AGREEMENT TO TERMINATE STRATEGIC ALLIANCE
I. The Parties
The Parties to this Agreement are:
1.01 Freightliner Corporation, a Delaware corporation located at Portland,
Oregon ("Freightliner").
1.02 Oshkosh Truck Corporation, a Wisconsin corporation located at
Oshkosh, Wisconsin ("Oshkosh").
II. The Recitals
2.01 The Date of this Agreement is April 10, 1997.
2.02 The Parties entered into a Strategic Alliance Agreement on June 5,
1995, pursuant to the terms of which Freightliner purchased 350,000
shares of unregistered Class B Common Stock of Oshkosh and 1,250,000
Warrants for the purchase of that number of unregistered Class B
Common Shares of Oshkosh, and each Party entered into certain
performance covenants.
2.03 Pursuant to the Strategic Alliance Agreement the Parties also entered
into a Distribution Agreement on December 13, 1995, pursuant to the
terms of which each Party entered into certain performance
covenants.
2.04 The Parties now wish to terminate the Strategic Alliance Agreement
and the Distribution Agreement, and release each other from their
respective performance covenants under those Agreements and other
liabilities with respect thereto, as set forth below.
III. The Agreement
Therefore, the Parties agree as follows:
3.01 The Recitals. The Recitals are a part of this Agreement.
3.02 Termination of Alliance. Effective upon completion of the payments
and deliveries described below, the Strategic Alliance Agreement
dated June 5, 1995, shall be terminated in all respects.
3.03 Purchase and Sale of Shares and Warrants. On June 9, 1997, or such
earlier date as Oshkosh may designate in writing, Oshkosh shall
purchase, and Freightliner shall sell all of its 350,000 shares of
Class B Common Stock and its 1,250,000 Warrants for the purchase of
that number of Class B Common Stock of Oshkosh, for the aggregate sum
of $6,750,000.00.
3.031 Freightliner shall deliver to Oshkosh its stock certificate
evidencing the 350,000 shares of Class B Common Stock of
Oshkosh which were purchased from Oshkosh on June 5, 1995,
duly endorsed to the order of Oshkosh, together with its
Warrant certificate evidencing the Warrants to purchase
1,250,000 Warrant Shares of Class B Common Stock of Oshkosh
which were purchased from Oshkosh on June 5, 1995, duly
endorsed to the order of Oshkosh.
3.032 Oshkosh shall deliver to Freightliner a wire transfer of
immediately available funds in the amount of $6,750,000.00
to any Bank in the United States designated in writing by
Freightliner with accompanying wiring instructions at least
two business days prior to the scheduled closing date.
3.033 The Parties each shall deliver such other agreements and
payments as are described below in this Agreement.
3.04 Settlement of Accounts. Except as set forth in this Section 3.04,
accounts relating to, or arising out of the normal course of business
between the Parties shall be settled in the normal course of
business. Amounts which either Party has claimed, or could have
claimed from the other arising out of disagreements about
contribution sharing or costs reimbursements under the Distribution
Agreement, or arising out of the transfer to Oshkosh and subsequent
return to Freightliner of the manufacture and assembly of the M-915
family of vehicles, shall be settled in full by the payment of the
sum of $180,000.00 by Freightliner to Oshkosh. This sum shall be
offset against the sum payable to Freightliner by Oshkosh under Sec.
3.03, above.
3.05 Sales of FLD Cabs. Freightliner will sell to Oshkosh its FLD cab
requirements in accordance with the Cab Purchase Agreement attached
as Exhibit "B" and incorporated here by reference. Customers of
Oshkosh who purchase trucks incorporating FLD cabs shall obtain
aftermarket service and support for such cabs through authorized
Freightliner dealers.
3.06 Sales of Front Drive Axles and Transfer Cases. Oshkosh will sell to
Freightliner front drive axles and transfer cases for the
Freightliner M-915 family of vehicles in volumes, and upon prices and
other terms and conditions that the Parties may agree upon from time
to time.
3.07 Termination of Distribution Agreement. The Distribution Agreement
between the Parties, dated December 13, 1995, is rescinded as of the
Date of this Agreement, except that the obligations of
confidentiality, indemnity, warranty, and for continuing support of
Oshkosh products sold under that Agreement shall survive, including
the termination of this Agreement.
3.08 Mutual Release. Each Party, for itself, its successors and assigns,
hereby releases the other Party and any other person, firm or
corporation charged with responsibility or liability, their
successors, assigns, heirs and legal representatives, from any and
all claims, demands, damages, costs, expenses, loss of services or
profits, actions and causes of action arising out of the Strategic
Alliance Agreement, the Distribution Agreement, and activities of
each Party under the said Agreements, except as provided above in
this Agreement.
Executed by the Parties on the Date of this Agreement.
OSHKOSH TRUCK CORPORATION FREIGHTLINER CORPORATION
By: /s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. Hebe
R. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇
Its: Chairman and Chief Executive Its: President and Chief
Officer Executive Officer
EXHIBIT A
INTEROFFICE CORRESPONDENCE
TO: ▇▇▇ ▇▇▇▇▇▇▇ 4/23/97
FROM: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
SUBJECT: Freightliner Parts
Following is a revision of the 9/17/96 letter showing Oshkosh part
numbers, descriptions and prices.
Freightliner Parts:
Cabs:
2218460 - Cab
2230530 & 2282130 & 2286800 - Cab spec, L10
2281850 - Cab
15-14555 010 Plate, cab mount - 2218580 - 1.36
A16-13606-000 - Valve cab leveling - 2218610 - 38.68
▇▇-▇▇▇▇▇-▇▇▇ - Pivot, hood hinge - 2218740 - 3.16
▇▇-▇▇▇▇▇-▇▇▇ - Bracket, mirror brace - 2231990 - 1.12
▇▇-▇▇▇▇▇-▇▇▇ - Retainer, shift lever boot - 2232010 - 2.35
▇▇-▇▇▇▇▇-▇▇▇ - Plate, air cleaner mounting - 2233120 - 21.37
*Supplier Parts - Freightliner Tooling:
STNOZX0615 - Behr
HUN68d885 - Buckhorn - Shift lever boot - 2232000 - 6.42
DNPVH001906 - Donaldson - Pre-cleaner - 2233090 - 155.06
EBA-11-2080 - ▇▇▇▇▇▇▇▇▇ - Air cleaner - 2233070 - 124.80
GYRIS5-040 - Goodyear - Air bag for cab mount - 2218600 - 10.50
GYR566209131 - Goodyear - Air bag for cab mount - 2232220
▇▇-▇▇▇▇▇-▇▇▇ - Specialty Stamping - Classic hood bezel - 2270630 -
121.92
▇▇-▇▇▇▇▇-▇▇▇ - ▇▇▇▇▇▇▇▇ Rubber
A06-23321-000 - Delphi Packard - Engine harness
▇▇▇-▇▇▇-▇▇-▇▇ - Clevite - Cab mounting isolator - 2218570 - 3.89
▇▇-▇▇▇▇▇-▇▇▇ - ▇▇▇▇▇ - Cab mount shock absorber - 9.81
A15-13788-000 - Clevite - Cab mount tie rod - 2218660 - 13.27
▇▇▇-▇▇▇-▇▇▇▇ - ▇▇▇▇▇ - Mirror head - 2219560 - 7.39
▇▇-▇▇▇▇▇-▇▇▇ - Con met - Grab handle brkt - 2219860 - 2.53
LOR/J17700-5 - Lord - Hood support - 2229360 - 2.01
▇▇-▇▇▇▇▇-▇▇▇ - ▇▇▇▇▇ - Mirror - 2231970 - 2.50
▇▇-▇▇▇▇▇-▇▇▇ - ▇▇▇▇▇ - Mirror - 2231980 - 4.79
▇▇▇-▇▇▇-▇▇-▇▇ - Clevite - Cab Mount - 2232200 - 1.76
A03-21474 - Custom Aluminum - Air intake duct - 2233100 - 55.60
▇▇-▇▇▇▇▇-▇▇▇ - Custom Aluminum/Elixir - Intake duct - 2233110 - 16.79
▇▇-▇▇▇▇▇-▇▇▇ - Con Met - Grab handle brkt - 2233350 - 2.53
▇▇-▇▇▇▇▇-▇▇▇ - Anodizing - Grab handle
▇▇-▇▇▇▇▇-▇▇▇ - ▇▇▇▇ Rubber - Grab handle gasket - 2233370 - .04
▇▇▇-▇▇▇-▇▇-▇▇ - ▇▇▇▇▇▇▇/Allied - Charge air cooler - 2259200 - 351.00
▇▇-▇▇▇▇▇-▇▇▇ - Behr - Radiator - 2259210 - 399.19
2270390 - Betts - Spring, torsion - 3.09
2270400 - Betts - Spring, torsion - 2.75
* Vendor prices shown are current prices. Oshkosh will negotiate
future prices directly with vendors.
EXHIBIT B
CAB REQUIREMENTS AGREEMENT
BETWEEN FREIGHTLINER CORPORATION
AND
OSHKOSH TRUCK CORPORATION
I. The Parties
The Parties to this Agreement are:
1.01 Freightliner Corporation, a Delaware corporation having its principal
place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇ ("Freightliner").
1.02 Oshkosh Truck Corporation, a Wisconsin corporation located at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Oshkosh").
II. The Recitals
2.01 The Date of this Agreement is April 10, 1997.
2.02 Freightliner manufactures and sells vocational and other vehicles and
components and parts under the trade name of Freightliner, and
2.03 Oshkosh manufactures and sells heavy duty on/off highway trucks and
rear discharge concrete mixer systems for a wide variety of
applications under the trade name of Oshkosh.
2.04 Freightliner and ▇▇▇▇▇▇▇ entered into a Strategic Alliance Agreement
on June 5, 1995.
2.05 On the same Date of this Agreement the parties also entered into an
Agreement to Terminate Strategic Alliance.
III. The Agreement
3.01 The Recitals are a part of this Agreement.
3.02 Freightliner shall manufacture and sell to Oshkosh, and Oshkosh shall
purchase from Freightliner up to one hundred fifty (150) Freightliner
FLD truck cabs ("Cabs") per year during the term of this Agreement,
for installation on Oshkosh "FF" vehicles only. None of the Cabs may
be installed on or used with any ▇▇▇▇▇▇ products or models or re-sold
to any third party. Aftermarket parts for such Cabs shall be
available from and purchased through Freightliner dealers.
3.03 The prices of "FF" cab componentry which are presently available are
set forth on Attachment "A," attached to this Agreement and
incorporated herein by reference. These prices shall apply with
respect to any and all standard configuration products ordered by
Oshkosh from Freightliner for delivery through the end of the 1997
model year. Thereafter, such prices may be adjusted reasonably from
time to time by Freightliner subject, however, to the following:
3.031. A price shall not be increased except upon at least ninety
(90) days' prior written notice from Freightliner to
Oshkosh of the increase, including the anticipated amount
thereof;
3.032. A price increase shall not be retroactive in effect, and
under no circumstances shall any price increase be allowed
with respect to any accepted order; and
3.033. A price shall be adjusted only one (1) time per calendar
year, beginning with the 1998 model year.
3.04 Freightliner shall give purchase orders of Oshkosh under Sections
3.02, above, the highest priority for completion of manufacture and
delivery. Freightliner promptly shall notify Oshkosh at any time
that it determines that it is reasonably probable that an Oshkosh
delivery date cannot be met. Such notice also shall indicate the
date(s) on which such delivery(s) will be met, so that Oshkosh can
determine whether such delay is acceptable.
3.05 Periodically, Oshkosh may issue a blanket purchase order for FF cab
componentry required by Oshkosh for the period designated in such
order. All such blanket purchase orders shall be subject to the
terms and conditions of this Agreement and, unless the Parties
otherwise agree in writing, to the standard terms and conditions of
sale used generally from time to time by Freightliner for sale to
third parties, but in the event of any conflict between (A) the terms
and conditions of this Agreement (or other terms agreed upon in
writing by the Parties) and (B) said standard terms and conditions,
the terms and conditions referred to in this Agreement shall control.
Freightliner shall receive and process each blanket purchase order in
a timely manner and shall notify Oshkosh promptly of its order
acceptance(s).
3.06 Pursuant to blanket purchase orders issued by Oshkosh under Paragraph
3.08, Oshkosh shall issue individual releases against such orders for
shipments of Freightliner products as specified in each release.
Freightliner shall make timely shipments under all individual
releases.
3.07 Payment terms shall be net thirty (30) days after delivery. Delivery
shall be F.O.B. Portland.
3.08 Warranty
3.081. Freightliner warrants to Oshkosh that each Cab component
supplied under this Agreement (i) shall be new; (ii) shall
meet Freightliner's specifications, drawings and/or other
descriptive materials pertaining to it; (iii) shall conform
to applicable federal, state and/or local statutes, laws,
rules, regulations, codes and ordinances; (iv) shall be
free from liens and encumbrances; and (v) shall not
infringe any patent, trade secret or other proprietary
right of any third party.
3.082. In addition to the warranties set forth in Subparagraph
3.111, each Freightliner cab component supplied under this
Agreement shall be warranted by Freightliner as more
particularly set forth on Attachment "B" attached hereto
and incorporated herein (the "Freightliner Limited
Warranty"). Freightliner may at any time or from time to
time amend the Freightliner Limited Warranty, but no such
amendment shall be effective except upon ninety (90) days'
prior written notice from Freightliner to Oshkosh of such
amendment and of Freightliner's intention to make the same,
and no such amendment shall be retroactive in effect or,
under any circumstances, applicable to any accepted offer.
A claim for breach of the Freightliner Limited Warranty
shall be handled in accordance with the Freightliner
Limited Warranty.
3.083. Freightliner shall not be liable for incidental or
consequential damages, including lost profits or production
downtime, incurred by Oshkosh as a result of a breach of
the warranties set forth in this Paragraph 3.11. Said
warranties shall be the sole and exclusive warranties and
are in lieu of all other warranties, express or implied,
and exclude the warranties of merchantability and fitness
for a particular purpose.
3.09 Oshkosh shall provide all engineering, including application
engineering, necessary for the proper and safe installation of the
Cab components and parts in its vocational trucks. Freightliner
shall provide all necessary product labeling with each Cab together
with Operator, Service, and Parts Manuals ("Operator Materials") for
each installation. Freightliner's recommended product labeling shall
include but not be limited to, warning labels to be affixed to the
vehicle and system in accordance with Freightliner's customary
procedures.
3.10 Except as provided below, this Agreement shall have an initial term
which begins on the date of this Agreement and ends on December 31,
2000.
3.101. Freightliner may terminate this Agreement upon one hundred
eighty (180) days' prior written notice to Oshkosh, in the
event that Freightliner substantially replaces and
discontinues production of its FLD cabs. Oshkosh may
terminate this Agreement upon ninety (90) days' prior
written notice of Freightliner.
3.102. A Party may terminate this Agreement immediately upon
written notice to the other Party if said other Party
ceases to do business or is declared by a court having
jurisdiction to be insolvent or bankrupt, or makes an
assignment or other arrangement for the benefit of
creditors, or sells, assigns or transfers all or
substantially all of its assets to another party outside of
the ordinary course of business.
3.103. Notwithstanding any provision of this Agreement to the
contrary, neither the expiration of the term nor the
termination or non-renewal of this Agreement shall affect
any of a Party's rights or obligations arising under this
Agreement prior to the effective date of the expiration of
the term or the termination or non-renewal of this
Agreement with respect to products sold and delivered at or
prior to the time of such expiration of the term or the
termination or non-renewal of this Agreement. This
Agreement shall continue to apply with respect to any
purchase order submitted by Oshkosh to Freightliner under
this Agreement prior to the effective date of the
expiration of the term or the termination or non-renewal of
this Agreement.
3.104. Neither Party shall be liable to the other by reason of
termination, non-renewal or breach of this Agreement for
compensation, reimbursement or damages for: (i) loss of
present or prospective profits on sales or anticipated
sales; (ii) consequential, special, or incidental damages
or production downtime; (iii) goodwill or loss thereof; or
(iv) expenditures, investment or any other type of
commitment, financial or otherwise, made in connection with
the business of such Party or in reliance upon the
existence of this Agreement.
3.11 Oshkosh may not use or advertise the name "Freightliner/TM/," in
connection with its marketing and sale of its "FF" vehicles
incorporating Freightliner products. Oshkosh shall not publicly use
or advertise the Freightliner/TM/ trademark without the prior written
approval of Freightliner.
3.12 General Provisions
3.121. Freightliner shall, at Freightliner's expense, furnish
Oshkosh with all information necessary to enable Oshkosh
to support aftermarket service of installed Freightliner
cab components and parts.
3.122. All notices under this Agreement shall be in writing and
shall be delivered personally or sent by certified mail,
return receipt requested, postage prepaid, by telex
(acknowledged by answer back), or by telecopy of telefax
(confirmed by certified mail, return receipt requested,
postage prepaid) addressed to the Parties at the addresses
immediately below, or to such other address of which either
Party may advise the other by notice under this
Subparagraph 3.132. Notices will be deemed given when
personally delivered or sent as specified above.
Freightliner Corporation Oshkosh Truck Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 3849 P.O. Box 2566
Portland, OR 97208-3849 Oshkosh, WI ▇▇▇▇▇-▇▇▇▇
Fax No. Fax No. ▇▇▇-▇▇▇-▇▇▇▇
Atten: Atten: Vice President & General
Counsel
3.123. Any claim or dispute arising under or out of this Agreement
shall first be presented to the other Party in a concise
written statement of the claim or dispute, accompanied by
supporting facts or data and by a designation of a
reasonable time period [but not more than thirty (30) days]
for resolution. If the matter has not been resolved within
the designated time period, the matter shall be referred to
the CEO of each of the Parties for resolution. If the CEOs
are unable to agree upon a resolution within fourteen (14)
days after the matter is referred to them, then this issue
is at impasse and either party may pursue any remedy
legally available to them. Neither Party shall initiate
arbitration proceedings or litigation without first (i)
following the procedure described above and (ii) giving the
other Party at least ten (10) days' prior written notice of
its intention to do so.
3.124. Any headings used herein are for convenience and reference
only and are not part of this Agreement, nor shall they in
any way affect the interpretation hereof.
3.125. Any action or the breach of this Agreement, except for
actions for any breach of warranty, shall be brought within
three (3) years from the date of the accrual of the cause
of action. The construction and interpretation of this
Agreement shall be governed by the laws of the State of
Oregon.
3.126. Each Party shall use its best efforts and act in good faith
in carrying out this Agreement.
3.127. This Agreement shall be amended only in writing signed by
the Parties to this Agreement.
3.128. Neither Party shall, voluntarily or involuntarily, by
operation of law or otherwise, assign or otherwise transfer
this Agreement, in whole or in part, without the prior,
express written consent of the other Party, which consent
shall not be unreasonably withheld.
3.129. This Agreement contains the entire understanding and
agreement of the Parties with respect to the subject matter
of this Agreement, and this Agreement shall supersede all
prior communications, representations, understandings,
promises or agreements between the Parties, whether verbal
or written, with respect to the subject matter of this
Agreement.
3.1210. This Agreement shall bind and benefit the Parties and their
respective legal representatives, successors and permitted
assigns.
3.1211. The warranties and representations made by a Party in this
Agreement shall survive the execution and delivery of this
Agreement.
3.13 Indemnification
3.131 Freightliner shall, upon Oshkosh's written request, defend,
indemnify, and hold Oshkosh harmless of and from any claim,
demand, suit, damage, liability, cost or expense, including
attorney fees and expenses, final judgments and
settlements, that may be asserted, commenced or arise
against Oshkosh by reason of alleged breach of warranty,
defects in material, design (except Oshkosh designs and
parts), assembly, or manufacture of Products sold by
Freightliner to Oshkosh under this Agreement. Freightliner
shall not be required to indemnify Oshkosh if the basis of
the liability asserted would have been precluded by the
inclusion of the Freightliner warranty in the contract with
the end user, in the event Oshkosh has any liability for
incidental or consequential damages arising out of the sale
of Products in the event Oshkosh has assumed liability
independent of the Freightliner warranty.
3.132. Oshkosh shall indemnify, defend and hold Freightliner
harmless from and against any and all claims or actions by
third parties, damages, losses, costs and expenses
(including, without limitation, reasonable attorneys' fees
and other legal costs and expenses) for injury to or death
of any person or persons or damage to or destruction of any
property to the extent that such personal injury, death or
property damage is caused by (i) any negligent act or
omission of Oshkosh or Oshkosh's employees or agents, (ii)
any alteration made by Oshkosh or Oshkosh employees or
agents to Operator Materials, or to Freightliner's
recommended product labeling, without Freightliner's prior
consent or concurrence, or (iii) any allegations relating
to Oshkosh designs.
Freightliner shall promptly notify Oshkosh of any claim or
action for which indemnification will be sought by Freightliner
under this Subparagraph 3.162, and Oshkosh shall have the right,
at its expense, to assume the defense or the settlement thereof
using counsel reasonably acceptable to Freightliner , provided,
however, that Freightliner shall have the right to participate,
at its own expense, with respect to any such claim, action or
proceeding, and no such claim, action or proceeding shall be
settled without the prior written consent of Freightliner, which
consent shall not be unreasonably withhold, and in connection
with any such claim, action or proceeding, the Parties shall
cooperate with each other and provide each other with access to
relevant books and records in each Party's possession or
control.
3.14 Proprietary and Confidential Information
3.141 Proprietary Information. Oshkosh and Freightliner will use
their best efforts to keep confidential any proprietary or
secret information developed by the other party. This
obligation shall not apply to information received by
either party which : (a) is or becomes publicly known
through no fault of the recipient party; (b) is already
known to the best efforts to keep confidential any
proprietary or secret information recipient party at the
time of disclosure; (c) has been rightfully received by the
recipient party from a third party; (d) is independently
developed by the recipient party; (e) is disclosed to a
court or government agency pursuant to a subpoena or
administrative order; or (f) is expressly released in
writing by the other party.
3.142 Confidential and Third Parties. The parties' obligations
under this Paragraph 7 are not violated by dealings with
consultant, suppliers, or authorized dealers. However, in
such dealings each party will undertake to maintain the
proprietary nature of proprietary or secret information via
confidential agreements or other appropriate measures.
3.173. The covenants set forth in this Paragraph 3.14 shall
survive termination or expiration of this Agreement for any
reason, for a period of five (5) years, and shall bind the
parties, their successors and assigns.
3.15 Oshkosh agrees further that it shall not disassemble, decompile or
otherwise reverse engineer, directly or indirectly, any or all of the
proprietary parts or of Freightliner, except that Oshkosh may, with
prior authorization from Freightliner (which authorization shall not
be unreasonably withheld), disassemble any proprietary part of
Freightliner incident to the manufacture of any Oshkosh FF truck
incorporating a Freightliner cab components or parts under this
Agreement.
3.16 Force Majeure
3.161 Neither Party shall be liable to the other for any delay in
or impairment of performance under this Agreement which
results in whole or in part from: fire, floods or other
catastrophes; strikes, lockouts or labor disruption; acts
of God; wars, riots or embargo delays; government
allocations or priorities; shortages of transportation,
fuel, labor or materials; inability to procure supplies or
raw materials; severe weather conditions; or any other
circumstances or cause beyond the control of such Party in
the reasonable conduct of its business.
Executed by the Parties on the Date of this Agreement.
FREIGHTLINER CORPORATION OSHKOSH TRUCK CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By /s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. Hebe R. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name/Title: President and Chief Name/Title: Chairman and Chief
Executive Officer Executive Officer
Date: May 2, 1997 Date: April 24, 1997
