EXHIBIT 10.6
SCHEDULE
to the
ISDA MASTER AGREEMENT
This is the Schedule to that certain ISDA Master Agreement dated as of May
5, 2006, between Wells Fargo Bank, National Association ("Party A") and Lindsay
Manufacturing Co., a Delaware corporation ("Party B").
PART 1
TERMINATION PROVISIONS
In this Agreement:
(A) "Specified Entity" means "Affiliates" in relation to Party B, and "not
applicable" in relation to Party A.
(B) "Specified Transaction" will have the meaning specified in Section 14
of this Agreement. In addition, Specified Transaction shall also include any
agreements or obligations between Party A and Party B, including, without
limitation, any loan, lines of credit, credit agreement, reimbursement
agreement, security agreement or other similar agreement.
(C) The "Cross-Default" provisions of Section 5(a)(vi) of this Agreement
will apply to Party A and to Party B.
"Specified Indebtedness" will have the meaning specified in Section 14; and
shall include, with respect to Party B, any indebtedness or obligation owing by
Party B to Party A (including, without limitation, any obligations owed by Party
B to Party A arising under any account agreement, loan, line of credit, credit
agreement, reimbursement agreement, security agreement or other similar
agreement); provided, however, with respect to Party A such term shall not
include deposits and obligations in respect of deposits received in the ordinary
course of Party A's banking business.
"Threshold Amount" means with respect to Party A, an amount equal to 3% of
the Shareholders Equity (as hereinafter defined) of Party A and with respect to
Party B, $5,000,000.00; provided that with respect to obligations owed by Party
B to Party A and its Affiliates the Threshold Amount shall mean $0.
"Shareholders' Equity" means, with respect to Party A, at any time, the sum
(as shown in its most recent annual audited financial statements) of (i) its
capital stock (including preferred stock outstanding, taken at par value), (ii)
its capital surplus and (iii) its retained earnings, minus
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(iv) treasury stock, each to be determined in accordance with generally accepted
accounting principles.
(D) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) of this
Agreement will apply to Party A and to Party B.
(E) The "Automatic Early Termination" provision of Section 6(a) of this
Agreement will not apply to Party A or to Party B.
(F) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement: (i) Loss will apply, and (ii) Second Method will apply.
(G) "Termination Currency" means United States Dollars.
(H) Additional Termination Event will apply. Each of the following shall
constitute an Additional Termination Event:
(i) Key Agreements. Any promissory note, loan agreement, credit
agreement reimbursement agreement or other document or instrument
evidencing a credit extension from Party A to Party B is terminated,
cancelled, voided, breached or amended in any manner which would affect
Party's B ability to perform its obligations under this Agreement,
determined by Party A in its sole discretion. Upon the occurrence of such
event, Party B shall be deemed to be the sole Affected Party and all
Transactions shall be deemed to be Affected Transactions.
PART 2
TAX REPRESENTATIONS
(A) Payer Representations. For the purpose of Section 3(e) of this
Agreement, each party makes the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of this
Agreement, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness
of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of this Agreement, provided that
it shall not be a breach of this representation where reliance is placed on
clause
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(ii) and the other party does not deliver a form or document under Section
4(a)(iii) by reason of material prejudice to its legal or commercial
position.
(B) Payee Representations.
(i) For the purpose of Section 3(f) of this Agreement, Party A
represents that it is a national banking association organized under the
laws of the United States.
(ii) For the purpose of Section 3(f) of this Agreement, Party B
represents that it is a corporation established under the laws of the State
of Delaware.
PART 3
AGREEMENT TO DELIVER DOCUMENTS
For the purposes of Section 4(a)(i) and (ii) of this Agreement, the parties
agrees that the following documents will be delivered:
COVERED BY
PARTY REQUIRED TO DATE BY WHICH SECTION 3(D)
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE TO BE DELIVERED REPRESENTATION
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Party B and any Satisfactory evidence of its Upon execution of this Yes
Credit Support capacity and ability to enter into Agreement and upon request
Provider of Party B this Agreement and any Transaction
hereunder
Party B and any Certified evidence of the authority, Upon execution of this Yes
Credit Support incumbency and specimen signature of Agreement and upon request
Provider of Party B each person executing any document
on its behalf in connection with
this Agreement
Party A Party A Designation of Authority and Upon the reasonable request of Yes
related extract from Party A's Party B in connection with the
By-Laws, certified by the Secretary execution of this Agreement
or an Assistant Secretary,
authorizing the execution, delivery
and performance of derivative
instruments of any kind
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COVERED BY
PARTY REQUIRED TO DATE BY WHICH SECTION 3(D)
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE TO BE DELIVERED REPRESENTATION
- --------------------- ------------------------------------ ------------------------------- --------------
Party B Duly executed and completed U.S. Upon execution of this Yes
Internal Revenue Service Form W-9 Agreement, promptly upon
(or successor thereto). reasonable demand by Party A
and promptly upon learning that
any such form previously
provided by Party B has become
obsolete or incorrect
PART 4
MISCELLANEOUS
(A) Addresses for Notices. For the purpose of Section 12(a) of this
Agreement:
Address for notices or communications to Party B:
Address: Lindsay Manufacturing Co.
2707 N. 108th Street, Suite 102
Omaha, NE 68154
Facsimile: 402 829 6836
Attention: Dave Downing
Address for all notices or communications to Party A:
Address: Wells Fargo Bank, National Association
417 Montgomery Street, Suite 500
MAC A0108-050
San Francisco, California 94104
Facsimile: 415 646 9166
Attention: Derivatives Documentation Manager
Additional Address for notices or communications for operational
purposes (payments and settlements):
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Address: Wells Fargo Bank, National Association
417 Montgomery Street, Suite 500
MAC A0108-050
San Francisco, California 94104
Facsimile No.: (415) 646-9208
Attention: Back Office Operations - Settlements
(B) Process Agent. For the purpose of Section 13(c) of this Agreement,
neither Party A nor Party B will appoint a Process Agent.
(C) Offices. The provisions of Section 10(a) will apply to this Agreement.
(D) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(E) Calculation Agent. The Calculation Agent is Party A.
(F) Credit Support Document.
Credit Support Document means, in relation to Party A: None.
Credit Support Document means, in relation to Party B: None.
(G) Credit Support Provider.
Credit Support Provider means in relation to Party A: None.
Credit Support Provider means in relation to Party B: None.
(H) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York without reference to choice of
law doctrine.
(I) Netting of Payments. Section 2(c) of this Agreement will apply to each
Transaction.
(J) "Affiliate" will have the meaning specified in Section 14 of this
Agreement; provided, however, that Party A shall not have any Affiliates for
purposes of this Agreement.
PART 5
OTHER PROVISIONS
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(A) Confirmations. Notwithstanding anything to the contrary in this
Agreement:
(i) The parties hereto agree that with respect to each Transaction
hereunder a legally binding agreement shall exist from the moment that the
parties hereto agree on the essential terms of such Transaction, which the
parties anticipate will occur by telephone.
(ii) For each Transaction Party A and Party B agree to enter into
hereunder, Party A shall promptly send to Party B a Confirmation setting
forth the terms of such Transaction. Party B shall execute and return the
Confirmation to Party A or request correction of any error within three
Business Days of receipt. Failure of Party B to respond within such period
shall not affect the validity or enforceability of such Transaction and
shall be deemed to be an affirmation of such terms.
(B) Definitions. For each Transaction (unless otherwise specified in a
Confirmation) all provisions of the 2000 ISDA Definitions (as published by the
International Swaps & Derivatives Association, Inc.), including the Annex to the
2000 ISDA Definitions and any supplements thereto, are hereby incorporated by
this reference into this Agreement and shall form a part hereof as if set forth
in full herein.
(C) Additional Representations. Section 3 of this Agreement is hereby
amended by adding at the end thereof the following subsections (g) through (l):
"(g) ELIGIBLE CONTRACT PARTICIPANT. It is either an "eligible contract
participant" as that term is defined in Section 1a(12) of the Commodity
Exchange Act (7 U.S.C. 1a(12)) and was not formed solely for the purposes
of constituting an "eligible contract participant, or if it is not an
eligible contract participant, this Agreement (including each Transaction)
is undertaken in conjunction with its line of business (including financial
intermediation services) or the financing of its business."
"(h) NO AGENCY. It is entering into this Agreement, any Credit Support
Document to which it is a party, each Transaction and any other
documentation relating to this Agreement or any Transaction as principal
(and not as agent or in any other capacity, fiduciary or otherwise)."
"(i) CREDITWORTHINESS. The economic terms of this Agreement, and any Credit
Support Documents to which it is a party, and each Transaction have been
individually tailored and negotiated by it, and the creditworthiness of the
other party was a material consideration in its entering into or
determining the terms of this Agreement, such Credit Support document, and
such Transaction."
"(j) INDIVIDUAL NEGOTIATION. This Agreement (including each Transaction)
has been subject to individual negotiation by the parties, including
individualized creditworthiness determinations."
"(k) ASSESSMENT AND UNDERSTANDING. It is capable of assessing the merits of
and understanding (on its own behalf or through independent professional
advice), and understands and accepts the terms, conditions and risks of
this Agreement and each
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Transaction hereunder. It is also capable of assuming, and assumes, the
risks of this Agreement and each Transaction hereunder."
"(l) NON-RELIANCE. It is acting for its own account, and it has made its
own independent decisions to enter into that Transaction and as to whether
that Transaction is appropriate or proper for it based upon its own
judgment and upon advice from such advisers as it has deemed necessary. It
is not relying on any communication (written or oral) of the other party as
investment advice or as a recommendation to enter into that Transaction: it
being understood that information and explanations related to the terms and
conditions of a Transaction shall not be considered investment advice or a
recommendation to enter into a Transaction. No communication (written or
oral) received from the other party shall be deemed to be an assurance or
guarantee of the expected results of that Transaction."
(D) Right of Setoff. Section 6 of this Agreement is amended by adding the
following new Section 6(f):
"(f) SET-OFF. Any amount (the "Early Termination Amount") payable to one
party (the Payee) by the other party (the Payer) under Section 6(e), in
circumstances where there is a Defaulting Party or one Affected Party,
will, at the option of the party ("X") other than the Defaulting Party or
the Affected Party (and without prior notice to the Defaulting Party or the
Affected Party), be reduced by its set-off against any amount(s) (the
"Other Agreement Amount") payable (whether at such time or in the future or
upon the occurrence of a contingency) by the Payee to the Payer
(irrespective of the currency, place of payment or booking office of the
obligation) under any other agreement(s) issued or executed by one party to
or in favour of, the other party (and the Other Agreement Amount will be
discharged promptly and in all respects to the extent it is so set-off). X
will give notice to the other party of any set-off effected under this
Section 6(f).
For this purpose, either the Early Termination Amount or the Other
Agreement Amount (or the relevant portion of such amounts) may be converted
by X into the currency in which the other is denominated at the rate of
exchange at which such party would be able, acting in a reasonable manner
and in good faith, to purchase the relevant amount of such currency.
If an obligation is unascertained, X may in good faith estimate that
obligation and set-off in respect of the estimate, subject to the relevant
party accounting to the other when the obligation is ascertained.
Nothing in this Section 6(f) shall be effective to create a charge or other
security interest. This Section shall be without prejudice and in addition
to any right of set-off, combination of accounts, lien or other right to
which any party is at any time otherwise entitled (whether by operation of
law, contract or otherwise)."
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(E) Inconsistency Among Definitions or Provisions. In the event of any
inconsistency between the definitions or provisions in any of the following
documents, the relevant document first listed below shall govern: (i) a
Confirmation (with respect only to definitions in such Confirmation; provided,
however, that other provisions in a Confirmation will govern over inconsistent
provisions in the following documents to the extent that such Confirmation
explicitly states its intent to modify the following documents); (ii) the
Schedule to the ISDA Master Agreement; (iii) the ISDA Master Agreement; and (v)
the 2000 ISDA Definitions.
(F) Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of the Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. The parties hereto
shall endeavor in good faith negotiations to replace the prohibited or
unenforceable provision with a valid provision, the economic effect of which
comes as close as possible to that of the prohibited or unenforceable provision.
(G) WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY TRIAL OR LITIGATION ARISING OUT OF OR IN
CONNECTION WITH ANY TRANSACTION OR THIS AGREEMENT.
(H) RISK DISCLOSURE. PARTY B HEREBY ACKNOWLEDGES AND AGREES THAT IT HAS:
(X) READ THE RISK DISCLOSURE SET FORTH ON EXHIBIT A; (Y) UNDERSTANDS SUCH RISK
DISCLOSURE; AND (Z) HAD AN ADEQUATE OPPORTUNITY TO DISCUSS ANY QUESTIONS OR
COMMENTS THAT IT MAY HAVE HAD WITH RESPECT TO SUCH RISK DISCLOSURE PRIOR TO THE
EXECUTION OF THIS AGREEMENT.
(J) Consent to Recording. Each party (i) consents to the recording of the
telephone conversations of trading and marketing personnel of the parties in
connection with this Agreement or any potential Transaction, and (ii) agrees to
obtain any necessary consents of and give notice of such recording to its
personnel, and (iii) consents to the submission of any such tape recording in
evidence in any Proceedings.
IN WITNESS WHEREOF the parties have executed this document on the
respective dates specified below with effect from the date specified on the
first page of this document.
Party A Party B
WELLS FARGO BANK, NATIONAL LINDSAY MANUFACTURING CO.,
ASSOCIATION a Delaware corporation
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By: /s/ Martha Burke By: /s/ Richard W. Parod
--------------------------------- ------------------------------------
Name: Martha Burke Name: Richard W. Parod
Title: Authorized Signatory Title: President & Chief Executive
Officer
EXHIBIT A
RISK DISCLOSURE
AS IS COMMON WITH MANY OTHER FINANCIAL INSTRUMENTS AND TRANSACTIONS, FINANCIAL
RISK MANAGEMENT PRODUCTS, IN ADDITION TO PROVIDING SIGNIFICANT BENEFITS, MAY IN
CERTAIN CASES INVOLVE A VARIETY OF SIGNIFICANT RISKS.
BEFORE ENTERING INTO ANY FINANCIAL RISK MANAGEMENT TRANSACTION, YOU SHOULD
CAREFULLY CONSIDER WHETHER THE TRANSACTION IS APPROPRIATE FOR YOU IN LIGHT OF
YOUR OBJECTIVES, EXPERIENCE, FINANCIAL AND OPERATIONAL RESOURCES, AND OTHER
RELEVANT CIRCUMSTANCES. YOU SHOULD ALSO ENSURE THAT YOU FULLY UNDERSTAND THE
NATURE AND EXTENT OF YOUR EXPOSURE TO RISK OF LOSS, IF ANY, WHICH IN SOME
CIRCUMSTANCES MAY SIGNIFICANTLY EXCEED THE AMOUNT OF ANY INITIAL PAYMENT MADE BY
OR TO YOU.
FINANCIAL RISK MANAGEMENT PRODUCTS PERMIT PRECISE CUSTOMIZATION TO ACCOMPLISH
PARTICULAR FINANCIAL AND RISK MANAGEMENT OBJECTIVES THAT MIGHT OTHERWISE BE
UNACHIEVABLE. THE SPECIFIC RISKS PRESENTED BY A PARTICULAR TRANSACTION
NECESSARILY DEPEND UPON THE TERMS OF THAT TRANSACTION AND YOUR CIRCUMSTANCES.
COMMON TO ALL, HOWEVER, IS THEIR NATURE AS LEGALLY BINDING CONTRACTUAL
COMMITMENTS, WHICH, ONCE AGREED TO, CANNOT BE ALTERED OTHER THAN BY TERMINATION
OR MODIFICATION. YOU SHOULD UNDERSTAND THAT SUCH TERMINATION AND/OR MODIFICATION
MAY, IN CERTAIN CIRCUMSTANCES, RESULT IN SIGNIFICANT LOSSES.
AS IN ANY FINANCIAL TRANSACTION, YOU SHOULD ENSURE THAT YOU UNDERSTAND THE
REQUIREMENTS, IF ANY, APPLICABLE TO YOU THAT ARE ESTABLISHED BY YOUR REGULATORS
OR BY YOUR BOARD OF DIRECTORS OR OTHER GOVERNING BODY. YOU SHOULD ALSO CONSIDER
THE LEGAL, TAX, ACCOUNTING, AND ECONOMIC IMPLICATIONS OF ENTERING INTO ANY
FINANCIAL RISK MANAGEMENT TRANSACTION, INDEPENDENTLY AND IF
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NECESSARY, THROUGH CONSULTATION WITH SUCH ADVISORS AS MAY BE APPROPRIATE TO
ASSIST YOU IN UNDERSTANDING THE RISKS INVOLVED.
IN ENTERING INTO ANY FINANCIAL RISK MANAGEMENT TRANSACTION WITH, OR ARRANGED BY,
US, WELLS FARGO BANK, N.A. (THE "BANK"), YOU SHOULD ALSO UNDERSTAND THAT THE
BANK IS ACTING SOLELY IN THE CAPACITY OF AN ARM'S LENGTH CONTRACTUAL COUNTER
PARTY AND NOT IN THE CAPACITY OF YOUR FINANCIAL ADVISOR OR FIDUCIARY UNLESS THE
BANK HAS SO AGREED IN WRITING AND THEN ONLY TO THE EXTENT SO PROVIDED.
THIS BRIEF STATEMENT DOES NOT PURPORT TO DISCLOSE ALL OF THE RISKS OR OTHER
RELEVANT CONSIDERATIONS OF ENTERING INTO FINANCIAL RISK MANAGEMENT TRANSACTIONS.
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