Bond Guaranty Agreement - Oilgear Co. and Norwest Bank Wisconsin NA
EXECUTION COPY
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BOND GUARANTY AGREEMENT
Dated as of October 1, 1997
___________________________
By
THE OILGEAR COMPANY
to
NORWEST BANK WISCONSIN, NATIONAL ASSOCIATION
as Trustee and Paying Agent
____________________________
Pertaining to
$4,000,000
County of Dodge, Nebraska
Variable Rate Demand Industrial Development Revenue Bonds, Series 1997
(The Oilgear Company Project)
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TABLE OF CONTENTS
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Page
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ARTICLE I
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
COVENANTS AND AGREEMENTS
Section 2.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
NOTICE AND SERVICE OF PROCESS,
PLEADINGS AND OTHER PAPERS
Section 3.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE IV
MISCELLANEOUS
Section 4.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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BOND GUARANTY AGREEMENT
This BOND GUARANTY AGREEMENT is made and entered into as of October 1,
1997 (the "Guaranty"), by and between The Oilgear Company (the "Company"), a
Wisconsin corporation, and Norwest Bank Wisconsin, National Association, as
Trustee, together with any successor trustee (the "Trustee"), at the time
serving as such under the Trust Indenture (hereinafter identified) between the
County of Dodge, Nebraska (the "County") and the Trustee.
W I T N E S S E T H :
WHEREAS, the County is a political subdivision of the State of
Nebraska and proposes to issue its industrial development revenue bonds
pursuant to the provisions of the Nebraska Industrial Development Act, Chapter
13, Article 11, Reissue Revised Statutes of Nebraska, 1943, as amended (the
"Act"), in the principal amount of $4,000,000 designated County of Dodge,
Nebraska Variable Rate Demand Industrial Development Revenue Bonds, Series 1997
(The Oilgear Company Project) (the "Bonds"); and
WHEREAS, the Bonds will be issued under and secured by a Trust
Indenture dated as of even date herewith by and between the County and the
Trustee (the "Indenture"), and the Trustee will initially serve as Paying Agent
under the Indenture; and
WHEREAS, the proceeds to be derived from the sale of the Bonds will be
applied to the acquisition and improvement of a portion of an addition to the
Company's existing hydraulic pump manufacturing facility located in Dodge
County, Nebraska (the "Project"), which is being leased to the Company pursuant
to the provisions of a Lease Agreement dated as of even date herewith (the
"Lease Agreement"); and
WHEREAS, the Company is desirous that the County issue the Bonds and
apply the proceeds as aforesaid and is willing to enter into this Guaranty in
order to enhance the marketability of the Bonds and thereby achieve interest
cost and other savings to the Company, and as an inducement to the purchase of
the Bonds by all who shall at any time become owners of the Bonds;
NOW, THEREFORE, in consideration of the premises and in order to
enhance the marketability of the Bonds and thereby achieve interest cost and
other savings to the Company, and as an inducement to the initial purchasers of
the Bonds and all who shall at any time become owners of the Bonds, the Company
does hereby, subject to the terms hereof, covenant and agree with the Trustee
as follows:
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ARTICLE I
REPRESENTATIONS AND WARRANTIES
The Company does hereby represent and warrant that:
(a) the Company is a corporation duly incorporated and in
good standing under the laws of the State of Wisconsin, has power to
enter into this Guaranty and has duly authorized the execution and
delivery of this Guaranty by proper corporate action;
(b) neither this Guaranty, the execution and delivery
hereof nor the agreements herein contained are prevented, limited by
or contravene or constitute a default under any agreement, instrument
or indenture to which the Company is a party or by which it is bound
or any provisions of the Company's certificate of incorporation or any
requirements of law; and
(c) the assumption by the Company of its obligations
hereunder will result in a direct financial benefit to the Company.
ARTICLE II
COVENANTS AND AGREEMENTS
SECTION 2.1. The Company hereby guarantees to the Trustee, for the
benefit of the owners from time to time of the Bonds, (a) the full and prompt
payment of the principal of and premium, if any, on any Bond when and as the
same shall become due, whether at the stated maturity thereof, by acceleration,
call for redemption or otherwise, and (b) the full and prompt payment of any
interest on any Bond when and as the same shall become due. All payments by
the Company shall be paid in lawful money of the United States of America.
Each and every default in payment of the principal of, premium, if any, or
interest on any Bond shall give rise to a separate cause of action hereunder,
and separate suits may be brought hereunder as each cause of action arises.
SECTION 2.2. The obligations of the Company under this Guaranty shall
be absolute and shall remain in full force and effect until the entire
principal of, premium, if any, and interest on the Bonds shall have been paid
or provided for under the Indenture and such obligations shall not be affected,
modified or impaired upon the happening from time to time of any event,
including without limitation any of the following, whether or not with notice
to, or the consent of, the Company:
(a) the compromise, settlement, release or termination of
any or all of the obligations, covenants or agreements of the County
under the Indenture, the Building Improvement Lease or the Lease
Agreement;
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(b) the failure to give notice to the Company of the
occurrence of an event of default under the terms and provisions of
this Guaranty, the Lease Agreement or the Indenture;
(c) the assignment or mortgaging or the purported
assignment or mortgaging of all or any part of the interest of the
County or the Company in the Project or any failure of title with
respect to the County's or the Company's interest in the Project;
(d) the waiver by the Trustee or the County of the
payment, performance or observance by the County, the Company or the
Trustee of any of the obligations, covenants or agreements contained
in the Indenture, the Lease Agreement or this Guaranty;
(e) the extension of the time for payment of any
principal of, premium, if any, or interest on any Bonds under this
Guaranty or of the time for performance of any other obligations,
covenants or agreements under or arising out of the Indenture or this
Guaranty or the extension or the renewal of either thereof;
(f) the modification or amendment (whether material or
otherwise) of any obligation, covenant or agreement set forth in the
Indenture or the Lease Agreement;
(g) the taking or the omission of any of the actions
referred to in the Indenture and of any actions under this Guaranty;
(h) any failure, omission, delay or lack on the part of
the County or the Trustee to enforce, assert or exercise any right,
power or remedy conferred on the County or the Trustee in this
Guaranty or the Indenture, or any other act or acts on the part of the
County, the Trustee or any of the owners from time to time of the
Bonds;
(i) the voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all the
assets, marshalling of assets and liabilities, receivership,
insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition with creditors or
readjustment of, or other similar proceedings affecting the Company or
the County or any of the assets of either of them, or any allegation
or contest of the validity of this Guaranty in any such proceeding;
(j) to the extent permitted by law, the release or
discharge of the Company from the performance or observance of any
obligation, covenant or agreement contained in this Guaranty by
operation of law; or
(k) any lack of validity or enforceability of the Bonds,
or other circumstance or condition under which the Company may claim
to be released from its obligations hereunder.
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SECTION 2.3. No set-off, counterclaim, reduction or diminution of any
obligation, other than payment, or any defense of any kind or nature which the
Company has or may have against the County or the Trustee shall be available
hereunder to the Company against the Trustee.
SECTION 2.4. In the event of a default in the payment of principal of
or premium, if any, on any Bond when and as the same shall become due, whether
at the stated maturity thereof, by acceleration, call for redemption or
otherwise, or in the event of a default in the payment of any interest on any
Bond when and as the same shall become due, the Trustee shall have the right to
proceed first and directly against the Company under this Guaranty without
proceeding against any other person or exhausting any other remedies which it
may have and without resorting to any other security held by the County or the
Trustee.
SECTION 2.5. The Company hereby expressly waives notice and demand
from the Trustee or the owners from time to time of any of the Bonds, if any,
of their acceptance and reliance on this Guaranty. The Company agrees to pay
all reasonable costs, expenses and fees, including all reasonable attorneys'
fees and expenses, which may be incurred by the Trustee in enforcing or
attempting to enforce this Guaranty following any default on the part of the
Company hereunder, whether the same shall be enforced by suit or otherwise.
SECTION 2.6. The Company will maintain its corporate existence and
will not dissolve or otherwise dispose of all or substantially all of its
assets and will not consolidate with or merge into another corporation or
permit one or more other corporations to consolidate with or merge into it
except as permitted by Section 7.9 of the Lease Agreement.
SECTION 2.7. This Guaranty is entered into by the Company for the
benefit of the Trustee and the owners from time to time of the Bonds, all of
whom shall be entitled to enforce performance and observance of this Guaranty
to the same extent provided for enforcement of remedies under the Indenture.
SECTION 2.8. Upon the satisfaction of the conditions specified in
Section 7.9 of the Lease Agreement and the assumption of the obligations
hereunder pursuant to Section 7.9 of the Lease Agreement, the obligations of
the Company hereunder shall be released.
ARTICLE III
NOTICE AND SERVICE OF PROCESS,
PLEADINGS AND OTHER PAPERS
SECTION 3.1. The Company represents that it is qualified to do
business and subject to service of process in the State of Nebraska and in the
State of Wisconsin and covenants that it will remain so qualified so long as
any of the Bonds are outstanding, subject to the provisions of Section 2.6
above.
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SECTION 3.2. Any notice, process, pleadings or other papers served
upon the agents or officers of the Company shall at the same time be sent by
registered mail, return receipt requested, postage prepaid, to the Company at
the following address:
The Oilgear Company
2300 South 51st Street
Milwaukee, WI 53219
Attention: Vice President--Finance
Telecopy: (414) 328-5323
Telephone: (414) 328-5230
or to such other address as may be furnished by the Company to the Trustee in
writing.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1. The obligations of the Company hereunder shall arise
absolutely when the Bonds shall have been issued, sold and delivered by the
County and the proceeds thereof paid to the Trustee for the account of the
County under the Indenture.
SECTION 4.2. No remedy herein conferred upon or reserved to the
Trustee is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Guaranty or now or hereafter existing at
law or in equity. No delay or omission to exercise any right or power accruing
upon any default, omission or failure of performance hereunder shall impair any
such right or power or shall be construed to be a waiver thereof, but any such
right and power may be exercised from time to time as often as may be deemed
expedient. In order to entitle the Trustee to exercise any remedy reserved to
it in this Guaranty, it shall not be necessary to give any notice, other than
such notice as may be herein expressly required. In the event any provision
contained in this Guaranty should be breached by the Company, and thereafter
duly waived by the Trustee, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other breach hereunder.
No waiver, amendment, release or modification of this Guaranty shall be
established by conduct, custom or course of dealing, but solely by an
instrument in writing duly executed by the Company and the Trustee.
SECTION 4.3. This Guaranty shall not be effectively amended, changed,
modified, altered or terminated without the written consent of the Trustee and
the Company, and no modification, alteration or amendment to this Guaranty
shall be binding upon either party hereto until such modification, alteration
or amendment is reduced to writing and executed by both parties hereto. This
Guaranty may not be amended, changed, modified or altered except in compliance
with Article XIV of the Indenture.
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Nothing contained herein shall permit, or be construed as permitting,
any amendment, change or modification of this Guaranty which would (a) reduce
the obligations of the Company hereunder, (b) change the time for payment of
the amounts payable by the Company hereunder or (c) change the unconditional
nature of the Guaranty herein contained.
SECTION 4.4. This Guaranty constitutes the entire agreement, and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and may be
executed in several counterparts, each of which shall be deemed an original,
and all of which together shall constitute one and the same instrument.
SECTION 4.5. The invalidity or unenforceability of any one or more
phrases, sentences, clauses or Sections in this Guaranty shall not affect the
validity or enforceability of the remaining portions of this Guaranty, or any
part thereof.
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IN WITNESS WHEREOF, the Company has caused this Guaranty Agreement to
be executed in its name and behalf and its corporate seal to be affixed hereto
and attested by its duly authorized officers as of the date first above
written.
THE OILGEAR COMPANY
By T.J. Price
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Vice President, Finance
Accepted as of October 1, 1997, by Norwest Bank Wisconsin, National
Association, as Trustee.
(SEAL) NORWEST BANK WISCONSIN,
NATIONAL ASSOCIATION
By Wendy M. DeToro
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Title Corporate Trust Officer
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