take any action hereunder or reduce the
percentage specified in the definition of "Required Lenders" or, without
the consent of each Revolving Lender, "Required Revolving Lenders"; or
(e) amend this Section, or Section 2.16, or any provision
herein providing for consent or other action by all Lenders;
(f) discharge any Guarantor, or release all or any material
portion of the Collateral except as otherwise may be provided in the
Collateral Documents or except where the consent of the Required Lenders
only is specifically provided for;
and, provided further, that (i) no amendment, waiver or consent shall,
unless in writing and signed by the Issuer in addition to the Required
Lenders or all the Lenders, as the case may be, affect the rights or
duties of the Issuer under this Agreement or any L/C-Related Document
relating to any Letter of Credit Issued or to be Issued by it, (ii) no
amendment, waiver or consent shall, unless in writing and signed by the
Agent in addition to the Required Lenders or all the Lenders, as the case
may be, affect the rights or duties of the Agent under this Agreement or
any other Loan Document, (iii) no amendment, waiver or consent shall,
unless in writing and signed by the Swing Line Lender in addition to the
Required Lenders or all the Lenders, as the case may be, affect the rights
or duties of the Swing Line Lender under this Agreement or any other Loan
Document, (iv) without limiting clauses (a) through (f) above, no
amendment, waiver or consent shall, unless signed by Lenders holding a
majority of a particular Loan (determined by reference to outstanding
Commitments or, if no Commitments are then outstanding, outstanding
principal amount), affect the rights of such Lenders to receive or defer
payment in respect of such Loan, and (v) the Fee Letter may be amended, or
rights or privileges thereunder waived, in a writing executed by the
parties thereto.
11.02 Notices. (a) All notices, requests, consents, approvals,
waivers and other communications shall be in writing (including, unless
the context expressly otherwise provides, by facsimile transmission,
provided that any matter transmitted by the Company by facsimile (i) shall
be immediately confirmed by a telephone call to the recipient at the
number specified on Schedule 11.02, and (ii) shall be followed promptly by
delivery of a hard copy original thereof) and mailed, faxed or delivered,
to the address or facsimile number specified for notices on Schedule
11.02; or, as directed to the Company or the Agent, to such other address
as shall be designated by such party in a written notice to the other
parties, and as directed to any other party, at such other address as
shall be designated by such party in a written notice to the Company and
the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered
for overnight (next-day) delivery, or transmitted in legible form by
facsimile machine, respectively, or if mailed or delivered, upon delivery;
except that notices pursuant to Article II, III or X to the Agent shall
not be effective until actually received by the Agent, and notices
pursuant to Article III to any Issuer shall not be effective until
actually received by such Issuer at the address specified on Schedule
11.02.
(c) Any agreement of the Agent and the Lenders herein to
receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Company. The Agent and the Lenders
shall be entitled to rely on the authority of any Person identifying
himself or herself as, and reasonably appearing to be, a Person authorized
by the Company to give such notice and the Agent and the Lenders shall not
have any liability to the Company or other Person on account of any action
taken or not taken by the Agent or the Lenders in good faith in reliance
upon such telephonic or facsimile notice. The obligation of the Company
to repay the Loans and L/C Obligations shall not be affected in any way or
to any extent by any failure by the Agent and the Lenders to receive
written confirmation of any telephonic or facsimile notice or the receipt
by the Agent and the Lenders of a confirmation which is at variance with
the terms understood by the Agent and the Lenders to be contained in the
telephonic or facsimile notice.
11.03 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Agent or any Lender, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
11.04 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (including in its capacity as Agent and
an Issuer) and the Arranger within five Business Days after demand
(subject to subsection 5.01(e)) for all costs and expenses incurred by
BofA (including in its capacity as Agent and Issuer) and the Arranger in
connection with the development, preparation, delivery, administration,
syndication and execution of, and any amendment, supplement, waiver or
modification to (in each case, whether or not consummated), this
Agreement, any Loan Document and any other documents prepared in
connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including reasonable Attorney Costs
incurred by BofA (including in its capacity as Agent and an Issuer) and
the Arranger with respect thereto;
(b) pay or reimburse the Agent, the Arranger and each Lender
within five Business Days after demand (subject to subsection 5.01(e)) for
all costs and expenses (including Attorney Costs) incurred by them in
connection with the enforcement, attempted enforcement, or preservation of
any rights or remedies under this Agreement or any other Loan Document
during the existence of an Event of Default or after acceleration of the
Loans (including in connection with any "workout" or restructuring
regarding the Loans, and including in any Insolvency Proceeding or
appellate proceeding); and
(c) pay or reimburse BofA (including in its capacity as
Agent) within five Business Days after demand (subject to subsection
5.01(e)) for all reasonable appraisal (including the allocated cost of
internal appraisal services), audit, environmental inspection and review
(including the allocated cost of such internal services), search and
filing costs, fees and expenses, incurred or sustained by BofA (including
in its capacity as Agent) in connection with the matters referred to under
subsections (a) and (b) of this Section.
11.05 Company Indemnification. (a) The Company shall indemnify,
defend and hold the Agent-Related Persons, and each Lender and each of its
respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements
(including Attorney Costs) of any kind or nature whatsoever which may at
any time (including at any time following repayment of the Loans, the
termination of the Letters of Credit and the termination, resignation or
replacement of the Agent or replacement of any Lender or assignment by any
Lender of its Loans or Commitments) be imposed on, incurred by or
asserted against any Indemnified Person arising out of this Agreement or
any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person
under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including any Insolvency
Proceeding or appellate proceeding) related to or arising out of this
Agreement or the Loans or Letters of Credit or the use of the proceeds
thereof or related to any Offshore Currency transactions entered into in
connection herewith, whether or not any Indemnified Person is a party
thereto (all the foregoing, collectively, the "Indemnified Liabilities");
provided, that the Company shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities resulting from
(i) the gross negligence or willful misconduct of such Indemnified Person
or (ii) any proceeding initiated by the Agent against any Lender (except
to the extent arising from a breach by such Lender of its obligations
hereunder) or by any Lender against the Agent or any other Lender (except
to the extent arising from a breach by the Agent or such Lender, as the
case may be, of its obligations hereunder). The agreements in this Section
shall survive payment of all other Obligations.
(b)(i) The Company shall indemnify, defend and hold harmless each
Indemnified Person, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, charges,
expenses or disbursements (including Attorney Costs and the allocated cost
of internal environmental audit or review services), which may be incurred
by or asserted against such Indemnified Person in connection with or
arising out of any pending or threatened investigation, litigation or
proceeding, or any action taken by any Person, with respect to any
Environmental Claim arising out of or related to any property, whether or
not subject to a Mortgage in favor of the Agent or any Lender, or arising
out of or related to any operations of the Company or any Subsidiary. No
action taken by legal counsel chosen by the Agent or any Lender in
defending against any such investigation, litigation or proceeding or
requested remedial, removal or response action shall vitiate or any way
impair the Company's obligation and duty hereunder to indemnify and hold
harmless the Agent and each Lender.
(ii) In no event shall any site visit, observation, or testing
by the Agent or any Lender (or any contractee of the Agent or any Lender)
be deemed a representation or warranty that Hazardous Materials are or are
not present in, on, or under, the site, or that there has been or shall be
compliance with any Environmental Law. Neither the Company nor any other
Person is entitled to rely on any site visit, observation, or testing by
the Agent or any Lender. Neither the Agent nor any Lender owes any duty
of care to protect the Company or any other Person against, or to inform
the Company or any other party of, any Hazardous Materials or any other
adverse condition affecting any site or property. The Agent or any Lender
may, at its discretion, disclose to the Company or any other Person any
report or findings made as a result of, or in connection with, any site
visit, observation, or testing by the Agent or any Lender. The Company
understands and agrees that the Agent and the Lenders make no warranty or
representation to the Company or any other Person regarding the truth,
accuracy or completeness of any such report or findings that may be
disclosed. The Company also understands that, depending upon the results
of any site visit, observation or testing by the Agent or any Lender and
disclosed to the Company, the Company may have a legal obligation to
notify one or more environmental agencies of the results and that such
reporting requirements are site-specific and are to be evaluated by the
Company without advice or assistance from the Agent or any Lender.
(c) Survival; Defense. The obligations in this Section shall
survive payment of all other Obligations. At the election of any
Indemnified Person, the Company shall defend such Indemnified Person using
legal counsel satisfactory to such Indemnified Person in such Person's
sole discretion, at the sole cost and expense of the Company. All amounts
owing under this Section shall be paid within 30 days after demand.
11.06 Marshalling; Payments Set Aside. Neither the Agent nor the
Lenders shall be under any obligation to marshall any assets in favor of
the Company or any other Person or against or in payment of any or all of
the Obligations. To the extent that the Company makes a payment to the
Agent or the Lenders, or the Agent or the Lenders exercise their right of
set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent or such Lender in its discretion) to be repaid
to a trustee, receiver or any other party, in connection with any
Insolvency Proceeding or otherwise, then (a) to the extent of such
recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Agent upon demand its pro rata
share of any amount so recovered from or repaid by the Agent.
11.07 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, except that the Company may not
assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of the Agent and each Lender.
11.08 Assignments, Participations, etc. (a) Any Lender may, with
the written consent of the Company at all times other than during the
existence of an Event of Default and the Agent, the Swing Line Lender and,
in respect of assignments of Revolving Loans or a Revolving Loan
Commitment, each Issuer with an outstanding Letter of Credit, which
consents shall not be unreasonably withheld or delayed, at any time assign
and delegate to one or more Eligible Assignees (each an "Assignee") all,
or any part of all, of the Loans, the Commitments, the L/C Obligations and
the other rights and obligations of such Lender hereunder, in a minimum
amount of $5,000,000 or, if less, the total amount of such Lender's
outstanding Loans and/or Commitments (provided that (x) no written consent
of the Company, the Agent, the Swing Line Lender or any Issuer shall be
required in connection with any assignment and delegation by a Lender to
an Eligible Assignee that is an Affiliate of such Lender or any Approved
Fund and (y) no consent of the Swing Line Lender or any Issuer shall be
required in respect of any assignment and delegation consisting solely of
Term Loans); provided, however, that the Company and the Agent may
continue to deal solely and directly with such Lender in connection with
the interest so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the
Company and the Agent by such Lender and the Assignee; (ii) such Lender
and its Assignee shall have delivered to the Company and the Agent an
Assignment and Acceptance in the form of Exhibit D ("Assignment and
Acceptance") together with any Note or Notes subject to such assignment
and (iii) the assignor Lender or Assignee has paid to the Agent a
processing fee in the amount of $3,500; provided, that in the case of
contemporaneous assignments by a Lender to more than one fund managed by
the same investment advisor, only a single fee of $3,500 shall be payable
for all such contemporaneous assignments.
(b) From and after the date that the Agent notifies the
assignor Lender that it has received (and, if required, provided its
consent with respect to) an executed Assignment and Acceptance and payment
of the above-referenced processing fee, (i) the Assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder
(including without limitation any obligations under Section 10.10) have
been assigned to it pursuant to such Assignment and Acceptance, shall have
the rights and obligations of a Lender under the Loan Documents, and (ii)
the assignor Lender shall, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents.
(c) Within five Business Days after its receipt of notice by
the Agent that it has received an executed Assignment and Acceptance and
payment of the processing fee, (and, if required, provided that it
consents to such assignment in accordance with subsection 11.08(a)), the
Company shall execute and deliver to the Agent new Notes evidencing such
Assignee's assigned Loans and Commitment and, if the assignor Lender has
retained a portion of its Loans and its Commitment, replacement Notes in
the principal amount of the Loans retained by the assignor Lender (such
Notes to be in exchange for, but not in payment of, the Notes held by such
Lender). Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance, this Agreement shall be
deemed to be amended to the extent, but only to the extent, necessary to
reflect the addition of the Assignee and the resulting adjustment of the
Commitments arising therefrom. The Commitment allocated to each Assignee
shall reduce such Commitments of the assigning Lender pro tanto.
(d) The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names
and addresses of the Lenders and the Commitments of, and principal amount
of the Loans owing to, each Lender from time to time. The entries in such
register shall be conclusive, in the absence of manifest error, and the
Company, the Agent and the Lenders shall treat each person whose name is
recorded in such register as the owner of the Commitments and the Loans
recorded therein for all purposes of this Agreement. The register shall
be available for inspection by the Company, any Lender and their
representatives, at any reasonable time and from time to time upon
reasonable prior notice.
(e) Any Lender may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Company (a "Participant")
participating interests in any Loans, the Commitment of that Lender and
the other interests of that Lender (the "originating Lender") hereunder
and under the other Loan Documents; provided, however, that (i) the
originating Lender's obligations under this Agreement shall remain
unchanged, (ii) the originating Lender shall remain solely responsible for
the performance of such obligations, (iii) the Company, each Issuer and
the Agent shall continue to deal solely and directly with the originating
Lender in connection with the originating Lender's rights and obligations
under this Agreement and the other Loan Documents, and (iv) no Lender
shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment to, or any consent or
waiver with respect to, this Agreement or any other Loan Document, except
to the extent such amendment, consent or waiver would require unanimous
consent of the Lenders as described in clause (a) (but only in respect of
any increase of any Commitment of any Originating Lender), (b) or (c) of
the first proviso to Section 11.01. In the case of any such participation,
the Participant shall be entitled to the benefit of Sections 4.01, 4.03
and 11.05 as though it were also a Lender hereunder, and if amounts
outstanding under this Agreement 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 Participant shall be deemed to have the right of
set-off in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement.
(f) Notwithstanding any other provision in this Agreement,
(i) any Lender may at any time create a security interest in, or pledge,
all or any portion of its rights under and interest in this Agreement and
the Notes held by it in favor of any Federal Reserve Bank in accordance
with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR Section
203.14, and such Federal Reserve Bank may enforce such pledge or security
interest in any manner permitted under applicable law and (ii) any Lender
that is a fund that invests in bank loans may, without the consent of the
Agent or the Company, pledge all or any portion of its rights under and
interest in this Agreement to any trustee or to any other representative
of holders of obligations owed or securities issued by such fund as
security for such obligations or securities; provided, that any transfer
to any Person upon the enforcement of such pledge or security interest may
only be made subject to Section 11.08.
11.09 Confidentiality. Each Lender agrees to take and to cause
its Affiliates to take normal and reasonable precautions and exercise due
care to maintain the confidentiality of all information provided to it by
the Company or any Subsidiary, or by the Agent on the Company's or such
Subsidiary's behalf, under this Agreement or any other Loan Document, and
neither it nor any of its Affiliates shall use any such information other
than in connection with or in enforcement of this Agreement and the other
Loan Documents or in connection with other business now or hereafter
existing or contemplated with the Company or any Subsidiary; except to the
extent such information (i) was or becomes generally available to the
public other than as a result of disclosure by the Lender or its
Affiliates, or (ii) was or becomes available on a non-confidential basis
from a source other than the Company, provided that such source is not
bound by a confidentiality agreement with the Company known to the Lender;
provided, however, that any Lender may disclose such information (A) at
the request or pursuant to any requirement of any Governmental Authority
to which the Lender is subject or in connection with an examination of
such Lender by any such authority; (B) pursuant to subpoena or other court
process; (C) when required to do so in accordance with the provisions of
any applicable Requirement of Law; (D) to the extent reasonably required
in connection with any litigation or proceeding involving the Company to
which the Agent, any Lender or their respective Affiliates may be party;
(E) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document; (F) to such
Lender's independent auditors and other professional advisors; (G) to any
Participant or Assignee, actual or potential, provided that such Person
agrees in writing to keep such information confidential to the same extent
required of the Lenders hereunder; (H) as to any Lender or its Affiliate,
as expressly permitted under the terms of any other document or agreement
regarding confidentiality to which the Company or any Subsidiary is party
or is deemed party with such Lender or such Affiliate; (I) to its
Affiliates, provided that such Person is advised of the confidentiality
requirements set forth herein; and (J) to the National Association of
Insurance Commissioners or any similar organization or any nationally
recognized rating agency that requires access to information about such
Lender's investment portfolio in connection with ratings issued with
respect to such Lender.
11.10 Set-off. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have
been accelerated, each Lender is authorized at any time and from time to
time, without prior notice to the Company, any such notice being waived by
the Company to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or
final) at any time held by, and other indebtedness at any time owing by,
such Lender to or for the credit or the account of the Company against any
and all Obligations owing to such Lender, now or hereafter existing,
irrespective of whether or not the Agent or such Lender shall have made
demand under this Agreement or any Loan Document and although such
Obligations may be contingent or unmatured. Each Lender agrees promptly
to notify the Company and the Agent after any such set-off and application
made by such Lender; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application.
11.11 Automatic Debits of Fees. With respect to any commitment
fee, arrangement fee, letter of credit fee or other fee, or any other cost
or expense (including Attorney Costs) due and payable to the Agent, any
Issuer, BofA or the Arranger under the Loan Documents, the Company hereby
irrevocably authorizes BofA to debit any deposit account of the Company
with BofA in an amount such that the aggregate amount debited from all
such deposit accounts does not exceed such fee or other cost or expense;
provided, that so long as no Event of Default has occurred and is
continuing, BofA has given notice to the Company thereof not later than
9:00 a.m. (Chicago time) on the date of such debit. If there are
insufficient funds in such deposit accounts to cover the amount of the fee
or other cost or expense then due, such debits will be reversed so as not
to create an overdraft (in whole or in part, in BofA's sole discretion)
and such amount not debited shall be deemed to be unpaid. No such debit
under this Section shall be deemed a set-off.
11.12 Notification of Addresses, Lending Offices, Etc. Each
Lender shall notify the Agent in writing of any changes in the address to
which notices to the Lender should be directed, of addresses of any
Lending Office, of payment instructions in respect of all payments to be
made to it hereunder and of such other administrative information as the
Agent shall reasonably request.
11.13 Counterparts. This Agreement may be executed in any number
of separate counterparts, each of which, when so executed, shall be deemed
an original, and all of said counterparts taken together shall be deemed
to constitute but one and the same instrument.
11.14 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required
hereunder shall not in any way affect or impair the legality or
enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
11.15 No Third Parties Benefited. This Agreement is made and
entered into for the sole protection and legal benefit of the Company, the
Lenders, the Agent and the Agent-Related Persons, and their permitted
successors and assigns, and no other Person shall be a direct or indirect
legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan
Documents.
11.16 Governing Law and Jurisdiction. (a) THIS AGREEMENT AND THE
NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAW OF THE STATE OF ILLINOIS (WITHOUT REGARD TO CONFLICTS OF LAW
PROVISIONS THEREOF); PROVIDED THAT THE COMPANY, THE AGENT AND THE LENDERS
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF
ILLINOIS, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE
COMPANY, THE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF
THE COMPANY, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING
OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE COMPANY, THE AGENT AND THE
LENDERS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY ILLINOIS LAW.
11.17 WAIVER OF JURY TRIAL. THE COMPANY, THE LENDERS AND THE
AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY
TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-
RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE LENDERS AND THE AGENT
EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS.
11.18 Judgment. If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder or under any other
Loan Document in one currency into another currency, the rate of exchange
used shall be that at which in accordance with normal banking procedures
the Agent could purchase the first currency with such other currency on
the Business Day preceding that on which final judgment is given. The
obligation of the Company in respect of any such sum due from it to the
Agent or any Lender hereunder or under the other Loan Documents shall,
notwithstanding any judgment in a currency (the "Judgment Currency") other
than that in which such sum is denominated in accordance with the
applicable provisions of this Agreement (the "Agreement Currency"), be
discharged only to the extent that on the Business Day following receipt
by the Agent or such Lender of any sum adjudged to be so due in the
Judgment Currency, the Agent or such Lender may in accordance with normal
banking procedures purchase the Agreement Currency with the Judgment
Currency. If the amount of the Agreement Currency so purchased is less
than the sum originally due to the Agent or such Lender in the Agreement
Currency, the Company agrees, as a separate obligation and notwithstanding
any such judgment, to indemnify the Agent or such Lender or the Person to
whom such obligation was owing against such loss. If the amount of the
Agreement Currency so purchased is greater than the sum originally due to
the Agent or such Lender in such currency, the Agent or such Lender agrees
to return the amount of any excess to the Company (or to any other Person
who may be entitled thereto under applicable law).
11.19 Entire Agreement. This Agreement, together with the other
Loan Documents, embodies the entire agreement and understanding among the
Company, the Lenders and the Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.
[signature pages follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered in Chicago, Illinois by their proper and
duly authorized officers as of the day and year first above written.
OSHKOSH TRUCK CORPORATION
By: /s/ Charles L. Szews
Charles L. Szews
Title: Executive Vice President/
Chief Financial Officer
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION,
as Agent
By: /s/ David A. Johanson
David A. Johanson
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as a Lender and as Swing Line
Lender
By: /s/ Ron A. Benishay
Ron A. Benishay
Title: Vice President
ACM CREDIT OPPORTUNITIES MASTER FUND
By: Alliance Capital Management L.P., its
Investment Advisor
By: Alliance Capital Management
Corporation, its General Partner
By: /s/
Title: Vice President
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ Patricia W. Wilson
Patricia W. Wilson
By: /s/ Daniel C. Leimbach
Daniel C. Leimbach
Its Authorized Signatories
ARCHIMEDES FUNDING, L.L.C.
By: ING Capital Advisors, Inc., as
Collateral Manager
By: /s/ Kathleen A. Lenarcic
Kathleen A. Lenarcic
Title: Vice President & Portfolio Manager
THE BANK OF NEW YORK
By: /s/
Title: Assistant Vice President
BANK OF SCOTLAND
By: /s/ Joseph Fratus
Joseph Fratus
Title: Assistant Vice President
BANK ONE, WISCONSIN
By: /s/
Title: Vice President
BANQUE PARIBAS
By: /s/ Brian F. Hewett
Brian F. Hewett
Title: Vice President
By: /s/ Nicholas C. Mast
Nicholas C. Mast
Title: Regional General Manager
COMERICA BANK
By: /s/ Mark B. Grover
Mark B. Grover
Title: Vice President
CREDIT AGRICOLE INDOSUEZ
By: /s/ Francoise Berthelot
Francoise Berthelot
Title: Vice President
By: /s/
Title: First Vice President
DELANO COMPANY
By: Pacific Investment Management Company,
as its Investment Advisor
By: /s/ Raymond Kennedy
Title: Vice President
FIRST BANK NATIONAL ASSOCIATION
By: /s/
Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ Glenn F. Edwards
Glenn F. Edwards
Title: Senior Vice President
FIRSTAR BANK MILWAUKEE, N.A.
By: /s/
Title: Vice President
THE FUJI BANK, LIMITED
By: /s/ Peter L. Chinnici
Peter L. Chinnici
Title: Joint General Manager
HARRIS TRUST AND SAVINGS BANK
By: /s/
Title: Vice President
JACKSON NATIONAL LIFE INSURANCE COMPANY
By: PPM America, Inc., as its attorney in
fact, on behalf of Jackson National
Life Insurance Company
By: /s/ William T. Considine
William T. Considine
Title: Managing Director
LASALLE NATIONAL BANK
By: /s/
Title: Senior Vice President
MASSACHUSETTS MUTUAL LIFE INSURANCE CO.
By: /s/
Title: Managing Director
MASSMUTUAL HIGH YIELD PARTNERS LLC
By: HYP Management, Inc., as Managing
Member
By: /s/ Mary Ann McCarthy
Mary Ann McCarthy
Title: Managing Director
M&I MARSHALL & ILSLEY BANK
By: /s/
Title: Senior Vice President
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ John R. Dingler
John R. Dingler
Title: Director
NATIONSBANK, N.A.
By: /s/
Title: Vice President
THE NORTHERN TRUST COMPANY
By: /s/
Title: Vice President
OCTAGON CREDIT INVESTORS LOAN PORTFOLIO
(a Unit of The Chase Manhattan Bank)
By: /s/ Richard W. Stewart
Richard W. Stewart
Title: Managing Director
PILGRIM AMERICA PRIME RATE TRUST
By: Pilgrim America Investments, Inc., as
its Investment Manager
By: /s/
Title: Assistant Portfolio Manager
RELIASTAR LIFE INSURANCE COMPANY
By: ING Capital Advisors, Inc., as
Investment Advisor
By: /s/ Kathleen A. Lenarcic
Kathleen A. Lenarcic
Title: Vice President & Portfolio Manager
OSHKOSH TRUCK CORPORATION, as Issuer
and
THE SUBSIDIARY GUARANTORS (defined herein)
and
FIRSTAR TRUST COMPANY, as Trustee
________________________
INDENTURE
Dated as of February 26, 1998
up to $150,000,000
8-3/4% SENIOR SUBORDINATED NOTES DUE 2008
<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1) 7.10 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.10
(b) 7.03; 7.10
(c) N.A.
311 (a) 7.11
(b) 7.11
(c) N.A.
312 (a) 2.05
(b) 13.03
(c) 13.03
313 (a) 7.06
(b)(1) 7.06
(b)(2) 7.06; 7.07
(c) 7.06;13.02
(d) 7.06
314 (a) 4.03;13.05
(b) N.A.
(c)(1) 13.04
(c)(2) 13.04
(c)(3) N.A.
(d) N.A.
(e) 13.05
(f) N.A.
315 (a) 7.01
(b) 7.05,13.02
(c) 7.01
(d) 7.01
(e) 6.11
316 (a)(last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
(c) 2.13
317 (a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318 (a) 13.01
(b) N.A.
(c) 13.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . 1
SECTION 1.01. DEFINITIONS. . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. OTHER DEFINITIONS. . . . . . . . . . . . . . . . . 18
SECTION 1.03. TIA DEFINITIONS. . . . . . . . . . . . . . . . . . 19
SECTION 1.04. RULES OF CONSTRUCTION. . . . . . . . . . . . . . . 19
ARTICLE 2. THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.01.FORM AND DATING. . . . . . . . . . . . . . . . . . 20
SECTION 2.02. EXECUTION AND AUTHENTICATION. . . . . . . . . . . 20
SECTION 2.03. REGISTRAR AND PAYING AGENT. . . . . . . . . . . . 21
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. . . . . . . . 21
SECTION 2.05. HOLDER LISTS. . . . . . . . . . . . . . . . . . . . 21
SECTION 2.06. TRANSFER AND EXCHANGE. . . . . . . . . . . . . . . 22
SECTION 2.07. REPLACEMENT NOTES . . . . . . . . . . . . . . . . 34
SECTION 2.08. OUTSTANDING NOTES. . . . . . . . . . . . . . . . . 34
SECTION 2.09. TREASURY NOTES. . . . . . . . . . . . . . . . . . 34
SECTION 2.10. TEMPORARY NOTES . . . . . . . . . . . . . . . . . 35
SECTION 2.11. CANCELLATION. . . . . . . . . . . . . . . . . . . 35
SECTION 2.12. DEFAULTED INTEREST. . . . . . . . . . . . . . . . 35
ARTICLE 3. REDEMPTION AND PREPAYMENT . . . . . . . . . . . . . . . . . 35
SECTION 3.01. NOTICES TO TRUSTEE . . . . . . . . . . . . . . . . 35
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED. . . . . . . . . 36
SECTION 3.03. NOTICE OF REDEMPTION . . . . . . . . . . . . . . . 36
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION . . . . . . . . . . 37
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE . . . . . . . . . . . 37
SECTION 3.06. NOTES REDEEMED IN PART. . . . . . . . . . . . . . 37
SECTION 3.07. OPTIONAL REDEMPTION. . . . . . . . . . . . . . . . 37
SECTION 3.08. MANDATORY REDEMPTION. . . . . . . . . . . . . . . 38
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS
PROCEEDS. . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 4. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.01. PAYMENT OF NOTES. . . . . . . . . . . . . . . . . 40
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . 40
SECTION 4.03. REPORTS. . . . . . . . . . . . . . . . . . . . . . 41
SECTION 4.04. COMPLIANCE CERTIFICATE. . . . . . . . . . . . . . 41
SECTION 4.05. TAXES. . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 4.06. STAY, EXTENSION AND USURY LAWS. . . . . . . . . . 42
SECTION 4.07. RESTRICTED PAYMENTS. . . . . . . . . . . . . . . . 42
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES. . . . . . . . . . . . . . 45
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
PREFERRED STOCK. . . . . . . . . . . . . . . . . . 46
SECTION 4.10. ASSET SALES . . . . . . . . . . . . . . . . . . . 49
SECTION 4.11. TRANSACTIONS WITH AFFILIATES. . . . . 50
SECTION 4.12. LIENS. . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 4.13. CORPORATE EXISTENCE. . . . . . . . . . . . . . . . 51
SECTION 4.14. LINE OF BUSINESS. . . . . . . . . . . . . . . . . 51
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL . . . . 51
SECTION 4.16. NO SENIOR SUBORDINATED DEBT . . . . . . . . . . . . 52
SECTION 4.17. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS . . . 53
SECTION 4.18. LIMITATION ON ISSUANCES AND SALES OF EQUITY
INTERESTS IN WHOLLY OWNED RESTRICTED
SUBSIDIARIES . . . . . . . . . . . . . . . . . . . 53
SECTION 4.19. PAYMENTS FOR CONSENT . . . . . . . . . . . . . . . 53
SECTION 4.20. ADDITIONAL SUBSIDIARY GUARANTEES . . . . . . . . . 53
ARTICLE 5. SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS . . . . . 54
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED . . . . . . . . 54
ARTICLE 6. DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . 55
SECTION 6.01. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . 55
SECTION 6.02. ACCELERATION . . . . . . . . . . . . . . . . . . . 56
SECTION 6.03. OTHER REMEDIES . . . . . . . . . . . . . . . . . 57
SECTION 6.04. WAIVER OF PAST DEFAULTS . . . . . . . . . . . . . 57
SECTION 6.05. CONTROL BY MAJORITY . . . . . . . . . . . . . . . 58
SECTION 6.06. LIMITATION ON SUITS . . . . . . . . . . . . . . . 58
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT . 58
SECTION 6.08. COLLECTION SUIT BY TRUSTEE . . . . . . . . . . . . 59
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM . . . . . . . . . 59
SECTION 6.10. PRIORITIES . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.11. UNDERTAKING FOR COSTS . . . . . . . . . . . . . . 60
ARTICLE 7. TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 7.01. DUTIES OF TRUSTEE . . . . . . . . . . . . . . . . 60
SECTION 7.02. RIGHTS OF TRUSTEE . . . . . . . . . . . . . . . . 61
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE . . . . . . . . . . . 61
SECTION 7.04. TRUSTEE'S DISCLAIMER . . . . . . . . . . . . . . . 62
SECTION 7.05. NOTICE OF DEFAULTS . . . . . . . . . . . . . . . . 62
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES . . . . 62
SECTION 7.07. COMPENSATION AND INDEMNITY . . . . . . . . . . . . 62
SECTION 7.08. REPLACEMENT OF TRUSTEE . . . . . . . . . . . . . . 63
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC . . . . . . . . . 64
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION . . . . . . . . . . . 64
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE 8. .LEGAL DEFEASANCE AND COVENANT DEFEASANCE . . . . . . . . . 65
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE . . . . . . . . . . 65
SECTION 8.03. COVENANT DEFEASANCE . . . . . . . . . . . . . . . . 65
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE . . . . 66
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS . . . 67
SECTION 8.06. REPAYMENT TO COMPANY . . . . . . . . . . . . . . . 67
SECTION 8.07. REINSTATEMENT . . . . . . . . . . . . . . . . . . . 68
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER . . . . . . . . . . . . . . 68
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES . . . . . . . . 68
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES . . . . . . . . . 69
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT . . . . . . . . 70
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS . . . . . . . . . 70
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES . . . . . . . . . 71
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC . . . . . . . . . . 71
ARTICLE 10. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 10.01. AGREEMENT TO SUBORDINATE . . . . . . . . . . . . . 71
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY . . . . . . . 71
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT . . . . . . . 72
SECTION 10.04. ACCELERATION OF SECURITIES . . . . . . . . . . . . 73
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER . . . . . . . 73
SECTION 10.06. NOTICE BY COMPANY . . . . . . . . . . . . . . . . 73
SECTION 10.07. SUBROGATION . . . . . . . . . . . . . . . . . . . 73
SECTION 10.08. RELATIVE RIGHTS . . . . . . . . . . . . . . . . . 74
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY . . . 74
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE . . . . . 74
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT . . . . . . . . 75
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION . . . . . . 75
SECTION 10.13. AMENDMENTS . . . . . . . . . . . . . . . . . . . . 75
ARTICLE 11. SUBSIDIARY GUARANTEES . . . . . . . . . . . . . . . . . . . 75
SECTION 11.01. GUARANTEE . . . . . . . . . . . . . . . . . . . . 75
SECTION 11.02. SUBORDINATION OF SUBSIDIARY GUARANTEE . . . . . . 76
SECTION 11.03. LIMITATION ON SUBSIDIARY GUARANTOR LIABILITY . . 76
SECTION 11.04. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE . . 77
SECTION 11.05. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC.,
ON CERTAIN TERMS . . . . . . . . . . . . . . . . 77
SECTION 11.06. RELEASES FOLLOWING SALE OF ASSETS . . . . . . . . 78
ARTICLE 12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 12.01. TRUST INDENTURE ACT CONTROLS . . . . . . . . . . . 79
SECTION 12.02. NOTICES . . . . . . . . . . . . . . . . . . . . . 79
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES . . . . . . . . . . . . . . . . . 80
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT . . . . . . . . . . . . . . . . . . . . 80
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR
OPINION . . . . . . . . . . . . . . . . . . . . . 81
SECTION 12.06. RULES BY TRUSTEE AND AGENTS . . . . . . . . . . . 81
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS . . . . . . . . . . . . 81
SECTION 12.08. GOVERNING LAW . . . . . . . . . . . . . . . . . . 81
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER
AGREEMENTS . . . . . . . . . . . . . . . . . . . . 81
SECTION 12.10. SUCCESSORS . . . . . . . . . . . . . . . . . . . . 82
SECTION 12.11. .SEVERABILITY . . . . . . . . . . . . . . . . . . 82
SECTION 12.12. COUNTERPART ORIGINALS . . . . . . . . . . . . . . 82
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC. . . . . . . . . 82
EXHIBITS
EXHIBIT A-1 FORM OF 144A/IAI GLOBAL NOTE
EXHIBIT A-2 FORM OF REGULATION S GLOBAL NOTE
EXHIBIT B FORM OF CERTIFICATE OF TRANSFER
EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE
EXHIBIT D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL
ACCREDITED INVESTOR
EXHIBIT E FORM OF NOTATION OF SUBSIDIARY GUARANTEE
EXHIBIT F FORM OF SUPPLEMENTAL INDENTURE
<PAGE>
INDENTURE dated as of February 26, 1998 between Oshkosh
Truck Corporation, a Wisconsin corporation (the "Company"), the
Subsidiary Guarantors (as hereinafter defined) and Firstar Trust
Company, as trustee (the "Trustee").
The Company, the Subsidiary Guarantors and the Trustee
agree as follows for the benefit of each other and for the equal
and ratable benefit of the Holders of the 8-3/4% Senior Subordinated
Notes due 2008 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"144A Global Note" means a global note in the form of
Exhibit A-1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of, and
registered in the name of, the Depositary or its nominee that
will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified
Person, (i) Indebtedness of any other Person existing at the time
such other Person is merged with or into or became a Subsidiary
of such specified Person, including, without limitation,
Indebtedness incurred in connection with, or in contemplation of,
such other Person merging with or into or becoming a Subsidiary
of such specified Person and (ii) Indebtedness secured by a Lien
encumbering any assets acquired by such specified Person.
"Additional Notes" means up to $50.0 million in
aggregate principal amount of Notes (other than the Initial
Notes) issued under this Indenture in accordance with Sections
2.02 and 4.09 hereof.
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling," "controlled
by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; provided, that beneficial
ownership of 25% or more of the Voting Stock of a Person shall be
deemed to be control.
"Agent" means any Registrar, Paying Agent or
co-registrar.
"Applicable Procedures" means, with respect to any
transfer or exchange of or for beneficial interests in any Global
Note, the rules and procedures of the Depositary, Euroclear and
Cedel that apply to such transfer or exchange.
"Asset Sale" means: (i) the sale, lease, conveyance or
other disposition of any assets or rights (including, without
limitation, by way of a sale and leaseback) other than sales of
inventory in the ordinary course of business (provided that the
sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company and its
Subsidiaries taken as a whole will be governed by the provisions
of Section 4.15 hereof and/or the provisions of Section 5.01
hereof and not by the provisions of Section 4.10 hereof); and
(ii) the issue or sale by the Company or any of its Subsidiaries
of Equity Interests of any of the Company's Subsidiaries, in the
case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a
fair market value in excess of $1.5 million or (b) for net
proceeds in excess of $1.5 million. Notwithstanding the
foregoing, the following items shall not be deemed to be Asset
Sales: (i) a transfer of assets by the Company to a Wholly Owned
Restricted Subsidiary or by a Wholly Owned Restricted Subsidiary
to the Company or to another Wholly Owned Restricted Subsidiary,
(ii) an issuance of Equity Interests by a Wholly Owned Restricted
Subsidiary to the Company or to another Wholly Owned Restricted
Subsidiary, (iii) a Restricted Payment that is permitted by
Section 4.07 hereof, (iv) the sale by the Company of Equity
Interests in, or assets of, Summit Performance Systems, Inc. for
net proceeds that include promissory notes in an aggregate
principal amount of not more than $5.0 million, (v) the initial
transfers of Lease Assets from MFSI to another Leasing Subsidiary
and (vi) transfers of Lease Assets to or by a Leasing Subsidiary
in the ordinary course of business.
"Attributable Debt" in respect of a sale and leaseback
transaction means, at the time of determination, the present
value (discounted at the rate of interest implicit in such
transaction, determined in accordance with GAAP) of the
obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback
transaction (including any period for which such lease has been
extended or may, at the option of the lessor, be extended).
"Bankruptcy Law" means Title 11, U.S. Code or any
similar federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of
the Company, or any authorized committee of the Board of
Directors.
"Borrowing Base" means, as of any date, an amount equal
to the sum of (a) 85% of the face amount of all accounts
receivable owned by the Company and the Subsidiary Guarantors
that are not Foreign Subsidiaries as of such date that are not
more than 90 days past due, and (b) 65% of the book value of all
inventory owned by the Company and its Subsidiary Guarantors that
are not Foreign Subsidiaries as of such date; minus the sum of
(a) the aggregate amount of trade payables of the Company and its
Subsidiary Guarantors that are not Foreign Subsidiaries as of
such date, and (b) the aggregate outstanding Indebtedness under
any Floor Plan Financing Facility as of such date, all calculated
on a consolidated basis and in accordance with GAAP.
"Business Day" means any day other than a Legal
Holiday.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability
in respect of a capital lease that would at such time be required
to be capitalized on a balance sheet in accordance with GAAP.
"Capital Stock" means: (i) in the case of a
corporation, corporate stock; (ii) in the case of an association
or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated)
of corporate stock; (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether
general or limited) and (iv) any other interest or participation
that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing
Person.
"Cash Equivalents" means (i) United States dollars or,
solely with respect to any Foreign Subsidiary, its local currency
equivalent; (ii) securities issued or directly and fully
guaranteed or insured by the United States government or any
agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof)
having maturities of not more than six months from the date of
acquisition; (iii) certificates of deposit and eurodollar time
deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding
six months and overnight bank deposits, in each case with any
lender party to the Senior Credit Agreement or with any domestic
commercial bank having capital and surplus in excess of $500
million and a Thompson Bank Watch Rating of "B" or better; (iv)
repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (ii)
and (iii) above entered into with any financial institution
meeting the qualifications specified in clause (iii) above; (v)
commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Corporation
and in each case maturing within six months after the date of
acquisition; and (vi) money market funds at least 95% of the
assets of which constitute Cash Equivalents of the kinds
described in clauses (i) - (v) of this definition.
"Cedel" means Cedel Bank, societe anonyme.
"Certificated Note" means a certificated Note
registered in the name of the Holder thereof and issued in
accordance with Section 2.06 hereof, in the form of Exhibit A-1
hereto except that such Note shall not bear the Global Note
Legend and shall not have the "Schedule of Exchanges of Interests
in the Global Note" attached thereto.
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in
one or a series of related transactions, of all or substantially
all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any "person" (as such term is used in Section
13(d)(3) of the Exchange Act); (ii) the adoption of a plan
relating to the liquidation or dissolution of the Company; (iii)
the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is
that any "person" (as defined above), other than the Principals
and their Related Parties, becomes the "beneficial owner" (as
such term is defined in Rule 13d-3 and Rule 13d-5 under the
Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the
right to acquire, whether such right is currently exercisable or
is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 35% of the
Voting Stock of the Company (measured by voting power rather than
number of shares); or (iv) the Company consolidates with, or
merges with or into, any Person, or any Person consolidates with,
or merges with or into, the Company, in any such event pursuant
to a transaction in which any of the outstanding Voting Stock of
the Company is converted into or exchanged for cash, securities
or other property, other than any such transaction where the
Voting Stock of the Company outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock
(other than Disqualified Stock) of the surviving or transferee
Person constituting a majority of the outstanding shares of such
Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance).
"Company" means Oshkosh Truck Corporation, and any and
all successors thereto.
"Consolidated Cash Flow" means, with respect to any
Person for any period, the Consolidated Net Income of such Person
for such period plus: (i) an amount equal to any extraordinary
loss plus any net loss realized in connection with an Asset Sale
(to the extent such losses were deducted in computing such
Consolidated Net Income); plus (ii) provision for taxes based on
income or profits of such Person and its Subsidiaries for such
period, to the extent that such provision for taxes was included
in computing such Consolidated Net Income; plus (iii)
consolidated interest expense of such Person and its Subsidiaries
for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment
obligations, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to
Hedging Obligations), to the extent that any such expense was
deducted in computing such Consolidated Net Income; plus (iv)
depreciation, amortization (including amortization of goodwill
and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash
expenses (including, without limitation, LIFO charges but
excluding any such non-cash expense to the extent that it
represents an accrual of or reserve for cash expenses in any
future period or amortization of a prepaid cash expense that was
paid in a prior period) of such Person and its Subsidiaries for
such period to the extent that such depreciation, amortization
and other non-cash expenses were deducted in computing such
Consolidated Net Income; minus (v) non-cash items increasing such
Consolidated Net Income for such period (including without
limitation under any LIFO credit), in each case, on a
consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the
income or profits of, and the depreciation and amortization and
other non-cash expenses of, a Subsidiary of the referent Person
shall be added to Consolidated Net Income to compute Consolidated
Cash Flow only to the extent that a corresponding amount would be
permitted at the date of determination to be dividended or
otherwise distributed to the Company by such Subsidiary without
prior governmental approval (that has not been obtained), and
without direct or indirect restriction pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable
to that Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any
Person for any period, the aggregate of the Net Income of such
Person and its Restricted Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP; provided
that: (i) the Net Income (but not loss) of any Person that is not
a Restricted Subsidiary or that is accounted for by the equity
method of accounting shall be included only to the extent of the
amount of dividends or distributions paid in cash to the referent
Person or a Wholly Owned Subsidiary thereof that is a Subsidiary
Guarantor; (ii) the Net Income of any Restricted Subsidiary shall
be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary
of that Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been
obtained) or, directly or indirectly, by operation of the terms
of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary or its stockholders; (iii) the Net
Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition
shall be excluded; (iv) the cumulative effect of a change in
accounting principles shall be excluded; (v) the Net Income (or
loss) of any Unrestricted Subsidiary that is a Leasing Subsidiary
shall be included; provided, that such Net Income shall be so
included only to the extent of cash dividends or other cash
distributions paid by such Leasing Subsidiary during such period
to the Company or a Restricted Subsidiary; and (vi) the Net
Income (but not loss) of any Unrestricted Subsidiary (other than
a Leasing Subsidiary) shall be excluded, whether or not
distributed to the Company or one of its Restricted Subsidiaries.
MFSI shall be considered an Unrestricted Subsidiary for purposes
of this definition provided that (a) MFSI incurs no Indebtedness
other than Indebtedness of MFSI existing on the date of the
Indenture and has no Indebtedness other than Indebtedness that
would be Non-Recourse Debt but for the existence of the Letter
Agreements and (b) none of the Company or any of its Restricted
Subsidiaries have made any payment or contribution in connection
with any Letter Agreement.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 12.02 hereof or such
other address as to which the Trustee may give notice to the
Company.
"Credit Facilities" means, one or more debt facilities
(including, without limitation, the Senior Credit Agreement) or
commercial paper facilities with banks or other institutional
lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables
to such lenders or to special purpose entities formed to borrow
from such lenders against such receivables) or letters of credit,
in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time.
Indebtedness incurred under Credit Facilities in existence on the
date on which Notes are first issued and authenticated under the
Indenture shall be deemed to have been incurred on such date in
reliance on, and shall be permitted by, the exceptions provided
by clause (i) or (ii), as applicable, of the definition of
Permitted Indebtedness.
"Custodian" means the Trustee, as custodian with
respect to the Notes in global form, or any successor entity
thereto.
"Default" means any event that is or with the passage
of time or the giving of notice or both would be an Event of
Default.
"Depositary" means, with respect to the Notes issuable
or issued in whole or in part in global form, the Person
specified in Section 2.03 hereof as the Depositary with respect
to the Notes, and any and all successors thereto appointed as
depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Senior Debt" means: (i) any Indebtedness
outstanding under the Senior Credit Agreement and (ii) any other
Senior Debt permitted under the Indenture the principal amount of
which is $25 million or more and that has been designated by the
Company (with, so long as the Senior Credit Agreement is in
effect, the consent of the Representative thereunder) as
"Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by
its terms (or by the terms of any security into which it is
convertible, or for which it is exchangeable, at the option of
the holder thereof), or upon the happening of any event, matures
or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the
Holder thereof, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes mature; provided,
however, that any Capital Stock that would constitute
Disqualified Stock solely because the holders thereof have the
right to require the Company to repurchase such Capital Stock
upon the occurrence of a Change of Control or an Asset Sale shall
not constitute Disqualified Stock if the terms of such Capital
Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such
repurchase or redemption complies with Section 4.07 hereof.
"Equity Interests" means Capital Stock and all
warrants, options or other rights to acquire Capital Stock (but
excluding any debt security that is convertible into, or
exchangeable for, Capital Stock).
"Euroclear" means Morgan Guaranty Trust Company of New
York, Brussels office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Exchange Notes" means the Notes issued in the Exchange
Offer pursuant to Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the
Registration Rights Agreement.
"Exchange Offer Registration Statement" has the meaning
set forth in the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the
Company and its Subsidiaries (other than Indebtedness under the
Senior Credit Agreement) in existence on the date of the
Indenture, until such amounts are repaid.
"Fixed Charges" means, with respect to any Person for
any period, the sum, without duplication, of: (i) the
consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued (including,
without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings
(other than letters of credit posted in lieu of performance or
completion bonds), and net payments (if any) pursuant to Hedging
Obligations); and (ii) the consolidated interest of such Person
and its Restricted Subsidiaries that was capitalized during such
period; and (iii) any interest expense on Indebtedness of another
Person that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one
of its Restricted Subsidiaries (whether or not such Guarantee or
Lien is called upon); and (iv) the product of (a) all dividend
payments, whether or not in cash, on any series of preferred
stock of such Person or any of its Restricted Subsidiaries, other
than dividend payments on Equity Interests payable solely in
Equity Interests of the Company (other than Disqualified Stock)
or to the Company or a Restricted Subsidiary of the Company,
times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP. MFSI shall not be considered a
Restricted Subsidiary for purposes of this definition provided
that (a) MFSI incurs no Indebtedness other than Indebtedness of
MFSI existing on the date of the Indenture and has no
Indebtedness other than Indebtedness that would be Non-Recourse
Debt but for the existence of the Letter Agreements and (b) none
of the Company or any of its Restricted Subsidiaries have made
any payments or contribution in connection with any Letter
Agreement.
"Fixed Charge Coverage Ratio" means with respect to any
Person for any period, the ratio of the Consolidated Cash Flow of
such Person and its Restricted Subsidiaries for such period to
the Fixed Charges of such Person and its Restricted Subsidiaries
for such period. In the event that the referent Person or any of
its Restricted Subsidiaries incurs, assumes, Guarantees or
redeems any Indebtedness (other than revolving credit or floor
plan borrowings) or issues or redeems preferred stock subsequent
to the commencement of the period for which the Fixed Charge
Coverage Ratio is being calculated but prior to the date on which
the event for which the calculation of the Fixed Charge Coverage
Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to
such incurrence, assumption, Guarantee or redemption of
Indebtedness, or such issuance or redemption of preferred stock,
as if the same had occurred at the beginning of the applicable
four-quarter reference period. In addition, for purposes of
making the computation referred to above (i) acquisitions that
have been made by the Company or any of its Subsidiaries,
including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference
period or subsequent to such reference period and on or prior to
the Calculation Date shall be deemed to have occurred on the
first day of the four-quarter reference period and Consolidated
Cash Flow for such reference period shall be calculated (x)
without giving effect to clause (iii) of the proviso set forth in
the definition of Consolidated Net Income and (y) to include the
pro forma adjustments reflected in the unaudited pro forma
condensed consolidated financial statements prepared in
connection with the acquisition of McNeilus Companies, Inc. and
included in the Offering Memorandum with respect to the Notes,
and an adjustment of up to $1.0 million reflecting the difference
between $1.3 million and the actual charitable contributions made
by the Company for any four quarter period ending on or prior to
March 31, 1999 and (ii) the Consolidated Cash Flow attributable
to discontinued operations, as determined in accordance with
GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, and (iii) the Fixed Charges
attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded, but only to the
extent that the obligations giving rise to such Fixed Charges
will not be obligations of the referent Person or any of its
Restricted Subsidiaries following the Calculation Date.
"Floor Plan Financing Facility" means any facility
entered or to be entered into by the Company or any Restricted
Subsidiary pursuant to which such Person may (i) incur
Indebtedness to purchase vehicles and/or related equipment from
vendors for the prompt resale to customers in the ordinary course
of business and (ii) grant a security interest in such vehicles
and/or related equipment to secure such borrowings.
"Foreign Borrowing Base" means, as of any date, an
amount equal to the sum of (a) 85% of the face amount of all
accounts receivable owned by Restricted Subsidiaries that are
Foreign Subsidiaries as of such date that are not more than 90
days past due, and (b) 65% of the book value of all inventory
owned by Restricted Subsidiaries that are Foreign Subsidiaries as
of such date; minus the aggregate amount of trade payables of
Restricted Subsidiaries that are Foreign Subsidiaries as of such
date, all calculated on a consolidated basis and in accordance
with GAAP.
"Foreign Subsidiary" means any Subsidiary not organized
and validly existing under the laws of the United States or any
state thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of
the accounting profession, which are in effect on the date of
this Indenture.
"Global Notes" means, individually and collectively,
each of the Restricted Global Notes and the Unrestricted Global
Notes, in the form of Exhibit A hereto issued in accordance with
Section 2.01, 2.06(b)(iv), 2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in
Section 2.06(g)(ii), which is required to be placed on all Global
Notes issued under this Indenture.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America, and the
payment for which the United States pledges its full faith and
credit.
"Guarantee" means a guarantee (other than by
endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner
(including, without limitation, by way of a pledge of assets or
through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness; provided,
however, that the Letter Agreements shall not be deemed
Guarantees.
"Hedging Obligations" means, with respect to any
Person, the obligations of such Person under: (i) interest rate
swap agreements, interest rate cap agreements and interest rate
collar agreements; (ii) other agreements or arrangements designed
to protect such Person against fluctuations in interest rates;
and (iii) agreements or arrangements designed to protect such
Person against fluctuations in the value of foreign currency.
"Holder" means a Person in whose name a Note is
registered.
"IAI Global Note" means the global Note in the form of
Exhibit A-1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and
registered in the name of the Depositary or its nominee that will
be issued in a denomination equal to the outstanding principal
amount of the Notes sold to Institutional Accredited Investors.
"Indebtedness" means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in
respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the
balance deferred and unpaid of the purchase price of any property
or representing any Hedging Obligations, except any such balance
that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP, as well as
all Indebtedness of others secured by a Lien on any asset of such
Person (whether or not such Indebtedness is assumed by such
Person) and, to the extent not otherwise included, the Guarantee
by such Person of any Indebtedness of any other Person. The
amount of any Indebtedness outstanding as of any date shall be
(i) the accreted value thereof, in the case of any Indebtedness
issued with original issue discount, and (ii) the principal
amount thereof, together with any interest thereon that is more
than 30 days past due, in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or
supplemented from time to time.
"Indirect Participant" means a Person who holds a
beneficial interest in a Global Note through a Participant.
"Initial Notes" means $100,000,000 in aggregate
principal amount of Notes issued under this Indenture on the date
hereof.
"Institutional Accredited Investor" means an
institution that is an "accredited investor" as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act, who are not
also QIBs.
"Investments" means, with respect to any Person, all
investments by such Person in other Persons (including
Affiliates) in the forms of direct or indirect loans (including
guarantees of Indebtedness or other obligations), advances or
capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with
all items that are or would be classified as investments on a
balance sheet prepared in accordance with GAAP. If the Company or
any Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Subsidiary of the
Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Subsidiary of the
Company, the Company shall be deemed to have made an Investment
on the date of any such sale or disposition equal to the fair
market value of the Equity Interests of such Subsidiary not sold
or disposed of in an amount determined as provided in the final
paragraph of Section 4.07 hereof.
"Lease Assets" means, with respect to any lease, all of
the following property and interests in property whether now
existing or existing in the future or hereafter acquired or
arising: (i) all vehicles or equipment manufactured or
refurbished by the Company or any of its Subsidiaries (and truck
chassis, cement block boom trucks and similar vehicles or
equipment manufactured or refurbished by third parties) and
acquired by a Leasing Subsidiary in connection with such assets
being contemporaneously leased to a third party; (ii) all leases
and other contracts or agreements relating to the lease financing
by a customer of vehicles or equipment manufactured or
refurbished by the Company or any of its Subsidiaries; (iii) all
accounts receivable and other obligations incurred by lessees in
connection with the foregoing, no matter how evidenced; (iv) all
rights to any vehicles or equipment subject to any of the
foregoing after or in connection with creation of the foregoing,
including, without limitation, returned or repossessed goods; (v)
all reserves and credit balances with respect to any such lease
contracts or agreements or lessees; (vi) all letters of credit,
security or guarantees for any of the foregoing; (vii) all
insurance policies or reports relating to any of the foregoing;
and (viii) all books and records relating to any of the
foregoing.
"Leasing Subsidiary" means MFSI, Oshkosh/McNeilus
Financial Services, Inc., Oshkosh/McNeilus Financial Services
Partnership and any other Subsidiary (or partnership of which a
Subsidiary of the Company is a general partner) that is
designated by the Board of Directors of the Company as a Leasing
Subsidiary and that is exclusively engaged in Leasing
Transactions and activities related thereto. If at any time any
Leasing Subsidiary should engage in a transaction or activity
other than those described above, it shall thereafter cease to be
a Leasing Subsidiary for purposes of the Indenture.
"Leasing Subsidiary Undertaking" means a guarantee (i)
of indemnification obligations with respect to representations
and warranties made by a Leasing Subsidiary in connection with a
transfer of Lease Assets to a partnership that is a Leasing
Subsidiary, provided that such representations and warranties are
similar to those that would customarily be made in connection
with a transfer of assets in a lease securitization; (ii) of the
performance by a Leasing Subsidiary of its obligations as tax
matters partner or as portfolio manager of a partnership that is
a Leasing Subsidiary; or (iii) of the performance by a Leasing
Subsidiary of its obligations as a partner to a partnership that
is a Leasing Subsidiary, provided, however, that the guarantee of
obligations set forth in clause (iii) above shall not at any time
exceed the amount that the Company could then invest in a Leasing
Subsidiary pursuant to clause (f) of the definition of Permitted
Investments and, provided, further, that the guarantees set forth
in clauses (i), (ii) and (iii) above shall not include guarantees
of Indebtedness of a Leasing Subsidiary or obligations to make
loans, investments or capital contributions in or to a
partnership that is a Leasing Subsidiary.
"Leasing Transaction" means (i) the sale or other
disposition to a third party of Lease Assets or an interest
therein; (ii) the borrowing of money secured by Lease Assets; or
(iii) the sale or other disposition of Lease Assets or an
interest therein to a Leasing Subsidiary followed by a financing
transaction in connection with such sale or disposition of such
Lease Assets (whether such financing transaction is effected by
such Leasing Subsidiary or by a third party to whom such Leasing
Subsidiary sells such Lease Assets or interests therein);
provided that in each of the foregoing, the Company or its
Restricted Subsidiaries receive or have received at least 95% of
the aggregate sale price attributed to the vehicles and equipment
that underlie the Leases financed in such transaction.
"Legal Holiday" means a Saturday, a Sunday or a day on
which banking institutions in the City of New York or at a place
of payment are authorized by law, regulation or executive order
to remain closed. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall
accrue on such payment for the intervening period.
"Letter Agreement" means (i) a guarantee in place on
the date of this Indenture in an amount not to exceed $1.0
million by McNeilus Truck and Manufacturing, Inc. of obligations
of MFSI to FBS Business Finance Corporation and (ii) letter
agreements in effect on the date of this Indenture concerning the
maintenance by McNeilus Companies, Inc. of a minimum net worth of
MFSI for the benefit of the lenders to MFSI on the date of this
Indenture and related documents in favor of Navistar Financial
Corporation.
"Letter of Transmittal" means the letter of transmittal
to be prepared by the Company and sent to all Holders of the
Notes for use by such Holders in connection with the Exchange
Offer.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law (including any
conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give
a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then
owing pursuant to Section 5 of the Registration Rights Agreement.
"MFSI" means McNeilus Financial Services, Inc.
"Net Income" means, with respect to any Person, the net
income (loss) of such Person, determined in accordance with GAAP
and before any reduction in respect of preferred stock dividends,
excluding, however, (i) any gain (but not loss), together with
any related provision for taxes on such gain (but not loss),
realized in connection with (a) any Asset Sale (including,
without limitation, dispositions pursuant to sale and leaseback
transactions), or (b) the disposition of any securities by such
Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its
Restricted Subsidiaries, and (ii) any extraordinary or
nonrecurring gain (but not loss), together with any related
provision for taxes on such extraordinary or nonrecurring gain
(but not loss).
"Net Proceeds" means the aggregate cash proceeds
received by the Company or any of its Restricted Subsidiaries in
respect of any Asset Sale (including, without limitation, any
cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of the direct
costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales
commissions) and any relocation expenses incurred as a result
thereof, taxes paid or payable as a result thereof (after taking
into account any available tax credits or deductions and any tax
sharing arrangements), amounts required to be applied to the
repayment of Senior Debt secured by a Lien on the asset or assets
that were the subject of such Asset Sale and any reserve for
adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"Non-U.S. Person" means a Person who is not a U.S.
Person.
"Notes" has the meaning assigned to it in the preamble
to this Indenture.
"Non-Recourse Debt" means Indebtedness as to which
neither the Company nor any of its Restricted Subsidiaries (i)
provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness, but
excluding undertakings customary in lease securitization
transactions for the benefit of any Leasing Subsidiary and
guarantees thereof), (ii) is directly or indirectly liable (as a
guarantor or otherwise), or (iii) constitutes the lender.
"Obligations" means any principal, interest (including
interest accruing after the commencement of any bankruptcy,
reorganization, insolvency or similar proceeding relating to the
Company or any of its Subsidiaries whether or not allowed as a
claim in such proceeding), penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the
documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the
Company.
"Officer" means, with respect to any Person, the
Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on
behalf of the Company by two Officers of the Company, one of whom
must be the principal executive officer, the principal financial
officer, the treasurer or the principal accounting officer of the
Company, that meets the requirements of Section 11.05 hereof.
"Opinion of Counsel" means an opinion from legal
counsel who is reasonably acceptable to the Trustee, that meets
the requirements of Section 12.05 hereof. The counsel may be an
employee of or counsel to the Company, any Subsidiary of the
Company or the Trustee.
"Participant" means, with respect to the Depositary,
Euroclear or Cedel, a Person who has an account with the
Depositary, Euroclear or Cedel, respectively (and, with respect
to The Depository Trust Company, shall include Euroclear and
Cedel).
"Permitted Business" means (a) any business in which
the Company and its Subsidiaries are engaged on the date of the
Indenture or any reasonable extension or expansion of such
businesses and (b) any business similar or related to the
manufacture, design, leasing, marketing, financing, servicing,
refurbishment, distribution or resale of specialty trucks or
truck bodies or of parts or components thereof.
"Permitted Investments" means (a) any Investment in the
Company or in a Subsidiary Guarantor; (b) any Investment in Cash
Equivalents; (c) any Investment by the Company or any Restricted
Subsidiary of the Company in a Person, if as a result of such
Investment (i) such Person becomes a Wholly Owned Restricted
Subsidiary of the Company and a Subsidiary Guarantor or (ii) such
Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Wholly Owned Restricted
Subsidiary of the Company that is a Subsidiary Guarantor and that
is engaged in the same or a similar line of business as the
Company and its Subsidiaries were engaged in on the date of the
Indenture; (d) any Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant
to and in compliance with Section 4.10 hereof; (e) any
acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the Company;
(f) Investments in Leasing Subsidiaries having an aggregate fair
market value (measured on the date such Investment was made and
without giving effect to subsequent changes in value) when taken
together with all other Investments made pursuant to this clause
(f) that are at the time outstanding, not to exceed $15.0
million; provided, that Investments made by a Leasing Subsidiary
in another Leasing Subsidiary do not count against such $15.0
million limitation; (g) contributions of Lease Assets from one
Leasing Subsidiary to another Leasing Subsidiary; (h) Investments
that are Leasing Subsidiary Undertakings; (i) Investments in
Nations Casualty Insurance, Inc. in an aggregate amount not to
exceed the aggregate amount of dividends paid to the Company by
Nations Casualty Insurance, Inc. after the date of the Indenture;
(j) Investments in Permitted Joint Ventures, Unrestricted
Subsidiaries or Foreign Subsidiaries having an aggregate fair
market value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when
taken together with all other Investments made pursuant to this
clause (j) that are at the time outstanding, not to exceed $15.0
million; and (k) other Investments in any Person having an
aggregate fair market value (measured on the date each such
Investment was made and without giving effect to subsequent
changes in value), when taken together with all other Investments
made pursuant to this clause (k) that are at the time
outstanding, not to exceed $10.0 million.
"Permitted Joint Venture" means any joint venture,
partnership or other Person incorporated or otherwise formed in a
jurisdiction outside the United States or the District of
Columbia (i) designated as a Permitted Joint Venture by the Board
of Directors, all of whose Indebtedness is Non-Recourse Debt or
otherwise permitted to be incurred by such entity pursuant to
Section 4.09(ii)(c) and/or Section 4.09(xvi), and (ii) which is
engaged in a Permitted Business. Any such designation or
designation to the contrary shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution giving
effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing
provisions.
"Permitted Junior Securities" means Equity Interests in
the Company or any Subsidiary Guarantor or debt securities that
are subordinated to all Senior Debt (and any debt or equity
securities issued in exchange for Senior Debt) to substantially
the same extent as, or to a greater extent than, the Notes are
subordinated to Senior Debt pursuant to Article 10 hereof.
"Permitted Liens" means: (i) Liens securing
Indebtedness and Guarantees under Credit Facilities or other
Senior Debt that was permitted by the terms of this Indenture to
be incurred; (ii) Liens on vehicles or related equipment securing
Indebtedness under Floor Plan Financing Facilities that was
permitted by the terms of this Indenture to be incurred; (iii)
Liens on assets of a Leasing Subsidiary securing Indebtedness
under Leasing Transactions, that were permitted by terms of this
Indenture to be incurred; (iv) Liens in favor of the Company and
its Subsidiary Guarantors; (v) Liens on property of a Person
existing at the time such Person is merged into or consolidated
with the Company or any Subsidiary of the Company; provided that
such Liens were in existence prior to the contemplation of such
merger or consolidation and do not extend to any assets other
than those of the Person merged into or consolidated with the
Company; (vi) Liens on property existing at the time of
acquisition thereof by the Company or any Subsidiary of the
Company, provided that such Liens were in existence prior to the
contemplation of such acquisition; (vii) Liens to secure
obligations in respect of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (viii) Liens to
secure Indebtedness (including Capital Lease Obligations)
permitted by Section 4.09(vi) hereof covering only the assets
acquired with such Indebtedness; (ix) Liens (including Liens to
secure Indebtedness under the Senior Credit Agreement) existing
on the date of this Indenture; (x) Liens for taxes, assessments
or governmental charges or claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; (xi) Liens on
assets of Subsidiary Guarantors to secure Senior Debt of such
Subsidiary Guarantors that was permitted by this Indenture to be
incurred; (xii) Liens on assets of Unrestricted Subsidiaries that
secure Non-Recourse Debt of Unrestricted Subsidiaries; (xiii)
Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security; (xiv) easements,
rights-of-way, municipal and zoning ordinances and similar
charges, encumbrances, title defects or other irregularities that
do not materially interfere with the ordinary course of business
of the Company or any of the Restricted Subsidiaries; (xv) any
interest or title of a lessor in the property subject to any
Capitalized Lease or operating lease; (xvi) Liens arising from
filing Uniform Commercial Code financing statements regarding
leases; (xvii) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; (xviii) Liens on
customer deposits in favor of the depositor; (xix) Liens
encumbering customary initial deposits and margin deposits, and
other Liens that are either within the general parameters
customary in the industry and incurred in the ordinary course of
business, in each case securing Hedging Obligations; (xx) Liens
arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into by the
Company or any of the Restricted Subsidiaries in the ordinary
course of business in accordance with the past practices of the
Company and the Restricted Subsidiaries prior to the date on
which the Notes are issued; (xxi) carriers', warehousemen's,
mechanics', landlords' materialmen's, repairmen's or other like
Liens arising in the ordinary course of business in respect of
obligations not overdue for a period in excess of 60 days or
which are being contested in good faith by appropriate
proceedings promptly instituted and diligently prosecuted;
provided that any reserve or other appropriate provision as shall
be required to conform with GAAP shall have been made therefor;
(xxii) any attachment or judgment Lien not constituting an Event
of Default under Section 6.01(f) hereof; and (xxiii) Liens on
property of the Company or any Subsidiary of the Company with
respect to obligations that do not exceed $5.0 million in the
aggregate at any one time outstanding.
"Permitted Refinancing Indebtedness" means any
Indebtedness of the Company or any of its Restricted Subsidiaries
issued in exchange for, or the net proceeds of which are used to
extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that: (i) the
principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal
amount of (or accreted value, if applicable), plus accrued
interest on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable
expenses incurred in connection therewith); (ii) such Permitted
Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; (iii) if the
Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the
Notes, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is
subordinated in right of payment to, the Notes on terms at least
as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv)
such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or
refunded.
"Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, estate, unincorporated organization or government or any
agency or political subdivision thereof.
"Principal" means J. Peter Mosling, Jr., Stephen P.
Mosling and Cadence Company, as long as a majority of its
economic interest is held by J. Peter Mosling, Jr., Stephen P.
Mosling and their Related Parties.
"Private Placement Legend" means the legend set forth
in Section 2.06(g)(i) to be placed on all Notes issued under this
Indenture except where otherwise permitted by the provisions of
this Indenture.
"QIB" means a "qualified institutional buyer" as
defined in Rule 144A.
"Registration Rights Agreement" means the Registration
Rights Agreement, dated as of February 26, 1998, by and among the
Company and the other parties named on the signature pages
thereof, as such agreement may be amended, modified or
supplemented from time to time and, with respect to any
Additional Notes, one or more registration rights agreements
between the Company and the other parties thereto, as such
agreement(s) may be amended, modified or supplemented from time
to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes
under the Securities Act.
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Regulation S Global Note" means a global Note in the
form of Exhibit A-2 hereto bearing the Private Placement Legend
and deposited with or on behalf of the Depositary and registered
in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the
Notes initially sold in reliance on Rule 903 of Regulation S.
"Related Parties" with respect to any Principal means
any (A) 70% (or more) owned Subsidiary, or spouse or immediate
family member (in the case of an individual) of such Principal or
(B) trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons
beneficially holding an 70% or more controlling interest of which
consist of such Principal and/or such other Persons referred to
in the immediately preceding clause (A).
"Representative" means the indenture trustee or other
trustee, agent or representative in respect of any Designated
Senior Debt; provided that, if and for so long as any Designated
Senior Debt lacks such a representative, then the Representative
for such Designated Senior Debt shall at all times constitute the
holders of a majority in outstanding principal amount of such
Designated Senior Debt in respect of any Designated Senior Debt.
"Responsible Officer," when used with respect to the
Trustee, means any officer within the Corporate Trust
Administration of the Trustee (or any successor group of the
Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the
above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity
with the particular subject.
"Restricted Broker-Dealer" has the meaning set forth in
the Registration Rights Agreement.
"Restricted Certificated Note" means a Certificated
Note bearing the Private Placement Legend.
"Restricted Global Note" means a Global Note bearing
the Private Placement Legend.
"Restricted Investment" means any Investment other than
a Permitted Investment.
"Restricted Period" means the 40-day restricted period
as defined in Regulation S.
"Restricted Subsidiary" of a Person means any
Subsidiary of the referent Person that is not an Unrestricted
Subsidiary
"Rule 144" means Rule 144 promulgated under the
Securities Act.
"Rule 144A" means Rule 144A promulgated under the
Securities Act.
"Rule 903" means Rule 903 promulgated under the
Securities Act.
"Rule 904" means Rule 904 promulgated under the
Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended.
"Senior Credit Agreement" means that certain Credit
Agreement, dated as of the date of this Indenture, by and among
the Company, Bank of America National Trust and Savings
Association (as administrative agent) and the co-agent, if any,
and the Lenders named therein, including any related notes,
guarantees, collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended,
modified, renewed, refunded, replaced or refinanced (directly or
indirectly) in whole or in part from time to time.
"Senior Debt" means: (i) all Indebtedness now or
hereafter outstanding under Credit Facilities and all Hedging
Obligations with respect thereto; (ii) any other Indebtedness
permitted to be incurred by the Company under the terms of this
Indenture, unless the instrument under which such Indebtedness is
incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Notes and (iii) all
Obligations with respect to the foregoing. Notwithstanding
anything to the contrary in the foregoing, Senior Debt will not
include (v) Indebtedness which is classified as non-recourse in
accordance with GAAP or any unsecured claim arising in respect
hereof by reason of application of section 1111(b)(1) of the U.S.
bankruptcy code, (w) any liability for federal, state, local or
other taxes owed or owing by the Company, (x) any Indebtedness of
the Company to any of its Subsidiaries or other Affiliates, (y)
any trade payables or (z) any Indebtedness that is incurred in
violation of this Indenture.
"Shelf Registration Statement" means the Shelf
Registration Statement as defined in the Registration Rights
Agreement.
"Significant Senior Debt" means any (i) Indebtedness
outstanding under Credit Facilities or (ii) Senior Debt with
principal amount due (as accreted value with respect to Senior
Debt issued at a discount) in excess of $5.0 million upon initial
issuance thereof.
"Significant Subsidiary" means any Subsidiary that
would be a "significant subsidiary" as defined in Article 1, Rule
1-02 of Regulation S-X, promulgated pursuant to the Securities
Act, as such Regulation is in effect on the date of this
Indenture.
"Stated Maturity" means, with respect to any
installment of interest or principal on any series of
Indebtedness, the date on which such payment of interest or
principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment
thereof.
"Subsidiary" means, with respect to any Person: (i) any
corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof); and (ii) any partnership (a)
the sole general partner or the managing general partner of which
is such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" means the Subsidiary Guarantee
by each Subsidiary Guarantor of the Company's payment obligations
under this Indenture and the Notes, executed pursuant to the
provisions of this Indenture.
" Subsidiary Guarantor" means each of (i) McNeilus
Truck & Manufacturing, Inc., Iowa Contract Fabricators, Inc.,
McIntire Fabricators, Inc., Kensett Fabricators, Inc., McNeilus
Companies, Inc. McNeilus Financial, Inc., Pierce Manufacturing,
Inc., and Summit Performance Systems, Inc. and (ii) any other
Person that executes a Subsidiary Guarantee in accordance with
the provisions of this Indenture, and their respective successors
and assigns.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
77aaa-77bbbb) as in effect on the date on which this Indenture
is qualified under the TIA.
"Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor
serving hereunder.
"Unrestricted Global Note" means a global Note in the
form of Exhibit A-1 attached hereto that bears the Global Note
Legend and that has the "Schedule of Exchanges of Interests in
the Global Note" attached thereto, and that is deposited with or
on behalf of and registered in the name of the Depositary,
representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Certificated Note" means one or more
Certificated Notes that do not bear and are not required to bear
the Private Placement Legend.
"Unrestricted Subsidiary" means Nations Casualty
Insurance, Inc., Oshkosh/McNeilus Financial Services, Inc. and
any Subsidiary that is designated by the Board of Directors as an
Unrestricted Subsidiary pursuant to a Board Resolution; but only
to the extent that such Subsidiary: (i) has no Indebtedness other
than Non-Recourse Debt; (ii) is not party to any agreement,
contract, arrangement or understanding with the Company or any
Restricted Subsidiary of the Company unless the terms of any such
agreement, contract, arrangement or understanding are no less
favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not
Affiliates of the Company; (iii) is a Person with respect to
which neither the Company nor any of its Restricted Subsidiaries
has any direct or indirect obligation (x) to subscribe for
additional Equity Interests or (y) to maintain or preserve such
Person's financial condition or to cause such Person to achieve
any specified levels of operating results; and (iv) has not
guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Company or any of its
Restricted Subsidiaries (excluding assumption of Indebtedness of
MFSI by any Leasing Subsidiary). Any such designation by the
Board of Directors shall be evidenced to the Trustee by filing
with the Trustee a certified copy of the Board Resolution giving
effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing
conditions and was permitted under Section 4.07 hereof. If, at
any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of
the Indenture and any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of the Company
as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company
shall be in default of such covenant). The Board of Directors of
the Company may at any time designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided that such designation
shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if: (i) such Indebtedness is permitted
under Section 4.09 hereof, calculated on a pro forma basis as if
such designation had occurred at the beginning of the four-
quarter reference period; and (ii) no Default or Event of Default
would be in existence following such designation.
"U.S. Person" means a U.S. person as defined in Rule
902(o) under the Securities Act.
"Weighted Average Life to Maturity" means, when applied
to any Indebtedness at any date, the number of years obtained by
dividing (a) the sum of the products obtained by multiplying (x)
the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal,
including payment at final maturity, in respect thereof, by (y)
the number of years (calculated to the nearest one-twelfth) that
will elapse between such date and the making of such payment, by
(b) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a
Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors'
qualifying shares) shall at the time be owned by such Person or
by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such
Person.
Section 1.02. Other Definitions.
Defined in
Term Section
"Affiliate Transaction" 4.11
"Asset Sale Offer" 3.09
"Authentication Order" 2.02
"Change of Control Offer" 4.15
"Change of Control Payment" 4.15
"Change of Control Payment Date" 4.15
"Covenant Defeasance" 8.03
"Event of Default" 6.01
"Excess Proceeds" 4.10
"incur" 4.09
"Legal Defeasance" 8.02
"Offer Amount" 3.09
"Offer Period" 3.09
"Paying Agent" 2.03
"Permitted Debt" 4.09
"Purchase Date" 3.09
"Registrar" 2.03
"Restricted Payments" 4.07
Section 1.03. TIA Definitions.
Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a
part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means
the Trustee; and
"obligor" on the Notes and the Subsidiary Guarantees
means the Company and the Subsidiary Guarantors, respectively,
and any successor obligor upon the Notes and the Subsidiary
Guarantees, respectively.
All other terms used in this Indenture that are defined
by the TIA, defined by TIA reference to another statute or
defined by SEC rule under the TIA have the meanings so assigned
to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and transactions;
and
(6) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01.Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A
hereto. The Notes may have notations, legends or endorsements
required by law, stock exchange rule or usage. Each Note shall
be dated the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this
Indenture and the Company, the Subsidiary Guarantors and the
Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound
thereby. However, to the extent any provision of any Note
conflicts with the express provisions of this Indenture, the
provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form shall be
substantially in the form of Exhibit A-1 or A-2 attached hereto (including
the Global Note Legend thereon and the "Schedule of Exchanges of
Interests in the Global Note" attached thereto). Notes issued in
definitive form shall be substantially in the form of Exhibit A-1
attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Each Global Note shall represent such
of the outstanding Notes as shall be specified therein and each
shall provide that it shall represent the aggregate principal
amount of outstanding Notes from time to time endorsed thereon
and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the
Trustee or the Note Custodian, at the direction of the Trustee,
in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
(c) Euroclear and Cedel Procedures Applicable. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be
applicable to transfers of beneficial interests in the Regulation S Global
Notes that are held by Participants through Euroclear or Cedel
Bank.
Section 2.02. Execution and Authentication. One Officer shall sign the
Notes for the Company by manual or facsimile signature. The Company's
seal may be reproduced on the Notes and may be in facsimile form, but is
not required to be included on the Notes.
If an Officer whose signature is on a Note no longer
holds that office at the time a Note is authenticated, the Note
shall nevertheless be valid.
A Note shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be
conclusive evidence that the Note has been authenticated under
this Indenture.
The Trustee shall, upon a written order of the Company
signed by one Officer (an "Authentication Order"), authenticate
Notes for original issue up to the aggregate principal amount of
up to $150,000,000. The aggregate principal amount of Notes
outstanding at any time may not exceed $150,000,000 except as
provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Notes. An
authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with
Holders or an Affiliate of the Company.
Section 2.03. Registrar and Paying Agent. The Company shall maintain an
office or agency where Notes may be presented for registration of transfer
or for exchange ("Registrar") and an office or agency where Notes may be
presented for payment ("Paying Agent"). The Registrar shall keep
a register of the Notes and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any
co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or
Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a
party to this Indenture. If the Company fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such. The Company or any of its Subsidiaries may
act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust
Company ("DTC") to act as Depositary with respect to the Global
Notes.
The Company initially appoints the Trustee to act as
the Registrar and Paying Agent and to act as Note Custodian with
respect to the Global Notes.
Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for
the benefit of Holders or the Trustee all money held by the Paying Agent
for the payment of principal, premium or Liquidated Damages, if any, or
interest on the Notes, and will notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the
Trustee. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If
the Company or a Subsidiary acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent. Upon any
bankruptcy or reorganization proceedings relating to the Company,
the Trustee shall serve as Paying Agent for the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of all Holders and shall otherwise comply
with TIA 312(a). If the Trustee is not the Registrar, the
Company shall furnish to the Trustee at least seven Business Days
before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of
such date as the Trustee may reasonably require of the names and
addresses of the Holders of Notes and the Company shall otherwise
comply with TIA 312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
All Global Notes will be exchanged by the Company for
Certificated Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to
continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a
successor Depositary is not appointed by the Company within 90
days after the date of such notice from the Depositary or (ii)
the Company in its sole discretion determines that the Global
Notes (in whole but not in part) should be exchanged for
Certificated Notes and delivers a written notice to such effect
to the Trustee. Upon the occurrence of either of the preceding
events in (i) or (ii) above, Certificated Notes shall be issued
in such names as the Depositary shall instruct the Trustee.
Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a
Global Note or any portion thereof, pursuant to this Section 2.06
or Section 2.07 or 2.10 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global
Note may not be exchanged for another Note other than as provided
in this Section 2.06(a), however, beneficial interests in a
Global Note may be transferred and exchanged as provided in
Section 2.06(b),(c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in
the Global Notes shall be effected through the Depositary, in
accordance with the provisions of this Indenture and the
Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by
the Securities Act. Transfers of beneficial interests in the
Global Notes also shall require compliance with either
subparagraph (i) or (ii) below, as applicable, as well as one or
more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global
Note. Beneficial interests in any Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in accordance with
the transfer restrictions set forth in the Private Placement Legend;
provided, however, that prior to the expiration of the Restricted Period,
transfers of beneficial interests in the Regulation S Global Note may not
be made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser). Beneficial interests in any
Unrestricted Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note. No written orders or instructions shall be required to be delivered
to the Registrar to effect the transfers described in this Section
2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section
2.06(b)(i) above, the transferor of such beneficial interest must
deliver to the Registrar either (A) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial
interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures
containing information regarding the Participant account to be
credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Certificated Note in an amount
equal to the beneficial interest to be transferred or exchanged
and (2) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such
Certificated Note shall be registered to effect the transfer or
exchange referred to in (1) above; provided that in no event
shall Certificated Notes be issued upon the transfer or exchange
of beneficial interests in the Regulation S Global Note prior to
(x) the expiration of the Restricted Period and (y) the receipt
by the Registrar of any certificates required pursuant to Rule
903 under the Securities Act. Upon consummation of an Exchange
Offer by the Company in accordance with Section 2.06(f) hereof,
the requirements of this Section 2.06(b)(ii) shall be deemed to
have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered by
the Holder of such beneficial interests in the Restricted Global
Notes. Upon satisfaction of all of the requirements for transfer
or exchange of beneficial interests in Global Notes contained in
this Indenture and the Notes or otherwise applicable under the
Securities Act, the Trustee shall adjust the principal amount of
the relevant Global Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another
Restricted Global Note. A beneficial interest in any Restricted
Global Note may be transferred to a Person who takes delivery
thereof in the form of a beneficial interest in another
Restricted Global Note if the transfer complies with the
requirements of Section 2.06(b)(ii) above and the Registrar
receives the following:
(A) if the transferee will take delivery in the
form of a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto,
including the certifications and certificates and Opinion of
Counsel required by item (3) thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the
Unrestricted Global Note. A beneficial interest in any
Restricted Global Note may be exchanged by any holder thereof for
a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note if the
exchange or transfer complies with the requirements of Section
2.06(b)(ii) above and:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the holder of the beneficial
interest to be transferred, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a broker-
dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Restricted
Broker-Dealer pursuant to the Exchange Offer Registration Statement
in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to exchange such
beneficial interest for a beneficial interest in an Unrestricted
Global Note, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(a)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D),
if the Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange
or transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to
subparagraph (B) or (D) above at a time when an Unrestricted
Global Note has not yet been issued, the Company shall issue and,
upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal
to the aggregate principal amount of beneficial interests
transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note
cannot be exchanged for, or transferred to Persons who take
delivery thereof in the form of, a beneficial interest in a
Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests in
Global Notes for Certificated Notes.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Certificated Notes. If any holder of a beneficial
interest in a Restricted Global Note proposes to exchange such
beneficial interest for a Restricted Certificated Note or to
transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Restricted Certificated Note, then, upon
receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Certificated Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904 under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other
than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to
the Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of
the applicable Global Note to be reduced accordingly
pursuant to Section 2.06(h) hereof, and the Company shall
execute and the Trustee shall authenticate and deliver to
the Person designated in the instructions a Certificated
Note in the appropriate principal amount. Any Certificated
Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.06(c)
shall be registered in such name or names and in such
authorized denomination or denominations as the holder of
such beneficial interest shall instruct the Registrar
through instructions from the Depositary and the Participant
or Indirect Participant. The Trustee shall deliver such
Certificated Notes to the Persons in whose names such Notes
are so registered. Any Certificated Note issued in exchange
for a beneficial interest in a Restricted Global Note
pursuant to this Section 2.06(c)(i) shall bear the Private
Placement Legend and shall be subject to all restrictions on
transfer contained therein.
Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Global Note may not be
exchanged for a Certificated Note or transferred to a Person
who takes delivery thereof in the form of a Certificated Note
prior to (x) the expiration of the Restricted Period and (y)
the receipt by the Registrar of any certificates required
pursuant to Rule 903(c)(3)(ii)(B) under the Securities Act,
except in the case of a transfer pursuant to an exemption from
the registration requirements of the Securities Act other than
Rule 903 or Rule 904.
(ii) Beneficial Interests in Restricted Global Notes to
Unrestricted Certificated Notes. A holder of a beneficial
interest in a Restricted Global Note may exchange such beneficial
interest for an Unrestricted Certificated Note or may transfer
such beneficial interest to a Person who takes delivery thereof
in the form of an Unrestricted Certificated Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the holder of such beneficial
interest, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Restricted
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights Agreement;
or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to exchange such
beneficial interest for a Certificated Note that does not bear
the Private Placement Legend, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in
item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Certificated Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the
restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes
to Unrestricted Certificated Notes. If any holder of a
beneficial interest in an Unrestricted Global Note proposes to
exchange such beneficial interest for a Certificated Note or to
transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Certificated Note, then, upon
satisfaction of the conditions set forth in Section 2.06(b)(ii)
hereof, the Trustee shall cause the aggregate principal amount of
the applicable Global Note to be reduced accordingly pursuant to
Section 2.06(h) hereof, and the Company shall execute and the
Trustee shall authenticate and deliver to the Person designated
in the instructions a Certificated Note in the appropriate
principal amount. Any Certificated Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iii) shall
be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from
the Depositary and the Participant or Indirect Participant. The
Trustee shall deliver such Certificated Notes to the Persons in
whose names such Notes are so registered. Any Certificated Note
issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Certificated Notes for
Beneficial Interests.
(i) Restricted Certificated Notes to Beneficial Interests
in Restricted Global Notes. If any Holder of a Restricted
Certificated Note proposes to exchange such Note for a beneficial
interest in a Restricted Global Note or to transfer such
Restricted Certificated Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following
documentation:
(A) if the Holder of such Restricted Certificated
Note proposes to exchange such Note for a beneficial interest in
a Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Certificated Note is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (1) thereof;
(C) if such Restricted Certificated Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such Restricted Certificated Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(a)
thereof;
(E) if such Restricted Certificated Note is being
transferred to an Institutional Accredited Investor in reliance
on an exemption from the registration requirements of the
Securities Act other than those listed in subparagraphs (B)
through (D) above, a certificate to the effect set forth in
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Certificated Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such Restricted Certificated Note is being
transferred pursuant to an effective registration statement under
the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cancel the Restricted Certificated Note,
increase or cause to be increased the aggregate principal
amount of, in the case of clause (A) above, the appropriate
Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (c) above, the
Regulation S Global Note, and in all other cases, the IAI
Global Note.
(ii) Restricted Certificated Notes to Beneficial
Interests in Unrestricted Global Notes. A Holder of a Restricted
Certificated Note may exchange such Note for a beneficial
interest in an Unrestricted Global Note or transfer such
Restricted Certificated Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted
Global Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the Holder, in the case
of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or
(3) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Restricted
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights
Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Certificated Notes
proposes to exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(1)(c) thereof; or
(2) if the Holder of such Certificated Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item
(4) thereof;
and, in each such case set forth in this subparagraph (D),
if the Registrar so requests or if the Applicable Procedures
so require, an Opinion of Counsel in form reasonably
acceptable to the Registrar to the effect that such exchange
or transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(ii), the Trustee shall
cancel the Certificated Notes and increase or cause to be
increased the aggregate principal amount of the Unrestricted
Global Note.
(iii) Unrestricted Certificated Notes to Beneficial
Interests in Unrestricted Global Notes. A Holder of an
Unrestricted Certificated Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer
such Certificated Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note
at any time. Upon receipt of a request for such an exchange or
transfer, the Trustee shall cancel the applicable Unrestricted
Certificated Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global
Notes.
If any such exchange or transfer from a Certificated Note to
a beneficial interest is effected pursuant to subparagraphs
(ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted
Global Note has not yet been issued, the Company shall issue and,
upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal
to the principal amount of Certificated Notes so transferred.
(e) Transfer and Exchange of Certificated Notes for
Certificated Notes. Upon request by a Holder of Certificated
Notes and such Holder's compliance with the provisions of this
Section 2.06(e), the Registrar shall register the transfer or
exchange of Certificated Notes. Prior to such registration of
transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Certificated Notes duly endorsed
or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by
his attorney, duly authorized in writing. In addition, the
requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to
the following provisions of this Section 2.06(e).
(i) Restricted Certificated Notes to Restricted
Certificated Notes. Any Restricted Certificated Note may be
transferred to and registered in the name of Persons who take
delivery thereof in the form of a Restricted Certificated Note if
the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule
144A under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item
(2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities
Act, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3) thereof, if
applicable.
(ii) Restricted Certificated Notes to Unrestricted
Certificated Notes. Any Restricted Certificated Note may be
exchanged by the Holder thereof for an Unrestricted Certificated
Note or transferred to a Person or Persons who take delivery
thereof in the form of an Unrestricted Certificated Note if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer, certifies
in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of
the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Restricted Broker-
Dealer pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted
Certificated Notes proposes to exchange such Notes for an
Unrestricted Certificated Note, a certificate from such
Holder in the form of Exhibit C hereto, including the
certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Certificated
Notes proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of an Unrestricted
Certificated Note, a certificate from such Holder in the form
of Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D),
if the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required
in order to maintain compliance with the Securities Act.
(iii) Unrestricted Certificated Notes to Unrestricted
Certificated Notes. A Holder of Unrestricted Certificated Notes
may transfer such Notes to a Person who takes delivery thereof in
the form of an Unrestricted Certificated Note. Upon receipt of a
request to register such a transfer, the Registrar shall register
the Unrestricted Certificated Notes pursuant to the instructions
from the Holder thereof.
(a) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company
shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02, the Trustee shall authenticate (i)
one or more Unrestricted Global Notes in an aggregate principal
amount equal to the principal amount of the beneficial interests
in the Restricted Global Notes tendered for acceptance by Persons
that certify in the applicable Letters of Transmittal that (x)
they are not broker-dealers, (y) they are not participating in a
distribution of the Exchange Notes and (z) they are not
affiliates (as defined in Rule 144) of the Company, and accepted
for exchange in the Exchange Offer and (ii) Certificated Notes in
an aggregate principal amount equal to the principal amount of
the Restricted Certificated Notes accepted for exchange in the
Exchange Offer. Concurrently with the issuance of such Notes,
the Trustee shall cause the aggregate principal amount of the
applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and
deliver to the Persons designated by the Holders of Certificated
Notes so accepted Certificated Notes in the appropriate principal
amount.
(b) Legends. The following legends shall appear on the face of
all Global Notes and Certificated Notes issued under this Indenture
unless specifically stated otherwise in the applicable provisions
of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B)
below, each Global Note and each Certificated Note (and all Notes
issued in exchange therefor or substitution thereof) shall bear
the legend in substantially the following form:
"THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER
OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (1) BY THE INITIAL PURCHASER (a) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT),
PURCHASING FOR ITS OWN ACCOUNT IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (c) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF APPLICABLE) OR IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (d) TO THE COMPANY, (e) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (f) TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND (2) BY
SUBSEQUENT PURCHASERS, AS SET FORTH IN (1)(a) THROUGH (e) ABOVE,
AND IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE, NO
REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE
EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY
EVIDENCED HEREBY."
(B) Notwithstanding the foregoing, any Global Note or
Certificated Note issued pursuant to subparagraphs (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to
this Section 2.06 (and all Notes issued in exchange therefor or
substitution thereof) shall not bear the Private Placement
Legend.
(ii) Global Note Legend. Each Global Note shall bear a
legend in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS
DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS
NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON
UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT
TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE
MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO
SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL
NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION
PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
COMPANY."
(c) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged
for Certificated Notes or a particular Global Note has been redeemed,
repurchased or cancelled in whole and not in part, each such Global Note
shall be returned to or retained and cancelled by the Trustee in
accordance with Section 2.11 hereof. At any time prior to such
cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global
Note or for Certificated Notes, the principal amount of Notes
represented by such Global Note shall be reduced accordingly and
an endorsement shall be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect
such reduction; and if the beneficial interest is being exchanged
for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note, such
other Global Note shall be increased accordingly and an
endorsement shall be made on such Global Note by the Trustee or
by the Depositary at the direction of the Trustee to reflect such
increase.
(d) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall
authenticate Global Notes and Certificated Notes upon the
Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a
Certificated Note for any registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover
any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer
pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05
hereof).
(iii) The Registrar shall not be required to register
the transfer of or exchange any Note selected for redemption in
whole or in part, except the unredeemed portion of any Note being
redeemed in part.
(iv) All Global Notes and Certificated Notes issued upon any
registration of transfer or exchange of Global Notes or
Certificated Notes shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Global Notes or Certificated Notes
surrendered upon such registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of
any selection of Notes for redemption under Section 3.02 hereof
and ending at the close of business on the day of selection, (B)
to register the transfer of or to exchange any Note so selected
for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part or (c) to register the
transfer of or to exchange a Note between a record date and the
next succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may
deem and treat the Person in whose name any Note is registered as
the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Notes and for all
other purposes, and none of the Trustee, any Agent or the Company
shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and
Certificated Notes in accordance with the provisions of Section
2.02 hereof.
(viii) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to
this Section 2.06 to effect a registration of transfer or
exchange may be submitted by facsimile.
Section 2.07. Replacement Notes
If any mutilated Note is surrendered to the Trustee or
the Company and the Trustee receives evidence to its satisfaction
of the destruction, loss or theft of any Note, the Company shall
issue and the Trustee, upon receipt of an Authentication Order,
shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company,
an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if
a Note is replaced. The Company may charge for its expenses in
replacing a Note.
Every replacement Note is an additional obligation of
the Company and shall be entitled to all of the benefits of this
Indenture equally and proportionately with all other Notes duly
issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it,
those delivered to it for cancellation, those reductions in the
interest in a Global Note effected by the Trustee in accordance
with the provisions hereof, and those described in this Section
as not outstanding. Except as set forth in Section 2.09 hereof,
a Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note; however, Notes held by
the Company or a Subsidiary of the Company shall not be deemed to
be outstanding for purposes of Section 3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof,
it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Note is held by a bona fide
purchaser.
If the principal amount of any Note is considered paid
under Section 4.01 hereof, it ceases to be outstanding and
interest on it ceases to accrue.
If the Paying Agent (other than the Company, a
Subsidiary or an Affiliate of any thereof) holds, on a redemption
date or maturity date, money sufficient to pay Notes payable on
that date, then on and after that date such Notes shall be deemed
to be no longer outstanding and shall cease to accrue interest.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required
principal amount of Notes have concurred in any direction, waiver
or consent, Notes owned by the Company, or by any Person directly
or indirectly controlling or controlled by or under direct or
indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Notes that the
Trustee knows are so owned shall be so disregarded.
Section 2.10. Temporary Notes
Until certificates representing Notes are ready for
delivery, the Company may prepare and the Trustee, upon receipt
of an Authentication Order, shall authenticate temporary Notes.
Temporary Notes shall be substantially in the form of
certificated Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be
reasonably acceptable to the Trustee. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate
Certificated Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of
the benefits of this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the
Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Trustee any Notes surrendered to them for
registration of transfer, exchange or payment. The Trustee and
no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and
shall destroy cancelled Notes (subject to the record retention
requirement of the Exchange Act). Certification of the
destruction of all cancelled Notes shall be delivered to the
Company. The Company may not issue new Notes to replace Notes
that it has paid or that have been delivered to the Trustee for
cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the
Notes, it shall pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special
record date, in each case at the rate provided in the Notes and
in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid
on each Note and the date of the proposed payment. The Company
shall fix or cause to be fixed each such special record date and
payment date, provided that no such special record date shall be
less than 10 days prior to the related payment date for such
defaulted interest. At least 15 days before the special record
date, the Company (or, upon the written request of the Company,
the Trustee in the name and at the expense of the Company) shall
mail or cause to be mailed to Holders a notice that states the
special record date, the related payment date and the amount of
such interest to be paid.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the
optional redemption provisions of Section 3.07 hereof, it shall
furnish to the Trustee, at least 30 days but not more than
60 days before a redemption date, an Officers' Certificate
setting forth (i) the clause of this Indenture pursuant to which
the redemption shall occur, (ii) the redemption date, (iii) the
principal amount of Notes to be redeemed and (iv) the redemption
price.
Section 3.02. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed or
purchased in an offer to purchase at any time, the Trustee shall
select the Notes to be redeemed or purchased among the Holders of
the Notes in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis,
by lot or in accordance with any other method the Trustee
considers fair and appropriate. In the event of partial
redemption by lot, the particular Notes to be redeemed shall be
selected, unless otherwise provided herein, not less than 30 nor
more than 60 days prior to the redemption date by the Trustee
from the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of
any Note selected for partial redemption, the principal amount
thereof to be redeemed. Notes and portions of Notes selected
shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed,
the entire outstanding amount of Notes held by such Holder, even
if not a multiple of $1,000, shall be redeemed. Except as
provided in the preceding sentence, provisions of this Indenture
that apply to Notes called for redemption also apply to portions
of Notes called for redemption.
Section 3.03. Notice of Redemption
Subject to the provisions of Section 3.09 hereof, at
least 30 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed, by first class
mail, a notice of redemption to each Holder whose Notes are to be
redeemed at its registered address.
The notice shall identify the Notes to be redeemed and
shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after
the redemption date upon surrender of such Note, a new Note or
Notes in principal amount equal to the unredeemed portion shall
be issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption
ceases to accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are
being redeemed; and
(h) that no representation is made as to the
correctness or accuracy of the CUSIP number, if any, listed in
such notice or printed on the Notes.
At the Company's request, the Trustee shall give the
notice of redemption in the Company's name and at its expense;
provided, however, that the Company shall have delivered to the
Trustee, at least 45 days prior to the redemption date, an
Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such
notice as provided in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption
Once notice of redemption is mailed in accordance with
Section 3.03 hereof, Notes called for redemption become
irrevocably due and payable on the redemption date at the
redemption price. A notice of redemption may not be conditional.
Section 3.05. Deposit of Redemption Price
One Business Day prior to the redemption date, the
Company shall deposit with the Trustee or with the Paying Agent
money sufficient to pay the redemption price of and accrued
interest on all Notes to be redeemed on that date. The Trustee
or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption
price of, and accrued interest on, all Notes to be redeemed.
If the Company complies with the provisions of the
preceding paragraph, on and after the redemption date, interest
shall cease to accrue on the Notes or the portions of Notes
called for redemption. If a Note is redeemed on or after an
interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid
to the Person in whose name such Note was registered at the close
of business on such record date. If any Note called for
redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the
preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption date until such principal is paid,
and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in
Section 4.01 hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the
Company shall issue and, upon the Company's written request, the
Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed
portion of the Note surrendered.
Section 3.07. Optional Redemption.
(a) Except as set forth in clause (b) of this Section 3.07,
the Company shall not have the option to redeem the Notes
pursuant to this Section 3.07 prior to March 1, 2003.
Thereafter, the Company shall have the option to redeem the
Notes, in whole or in part, at the redemption prices (expressed
as percentages of principal amount) set forth below plus accrued
and unpaid interest and Liquidated Damages thereon, if any, to
the applicable redemption date, if redeemed during the twelve-
month period beginning on March 1 of the years indicated below:
Year Percentage
2003 104.375%
2004 102.917%
2005 101.458%
2006 and thereafter 100.000%
(b) Notwithstanding the provisions of clause (a) of this
Section 3.07, at any time prior to March 1, 2001, the Company may
on any one or more occasions redeem up to 35% of the aggregate
principal amount of the Initial Notes at a redemption price equal
to 108.750% of the principal amount thereof, plus accrued and
unpaid Liquidated Damages thereon, if any, to the applicable
redemption date, with the net cash proceeds of one or more public
offerings of common stock of the Company; provided that Notes in
an aggregate principal amount of at least 65% of the aggregate
principal amount of the Notes issued on the date of the Indenture
remain outstanding immediately after the occurrence of such
redemption (excluding Notes held by the Company and its
Subsidiaries); and provided, further, that such redemption shall
occur within 45 days of the date of the closing of such public
offering.
(c) Any redemption pursuant to this Section 3.07 shall be
made pursuant to the provisions of Section 3.01 through 3.06
hereof.
Section 3.08. Mandatory Redemption.
The Company shall not be required to make mandatory
redemption payments with respect to the Notes.
Section 3.09. Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the
Company shall be required to commence an offer to all Holders to
purchase Notes (an "Asset Sale Offer"), it shall follow the
procedures specified below.
The Asset Sale Offer shall remain open for a period of
20 Business Days following its commencement and no longer, except
to the extent that a longer period is required by applicable law
(the "Offer Period"). No later than five Business Days after the
termination of the Offer Period (the "Purchase Date"), the
Company shall purchase the principal amount of Notes required to
be purchased pursuant to Section 4.10 hereof (the "Offer Amount")
or, if less than the Offer Amount has been tendered, all Notes
tendered in response to the Asset Sale Offer. Payment for any
Notes so purchased shall be made in the same manner as interest
payments are made.
If the Purchase Date is on or after an interest record
date and on or before the related interest payment date, any
accrued and unpaid interest shall be paid to the Person in whose
name a Note is registered at the close of business on such record
date, and no additional interest shall be payable to Holders who
tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the
Company shall send, by first class mail, a notice to the Trustee
and each of the Holders, with a copy to the Trustee. The notice
shall contain all instructions and materials necessary to enable
such Holders to tender Notes pursuant to the Asset Sale Offer.
The Asset Sale Offer shall be made to all Holders. The notice,
which shall govern the terms of the Asset Sale Offer, shall
state:
(a) that the Asset Sale Offer is being made pursuant to
this Section 3.09 and Section 4.10 hereof and the length of time
the Asset Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not tendered or accepted for payment
shall continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrete or accrue interest after the
Purchase Date;
(e) that Holders electing to have a Note purchased pursuant
to an Asset Sale Offer may only elect to have all of such Note
purchased and may not elect to have only a portion of such Note
purchased;
(f) that Holders electing to have a Note purchased pursuant
to any Asset Sale Offer shall be required to surrender the Note,
with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Note completed, or transfer by book-entry
transfer, to the Company, a depositary, if appointed by the
Company, or a Paying Agent at the address specified in the notice
at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their
election if the Company, the depositary or the Paying Agent, as
the case may be, receives, not later than the expiration of the
Offer Period, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the
Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, the Company
shall select the Notes to be purchased on a pro rata basis (with
such adjustments as may be deemed appropriate by the Company so
that only Notes in denominations of $1,000, or integral multiples
thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part
shall be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered (or transferred by
book-entry transfer).
On or before the Purchase Date, the Company shall, to
the extent lawful, accept for payment, on a pro rata basis to the
extent necessary, the Offer Amount of Notes or portions thereof
tendered pursuant to the Asset Sale Offer, or if less than the
Offer Amount has been tendered, all Notes tendered, and shall
deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the
Company in accordance with the terms of this Section 3.09. The
Company, the Depositary or the Paying Agent, as the case may be,
shall promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an
amount equal to the purchase price of the Notes tendered by such
Holder and accepted by the Company for purchase, and the Company
shall promptly issue a new Note, and the Trustee, upon written
request from the Company shall authenticate and mail or deliver
such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so
accepted shall be promptly mailed or delivered by the Company to
the Holder thereof. The Company shall publicly announce the
results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this
Section 3.09, any purchase pursuant to this Section 3.09 shall be
made pursuant to the provisions of Sections 3.01 through 3.06
hereof.
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or cause to be paid the principal
of, premium, if any, and interest on the Notes on the dates and
in the manner provided in the Notes. Principal, premium, if any,
and interest shall be considered paid on the date due if the
Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money
deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if
any, and interest then due. The Company shall pay all Liquidated
Damages, if any, in the same manner on the dates and in the
amounts set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue
principal at the rate equal to 1% per annum in excess of the then
applicable interest rate on the Notes to the extent lawful; it
shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable
grace period) at the same rate to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan,
the City of New York, an office or agency (which may be an office
of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Notes may be surrendered for registration of
transfer or for exchange and where notices and demands to or upon
the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or
more other offices or agencies where the Notes may be presented
or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough
of Manhattan, the City of New York for such purposes. The
Company shall give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location
of any such other office or agency.
The Company hereby designates the Corporate Trust
Office of the Trustee as one such office or agency of the Company
in accordance with Section 2.03.
Section 4.03. Reports.
(a) Whether or not required by the rules and regulations of
the SEC, so long as any Notes are outstanding, the Company shall
furnish to the Holders of Notes (i) all quarterly and annual
financial information that would be required to be contained in a
filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such forms, including a "Management's Discussion
and Analysis of Consolidated Financial Condition and Results of
Operations" that describes the financial condition and results of
operations of the Company and its consolidated Subsidiaries
(showing in reasonable detail, either on the face of the
financial statements or in the footnotes thereto, the financial
condition and results of operations of the Company and its
Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the
Company, if material) and, with respect to the annual information
only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required
to be filed with the SEC on Form 8-K if the Company were required
to file such reports, in each case, within the time periods
specified in the SEC's rules and regulations. In addition,
following consummation of the Exchange Offer, whether or not
required by the rules and regulations of the SEC, the Company
shall file a copy of all such information and reports with the
SEC for public availability within the time periods specified in
the SEC's rules and regulations (unless the SEC will not accept
such a filing) and make such information available to securities
analysts and prospective investors upon request. The Company
shall at all times comply with TIA 314(a).
(b) For so long as any Notes remain outstanding, the
Company and the Subsidiary Guarantors shall furnish to the
Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.
Section 4.04. Compliance Certificate.
(a) The Company and each Subsidiary Guarantor (to the
extent that such Subsidiary Guarantor is so required under the
TIA) shall deliver to the Trustee, within 90 days after the end
of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries
during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining
whether the Company has kept, observed, performed and fulfilled
its obligations under this Indenture, and further stating, as to
each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed
and fulfilled each and every covenant contained in this Indenture
and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a
Default or Event of Default shall have occurred, describing all
such Defaults or Events of Default of which he or she may have
knowledge and what action the Company is taking or proposes to
take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by
reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has
occurred, a description of the event and what action the Company
is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the Auditing Standards Board of the American
Institute of Certified Public Accountants or any equivalent or
successor governing organization, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be
accompanied by a written statement of the Company's independent
public accountants (who shall be a firm of established national
reputation) that in making the examination necessary for
certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company
has violated any provisions of Article 4 or Article 5 hereof or,
if any such violation has occurred, specifying the nature and
period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any
Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer
becoming aware of any Default or Event of Default, an Officers'
Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect
thereto.
Section 4.05. Taxes.
The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes,
assessments, and governmental levies except such as are contested
in good faith and by appropriate proceedings or where the failure
to effect such payment is not adverse in any material respect to
the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
The Company and each of the Subsidiary Guarantors
covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Company and each of the
Subsidiary Guarantors (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law,
and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted
to the Trustee, but shall suffer and permit the execution of
every such power as though no such law has been enacted.
Section 4.07. Restricted Payments.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly: (i) declare
or pay any dividend or make any other payment or distribution on
account of the Company's or any of its Restricted Subsidiaries'
Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving the Company
or any of its Restricted Subsidiaries) or to the direct or
indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other
than dividends or distributions payable in Equity Interests
(other than Disqualified Stock) of the Company or to the Company
or a Restricted Subsidiary of the Company); (ii) purchase, redeem
or otherwise acquire or retire for value (including without
limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company; (iii)
make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness
that is subordinated to the Notes, except a payment of interest
or principal at Stated Maturity; or (iv) make any Restricted
Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as
"Restricted Payments"), unless, at the time of and after giving
effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and
be continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the
applicable four-quarter period, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09 hereof; and
(c) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and
its Subsidiaries after the date of this Indenture (excluding
Restricted Payments permitted by clauses (ii), (iii) and (iv) of
the next succeeding paragraph), is less than the sum, without
duplication, of (i) 50% of the Consolidated Net Income of the
Company for the period (taken as one accounting period) from the
beginning of the first fiscal month commencing after the date of
this Indenture to the end of the Company's most recently ended
fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100%
of such deficit), plus (ii) 100% of the aggregate net cash
proceeds received by the Company since the date of this Indenture
as a contribution to its common equity capital or from the issue
or sale of Equity Interests of the Company (other than
Disqualified Stock) or from the issue or sale of Disqualified
Stock or debt securities of the Company that have been converted
into such Equity Interests (other than Equity Interests (or
Disqualified Stock or convertible debt securities) sold to a
Subsidiary of the Company), plus (iii) to the extent that any
Restricted Investment that was made after the date of the
Indenture is sold for cash or otherwise liquidated or repaid for
cash, the lesser of (A) the cash return of capital with respect
to such Restricted Investment (less the cost of disposition, if
any) and (B) the initial amount of such Restricted Investment,
plus (iv) 50% of any cash dividends or other cash distributions
received by the Company or a Restricted Subsidiary that is a
Subsidiary Guarantor after the date of this Indenture from MFSI
or an Unrestricted Subsidiary of the Company (other than
dividends or distributions made by Nations Casualty Insurance,
Inc.), to the extent that such dividends or other cash
distributions were not otherwise included in Consolidated Net
Income of the Company for such period, plus (v) to the extent
that any Unrestricted Subsidiary designated as such after the
date of this Indenture is redesignated as a Restricted Subsidiary
after the date of the Indenture, the lesser of (A) the fair
market value of the Company's Investment in such Subsidiary as of
the date of such redesignation or (B) such fair market value as
of the date on which such Subsidiary was originally designated as
an Unrestricted Subsidiary, plus (vi) after the sale or
liquidation of Nations Casualty Insurance, Inc., 50% of the
excess of (A) any cash dividends or other cash distributions
received by the Company or a Subsidiary Guarantor after the date
of this Indenture from Nations Casualty Insurance, Inc. over (B)
any Investment in Nations Casualty Insurance, Inc. permitted
pursuant to clause (h) of the definition of Permitted
Investments, plus (vii) other Restricted Payments in an aggregate
amount not to exceed $5.0 million.
The foregoing provisions shall not prohibit (i) the
payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment
would have complied with the provisions of this Indenture; (ii)
the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests
of the Company in exchange for, or out of the net cash proceeds
of the substantially concurrent sale (other than to a Subsidiary
of the Company) of, other Equity Interests of the Company (other
than any Disqualified Stock); provided that the amount of any
such net cash proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition shall be
excluded from clause (c)(ii) of the preceding paragraph; (iii)
the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness with the net cash proceeds from an
incurrence of Permitted Refinancing Indebtedness; (iv) the
payment of any dividend by a Subsidiary of the Company to the
holders of its common Equity Interests on a pro rata basis; and
(v) the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company or any
Subsidiary of the Company held by any member of the Company's (or
any of its Subsidiaries') management pursuant to any management
equity subscription agreement or stock option agreement in effect
as of the date of this Indenture; provided that the aggregate
price paid for all such repurchased, redeemed, acquired or
retired Equity Interests shall not exceed $1.0 million in any
twelve-month period and shall not at any time exceed $5 million
in the aggregate and no Default or Event of Default shall have
occurred and be continuing immediately after such transaction;
(vi) Investments in securities not constituting cash or Cash
Equivalents and received in connection with an Asset Sale made
pursuant to the provisions of Section 4.10 or any other
disposition of assets not constituting an Asset Sale by reason of
the definition thereof; and (vii) repurchases of Equity Interests
deemed to occur upon exercise of stock options if such Equity
Interests represent a portion of the exercise price of such
options.
The Board of Directors may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation
would not cause a Default; provided that in no event shall all or
substantially all of the business currently operated by the
Company, McNeilus Truck & Manufacturing Inc., or Pierce
Manufacturing, Inc. be transferred to or held by an Unrestricted
Subsidiary. For purposes of making such determination, all
outstanding Investments by the Company and its Restricted
Subsidiaries (except to the extent repaid in cash) in the
Subsidiary so designated shall be deemed to be Restricted
Payments at the time of such designation and shall reduce the
amount available for Restricted Payments under the first
paragraph of this Section 4.07. All such outstanding Investments
shall be deemed to constitute Investments in an amount equal to
the fair market value of such Investments at the time of such
designation. Such designation shall only be permitted if such
Restricted Payment would be permitted at such time and if such
Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash)
shall be the fair market value on the date of the Restricted
Payment of the asset(s) or securities proposed to be transferred
or issued by the Company or such Subsidiary, as the case may be,
pursuant to the Restricted Payment. The fair market value of any
non-cash Restricted Payment shall be determined by the Board of
Directors whose resolution with respect thereto shall be
delivered to the Trustee, such determination to be based upon an
opinion or appraisal issued by an accounting, appraisal or
investment banking firm of national standing if such fair market
value exceeds $5.0 million. Not later than five Business Days
after making any Restricted Payment, the Company shall deliver to
the Trustee an Officers' Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.07 were computed,
together with a copy of any fairness opinion or appraisal
required by this Indenture.
Section 4.08. Dividend and Other Payment Restrictions
Affecting Subsidiaries.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Restricted
Subsidiary to (i)(a) pay dividends or make any other
distributions to the Company or any of its Restricted
Subsidiaries (1) on its Capital Stock or (2) with respect to any
other interest or participation in, or measured by, its profits
or (b) pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the
Company or any of its Restricted Subsidiaries or (iii) transfer
any of its properties or assets to the Company or any of its
Restricted Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (a) Existing
Indebtedness as in effect on the date hereof, (b) the Senior
Credit Agreement as in effect on the date hereof and any
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof,
provided that such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements and
refinancings are no more restrictive, taken as a whole, with
respect to such dividend and other payment restrictions than
those contained in the Senior Credit Agreement as of the
hereof or the agreement governing such Existing Indebtedness as
of the date hereof, as applicable, (c) this Indenture and the
Notes, (d) applicable law, (e) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company
or any of its Restricted Subsidiaries as in effect at the time of
such acquisition (except to the extent such Indebtedness was
incurred in connection with or in anticipation of such
acquisition), which encumbrance or restriction is not applicable
to any Person, or the properties or assets of any Person, other
than the Person, or the property or assets of the Person, so
acquired, provided that in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be
incurred by the acquiring Company or Restricted Subsidiary, as
applicable, at the time of such acquisition, (f) by reason of
non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices,
(g) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the
nature described in clause (iii) above on the property so
acquired, (h) any agreement for the sale of a Restricted
Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale, (i) Permitted Refinancing
Indebtedness, provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are
no more restrictive, taken as a whole, than those contained in
the agreements governing the Indebtedness being refinanced, (j)
secured Indebtedness otherwise permitted to be incurred pursuant
to the provisions of Section 4.12 hereof that limits the right of
the debtor to dispose of the assets securing such Indebtedness,
(k) any Indebtedness incurred by a Foreign Subsidiary pursuant to
clause (ii)(c) of the second paragraph of Section 4.09 hereof,
(l) provisions with respect to the disposition or distribution of
assets or property in an Asset Sale (or in a transaction which,
but for its size, would be an Asset Sale), or in joint venture
agreements and other similar agreements entered into in the
ordinary course of business and (m) restrictions on cash or other
deposits or net worth imposed by customers under contracts
entered into in the ordinary course of business.
Section 4.09. Incurrence of Indebtedness and Issuance of
Preferred Stock.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create,
incur, issue, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired
Debt) and the Company shall not issue any Disqualified Stock and
shall not permit any of its Restricted Subsidiaries to issue any
shares of preferred stock; provided, however, that the Company
may incur Indebtedness (including Acquired Debt) or issue shares
of Disqualified Stock and any Subsidiary Guarantor may incur
Indebtedness or issue preferred stock if the Fixed Charge
Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are
available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock or preferred
stock is issued would have been at least 2.0 to 1, determined on
a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been
incurred, or the Disqualified Stock or preferred stock had been
issued, as the case may be, at the beginning of such four-quarter
period.
The provisions of the first paragraph of this Section 4.09
shall not apply to the incurrence of any of the following items
of Indebtedness (collectively, "Permitted Debt"):
(i) the incurrence by the Company and the
Subsidiary Guarantors of term Indebtedness under the Senior
Credit Agreement (or, if the Senior Credit Agreement has matured
or been terminated or repaid in whole or in part, any other
Credit Facility); provided that the aggregate principal amount of
all term Indebtedness outstanding under the Credit Facilities
after giving effect to such incurrence shall not exceed the
greater of (a) the aggregate amount of term Indebtedness borrowed
under the Senior Credit Agreement on the date of the Indenture
less the aggregate amount of all repayments, optional or
mandatory, of the principal of any term Indebtedness under the
Senior Credit Agreement (other than payments that are immediately
reborrowed) that have been made since the date of this Indenture
and (b) $30.0 million;
(ii) (a) the incurrence by the Company and the
Subsidiary Guarantors of revolving Indebtedness and letters of
credit pursuant to the Senior Credit Agreement; provided that the
aggregate principal amount of all revolving Indebtedness (with
letters of credit being deemed to have a principal amount equal
to the maximum potential liability of the Company and its
Restricted Subsidiaries thereunder) at any time outstanding under
the Senior Credit Agreement pursuant to this subsection (ii)(a)
after giving effect to such incurrence shall not exceed $100.0
million, less the aggregate amount of all Net Proceeds of Asset
Sales applied to permanently reduce revolving commitments with
respect to the Senior Credit Agreement pursuant to Section 4.10
hereof; (b) the incurrence by the Company and the Subsidiary
Guarantors of additional revolving Indebtedness and letters of
credit pursuant to the Credit Facilities; provided that the
aggregate principal amount of all such additional revolving
Indebtedness (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the
Company and its Subsidiary Guarantors thereunder) at any time
outstanding under all Credit Facilities after giving effect to each
incurrence does not exceed (i) the Borrowing Base minus (ii) $100.0
million (or such lesser amount as may then be the maximum aggregate
commitments under the Senior Credit Agreement); and (c) the incurrence
by Foreign Subsidiaries of revolving Indebtedness and letters of
credit pursuant to Credit Facilities; provided that the aggregate
principal amount of all revolving Indebtedness (with letters of credit
being deemed to have a principal amount equal to the maximum potential
liability of the Foreign Subsidiaries thereunder) at any time
outstanding to Foreign Subsidiaries under all Credit Facilities after
giving effect to such incurrence shall not exceed the greater of (i)
$15.0 million and (ii) the Foreign Borrowing Base;
(iii) the incurrence by the Company and the Subsidiary Guarantors
of Indebtedness under any Floor Plan Financing Facility; provided that the
aggregate principal amount of all Indebtedness at any time outstanding
under all Floor Plan Financing Facilities after giving effect to such
incurrence shall not exceed the total cost of the vehicles and equipment
securing such Indebtedness;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of the Existing Indebtedness;
(v) the incurrence by the Company of Indebtedness represented by
the Initial Notes and the incurrence by the Subsidiary Guarantors of the
Subsidiary Guarantees;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred
for the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property, plant or equipment used in the
business of the Company or a Subsidiary Guarantor, in an aggregate
principal amount not to exceed $25.0 million at any time outstanding;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was permitted by
this Indenture to be incurred pursuant to the first paragraph of this
Section 4.09 or clause (iv) or (v) of this paragraph;
(viii) the incurrence by the Company or any of the Subsidiary
Guarantors of intercompany Indebtedness between or among the Company and
any of the Subsidiary Guarantors or the incurrence by Wholly Owned
Restricted Subsidiaries of intercompany Indebtedness between or among
Wholly Owned Restricted Subsidiaries; provided, however, that: (i) if the
Company is the obligor on such Indebtedness, such Indebtedness is
expressly subordinated to the prior payment in full in cash of all
Obligations with respect to the Senior Debt and the Notes; and (ii)(A) any
subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than the Company or a
Subsidiary Guarantor and (B) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Subsidiary
Guarantor shall be deemed, in each case, to constitute an incurrence of
such Indebtedness by the Company or such Subsidiary Guarantor, as the case
may be, that was not permitted by this clause (viii);
(ix) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of
fixing or hedging: (i) interest rate risk with respect to any floating
rate Indebtedness that is permitted by the terms of this Indenture to be
outstanding; (ii) the value of foreign currencies purchased or received by
the Company in the ordinary course of business, or (iii) commodities
purchased in the ordinary course of business for use in a Permitted
Business and not for speculation;
(x) the guarantee by the Company or any of the Subsidiary
Guarantors of Indebtedness of the Company or a Subsidiary Guarantor that
was permitted to be incurred by another provision of this Section 4.09;
(xi) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness incurred in respect of performance, surety
and similar bonds and letters of credit (and reimbursement obligations
with respect thereto) provided by the Company and the Restricted
Subsidiaries in the ordinary course of business for commercial purposes
and not for or related to money borrowed;
(xii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness for letters of credit relating to workers'
compensation claims and self-insurance or similar requirements in the
ordinary course of business;
(xiii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness arising from guarantees of Indebtedness of
the Company or any of its Restricted Subsidiaries or other agreements of
the Company or any of its Restricted Subsidiaries providing for
indemnification, adjustment of purchase price or similar obligations, in
each case, incurred or assumed in connection with the disposition of any
business, assets or Subsidiary, other than guarantees of Indebtedness
incurred by any person acquiring all or any portion of such business,
assets or Subsidiary for the purpose of financing such acquisition,
provided that the maximum aggregate liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds actually received
by the Company and its Subsidiaries in connection with such disposition;
(xiv) the incurrence by a Leasing Subsidiary of Indebtedness in
connection with a Leasing Transaction;
(xv) the incurrence by the Company or any Restricted Subsidiary
of Indebtedness in connection with the acquisition of assets or a new
Subsidiary Guarantor; provided such Indebtedness was incurred by the prior
owner of such assets or such Subsidiary Guarantor prior to such
acquisition by the Company or one of its Subsidiary Guarantors and was not
incurred in connection with, or in contemplation of, such acquisition by
the Company or a Subsidiary Guarantor; and provided further that the
principal amount (or accreted value, as applicable) of such Indebtedness,
together with any other outstanding Indebtedness secured pursuant to this
clause (xv) and any Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(xv), does not exceed $10.0 million; and
(xvi) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (xvi), not to
exceed $20.0 million; provided, however, that the principal amount (or
accreted value, as applicable) of Indebtedness of Restricted Subsidiaries
that are not Subsidiary Guarantors, at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (xvi), shall not
exceed $5.0 million.
For purposes of determining compliance with this covenant, in the
event that an item of Indebtedness meets the criteria of more than one of
the categories of Permitted Debt described in clauses (i) through (xvi)
above or is entitled to be incurred pursuant to the first paragraph of
this covenant, the Company shall, in its sole discretion, classify such
item of Indebtedness in any manner that complies with this covenant.
Accrual of interest, accretion or amortization of original issue discount,
the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, and the payment of dividends on
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock will not be deemed to be an incurrence of Indebtedness
or an issuance of Disqualified Stock for purposes of this Section 4.09;
provided, in each such case, that the amount thereof is included in Fixed
Charges of the Company as accrued. Nothing in this Section 4.09 shall
prohibit the incurrence by the Company's Unrestricted Subsidiaries of Non-
Recourse Debt (excluding Indebtedness owed by such Unrestricted Subsidiary
to the Company); provided, however, that if any such Indebtedness ceases
to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Company.
Section 4.10. Asset Sales
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to consummate an Asset Sale unless (x) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the
time of such Asset Sale at least equal to the fair market value (evidenced
by a resolution of the Board of Directors set forth in an Officers'
Certificate delivered to the Trustee) of the assets or Equity Interests
issued or sold or otherwise disposed of and (y) at least 75% of the
consideration received therefor by the Company or such Restricted
Subsidiary is in the form of cash; provided, however, that the amount of
(A) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet), of the Company or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by
their terms subordinated to the Notes or any guarantee thereof) that are
assumed by the transferee of any such assets pursuant to a customary
novation agreement that releases the Company or such Restricted Subsidiary
from further liability and (B) any securities, notes or other obligations
received by the Company or any such Subsidiary from such transferee that
are contemporaneously (subject to ordinary settlement periods) converted
by the Company or such Restricted Subsidiary into cash (to the extent of
the cash received), shall be deemed to be cash for purposes of this
Section 4.10. A transfer of assets by the Company to a Wholly Owned
Subsidiary or by a Wholly Owned Subsidiary to the Company or to another
Wholly Owned Subsidiary, and an issuance of Equity Interests by a Wholly
Owned Subsidiary to the Company or to another Wholly Owned Subsidiary,
shall not be deemed to be an Asset Sale. Any Restricted Payment that is
permitted by Section 4.07 hereof will not be deemed to be an Asset Sale.
Within 360 days after receipt of any Net Proceeds from an Asset Sale,
the Company may apply the Net Proceeds from such Asset Sale, at its
option, (a) to permanently reduce the Senior Debt (or, if such Senior Debt
is revolving Indebtedness under a Credit Facility, to permanently reduce
any related commitments of lenders under the Senior Debt (provided that
such reduction shall have no effect on the amount of Indebtedness
permitted to be incurred pursuant to Section 4.09(ii)(b))), or (b) to the
acquisition of a majority of the assets of, or a majority of the Voting
Stock of, another Permitted Business, the making of a capital expenditure
or the acquisition of other assets that are not classified as current
assets under GAAP and are used or useful in a Permitted Business. Pending
the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest such
Net Proceeds in any manner that is not prohibited by this Indenture. Any
Net Proceeds from such Asset Sale that are not finally applied or invested
as provided in the first sentence of this paragraph will be deemed to
constitute "Excess Proceeds." Within five days of each date on which the
aggregate amount of Excess Proceeds exceeds $10.0 million, the Company
shall commence an Asset Sale Offer (pro rata in proportion to the
principal amount (or accreted value, if applicable) outstanding in respect
of any Asset Sale Offer required by the terms of any pari passu
Indebtedness incurred in accordance with this Indenture) to all Holders
of Notes pursuant to Section 3.09 hereof to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds at an
offer price in cash in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the date fixed for the closing of such offer in accordance with
the procedures set forth in Section 3.09 hereof. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, the Company may use such deficiency for any
purpose not otherwise prohibited by this Indenture. To the extent that
the aggregate amount of Notes tendered pursuant to an Asset Sale Offer
(and any pari passu Indebtedness, as aforesaid) exceeds the Excess
Proceeds, the Trustee shall select the Notes to be purchased on a pro rata
basis. Upon completion of such offer to purchase, the amount of Excess
Proceeds will be deemed to be reset at zero.
Section 4.11. Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or
for the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless (a) such Affiliate Transaction is on terms that are
no less favorable to the Company or the relevant Subsidiary than those
that would have been obtained in a comparable transaction by the Company
or such Subsidiary with an unrelated Person and (b) the Company delivers
to the Trustee (i) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess
of $1.0 million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies
with clause (a) above and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the Board of
Directors and (ii) with respect to any Affiliate Transaction involving
aggregate consideration in excess of $5.0 million, an opinion as to the
fairness to the Holders of such Affiliate Transaction from a financial
point of view issued by an accounting, appraisal or investment banking
firm of national standing; provided, however, that (i) any employment or
severance agreement and any amendment thereto entered into by the Company
or any of its Subsidiaries in the ordinary course of business, (ii)
transactions between or among the Company and/or its Restricted
Subsidiaries and transactions between or among the Company or any
Restricted Subsidiary and any Leasing Subsidiary in the ordinary course of
business (including the contribution of overhead costs consistent with
past practice and in the ordinary course of business), (iii) undertakings
customary in lease securitization transactions for the benefit of any
Leasing Subsidiary (whether undertaken in connection with a lease
securitization or other transaction involving any Leasing Subsidiary),
including Leasing Subsidiary Undertakings and guarantees thereof; (iv)
transfers of Lease Assets by MFSI to any Leasing Subsidiary (provided that
such transfer includes an assumption of MFSI's Indebtedness in respect of
such Lease Assets and a release of MFSI's liability therefor); (v) payment
of reasonable directors' fees and benefits, provided that the amount of
such fees and benefits paid to any Affiliate shall not exceed the amount
of such fees and benefits paid to any Person who is not otherwise an
Affiliate of the Company, (vi) Restricted Payments that are permitted
under Section 4.07 hereof; (vii) provision of officers' and directors'
indemnification and insurance in the ordinary course of business to the
extent permitted by applicable law, (viii) payment of employee salaries,
bonuses and employee benefits in the ordinary course of business
(including payment of commissions on behalf of any Leasing Subsidiary by
the Company or any of its Restricted Subsidiaries consistent with past
practices and in the ordinary course of business) and (ix) payment of
amounts owing under the existing lease between the Company and Cadence
Company and under any amendment or extension thereof so long as any such
amendment or extension is not disadvantageous to the Holders of the Notes
in any material respect.
Section 4.12. Liens.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any
Lien securing Indebtedness or trade payables on any asset now owned or
hereafter acquired, or any income or profits therefrom or assign or convey
any right to receive income therefrom, except Permitted Liens.
Section 4.13. Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of
each of its Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or
any such Subsidiary and (ii) the rights (charter and statutory), licenses
and franchises of the Company and its Subsidiaries; provided, however,
that the Company shall not be required to preserve any such right, license
or franchise, or the corporate, partnership or other existence of any of
its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business
of the Company and its Subsidiaries, taken as a whole, and that the loss
thereof is not adverse in any material respect to the Holders of the
Notes.
Section 4.14. Line of Business.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than the Permitted
Businesses, except to such extent as would not be material to the Company
and its Subsidiaries as a whole.
Section 4.15. Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall
make an offer (a "Change of Control Offer") to each Holder to repurchase
all or any part (equal to $1,000 or an integral multiple thereof) of each
Holder's Notes at a purchase price equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date of purchase (the "Change of Control
Payment"). Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder stating: (1) that the Change of Control
Offer is being made pursuant to this Section 4.15 and that all Notes
tendered will be accepted for payment; (2) the purchase price and the
purchase date, which shall be no earlier than 30 days and no later than 60
days from the date such notice is mailed (the "Change of Control Payment
Date"); (3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change of
Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control
Payment Date; (5) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer will be required to surrender the
Notes, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Notes completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (6) that
Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Notes delivered for purchase, and a statement that such Holder
is withdrawing his election to have the Notes purchased; and (7) that
Holders whose Notes are being purchased only in part will be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. The Company shall
comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws
and regulations are applicable in connection with the repurchase of Notes
in connection with a Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer, (2) deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions thereof so tendered and (3) deliver or
cause to be delivered to the Trustee the Notes so accepted together with
an Officers' Certificate stating the aggregate principal amount of Notes
or portions thereof being purchased by the Company. The Paying Agent
shall promptly mail to each Holder of Notes so tendered payment in an
amount equal to the purchase price for the Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry)
to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered by such Holder, if any; provided, that
each such new Note shall be in a principal amount of $1,000 or an integral
multiple thereof. The Company shall publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15,
the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements
set forth in this Section 4.15 and Section 3.09 hereof and purchases all
Notes validly tendered and not withdrawn under such Change of Control
Offer.
Section 4.16. No Senior Subordinated Debt.
Notwithstanding the provisions of Section 4.09 hereof, (i) the Company
shall not incur, create, issue, assume, guarantee or otherwise become
liable for any Indebtedness that is subordinate or junior in right of
payment to any Senior Debt and senior in any respect in right of payment
to the Notes, and (ii) no Subsidiary Guarantor shall incur, create, issue,
assume, guarantee or otherwise become liable for any Indebtedness that is
subordinated or junior in right of payment to any Guarantees of Senior
Debt and senior in any respect in right of payment to the Subsidiary
Guarantees.
Section 4.17. Limitation on Sale and Leaseback Transactions.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided
that the Company may enter into a sale and leaseback transaction if (i)
the Company could have (a) incurred Indebtedness in an amount equal to the
Attributable Debt relating to such sale and leaseback transaction pursuant
to the Fixed Charge Coverage Ratio test set forth in the first paragraph
of Section 4.09 hereof and (b) incurred a Lien to secure such Indebtedness
pursuant to the provisions of Section 4.12 hereof, (ii) the gross cash
proceeds of such sale and leaseback transaction are at least equal to the
fair market value (as determined in good faith by the Board of Directors
and set forth in an Officers' Certificate delivered to the Trustee) of the
property that is the subject of such sale and leaseback transaction and
(iii) the transfer of assets in such sale and leaseback transaction is
permitted by, and the Company applies the proceeds of such transaction in
compliance with, Section 4.10 hereof.
Section 4.18. Limitation On Issuances And Sales Of Equity Interests In
Wholly Owned Restricted Subsidiaries.
The Company (i) shall not, and shall not permit any Wholly Owned
Restricted Subsidiary of the Company to, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of any Wholly Owned Restricted
Subsidiary of the Company to any Person (other than the Company or a
Wholly Owned Restricted Subsidiary of the Company), unless (a) such
transfer, conveyance, sale, lease or other disposition is of all the
Capital Stock of such Wholly Owned Restricted Subsidiary and (b) the cash
Net Proceeds from such transfer, conveyance, sale, lease or other
disposition are applied in accordance with Section 4.10 hereof and (ii)
will not permit any Wholly Owned Restricted Subsidiary of the Company to
issue any of its Equity Interests (other than, if necessary, shares of its
Capital Stock constituting directors' qualifying shares) to any Person
other than to the Company or a Wholly Owned Restricted Subsidiary of the
Company.
Section 4.19. Payments for Consent.
Neither the Company nor any of its Restricted Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether
by way of interest, fee or otherwise, to any Holder of any Notes for or as
an inducement to any consent, waiver or amendment of any of the terms or
provisions of the Indenture or the Notes unless such consideration is
offered to be paid or is paid to all Holders of the Notes that consent,
waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
Section 4.20. Additional Subsidiary Guarantees
If the Company or any of its Restricted Subsidiaries shall, after the
date of this Indenture, transfer or cause to be transferred, including by
way of any Investment, in one or a series of transactions (whether or not
related), any assets, businesses, divisions, real property or equipment
having any aggregate fair market value (as determined in good faith by the
Board of Directors) in excess of $1.0 million to any Restricted Subsidiary
(other than any Leasing Subsidiary) that is not a Subsidiary Guarantor or
a Foreign Subsidiary, (ii) the Company or any of its Restricted
Subsidiaries shall acquire another Restricted Subsidiary other than a
Foreign Subsidiary having total assets with a fair market value (as
determined in good faith by the Board of Directors) in excess of $1.0
million, or (iii) if any Restricted Subsidiary other than a Foreign
Subsidiary shall incur Indebtedness in excess of $1.0 million, then the
Company shall, at the time of such transfer, acquisition or incurrence,
cause such Restricted Subsidiary that is the transferee of such transfer,
is so acquired, or incurs such Indebtedness (if not then a Subsidiary
Guarantor) to become a Subsidiary Guarantor by executing a Supplemental
Indenture in the form attached hereto as Exhibit E and deliver an Opinion
of Counsel to the Trustee to the effect that such Supplemental Indenture
has been duly authorized, executed and delivered by such Subsidiary and
constitutes a valid and binding obligation of such Subsidiary, enforceable
against such Subsidiary in accordance with its terms (subject to customary
exceptions); provided, that: (i) the Subsidiary Guarantee of such
Subsidiary Guarantor may be subordinated to Senior Debt of such Subsidiary
Guarantor; and (ii) such Restricted Subsidiary shall not be required to
issue a Subsidiary Guarantee if such Restricted Subsidiary is a Foreign
Subsidiary and such Foreign Subsidiary has not guaranteed and does not
guarantee any other Indebtedness of the Company or any other Restricted
Subsidiary of the Company that is not a Foreign Subsidiary.
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Company shall not consolidate or merge with or into (whether or
not the Company is the surviving corporation) or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions to, another
corporation, Person or entity unless (i) the Company is the surviving
corporation or the entity or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have
been made is a corporation organized or existing under the laws of the
United States, any state thereof or the District of Columbia, (ii) the
entity or Person formed by or surviving any such consolidation or merger
(if other than the Company) or the entity or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have
been made assumes all the obligations of the Company pursuant to a
supplemental indenture under the Notes, the Registration Rights Agreement
and this Indenture in a form reasonably satisfactory to the Trustee, (iii)
immediately after such transaction, no Default or Event of Default exists
and (iv) except in the case of a merger of the Company with or into a
Wholly Owned Restricted Subsidiary of the Company, the Company or the
entity or Person formed by or surviving any such consolidation or merger
(if other than the Company), or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made shall, at the
time of such transaction and after giving pro forma effect thereto as if
such transaction had occurred at the beginning of the applicable four-
quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
clause (a) of the first paragraph of Section 4.09 hereof.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01 hereof, the
successor corporation formed by such consolidation or into or with which
the Company is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation,
merger, sale, lease, conveyance or other disposition, the provisions of
this Indenture referring to the "Company" shall refer instead to the
successor corporation and not to the Company), and may exercise every
right and power of the Company under this Indenture with the same effect
as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from
the obligation to pay the principal of and interest on the Notes except in
the case of a sale of all of the Company's assets that meets the
requirements of Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes (whether or not prohibited
by Article 10 hereof) and such default continues for a period of 30 days;
(b) the Company defaults in the payment when due of principal of or
premium, if any, on the Notes (whether or not prohibited by Article 10
hereof) when the same becomes due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise;
(c) the Company or any of its Subsidiaries fails to comply with any
of the provisions of Section 4.07, 4.09, 4.10, 4.15 or 5.01 hereof;
(d) the Company or any of its Subsidiaries fails to observe or
perform any other covenant, representation, warranty or other agreement in
this Indenture or the Notes for 60 days after notice to the Company by the
Trustee or the Holders of at least 25% in aggregate principal amount of
the Notes then outstanding voting as a single class;
(e) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Subsidiaries), whether such Indebtedness or guarantee now exists,
or is created after the date of this Indenture, which default (a) is
caused by a failure to pay principal of or premium, if any, or interest on
such Indebtedness prior to the expiration of the grace period provided in
such Indebtedness on the date of such default (a "Payment Default") or (b)
results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $10.0 million or more;
(f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company
or any of its Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary and such judgment or judgments remain undischarged
for a period (during which execution shall not be effectively stayed) of
60 days, provided that the aggregate of all such undischarged judgments
exceeds $5.0 million;
(g) except as permitted by this Indenture, any Subsidiary Guarantee
is held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Subsidiary
Guarantor, or any Person acting on behalf of any Subsidiary Guarantor,
shall deny or disaffirm its obligations under such Subsidiary Guarantor's
Subsidiary Guarantee;
(h) the Company or any of its Significant Subsidiaries pursuant to
or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become due; or
(i) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(vi) is for relief against the Company or any of its Significant
Subsidiaries in an involuntary case;
(vii) appoints a Custodian of the Company or any of its
Significant Subsidiaries or for all or substantially all of the
property of the Company or any of its Significant Subsidiaries; or
(viii) orders the liquidation of the Company or any of its
Significant Subsidiaries;
and the order or decree remains unstayed and in effect for 60
consecutive days.
Section 6.02. Acceleration.
If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the then outstanding
Notes may declare all the Notes to be due and payable immediately;
provided, that so long as any Indebtedness is outstanding under the Senior
Credit Agreement, such acceleration shall not be effective until the
earlier of (i) an acceleration under the Senior Credit Agreement or (ii)
five Business Days after receipt by the Company and the Representative
under the Senior Credit Agreement of written notice of such acceleration
of the Notes. Subject to the preceding sentence, the Notes shall become
due and payable immediately upon any such declaration. In the event of a
declaration of acceleration because an Event of Default set forth in
clause (e) of Section 6.01 hereof has occurred and is continuing, such
declaration of acceleration shall be automatically annulled if (A) the
missed payments in respect of the applicable Indebtedness have been paid
or if the holders of the Indebtedness that is subject to acceleration have
rescinded their declaration of acceleration, in each case within 60 days
thereof and (B) all existing Events of Default, except non-payment of
principal or interest which have become due solely because of the
acceleration of the Notes, have been cured or waived. Notwithstanding
the foregoing, if an Event of Default specified in clause ( g) or (h) of
Section 6.01 hereof occurs with respect to the Company, any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary, all outstanding Notes
shall be due and payable immediately without further action or notice.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of all of
the Holders rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events
of Default (except nonpayment of principal, interest or premium that has
become due solely because of the acceleration) have been cured or waived.
If an Event of Default occurs on or after March 1, 2003 by reason
of any willful action (or inaction) taken (or not taken) by or on behalf
of the Company with the intention of avoiding payment of the premium that
the Company would have had to pay if the Company then had elected to
redeem the Notes pursuant to Section 3.07 hereof, then, upon acceleration
of the Notes, an equivalent premium shall also become and be immediately
due and payable, to the extent permitted by law, anything in this
Indenture or in the Notes to the contrary notwithstanding. If an Event of
Default occurs prior to March 1, 2003 by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the
intention of avoiding the prohibition on redemption of the Notes prior to
such date, then, upon acceleration of the Notes, an additional premium
shall also become and be immediately due and payable in an amount, for
each of the years beginning on March 1 of the years set forth below, as
set forth below (expressed as a percentage of the principal amount to the
date of payment that would otherwise be due but for the provisions of this
sentence):
Year Percentage
1998 110.083%
1999 108.750%
2001 107.292%
2002 105.833%
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium,
if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note in exercising any
right or remedy accruing upon an Event of Default shall not impair the
right or remedy or constitute a waiver of or acquiescence in the Event of
Default. All remedies are cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount
of the then outstanding Notes by notice to the Trustee may on behalf of
the Holders of all of the Notes waive an existing Default or Event of
Default and its consequences hereunder, except a continuing Default or
Event of Default in the payment of the principal of, premium and
Liquidated Damages, if any, or interest on, the Notes (including in
connection with an offer to purchase) (provided, however, that the Holders
of a majority in aggregate principal amount of the then outstanding Notes
may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration). Upon any such
waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of
this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust
or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of other Holders of
Notes or that may involve the Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority
over another Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Holder of a Note to receive payment of principal, premium and
Liquidated Damages, if any, and interest on the Note, on or after the
respective due dates expressed in the Note (including in connection with
an offer to purchase), or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) occurs
and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the
whole amount of principal of, premium and Liquidated Damages, if any, and
interest remaining unpaid on the Notes and interest on overdue principal
and, to the extent lawful, interest and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and the Holders of the Notes allowed in any judicial
proceedings relative to the Company (or any other obligor upon the Notes),
its creditors or its property and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claims and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount
due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07 hereof. To the extent that the payment of
any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07 hereof out of the estate in any such proceeding, shall
be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights
of any Holder, or to authorize the Trustee to vote in respect of the claim
of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium and Liquidated
Damages, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the
costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07
hereof, or a suit by Holders of more than 10% in principal amount of the
then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have
offered to the Trustee security and indemnity satisfactory to it against
any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith
in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel and the written advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and
protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient
if signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities that might be incurred by it in compliance with such
request or direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC
for permission to continue as trustee or resign. Any Agent may do the
same with like rights and duties. The Trustee is also subject to Sections
7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Notes, it shall not be accountable for the Company's use of the proceeds
from the Notes or any money paid to the Company or upon the Company's
direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying
Agent other than the Trustee, and it shall not be responsible for any
statement or recital herein or any statement in the Notes or any other
document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 90 days after it occurs.
Except in the case of a Default or Event of Default in payment of
principal of, premium, if any, or interest on any Note, the Trustee may
withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of the Holders of the Notes.
Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief
report dated as of such reporting date that complies with TIA Section 313(a)
(but if no event described in TIA Section 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted).
The Trustee also shall comply with TIA Section 313(b)(2). The Trustee
shall also transmit by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on
any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder.
The Trustee's compensation shall not be limited by any law on compensation
of a trustee of an express trust. The Company shall reimburse the Trustee
promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture
against the Company (including this Section 7.07) and defending itself
against any claim (whether asserted by the Company or any Holder or any
other person) or liability in connection with the exercise or performance
of any of its powers or duties hereunder, except to the extent any such
loss, liability or expense may be attributable to its negligence or bad
faith. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The
Company shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Company shall pay
the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not
be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal
and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(g) or (h) hereof occurs, the
expenses and the compensation for the services (including the fees and
expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of
Notes of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the then
outstanding Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of Notes of at least 10% in principal amount of
the then outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice
of its succession to Holders of the Notes. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor
Trustee, provided all sums owing to the Trustee hereunder have been paid
and subject to the Lien provided for in Section 7.07 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be
the successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United
States of America or of any state thereof that is authorized under such
laws to exercise corporate trustee power, that is subject to supervision
or examination by federal or state authorities and (except with respect to
Firstar Trust Company) that has a combined capital and surplus of at least
$100 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1), (2) and (5). The Trustee is
subject to TIA Section 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect
to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article
8.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed
to have been discharged from its obligations with respect to all
outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance
means that the Company shall be deemed to have paid and discharged the
entire Indebtedness represented by the outstanding Notes, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section
8.05 hereof and the other Sections of this Indenture referred to in (a)
and (b) below, and to have satisfied all its other obligations under such
Notes and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same),
except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in
Section 8.04 hereof, and as more fully set forth in such Section, payments
in respect of the principal of, premium, if any, and interest on such
Notes when such payments are due, (b) the Company's obligations with
respect to such Notes under Article 2 and Section 4.02 hereof, (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and
the Company's obligations in connection therewith and (d) this Article
Eight. Subject to compliance with this Article Eight, the Company may
exercise its option under this Section 8.02 notwithstanding the prior
exercise of its option under Section 8.03 hereof.
Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be
released from its obligations under the covenants contained in Sections
4.03, 4.04, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16,
4.17, 4.18, 4.19 and 4.20 hereof with respect to the outstanding Notes on
and after the date the conditions set forth in Section 8.04 are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver,
consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be
deemed "outstanding" for all other purposes hereunder (it being understood
that such Notes shall not be deemed outstanding for accounting purposes).
For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any
such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of
Default under Section 6.01 hereof, but, except as specified above, the
remainder of this Indenture and such Notes shall be unaffected thereby.
In addition, upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03 hereof, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, Sections 6.01(d)
through 6.01(f) hereof shall not constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-
callable Government Securities, or a combination thereof, in such amounts
as will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium and
Liquidated Damages, if any, and interest on the outstanding Notes on the
stated date for payment thereof or on the applicable redemption date, as
the case may be;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that (A) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this Indenture, there
has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant Defeasance
and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion of
the proceeds of which will be used to defease the Notes pursuant to this
Article Eight concurrently with such incurrence) or insofar as Sections
6.01(g) or 6.01(h) hereof is concerned, at any time in the period ending
on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that, assuming no intervening bankruptcy of the
Company between the date of deposit and the 91st day following the deposit
and assuming no Holder of Notes is an insider of the Company, after the
91st day following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
Section 8.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of
the outstanding Notes shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Notes and this Indenture, to the
payment, either directly or through any Paying Agent (including the
Company acting as Paying Agent) as the Trustee may determine, to the
Holders of such Notes of all sums due and to become due thereon in respect
of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-
callable Government Securities deposited pursuant to Section 8.04 hereof
or the principal and interest received in respect thereof other than any
such tax, fee or other charge which by law is for the account of the
Holders of the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or non-callable Government Securities
held by it as provided in Section 8.04 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee (which may be the
opinion delivered under Section 8.04(a) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of,
premium, if any, or interest on any Note and remaining unclaimed for two
years after such principal, and premium, if any, or interest has become
due and payable shall be paid to the Company on its request or (if then
held by the Company) shall be discharged from such trust; and the Holder
of such Note shall thereafter, as a secured creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once,
in the New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with
Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's obligations
under this Indenture and the Notes shall be revived and reinstated as
though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof
until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03 hereof, as the case may
be; provided, however, that, if the Company makes any payment of principal
of, premium, if any, or interest on any Note following the reinstatement
of its obligations, the Company shall be subrogated to the rights of the
Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Subsidiary Guarantors and the Trustee may amend or supplement this
Indenture, the Subsidiary Guarantees or the Notes without the consent of
any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place
of certificated Notes or to alter the provisions of Article 2 hereof
(including the related definitions) in a manner that does not materially
adversely affect any Holder;
(c) to provide for the assumption of the Company's or a Subsidiary
Guarantor's obligations to the Holders of the Notes by a successor to the
Company or a Subsidiary Guarantor pursuant to Article 5 or Article 11
hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder of the Notes;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(f) to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture as of the date hereof; or
(g) to allow any Subsidiary Guarantor to execute a supplemental
indenture and/or a Subsidiary Guarantee with respect to the Notes.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Company
and the Subsidiary Guarantors in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be obligated to
enter into such amended or supplemental Indenture that affects its own
rights, duties or immunities under this Indenture or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including Sections 3.09,
4.10 and 4.15 hereof), the Subsidiary Guarantees and the Notes may be
amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the Notes (including Additional Notes, if
any) then outstanding voting as a single class (including, without
limitation, consents obtained in connection with a purchase of, or tender
offer or exchange offer for, the Notes), and, subject to Sections 6.04 and
6.07 hereof, any existing Default or Event of Default (other than a
Default or Event of Default in the payment of the principal of, premium,
if any, or interest on the Notes, except a payment default resulting from
an acceleration that has been rescinded) or compliance with any provision
of this Indenture, the Subsidiary Guarantees or the Notes may be waived
with the consent of the Holders of a majority in principal amount of the
then outstanding Notes (including Additional Notes, if any) voting as a
single class (including consents obtained in connection with a tender
offer or exchange offer for, or purchase of, the Notes). Section 2.08
hereof shall determine which Notes are considered to be "outstanding" for
purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 7.02 hereof, the Trustee shall join with the Company in the
execution of such amended or supplemental Indenture unless such amended or
supplemental Indenture directly affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case the Trustee
may in its discretion, but shall not be obligated to, enter into such
amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves
the substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver.
Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amended or supplemental Indenture or waiver. Subject to Sections 6.04 and
6.07 hereof, the Holders of a majority in aggregate principal amount of
the Notes (including Additional Notes, if any) then outstanding voting as
a single class may waive compliance in a particular instance by the
Company with any provision of this Indenture or the Notes. However,
without the consent of each Holder affected, an amendment or waiver under
this Section 9.02 may not (with respect to any Notes held by a non-
consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter or waive any of the provisions with respect to the redemption of
the Notes except as provided above with respect to Sections 3.09, 4.10 and
4.15 hereof;
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes (including
Additional Notes, if any) and a waiver of the payment default that
resulted from such (e) make any Note payable in money other than that
stated in the Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or interest on the Notes; or
(g) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
Notwithstanding anything to the contrary contained herein, any
amendment to the provisions of Article 10 of this Indenture shall require
the consent of the Holders of at least 66 2/3% in aggregate principal
amount of the Notes then outstanding if such amendment would adversely
affect the rights of Holders of Notes.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall
be set forth in a amended or supplemental Indenture that complies with the
TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder
of a Note and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder's Note, even if notation
of the consent is not made on any Note. However, any such Holder of a
Note or subsequent Holder of a Note may revoke the consent as to its Note
if the Trustee receives written notice of revocation before the date the
waiver, supplement or amendment becomes effective. An amendment,
supplement or waiver becomes effective in accordance with its terms and
thereafter binds every Holder.
Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or
waiver.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement
does not adversely affect the rights, duties, liabilities or immunities of
the Trustee. The Company may not sign an amendment or supplemental
Indenture until the Board of Directors approves it. In executing any
amended or supplemental indenture, the Trustee shall be entitled to
receive and (subject to Section 7.01 hereof) shall be fully protected in
relying upon, in addition to the documents required by Section 11.04
hereof, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
ARTICLE 10.
SUBORDINATION
Section 10.01. Agreement to Subordinate.
The Company agrees, and each Holder by accepting a Note agrees,
that the Indebtedness evidenced by, and all Obligations relating to, the
Notes are subordinated in right of payment, to the extent and in the
manner provided in this Article 10, to the prior payment in full in cash
or Cash Equivalents of all Senior Debt (whether outstanding on the date
hereof or hereafter created, incurred, assumed or guaranteed), and that
the subordination is for the benefit of the holders of Senior Debt.
Section 10.02. Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company in a liquidation
or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or
its property, in an assignment for the benefit of creditors or any
marshalling of the Company's assets and liabilities:
(1) holders of Senior Debt shall be entitled to receive payment
in full in cash or Cash Equivalents of all Obligations in respect of such
Senior Debt (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior Debt) before
Holders of the Notes shall be entitled to receive any payment of cash,
properties or securities with respect to the Notes (except that Holders
may receive and retain (i) Permitted Junior Securities and (ii) payments
and other distributions made from any defeasance trust created pursuant to
Section 8.01 hereof); and
(2) until all Obligations with respect to Senior Debt (as
provided in subsection (1) above) are paid in full in cash or Cash
Equivalents, any distribution to which Holders would be entitled but for
this Article 10 shall be made to holders of Senior Debt (except that
Holders of Notes may receive and retain (i) Permitted Junior Securities
and (ii) payments and other distributions made from any defeasance trust
created pursuant to Section 8.01 hereof), as their interests may appear.
Section 10.03. Payment On Change In Control
Notwithstanding the provisions of Section 4.15 hereof, if the
Company then has Obligations under Senior Debt whose terms do not permit
the repurchase of Notes pursuant to any Change of Control Offer, the
Company shall not, directly or indirectly, repurchase any Notes tendered
to the Company pursuant to a Change of Control Offer unless the Company
has, within 90 days of the Change of Control, paid in full in cash or Cash
Equivalents all Obligations relating to such Senior Debt or obtained the
requisite consent from the holders of such Senior Debt for the repurchase
of Notes so tendered. Notwithstanding the provisions of this Section
10.03, a failure to repurchase Notes as required pursuant to Section 4.15
shall be an Event of Default under Section 6.01(b) hereof.
Section 10.04. Default on Significant Senior Debt.
The Company may not, directly or indirectly, make any payment or
distribution to the Trustee or any Holder in respect of Obligations with
respect to the Notes and may not acquire from the Trustee or any Holder
any Notes for cash or property (other than (a) Permitted Junior Securities
and (b) payments and other distributions made from any defeasance trust
created pursuant to Section 8.01 hereof) until all principal and other
Obligations with respect to the Significant Senior Debt (in the case of
clause (i)) or Designated Senior Debt (in the case of clause (ii)), have
been paid in full if:
(i) a default in the payment of any principal of, premium, if
any, interest or other Obligations with respect to Significant Senior
Debt occurs and is continuing; or
(ii) a default, other than a payment default, on any Designated
Senior Debt occurs and is continuing that then permits holders of such
Designated Senior Debt to accelerate its maturity and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from a
Person (or their Representative, if applicable) who may give it
pursuant to Section 10.13 hereof. If the Trustee receives any such
Payment Blockage Notice, no subsequent Payment Blockage Notice shall
be effective for purposes of this Section unless and until (i) at
least 360 days shall have elapsed since the initial effectiveness of
the immediately prior Payment Blockage Notice and (ii) all scheduled
payments of principal, premium, if any, Liquidated Damages, if any,
and interest on the Notes that have come due have been paid in full in
cash. No nonpayment default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall
be, or be made, the basis for a subsequent Payment Blockage Notice
unless such default shall have been cured or waived for a period of
not less than 180 days.
The Company may and shall resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:
(1) the date upon which the default referred to in Section
10.04(i) or (ii) hereof is cured or waived, or
(2) in the case of a default referred to in Section 10.04(ii)
hereof, the 179th day after the receipt by the Trustee of the applicable
Payment Blockage Notice if the maturity of such Designated Senior Debt has
not been accelerated,
if this Article 10 otherwise permits the payment, distribution or
acquisition at the time of such payment or acquisition.
Section 10.05 Acceleration of Securities.
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the
acceleration.
Section 10.06. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any payment
of any Obligations with respect to the Notes at a time when such payment
is prohibited by Section 10.04 hereof, such payment shall be held by the
Trustee or such Holder, in trust for the benefit of, and shall be paid
forthwith over and delivered, upon written request, to, the holders of
Significant Senior Debt or Designated Senior Debt as their interests may
appear or their Representative under the indenture or other agreement (if
any) pursuant to which such Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of all
Obligations with respect to such Senior Debt remaining unpaid to the
extent necessary to pay such Obligations in full in accordance with their
terms, after giving effect to any concurrent payment or distribution to or
for the holders of such Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes
to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into
this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Debt, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to
or on behalf of Holders or the Company or any other Person money or assets
to which any holders of Senior Debt shall be entitled by virtue of this
Article 10, except if such payment is made as a result of the willful
misconduct or gross negligence of the Trustee.
Section 10.07. Notice by Company.
The Company shall promptly notify the Trustee and the Paying Agent
of any facts known to the Company that would cause a payment of any
Obligations with respect to the Notes to violate this Article 10, but
failure to give such notice shall not affect the subordination of the
Notes to the Senior Debt as provided in this Article 10.
Section 10.08. Subrogation.
After all Senior Debt is paid in full in cash and Cash Equivalents
and until the Notes are paid in full, Holders of Notes shall be subrogated
(equally and ratably with all other Indebtedness pari passu with the
Notes) to the rights of holders of Senior Debt to receive distributions
applicable to Senior Debt to the extent that distributions otherwise
payable to the Holders of Notes have been applied to the payment of Senior
Debt. A distribution made under this Article 10 to holders of Senior Debt
that otherwise would have been made to Holders of Notes is not, as between
the Company and Holders, a payment by the Company on the Notes.
Section 10.09. Relative Rights.
This Article 10 defines the relative rights of Holders of Notes
and holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders of Notes and other
creditors of the Company other than the rights of Holders in relation to
holders of Senior Debt; or
(3) prevent the Trustee or any Holder of Notes from exercising
its available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt to receive distributions and
payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal
of or interest on a Note on the due date, the failure is still a Default
or Event of Default.
Section 10.10. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Debt to enforce the subordination
of the Indebtedness evidenced by the Notes shall be impaired by any act or
failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
Section 10.11. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders
of Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred
to in this Article 10, the Trustee and the Holders of Notes shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to
the Trustee or to the Holders of Notes for the purpose of ascertaining the
Persons entitled to participate in such distribution, the holders of the
Senior Debt and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 10.
Section 10.12. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of
any payment or distribution by the Trustee, and the Trustee and the Paying
Agent may continue to make payments on the Notes, unless the Trustee shall
have received at its Corporate Trust Office at least three Business Days
prior to the date of such payment written notice of facts that would cause
the payment of any Obligations with respect to the Notes to violate this
Article 10. Only the Company (but only with respect to a default
described in Section 10.04(i) hereof) or a Representative may give the
notice. Nothing in this Article 10 shall impair the claims of, or
payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights.
Section 10.13. Authorization to Effect Subordination.
Each Holder of Notes, by the Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
as provided in this Article 10, and appoints the Trustee to act as such
Holder's attorney-in-fact for any and all such purposes. If the Trustee
does not file a proper proof of claim or proof of debt in the form
required in any proceeding referred to in Section 6.09 hereof at least 30
days before the expiration of the time to file such claim, the
Representative(s) of Designated Senior Debt are hereby authorized to file
an appropriate claim for and on behalf of the Holders of the Notes.
Section 10.14. Amendments.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the holders of all Senior Debt.
ARTICLE 11.
SUBSIDIARY GUARANTEES
Section 11.01. Guarantee.
Subject to this Article 11, each of the Subsidiary Guarantors
hereby, jointly and severally, unconditionally guarantees to each Holder
of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Notes or the obligations of the
Company hereunder or thereunder, that: (a) the principal of and interest
on the Notes will be promptly paid in full when due, whether at maturity,
by acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance
with the terms hereof and thereof; and (b) in case of any extension of
time of payment or renewal of any Notes or any of such other obligations,
that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed or any performance so guaranteed for whatever reason,
the Subsidiary Guarantors shall be jointly and severally obligated to pay
the same immediately. Each Subsidiary Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
The Subsidiary Guarantors hereby agree that their obligations
hereunder shall be unconditional, irrespective of the validity, regularity
or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the
Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Subsidiary Guarantor. Each Subsidiary Guarantor
hereby waives diligence, presentment, demand of payment, filing of claims
with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest, notice
and all demands whatsoever and covenant that this Subsidiary Guarantee
shall not be discharged except by complete performance of the obligations
contained in the Notes and this Indenture.
If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Subsidiary Guarantors or any custodian,
trustee, liquidator or other similar official acting in relation to either
the Company or the Subsidiary Guarantors, any amount paid by either to the
Trustee or such Holder, this Subsidiary Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.
Each Subsidiary Guarantor agrees that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Subsidiary Guarantor further agrees that, as
between the Subsidiary Guarantors, on the one hand, and the Holders and
the Trustee, on the other hand, (x) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article 6 hereof for
the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (y) in the event of any declaration
of acceleration of such obligations as provided in Article 6 hereof, such
obligations (whether or not due and payable) shall forthwith become due
and payable by the Subsidiary Guarantors for the purpose of this
Subsidiary Guarantee. The Subsidiary Guarantors shall have the right to
seek contribution from any non-paying Subsidiary Guarantor so long as the
exercise of such right does not impair the rights of the Holders under the
Guarantee.
Section 11.02. Subordination of Subsidiary Guarantee.
The Obligations of each Subsidiary Guarantor under its Subsidiary
Guarantee pursuant to this Article 11 shall be junior and subordinated to
the Senior Debt of such Subsidiary Guarantor on the same basis as the
Notes are junior and subordinated to Senior Debt of the Company. For the
purposes of the foregoing sentence, the Trustee and the Holders shall have
the right to receive and/or retain payments by any of the Subsidiary
Guarantors only at such times as they may receive and/or retain payments
in respect of the Notes pursuant to this Indenture, including Article 10.
Section 11.03. Limitation on Subsidiary Guarantor Liability.
Each Subsidiary Guarantor, and by its acceptance of Notes, each
Holder, hereby confirms that it is the intention of all such parties that
the Subsidiary Guarantee of such Subsidiary Guarantor not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law to the extent applicable to any
Subsidiary Guarantee. To effectuate the foregoing intention, the Trustee,
the Holders and the Subsidiary Guarantors hereby irrevocably agree that
the obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee and this Article 11 shall be limited to the maximum amount as
will, after giving effect to such maximum amount and all other contingent
and fixed liabilities of such Subsidiary Guarantor that are relevant under
such laws, and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under this Article 11, result in the obligations of
such Subsidiary Guarantor under its Subsidiary Guarantee not constituting
a fraudulent transfer or conveyance.
Section 11.04. Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 11.01,
each Subsidiary Guarantor hereby agrees that a notation of such Subsidiary
Guarantee substantially in the form included in Exhibit E shall be
endorsed by an Officer of such Subsidiary Guarantor on each Note
authenticated and delivered by the Trustee and that this Indenture shall
be executed on behalf of such Subsidiary Guarantor by its President or one
of its Vice Presidents.
Each Subsidiary Guarantor hereby agrees that its Subsidiary
Guarantee set forth in Section 11.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary
Guarantee set forth in this Indenture on behalf of the Subsidiary
Guarantors.
In the event that the Company creates or acquires any new
Subsidiaries subsequent to the date of this Indenture, if required by
Section 4.20 hereof, the Company shall cause such Subsidiaries to execute
supplemental indentures to this Indenture and Subsidiary Guarantees in
accordance with Section 4.20 hereof and this Article 11, to the extent
applicable.
Section 11.05. Subsidiary Guarantors May Consolidate, etc., on
Certain Terms.
No Subsidiary Guarantor may consolidate with or merge with or into
(whether or not such Subsidiary Guarantor is the surviving Person) another
Person whether or not affiliated with such Subsidiary Guarantor unless:
(a) subject to this Section 11.05, the Person formed by or surviving
any such consolidation or merger (if other than a Subsidiary Guarantor or
the Company) unconditionally assumes all the obligations of such
Subsidiary Guarantor, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the Notes, the
Indenture, the Registration Rights Agreement and the Subsidiary Guarantee
on the terms set forth herein or therein;
(b) immediately after giving effect to such transaction, no Default
or Event of Default exists; and
(c) the Company would be permitted, immediately after giving effect
to such transaction, to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof.
In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the
Trustee, of the Subsidiary Guarantee endorsed upon the Notes and the due
and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Subsidiary Guarantor, such successor
Person shall succeed to and be substituted for the Subsidiary Guarantor
with the same effect as if it had been named herein as a Subsidiary
Guarantor. Such successor Person thereupon may cause to be signed any or
all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee. All the Subsidiary Guarantees so
issued shall in all respects have the same legal rank and benefit under
this Indenture as the Subsidiary Guarantees theretofore and thereafter
issued in accordance with the terms of this Indenture as though all of
such Subsidiary Guarantees had been issued at the date of the execution
hereof.
Except as set forth in Articles 4 and 5 hereof, and
notwithstanding clauses (a) and (b) above, nothing contained in this
Indenture or in any of the Notes shall prevent any consolidation or merger
of a Subsidiary Guarantor with or into the Company or another Subsidiary
Guarantor, or shall prevent any sale or conveyance of the property of a
Subsidiary Guarantor as an entirety or substantially as an entirety to the
Company or another Subsidiary Guarantor.
Section 11.06. Releases Following Sale of Assets.
In the event of a sale or other disposition of all of the assets
of any Subsidiary Guarantor, by way of merger, consolidation or otherwise,
or a sale or other disposition of all of the capital stock of any
Subsidiary Guarantor, then such Subsidiary Guarantor (in the event of a
sale or other disposition, by way of merger, consolidation or otherwise,
of all of the capital stock of such Subsidiary Guarantor) or the
corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Subsidiary
Guarantor) will be released and relieved of any obligations under its
Subsidiary Guarantee; provided that the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable provisions of
this Indenture, including without limitation Section 4.10 hereof. Upon
delivery by the Company to the Trustee of an Officers' Certificate and an
Opinion of Counsel to the effect that such sale or other disposition was
made by the Company in accordance with the applicable provisions of this
Indenture, including without limitation Section 4.10 hereof, the Trustee
shall execute any documents reasonably required in order to evidence the
release of any Subsidiary Guarantor from its obligations under its
Subsidiary Guarantee.
Any Subsidiary Guarantor not released from its obligations under
its Subsidiary Guarantee shall remain liable for the full amount of
principal of and interest on the Notes and for the other obligations of
any Subsidiary Guarantor under this Indenture as provided in this Article
11.
ARTICLE 12.
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA Section 318(c), the imposed duties shall
control.
Section 12.02. Notices.
Any notice or communication by the Company, any Subsidiary
Guarantor or the Trustee to the others is duly given if in writing and
delivered in Person or mailed by first class mail (registered or
certified, return receipt requested), telex, telecopier or overnight air
courier guaranteeing next day delivery, to the others' address
If to the Company and/or any Subsidiary Guarantor:
Oshkosh Truck Corporation
P.O. Box 2566
Oshkosh, Wisconsin 54903-2566
Telephone No.: (414) 235-9151
Attention: Chief Financial Officer
With a copy to:
Foley & Lardner
Firstar Center, 777 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202-5367
Telecopier No.: (414) 297-4900
Attention: Benjamin F. Garmer III
If to the Trustee:
Firstar Trust Company
1555 North Rivercenter Drive
Suite 301
Milwaukee, Wisconsin 53212
Telephone No.: (414) 905-5050
Telecopier No.: (414) 905-5049
Attention: Department Manager
The Company, any Subsidiary Guarantor or the Trustee, by notice to
the others may designate additional or different addresses for subsequent
notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the
mail, postage prepaid, if mailed; when answered back, if telexed; when
receipt acknowledged, if telecopied; and the next Business Day after
timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown
on the register kept by the Registrar. Any notice or communication shall
also be so mailed to any Person described in TIA Section 313(c), to the
extent required by the TIA. Failure to mail a notice or communication to
a Holder or any defect in it shall not affect its sufficiency with respect
to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the
addressee receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 12.03. Communication by Holders of Notes with Other Holders
of Notes.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
Section 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) if requested by the Trustee, an Opinion of Counsel in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 12.05 hereof) stating that, in the opinion
of such counsel, all such conditions precedent and covenants have been
satisfied.
Section 12.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall comply with
the provisions of TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 12.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.
Section 12.07. No Personal Liability of Directors, Officers,
Employees and Stockholders.
No past, present or future director, officer, employee,
incorporator or stockholder of the Company or any Subsidiary Guarantor, as
such, shall have any liability for any obligations of the Company or such
Subsidiary Guarantor under the Notes, the Subsidiary Guarantees, this
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
Section 12.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
Section 12.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
Section 12.10. Successors.
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successors.
Section 12.11. Severability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 12.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the
same agreement.
Section 12.13. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and
shall in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
SIGNATURES
Dated as of February 26, 1998
OSHKOSH TRUCK CORPORATION
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President and Chief
Financial Officer
MCNEILUS TRUCK & MANUFACTURING, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President and Chief
Financial Officer
IOWA CONTRACT FABRICATORS, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President and Chief
Financial Officer
MCINTIRE FABRICATORS, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President and Chief
Financial Officer
KENSETT FABRICATORS, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President and Chief
Financial Officer
MCNEILUS COMPANIES, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President and Chief
Financial Officer
MCNEILUS FINANCIAL, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Executive Vice President and Chief
Financial Officer
PIERCE MANUFACTURING, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Vice President and Chief Financial Officer
SUMMIT PERFORMANCE SYSTEMS, INC.
By: /s/ Charles L. Szews
Name: Charles L. Szews
Title: Vice President and Chief Financial Officer
FIRSTAR TRUST COMPANY, as Trustee
BY: /s/ Pamela Warner
Name: Pamela Warner
Title: Assistant Vice President
BY: /s/ Amy E. Nolde
Name: Amy E. Nolde
Title: Assistant Secretary
<PAGE>
EXHIBIT A-1
(Face of 144A/IAI Note)
CUSIP/CINS ______________
8 3/4% Senior Subordinated Notes due 2008
No. _____ $____________
OSHKOSH TRUCK CORPORATION
promises to pay to _____________________________________________________
or registered assigns,
the principal sum of _______________________________________________
Dollars on March 1, 2008.
Interest Payment Dates: March 1 and September 1
Record Dates: February 15 and August 15
DATED: ____________, 199___
OSHKOSH TRUCK CORPORATION
BY:
Name:
Title:
This is one of the [Global]
Notes referred to in the
within-mentioned Indenture:
FIRSTAR TRUST COMPANY,
as Trustee
By:
<PAGE>
(Back of Note)
8 3/4% Senior Subordinated Notes due 2008
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT
OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON
UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH
NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE
INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY
BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF
THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(1) BY THE INITIAL PURCHASER (a) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT), PURCHASING FOR ITS OWN ACCOUNT IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (d) TO
THE COMPANY, (e) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (f) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, AND (2) BY SUBSEQUENT PURCHASERS, AS SET FORTH IN (1)(a) THROUGH (e)
ABOVE, AND IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (A) ABOVE, NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY
OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED
HEREBY.1
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Oshkosh Truck Corporation, a Wisconsin corporation
(the "Company"), promises to pay interest on the principal amount of this
Note at 8 3/4% per annum from the date hereof until maturity and shall pay
the Liquidated Damages payable pursuant to Section 5 of the Registration
Rights Agreement referred to below. The Company will pay interest and
Liquidated Damages semi-annually on March 1 and September 1 of each year,
or if any such day is not a Business Day, on the next succeeding Business
Day (each an "Interest Payment Date"). Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there
is no existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the
next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date; provided, further, that the first
Interest Payment Date shall be September 1, 1998. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate that is 1% per annum in excess of the rate then
in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
and Liquidated Damages (without regard to any applicable grace periods)
from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the February 15 or
August 15 next preceding the Interest Payment Date, even if such Notes are
cancelled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.12 of the Indenture with respect to
defaulted interest. The Notes will be payable as to principal, premium
and Liquidated Damages, if any, and interest at the office or agency of
the Company maintained for such purpose within or without the City and
State of New York, or, at the option of the Company, payment of interest
and Liquidated Damages may be made by check mailed to the Holders at their
addresses set forth in the register of Holders, and provided that payment
by wire transfer of immediately available funds will be required with
respect to principal of and interest, premium and Liquidated Damages on,
all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent.
Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public
and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Firstar Trust Company,
the Trustee under the Indenture, will act as Paying Agent and Registrar.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Notes under an Indenture
dated as of February 26, 1998 ("Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act
of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are
subject to all such terms, and Holders are referred to the Indenture and
such Act for a statement of such terms. To the extent any provision of
this Note conflicts with the express provisions of the Indenture, the
provisions of the Indenture shall govern and be controlling. The Notes
are general unsecured obligations of the Company limited to $150.0 million
in aggregate principal amount.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph
5, the Company shall not have the option to redeem the Notes prior to
March 1, 2003. Thereafter, the Company shall have the option to redeem
the Notes, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages thereon to the applicable redemption date, if redeemed
during the twelve-month period beginning on March 1 of the years indicated
below:
Year Percentage
2003 104.375%
2004 102.917%
2005 101.458%
2006 and thereafter 100.000 %
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to March 1, 2001, the Company may on any
one or more occasions redeem up to 35% of the aggregate principal amount
of the Initial Notes at a redemption price equal to 108.750% of the
principal amount thereof, plus accrued and unpaid Liquidated Damages
thereon, if any, to the applicable redemption date, with the net cash
proceeds of one or more public offerings of common stock of the Company;
provided that Notes in an aggregate principal amount of at least 65% of
the aggregate principal amount of the Notes issued on the date of the
Indenture remain outstanding immediately after the occurrence of such
redemption (excluding Initial Notes held by the Company and its
Subsidiaries); and provided, further, that such redemption shall occur
within 45 days of the date of the closing of such public offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to repurchase all
or any part (equal to $1,000 or an integral multiple thereof) of each
Holder's Notes at a purchase price equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest, if any, to the
date of purchase (the "Change of Control Payment"). Within 30 days
following any Change of Control, the Company shall mail a notice to each
Holder setting forth the procedures governing the Change of Control Offer
as required by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales,
within five days of each date on which the aggregate amount of Excess
Proceeds exceeds $10.0 million, the Company shall commence an offer (pro
rata in proportion to the principal amount (or accreted value, if
applicable) outstanding in respect of any Asset Sale offer required by the
terms of any pari passu Indebtedness incurred in accordance with this
Indenture) to all Holders of Notes (as "Asset Sale Offer") pursuant to
Section 3.09 of the Indenture to purchase the maximum principal amount of
Notes (including any Additional Notes) that may be purchased out of the
Excess Proceeds at an offer price in cash in an amount equal to 100% of
the principal amount thereof plus accrued and unpaid interest, if any, to
the date fixed for the closing of such offer, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate
amount of Notes tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Company may use such deficiency for any purpose not
otherwise prohibited by the Indenture. If the aggregate principal amount
of Notes surrendered by Holders thereof (and any pari passu Indebtedness
as aforesaid) exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes to be purchased on a pro rata basis. Holders of Notes
that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Company prior to any related purchase date and may elect to
have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on
Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder
to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Note or
portion of a Note selected for redemption, except for the unredeemed
portion of any Note being redeemed in part. Also, the Company need not
exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a
record date and the corresponding Interest Payment Date.
10. SUBORDINATION. The Notes are subordinated in right of
payment, to the extent and in the manner provided in Article 10 of the
Indenture, to the prior payment in full in cash or Cash Equivalents of all
Senior Debt. To the extent provided in the Indenture, Senior Debt must be
paid before the Securities may be paid. The Company agrees and each
Holder of Notes by accepting a Note consents and agrees to the
subordination provided in the Indenture and authorizes the Trustee to give
it effect.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may
be treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Subsidiary Guarantees or the Notes may be
amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the then outstanding Notes and Additional
Notes, if any, voting as a single class, and any existing default or
compliance with any provision of the Indenture, the Subsidiary Guarantees
or the Notes may be waived with the consent of the Holders of a majority
in principal amount of the then outstanding Notes and Additional Notes, if
any, voting as a single class. Without the consent of any Holder of a
Note, the Indenture, the Subsidiary Guarantees or the Notes may be amended
or supplemented to cure any ambiguity, defect or inconsistency, to provide
for uncertificated Notes in addition to or in place of certificated Notes,
to provide for the assumption of the Company's or Subsidiary Guarantor's
obligations to Holders of the Notes in case of a merger or consolidation,
to make any change that would provide any additional rights or benefits to
the Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, to comply with the
requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act, to provide
for the Issuance of Additional Notes in accordance with the limitations
set forth in the Indenture, or to allow any Subsidiary Guarantor to
execute a supplemental indenture to the Indenture and/or a Subsidiary
Guarantee with respect to the Notes.
13. DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest or Liquidated
Damages on the Notes; (ii) default in payment when due of principal of or
premium, if any, on the Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to
purchase) or otherwise, (iii) failure by the Company to comply with
Section 4.07, 4.09, 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by
the Company for 60 days after notice to the Company by the Trustee or the
Holders of at least 25% in principal amount of the Notes (including
Additional Notes, if any) then outstanding voting as a single class to
comply with certain other agreements in the Indenture or the Notes; (v)
default under certain other agreements relating to Indebtedness of the
Company which default results in the acceleration of such Indebtedness
prior to its express maturity; (vi) certain final judgments for the
payment of money that remain undischarged for a period of 60 days; (vii)
except as permitted by the Indenture, any Subsidiary Guarantee shall be
held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Subsidiary
Guarantor or any Person acting on its behalf shall deny or disaffirm its
obligations under such Subsidiary Guarantor's Subsidiary Guarantee; and
(viii) certain events of bankruptcy or insolvency with respect to the
Company or any of its Significant Subsidiaries. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes
to be due and payable. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency,
all outstanding Notes will become due and payable without further action
or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in
their interest. The Holders of a majority in aggregate principal amount
of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest on, or the
principal of, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and
the Company is required upon becoming aware of any Default or Event of
Default, to deliver to the Trustee a statement specifying such Default or
Event of Default.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or of any Subsidiary
Guarantor, as such, shall not have any liability for any obligations of
the Company under the Notes or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the
Notes.
16. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right
of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED CERTIFICATED NOTES. In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global Notes
and Restricted Certificated Notes shall have all the rights set forth in
the Registration Rights Agreement dated as of February 26, 1998, between
the Company and the parties named on the signature pages thereof (the
"Registration Rights Agreement").
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company
has caused CUSIP numbers to be printed on the Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders.
No representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed
thereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Oshkosh Truck Corporation
P.O. Box 2566
Oshkosh, Wisconsin 54903-2566
Attention: Chief Financial Officer
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
__________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
__________________________________________________________________________
__________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint __________________________________________________
to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
__________________________________________________________________________
Date: _________________________ Your Signature: ________________________
(Sign exactly as your name
appears on the Note)
SIGNATURE GUARANTEE
_____________________________________
Signatures must be guaranteed by an "eligible
guarantor Institution" meeting the requirements of the
Registrar, which requirements include membership or
participation in the Security transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934,
as amended.
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate
box below:
/ / Section 4.10 / / Section 4.15
If you want to elect to have only part of the Note purchased by
the Company pursuant to Section 4.10 or Section 4.15 of the Indenture,
state the amount you elect to have purchased: $___________
Date: ________________________ Your Signature: ________________________
(Sign exactly as your name
appears on the face of this Note)
Tax Identification No.:
SIGNATURE GUARANTEE
_____________________________________
Signatures must be guaranteed by an "eligible
guarantor Institution" meeting the requirements of the
Registrar, which requirements include membership or
participation in the Security transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934,
as amended.
<PAGE>
SCHEDULE OF EXCHANGES OF RULE 144A/ACCREDITED INVESTOR GLOBAL NOTE
The following exchanges of a part of this Regulation S Global Note
for an interest in another Global Note, or of other Restricted Global
Notes for an interest in this Regulation S Global Note, have been made:
Principal
Amount of Amount of Amount of Signature of
decrease in increase in this Global authorized
Principal Principal Note officer of
Amount of amount of following Trustee or
Date of this Global this Global such decrease Note
Exchange Note Note (or increase) Custodian
<PAGE>
EXHIBIT A-2
(Face of Regulation S Global Note)
CUSIP/CINS _________
8 3/4% Senior Subordinated Notes due 2008
No. _____ $___________
OSHKOSH TRUCK CORPORATION
promises to pay to _____________________________________________________
or registered assigns,
the principal sum of _________________________________________________
Dollars on March 1, 2008.
Interest Payment Dates: March 1 and September 1
Record Dates: February 15 and August 15
Dated: ____________________, 199 ___
OSHKOSH TRUCK CORPORATION
By:__________________________________
Name:
Title:
This is one of the [Global]
Notes referred to in the
within-mentioned Indenture:
FIRSTAR TRUST COMPANY,
as Trustee
By: __________________________
<PAGE>
(Back of Regulation S Global Note)
8 3/4 % Senior Subordinated Notes due 2008
THE RIGHTS ATTACHING TO THIS REGULATION S GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES,
ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER
NOR THE BENEFICIAL OWNERS OF THIS REGULATION S GLOBAL NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.
THIS REGULATION S GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS
DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY
FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE
TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE
INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY
BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF
THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE
HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(1) BY THE INITIAL PURCHASER (a) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT), PURCHASING FOR ITS OWN ACCOUNT IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT, (c) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER (IF APPLICABLE) OR IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (d) TO
THE COMPANY, (e) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (f) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, AND (2) BY SUBSEQUENT PURCHASERS, AS SET FORTH IN (1)(a) THROUGH (e)
ABOVE, AND IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (A) ABOVE, NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY
OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALE OF THE SECURITY EVIDENCED
HEREBY.
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Oshkosh Truck Corporation, a Wisconsin corporation
(the "Company"), promises to pay interest on the principal amount of this
Note at 8 3/4% per annum from the date hereof until maturity and shall pay
the Liquidated Damages payable pursuant to Section 5 of the Registration
Rights Agreement referred to below. The Company will pay interest and
Liquidated Damages semi-annually on March 1 and September 1 of each year,
or if any such day is not a Business Day, on the next succeeding Business
Day (each an "Interest Payment Date"). Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there
is no existing Default in the payment of interest, and if this Note is
authenticated between a record date referred to on the face hereof and the
next succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date; provided, further, that the first
Interest Payment Date shall be September 1, 1998. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate that is 1% per annum in excess of the rate then
in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
and Liquidated Damages (without regard to any applicable grace periods)
from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the February 15 or
August 15 next preceding the Interest Payment Date, even if such Notes are
cancelled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.12 of the Indenture with respect to
defaulted interest. The Notes will be payable as to principal, premium,
interest and Liquidated Damages at the office or agency of the Company
maintained for such purpose within or without the City and State of New
York, or, at the option of the Company, payment of interest and Liquidated
Damages may be made by check mailed to the Holders at their addresses set
forth in the register of Holders, and provided that payment by wire
transfer of next day funds will be required with respect to principal of
and interest, premium and Liquidated Damages on, all Global Notes and all
other Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent. Such payment shall be in
such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Firstar Trust Company,
the Trustee under the Indenture, will act as Paying Agent and Registrar.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Notes under an Indenture
dated as of February 26, 1998 ("Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act
of 1939, as amended (15 U.S. Code SectionSection 77aaa-77bbbb). The Notes
are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision
of this Note conflicts with the express provisions of the Indenture, the
provisions of the Indenture shall govern and be controlling. The Notes
are secured obligations of the Company limited to $150.0 million in
aggregate principal amount.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph
5, the Company shall not have the option to redeem the Notes prior to
March 1, 2003. Thereafter, the Company shall have the option to redeem
the Notes, in whole or in part, upon not less than 30 nor more than 60
days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages thereon to the applicable redemption date, if redeemed
during the twelve-month period beginning on March 1 of the years indicated
below:
Year Percentage
2003 104.375%
2004 102.917%
2005 101.458%
2006 and thereafter 100.000 %
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to March 1, 2001, the Company may on any
one or more occasions redeem up to 35% of the aggregate principal amount
of the Initial Notes at a redemption price equal to 108.750% of the
principal amount thereof, plus accrued and unpaid Liquidated Damages
thereon, if any, to the applicable redemption date, with the net cash
proceeds of one or more public offerings of common stock of the Company;
provided that Notes in an aggregate principal amount of at least 65% of
the aggregate principal amount of the Notes issued on the date of the
Indenture remain outstanding immediately after the occurrence of such
redemption (excluding Initial Notes held by the Company and its
Subsidiaries); and provided, further, that such redemption shall occur
within 45 days of the date of the closing of such public offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to repurchase all
or any part (equal to $1,000 or an integral multiple thereof) of each
Holder's Notes at a purchase price equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest, if any, to the
date of purchase the "Change of Control Payment"). Within 30 days
following any Change of Control, the Company shall mail a notice to each
Holder setting forth the procedures governing the Change of Control Offer
as required by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sales,
within five days of each date on which the aggregate amount of Excess
Proceeds exceeds $10.0 million, the Company shall commence an offer (pro
rata in proportion to the principal amount (or accreted value, if
applicable) outstanding in respect of any Asset Sale offer required by the
terms of any pari passu Indebtedness incurred in accordance with this
Indenture) to all Holders of Notes (as "Asset Sale Offer") pursuant to
Section 3.09 of the Indenture to purchase the maximum principal amount of
Notes (including any Additional Notes) that may be purchased out of the
Excess Proceeds at an offer price in cash in an amount equal to 100% of
the principal amount thereof plus accrued and unpaid interest, if any, to
the date fixed for the closing of such offer, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate
amount of Notes tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Company may use such deficiency for any purpose not
otherwise prohibited by the Indenture. If the aggregate principal amount
of Notes surrendered by Holders thereof (and any pari passu Indebtedness
as aforesaid) exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes to be purchased on a pro rata basis. Holders of Notes
that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Company prior to any related purchase date and may elect to
have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on
Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a Holder
to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Note or
portion of a Note selected for redemption, except for the unredeemed
portion of any Note being redeemed in part. Also, it need not exchange or
register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
This Regulation S Global Note is exchangeable in whole or in part
for one or more Global Notes only (i) on or after the termination of the
40-day restricted period (as defined in Regulation S) and (ii) upon
presentation of certificates (accompanied by an Opinion of Counsel, if
applicable) required by Article 2 of the Indenture. Upon exchange of this
Regulation S Global Note for one or more Global Notes, the Trustee shall
cancel this Regulation S Global Note.
10. SUBORDINATION. The Notes are subordinated in right of
payment, to the extent and in the manner provided in Article 10 of the
Indenture, to the prior payment in full in cash or Cash Equivalents of all
Senior Debt. To the extent provided in the Indenture, Senior Debt must be
paid before the Notes may be paid. The Company agrees and each Holder of
Notes by accepting a Note consents and agrees to the subordination
provided in the Indenture and authorizes the Trustee to give it effect.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may
be treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes, and any existing default or compliance with
any provision of the Indenture or the Notes may be waived with the consent
of the Holders of a majority in principal amount of the then outstanding
Notes. Without the consent of any Holder of a Note, the Indenture or the
Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in
place of certificated Notes, to provide for the assumption of the
Company's obligations to Holders of the Notes in case of a merger or
consolidation, to make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not adversely affect
the legal rights under the Indenture of any such Holder, or to comply with
the requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
13. DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest or Liquidated
Damages on the Notes; (ii) default in payment when due of principal of or
premium, if any, on the Notes when the same becomes due and payable at
maturity, upon redemption (including in connection with an offer to
purchase) or otherwise, (iii) failure by the Company to comply with
Section 4.07, 4.09, 4.10, 4.15 or 5.01 of the Indenture, which failure
remains uncured for 30 days; (iv) failure by the Company for 60 days after
notice to the Company by the Trustee or the Holders of at least 25% in
principal amount of the Notes then outstanding to comply with certain
other agreements in the Indenture, the Notes or the Pledge Agreement; (v)
default under certain other agreements relating to Indebtedness of the
Company which default results in the acceleration of such Indebtedness
prior to its express maturity; (vi) certain final judgments for the
payment of money that remain undischarged for a period of 60 days; (vii)
the breach of certain covenants in the Pledge Agreement or the Pledge
Agreement shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect; and
(viii) certain events of bankruptcy or insolvency with respect to the
Company or any of its Significant Subsidiaries. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes
to be due and payable. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency,
all outstanding Notes will become due and payable without further action
or notice. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in
their interest. The Holders of a majority in aggregate principal amount
of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest on, or the
principal of, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and
the Company is required upon becoming aware of any Default or Event of
Default, to deliver to the Trustee a statement specifying such Default or
Event of Default.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or of any Subsidiary
Guarantor, as such, shall not have any liability for any obligations of
the Company or such Subsidiary Guarantor under the Notes, the Subsidiary
Guarantees or the Indenture or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes.
16. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right
of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED CERTIFICATED NOTES. In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global Notes
and Restricted Certificated Notes shall have all the rights set forth in
the Exchange Registration Rights Agreement dated as of February 26, 1998,
between the Company and the parties named on the signature pages thereof
or, in the case of Additional Notes, Holders of Restricted Global Notes
and Restricted Certificated Notes shall have the rights set forth in one
or more registration rights agreements, if any, between the Company and
the other parties thereto, relating to rights given by the Company to the
purchasers of any Additional Notes (collectively, the "Registration Rights
Agreement").
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company
has caused CUSIP numbers to be printed on the Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders.
No representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed
thereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Oshkosh Truck Corporation
P.O. Box 2566
Oshkosh, Wisconsin 54903-2566
Telephone: (414) 235-9151
Attention: Chief Financial Officer
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
_________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_________________________________________________________________________
_________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________
to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
_________________________________________________________________________
Date: __________________________ Your Signature: _______________________
(Sign exactly as your name appears on the
Note)
SIGNATURE GUARANTEE
___________________________________
Signatures must be guaranteed by an "eligible
guarantor Institution" meeting the requirements of the
Registrar, which requirements include membership or
participation in the Security transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934,
as amended.
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate
box below:
/ / Section 4.10 / / Section 4.15
If you want to elect to have only part of the Note purchased by
the Company pursuant to Section 4.10 or Section 4.15 of the Indenture,
state the amount you elect to have purchased: $___________
_________________________________________________________________________
Date: _________________________ Your Signature: ________________________
(Sign exactly as your name appears on the
face of this Note)
Tax Identification No.:
SIGNATURE GUARANTEE
__________________________________
Signatures must be guaranteed by an "eligible
guarantor Institution" meeting the requirements of the
Registrar, which requirements include membership or
participation in the Security transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934,
as amended.
<PAGE>
SCHEDULE OF EXCHANGES OF REGULATION S GLOBAL NOTE
The following exchanges of a part of this Regulation S Global Note
for an interest in another Global Note, or of other Restricted Global
Notes for an interest in this Regulation S Global Note, have been made:
Principal
Amount of Amount of Amount of Signature of
decrease in increase in this Global authorized
Principal Principal Note officer of
Amount of amount of following Trustee or
Date of this Global this Global such decrease Note
Exchange Note Note (or increase) Custodian
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Oshkosh Truck Corporation
P. O. Box 2566
Oshkosh, WI 54903
[Registrar address block]
Re: 8 3/4% Senior Subordinated Notes Due 2008
Reference is hereby made to the Indenture, dated as of [insert
date] (the "Indenture"), between Oshkosh Truck Corporation, as issuer (the
"Company"), the Subsidiary Guarantors (as defined therein), and Firstar
Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
______________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount of $___________ in such Note[s] or interests (the
"Transfer"), to __________ (the "Transferee"), as further specified in
Annex A hereto. In connection with the Transfer, the Transferor hereby
certifies that:
[CHECK ALL THAT APPLY]
1. / / Check if Transferee will take delivery of a beneficial interest
in the 144A Global Note or a Certificated Note Pursuant to Rule 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A
under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further
certifies that the beneficial interest or Certificated Note is being
transferred to a Person that the Transferor reasonably believed and
believes is purchasing the beneficial interest or Certificated Note for
its own account, or for one or more accounts with respect to which such
Person exercises sole investment discretion, and such Person and each such
account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such
Transfer is in compliance with any applicable blue sky securities laws of
any state of the United States. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Certificated Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the 144A Global Note and/or the Certificated Note and in the
Indenture and the Securities Act.
2. / / Check if Transferee will take delivery of a beneficial interest
in [the Temporary Regulation S Global Note,]903(c)(3) the Regulation S
Global Note or a Certificated Note pursuant to Regulation S. The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904
under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee
was outside the United States or (y) the transaction was executed in, on
or through the facilities of a designated offshore securities market and
neither such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S under the
Securities Act [and/,] (iii) the transaction is not part of a plan or
scheme to evade the registration requirements of the Securities Act [and
(iv) if the proposed transfer is being made prior to the expiration of the
Restricted Period, the transfer is not being made to a U.S. Person or for
the account or benefit of a U.S. Person (other than an Initial
Purchaser)].903(c)(2) or (3) Upon consummation of the proposed transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Certificated Note will be subject to the restrictions on
Transfer enumerated in the Private Placement Legend printed on the
Regulation S Global and/or the Certificated Note and in the Indenture and
the Securities Act.
3. / / Check and complete if Transferee will take delivery of a
beneficial interest in a Certificated Note pursuant to any provision of
the Securities Act other than Rule 144A or Regulation S. The Transfer is
being effected in compliance with the transfer restrictions applicable to
beneficial interests in Restricted Global Notes and Restricted
Certificated Notes and pursuant to and in accordance with the Securities
Act and any applicable blue sky securities laws of any state of the United
States, and accordingly the Transferor hereby further certifies that
(check one):
(a) / / such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) / / such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) / / such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) / / such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule
904, and the Transferor hereby further certifies that it has not engaged
in any general solicitation within the meaning of Regulation D under the
Securities Act and the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Note or
Restricted Certificated Notes and the requirements of the exemption
claimed, which certification is supported by (1) a certificate executed by
the Transferee in the form of Exhibit D to the Indenture and (2) if such
Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has attached
to this certification), to the effect that such Transfer is in compliance
with the Securities Act. Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Certificated Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the
Certificated Notes and in the Indenture and the Securities Act.
4. / / Check if Transferee will take delivery of a beneficial interest
in an Unrestricted Global Note or of an Unrestricted Certificated Note.
(a) / / Check if Transfer is pursuant to Rule 144. (i) The Transfer
is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained
in the Indenture and any applicable blue sky securities laws of any state
of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order
to maintain compliance with the Securities Act. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Certificated Note will no longer be
subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes, on Restricted
Certificated Notes and in the Indenture.
(b) / / Check if Transfer is Pursuant to Regulation S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Certificated Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the
Restricted Global Notes, on Restricted Certificated Notes and in the
Indenture.
(c) / / Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act other than Rule
144, Rule 903 or Rule 904 and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of
any State of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Certificated Note will
not be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Notes or Restricted
Certificated Notes and in the Indenture.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
______________________________________
[Insert Name of Transferor]
By: __________________________________
Name:
Title:
Dted: ____________, ____
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP ), or
(ii) / / Regulation S Global Note (CUSIP ), or
(iii) / / IAI Global Note (CUSIP ), or
(b) / / a Restricted Certificated Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) / / a beneficial interest in the:
(i) / / 144A Global Note (CUSIP ), or
(ii) / / Regulation S Global Note (CUSIP ), or
(iii) / / IAI Global Note (CUSIP ), or
(iv) / / Unrestricted Global Note (CUSIP ); or
(b) / / a Restricted Certificated Note; or
(c) / / an Unrestricted Certificated Note,
in accordance with the terms of the Indenture.
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Oshkosh Truck Corporation
P. O. Box 2566
Oshkosh, WI 54903
[Registrar address block]
Re: 8 3/4% Senior Subordinated Notes Due 2008
(CUSIP______________)
Reference is hereby made to the Indenture, dated as of [insert
date] (the "Indenture"), between Oshkosh Truck Corporation, as issuer (the
"Company"), the Subsidiary Guarantors (as defined therein), and Firstar
Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
Reference is hereby made to the Indenture, dated as of [insert
date] (the "Indenture"), between [insert Company], as issuer (the
"Company"), and [insert Trustee], as trustee. Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.
____________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Certificated Notes or Beneficial
Interests in a Restricted Global Note for Unrestricted Certificated Notes
or Beneficial Interests in an Unrestricted Global Note
(a) / / Check if Exchange is from beneficial interest in a
Restricted Global Note to beneficial interest in an Unrestricted Global
Note. In connection with the Exchange of the Owner's beneficial interest
in a Restricted Global Note for a beneficial interest in an Unrestricted
Global Note in an equal principal amount, the Owner hereby certifies (i)
the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with
the transfer restrictions applicable to the Global Notes and pursuant to
and in accordance with the United States Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv)
the beneficial interest in an Unrestricted Global Note is being acquired
in compliance with any applicable blue sky securities laws of any state of
the United States.
(b) / / Check if Exchange is from beneficial interest in a
Restricted Global Note to Unrestricted Certificated Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for an Unrestricted Certificated Note, the Owner hereby
certifies (i) the Certificated Note is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted
Global Notes and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance
with the Securities Act and (iv) the Certificated Note is being acquired
in compliance with any applicable blue sky securities laws of any state of
the United States.
(c) / / Check if Exchange is from Restricted Certificated Note
to beneficial interest in an Unrestricted Global Note. In connection with
the Owner's Exchange of a Restricted Certificated Note for a beneficial
interest in an Unrestricted Global Note, the Owner hereby certifies (i)
the beneficial interest is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance with
the transfer restrictions applicable to Restricted Certificated Notes and
pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest is being acquired in
compliance with any applicable blue sky securities laws of any state of
the United States.
(d) / / Check if Exchange is from Restricted Certificated Note
to Unrestricted Certificated Note. In connection with the Owner's
Exchange of a Restricted Certificated Note for an Unrestricted
Certificated Note, the Owner hereby certifies (i) the Unrestricted
Certificated Note is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Certificated Notes and
pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the Unrestricted Certificated Note is being
acquired in compliance with any applicable blue sky securities laws of any
state of the United States.
2. Exchange of Restricted Certificated Notes or Beneficial Interests in
Restricted Global Notes for Restricted Certificated Notes or Beneficial
Interests in Restricted Global Notes
(a) / / Check if Exchange is from beneficial interest in a
Restricted Global Note to Restricted Certificated Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a Restricted Certificated Note with an equal principal
amount, the Owner hereby certifies that the Restricted Certificated Note
is being acquired for the Owner's own account without transfer. Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the Restricted Certificated Note issued will continue to be
subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Certificated Note and in the
Indenture and the Securities Act.
(b) / / Check if Exchange is from Restricted Certificated Note to
beneficial interest in a Restricted Global Note. In connection with the
Exchange of the Owner's Restricted Certificated Note for a beneficial
interest in the [CHECK ONE] " 144A Global Note, " Regulation S Global
Note, with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and
pursuant to and in accordance with the Securities Act, and in compliance
with any applicable blue sky securities laws of any state of the United
States. Upon consummation of the proposed Exchange in accordance with the
terms of the Indenture, the beneficial interest issued will be subject to
the restrictions on transfer enumerated in the Private Placement Legend
printed on the relevant Restricted Global Note and in the Indenture and
the Securities Act.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
___________________________________
[Insert Name of Owner]
By: _______________________________
Name:
Title:
Dated: ________________, ____
<PAGE>
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Oshkosh Truck Corporation
P. O. Box 2566
Oshkosh, WI 54903
[Registrar address block]
Re: 8 3/4% Senior Subordinated Notes Due 2008
Reference is hereby made to the Indenture, dated as of [insert
date] (the "Indenture"), between Oshkosh Truck Corporation, as issuer (the
"Company"), the Subsidiary Guarantors (as defined therein), and Firstar
Trust Company, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) / / a beneficial interest in a Global Note, or
(b) / / a Certificated Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set
forth in the Indenture and the undersigned agrees to be bound by, and not
to resell, pledge or otherwise transfer the Notes or any interest therein
except in compliance with, such restrictions and conditions and the United
States Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any
interest therein may not be offered or sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any
accounts for which we are acting as hereinafter stated, that if we should
sell the Notes or any interest therein, we will do so only (A) to the
Company or any subsidiary thereof, (B) in accordance with Rule 144A under
the Securities Act to a "qualified institutional buyer" (as defined
therein), (c) to an institutional "accredited investor" (as defined below)
that, prior to such transfer, furnishes (or has furnished on its behalf by
a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and , if such transfer is in
respect of a principal amount of Notes, at the time of transfer of less
than $250,000, an Opinion of Counsel in form reasonably acceptable to the
Company to the effect that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904
of Regulation S under the Securities Act, (E) pursuant to the provisions
of Rule 144(k) under the Securities Act or (F) pursuant to an effective
registration statement under the Securities Act, and we further agree to
provide to any person purchasing the Certificated Note or beneficial
interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice
advising such purchaser that resales thereof are restricted as stated
herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you
and the Company may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that the
Notes purchased by us will bear a legend to the foregoing effect. We
further understand that any subsequent transfer by us of the Notes or
beneficial interest therein acquired by us must be effected through one of
the Placement Agents.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
and have such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of our investment in
the Notes, and we and any accounts for which we are acting are each able
to bear the economic risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each of which we
exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby.
__________________________________________
[Insert Name of Accredited Investor]
By: _______________________________
Name:
Title:
Dated: __________________, ____
<PAGE>
EXHIBIT E
FORM OF NOTATION OF SUBSIDIARY GUARANTEE
For value received, each Subsidiary Guarantor (which term includes
any successor Person under the Indenture) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in the Indenture and
subject to the provisions in the Indenture dated as of February 26, 1998
(the "Indenture") among Oshkosh Truck Corporation, the Subsidiary
Guarantors listed on Schedule I thereto and Firstar Trust Company, as
trustee (the "Trustee"), (a) the due and punctual payment of the principal
of, premium, if any, and interest on the Notes (as defined in the
Indenture), whether at maturity, by acceleration, redemption or otherwise,
the due and punctual payment of interest on overdue principal and premium,
and, to the extent permitted by law, interest, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms of the Indenture and (b) in case
of any extension of time of payment or renewal of any Notes or any of such
other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. The obligations
of the Subsidiary Guarantors to the Holders of Notes and to the Trustee
pursuant to the Subsidiary Guarantee and the Indenture are expressly set
forth in Article 10 of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Subsidiary Guarantee. Each Holder
of a Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee, on behalf of such
Holder, to take such action as may be necessary or appropriate to
effectuate the subordination as provided in the Indenture and (c) appoints
the Trustee attorney-in-fact of such Holder for such purpose; provided,
however, that the Indebtedness evidenced by this Subsidiary Guarantee
shall cease to be so subordinated and subject in right of payment upon any
defeasance of this Note in accordance with the provisions of the
Indenture.
[Name of Subsidiary Guarantor(s)]
By: ________________________________
Name:
Title:
<PAGE>
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT SUBSIDIARY GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as
of ________________, among __________________ (the "Guaranteeing
Subsidiary"), a subsidiary of Oshkosh Truck Corporation (or its permitted
successor), a Wisconsin corporation (the "Company"), the Company, the
other Subsidiary Guarantors (as defined in the Indenture referred to
herein) and Firstar Trust Company, as trustee under the indenture referred
to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of February 26, 1998
providing for the issuance of an aggregate principal amount of up to
$150,000,000 of 8 3/4% Senior Subordinated Notes due 2008 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances
the Guaranteeing Subsidiary shall execute and deliver to the Trustee a
supplemental indenture pursuant to which the Guaranteeing Subsidiary shall
unconditionally guarantee all of the Company's Obligations under the Notes
and the Indenture on the terms and conditions set forth herein (the
"Subsidiary Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby
acknowledged, the Guaranteeing Subsidiary and the Trustee mutually
covenant and agree for the equal and ratable benefit of the Holders of the
Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby
agrees as follows:
(a) Along with all Subsidiary Guarantors named in the
Indenture, to jointly and severally Guarantee to each
Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of the
Indenture, the Notes or the obligations of the Company
hereunder or thereunder, that:
(i) the principal of and interest on the Notes will be
promptly paid in full when due, whether at maturity,
by acceleration, redemption or otherwise, and interest
on the overdue principal of and interest on the Notes,
if any, if lawful, and all other obligations of the
Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed,
all in accordance with the terms hereof and thereof;
and
(ii) in case of any extension of time of payment or renewal
of any Notes or any of such other obligations, that
same will be promptly paid in full when due or
performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by
acceleration or otherwise. Failing payment when due
of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Subsidiary
Guarantors shall be jointly and severally obligated to
pay the same immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability
of the Notes or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of
the Notes with respect to any provisions hereof or thereof,
the recovery of any judgment against the Company, any
action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge
or defense of a Subsidiary Guarantor.
(c) The following is hereby waived: diligence presentment,
demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right
to require a proceeding first against the Company, protest,
notice and all demands whatsoever.
(d) This Note Guarantee shall not be discharged except by
complete performance of the obligations contained in the
Notes and the Indenture.
(e) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Subsidiary
Guarantors, or any Custodian, Trustee, liquidator or other
similar official acting in relation to either the Company
or the Subsidiary Guarantors, any amount paid by either to
the Trustee or such Holder, this Subsidiary Guarantee, to
the extent theretofore discharged, shall be reinstated in
full force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any
right of subrogation in relation to the Holders in respect
of any obligations guaranteed hereby until payment in full
of all obligations guaranteed hereby.
(g) As between the Subsidiary Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 of the Indenture for
the purposes of this Subsidiary Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed
hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 6
of the Indenture, such obligations (whether or not due and
payable) shall forthwith become due and payable by the
Subsidiary Guarantors for the purpose of this Subsidiary
Guarantee.
(h) The Subsidiary Guarantors shall have the right to seek
contribution from any non-paying Subsidiary Guarantor so
long as the exercise of such right does not impair the
rights of the Holders under the Guarantee.
(i) Pursuant to Section 10.02 of the Indenture, after giving
effect to any maximum amount and any other contingent and
fixed liabilities that are relevant under any applicable
Bankruptcy or fraudulent conveyance laws, and after giving
effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under Article 10 of the
Indenture shall result in the obligations of such
Subsidiary Guarantor under its Subsidiary Guarantee not
constituting a fraudulent transfer or conveyance.
3 EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees
that the Subsidiary Guarantees shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
4. Guaranteeing Subsidiary May Consolidate, Etc. on Certain
Terms.
(a) The Guaranteeing Subsidiary may not consolidate with or merge
with or into (whether or not such Subsidiary Guarantor is the
surviving Person) another corporation, Person or entity
whether or not affiliated with such Subsidiary Guarantor unless:
(i) subject to Section 10.05 of the Indenture, the Person
formed by or surviving any such consolidation or merger (if
other than a Subsidiary Guarantor or the Company)
unconditionally assumes all the obligations of such
Subsidiary Guarantor, pursuant to a supplemental indenture
in form and substance reasonably satisfactory to the
Trustee, under the Notes, the Indenture and the Subsidiary
Guarantee on the terms set forth herein or therein; and
(ii) immediately after giving effect to such transaction, no
Default or Event of Default exists.
(b) In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of the Subsidiary
Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of the
Indenture to be performed by the Subsidiary Guarantor, such
successor corporation shall succeed to and be substituted for
the Subsidiary Guarantor with the same effect as if it had
been named herein as a Subsidiary Guarantor. Such successor
corporation thereupon may cause to be signed any or all of the
Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee. All the
Subsidiary Guarantees so issued shall in all respects have the
same legal rank and benefit under the Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in
accordance with the terms of the Indenture as though all of
such Subsidiary Guarantees had been issued at the date of the
execution hereof.
(c) Except as set forth in Articles 4 and 5 of the Indenture, and
notwithstanding clauses (a) and (b) above, nothing contained
in the Indenture or in any of the Notes shall prevent any
consolidation or merger of a Subsidiary Guarantor with or into
the Company or another Subsidiary Guarantor, or shall prevent
any sale or conveyance of the property of a Subsidiary
Guarantor as an entirety or substantially as an entirety to
the Company or another Subsidiary Guarantor.
5. Releases.
(a) In the event of a sale or other disposition of all of the
assets of any Subsidiary Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of
all to the capital stock of any Subsidiary Guarantor, then
such Subsidiary Guarantor (in the event of a sale or other
disposition, by way of merger, consolidation or otherwise, of
all of the capital stock of such Subsidiary Guarantor) or the
corporation acquiring the property (in the event of a sale or
other disposition of all or substantially all of the assets of
such Subsidiary Guarantor) will be released and relieved of
any obligations under its Subsidiary Guarantee; provided that
the Net Proceeds of such sale or other disposition are applied
in accordance with the applicable provisions of the Indenture,
including without limitation Section 4.10 of the Indenture.
Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such
sale or other disposition was made by the Company in
accordance with the provisions of the Indenture, including
without limitation Section 4.10 of the Indenture, the Trustee
shall execute any documents reasonably required in order to
evidence the release of any Subsidiary Guarantor from its
obligations under its Subsidiary Guarantee.
(b) Any Subsidiary Guarantor not released from its obligations
under its Subsidiary Guarantee shall remain liable for the
full amount of principal of and interest on the Notes and for
the other obligations of any Subsidiary Guarantor under the
Indenture as provided in Article 10 of the Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, stockholder or agent of the
Guaranteeing Subsidiary, as such, shall have any liability for any
obligations of the Company or any Guaranteeing Subsidiary under the Notes,
any Subsidiary Guarantees, the Indenture or this Supplemental Indenture or
for any claim based on, in respect of, or by reason of, such obligations
or their creation. Each Holder of the Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective
to waive liabilities under the federal securities laws and it is the view
of the Commission that such a waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
8. COUNTERPARTS The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
10 THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained
herein, all of which recitals are made solely by the Guaranteeing
Subsidiary and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the
date first above written.
Dated: _______________, ____
[Guaranteeing Subsidiary]
By: _________________________________
Name:
Title:
OSHKOSH TRUCK CORPORATION
By: _________________________________
Name:
Title:
[EXISTING SUBSIDIARY GUARANTORS]
By: ______________________________
Name:
Title
FIRSTAR TRUST COMPANY, as Trustee
By: ______________________________
Name:
Title:
<PAGE>
Schedule I
SCHEDULE OF SUBSIDIARY GUARANTORS
The following schedule lists each Subsidiary Guarantor under the
Indenture as of the Issue Date:
McNeilus Truck & Manufacturing, Inc.
Iowa Contract Fabricators, Inc.
McIntire Fabricators, Inc.
Kensett Fabricators, Inc.
McNeilus Companies, Inc.
McNeilus Financial, Inc.
Pierce Manufacturing, Inc.
Summit Performance Systems, Inc.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report dated April 23, 1997, except for Notes 2 and 13, as to which the
date is December 8, 1997, on the consolidated financial statements of
McNeilus Companies, Inc. and Subsidiaries included in this Form 8-K. It
should be noted that we have not audited any financial statements of
McNeilus Companies, Inc. and Subsidiaries subsequent to February 28, 1997
or performed any audit procedures subsequent to the date of our report.
LARSON, ALLEN, WEISHAIR & CO., LLP
Austin, Minnesota
March 11, 1998
