<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AMENDMENT NO. 6
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 17)
------------------------
CHICAGO AND NORTH WESTERN
TRANSPORTATION COMPANY
(NAME OF SUBJECT COMPANY)
UNION PACIFIC CORPORATION
UNION PACIFIC HOLDINGS, INC.
UP RAIL, INC.
(BIDDERS)
------------------------
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
167155 10 0
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
RICHARD J. RESSLER, ESQ.
ASSISTANT GENERAL COUNSEL
UNION PACIFIC CORPORATION
MARTIN TOWER, EIGHTH AND EATON AVENUES
BETHLEHEM, PENNSYLVANIA 18018
(610) 861-3200
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
------------------------
With a copy to:
PAUL T. SCHNELL, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 735-3000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Union Pacific Corporation, a Utah corporation ('Parent'), Union Pacific
Holdings, Inc., a Utah corporation and a wholly owned subsidiary of Parent
('Holdings'), and UP Rail, Inc. (the 'Purchaser'), a Utah corporation and a
wholly owned subsidiary of Holdings, and an indirect wholly owned subsidiary of
Parent, hereby amend and supplement their Tender Offer Statement on Schedule
14D-1 ('Schedule 14D-1'), filed with the Securities and Exchange Commission (the
'Commission') on March 23, 1995, as amended, with respect to the Purchaser's
offer to purchase all outstanding shares of Common Stock, par value $.01 per
share (the 'Common Stock' or the 'Shares'), of Chicago and North Western
Transportation Company, a Delaware corporation (the 'Company'), at a price of
$35.00 per Share, net to the seller in cash (the 'Offer Price'), upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated March
23, 1995 (the 'Offer to Purchase'), as amended and supplemented by the
Supplement thereto, dated April 14, 1995 (the 'Supplement'), and in the revised
Letter of Transmittal (which, as amended from time to time, together constitute
the 'Offer'), which have been annexed to and filed with the Schedule 14D-1 as
Exhibits (a)(1), (a)(11) and (a)(12), respectively.
Unless otherwise indicated herein, each capitalized term used and not
defined herein shall have the meaning assigned to such term in Schedule 14D-1,
the Offer to Purchase or in the Supplement referred to therein.
ITEM 1. SECURITY AND SUBJECT COMPANY.
The information set forth in Item 1(b) and (c) of Schedule 14D-1 is hereby
amended and supplemented by the following:
(b) The information set forth in 'INTRODUCTION' in the Supplement is
incorporated herein by reference. A copy of the Amendment to the Option
Agreement is attached hereto as Exhibit (c)(15) and incorporated herein by
reference.
(c) The information set forth in 'THE OFFER--Price Range of Shares;
Dividends' in the Supplement is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
The information set forth in Items 3(a) and (b) of Schedule 14D-1 is hereby
amended and supplemented by the following:
(a) - (b) The information set forth in 'INTRODUCTION,' 'SPECIAL FACTORS--
Background of the Transaction' and '--Interests of Certain Persons in
the Transaction' in the Supplement is incorporated herein by reference. Copies
of the clarification document and the Amendment to the Option Agreement are
attached hereto as Exhibits (c)(14) and (c)(15), respectively, and incorporated
herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The information set forth in Items 4(a) and (b) of Schedule 14D-1 is hereby
amended and supplemented by the following:
(a) - (b) The information set forth in 'INTRODUCTION' and 'FINANCING OF THE
TRANSACTION' in the Supplement is incorporated herein by reference. Copies of
the $1.1 Billion Credit Agreement, the $1.2 Billion Credit Agreement and the
Amendment to the Option Agreement are attached hereto as Exhibits (b)(2), (b)(3)
and (c)(15), respectively, and incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
The information set forth in Items 5(a)-(e) of Schedule 14D-1 is hereby
amended and supplemented by the following:
(a) - (e) The information set forth in 'INTRODUCTION,' 'SPECIAL FACTORS--
Background of the Transaction,' '--Interests of Certain Persons in the
Transaction' and 'FINANCING OF THE TRANSACTION' in the Supplement is
incorporated herein by reference. Copies of the $1.1 Billion Credit Agreement,
the $1.2 Billion Credit Agreement, the clarification document and the Amendment
to the Option Agreement are attached hereto as Exhibits (b)(2), (b)(3), (c)(14)
and (c)(15), respectively, and incorporated herein by reference.
2
<PAGE>
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
The information set forth in Item 6(a) of Schedule 14D-1 is hereby amended
and supplemented by the following:
(a) The information set forth in 'INTRODUCTION' and 'SPECIAL FACTORS--
Interests of Certain Persons in the Transaction' in the Supplement is
incorporated herein by reference. Copies of the clarification document and the
Amendment to the Option Agreement are attached hereto as Exhibits (c)(14) and
(c)(15), respectively, and incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in Item 7 of Schedule 14D-1 is hereby amended and
supplemented by the following:
The information set forth in 'INTRODUCTION,' 'SPECIAL FACTORS--Background
of the Transaction' and '--Interests of Certain Persons in the Transaction' in
the Supplement is incorporated herein by reference. Copies of the clarification
document and the Amendment to the Option Agreement are attached hereto as
Exhibits (c)(14) and (c)(15), respectively, and incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
The information set forth in Items 10(a), (b), (e) and (f) of Schedule
14D-1 is hereby amended and supplemented by the following:
(a) The information set forth in 'SPECIAL FACTORS--Opinion of The
Blackstone Group L.P.' and '--Interests of Certain Persons in the Transaction'
in the Supplement is incorporated herein by reference. A copy of the
clarification document is attached hereto as Exhibit (c)(14) and incorporated
herein by reference.
(b) The information set forth in 'INTRODUCTION,' 'SPECIAL FACTORS--
Background of the Transaction,' 'FINANCING OF THE TRANSACTION,'
'DISSENTERS' RIGHTS,' 'THE OFFER--Terms of the Offer' and '--Certain Legal
Matters; Regulatory Approvals' in the Supplement is incorporated herein by
reference. Copies of the clarification document, the Amendment to the Option
Agreement and the press release, dated April 14, 1995, are attached hereto as
Exhibits (c)(14), (c)(15) and (g)(14), respectively, and incorporated herein by
reference.
(e) The information set forth in 'SPECIAL FACTORS--Certain Litigation' and
'THE OFFER--Certain Legal Matters; Regulatory Approvals' in the Supplement is
incorporated herein by reference. Copies of the Amendment to the Option
Agreement, Memorandum of Understanding and press release, dated April 14, 1995,
are attached hereto as Exhibits (c)(15), (g)(13) and (g)(14), respectively, and
incorporated herein by reference.
(f) The information set forth in the Supplement and the revised Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(11) and
(a)(12), respectively, is incorporated herein by reference. Copies of the
revised Notice of Guaranteed Delivery and the press release, dated April 14,
1995, are attached hereto as Exhibits (a)(13) and (g)(14), respectively, and
incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(11) Supplement to the Offer to Purchase, dated April 14, 1995.
(a)(12) Revised Letter of Transmittal.
(a)(13) Revised Notice of Guaranteed Delivery.
(b) (2) $1.1 Billion Credit Agreement, dated April 11, 1995, among Parent,
Chemical Bank, Citicorp Securities, Inc., Chemical Securities, Inc. and
the other banks named therein.
(b) (3) $1.2 Billion Credit Agreement, dated April 11, 1995, among Parent,
Chemical Bank, Citicorp Securities, Inc., Chemical Securities, Inc. and
the other banks named therein.
(c)(14) Clarification document, dated April 12, 1995, among the Company, Parent
and the Purchaser.
(c)(15) Amendment to the Option Agreement, dated April 13, 1995, between the
Purchaser and the Company.
(g)(13) Memorandum of Understanding, dated April 13, 1995, among the Company
and plaintiffs in the five purported class action suits previously
filed in the Delaware Court of Chancery.
(g)(14) Text of press release issued by Parent on April 14, 1995.
3
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: April 14, 1995
UNION PACIFIC CORPORATION
By: /s/ CARL W. VON BERNUTH
4
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: April 14, 1995
UNION PACIFIC HOLDINGS, INC.
By: /s/ CARL W. VON BERNUTH
5
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: April 14, 1995
UP RAIL, INC.
By: /s/ CARL W. VON BERNUTH
6
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- ------------------------------------------------------------------------
(a)(11) Supplement to the Offer to Purchase, dated April 14, 1995.
(a)(12) Revised Letter of Transmittal.
(a)(13) Revised Notice of Guaranteed Delivery.
(b)(2) $1.1 Billion Credit Agreement, dated April 11, 1995, among Parent,
Chemical Bank, Citicorp Securities, Inc., Chemical Securities, Inc. and
the other banks named therein.
(b)(3) $1.2 Billion Credit Agreement, dated April 11, 1995, among Parent,
Chemical Bank, Citicorp Securities, Inc., Chemical Securities, Inc. and
the other banks named therein.
(c)(14) Clarification document, dated April 12, 1995, among the Company, Parent
and the Purchaser.
(c)(15) Amendment to the Option Agreement, dated April 13, 1995, between the
Purchaser and the Company.
(g)(13) Memorandum of Understanding, dated April 13, 1995, among the Company
and plaintiffs in the five purported class action suits previously
filed in the Delaware Court of Chancery.
(g)(14) Text of press release issued by Parent on April 14, 1995.
<PAGE>
SUPPLEMENT TO
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
CHICAGO AND NORTH WESTERN
TRANSPORTATION COMPANY
AT
$35.00 NET PER SHARE
BY
UP RAIL, INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
UNION PACIFIC CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS HAVE BEEN EXTENDED UNTIL 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, APRIL 24, 1995,
UNLESS THE OFFER IS FURTHER EXTENDED.
------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH, WHEN ADDED TO THE SHARES OF NON-VOTING COMMON STOCK OF CHICAGO
AND NORTH WESTERN TRANSPORTATION COMPANY (THE 'COMPANY') BENEFICIALLY
OWNED BY UNION PACIFIC CORPORATION ('PARENT') AND UP RAIL, INC. (THE
'PURCHASER') (ASSUMING CONVERSION THEREOF INTO SHARES), CONSTITUTES AT
LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY DILUTED BASIS
(ASSUMING CONVERSION OF THE NON-VOTING COMMON STOCK INTO SHARES)
AND (2) THE INTERSTATE COMMERCE COMMISSION'S APPROVAL OF PARENT'S
AND THE COMPANY'S APPLICATION FOR AN ORDER AUTHORIZING THE
COMMON CONTROL OF THE RAIL SUBSIDIARIES OF THE COMPANY AND
PARENT HAVING BECOME FINAL AND EFFECTIVE PRIOR TO THE
EXPIRATION OF THE OFFER. ON APRIL 6, 1995, THE INTERSTATE
COMMERCE COMMISSION (THE 'ICC') SERVED AN ORDER, EFFECTIVE
ON THE SAME DAY, SETTING THE FINAL TERMS OF THE PREVIOUSLY
IMPOSED CONDITION IN FAVOR OF THE SOO LINE RAILROAD
COMPANY ('SOO') TO PARENT'S EXERCISE OF CONTROL OVER
THE COMPANY'S RAILROAD SUBSIDIARIES. THE COMPANY IS
CONTRACTUALLY OBLIGATED, SUBJECT TO THE CONSUMMATION
OF THE OFFER, TO EXECUTE CERTAIN AMENDMENTS TO
AGREEMENTS, PREVIOUSLY ENTERED INTO BETWEEN THE
PREDECESSORS OF CHICAGO AND NORTH WESTERN
RAILWAY COMPANY ('CNW RAILWAY') AND SOO. UPON
SUCH EXECUTION, THE ICC ORDER WILL BE FINAL
AND EFFECTIVE, AND PARENT WILL HAVE ICC
AUTHORITY TO EXERCISE CONTROL OVER THE
COMPANY, INCLUDING THE PURCHASE OF
SHARES IN THE OFFER AND THE MERGER.
----------------------------------------------------------------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY (WITH ONE DIRECTOR
AFFILIATED WITH PARENT ABSENT AND NOT VOTING) APPROVED THE OFFER AND THE
MERGER, HAS DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO AND IN
THE BEST INTERESTS OF THE COMPANY'S STOCKHOLDERS (OTHER THAN
PARENT AND THE PURCHASER) AND RECOMMENDS THAT STOCKHOLDERS OF
THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT
TO THE OFFER.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (i) complete and sign the revised Letter of Transmittal (or
a facsimile thereof) in accordance with the instructions in the revised Letter
of Transmittal, have such stockholder's signature thereon guaranteed if required
by Instruction 1 to the revised Letter of Transmittal, mail or deliver the
revised Letter of Transmittal or such facsimile and any other required documents
to the Depositary and either deliver the certificates for such Shares to the
Depositary along with the revised Letter of Transmittal or facsimile or deliver
such Shares pursuant to the procedure for book-entry transfer set forth in 'THE
OFFER--Procedures for Tendering Shares' in the Offer to Purchase prior to the
expiration of the Offer or (ii) request such stockholder's broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
such stockholder. Tendering stockholders may continue to use the BLUE Letter of
Transmittal delivered with the Offer to Purchase. A stockholder having Shares
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact such broker, dealer, commercial bank, trust company
or other nominee if such stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates for such
Shares are not immediately available or who cannot comply with the procedures
for book-entry transfer on a timely basis, may tender such Shares by following
the procedures for guaranteed delivery set forth in 'THE OFFER--Procedures for
Tendering Shares' in the Offer to Purchase.
Questions and requests for assistance or for additional copies of the Offer
to Purchase, this Supplement, the revised Letter of Transmittal or other tender
offer materials, may be directed to the Information Agent or the Dealer Manager
at their respective addresses and telephone numbers set forth on the back cover
of this Supplement.
------------------------
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
------------------------
The Dealer Manager for the Offer is:
CS First Boston
April 14, 1995
<PAGE>
TABLE OF CONTENTS
Page
----
INTRODUCTION.......................................... 1
SPECIAL FACTORS....................................... 2
Background of the Transaction....................... 2
Opinion of The Blackstone Group L.P. ............... 2
Summary of Presentation Materials to the Board...... 3
Opinion of CS First Boston Corporation.............. 3
Interests of Certain Persons in the Transaction..... 3
Certain Litigation.................................. 5
FINANCING OF THE TRANSACTION.......................... 5
DISSENTERS' RIGHTS.................................... 6
THE OFFER............................................. 6
1. Terms of the Offer................................ 6
2. Acceptance for Payment and Payment................ 6
5. Price Range of Shares; Dividends.................. 7
11. Certain Legal Matters; Regulatory Approvals....... 7
<PAGE>
To the Holders of Common Stock of Chicago and North Western Transportation
Company:
INTRODUCTION
The following information amends and supplements the Offer to Purchase,
dated March 23, 1995 (the 'Offer to Purchase'), of UP Rail, Inc. (the
'Purchaser'), a Utah corporation and an indirect wholly owned subsidiary of
Union Pacific Corporation, a Utah corporation ('Parent'), pursuant to which the
Purchaser is offering to purchase all outstanding shares of common stock, par
value $.01 per share (the 'Common Stock' or the 'Shares'), of Chicago and North
Western Transportation Company, a Delaware corporation (the 'Company'), at a
price of $35.00 per Share, net to the seller in cash (the 'Offer Price'), upon
the terms and subject to the conditions set forth in the Offer to Purchase, this
Supplement and in the revised Letter of Transmittal (which, as amended from time
to time, together constitute the 'Offer').
This Supplement should be read in conjunction with the Offer to Purchase.
This Supplement, among other things, sets forth certain additional information.
Except as set forth in this Supplement or the revised Letter of Transmittal, the
terms and conditions previously set forth in the Offer to Purchase and the
Letter of Transmittal remain applicable in all respects to the Offer.
Capitalized terms used but not defined in this Supplement have the meanings
assigned to them in the Offer to Purchase.
The purpose of the Offer is for Parent, through the Purchaser, to acquire
the entire equity interest in the Company. The Purchaser currently beneficially
owns all 12,835,304 of the issued and outstanding shares of Non-Voting Common
Stock of the Company, par value $.01 per share (the 'Non-Voting Common Stock')
which, assuming conversion thereof into Shares, represents 27.48% of the
outstanding Shares calculated on a fully diluted basis (assuming conversion of
the shares of Non-Voting Common Stock into Shares and exercise of outstanding
stock options). The Offer is being made pursuant to an Agreement and Plan of
Merger, dated as of March 16, 1995 (the 'Merger Agreement'), by and among the
Company, Parent and the Purchaser, a copy of which is attached to the Offer to
Purchase as Annex I. The Merger Agreement provides that, following the
completion of the Offer and the satisfaction or the waiver of certain
conditions, the Purchaser will be merged with and into the Company (the
'Merger'), with the Company as the surviving corporation (the 'Surviving
Corporation'). In the Merger, each outstanding Share (other than Shares held in
the treasury of the Company or owned by Parent, the Purchaser or any other
wholly owned subsidiary of Parent), will be converted into the right to receive
the Offer Price or any higher price per Share paid in the Offer, without
interest thereon. As a result of the Merger, the Surviving Corporation will
become an indirect wholly owned subsidiary of Parent. See 'SPECIAL
FACTORS--Purpose and Structure of the Transaction' and 'THE MERGER AGREEMENT' in
the Offer to Purchase. The time at which the Merger is consummated in accordance
with the Merger Agreement is hereinafter referred to as the 'Effective Time.'
The Offer and the Merger are sometimes collectively referred to herein as the
'Transaction.'
On April 13, 1995, the Purchaser and the Company entered into an amendment
to the Option Agreement to provide that the Purchaser may only exercise its
option to acquire additional Shares from the Company (thereby permitting a
short-form merger) if the Purchaser acquires more than 87.5% (previously 85%)
but less than 90% of the Shares in the Offer.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER
OF SHARES WHICH, WHEN ADDED TO THE SHARES OF NON-VOTING COMMON STOCK
BENEFICIALLY OWNED BY PARENT AND THE PURCHASER (ASSUMING CONVERSION THEREOF INTO
SHARES), CONSTITUTES AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A FULLY
DILUTED BASIS (ASSUMING CONVERSION OF THE NON-VOTING COMMON STOCK INTO SHARES)
(THE 'MINIMUM CONDITION') AND (2) THE ICC'S APPROVAL OF PARENT'S AND THE
COMPANY'S APPLICATION FOR AN ORDER AUTHORIZING THE COMMON CONTROL OF THE RAIL
SUBSIDIARIES OF THE COMPANY AND PARENT HAVING BECOME FINAL AND EFFECTIVE PRIOR
TO THE EXPIRATION OF THE OFFER (THE 'ICC FINAL APPROVAL CONDITION'). ON APRIL 6,
1995, THE ICC SERVED AN ORDER, EFFECTIVE ON THE SAME DAY, SETTING THE FINAL
TERMS OF THE PREVIOUSLY IMPOSED CONDITION IN FAVOR OF SOO TO PARENT'S EXERCISE
OF CONTROL OVER THE COMPANY'S RAILROAD SUBSIDIARIES. THE COMPANY IS
CONTRACTUALLY OBLIGATED, SUBJECT TO THE CONSUMMATION OF THE OFFER, TO EXECUTE
CERTAIN AMENDMENTS TO AGREEMENTS, PREVIOUSLY ENTERED INTO BETWEEN THE
PREDECESSORS OF CNW
<PAGE>
RAILWAY AND SOO. UPON SUCH EXECUTION, THE ICC ORDER WILL BE FINAL AND EFFECTIVE,
AND PARENT WILL HAVE ICC AUTHORITY TO EXERCISE CONTROL OVER THE COMPANY,
INCLUDING THE PURCHASE OF SHARES IN THE OFFER AND THE MERGER.
THE BOARD OF DIRECTORS OF THE COMPANY (THE 'BOARD' OR 'BOARD OF DIRECTORS')
HAS UNANIMOUSLY (WITH MR. RICHARD K. DAVIDSON, PRESIDENT OF PARENT, ABSENT AND
NOT VOTING) APPROVED THE OFFER AND THE MERGER, DETERMINED THAT THE OFFER AND THE
MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF HOLDERS OF SHARES (OTHER THAN
PARENT AND THE PURCHASER) AND RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY ACCEPT
THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. See 'SPECIAL
FACTORS--Recommendation of the Board of Directors of the Company; Fairness of
the Transaction' in the Offer to Purchase.
THE BLACKSTONE GROUP L.P. ('BLACKSTONE') HAS DELIVERED TO THE BOARD ITS
WRITTEN OPINION TO THE EFFECT THAT, AS OF THE DATE OF THE MERGER AGREEMENT, THE
CASH CONSIDERATION TO BE RECEIVED BY THE HOLDERS OF SHARES PURSUANT TO THE OFFER
AND THE MERGER IS FAIR TO SUCH HOLDERS FROM A FINANCIAL POINT OF VIEW. See
'SPECIAL FACTORS--Opinion of The Blackstone Group L.P.' in the Offer to Purchase
and this Supplement.
THE OFFER TO PURCHASE, THIS SUPPLEMENT AND THE REVISED LETTER OF
TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE
ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
The procedure for tendering Shares is set forth in 'THE OFFER--Procedures
for Tendering Shares' in the Offer to Purchase. Tendering stockholders may
continue to use the BLUE Letter of Transmittal and GRAY Notice of Guaranteed
Delivery delivered with the Offer to Purchase or may use the GREEN revised
Letter of Transmittal and PINK revised Notice of Guaranteed Delivery which are
being provided with this Supplement.
Stockholders who have validly tendered Shares and not withdrawn such
tenders and who wish to have such Shares purchased pursuant to the Offer need
not take any further action except for complying with the procedure for
guaranteed delivery if such procedure is being used.
1. The discussion set forth in 'SPECIAL FACTORS--Background of the
Transaction' in the Offer to Purchase is hereby amended and supplemented as
follows:
During late 1994 and January 1995, representatives of Blackstone discussed
with the Company's management the advantages in terms of potentially increased
negotiating leverage and disadvantages of adopting a stockholders' rights plan;
they also discussed this topic with members of the Company's Board (with Mr.
Davidson absent) following the Board's December 15, 1994 meeting.
At the February 28 Board meeting, again with Mr. Davidson absent, the
benefits and detriments of adoption of a stockholders' rights plan were
reviewed, counsel made a presentation of legal considerations, and the Board
concluded to defer adoption of a plan. The Board's conclusion was based on their
view that (i) a rights plan would dissuade Parent from making a friendly offer,
and that, given Parent's existing 29% stock ownership in the Company and the
absence of any realistic potential competitive bidders, a friendly offer was
likely to result in a higher ultimate price than a hostile offer; and (ii) a
rights plan could be adopted quickly if the need arose. A rights plan was not
thereafter adopted because Parent proceeded to negotiate directly with the
Company's Board and did not make a hostile offer for the Company.
2. The discussion set forth in 'SPECIAL FACTORS--Opinion of The Blackstone
Group L.P.' in the Offer to Purchase is hereby amended and supplemented by
adding to the end thereof:
Pursuant to the terms of the March 3, 1995 letter agreement, the Company
agreed to pay Blackstone a fee equal to $6,000,000, less one-half of the
$500,000 fee paid Blackstone pursuant to the December 14, 1994 letter agreement,
plus reasonable expenses. Blackstone's fee was contingent upon the signing of a
definitive agreement for a sale of, investment in, recapitalization by,
strategic alliance with or joint venture involving, the Company (the 'CNW
Transaction') and was payable as follows: (i) $4,750,000 upon the signing of
such an agreement; and (ii) the remaining $1,000,000 upon the earlier of the
consummation of the CNW Transaction and December 31, 1995. Two directors,
Messrs. Poling and Skinner, voted against the approval of Blackstone's fee
arrangement, on the basis of their view that the fee should be consistent with
the amount of time involved to
2
<PAGE>
complete the transaction. At no time did either Mr. Poling or Mr. Skinner
express any reservation about Blackstone's independence, ability or work.
Transtar, Inc. ('Transtar') is a holding company which, among other
businesses, is involved in the rail transportation business which operates in
certain of the same and neighboring geographic regions as the Company.
Blackstone and its affiliates hold a 51% interest in Transtar. The remaining 49%
is held by USX Corporation ('USX') and Transtar management. The Company's
business with Transtar accounts for less than 1% of the Company's revenues.
During 1993 and 1994, the Company informally engaged in discussions with
Blackstone and USX regarding a possible acquisition of Transtar. These
discussions ended in March 1994, at which point Mr. Schmiege had indicated to a
representative of USX a possible interest in pursuing a transaction in the
future. Company director Mr. Mossman, a Blackstone General Partner, and
Blackstone General Partners Messrs. Peterson and Schwarzman serve as Transtar
directors. Transtar was in no way involved in any aspect of the Merger
Agreement.
3. The discussion set forth in 'SPECIAL FACTORS--Summary of Presentation
Materials to the Board--Potential Value to Parent--Pro Forma Merger Analysis'
in the Offer to Purchase is hereby supplemented by revising the next to last
sentence of such section to read as follows:
In the Control Application, Parent and the Company projected that a merger
between the two companies would result in normalized annual synergies totaling
approximately $184 million in 1991 dollars. The Company's management determined
that in assessing the value of the Company to Parent, this $184 million should
be discounted, ascribing a relatively high level of probability to its
approximately $79 million cost reduction component and a substantially lower
level of probability to its approximately $105 million revenue enhancement
component.
4. The discussion set forth in 'SPECIAL FACTORS--Opinion of CS First
Boston Corporation' in the Offer to Purchase is hereby amended and supplemented
as follows:
The Comparable Company Analysis and the Discounted Cash Flow Analysis
performed by CS First Boston did not consider the value of the Synergies which
would be created by a merger between Parent and the Company in assessing the
Company's value. In order to determine the value of the Company to Parent as an
acquisition, it is therefore necessary to add the values derived by CS First
Boston's Synergies Analysis to the values derived by its Comparable Company
Analysis and Discounted Cash Flow Analysis. The values derived by performing
this addition do not necessarily reflect the price Parent would be willing to
pay to acquire the Company.
The ranges of values calculated by means of CS First Boston's Synergies
Analysis were based on the Synergies projected by Parent as described in the
Offer to Purchase under the section 'SPECIAL FACTORS--Plans for the Company
after the Offer and Merger.' Parent advised CS First Boston that it believed
that such Synergies were a reliable estimate of the actual Synergies that would
be created as a result of the Merger.
CS First Boston's analyses indicated, based on Parent's view of the
estimates of realistically attainable Synergies, that the full value of the
Synergies would be approximately $21.00-$25.00, on a per Share basis. The
percentages of retained Synergies set forth in CS First Boston's Synergies
Analysis represent an assumed range of Synergies to be added to the Comparable
Company Analysis and Discounted Cash Flow Analysis, and not the absolute level
of Synergies that would be realized as a result of the Merger.
5. The discussion set forth in 'SPECIAL FACTORS--Interests of Certain
Persons in the Transaction' in the Offer to Purchase is hereby amended and
supplemented as follows:
Negotiations concerning the Separate Payments began after the CNW Board
negotiated and approved the $35 per Share price. The Company expressed the view
to Parent that amounts to be paid under the Change of Control Employment
Agreements would not be adequate severance compensation, especially in light of
the covenants not to compete which would prevent recipients from pursuing
employment in the railroad industry for a period of one year following the
cessation of their employment with the Company.
The Offer to Purchase under the caption 'SPECIAL FACTORS--Interests of
Certain Persons in the Transaction' sets forth the estimated amounts payable to
executive officers under the Change of Control Employment Agreements upon
qualifying terminations of employment, after reduction, pursuant to the terms of
such agreements, for (i) the amount of the prorated guaranteed bonus (assuming
an April 24, 1995 termination) and (ii) portions of the payments made under the
Merger Agreement with respect to the value of the executive's
3
<PAGE>
unvested options, all as determined by the Company under the proposed
regulations issued by the Internal Revenue Service under Code Section 280G, at
the amounts indicated in the left column below. Those amounts are currently
estimated as shown in the right column below.
<TABLE>
<CAPTION>
INITIAL CURRENT
ESTIMATES ESTIMATES
----------- -----------
<S> <C> <C>
Mr. Bitter........................................ $ 437,112 $ 355,743
Mr. Lundberg...................................... 456,302 391,243
Mr. Martin........................................ 1,181,172 1,106,460
Mr. Peters........................................ 1,212,549 1,127,466
Mr. Waller........................................ 431,648 366,589
All officers with Change of Control Employment
Agreements....................................... 11,865,054 10,906,363
</TABLE>
As previously disclosed in the Offer to Purchase under the caption 'SPECIAL
FACTORS--Interests of Certain Persons in the Transaction,' the Company and UPRR
have offered three-year employment agreements to certain executives which, if
accepted by the executives, will replace the Change of Control Employment
Agreements which the executives now have with the Company. Each proposed
employment agreement provides that, during the employment period, an executive's
salary will not be less than the executive's current salary and the executive's
annual bonus will not be less than the executive's bonus with respect to 1994.
After January 1, 1996, the executive will receive the benefits provided to
comparable employees performing similar services and will be given service
credit under the benefit plans for all years of service for which the executive
received credit under the comparable plans of CNW Railway (subject to reduction
for similar benefits therefrom). If the executive's employment is terminated
during the employment period by the employer without cause (or by the executive
after a reduction in the executive's salary or bonus), the executive will be
paid a lump sum amount equal to the present value of the aggregate salary and
bonus otherwise payable under the proposed employment agreement. Under the
proposed employment agreement the executive will make certain commitments as to
confidentiality, noncompetition and the amendment of certain other agreements to
which the executive may be a party. It is anticipated that one executive, at his
request, will be offered a revised employment agreement which will permit him to
defer the receipt of any bonus from UPRR for 1995 or subsequent years.
Of the twenty-seven executives with Change of Control Employment
Agreements, it is currently estimated that approximately nine of such executives
will enter into such employment agreements, including Mr. Peters. In addition,
in order to implement the terms of the severance arrangements provided for in
the Merger Agreement and described in the Offer to Purchase, the Company, UPRR
and CNW Railway have offered severance agreements to such twenty-seven
executives. It is anticipated that those of such executives who do not enter
into the employment agreements will enter into the severance agreements. Under
most of the proposed severance agreements, the executive's employment would
terminate shortly after the consummation of the Offer, but a few individuals may
agree to continue employment for various transition periods, which will not
exceed nine months.
On April 12, 1995, the Company, Parent and the Purchaser entered into a
document clarifying their understanding of how certain provisions of the Merger
Agreement should be applied with respect to employees of the Company whose
employment is terminated prior to the Effective Time. Such clarification
document provides that if the employment of a Company employee is terminated
(voluntarily or otherwise) prior to the Effective Time, each Option which is
held by such employee immediately prior to the later of the date of the
consummation of the Offer or the date of such termination of employment will be
cancelled on the later of such dates (provided that any required consent to
cancellation has been given by the employee). Promptly upon such cancellation,
the Company will pay to such employee an amount equal to the excess, if any, of
the Offer Price over the exercise price per Share subject to such Option,
multiplied by the number of Shares subject thereto. The clarification document
also provides that the Company will pay to a 'Terminated Employee' (as defined
below), as soon as reasonably practical after the date of his or her termination
of employment, a prorated bonus calculated in accordance with the Merger
Agreement, provided that such prorated bonus shall be based on the Company's
performance through the end of the calendar quarter coinciding with or
immediately preceding such termination and prorated to the date of such
termination. For such purposes, a 'Terminated Employee' shall mean a Company
employee, (i) whose employment is terminated (whether voluntarily or otherwise)
prior to the Effective Time, (ii) who does not (either before or after such
termination) enter into a severance agreement with
4
<PAGE>
respect to such employment similar to the employment agreements described in the
second preceding paragraph, and (iii) who was, immediately prior to the
execution of the Merger Agreement, a participant in the Company's Bonus Plan. A
copy of the clarification document has been filed as an exhibit to the Schedule
14D-1 and the Schedule 13E-3.
6. The discussion set forth in 'SPECIAL FACTORS--Certain Litigation' in
the Offer to Purchase is hereby amended and supplemented as follows:
On March 28, 1995, an amended class action complaint, amending two of the
previously filed five purported class action suits (the 'Amended Class Action'),
was filed in the Court of Chancery in Delaware. The Amended Class Action
reiterated the claims which had been made in the earlier suits which it amended,
and also alleged, among other things, (i) that Blackstone, the investment bank
retained by the defendants to render a fairness opinion in connection with the
Offer, is not disinterested or independent and has a conflict of interest with
regard to the Offer, (ii) that the defendants breached or aided and abetted
breaches of their duties of good faith and loyalty by approving for themselves
and members of the Company's senior management lucrative compensation packages
and other financial benefits, (iii) that the defendants structured the
transaction in such a way as to prevent the Company's public stockholders from
voting on the Merger or exercising dissenters' rights, and (iv) that the
defendants breached their duties of candor and full disclosure by failing
adequately to disclose, among other things, the information described in this
paragraph, the reasons why the Company's Board failed to implement a
stockholders' rights plan and the reasons for alleged discrepancies and
variations between valuation ranges for the Shares as prepared by the financial
advisors of Parent and the Company, respectively.
On March 30, 1995, the Delaware Court of Chancery, in the Amended Class
Action, granted expedited discovery and scheduled a hearing on April 13, 1995,
for (i) plaintiffs' motion for a preliminary injunction and (ii) defendants'
motion to dismiss the case for lack of subject matter jurisdiction on grounds
that the ICC is the exclusive forum to consider plaintiffs' purported claims.
On April 13, 1995, counsel for the Company, Parent and the plaintiffs in
the pending class action lawsuits entered into a memorandum of understanding
(the 'Memorandum of Understanding') proposing to settle all of the pending class
action lawsuits relating to the Offer. Pursuant to the Memorandum of
Understanding, Parent and the Company agreed, among other things, (i) to
disseminate certain supplemental disclosures to the Company's stockholders
(which disclosures, among others, are included in this Supplement), (ii) to
modify the Option Agreement to provide that the Purchaser may only exercise its
option to acquire additional Shares from the Company (thereby permitting a
short-form merger) if the Purchaser acquires more than 87.5% (previously 85%)
but less than 90% of the Shares in the Offer, and (iii) to extend the Expiration
Date until ten (10) calendar days after the date of this Supplement. The
Memorandum of Understanding also provides that Parent and/or the Company will
pay plaintiffs' counsel fees in an amount not to exceed $525,000, inclusive of
expenses, subject to approval of the Delaware Court of Chancery.
The parties to the Memorandum of Understanding also agreed to work in good
faith to prepare and submit to the Delaware Court of Chancery for its approval
at the earliest practicable time a Stipulation of Settlement of the pending
class action lawsuits. If such Stipulation of Settlement is not executed or is
not approved by the Court, or if the Offer is not consummated, the proposed
settlement will be null and void and will not prejudice the rights of any party
with respect to such litigation. A copy of the Memorandum of Understanding has
been filed as an exhibit to the Schedule 14D-1 and Schedule 13E-3.
7. The discussion set forth in 'FINANCING OF THE TRANSACTION' in the Offer
to Purchase is hereby amended and supplemented as follows:
As was contemplated by the Commitment, on April 11, 1995, Parent entered
into a credit agreement (the '$1.1 Billion Credit Agreement') among Parent,
Chemical Bank and Citicorp Securities, Inc., as Co-Arrangers, Chemical
Securities, Inc., as Syndication Agent, and the other banks named therein, which
provides Parent with a revolving credit facility in the amount of $1.1 billion
which will mature on April 11, 2000. In addition, as was contemplated by the
Commitment, on April 11, 1995, Parent entered into a separately documented
credit agreement (the '$1.2 Billion Credit Agreement') among Parent, Chemical
Bank and Citicorp Securities, Inc., as Co-Arrangers, Chemical Securities, Inc.,
as Syndication Agent, and the other banks named therein, which provides Parent
with a revolving credit facility in the amount of $1.2 billion which will mature
on April 10, 1996. The terms of the $1.1 Billion Credit Agreement and $1.2
Billion Credit Agreement were set forth in
5
<PAGE>
'FINANCING OF THE TRANSACTION' in the Offer to Purchase. The Facility fee
relating to the $1.2 Billion Credit Agreement is .060% per annum in contrast to
the .190% per annum disclosed in the Offer to Purchase.
The Purchaser estimates that the total amount of funds required to purchase
all Shares validly tendered pursuant to the Offer, consummate the Merger and to
pay all related costs and expenses (inclusive of estimated expenses of the
Company other than the cost of refinancing certain indebtedness of the Company,
if any) will be approximately $1.2 billion. See 'THE OFFER--Fees and Expenses'
in the Offer to Purchase.
The Purchaser plans to obtain the necessary funds through capital
contributions or advances made by Parent. Parent plans to obtain the funds for
such capital contributions or advances from its available cash and working
capital and/or the proceeds of the Facility or Parent's commercial paper
program.
Parent's commercial paper program involves the private placement of
unsecured, commercial paper notes with maturities of up to 270 days. The
commercial paper generally has an effective interest rate approximating the then
market rate of interest for commercial paper of similar rating, currently
approximately 6.2%. Parent may refinance any commercial paper borrowings used to
finance the purchase of Shares pursuant to the Offer through private placements
of additional commercial paper, borrowings under the Facility contemplated by
the Commitment or, depending on market or business conditions, through such
other financing as Parent may deem appropriate.
On April 6, 1995, the ICC served an order which, among other things, (i)
exempts Parent from the requirement of filing applications under 49 U.S.C. 11301
with respect to the issuance of certain securities and/or assumption of certain
obligations or liabilities, which are expected to be required for the repayment
of obligations incurred in financing the Transaction and prepaying certain
indebtedness of the Company, in a principal amount not to exceed $2.3 billion
and (ii) set April 10, 1995, as the date upon which such decision would become
effective.
8. The discussion set forth in 'DISSENTERS' RIGHTS' of the Offer to
Purchase is hereby amended and supplemented as follows:
As previously disclosed in the Offer to Purchase under the caption
'DISSENTERS' RIGHTS,' Parent and the Company stated their intention to seek a
determination of the ICC that the terms of the Merger are just and reasonable.
On April 4, 1995, Parent, UPRR, MPRR and the Company submitted to the ICC a
petition for a determination that the terms of the Merger are just and
reasonable. To date, the ICC has not issued any determination in response to
such petition.
9. The discussion set forth in 'THE OFFER--Terms of the Offer' in the
Offer to Purchase is hereby amended and supplemented as follows:
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date (as hereinafter defined) and not withdrawn
in accordance with Section 4 in the Offer to Purchase. The term 'Expiration
Date' means 12:00 Midnight, New York City time, on Monday, April 24, 1995,
unless and until the Purchaser, in its sole discretion (but subject to the terms
of the Merger Agreement), shall have extended the period of time during which
the Offer is open, in which event the term 'Expiration Date' shall refer to the
latest time and date at which the Offer, as so extended by the Purchaser, shall
expire.
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition and the ICC Final Approval Condition. On April 6, 1995, the
ICC served an order, effective on the same day, setting the final terms of the
previously imposed condition in favor of Soo to Parent's exercise of control
over the Company's railroad subsidiaries. The Company is contractually
obligated, subject to the consummation of the Offer, to execute certain
amendments to agreements, previously entered into between the predecessors of
CNW Railway and Soo. Upon such execution, the ICC order will be final and
effective, and Parent will have ICC authority to exercise control over the
Company, including the purchase of Shares in the Offer and the Merger.
10. The discussion set forth in 'THE OFFER--Acceptance for Payment and
Payment' in the Offer to Purchase is hereby amended and supplemented as follows:
Notwithstanding the fact that the Purchaser stated in the Offer to Purchase
that it reserved the right to assert the occurrence of a condition following
acceptance for payment of Shares but prior to payment for Shares in
6
<PAGE>
order to delay payment or cancel its obligation to pay for properly tendered
Shares, the Purchaser understands that all conditions of the Offer, other than
receipt of necessary governmental approvals, must be satisfied or waived prior
to the acceptance of Shares for payment. In addition, if, following acceptance
of payment for Shares, the Purchaser asserts such a governmental approval as a
condition and does not promptly pay for Shares tendered, the Purchaser will
promptly return such Shares.
11. The discussion set forth in 'THE OFFER--Price Range of Shares;
Dividends' in the Offer to Purchase is hereby amended and supplemented as
follows:
The following table sets forth, for the quarters indicated, the high and
low closing sales prices per Share on the NYSE as reported by the Dow Jones News
Service.
<TABLE>
<CAPTION>
MARKET PRICE
----------------
HIGH LOW
---- ---
<S> <C> <C>
FISCAL YEAR ENDED DECEMBER 31, 1993:
First Quarter............................................ $23 1/8 $19 1/8
Second Quarter........................................... 24 1/4 19 7/8
Third Quarter............................................ 23 19
Fourth Quarter........................................... 25 1/8 19 1/2
FISCAL YEAR ENDED DECEMBER 31, 1994:
First Quarter............................................ 28 1/8 24 1/8
Second Quarter........................................... 25 21 5/8
Third Quarter............................................ 24 1/4 19 3/8
Fourth Quarter........................................... 20 7/8 18 1/4
FISCAL YEAR ENDED DECEMBER 31, 1995:
First Quarter............................................ 34 7/8 19
Second Quarter (through April 13, 1995).................. 34 7/8 34 3/4
</TABLE>
Stockholders are urged to obtain a current market quotation for the Shares.
12. The discussion set forth in 'THE OFFER--Certain Legal Matters;
Regulatory Approvals' in the Offer to Purchase is hereby amended and
supplemented as follows:
ICC Matters. On April 6, 1995, the ICC served an order, effective on the
same day, setting the final terms of the previously imposed condition in favor
of Soo to Parent's exercise of control over the Company's railroad subsidiaries.
The Company is contractually obligated, subject to the consummation of the
Offer, to execute certain amendments to agreements, previously entered into
between the predecessors of CNW Railway and Soo. Upon such execution, the ICC
order will be final and effective, and Parent will have ICC authority to
exercise control over the Company, including the purchase of Shares in the Offer
and the Merger.
On April 4, 1995, Parent, UPRR, MPRR and the Company submitted to the ICC a
petition for a determination that the terms of the Merger are just and
reasonable. To date, the ICC has not issued any determination in response to
such petition.
UP RAIL, INC.
April 14, 1995
7
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal or revised
Letter of Transmittal will be accepted. The Letter of Transmittal or revised
Letter of Transmittal, certificates for Shares and any other required documents
should be sent or delivered by each stockholder of the Company or such
stockholder's broker, dealer, commercial bank, trust company or other nominee to
the Depositary at one of its addresses set forth below:
The Depositary for the Offer is:
CITIBANK, N.A.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Delivery: By Hand:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
c/o Citicorp Data c/o Citicorp Data Corporate Trust Window
Distribution, Inc. Distribution, Inc. 111 Wall Street, 5th Floor
P.O. Box 1429 404 Sette Drive New York, New York
Paramus, New Jersey 07653 Paramus, New Jersey 07652
By Facsimile Transmission: By Telex:
(For Eligible Institutions Only) (710) 990-4964
(201) 262-3240 Answer Back: CDDI PARA
Confirm By Telephone:
(800) 422-2066
</TABLE>
-----------------------------
Questions and requests for assistance or for additional copies of the Offer
to Purchase, this Supplement, the revised Letter of Transmittal and the revised
Notice of Guaranteed Delivery may be directed to the Information Agent or the
Dealer Manager at their respective telephone numbers and locations listed below.
You may also contact your broker, dealer, commercial bank, trust company or
other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
<TABLE>
<S> <C> <C>
909 Third Avenue, 20th Floor 14755 Preston Road, Suite 725 39 South LaSalle Street
New York, New York 10022 Dallas, TX 75240 Chicago, Illinois 60603
(212) 754-8000 (214) 788-0977 (312) 444-1150
(Call Collect) (Call Collect) (Call Collect)
</TABLE>
or
Banks & Brokers Call Toll Free 1-800-662-5200
All Others Call Toll Free 1-800-566-9058
The Dealer Manager for the Offer is:
CS FIRST BOSTON
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
(212) 909-2000 (Call Collect)
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
CHICAGO AND NORTH WESTERN
TRANSPORTATION COMPANY
PURSUANT TO THE OFFER TO PURCHASE DATED MARCH 23, 1995
AS SUPPLEMENTED BY THE SUPPLEMENT TO THE OFFER
TO PURCHASE DATED APRIL 14, 1995
BY
UP RAIL, INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
UNION PACIFIC CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS HAVE BEEN EXTENDED UNTIL
12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, APRIL 24, 1995,
UNLESS THE OFFER IS FURTHER EXTENDED.
The Depositary for the Offer is:
CITIBANK, N.A.
By Mail: By Overnight Delivery: By Hand:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
c/o Citicorp Data c/o Citicorp Data Corporate Trust Window
Distribution, Inc. Distribution, Inc. 111 Wall Street, 5th
P.O. Box 1429 404 Sette Drive Floor
Paramus, New Jersey 07653 Paramus, New Jersey 07652 New York, New York
By Facsimile Transmission: By Telex:
(For Eligible Institutions (710) 990-4964
Only) Answer Back: CDDI PARA
(201) 262-3240
Confirm By Telephone:
(800) 422-2066
------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OR TELEX TRANSMISSION
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders either if
certificates evidencing Shares ('Share Certificates') are to be forwarded
herewith or if delivery of Shares is to be made by book-entry transfer to the
Depositary's account at The Depository Trust Company, the Midwest Securities
Trust Company or the Philadelphia Depository Trust Company (each a 'Book-Entry
Transfer Facility' and collectively, the 'Book-Entry Transfer Facilities')
pursuant to the book-entry transfer procedure described in 'THE
OFFER--Procedures for Tendering Shares' of the Offer to Purchase (as defined
below). Delivery of documents to a Book-Entry Transfer Facility in accordance
with the Book-Entry Transfer Facility's procedures does not constitute delivery
to the Depositary.
Stockholders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other documents required hereby
to the Depositary prior to the Expiration Date (as defined in 'THE OFFER--Terms
of the Offer' of the Supplement (as defined below) or who cannot complete the
procedure for delivery by book-entry transfer on a timely basis and who wish to
tender their Shares must do so pursuant to the guaranteed delivery procedure
described in 'THE OFFER--Procedures for Tendering Shares' of the Offer to
Purchase. See Instruction 2.
/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution:
---------------------------------------------------------------------------
Check Box of Applicable Book-Entry Transfer Facility:
/ / The Depository Trust Company / / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number _________________________________________
Transaction Code Number _________________________________________
<PAGE>
/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s): ___________________________________________
Window Ticket No. (if any): ________________________________________________
Date of Execution of Notice
of Guaranteed Delivery: ___________________________________________________
Name of Institution which Guaranteed Delivery: _____________________________
If Delivered by Book-Entry Transfer, Check Box of Book-Entry Transfer
Facility:
/ / The Depository Trust Company / / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number _________________________________________
Transaction Code Number _________________________________________
DESCRIPTION OF SHARES TENDERED
SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
(ATTACH ADDITIONAL LIST, IF NECESSARY)
-----------------------------------------------
NAME(S) AND ADDRESS(ES) OF TOTAL NUMBER
REGISTERED HOLDER(S) OF SHARES
(PLEASE FILL IN, IF BLANK, SHARE EVIDENCED BY NUMBER OF
EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE SHARE SHARES
SHARE CERTIFICATE(S)) NUMBER(S)* CERTIFICATE(S)* TENDERED**
- --------------------------------------------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
TOTAL SHARES
-----------------------------------------------
* Need not be completed by stockholders tendering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by
each Share Certificate delivered to the Depositary are being tendered
hereby. See Instruction 4.
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ
THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to UP Rail, Inc. (the 'Purchaser'), a Utah
corporation and an indirect wholly owned subsidiary of Union Pacific
Corporation, a Utah corporation, the above-described shares of common stock, par
value $.01 per share (the 'Common Stock' or the 'Shares'), of Chicago and North
Western Transportation Company, a Delaware corporation (the 'Company'), pursuant
to the Purchaser's offer to purchase all outstanding Shares, at a price of
$35.00 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated March 23, 1995 (the 'Offer
to Purchase'), as supplemented by the Supplement to the Offer to Purchase, dated
April 14, 1995 (the 'Supplement'), receipt of which is hereby acknowledged, and
in this Letter of Transmittal (which, as amended from time to time, together
constitute the 'Offer'). The undersigned understands that the Purchaser reserves
the right to transfer or assign, in whole at any time, or in part from time to
time, to one or more of its affiliates, the right to purchase all or any portion
of the Shares tendered pursuant to the Offer, but any such transfer or
assignment will not relieve the Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering stockholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to, or upon the
order of, the Purchaser all right, title and interest in and to all the Shares
that are being tendered hereby (and any and all non-cash dividends,
distributions, rights, other Shares or other securities issued or issuable in
respect of such Shares) and rights declared, paid or distributed in respect of
such Shares on or after March 16, 1995, (collectively, 'Distributions'), and
irrevocably appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares and all
Distributions, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (i) deliver
Share Certificates evidencing such Shares and all Distributions, or transfer
ownership of such Shares and all Distributions on the account books maintained
by a Book-Entry Transfer Facility, together, in either case, with all
accompanying evidence of transfer and authenticity, to or upon the order of the
Purchaser, (ii) present such Shares and all Distributions for transfer on the
books of the Company and (iii) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares and all Distributions, all in
accordance with the terms of the Offer.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints L. White Matthews, III, Richard K. Davidson and Judy L. Swantak as
proxies of the undersigned, each with full power of substitution, to the full
extent of the undersigned's rights with respect to the Shares tendered by the
undersigned and accepted for payment by the Purchaser (and all Distributions).
All such proxies shall be considered coupled with an interest in the tendered
Shares. This appointment will be effective if, when, and only to the extent
that, the Purchaser accepts such Shares for payment pursuant to the Offer. Upon
such acceptance for payment, all prior proxies given by the undersigned with
respect to such Shares and all Distributions will, without further action, be
revoked, and no subsequent proxies may be given. All such proxies will, with
respect to the Shares and all Distributions for which the appointment is
effective, be empowered to exercise all voting and other rights of the
undersigned as they in their sole discretion may deem proper at any annual,
special, adjourned or postponed meeting of the Company's stockholders, by
written consent or otherwise, and the Purchaser reserves the right to require
that, in order for Shares or all Distributions to be deemed validly tendered,
immediately upon the Purchaser's acceptance for payment of such Shares the
Purchaser must be able to exercise full voting rights with respect to such
Shares.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, and that when such Shares are accepted
for payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title thereto and to all Distributions, free and clear of all
liens, restrictions, charges and encumbrances, and that none of such Shares and
Distributions will be subject to any adverse claim. The undersigned, upon
request, shall execute and deliver all additional documents deemed by the
Depositary or the Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Shares tendered hereby and all Distributions. In
addition, the undersigned shall remit and transfer promptly to the Depositary
for the account of the Purchaser all Distributions in respect of the Shares
tendered hereby, accompanied by appropriate documentation of transfer, and,
pending such remittance and transfer or appropriate assurance thereof, the
Purchaser shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the Shares tendered
hereby or deduct from such purchase price, the amount or value of such
Distribution as determined by the Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
<PAGE>
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in 'THE OFFER--Procedures for Tendering Shares' of the
Offer to Purchase and in the instructions hereto will constitute the
undersigned's acceptance of the terms and conditions of the Offer. The
Purchaser's acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the undersigned and the Purchaser upon
the terms and subject to the conditions of the Offer. The undersigned recognizes
that under certain circumstances set forth in the Offer to Purchase, the
Purchaser may not be required to accept for payment any of the Shares tendered
hereby.
Unless otherwise indicated herein in the box entitled 'Special Payment
Instructions,' please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased or
not tendered, in the name(s) of the registered holder(s) appearing above under
'Description of Shares Tendered.' Similarly, unless otherwise indicated in the
box entitled 'Special Delivery Instructions,' please mail the check for the
purchase price of all Shares purchased and all Share Certificates evidencing
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under 'Description of Shares Tendered.' In the event that the boxes entitled
'Special Payment Instructions' and 'Special Delivery Instructions' are both
completed, please issue the check for the purchase price of all Shares purchased
and return all Share Certificates evidencing Shares not purchased or not
tendered in the name(s) of, and mail such check and Share Certificates to, the
person(s) so indicated. Unless otherwise indicated herein in the box entitled
'Special Payment Instructions,' please credit any Shares tendered hereby and
delivered by book-entry transfer, but which are not purchased, by crediting the
account at the Book-Entry Transfer Facility designated above. The undersigned
recognizes that the Purchaser has no obligation, pursuant to the Special Payment
Instructions, to transfer any Shares from the name of the registered holder(s)
thereof if the Purchaser does not accept for payment any of the Shares tendered
hereby.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or Share Certificates evidencing Shares not tendered or not purchased
are to be issued in the name of someone other than the undersigned, or if Shares
tendered hereby and delivered by book-entry transfer which are not purchased are
to be returned by credit to an account at one of the Book-Entry Transfer
Facilities other than that designated above.
Issue / / check / / Share Certificate(s) to:
Name: __________________________________________________________________________
(PLEASE PRINT)
Address: _______________________________________________________________________
________________________________________________________________________________
(ZIP CODE)
________________________________________________________________________________
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
/ / Credit Shares delivered by book-entry transfer and not purchased to the
account set forth below:
Check appropriate box:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account Number _________________________________________________________________
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or Share Certificates evidencing Shares not tendered or not purchased
are to be mailed to someone other than the undersigned, or to the undersigned at
an address other than that shown under 'Description of Shares Tendered.'
Mail / / check / / Share Certificate(s) to:
Name: __________________________________________________________________________
(PLEASE PRINT)
Address: _______________________________________________________________________
________________________________________________________________________________
(ZIP CODE)
<PAGE>
IMPORTANT
STOCKHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
_______________________________________________________________________________
_______________________________________________________________________________
SIGNATURE(S) OF HOLDER(S)
Dated: _______________, 1995
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificates or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, please provide the following information. See
Instruction 5.)
Name(s) _______________________________________________________________________
_______________________________________________________________________________
(PLEASE PRINT)
Capacity (full title) _________________________________________________________
(SEE INSTRUCTION 5)
Address _______________________________________________________________________
_______________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No. ___________________________________________________
Taxpayer Identification or Social Security No. ________________________________
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature __________________________________________________________
Name __________________________________________________________________________
(PLEASE PRINT)
Title _________________________________________________________________________
Name of Firm __________________________________________________________________
Address _______________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No. ___________________________________________________
Dated: _______________, 1995
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a member firm of
a registered national securities exchange, a member of the National Association
of Securities Dealers, Inc. or a commercial bank or trust company having an
office or correspondent in the United States (each an 'Eligible Institution').
No signature guarantee is required on this Letter of Transmittal (a) if this
Letter of Transmittal is signed by the registered holder(s) (which term, for
purposes of this document, shall include any participant in a Book-Entry
Transfer Facility whose name appears on a security position listing as the owner
of Shares) of Shares herewith, unless such holder(s) has completed either the
box entitled 'Special Delivery Instructions' or the box entitled 'Special
Payment Instructions' on the reverse hereof, or (b) if such Shares are tendered
for the account of an Eligible Institution. See Instruction 5. If a Share
Certificate is registered in the name of a person other than the signer of this
Letter of Transmittal, or if payment is to be made, or a Share Certificate not
accepted for payment or not tendered is to be returned, to a person other than
the registered holder(s), then the Share Certificate must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on the Share Certificate, with the
signature(s) on such Share Certificate or stock powers guaranteed as described
above. See Instruction 5.
2. Delivery of Letter of Transmittal and Share Certificates. This Letter
of Transmittal is to be used either if Share Certificates are to be forwarded
herewith or if Shares are to be delivered by book-entry transfer pursuant to the
procedure set forth in 'THE OFFER--Procedures for Tendering Shares' of the Offer
to Purchase. Share Certificates evidencing all tendered Shares, or confirmation
of a book-entry transfer of such Shares, if such procedure is available, into
the Depositary's account at one of the Book-Entry Transfer Facilities pursuant
to the procedures set forth in 'THE OFFER--Procedures for Tendering Shares' of
the Offer to Purchase, together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message, as
defined below) and any other documents required by the Letter of Transmittal,
must be received by the Depositary at one of its addresses set forth on the
reverse hereof prior to the Expiration Date (as defined in 'THE OFFER--Terms of
the Offer' of the Supplement). If Share Certificates are forwarded to the
Depositary in multiple deliveries, a properly completed and duly executed Letter
of Transmittal must accompany each such delivery. Stockholders whose Share
Certificates are not immediately available, who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date or who cannot complete the procedure for delivery by book-entry
transfer on a timely basis may tender their Shares pursuant to the guaranteed
delivery procedure described in 'THE OFFER--Procedures for Tendering Shares' of
the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made
by or through an Eligible Institution; (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
the Purchaser herewith, must be received by the Depositary prior to the
Expiration Date; and (iii) in the case of a guarantee of Shares, the Share
Certificates, in proper form for transfer, or a confirmation of a book-entry
transfer of such Shares, if such procedure is available, into the Depositary's
account at one of the Book-Entry Transfer Facilities, together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) with
any required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message) and any other documents required by this Letter of Transmittal,
must be received by the Depositary within five New York Stock Exchange, Inc.
trading days after the date of execution of the Notice of Guaranteed Delivery,
all as described in 'THE OFFER--Procedures for Tendering Shares' of the Offer to
Purchase. The term 'Agent's Message' means a message, transmitted by a
Book-Entry Transfer Facility to, and received by, the Depositary and forming a
part of a Book-Entry Confirmation, which states that such Book-Entry Transfer
Facility has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the Shares, that such participant has
received and agrees to be bound by the terms of this Letter of Transmittal and
that the Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY.
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a facsimile hereof), all tendering stockholders waive any right to receive
any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein under 'Description of
Shares Tendered' is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.
4. Partial Tenders. (Not applicable to stockholders who tender by
book-entry transfer.) If fewer than all the Shares evidenced by any Share
Certificate delivered to the Depositary herewith are to be tendered hereby, fill
in the number of Shares which are to be tendered in the box entitled 'Number of
Shares Tendered.' In such cases, new Share Certificate(s) evidencing the
remainder of the Shares that were evidenced by the Share Certificates delivered
to the Depositary herewith will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the box entitled 'Special Delivery
Instructions,' as soon as practicable after the expiration or termination of the
Offer. All Shares evidenced by Share Certificates delivered to the Depositary
will be deemed to have been tendered unless otherwise indicated.
<PAGE>
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever.
If any Share tendered hereby is owned of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, or Share Certificates
evidencing Shares not tendered or not purchased are to be issued in the name of,
a person other than the registered holder(s), in which case, the Share
Certificate(s) evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) and stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Purchaser of such person's authority so to act must be
submitted.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, the Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or Share
Certificate(s) evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s), the amount of any
stock transfer taxes (whether imposed on the registered holder(s), such other
person or otherwise) payable on account of the transfer to such other person
will be deducted from the purchase price of such Shares purchased, unless
evidence satisfactory to the Purchaser of the payment of such taxes, or
exemption therefrom, is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATES EVIDENCING THE
SHARES TENDERED HEREBY.
7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name of
a person other than the person(s) signing this Letter of Transmittal or if such
check or any such Share Certificate is to be sent to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal but at an address other than that shown in the box
entitled 'Description of Shares Tendered,' the appropriate boxes on this Letter
of Transmittal must be completed. Stockholders delivering Shares tendered hereby
by book-entry transfer may request that Shares not purchased be credited to such
account maintained at a Book-Entry Transfer Facility as such stockholder may
designate in the box entitled 'Special Payment Instructions.' If no such
instructions are given, all such Shares not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated on the
reverse hereof as the account from which such Shares were delivered.
8. Requests for Assistance or Additional Copies. Requests for assistance
may be directed to the Information Agent or the Dealer Manager at their
respective addresses or telephone numbers set forth below. Additional copies of
the Offer to Purchase, the Supplement, this Letter of Transmittal, the Notice of
Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 may be obtained from the
Information Agent or the Dealer Manager or from brokers, dealers, commercial
banks or trust companies.
9. Substitute Form W-9. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ('TIN') on the
Substitute Form W-9 which is provided under 'Important Tax Information' below,
and to certify, under penalties of perjury, that such number is correct and that
such stockholder is not subject to backup withholding of federal income tax. If
a tendering stockholder has been notified by the Internal Revenue Service that
such stockholder is subject to backup withholding, such stockholder must cross
out item (2) of the Certification box of the Substitute Form W-9, unless such
stockholder has since been notified by the Internal Revenue Service that such
stockholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering stockholder to
31% federal income tax withholding on the payment of the purchase price of all
Shares purchased from such stockholder. If the tendering stockholder has not
been issued a TIN and has applied for one or intends to apply for one in the
near future, such stockholder should write 'Applied For' in the space provided
for the TIN in Part I of the Substitute Form W-9, and sign and date the
Substitute Form W-9. If 'Applied For' is written in Part l and the Depositary is
not provided with a TIN within 60 days, the Depositary will withhold 31% on all
payments of the purchase price to such stockholder until a TIN is provided to
the Depositary.
<PAGE>
10. Lost, Destroyed or Stolen Certificates. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. The stockholder will then be instructed as to
the steps that must be taken in order to replace the certificate(s). This Letter
of Transmittal and related documents cannot be processed until the procedures
for replacing lost or destroyed certificates have been followed.
11. Waiver of Conditions. The conditions of the Offer are for the sole
benefit of the Purchaser and Parent and may be waived by Parent or the
Purchaser, in whole or in part at any time and from time to time in the sole
discretion of Parent or the Purchaser.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED, WITH ANY REQUIRED SIGNATURE GUARANTEES, OR AN
AGENT'S MESSAGE (TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY
EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR
TO THE EXPIRATION DATE (AS DEFINED IN THE SUPPLEMENT).
IMPORTANT TAX INFORMATION
Under the federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such stockholder's correct TIN on Substitute Form W-9 below. If such
stockholder is an individual, the TIN is such stockholder's social security
number. If the Depositary is not provided with the correct TIN, the stockholder
may be subject to a $50 penalty imposed by the Internal Revenue Service. In
addition, payments that are made to such stockholder with respect to Shares
purchased pursuant to the Offer may be subject to backup withholding of 31%.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement, signed under penalties of
perjury, attesting to such individual's exempt status. Forms of such statements
can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies with respect to a stockholder, the Depositary
is required to withhold 31% of any payments made to such stockholder. Backup
withholding is not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the form below certifying (a) that the TIN provided on Substitute
Form W-9 is correct (or that such stockholder is awaiting a TIN), and (b) that
(i) such stockholder has not been notified by the Internal Revenue Service that
such stockholder is subject to backup withholding as a result of a failure to
report all interest or dividends or (ii) the Internal Revenue Service has
notified such stockholder that such stockholder is no longer subject to backup
withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance on
which number to report. If the tendering stockholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future, the stockholder should write 'Applied For' in the space provided for the
TIN in Part I, and sign and date the Substitute Form W-9. If 'Applied For' is
written in Part I and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 31% of all payments of the purchase price to such
stockholder until a TIN is provided to the Depositary.
<PAGE>
PAYER'S NAME: CITIBANK, N.A.
<TABLE>
<S> <C>
SUBSTITUTE PART I -- PLEASE PROVIDE
FORM W-9 YOUR TIN IN
DEPARTMENT OF THE TREASURY THE BOX AT RIGHT AND
INTERNAL REVENUE SERVICE CERTIFY BY SIGNING AND
DATING BELOW. ________________________
Social Security Number
OR
________________________
Employer Identification
Number
(If awaiting TIN write
'Applied For')
-------------------------------------------------------------------------------
PAYER'S REQUEST FOR PART II -- For Payees Exempt From Backup Withholding, see the enclosed
TAXPAYER Guidelines for Certification of Taxpayer Identification Number on Substitute
IDENTIFICATION Form W-9 and complete as instructed therein.
NUMBER (TIN) CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or a Taxpayer Identification Number has not been issued to me and either
(a) I have mailed or delivered an application to receive a Taxpayer
Identification Number to the appropriate Internal Revenue Service ('IRS')
or Social Security Administration office or (b) I intend to mail or
deliver an application in the near future. I understand that if I do not
provide a Taxpayer Identification Number within sixty (60) days, 31% of
all reportable payments made to me thereafter will be withheld until I
provide a number), and
(2) I am not subject to backup withholding either because I have not been
notified by the IRS that I am subject to backup withholding as a result of
failure to report all interest or dividends, or the IRS has notified me
that I am no longer subject to backup withholding.
CERTIFICATE INSTRUCTIONS -- You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding you
received another notification from the IRS that you are no longer subject to
backup withholding, do not cross out item (2). (Also see instructions in the
enclosed Guidelines.)
SIGNATURE: DATE: , 1995
- -------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
Questions and requests for assistance or additional copies of the Offer to
Purchase, Supplement, Letter of Transmittal and other tender offer materials may
be directed to the Information Agent or the Dealer Manager as set forth below:
The Information Agent for the Offer is:
MORROW & CO., INC.
<TABLE>
<S> <C> <C>
909 Third Avenue, 20th Floor 14755 Preston Road, Suite 725 39 South LaSalle Street
New York, New York 10022 Dallas, TX 75240 Chicago, Illinois 60603
(212) 754-8000 (214) 788-0977 (312) 444-1150
(Call Collect) (Call Collect) (Call Collect)
</TABLE>
or
Banks & Brokers Call Toll Free 1-800-662-5200
All Others Call Toll Free 1-800-566-9058
The Dealer Manager for the Offer is:
CS FIRST BOSTON CORPORATION
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
(212) 909-2000 (Call Collect)
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
CHICAGO AND NORTH WESTERN
TRANSPORTATION COMPANY
TO
UP RAIL, INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
UNION PACIFIC CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) if (i) certificates
('Share Certificates') evidencing shares of common stock, par value $.01 per
share (the 'Common Stock' or the 'Shares'), of Chicago and North Western
Transportation Company, a Delaware corporation (the 'Company'), are not
immediately available, (ii) time will not permit all required documents to reach
Citibank, N.A., as Depositary (the 'Depositary'), prior to the Expiration Date
(as defined in 'THE OFFER--Terms of the Offer' of the Supplement (as defined
below)) or (iii) the procedure for book-entry transfer cannot be completed on a
timely basis. This Notice of Guaranteed Delivery may be delivered by hand or
transmitted by telegram, facsimile transmission or mail to the Depositary. See
'THE OFFER--Procedures for Tendering Shares' of the Offer to Purchase dated
March 23, 1995 (the 'Offer to Purchase').
The Depositary for the Offer is:
CITIBANK, N.A.
By Mail: By Overnight Delivery: By Hand:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
c/o Citicorp Data c/o Citicorp Data Corporate Trust Window
Distribution, Inc. Distribution, Inc. 111 Wall Street, 5th
P.O. Box 1429 404 Sette Drive Floor
Paramus, New Jersey 07653 Paramus, New Jersey 07652 New York, New York
By Facsimile Transmission: By Telex:
(For Eligible Institutions (710) 990-4964
Only) Answer Back: CDDI PARA
(201) 262-3240
Confirm By Telephone:
(800) 422-2066
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN 'ELIGIBLE INSTITUTION'
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to UP Rail, Inc., a Utah corporation and an
indirect wholly owned subsidiary of Union Pacific Corporation, a Utah
corporation, upon the terms and subject to the conditions set forth in the Offer
to Purchase, as supplemented by the Supplement to the Offer to Purchase, dated
April 14, 1995 (the 'Supplement'), and the related Letter of Transmittal (which,
as amended from time to time, together constitute the 'Offer'), receipt of each
of which is hereby acknowledged, the number of Shares specified below pursuant
to the guaranteed delivery procedures described in 'THE OFFER--Procedures for
Tendering Shares' of the Offer to Purchase.
Number of Shares: Name(s) of Record Holder(s):
__________________________________ _________________________________________
Certificate Nos. (if available): _________________________________________
PLEASE PRINT
__________________________________
Address(es): ____________________________
Check ONE box if Shares will be
tendered by book-entry transfer: _________________________________________
/ / The Depository Trust Company ZIP CODE
/ / Midwest Securities Trust
Company Area Code and Tel. No: __________________
/ / Philadelphia Depository Trust
Company Signature(s): ___________________________
Account Number: __________________ _________________________________________
Dated: _______________, 1995
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the United
States, hereby guarantees delivery to the Depositary, at one of its addresses
set forth above, of certificates evidencing the Shares tendered hereby in proper
form for transfer, or confirmation of book-entry transfer of such Shares into
the Depositary's accounts at The Depository Trust Company, the Midwest
Securities Trust Company or the Philadelphia Depository Trust Company, in each
case with delivery of a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) with any required signature guarantees, or an
Agent's Message (as defined in 'THE OFFER--Acceptance for Payment and Payment'
of the Offer to Purchase), and any other documents required by the Letter of
Transmittal, within five New York Stock Exchange, Inc. trading days after the
date of execution of this Notice of Guaranteed Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in financial loss to such Eligible Institution.
______________________________________ ______________________________________
NAME OF FIRM AUTHORIZED SIGNATURE
______________________________________ ______________________________________
ADDRESS TITLE
______________________________________ Name: ________________________________
ZIP CODE PLEASE PRINT
Area Code and Tel. No.: ______________ Date: _______________, 1995
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. SHARE
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE>
[EXECUTION COUNTERPART]
- --------------------------------------------------------------------------------
U.S. $1,100,000,000
REVOLVING CREDIT AGREEMENT
Dated as of April 11, 1995
Among
UNION PACIFIC CORPORATION,
as Borrower,
THE BANKS NAMED HEREIN,
as Banks,
CHEMICAL BANK
and
CITICORP SECURITIES, INC.,
as Co-Arrangers,
CHEMICAL SECURITIES, INC.,
as Syndication Agent,
CITIBANK, N.A.,
as Documentation Agent,
and
CHEMICAL BANK,
as Administrative Agent
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms . . . . . . . . . . . 1
SECTION 1.02. Computation of Time Periods . . . . . . . . 13
SECTION 1.03. Accounting Terms. . . . . . . . . . . . . . 13
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND SPECIAL RATE LOANS
SECTION 2.01. The Contract Advances; Special Rate
Loans. . . . . . . . . . . . . . . . . . . 13
SECTION 2.02. Making the Contract Advances. . . . . . . . 15
SECTION 2.03. The Auction Advances. . . . . . . . . . . . 16
SECTION 2.04. Conversion and Continuation of Contract
Borrowings . . . . . . . . . . . . . . . . 19
SECTION 2.05. Fees. . . . . . . . . . . . . . . . . . . . 21
SECTION 2.06. Optional Reduction of the Commitments . . . 21
SECTION 2.07. Repayment of Advances and Special Rate
Loans; Prepayment. . . . . . . . . . . . . 21
SECTION 2.08. Interest. . . . . . . . . . . . . . . . . . 22
SECTION 2.09. Interest Rate Determination . . . . . . . . 23
SECTION 2.10. Alternate Rate of Interest. . . . . . . . . 23
SECTION 2.11. Increased Costs; Increased Capital. . . . . 24
SECTION 2.12. Additional Interest on Eurodollar Rate
Advances . . . . . . . . . . . . . . . . . 26
SECTION 2.13. Change in Legality. . . . . . . . . . . . . 26
SECTION 2.14. Payments and Computations . . . . . . . . . 27
SECTION 2.15. Taxes on Payments . . . . . . . . . . . . . 28
SECTION 2.16. Sharing of Payments, Etc. . . . . . . . . . 31
SECTION 2.17. Removal of a Bank . . . . . . . . . . . . . 31
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial
Borrowing. . . . . . . . . . . . . . . . . 32
SECTION 3.02. Conditions Precedent to Each Borrowing. . . 33
SECTION 3.03. Borrowings for General Corporate
Purposes.. . . . . . . . . . . . . . . . . 33
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower . . . . . . . . . . . . . . . . . 34
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants . . . . . . . . . . . 36
SECTION 5.02. Negative Covenants. . . . . . . . . . . . . 39
<PAGE>
Page
----
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default . . . . . . . . . . . . . 45
ARTICLE VII
THE ADMINISTRATIVE AGENT, ETC.
SECTION 7.01. Authorization and Action. . . . . . . . . . 47
SECTION 7.02. Administrative Agent's Reliance, Etc. . . . 48
SECTION 7.03. Chemical Bank and Affiliates. . . . . . . . 48
SECTION 7.04. Bank Credit Decision. . . . . . . . . . . . 49
SECTION 7.05. Indemnification . . . . . . . . . . . . . . 49
SECTION 7.06. Successor Administrative Agent. . . . . . . 50
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc.. . . . . . . . . . . . . . 50
SECTION 8.02. Notices, Etc. . . . . . . . . . . . . . . . 51
SECTION 8.03. No Waiver; Remedies . . . . . . . . . . . . 52
SECTION 8.04. Costs, Expenses and Taxes . . . . . . . . . 52
SECTION 8.05. Right of Set-off. . . . . . . . . . . . . . 53
SECTION 8.06. Binding Effect. . . . . . . . . . . . . . . 54
SECTION 8.07. Assignments and Participations. . . . . . . 54
SECTION 8.08. Governing Law . . . . . . . . . . . . . . . 58
SECTION 8.09. Submission to Jurisdiction; Service of
Process; Jury Trial. . . . . . . . . . . . 58
SECTION 8.10. Treatment of Certain Information;
Confidentiality. . . . . . . . . . . . . . 58
SECTION 8.11. Execution in Counterparts . . . . . . . . . 60
SECTION 8.12. Indemnification.. . . . . . . . . . . . . . 60
Schedule I List of Applicable Lending Offices
Schedule II List of Existing Mortgages
Exhibit A-1 Form of Notice of Contract Borrowing
Exhibit A-2 Form of Notice of Auction Borrowing
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Opinion of Counsel for the Borrower
Exhibit D Form of Opinion of Counsel to the Administrative
Agent
<PAGE>
REVOLVING CREDIT AGREEMENT, dated
as of April 11, 1995, among UNION PACIFIC
CORPORATION, a Utah corporation (the
"Borrower"); the banks listed on the
signature pages hereof and any other banks
which from time to time become parties hereto
pursuant to Section 8.07 of this Agreement
(all such banks being referred to herein
collectively as the "Banks"); CHEMICAL BANK
and CITICORP SECURITIES, INC., as Co-
Arrangers (collectively, the "Co-Arrangers");
CHEMICAL SECURITIES, INC., as Syndication
Agent (the "Syndication Agent"); CITIBANK,
N.A., as Documentation Agent (the
"Documentation Agent"); and CHEMICAL BANK, as
agent for the purposes hereinafter provided
(in such capacity, the "Administrative
Agent") for the Banks hereunder.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Adjusted CD Rate" means, for each Adjusted CD Rate
Advance comprising part of the same Contract Borrowing, an
interest rate per annum (rounded upwards, if necessary, to the
next 1/100 of 1%) equal to the sum of (a) a rate per annum equal
to the product of (i) the Fixed CD Rate in effect for the
Interest Period then applicable to such Advance and (ii) 1.00
plus the Domestic Reserve Percentage, plus (b) the Assessment
Rate. For purposes hereof, the term "Fixed CD Rate" shall mean
the arithmetic average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the prevailing rates per annum bid at or
about 10:00 a.m. (New York City time) to each Reference Bank on
the first Business Day of the Interest Period then applicable to
such Contract Borrowing by three New York City negotiable
certificate of deposit dealers of recognized standing for the
purchase at face value of negotiable certificates of deposit of
such Reference Bank in a principal amount approximately equal to
such Reference Bank's portion of such Contract Borrowing and with
a maturity comparable to such Interest Period.
"Adjusted CD Rate Advance" means a Contract Advance
that bears interest based on the Adjusted CD Rate.
"Advance" means any Contract Advance or Auction
Advance.
<PAGE>
"Agreement" means this Agreement, as amended, modified
and supplemented from time to time, including, without limita-
tion, any such supplement in respect of Auction Advances under
Section 2.03(a)(v).
"Alternate Base Rate" means, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the greatest of (a) the Prime Rate in effect on such
day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the
rate of interest per annum publicly announced from time to time
by Chemical Bank as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be
effective on the date such change is publicly announced as
effective. "Base CD Rate" shall mean the sum of (a) the product
of (i) the Three-Month Secondary CD Rate and (ii) 1.00 plus the
Domestic Reserve Percentage and (b) the Assessment Rate. "Three-
Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as
being in effect on such day (or, if such day shall not be a
Business Day, the next preceding Business Day) by the Board of
Governors of the Federal Reserve System through the public
information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of such Board,
be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not
be so reported on such day or such next preceding Business Day,
the average of the secondary market quotations for three-month
certificates of deposit of major money center banks in New York
City received at approximately 10:00 a.m. (New York City time) on
such day (or, if such day shall not be a Business Day, on the
next preceding Business Day) by the Administrative Agent from
three New York City negotiable certificate of deposit dealers of
recognized standing selected by it. "Federal Funds Effective
Rate" shall mean, for any day, the weighted average of the rates
on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quota-
tions for the day of such transactions received by the
Administrative Agent from three Federal funds brokers of
recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to
ascertain the Base CD Rate or the Federal Funds Effective Rate or
both for any reason, including the inability of the
Administrative Agent to obtain sufficient quotations in
accordance with the terms hereof, the Alternate Base Rate shall
be determined without regard to clause (b) or (c), or both, of
the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any
change in the Alternate Base Rate due to a change in the Prime
Rate, the Three-Month Secondary CD Rate or the Federal Funds
<PAGE>
Effective Rate shall be effective on the effective date of such
change in the Prime Rate, the Three-Month Secondary CD Rate or
the Federal Funds Effective Rate, respectively.
"Alternate Base Rate Advance" means a Contract Advance
which bears interest computed at the Alternate Base Rate.
"Applicable Fee Percentage" means on any date (a) if
the Applicable Margin for such date is or would be determined
with reference to Category 1, 0.100%; (b) if the Applicable
Margin for such date is or would be determined with reference to
Category 2, 0.125%; (c) if the Applicable Margin for such date is
or would be determined with reference to Category 3, 0.150%; and
(d) if the Applicable Margin for such date is or would be
determined with reference to Category 4, 0.250%.
"Applicable Lending Office" means, with respect to each
Bank, such Bank's Domestic Lending Office in the case of an
Alternate Base Rate Advance, such Bank's CD Lending Office in the
case of an Adjusted CD Rate Advance, such Bank's Eurodollar
Lending Office in the case of a Eurodollar Rate Contract Advance
and, in the case of an Auction Advance, the office or affiliate
of such Bank notified by such Bank to the Borrower and the
Administrative Agent as such Bank's Applicable Lending Office
with respect to such Auction Advance.
"Applicable Margin" means, with respect to Adjusted CD
Rate Advances and Eurodollar Rate Contract Advances on any date,
the applicable percentage set forth below for such Type of
Advance under the caption "Applicable Margin" based upon the
ratings applicable on such date to the Borrower's senior,
unsecured, non-credit-enhanced long term indebtedness for
borrowed money ("Index Debt"):
Applicable Margin
-------------------------
Ratings Adjusted CD Eurodollar
------- Rate Rate
Advances Contract
Advances
----------- ----------
Category 1
----------
A- or higher by S&P; and
0.275% 0.150%
A3 or higher by Moody's
Category 2
----------
Lower than A- and equal to or
higher than BBB+ by S&P; and
0.375% 0.250%
Lower than A3 and equal to or
higher than Baa1 by Moody's
<PAGE>
Applicable Margin
-------------------------
Ratings Adjusted CD Eurodollar
------- Rate Rate
Advances Contract
Advances
----------- ----------
Category 3
----------
Lower than BBB+ and equal to
or higher than BBB- by S&P;
and
0.425% 0.300%
Lower than Baa1 and equal to
or higher than Baa3 by
Moody's
Category 4
----------
Lower than BBB- by S&P; or
0.625% 0.500%
Lower than Baa3 by Moody's
For purposes of the foregoing, (i) if neither Moody's nor S&P
shall have in effect a rating for Index Debt (other than by
reason of the circumstances referred to in the last sentence of
this definition), then both such rating agencies will be deemed
to have established ratings for Index Debt in Category 4; (ii) if
only one of Moody's or S&P shall have in effect a rating for
Index Debt, the Borrower and the Banks will negotiate in good
faith to agree upon another rating agency to be substituted by an
amendment to this Agreement for the rating agency which shall not
have a rating in effect, and in the absence of such amendment the
Applicable Margin will be determined by reference to the
available rating; (iii) if the ratings established by Moody's and
S&P shall fall within different Categories, the Applicable Margin
shall be determined by reference to the numerically lower
Category (where Category 1 is the numerically lowest such
Category and Category 4 is the numerically highest such
Category); and (iv) if any rating established by Moody's or S&P
shall be changed (other than as a result of a change in the
rating system of either Moody's or S&P) such change shall be
effective as of the date on which such change is first announced
by the rating agency making such change. Each change in the
Applicable Margin shall apply during the period commencing on the
effective date of such change and ending on the date immediately
preceding the effective date of the next such change. If the
rating system of either Moody's or S&P shall change prior to the
Maturity Date, the Borrower and the Banks shall negotiate in good
faith to amend the references to specific ratings in this
definition to reflect such changed rating system. If both
Moody's and S&P shall cease to be in the business of rating
corporate debt obligations, the Borrower and the Banks shall
negotiate in good faith to agree upon a substitute rating agency
and to amend the references to specific ratings in this defini-
<PAGE>
tion to reflect the ratings used by such substitute rating
agency.
"Applicable Rate" means:
(i) with respect to Adjusted CD Rate Advances, the
Adjusted CD Rate plus the Applicable Margin;
(ii) with respect to Alternate Base Rate Advances, the
Alternate Base Rate; and
(iii) with respect to Eurodollar Rate Contract Advances,
the Eurodollar Rate plus the Applicable Margin.
"Assessment Rate" means for any date the annual rate
(rounded upwards, if necessary, to the next 1/100 of 1%) most
recently estimated by the Administrative Agent as the then
current net annual assessment rate that will be employed in
determining amounts payable by the Administrative Agent to the
Federal Deposit Insurance Corporation (or any successor) for
insurance by such Corporation (or such successor) of time
deposits made in dollars at the Administrative Agent's domestic
offices.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Bank and an Eligible Assignee, and
accepted by the Administrative Agent, in substantially the form
of Exhibit B hereto.
"Auction Advance" means an advance by a Bank to the
Borrower as part of an Auction Borrowing resulting from the
auction bidding procedure described in Section 2.03, and refers
to a Fixed Rate Auction Advance or a Eurodollar Rate Auction
Advance.
"Auction Borrowing" means a Borrowing consisting of
simultaneous Auction Advances of the same Type from each of the
Banks whose offer to make an Auction Advance as part of such
Borrowing has been accepted by the Borrower under the auction
bidding procedure described in Section 2.03.
"Auction Reduction" means, as to any Bank as at any
date, an amount equal to such Bank's pro rata (in accordance with
the Commitments) share of the aggregate amount of all Auction
Advances outstanding on such date (giving effect to the payment
of any Auction Advances to be made on such date).
<PAGE>
"Borrowing" means a Contract Borrowing or an Auction
Borrowing.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City and, if
the applicable Business Day relates to any Eurodollar Rate
Advances, on which dealings in dollar deposits are carried on in
the London interbank market.
"Category 1", "Category 2", "Category 3" and
"Category 4" have the meanings specified in the definition of
"Applicable Margin" in this Section 1.01.
"CD Lending Office" means, with respect to any Bank,
the office or affiliate of such Bank specified as its "CD Lending
Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Bank (or,
if no such office or affiliate is specified, its Domestic Lending
Office), or such other office or affiliate of such Bank as such
Bank may from time to time specify to the Borrower and the
Administrative Agent.
"Chemical Bank" means Chemical Bank, a New York banking
corporation, and its successors.
"Closing Date" means the date of this Agreement.
"CNW" means Chicago and North Western Transportation
Company, a Delaware corporation.
"Co-Agents" means, collectively, the Syndication Agent,
the Documentation Agent and the Administrative Agent.
"Code" means the Internal Revenue Code of 1986, as the
same may be amended from time to time.
"Commitment" has the meaning specified in
Section 2.01(a).
"Contract Advance" means an advance by a Bank to the
Borrower as part of a Contract Borrowing and refers to an
Adjusted CD Rate Advance, an Alternate Base Rate Advance or a
Eurodollar Rate Contract Advance.
"Contract Borrowing" means a Borrowing consisting of
simultaneous Contract Advances of the same Type made ratably by
all of the Banks pursuant to Section 2.01(a).
<PAGE>
"Debt" means (i) indebtedness for borrowed money,
(ii) obligations evidenced by bonds, debentures, notes or other
similar instruments, (iii) obligations to pay the deferred pur-
chase price of property (excluding obligations under agreements
for the purchase of goods in the normal course of business, but
including obligations under agreements relating to the issuance
of performance letters of credit or acceptance financing), (iv)
obligations as lessee under leases which shall have been or
should be, in accordance with generally accepted accounting
principles, recorded as capital leases, (v) obligations under
direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in
clauses (i) through (iv) above and (vi) liabilities in respect of
unfunded vested benefits under Plans covered by Title IV of
ERISA; provided, however, that (x) for the purposes of
Section 5.02(a), "Debt" means only indebtedness for borrowed
money (however evidenced) and (y) for the purposes of
Section 6.01(e), "Debt" means only (1) the obligations described
in clauses (i), (ii) and (iii) above and (2) the obligations
described in clause (v) above (to the extent such obligations
relate to Debt described in clause (i) or (ii) above).
"Default" means any condition or event which, after
notice or lapse of time, or both, would constitute an Event of
Default.
"Domestic Lending Office" means, with respect to any
Bank, the office or affiliate of such Bank specified as its
"Domestic Lending Office" opposite its name on Schedule I hereto
or in the Assignment and Acceptance pursuant to which it became a
Bank, or such other office or affiliate of such Bank as such Bank
may from time to time specify to the Borrower and the
Administrative Agent.
"Domestic Reserve Percentage" means, for any Interest
Period, the reserve percentage applicable on the first day of
such Interest Period under regulations issued from time to time
by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including, but not limited to, any emergency, supplemental or
other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with deposits exceeding
one billion dollars with respect to liabilities consisting of or
including (among other liabilities) U.S. dollar nonpersonal time
deposits in the United States with a maturity equal to such
Interest Period.
<PAGE>
"Eligible Assignee" means:
(a) any of the following entities approved in writing
by the Borrower in its sole discretion and notified to the
Administrative Agent, and then only to the extent of a proposed
assignment approved in writing by the Borrower in its sole
discretion and notified to the Administrative Agent: (i) a
commercial bank organized under the laws of the United States, or
any state thereof, and having total assets in excess of
$3,000,000,000 and a combined capital and surplus of at least
$150,000,000; (ii) a commercial bank organized under the laws of
any other country which is a member of the OECD, or a political
subdivision of any such country, and having total assets in
excess of $3,000,000,000 and a combined capital and surplus of at
least $150,000,000, provided that such bank is acting through a
branch or agency located in the United States, in the country in
which it is organized or in another country which is also a
member of the OECD; and (iii) the central bank of any country
which is a member of the OECD; and
(b) an affiliate of the assigning Bank (for which
purposes "affiliate" means a Person controlling, controlled by or
under common control with such assigning Bank).
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether
or not incorporated) which is a member of a group of which the
Borrower is a member and which is under common control within the
meaning of the regulations under Section 414 of the Code.
"Eurocurrency Liabilities" has the meaning assigned to
that term in Regulation D of the Board of Governors of the
Federal Reserve System (or any successor regulation), as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any
Bank, the office or affiliate of such Bank specified as its
"Eurodollar Lending Office" opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which it
became a Bank (or, if no such office or affiliate is specified,
its Domestic Lending Office), or such other office or affiliate
of such Bank as such Bank may from time to time specify to the
Borrower and the Administrative Agent.
"Eurodollar Rate" means, for each Eurodollar Rate
Advance comprising part of the same Borrowing, an interest rate
<PAGE>
per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the average of the rates at which deposits in U.S.
dollars in immediately available funds approximately equal in
principal amount to (i) in the case of a Contract Borrowing, the
portion of such Eurodollar Rate Contract Advance of the Bank
serving as Administrative Agent and (ii) in the case of an
Auction Borrowing, a principal amount that would have been the
portion of such Auction Borrowing of the Bank serving as
Administrative Agent had such Auction Borrowing been a Contract
Borrowing, and for a maturity comparable to (a) in the case of a
Contract Borrowing, the Interest Period then applicable to such
Contract Advance and (b) in the case of an Auction Borrowing, the
maturity of such Auction Advance, are offered to the principal
London offices of the Reference Banks (or if any Reference Bank
does not at the time maintain a London office, the principal
London office of any affiliate of such Reference Bank) in the
London interbank market at approximately 11:00 a.m. (London time)
two Business Days prior to (x) the commencement of the Interest
Period then applicable to such Contract Advance or (y) the making
of such Auction Advance, as the case may be.
"Eurodollar Rate Advance" means any Eurodollar Rate
Contract Advance or Eurodollar Rate Auction Advance.
"Eurodollar Rate Auction Advance" means an Auction
Advance which bears interest based on the Eurodollar Rate.
"Eurodollar Rate Contract Advance" means a Contract
Advance which bears interest based on the Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" of any Bank for
any Eurodollar Rate Advance means the reserve percentage applic-
able to such Bank on (i) in the case of a Contract Advance, the
first day of the Interest Period then applicable to such Contract
Advance and (ii) in the case of an Auction Advance, the date of
such Auction Advance, under regulations issued from time to time
by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirement (including,
without limitation, any emergency, supplemental or other marginal
reserve requirement) under Regulation D promulgated by the Board
of Governors of the Federal Reserve System, or any successor or
supplemental regulations, then applicable to such Bank with
respect to liabilities or assets consisting of or including Euro-
currency Liabilities having a term equal to such Interest Period
or the term of such Auction Advance, as the case may be.
"Events of Default" has the meaning specified in
Section 6.01.
<PAGE>
"Financial Officer" of any corporation shall mean the
chief financial officer, principal accounting officer, Treasurer
or Controller of such corporation.
"Fixed Rate" means an interest rate per annum
(expressed in the form of a decimal to no more than four decimal
places) specified by a Bank making an Auction Advance under the
auction bidding procedure described in Section 2.03.
"Fixed Rate Auction Advance" means an Auction Advance
which bears interest based on the Fixed Rate.
"Interest Period" means, for each Contract Advance
comprising part of the same Contract Borrowing, the period com-
mencing on the date of such Contract Advance or on the last day
of the immediately preceding Interest Period applicable to such
Contract Advance, as the case may be, and ending on the last day
of the period selected by the Borrower pursuant to the provisions
below. The duration of each such Interest Period shall be (a) in
the case of an Alternate Base Rate Advance, until the next suc-
ceeding March 31, June 30, September 30 or December 31, (b) in
the case of an Adjusted CD Rate Advance, 30, 60, 90 or 180 days
and (c) in the case of a Eurodollar Rate Contract Advance, 1
month or 2, 3 or 6 months, as the Borrower may select (in the
case of clause (b) or (c)) by notice to the Administrative Agent
pursuant to Section 2.02(a); provided, however, that:
(i) Interest Periods commencing on the same date for
Contract Advances comprising part of the same Contract
Borrowing shall be of the same duration;
(ii) subject to clause (iii) below, whenever the last
day of any Interest Period would otherwise occur on a day
other than a Business Day in both New York City and London,
the last day of such Interest Period shall be extended to
occur on the next succeeding Business Day in both such
cities, provided, in the case of any Interest Period for a
Eurodollar Rate Contract Advance, that if such extension
would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business
Day in both such cities; and
(iii) no Interest Period shall end on a date later than
the Maturity Date.
"Majority Banks" means at any time Banks that in the
aggregate (a) represent at least 66-2/3% of the Commitments and
<PAGE>
(b) after the expiry or termination of the Commitments, represent
at least 66-2/3% of the aggregate unpaid principal amount of the
Advances and Special Rate Loans.
"Margin Stock" means "margin stock" within the meaning
of Regulation U.
"Material Plan" means either (i) a Plan under which the
present value of the vested benefits exceeds the fair market
value of the assets of such Plan allocable to such benefits by
more than $20,000,000 or (ii) a Plan whose assets have a market
value in excess of $100,000,000.
"Maturity Date" means the fifth anniversary of the
Closing Date; provided that if such date is not a Business Day,
the Maturity Date shall be the immediately preceding Business
Day.
"Merger Agreement" means the Agreement and Plan of
Merger, dated as of March 16, 1995, by and among the Borrower, UP
Rail, Inc. and CNW, as from time to time amended (without
prejudice to Section 5.02(f)).
"Moody's" means Moody's Investors Service, Inc. or any
successor thereto.
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which the Borrower or
any ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding three plan
years made or accrued an obligation to make contributions.
"Notice of Contract Borrowing" has the meaning
specified in Section 2.02(a).
"Notice of Auction Borrowing" has the meaning specified
in Section 2.03(a).
"$1,200,000,000 Agreement" means the $1,200,000,000
Revolving Credit Agreement, dated as of April 11, 1995, among the
Borrower, the banks named therein (which include certain of the
Banks), the co-arrangers, syndication agent and documentation
agent named therein and Chemical Bank, as administrative agent
for said banks, as from time to time amended.
"$1,400,000,000 Credit Agreement" means the
$1,400,000,000 Revolving Credit Agreement, dated as of March 2,
1993, among the Borrower, the banks named therein (which include
<PAGE>
certain of the Banks), the co-agents named therein and Chemical
Bank, as administrative agent for said banks, as from time to
time amended.
"OECD" means the Organization for Economic Cooperation
and Development.
"Participating Bank" has the meaning specified in
Section 2.03(a)(v).
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Plan" means an employee benefit plan (other than a
Multiemployer Plan) maintained for employees of the Borrower or
any ERISA Affiliate and covered by Title IV of ERISA.
"Railroads" means Union Pacific Railroad Company,
Missouri Pacific Railroad Company, and, after substantially all
shares of the capital stock of CNW (or the surviving corporation
pursuant to the Merger Agreement) shall have been acquired
(directly or indirectly) by the Borrower pursuant to the approval
or exemption (if required) of the Interstate Commerce Commission
(or any successor agency having jurisdiction), Chicago and North
Western Railway Company and Western Railroad Properties,
Incorporated, in each case together with their respective
successors.
"Reference Banks" means Chemical Bank, Citibank, N.A.
and Morgan Guaranty Trust Company of New York, and such other
additional or substitute financial institutions as may be agreed
to by the Borrower, the Administrative Agent and the Majority
Banks from time to time.
"Register" has the meaning specified in
Section 8.07(c).
"Regulation U" means Regulation U issued by the Board
of Governors of the Federal Reserve System, as from time to time
amended.
<PAGE>
"Reportable Event" means an event described in Section
4043(b) of ERISA with respect to which the 30-day notice require-
ment has not been waived by the PBGC.
"S&P" means Standard and Poor's Ratings Group, a
division of McGraw-Hill, Inc., or any successor thereto.
"Special Rate Loan" means any loan made by a Bank to
the Borrower pursuant to Section 2.01(b).
"Special Rate Loan Reduction" means, as to any Bank as
at any date, an amount equal to such Bank's pro rata (in accor-
dance with the Commitments) share of the aggregate amount of all
Special Rate Loans outstanding on such date (giving effect to the
payment of any Special Rate Loans to be made on such date).
"Subsidiary" of a Person means any corporation or other
similar entity of which more than 50% of the outstanding capital
stock having ordinary voting power to elect a majority of the
Board of Directors of such corporation or entity (irrespective of
whether or not at the time capital stock of any other class or
classes of such corporation or entity shall or might have voting
power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person, by such Person and
one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person.
"Tender Offer" means the offer by UP Rail, Inc., a Utah
corporation and wholly owned Subsidiary of the Borrower, to
purchase for cash all of the shares of common stock of CNW not
otherwise owned by the Borrower or any of its affiliates, dated
March 23, 1995, as from time to time amended (without prejudice
to Section 5.02(f)).
"Tender Offer Materials" means, collectively, (i) the
Offer to Purchase for Cash All Outstanding Shares of Common Stock
of Chicago and North Western Transportation Company at $35.00 Net
Per Share by UP Rail, Inc. dated March 23, 1995, (ii) the related
Letter of Transmittal and (iii) the Tender Offer Statement on
Schedule 14D-1 with respect to the Tender Offer filed with the
Securities and Exchange Commission, as any of the same may be
from time to time amended or extended.
"Termination Date" means the Maturity Date or the
earlier date of termination in whole of the Commitments pursuant
to Section 2.06 or 6.01.
<PAGE>
"Termination Event" means (i) a "Reportable Event"
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a "Reportable Event" not subject to the
provision for 30-day notice to the PBGC under such regulations),
or (ii) the withdrawal of the Borrower or any of its ERISA
Affiliates from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (iii) the filing of a notice of intent to terminate a Plan or
the treatment of a Plan amendment as a termination under Section
4041 of ERISA, or (iv) the institution of proceedings to termi-
nate a Plan by the PBGC, or (v) any other event or condition
which might constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to
administer, any Plan.
"Type", when used in respect of any Advance or
Borrowing, refers to the Rate by reference to which interest on
such Advance or on the Advances comprising such Borrowing is
determined. For purposes hereof, "Rate" shall include the
Eurodollar Rate, the Adjusted CD Rate, the Alternate Base Rate
and the Fixed Rate.
SECTION 1.02. Computation of Time Periods. In this
Agreement in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but
excluding".
SECTION 1.03. Accounting Terms. All accounting terms
not specifically defined herein shall be construed in accordance
with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements
referred to in Section 4.01(e).
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND SPECIAL RATE LOANS
SECTION 2.01. The Contract Advances; Special Rate
Loans. (a) Each Bank severally agrees, on the terms and
conditions hereinafter set forth, to make Contract Advances to
the Borrower from time to time on any Business Day during the
period from the Closing Date until the Termination Date in an
aggregate amount not to exceed at any time outstanding the
excess, if any, of (i) the amount set opposite such Bank's name
on the signature pages to this Agreement, as such amount may be
<PAGE>
reduced pursuant to Section 2.06 or increased pursuant to
Section 2.17 or reduced or increased pursuant to Section 8.07
(such Bank's obligation to make such Advances being hereinafter
referred to as such Bank's "Commitment") over (ii) the aggregate
amount of (x) such Bank's Special Rate Loan Reduction, if any,
and (y) such Bank's Auction Reduction, if any; provided, however,
that at no time shall the aggregate outstanding principal amount
of Contract Advances, Auction Advances and Special Rate Loans
exceed the aggregate amount of the Commitments. Each Contract
Borrowing shall be in an aggregate amount not less than
$10,000,000 (subject to the terms of this Section 2.01(a)) or an
integral multiple of $1,000,000 in excess thereof and shall
consist of Contract Advances of the same Type made on the same
day by the Banks ratably according to their respective
Commitments.
(b) Upon the request of the Borrower, each Bank may,
in its sole discretion, from time to time on any Business Day
during the period from the Closing Date until the Termination
Date, extend loans to the Borrower in an aggregate amount not
less than $10,000,000 or an integral multiple of $1,000,000 in
excess thereof, at an interest rate and upon repayment terms to
be mutually agreed upon between such Bank and the Borrower
("Special Rate Loans"). The amount of any Special Rate Loan made
by a Bank may exceed such Bank's Commitment; provided that at no
time shall the aggregate amount of Contract Advances, Auction
Advances and Special Rate Loans outstanding exceed the aggregate
amount of the Commitments. Notwithstanding any other provision
of this Agreement, (i) any Special Rate Loan shall be made by a
Bank directly to the Borrower; (ii) all payments in respect of
any Special Rate Loan shall be made by the Borrower directly to
the Bank which made such loan; (iii) Special Rate Loans need not
be made on a pro rata basis among the Banks; and (iv) each
Special Rate Loan shall be entitled to the benefits of the
provisions contained in Articles V and VI and Sections 8.05 and
8.07 hereof unless otherwise agreed by the Borrower and the Bank
which made such loan with written notice to the Administrative
Agent. On each date when any Bank makes a Special Rate Loan, the
Borrower and such Bank shall notify the Administrative Agent
thereof (and the Administrative Agent shall promptly notify the
other Banks), specifying the principal amount of such Special
Rate Loan, the interest rate thereon, the repayment terms and the
maturity thereof.
(c) Within the limits and on the conditions set forth
in this Section 2.01, the Borrower may from time to time borrow
under this Section 2.01, repay pursuant to Sections 2.07(a) and
<PAGE>
2.07(b), as appropriate, prepay under Section 2.07(d) and
reborrow under this Section 2.01 and borrow under Section 2.03.
SECTION 2.02. Making the Contract Advances. (a) Each
Contract Borrowing shall be made on notice, given (i) in the case
of a Borrowing consisting of Alternate Base Rate Advances, not
later than 10:30 a.m. (New York City time) on the day of the
proposed Borrowing; (ii) in the case of a Borrowing consisting of
Adjusted CD Rate Advances, not later than 10:30 a.m. (New York
City time) on the second Business Day prior to the day of the
proposed Borrowing; and (iii) in the case of a Borrowing
consisting of Eurodollar Rate Contract Advances, not later than
10:30 a.m. (New York City time) on the third Business Day prior
to the date of the proposed Borrowing, by the Borrower to the
Administrative Agent, which shall give to each Bank prompt notice
thereof by cable or telecopy. Each such notice of a Contract
Borrowing (a "Notice of Contract Borrowing") shall be in
substantially the form of Exhibit A-1 hereto, specifying therein
the requested (i) date of such Contract Borrowing, (ii) Type of
Contract Advances comprising such Contract Borrowing,
(iii) aggregate amount of such Contract Borrowing and
(iv) Interest Period. Each Bank shall, before 12:00 noon (New
York City time) on the date of any such Contract Borrowing, make
available for the account of its Applicable Lending Office to the
Administrative Agent at its address referred to in Section 8.02,
in same-day funds, such Bank's ratable portion of such Contract
Borrowing. Upon the Administrative Agent's receipt of such funds
and upon fulfillment of the applicable conditions set forth in
Article III, the Administrative Agent will make such funds
available to the Borrower at the Administrative Agent's aforesaid
address.
(b) Each Notice of Contract Borrowing shall be
irrevocable and binding on the Borrower. In the case of any
Contract Borrowing which the related Notice of Contract Borrowing
specifies is to be comprised of Eurodollar Rate Contract Advances
or Adjusted CD Rate Advances, the Borrower shall indemnify each
Bank against any loss, cost or expense incurred by such Bank as a
result of any failure by the Borrower to complete such Borrowing
(whether or not due to a failure to fulfill on or before the date
specified in such Notice of Contract Borrowing the applicable
conditions set forth in Article III), such losses, costs and
expenses to include, without limitation, any loss (including loss
of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds
acquired by such Bank to fund the Contract Advance to be made by
such Bank as part of such Contract Borrowing when such Contract
Advance, as a result of such failure, is not made on such date.
<PAGE>
(c) Unless the Administrative Agent shall have
received notice from a Bank prior to the date of any Contract
Borrowing that such Bank will not make available to the
Administrative Agent such Bank's ratable portion of such Contract
made such portion available to the Administrative Agent on the
date of such Contract Borrowing in accordance with subsection (a)
of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such
Bank shall not have so made such ratable portion available to the
Administrative Agent, such Bank and the Borrower severally agree
to repay to the Administrative Agent forthwith on demand such
corresponding amount, together with interest thereon, for each
day from the date such amount is made available to the Borrower
until the date such amount is repaid to the Administrative Agent,
at (i) in the case of the Borrower, the interest rate applicable
at the time to Contract Advances comprising such Contract
Borrowing and (ii) in the case of such Bank, an interest rate
equal at all times to the Federal Funds Effective Rate (as
defined in the definition of Alternate Base Rate in
Section 1.01). If such Bank shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Contract Advance as part of such Contract
Borrowing for purposes of this Agreement.
(d) The failure of any Bank to make the Contract
Advance to be made by it as part of any Contract Borrowing shall
not relieve any other Bank of its obligation, if any, hereunder
to make its Contract Advance on the date of such Contract Borrow-
ing, but no Bank shall be responsible for the failure of any
other Bank to make the Contract Advance to be made by such other
Bank on the date of any Contract Borrowing.
SECTION 2.03. The Auction Advances. (a) Each Bank
severally agrees that the Borrower may make Auction Borrowings
under this Section 2.03 from time to time on any Business Day
during the period from the Closing Date until the Termination
Date, in each case on the terms and conditions hereinafter set
forth; provided, however, that at no time shall the aggregate
amount of Contract Advances, Auction Advances and Special Rate
Loans outstanding exceed the aggregate amount of the Commitments.
Each Auction Borrowing shall consist of Auction Advances of the
same Type made on the same day.
(i) The Borrower may request an Auction Borrowing
under this Section 2.03 by delivering to the Administrative
Agent (A) in the case of a Borrowing consisting of Fixed
<PAGE>
Rate Auction Advances, by not later than 10:00 a.m. (New
York City time) one day prior to the day of the proposed
Auction Borrowing, and (B) in the case of a Borrowing
consisting of Eurodollar Rate Auction Advances, by not later
than 10:00 a.m. (New York City time) on the fourth Business
Day prior to the date of the proposed Auction Borrowing, a
notice of an Auction Borrowing (a "Notice of Auction
Borrowing"), in substantially the form of Exhibit A-2 hereto
specifying the proposed (1) date of such Auction Borrowing,
(2) Type of Auction Advances comprising such Auction
Borrowing, (3) aggregate amount (which shall not be less
than $10,000,000 or an integral multiple of $1,000,000 in
excess thereof) of such Auction Borrowing, (4) maturity date
for repayment of each Auction Advance to be made as part of
such Auction Borrowing (which maturity date shall be, in the
case of a Fixed Rate Auction Borrowing, not earlier than
seven days after the date of such Borrowing, and, in the
case of a Eurodollar Rate Auction Borrowing, not later than
1 month or 2, 3 or 6 months after the date of such
Borrowing, as the Borrower shall elect) and (5) any other
terms to be applicable to such Auction Borrowing. The
Administrative Agent shall in turn promptly notify (by cable
or telecopy) each Bank of each request for an Auction
Borrowing received by it from the Borrower and of the terms
contained in such Notice of Auction Borrowing.
(ii) Each Bank shall, if, in its sole discretion, it
elects to do so, irrevocably offer to make one or more
Auction Advances to the Borrower as part of such proposed
Auction Borrowing at a rate or rates of interest specified
by such Bank in its sole discretion, by notifying (by tele-
copy, cable or telephone (in the case of telephone, immedi-
ately confirmed by telecopy)) the Administrative Agent
(which shall give prompt notice thereof to the Borrower),
(A) in the case of a Fixed Rate Auction Borrowing, before
10:00 a.m. (New York City time) on the date of such proposed
Auction Borrowing specified in the Notice of Auction Borrow-
ing delivered with respect thereto, and (B) in the case of a
Eurodollar Rate Auction Borrowing, before 10:00 a.m. (New
York City time) on the third Business Day prior to the date
of such proposed Auction Borrowing specified in the Notice
of Auction Borrowing delivered with respect thereto, of the
maximum amount of each Auction Advance which such Bank would
be willing to make as part of such proposed Auction
Borrowing (which amount may, subject to the proviso to the
first sentence of this Section 2.03(a), exceed such Bank's
Commitment), the rate or rates of interest therefor (and
whether reserves are included therein) and such Bank's
<PAGE>
Applicable Lending Office with respect to each such Auction
Advance and any other terms and conditions required by such
Bank; provided that, if the Bank then acting as
Administrative Agent shall, in its sole discretion, elect to
make any such offer, it shall notify the Borrower of such
offer before 9:45 a.m. (New York City time) on the date
specified herein for notice of offers by the other Banks.
If any Bank shall fail to notify the Administrative Agent,
before the time specified herein for notice of offers, that
it elects to make such an offer, such Bank shall be deemed
to have elected not to make such an offer, and such Bank
shall not be obligated or entitled to, and shall not, make
any Auction Advance as part of such Auction Borrowing. If
any Bank shall provide telephonic notice to the
Administrative Agent of its election to make an offer, but
such telephonic notice has not been confirmed by telecopy to
the Administrative Agent at or before the time specified
herein for notice of offers, the Administrative Agent may,
in its sole discretion and without liability to such Bank or
the Borrower, elect whether or not to provide notice thereof
to the Borrower.
(iii) The Borrower shall, in turn, (A) in the case of a
Fixed Rate Auction Borrowing, before 11:00 a.m. (New York
City time) on the date of such proposed Auction Borrowing
specified in the Notice of Auction Borrowing delivered with
respect thereto, and (B) in the case of a Eurodollar Rate
Auction Borrowing, before 11:00 a.m. (New York City time) on
the third Business Day prior to the date of such proposed
Auction Borrowing specified in the Notice of Auction
Borrowing delivered with respect thereto, either:
(x) cancel such proposed Auction Borrowing by
giving the Administrative Agent notice to that effect,
or
(y) accept one or more of the offers made by any
Bank or Banks pursuant to paragraph (ii) above, in its
sole discretion, by giving notice to the Administrative
Agent of the amount of each Auction Advance (which
amount shall be equal to or greater than $1,000,000,
and equal to or less than the maximum amount offered by
such Bank, notified to the Borrower by the Administra-
tive Agent on behalf of such Bank for such Auction
Advance pursuant to paragraph (ii) above) to be made by
each Bank as part of such Auction Borrowing, and reject
any remaining offers made by Banks pursuant to para-
graph (ii) above, by giving the Administrative Agent
<PAGE>
notice to that effect; provided, however, that the
aggregate amount of such offers accepted by the
Borrower shall be equal at least to $10,000,000 or an
integral multiple of $1,000,000 in excess thereof.
(iv) If the Borrower notifies the Administrative Agent
that such Auction Borrowing is canceled pursuant to para-
graph (iii)(x) above, the Administrative Agent shall give
prompt notice (by cable or telecopy) thereof to the Banks,
and such Auction Borrowing shall not be made.
(v) If the Borrower accepts one or more of the offers
made by any Bank or Banks pursuant to paragraph (iii)(y)
above, such offer or offers and the Notice of Auction
Borrowing in respect thereof shall constitute a supplement
to this Agreement in respect of such Auction Borrowing and
the Auction Advances made pursuant thereto, and the
Administrative Agent shall in turn promptly notify (A) each
Bank that has made an offer as described in paragraph (ii)
above of the date and aggregate amount of such Auction
Borrowing, the interest rate thereon and whether or not any
offer or offers made by such Bank pursuant to paragraph (ii)
above have been accepted by the Borrower and (B) each Bank
that is to make an Auction Advance as part of such Auction
Borrowing (a "Participating Bank" as to such Auction Borrow-
ing) of the amount of each Auction Advance to be made by
such Bank as part of such Auction Borrowing and the maturity
date for the repayment of each such Auction Advance
(together with a confirmation of the Administrative Agent's
understanding of the interest rate and any other terms
applicable to each such Auction Advance; the Administrative
Agent shall assume, unless notified by such Bank to the
contrary, that its understanding of such information is
correct). Each such Participating Bank shall, before 12:00
noon (New York City time) on the date of such Auction
Borrowing specified in the notice received from the
Administrative Agent pursuant to clause (A) of the preceding
sentence, make available for the account of its Applicable
Lending Office to the Administrative Agent at its address
referred to in Section 8.02 such Bank's portion of such
Auction Borrowing, in same-day funds. Upon fulfillment of
the applicable conditions set forth in Article III and after
receipt by the Administrative Agent of such funds, the
Administrative Agent will make such funds available to the
Borrower at the Administrative Agent's aforesaid address.
Promptly after each Auction Borrowing, the Administrative
Agent will notify each Bank of the amount of the Auction
Borrowing, such Bank's Auction Reduction resulting therefrom
<PAGE>
and the date upon which such Auction Reduction commenced and
is anticipated to terminate.
(b) Within the limits and on the conditions set forth
in this Section 2.03, the Borrower may from time to time borrow
under this Section 2.03, repay pursuant to Section 2.07(c),
prepay under Section 2.07(d) and reborrow under this Section 2.03
and borrow under Section 2.01.
SECTION 2.04. Conversion and Continuation of Contract
Borrowings. The Borrower shall have the right at any time upon
prior irrevocable notice to the Administrative Agent (i) not
later than 12:00 noon (New York City time), one Business Day
prior to conversion, to convert any Borrowing consisting of
Eurodollar Rate Contract Advances or Adjusted CD Rate Advances
into a Borrowing consisting of Alternate Base Rate Advances, (ii)
not later than 10:00 a.m. (New York City time), two Business Days
prior to conversion or continuation, to convert any Borrowing
consisting of Eurodollar Rate Contract Advances or Alternate Base
Rate Advances into a Borrowing consisting of Adjusted CD Rate
Advances or to continue any Borrowing consisting of Adjusted CD
Rate Advances for an additional Interest Period, (iii) not later
than 10:00 a.m. (New York City time), three Business Days prior
to conversion or continuation, to convert any Borrowing
consisting of Alternate Base Rate Advances or Adjusted CD Rate
Advances into a Borrowing consisting of Eurodollar Rate Contract
Advances or to continue any Borrowing consisting of Eurodollar
Rate Contract Advances for an additional Interest Period,
(iv) not later than 10:00 a.m. (New York City time), three
Business Days prior to conversion, to convert the Interest Period
with respect to any Borrowing consisting of Eurodollar Rate
Contract Advances to another permissible Interest Period, and
(v) not later than 10:00 a.m. (New York City time), two Business
Days prior to conversion, to convert the Interest Period with
respect to any Borrowing consisting of Adjusted CD Rate Advances
to another permissible Interest Period, subject in each case to
the following:
(a) each conversion or continuation shall be made pro
rata among the Banks in accordance with the respective
principal amounts of the Advances comprising the converted
or continued Contract Borrowing;
(b) if less than all the outstanding principal amount
of any Contract Borrowing shall be converted or continued,
the aggregate principal amount of such Contract Borrowing
converted or continued shall be an amount of $10,000,000 or
an integral multiple of $1,000,000 in excess thereof;
<PAGE>
(c) accrued interest on an Advance (or portion
thereof) being converted shall be paid by the Borrower at
the time of conversion;
(d) if any Borrowing consisting of Eurodollar Rate
Contract Advances or Adjusted CD Rate Advances is converted
at a time other than the end of the Interest Period
applicable thereto, the Borrower shall pay, upon demand, any
amounts due to the Banks pursuant to Section 8.04(b) as a
result of such conversion;
(e) any portion of a Contract Borrowing maturing or
required to be repaid in less than one month may not be
converted into or continued as a Borrowing consisting of
Eurodollar Rate Contract Advances;
(f) any portion of a Borrowing maturing or required to
be repaid in less than 30 days may not be converted into or
continued as a Borrowing consisting of Adjusted CD Rate
Advances;
(g) any portion of a Borrowing consisting of
Eurodollar Rate Contract Advances or Adjusted CD Rate
Advances which cannot be converted into or continued as such
by reason of clauses (e) and (f) above shall be
automatically converted at the end of the Interest Period in
effect for such Borrowing into a Borrowing consisting of
Alternate Base Rate Advances; and
(h) no Interest Period may be selected for any
Borrowing consisting of Eurodollar Rate Contract Advances or
Adjusted CD Rate Advances that would end later than the
Maturity Date.
Each notice pursuant to this Section 2.04 shall be
irrevocable and shall refer to this Agreement and specify (i) the
identity and amount of the Contract Borrowing that the Borrower
requests be converted or continued, (ii) whether such Contract
Borrowing is to be converted to or continued as a Borrowing
consisting of Eurodollar Rate Contract Advances, Adjusted CD Rate
Advances or Alternate Base Rate Advances, (iii) if such notice
requests a conversion, the date of such conversion (which shall
be a Business Day) and (iv) if such Contract Borrowing is to be
converted to or continued as a Borrowing consisting of Eurodollar
Rate Contract Advances or Adjusted CD Rate Advances, the Interest
Period with respect thereto. If no Interest Period is specified
in any such notice with respect to any conversion to or
continuation as a Borrowing consisting of Eurodollar Rate
<PAGE>
Contract Advances or Adjusted CD Rate Advances, the Borrower
shall be deemed to have selected an Interest Period of one
month's duration, in the case of a Borrowing consisting of
Eurodollar Rate Contract Advances, or 30 days' duration, in the
case of a Borrowing consisting of Adjusted CD Rate Advances. The
Administrative Agent shall advise the other Banks of any notice
given pursuant to this Section 2.04 and of each Bank's portion of
any converted or continued Contract Borrowing. If the Borrower
shall not have given notice in accordance with this Section 2.04
to continue any Contract Borrowing into a subsequent Interest
Period (and shall not otherwise have given notice in accordance
with this Section 2.04 to convert such Contract Borrowing), such
Contract Borrowing shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof),
automatically be continued into a new Interest Period as a
Borrowing consisting of Alternate Base Rate Advances.
SECTION 2.05. Fees. The Borrower agrees to pay to
each Bank, through the Administrative Agent, a facility fee equal
to the Applicable Fee Percentage multiplied by the daily average
amount of the Commitment of such Bank, whether used or unused,
during the preceding quarter (or shorter period commencing with
the Closing Date or ending with the Termination Date), payable in
arrears on the last day of each March, June, September and
December during the term of the Commitments and on the
Termination Date.
SECTION 2.06. Optional Reduction of the Commitments.
The Borrower shall have the right, upon at least two Business
Days' irrevocable notice to the Administrative Agent, to termi-
nate in whole or reduce ratably in part the respective Commit-
ments of the Banks; provided, however, that (i) each partial
reduction shall be in the aggregate amount of $10,000,000 or in
an integral multiple of $1,000,000 in excess thereof and (ii) no
such termination or reduction shall be made which would reduce
the Commitments to an amount less than the aggregate outstanding
principal amount of the Advances and Special Rate Loans. The
Administrative Agent shall promptly thereafter notify each Bank
of such termination or reduction.
SECTION 2.07. Repayment of Advances and Special Rate
Loans; Prepayment. (a) The Borrower shall repay to the
Administrative Agent for the account of each Bank the principal
amount of each Contract Advance made by each Bank on the Maturity
Date.
(b) The Borrower shall repay to each Bank making a
Special Rate Loan the principal amount of such Special Rate Loan
<PAGE>
on the date when due (as agreed by the Borrower and the Bank
making the relevant Special Rate Loan in accordance with
Section 2.01(b)).
(c) The Borrower shall repay to the Administrative
Agent for the account of each Participating Bank which has made
an Auction Advance on the maturity date of each Auction Advance
(such maturity date being that specified by the Borrower for
repayment of such Auction Advance in the Notice of Auction Bor-
rowing delivered with respect thereto) the then unpaid principal
amount of such Auction Advance.
(d) The Borrower may, on notice given to the
Administrative Agent (i) in the case of Alternate Base Rate
Advances, not later than 10:30 a.m. (New York City time) on the
day of the proposed prepayment, and (ii) in the case of Adjusted
CD Rate Advances and Eurodollar Rate Contract Advances, not later
than 10:30 a.m. (New York City time) on the second Business Day
prior to the day of the proposed prepayment, stating the proposed
date and aggregate principal amount of the prepayment, and if
such notice is given the Borrower shall, prepay the outstanding
principal amounts of the Contract Advances constituting part of
the same Contract Borrowing in whole or ratably in part;
provided, however, that any such partial prepayment shall be in
an aggregate principal amount not less than $10,000,000, and
provided, further, that any such prepayment of Adjusted CD Rate
Advances or Eurodollar Rate Contract Advances shall be subject to
the provisions of Section 8.04(b) hereof. The Borrower may not
(x) prepay any principal amount of any Auction Advance unless the
Participating Bank making such Auction Advance shall have
expressly agreed thereto or (y) prepay any principal amount of
any Special Rate Loan unless the Bank making such Special Rate
Loan shall have expressly agreed thereto. The Administrative
Agent shall promptly notify each Bank of any prepayments pursuant
to this Section 2.07(d) promptly after any such prepayment. The
Borrower shall have no right to prepay any principal amount of
any Advance except as expressly set forth in this
Section 2.07(d).
SECTION 2.08. Interest. The Borrower shall pay
interest on each Advance and Special Rate Loan made by each Bank
from the date of such Advance or Special Rate Loan, as the case
may be, until paid in full, at the following rates per annum:
(i) Contract Advances. If such Advance is a Contract
Advance, the Applicable Rate from time to time for such
Contract Advance from the date of such Advance until the
last day of the last Interest Period therefor, payable on
<PAGE>
the last day of each Interest Period and, in the case of any
Interest Period longer than 90 days (in the case of Adjusted
CD Rate Advances) or three months (in the case of Eurodollar
Rate Contract Advances), on such 90th day or the last day of
such three-month period, as the case may be.
(ii) Auction Advances. If such Advance is an Auction
Advance, a rate per annum equal at all times from the date
of such Advance until the maturity thereof at the rate of
interest for such Auction Advance specified by the Partici-
pating Bank making such Auction Advance in its notice with
respect thereto delivered pursuant to subsection (a)(ii) of
Section 2.03 above, payable on the proposed maturity date
specified by the Borrower for such Auction Advance in the
related Notice of Auction Borrowing delivered pursuant to
subsection (a)(i) of Section 2.03 above, provided, that in
the case of Advances with maturities of greater than three
months, interest shall be payable at the end of each three-
month period for such Advance.
(iii) Special Rate Loans. If such loan is a Special
Rate Loan, a rate per annum equal at all times as agreed to
between the Bank making such Special Rate Loan and the Bor-
rower at the time of the making of the Special Rate Loan by
such Bank in accordance with Section 2.01(b).
(iv) Default Amounts. In the case of any past-due
amounts of the principal of, or (to the fullest extent
permitted by law) interest on, any Advance or Special Rate
Loan, or any other amount payable under this Agreement, from
the date such amount becomes due until paid in full, payable
on demand, a rate per annum equal at all times to 2% above
the Alternate Base Rate in effect from time to time.
SECTION 2.09. Interest Rate Determination. Each
Reference Bank agrees to furnish to the Administrative Agent
timely information for the purpose of determining each Adjusted
CD Rate or Eurodollar Rate, as applicable. If any one or more of
the Reference Banks shall not furnish such timely information to
the Administrative Agent for the purpose of determining any such
interest rate, the Administrative Agent shall determine such
interest rate on the basis of timely information furnished by the
remaining Reference Banks, subject, however, to Section 2.10(a)
hereof.
SECTION 2.10. Alternate Rate of Interest. (a) If
fewer than two Reference Banks furnish timely information to the
Administrative Agent for determining the Eurodollar Rate for any
<PAGE>
Eurodollar Rate Advances or the Adjusted CD Rate for any Adjusted
CD Rate Advances comprising any requested Borrowing, the
Administrative Agent will notify the Banks and the Borrower
thereof, and the right of the Borrower to select Advances of such
Type for such Borrowing or any subsequent Borrowing shall be
suspended until the Administrative Agent shall notify the
Borrower and the Banks that the circumstances causing such
suspension no longer exist, and (i) any request by the Borrower
for a Eurodollar Rate Auction Advance shall be of no force and
effect and shall be denied by the Administrative Agent and (ii)
any request by the Borrower for a Eurodollar Rate Contract
Advance or an Adjusted CD Rate Advance, as the case may be, shall
be deemed to be a request for an Alternate Base Rate Advance; and
(b) If Banks having more than 66-2/3% of the
Commitments shall, at least one Business Day before the date of
any requested Borrowing, notify the Administrative Agent that the
Eurodollar Rate for any Eurodollar Rate Advances or the Adjusted
CD Rate for any Adjusted CD Rate Advances comprising such Borrow-
ing will not adequately reflect the cost to such Banks of making
or funding their respective Advances for such Borrowing, the
Administrative Agent will notify the Banks and the Borrower
thereof, and the right of the Borrower to select Advances of such
Type for such Borrowing or any subsequent Borrowing shall be
suspended until the Administrative Agent shall notify the
Borrower and the Banks that the circumstances causing such
suspension no longer exist, and (i) any request by the Borrower
for a Eurodollar Rate Auction Advance shall be of no force and
effect and shall be denied by the Administrative Agent and (ii)
any request by the Borrower for a Eurodollar Rate Contract
Advance or an Adjusted CD Rate Advance, as the case may be, shall
be deemed to be a request for an Alternate Base Rate Advance.
SECTION 2.11. Increased Costs; Increased Capital.
(a) If, due to either (i) the introduction after the date hereof
of or any change after the date hereof (other than any change by
way of imposition or increase of reserve requirements, in the
case of Adjusted CD Rate Advances, included in the determination
of the Domestic Reserve Percentage for such Advances or, in the
case of Eurodollar Rate Advances, included in the determination
of the Eurodollar Rate Reserve Percentage for such Advances) in
or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request received from any
central bank or other governmental authority after the date
hereof (whether or not having the force of law), there shall be
any increase in the cost to any Bank of agreeing to make or
making, funding or maintaining Adjusted CD Rate Advances or
Eurodollar Rate Advances, then the Borrower shall from time to
<PAGE>
time, upon demand by such Bank (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the
account of such Bank additional amounts sufficient to compensate
such Bank for such increased cost. Increased costs shall not
include income, stamp or other taxes, imposts, duties, charges,
fees, deductions or withholdings imposed, levied, collected,
withheld or assessed by the United States of America or any
political subdivision or taxing authority thereof or therein
(including Puerto Rico) or of the country in which any Bank's
principal office or Applicable Lending Office may be located or
any political subdivision or taxing authority thereof or therein.
Each Bank agrees that, upon the occurrence of any event giving
rise to a demand under this subsection 2.11(a) with respect to
the Eurodollar Lending Office or the CD Lending Office of such
Bank, it will, if requested by the Borrower and to the extent
permitted by law or the relevant governmental authority, endeavor
in good faith and consistent with its internal policies to avoid
or minimize the increase in costs resulting from such event by
endeavoring to change its Eurodollar Lending Office or CD Lending
Office, as appropriate; provided, however, that such avoidance or
minimization can be made in such a manner that such Bank, in its
sole determination, suffers no economic, legal or regulatory
disadvantage. A certificate as to the amount of and specifying
in reasonable detail the basis for such increased cost, submitted
to the Borrower and the Administrative Agent by such Bank, shall
constitute such demand and shall, in the absence of manifest
error, be conclusive and binding for all purposes.
(b) If either (i) the introduction after the date
hereof of, or any change after the date hereof in or in the
interpretation of, any law or regulation or (ii) the compliance
by any Bank with any guideline or request received from any
central bank or other governmental authority after the date
hereof (whether or not having the force of law), affects or would
affect the amount of capital required or expected to be main-
tained by such Bank or any corporation controlling such Bank and
such Bank determines that the amount of such capital is increased
by or based upon the existence of its Advances or Special Rate
Loans or Commitment, then the Borrower shall, from time to time,
upon demand by such Bank (with a copy of such demand to the
Administrative Agent), immediately pay to the Administrative
Agent for the account of such Bank additional amounts sufficient
to compensate such Bank to the extent that such Bank determined
such increase in capital to be allocable to the existence of such
Bank's Advances or Special Rate Loans or Commitment. A certifi-
cate as to the amount of such increased capital and specifying in
reasonable detail the basis therefor, submitted to the Borrower
and the Administrative Agent by such Bank, shall constitute such
<PAGE>
demand and shall, in the absence of manifest error, be conclusive
and binding for all purposes. Each Bank shall use all reasonable
efforts to mitigate the effect upon the Borrower of any such
increased capital requirement and shall assess any cost related
to such increased capital on a nondiscriminatory basis among the
Borrower and other borrowers of such Bank to which it applies and
such Bank shall not be entitled to demand or be compensated for
any increased capital requirement unless it is, as a result of
such law, regulation, guideline or request, such Bank's policy
generally to seek to exercise such rights, where available,
against other borrowers of such Bank.
(c) Notwithstanding the foregoing provisions of this
Section 2.11, (i) the Borrower shall not be required to reimburse
any Bank for any increased costs incurred more than three months
prior to the date that such Bank notifies the Borrower in writing
thereof and (ii) in the event any Bank makes an assignment of, or
grants a participation in, an Advance or Special Rate Loan or its
Commitment pursuant to Section 8.07, the Borrower shall not be
obligated to reimburse for increased costs with respect to such
Advance, Special Rate Loan or Commitment to the extent that the
aggregate amount thereof exceeds the aggregate amount for which
the Borrower would have been obligated (determined, in the case
of an assignment, on the basis of laws and regulations in effect
at the time of such assignment) if such Bank had not made such
assignment or granted such participation.
SECTION 2.12. Additional Interest on Eurodollar Rate
Advances. The Borrower shall pay to the Administrative Agent for
the account of each Bank any costs which such Bank determines are
attributable to such Bank's compliance with regulations of the
Board of Governors of the Federal Reserve System requiring the
maintenance of reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities. Such costs
shall be paid to the Administrative Agent for the account of such
Bank in the form of additional interest on the unpaid principal
amount of each Eurodollar Rate Advance of such Bank, from the
date of such Advance until such principal amount is paid in full,
at an interest rate per annum equal at all times to the remainder
obtained by subtracting (i) the Eurodollar Rate for the applic-
able period for such Advance from (ii) the rate obtained by
dividing such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Bank for such
period, payable on each date on which interest is payable on such
Advance. Such additional interest shall be determined by such
Bank and notified to the Borrower and the Administrative Agent.
A certificate setting forth the amount of such additional inter-
est, submitted to the Borrower and the Administrative Agent by
<PAGE>
such Bank, shall be conclusive and binding for all purposes,
absent manifest error.
SECTION 2.13. Change in Legality. If any Bank shall,
at least three Business Days before the date of any requested
Borrowing consisting of Eurodollar Rate Advances or at least two
Business Days before the date of any requested Borrowing
consisting of Adjusted CD Rate Advances, notify the
Administrative Agent that the introduction of or any change in or
in the interpretation of any law or regulation makes it unlawful,
or that any central bank or other governmental authority asserts
that it is unlawful, for such Bank or its Applicable Lending
Office to perform its obligations hereunder to make, fund or
maintain Eurodollar Rate Advances or Adjusted CD Rate Advances
hereunder, the right of the Borrower to select Advances of such
Type from such Bank for such Borrowing or any subsequent
Borrowing shall be suspended until such Bank shall notify the
Administrative Agent that the circumstances causing such
suspension no longer exist; and during the period when such
obligation of such Bank is suspended, any Borrowing consisting of
Eurodollar Rate Advances or Adjusted CD Rate Advances, as the
case may be, shall not exceed the Commitments of the other Banks
less the aggregate amount of any Special Rate Loans and Auction
Advances then outstanding, and shall be made by the other Banks
pro rata according to their respective Commitments.
SECTION 2.14. Payments and Computations. (a) Except
as expressly provided in Section 2.01(b)(ii), the Borrower shall
make each payment hereunder from a bank account of the Borrower
located in the United States not later than 11:00 a.m. (New York
City time) on the day when due in U.S. dollars to the
Administrative Agent at its address referred to in Section 8.02
in same-day funds, without set-off or counterclaim. The
Administrative Agent will promptly thereafter cause to be
distributed like funds to the Banks entitled thereto for the
account of their respective Applicable Lending Offices, in each
case to be applied in accordance with the terms of this
Agreement.
(b) All computations of interest based on the
Alternate Base Rate shall be made by the Administrative Agent on
the basis of a year of 365 or 366 days, as the case may be, when
determined by reference to the Prime Rate (as defined in the
definition of Alternate Base Rate in Section 1.01) and on the
basis of a year of 360 days at all other times, and all
computations of fees and of interest based on the Adjusted CD
Rate, the Eurodollar Rate or the Fixed Rate shall be made by the
Administrative Agent, and all computations of interest pursuant
<PAGE>
to Section 2.09 shall be made by the Reference Banks, on the
basis of a year of 360 days, in each case for the actual number
of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are
payable. Each determination by the Administrative Agent (or, in
the case of Section 2.09, by the Reference Banks) of an interest
rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(c) Whenever any payment hereunder shall be stated to
be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of
time shall be included in the computation of payment of interest
or fees, as the case may be; provided, however, that, if such
extension would cause payment of interest on or principal of
Eurodollar Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding
Business Day.
(d) Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any
payment is due to the Banks hereunder that the Borrower will not
make such payment in full, the Administrative Agent may assume
that the Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to
each Bank on such due date an amount equal to the amount then due
such Bank. If and to the extent the Borrower shall not have so
made such payment in full to the Administrative Agent, each Bank
shall repay to the Administrative Agent forthwith on demand such
amount distributed to such Bank together with interest thereon,
for each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the
Administrative Agent, at the Federal Funds Effective Rate (as
defined in the definition of Alternate Base Rate in
Section 1.01).
(e) Each Bank shall maintain on its books a loan
account in the name of the Borrower in which shall be recorded
all Advances made by such Bank to the Borrower, the interest rate
and the maturity date of each such Advance and all payments of
principal and interest made by the Borrower with respect to such
Advances. The obligation of the Borrower to repay the Advances
made by each Bank and to pay interest thereon shall be evidenced
by the entries from time to time made in the loan account of such
Bank maintained pursuant to this Section 2.14(e); provided that
the failure to make an entry with respect to an Advance shall not
affect the obligations of the Borrower hereunder with respect to
<PAGE>
such Advance. In case of any dispute, action or proceeding
relating to any Advance, the entries in such loan account shall
be prima facie evidence of the amount of such Advance and of any
amounts paid or payable with respect thereto.
(f) The Administrative Agent shall maintain on its
books a set of accounts in which shall be recorded all Advances
made by the Banks to the Borrower, the interest rates and matur-
ity dates of such Advances and all payments of principal and
interest made thereon. In case of any discrepancy between the
entries in the Administrative Agent's books and the entries in
any Bank's books, such Bank's records shall be considered
correct, in the absence of manifest error.
SECTION 2.15. Taxes on Payments. (a) All payments
made by the Borrower under this Agreement shall be made free and
clear of, and without reduction for or on account of, any income,
stamp or other taxes, imposts, duties, charges, fees, deductions
or withholdings, imposed, levied, collected, withheld or assessed
by the United States of America (or by any political subdivision
or taxing authority thereof or therein) as a result of (i) the
introduction after the date hereof of any law, regulation,
treaty, directive or guideline (whether or not having the force
of law), or (ii) any change after the date hereof in any law,
regulation, treaty, directive or guideline (whether or not having
the force of law), or (iii) any change after the date hereof in
the interpretation or application of any law, regulation, treaty,
directive or guideline (whether or not having the force of law)
or (iv) any such taxes, imposts, duties, charges, fees,
deductions or withholdings being imposed, levied, collected,
withheld or assessed at a greater rate than the rate that would
have been applicable had such an introduction or change not been
made, but only to the extent of the increase in such rate
("Withholding Taxes"). If any Withholding Taxes are required to
be withheld from any amounts payable to or for the account of any
Bank hereunder, the amounts so payable to or for the account of
such Bank shall be increased to the extent necessary to yield to
such Bank (after payment of all Withholding Taxes) interest or
any such other amounts payable hereunder at the rates or in the
amounts payable to or for the account of such Bank under this
Agreement prior to such introduction or change. Whenever any
Withholding Tax is payable by the Borrower, as promptly as
possible thereafter, the Borrower shall send to the
Administrative Agent, for the account of such Bank, a certified
copy of an original official receipt showing payment thereof. If
the Borrower fails to pay any Withholding Taxes when due to the
appropriate taxing authority or fails to remit to the
Administrative Agent for the account of any Bank the required
<PAGE>
receipts or other required documentary evidence, the Borrower
shall indemnify such Bank or the Administrative Agent for any
incremental taxes, interest or penalties that may become payable
by such Bank or the Administrative Agent as a result of any such
failure.
(b) At least four Business Days prior to the first
Borrowing or, if the first Borrowing does not occur within thirty
days after the date of execution of this Agreement, by the end of
such thirty day period, each Bank that is organized outside the
United States agrees that it will deliver to the Borrower and the
Administrative Agent two duly completed copies of United States
Internal Revenue Service Form 1001 (or such other documentation
or information as may, under applicable United States federal
income tax statutes or regulations, be required in order to claim
an exemption or reduction from United States income tax withhold-
ing by reason of an applicable treaty with the United States,
such documentation or other information being hereafter referred
to as "Form 1001") or 4224 (or such other documentation or
information as may, under applicable United States federal income
tax statutes or regulations, be required in order to claim an
exemption from United States income tax withholding for income
that is effectively connected with the conduct of a trade or
business within the United States, such documentation or other
information being hereafter referred to as "Form 4224"), as the
case may be, indicating in each case that such Bank is either
entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income
taxes or, as the case may be, is subject to such limited
deduction or withholding as it is capable of recovering in full
from a source other than the Borrower. Each Bank which delivers
to the Borrower and the Administrative Agent a Form 1001 or 4224
pursuant to the next preceding sentence further undertakes to
deliver to the Borrower and the Administrative Agent two further
copies of the said Form 1001 or 4224, or successor applicable
form or certificate, as the case may be, as and when the previous
form filed by it hereunder shall expire or shall become
incomplete or inaccurate in any respect, unless in any of such
cases an event has occurred prior to the date on which any such
delivery would otherwise be required which renders such form
inapplicable.
(c) If at any time any Bank by reason of payment by
the Borrower of any Withholding Taxes obtains a credit against,
or return or reduction of, any tax payable by it, or any other
currently realized tax benefit, which it would not have enjoyed
but for such payment ("Tax Benefit"), such Bank shall thereupon
pay to the Borrower the amount which such Bank shall certify to
<PAGE>
be the amount that, after payment, will leave such Bank in the
same economic position it would have been in had it received no
such Tax Benefit ("Equalization Amount"); provided, however, that
if such Bank shall subsequently determine that it has lost the
benefit of all or a portion of such Tax Benefit, the Borrower
shall promptly remit to such Bank the amount certified by such
Bank to be the amount necessary to restore such Bank to the
position it would have been in if no payment had been made
pursuant to this Section 2.15(c); provided, further, however,
that if such Bank shall be prevented by applicable law from
paying the Borrower all or any portion of the Equalization Amount
owing to the Borrower such payment need not be made to the extent
such Bank is so prevented and the amount not paid shall be
credited to the extent lawful against future payment owing to
such Bank; provided, further, however, that the aggregate of all
Equalization Amounts paid by any Bank shall in no event exceed
the aggregate of all amounts paid by the Borrower to such Bank in
respect of Withholding Taxes plus, in the case of a Tax Benefit
that occurs by reason of a refund, interest actually received
from the relevant taxing authority with respect to such refund.
A certificate submitted in good faith by the Bank pursuant to
this Section 2.15(c) shall be deemed conclusive absent manifest
error.
(d) In the event a Bank shall become aware that the
Borrower is required to pay any additional amount to it pursuant
to Section 2.15(a), such Bank shall promptly notify the
Administrative Agent and the Borrower of such fact and shall use
reasonable efforts, consistent with legal and regulatory restric-
tions, to change the jurisdiction of its Applicable Lending
Office if the making of such change (i) would avoid the need for
or reduce the amount of any such additional amounts that may
thereafter accrue, (ii) would not, in the good faith
determination of such Bank, be disadvantageous for regulatory or
competitive reasons to such Bank and (iii) would not require such
Bank to incur any cost or forego any economic advantage for which
the Borrower shall not have agreed to reimburse and indemnify
such Bank.
(e) Notwithstanding the foregoing provisions of this
Section 2.15, in the event any Bank makes an assignment of, or
grants a participation in, an Advance or Special Rate Loan or its
Commitment pursuant to Section 8.07, the Borrower shall not be
obligated to pay any taxes, imposts, duties, charges, fees,
deductions or withholdings to the extent that the aggregate
amount thereof exceeds the aggregate amount for which the
Borrower would have been obligated (determined, in the case of an
assignment, on the basis of laws and regulations in effect at the
<PAGE>
time of such assignment) if such Bank had not made such
assignment or granted such participation.
SECTION 2.16. Sharing of Payments, Etc. If any Bank
shall obtain any payment (whether voluntary, involuntary, through
the exercise of any right of setoff or otherwise) on account of
the Contract Advances made by it (other than pursuant to
Sections 2.11, 2.12, 2.15, 2.17, 8.04 or 8.07(g) hereof) in
excess of its ratable share of payments on account of the
Contract Advances obtained by all the Banks, then such Bank shall
forthwith purchase from the other Banks through the
Administrative Agent such participations in the Contract Advances
made by them as shall be necessary to cause such purchasing Bank
to share the excess payment ratably with each of them; provided,
however, that, if all or any portion of such excess payment is
thereafter recovered from such purchasing Bank, such purchase
from each Bank shall be rescinded and such Bank shall repay to
the purchasing Bank the purchase price to the extent of such
recovery together with an amount equal to such Bank's ratable
share (according to the proportion of (i) the amount of such
Bank's required repayment to (ii) the total amount so recovered
from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so
recovered. The Borrower agrees that any Bank so purchasing a
participation from another Bank pursuant to this Section 2.16
may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of setoff) with respect to
such participation as fully as if such Bank were the direct
creditor of the Borrower in the amount of such participation.
SECTION 2.17. Removal of a Bank. The Borrower shall
have the right, by giving at least 15 Business Days' prior notice
in writing to the affected Bank and the Administrative Agent, at
any time when no Default or Event of Default has occurred and is
then continuing, to remove as a party hereto any Bank having a
credit rating of C/D (or its equivalent) or lower by Thomson
BankWatch, Inc. (or any successor thereto), such removal to be
effective as of the date specified in such notice from the
Borrower (a "Removal Date"), which date shall be the last day of
an Interest Period. On any Removal Date, the Borrower shall
repay all the outstanding Contract Advances, Special Rate Loans
and Auction Advances of the affected Bank, together with all
accrued interest, fees and all other amounts owing hereunder to
such Bank. Upon such Removal Date and receipt of the payment
referred to above, the Commitment of such affected Bank shall
terminate and such Bank shall cease thereafter to constitute a
Bank hereunder. The Borrower shall have the right to offer to
one or more Banks the right to increase their Commitments up to,
<PAGE>
in the aggregate for all such increases, the Commitment of any
Bank which is removed pursuant to the foregoing provisions of
this Section 2.17 (such Commitment being herein called an
"Unallocated Commitment") effective on the relevant Removal Date,
it being understood that no Bank shall be obligated to increase
its Commitment in response to any such offer. The Borrower shall
also have the right to offer all or any portion of an Unallocated
Commitment to one or more commercial banks not parties hereto
having a credit rating higher than C/D (or its equivalent) by
Thomson BankWatch, Inc. (or any successor thereto), and, upon
each such bank's acceptance of such offer and execution and
delivery of an instrument agreeing to the terms and conditions
hereof, each such bank shall become a Bank hereunder with a
Commitment in an amount specified in such instrument. If the
Bank which is removed pursuant to this Section 2.17 is a Refer-
ence Bank, the Administrative Agent, with the consent of the
Borrower (which shall not be unreasonably withheld), shall
appoint a new Reference Bank from among the Banks. The
obligations of the Borrower described in Sections 2.02(b), 2.11,
2.12, 2.15, 8.04 and 8.12 that arose prior to the date of removal
shall survive for the benefit of any Bank removed pursuant to
this Section 2.17 notwithstanding such removal.
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial
Borrowing. The obligation of each Bank to make an Advance on the
occasion of the initial Borrowing is subject to the following
conditions precedent (each of the documents referred to below to
be in form and substance satisfactory to the Administrative
Agent, dated a date on or within 10 days prior to the date of
such Borrowing and in sufficient copies for each Bank):
(a) The Administrative Agent shall have received, on
behalf of the Banks, certified copies of the resolutions of
the Board of Directors of the Borrower approving this
Agreement and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with
respect to this Agreement.
(b) The Administrative Agent shall have received, on
behalf of the Banks, a certificate of the Secretary or an
Assistant Secretary of the Borrower certifying the names and
true signatures of the officers of the Borrower authorized
to sign this Agreement and the other documents to be
delivered hereunder.
<PAGE>
(c) The Administrative Agent shall have received, on
behalf of the Banks, a favorable opinion of the Senior Vice
President and General Counsel or Assistant General Counsel
of the Borrower, substantially in the form of Exhibit C
hereto and as to such other matters as any Bank through the
Administrative Agent may reasonably request.
(d) The Administrative Agent shall have received, on
behalf of the Banks, a favorable opinion of Milbank, Tweed,
Hadley & McCloy, special New York counsel for the
Administrative Agent, substantially in the form of Exhibit D
hereto.
(e) The Borrower shall not have made any change in the
structure or terms of the Tender Offer disclosed to the
Banks prior to the Closing Date, except for changes that, in
the reasonable opinion of the Majority Banks, are not
materially adverse from the standpoint of the financing
contemplated hereby.
(f) The Borrower shall have certified to the
Administrative Agent that all material conditions to the
Tender Offer have been satisfied (without any waiver thereof
by the Borrower).
(g) The Merger Agreement shall be in substantially the
same form as provided to the Banks prior to the Closing
Date, except for amendments that, in the reasonable opinion
of the Majority Banks, are not materially adverse from the
standpoint of the financing contemplated hereby.
(h) The Borrower shall have paid all fees due and
payable as of or before the Closing Date to the Banks.
SECTION 3.02. Conditions Precedent to Each Borrowing.
The obligation of each Bank to make an Advance in connection with
any Borrowing shall be subject to the further conditions
precedent that on the date of such Borrowing the following
statements shall be true (and each of the giving of the
applicable Notice of Contract Borrowing or Notice of Auction
Borrowing and the acceptance by the Borrower of the proceeds of
such Borrowing shall constitute a representation and warranty by
the Borrower that on the date of such Borrowing such statements
are true):
(i) the representations and warranties contained in
Section 4.01 (excluding those contained in subsections (e)
and (f) thereof and, in the event of a Borrowing for general
<PAGE>
corporate purposes, excluding those contained in
subsection (k) thereof) are correct on and as of the date of
such Borrowing, before and after giving effect to such
Borrowing and to the application of the proceeds therefrom,
as though made on and as of such date; and
(ii) no Default or Event of Default has occurred and is
continuing, or would result from such Borrowing or from the
application of the proceeds therefrom.
SECTION 3.03. Borrowings for General Corporate
Purposes. With respect to any Borrowing the proceeds of which
are to be used in whole or in part for the general corporate
purposes of the Borrower, the conditions precedent set forth in
paragraphs (e), (f) and (g) of Section 3.01 shall be deemed to
have been satisfied upon the consummation of the Tender Offer in
accordance with the terms and conditions hereof and thereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower. The Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Utah.
(b) The execution, delivery and performance by the
Borrower of this Agreement are within the Borrower's corpo-
rate powers, have been duly authorized by all necessary
corporate action and do not contravene (i) the Borrower's
charter or by-laws or (ii) any law or any contractual
restriction binding on or affecting the Borrower.
(c) No authorization or approval or other action by,
and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution,
delivery and performance by the Borrower of this Agreement
except such as have been duly obtained or made and are in
full force and effect.
(d) This Agreement is the legal, valid and binding
obligation of the Borrower enforceable against the Borrower
in accordance with its terms.
<PAGE>
(e) The statement of consolidated financial position
of the Borrower and its consolidated Subsidiaries as at
December 31, 1994, and the related statements of consoli-
dated income and consolidated changes in common stock-
holders' equity of the Borrower and its consolidated Sub-
sidiaries for the fiscal year then ended, copies of which
have been furnished to each Bank, fairly present the finan-
cial condition of the Borrower and its consolidated Subsidi-
aries as at such date and the results of the operations of
the Borrower and its consolidated Subsidiaries for the
period ended on such date, all in accordance with generally
accepted accounting principles consistently applied, and
since December 31, 1994, there has been no material adverse
change in such condition or operations.
(f) There is no pending or threatened action or pro-
ceeding affecting the Borrower or any of its consolidated
Subsidiaries before any court, governmental agency or
arbitrator, (i) which purports to affect the legality,
validity or enforceability of this Agreement, or (ii) which
may materially adversely affect the consummation of the
Tender Offer, or (iii) except as set forth in the Borrower's
annual report on Form 10-K for the fiscal year ended
December 31, 1994 (a copy of which has been furnished to
each Bank), which may materially adversely affect the
financial condition or operations of the Borrower or any of
its Subsidiaries, taken as a whole.
(g) After applying the proceeds of each Advance and
Special Rate Loan, not more than 25% of the value of the
assets of the Borrower and its Subsidiaries (as determined
in good faith by the Borrower) that are subject to
Section 5.02(a)(i) or Section 5.02(d) will consist of or be
represented by Margin Stock.
(h) The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying
Margin Stock, and no proceeds of any Advance or Special Rate
Loan will be used for any purpose which violates the
provisions of the regulations of the Board of Governors of
the Federal Reserve System. If requested by any Bank or the
Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Bank a statement in conformity
with the requirements of Federal Reserve Form U-1 referred
to in Regulation U, the statements made in which shall be
such, in the opinion of each Bank, as to permit the trans-
actions contemplated hereby in accordance with Regulation U.
<PAGE>
(i) No Termination Event has occurred nor is
reasonably expected to occur with respect to any Plan which
may materially adversely affect the financial condition or
operations of the Borrower and its Subsidiaries, taken as a
whole. Neither the Borrower nor any of its ERISA Affiliates
has incurred nor reasonably expects to incur any withdrawal
liability under ERISA to any Multiemployer Plan which may
materially adversely affect the financial condition or
operations of the Borrower and its Subsidiaries, taken as a
whole. Schedule B (Actuarial Information) to the 1993
annual report (Form 5500 Series) with respect to each Plan,
copies of which have been filed with the Internal Revenue
Service and furnished to each Bank, is complete and accurate
in all material respects and in all material respects fairly
presents the funding status of each Plan. No Reportable
Event has occurred and is continuing with respect to any
Plan which may materially adversely affect the financial
condition or operations of the Borrower and its
Subsidiaries, taken as a whole.
(j) The Borrower and its Subsidiaries are in
compliance with all applicable laws and regulations relating
to the environment or to the discharge, transport or storage
of hazardous materials except to the extent that non-
compliance therewith would not have a material adverse
effect on the financial condition or operations of the
Borrower and its Subsidiaries taken as a whole.
(k) (i) True copies of the Tender Offer Materials as
in effect on the date hereof have been delivered to the
Banks; (ii) the Tender Offer is in compliance in all
material respects with applicable law; (iii) all written
information concerning the Borrower and its Subsidiaries
(excluding financial projections) that has been or will
hereafter be made available to the Administrative Agent, any
other Co-Agent, either Co-Arranger or any Bank by the
Borrower or any of its representatives under this Agreement
or in connection with the transactions contemplated hereby
is and will be correct in all material respects and does not
and will not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make
the statements contained therein not misleading in light of
the circumstances under which such statements were or are
made; and (iv) all financial projections concerning the
Borrower and its Subsidiaries that have been or will be
prepared by the Borrower in writing and made available to
the Administrative Agent, any other Co-Agent, either Co-
Arranger or any Bank by the Borrower or any of its
<PAGE>
representatives under this Agreement or in connection with
the transactions contemplated hereby have been or will be
prepared in good faith based upon reasonable assumptions (it
being understood that such projections are subject to
significant uncertainties and contingencies, many of which
are beyond the control of the Borrower, and that no
assurance can be given that the projections will be
realized).
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any
Advance or Special Rate Loan shall remain unpaid or any Bank
shall have any Commitment hereunder, the Borrower will, and, in
the case of Section 5.01(a), will cause its Subsidiaries to,
unless the Majority Banks shall otherwise consent in writing:
(a) Keep Books; Corporate Existence; Maintenance of
Properties; Compliance with Laws; Insurance.
(i) keep proper books of record and account, all
in accordance with generally accepted accounting
principles;
(ii) preserve and keep in full force and effect
its existence, and preserve and keep in full force and
effect its licenses, rights and franchises to the
extent it deems necessary to carry on its business;
(iii) maintain and keep, or cause to be maintained
and kept, its properties in good repair, working order
and condition, and from time to time make or cause to
be made all needful and proper repairs, renewals,
replacements and improvements, in each case to the
extent it deems necessary to carry on its business;
(iv) use its reasonable efforts to comply in all
material respects with all material applicable stat-
utes, regulations and orders of, and all material
applicable restrictions imposed by, any governmental
agency in respect of the conduct of its business and
the ownership of its properties, to the extent it deems
necessary to carry on its business, except such as are
being contested in good faith by appropriate
proceedings; and
<PAGE>
(v) insure and keep insured its properties in
such amounts (and with such self-insurance and deduct-
ibles) as it deems necessary to carry on its business
and to the extent available on premiums and other terms
which the Borrower or any Subsidiary, as the case may
be, deems appropriate. Any of such insurance may be
carried by, through or with any captive or affiliated
insurance company or by way of self-insurance as the
Borrower or any Subsidiary, as the case may be, deems
appropriate.
Nothing in this subsection shall prohibit the Borrower or any of
its Subsidiaries from discontinuing any business, forfeiting any
license, right or franchise or discontinuing the operation or
maintenance of any of its properties to the extent it deems
appropriate in the conduct of its business.
(b) Net Worth. Maintain an excess of consolidated
total assets over consolidated total liabilities of the
Borrower and its consolidated Subsidiaries of not less than
$2,250,000,000.
(c) Reporting Requirements. Furnish to each Bank:
(i) as soon as available and in any event within
60 days after the end of each of the first three quar-
ters of each fiscal year of the Borrower, a statement
of the consolidated financial condition of the Borrower
and its consolidated Subsidiaries as at the end of such
quarter and the related statements of income and re-
tained earnings of the Borrower and its consolidated
Subsidiaries for the period commencing at the end of
the previous fiscal year and ending with the end of
such quarter, certified by a principal financial or
accounting officer of the Borrower; provided, however,
that the Borrower may deliver, in lieu of the fore-
going, the quarterly report of the Borrower for such
fiscal quarter on Form 10-Q filed with the Securities
and Exchange Commission or any governmental authority
succeeding to the functions of such Commission, but
only so long as the financial statements contained in
such quarterly report on Form 10-Q relate to the same
companies and are substantially the same in content as
the financial statements referred to in the preceding
provisions of this clause (i);
(ii) as soon as available and in any event within
90 days after the end of each fiscal year of the
<PAGE>
Borrower, a copy of the annual report for such year for
the Borrower and its Subsidiaries, containing the
consolidated financial statements of the Borrower and
its consolidated Subsidiaries for such year and accom-
panied by a report thereon of Deloitte & Touche or
other independent public accountants of nationally
recognized standing;
(iii) promptly after the sending or filing thereof,
copies of all reports which the Borrower sends to its
stockholders generally, and copies of all reports and
registration statements (without exhibits) which the
Borrower files with the Securities and Exchange
Commission or any national securities exchange (other
than registration statements relating to employee
benefit plans);
(iv) promptly after the filing or receiving
thereof, copies of any notices of any of the events set
forth in Section 4043(b) of ERISA or the regulations
thereunder which the Borrower or any Subsidiary files
with the PBGC, or which the Borrower or any Subsidiary
receives from the PBGC to the effect that proceedings
or other action by the PBGC is to be instituted; and
(v) such other information respecting the
condition or operations, financial or otherwise, of the
Borrower or any of its Subsidiaries as any Bank through
the Administrative Agent may from time to time
reasonably request.
(d) Notices. Promptly give notice to the
Administrative Agent and each Bank:
(i) of the occurrence of any Default or Event of
Default; and
(ii) of the commencement of any litigation,
investigation or proceeding affecting the Borrower or
any of its Subsidiaries before any court, governmental
authority or arbitrator which, in the reasonable judg-
ment of the Borrower, could have a material adverse
effect on the business, operations, property or finan-
cial or other condition of the Borrower and its Sub-
sidiaries, taken as a whole.
Each notice pursuant to this subsection shall be accompanied by a
statement of the Borrower setting forth details of the occurrence
<PAGE>
referred to therein and stating what action the Borrower proposes
to take with respect thereto.
(e) Certificates. Furnish to each Bank:
(i) concurrently with the delivery of the finan-
cial statements referred to in Section 5.01(c)(ii), a
letter signed by the independent public accountants
certifying such financial statements to the effect
that, in the course of the examination upon which their
report for such fiscal year was based (but without any
special or additional audit procedures for that purpose
other than review of the terms and provisions of this
Agreement), they did not become aware of any Default or
Event of Default involving financial or accounting
matters, or, if such accountants became aware of any
such Default or Event of Default, specifying the nature
thereof; and
(ii) concurrently with the delivery of the finan-
cial statements or Form 10-Q referred to in Section
5.01(c)(i), a certificate of a principal financial or
accounting officer of the Borrower stating that, to the
best of such officer's knowledge, the Borrower during
such period has observed or performed all of its cove-
nants and other agreements, and satisfied every condi-
tion, contained in this Agreement to be observed, per-
formed or satisfied by it, and that such officer has
obtained no knowledge of any Default or Event of
Default, except as specified in such certificate.
(f) Use of Proceeds. Use the proceeds of the Advances
and Special Rate Loans solely to finance the Tender Offer
and for the general corporate purposes of the Borrower;
provided that neither any Bank nor the Administrative Agent
nor any other Co-Agent or either Co-Arranger shall have any
responsibility for the use of any of the proceeds of the
Advances or Special Rate Loans.
SECTION 5.02. Negative Covenants. So long as any
Advance or Special Rate Loan shall remain unpaid or any Bank
shall have any Commitment hereunder, the Borrower will not,
without the written consent of the Majority Banks:
(a) Liens, Etc. (i) Create, assume, incur or
suffer to exist, or permit any Subsidiary to create,
assume, incur or suffer to exist, any Mortgage (as
hereinafter defined) upon any stock or indebtedness,
<PAGE>
whether now owned or hereafter acquired, of any
Domestic Subsidiary (as hereinafter defined), to secure
any Debt of the Borrower or any other Person (other
than the Advances and Special Rate Loans made
hereunder), without in any such case making effective
provision whereby all of the Advances and Special Rate
Loans made hereunder shall be directly secured equally
and ratably with such Debt, excluding, however, from
the operation of the foregoing provisions of this
paragraph (i) any Mortgage upon stock or indebtedness
of any corporation existing at the time such
corporation becomes a Domestic Subsidiary, or existing
upon stock or indebtedness of a Domestic Subsidiary at
the time of acquisition of such stock or indebtedness,
and any extension, renewal or replacement (or
successive extensions, renewals or replacements) in
whole or in part of any such Mortgage; provided,
however, that the principal amount of Debt secured
thereby shall not exceed the principal amount of Debt
so secured at the time of such extension, renewal or
replacement; and provided, further, that such Mortgage
shall be limited to all or such part of the stock or
indebtedness which secured the Mortgage so extended,
renewed or replaced;
(ii) Create, assume, incur or suffer to exist, or
permit any Restricted Subsidiary (as hereinafter
defined) to create, assume, incur or suffer to exist,
any Mortgage upon any Principal Property (as
hereinafter defined), whether owned or leased on the
date hereof or hereafter acquired, to secure any Debt
of the Borrower or any other Person (other than the
Advances and Special Rate Loans made hereunder),
without in any such case making effective provision
whereby all of the Advances and Special Rate Loans made
hereunder shall be directly secured equally and ratably
with such Debt, excluding, however, from the operation
of the foregoing provisions of this paragraph (ii):
(A) any Mortgage upon property owned or
leased by any corporation existing at the time
such corporation becomes a Restricted Subsidiary;
(B) any Mortgage upon property existing at
the time of acquisition thereof or to secure the
payment of all or any part of the purchase price
thereof or to secure any Debt incurred prior to,
at the time of or within 180 days after the
<PAGE>
acquisition of such property for the purpose of
financing all or any part of the purchase price
thereof;
(C) any Mortgage upon property to secure all
or any part of the cost of exploration, drilling,
development, construction, alteration, repair or
improvement of all or any part of such property,
or Debt incurred prior to, at the time of or
within 180 days after the completion of such
exploration, drilling, development, construction,
alteration, repair or improvement for the purpose
of financing all or any part of such cost;
(D) any Mortgage securing Debt of a
Restricted Subsidiary owing to the Borrower or to
another Restricted Subsidiary;
(E) any Mortgage existing on the date hereof
and set forth on Schedule II hereto; and
(F) any extension, renewal or replacement
(or successive extensions, renewals or replace-
ments) in whole or in part of any Mortgage refer-
red to in the foregoing clauses (A) to (E), inclu-
sive; provided, however, that the principal amount
of Debt secured thereby shall not exceed the prin-
cipal amount of Debt so secured at the time of
such extension, renewal or replacement; and
provided, further, that such Mortgage shall be
limited to all or such part of the property which
secured the Mortgage so extended, renewed or
replaced (plus improvements on such property).
Notwithstanding the foregoing provisions of this
paragraph (ii), the Borrower may, and may permit any
Restricted Subsidiary to, create, assume, incur or
suffer to exist any Mortgage upon any Principal Prop-
erty which is not excepted by clauses (A) through (F),
above, without equally and ratably securing the
Advances and Special Rate Loans, provided that the
aggregate amount of Debt then outstanding secured by
such Mortgage and all similar Mortgages does not exceed
10% of the total consolidated stockholders' equity of
the Borrower as shown on the most recent audited
consolidated balance sheet required to be delivered to
the Banks pursuant to Section 5.01(c). For the purpose
of this paragraph (ii), the following types of
<PAGE>
transactions shall not be deemed to create a Mortgage
to secure any Debt:
(A) the sale or other transfer of (y) any
oil or gas or minerals in place for a period of
time until, or in an amount such that, the
purchaser will realize therefrom a specified
amount of money (however determined) or a
specified amount of such oil or gas or minerals,
or (z) any other interest in property of the
character commonly referred to as a "production
payment"; and
(B) any Mortgage in favor of the United
States of America or any state thereof, or any
other country, or any political subdivision of any
of the foregoing, to secure partial, progress,
advance or other payments pursuant to the provi-
sions of any contract or statute, or any Mortgage
upon property of the Borrower or a Restricted
Subsidiary intended to be used primarily for the
purpose of or in connection with air or water
pollution control, provided that no such Mortgage
shall extend to any other property of the Borrower
or a Restricted Subsidiary.
As used in this Section 5.02(a), the following terms
shall have the following meanings notwithstanding any conflicting
definition set forth in Section 1.01:
"Domestic Subsidiary" means a Subsidiary which is
incorporated or conducting its principal operations within the
United States of America or any state thereof or off the coast of
the United States of America but within an area over which the
United States of America or any state thereof has jurisdiction.
"Mortgage" means any mortgage, pledge, lien, encum-
brance, charge or security interest of any kind.
"Principal Property" means (i) any property owned or
leased by the Borrower or any Subsidiary, or any interest of the
Borrower or any Subsidiary in property, located within the United
States of America or any state thereof (including property
located off the coast of the United States of America held pur-
suant to lease from any Federal, State or other governmental
body), which is considered by the Borrower to be capable of
producing oil or gas or minerals in commercial quantities, and
(ii) any refinery, smelter or processing or manufacturing plant
<PAGE>
owned or leased by the Borrower or any Subsidiary and located
within the United States of America or any state thereof, except
(a) facilities related thereto employed in transportation, dis-
tribution or marketing or (b) any refinery, smelter or processing
or manufacturing plant, or portion thereof, which in the opinion
of the Board of Directors of the Borrower is not a principal
plant in relation to the activities of the Borrower and its
Restricted Subsidiaries taken as a whole.
"Restricted Subsidiary" means any Subsidiary which owns
or leases (as lessor or lessee) a Principal Property but does not
include (i) Union Pacific Railroad Company or any other
Subsidiary which is principally a common carrier by rail or truck
engaged in interstate or intrastate commerce and is subject to
regulation of such activities by any Federal, state or other
governmental body, or (ii) any Subsidiary the principal business
of which is leasing machinery, equipment, vehicles or other
properties none of which is a Principal Property, or financing
accounts receivable, or engaging in ownership and development of
any real property which is not a Principal Property.
(b) Debt to Net Worth Restriction. Create or suffer
to exist, or permit any of its Subsidiaries to create or
suffer to exist, any Debt if, immediately after giving
effect to such Debt and to the receipt and application of
any proceeds thereof, the aggregate amount of Debt of the
Borrower and its consolidated Subsidiaries, on a
consolidated basis, would exceed 200% of the total
consolidated stockholders' equity of the Borrower as shown
on the most recent consolidated balance sheet required to be
delivered to the Banks pursuant to Section 5.01(c).
(c) Restriction on Fundamental Changes. Enter into
any transaction of merger or consolidation, or convey,
transfer or lease its properties and assets substantially as
an entirety to any Person, unless:
(i) the corporation formed by such consolidation
or into which the Borrower is merged or the Person
which acquires by conveyance or transfer, or which
leases, the properties and assets of the Borrower
substantially as an entirety shall be a corporation
organized and existing under the laws of the United
States of America, any state thereof or the District of
Columbia (the "Successor Corporation") and shall
expressly assume, by amendment to this Agreement exe-
cuted by the Borrower and such Successor Corporation
and delivered to the Administrative Agent, the due and
<PAGE>
punctual payment of the principal of and interest on
the Advances and Special Rate Loans made hereunder and
all other amounts payable under this Agreement and the
performance or observance of every covenant hereof on
the part of the Borrower to be performed or observed;
(ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have
occurred and be continuing;
(iii) if, as a result of any such consolidation or
merger or such conveyance, transfer or lease, proper-
ties or assets of the Borrower would become subject to
a Mortgage which would not be permitted by Section
5.02(a), the Borrower or the Successor Corporation, as
the case may be, shall take such steps as shall be
necessary effectively to secure the Advances and
Special Rate Loans made hereunder equally and ratably
with (or prior to) all indebtedness secured thereby;
and
(iv) the Borrower shall have delivered to the
Administrative Agent a certificate signed by an
executive officer of the Borrower and a written opinion
of counsel satisfactory to the Administrative Agent
(who may be counsel to the Borrower), each stating that
such transaction and such amendment to this Agreement
comply with this Section 5.02(c) and that all
conditions precedent herein provided for relating to
such transaction have been satisfied.
(d) Prohibition of Sale of Certain Stock. Convey,
sell, assign or otherwise transfer (or permit any Subsidiary
to do so) any of the shares of capital stock of the
Railroads now owned (directly or indirectly) or at any time
hereafter acquired (directly or indirectly) by the Borrower,
provided that nothing in this Section 5.02(d) will prohibit
transfers of shares of capital stock of a Railroad to
another Railroad or to another Subsidiary of the Borrower or
will prohibit the merger or other consolidation of one
Railroad with or into another Railroad or another Subsidiary
of the Borrower.
(e) Compliance with ERISA. To the extent that any
event or action set forth in clauses (i) through (iv) below
would subject the Borrower and its Subsidiaries taken as a
whole to any material liability to the PBGC or otherwise,
(i) terminate, or permit any Subsidiary to terminate, any
<PAGE>
Plan; (ii) engage in, or permit any Subsidiary to engage in,
any "prohibited transaction" (as defined in Section 4975 of
the Code) involving any Plan; (iii) incur or suffer to
exist, or permit any Subsidiary to incur or suffer to exist,
any "accumulated funding deficiency" (as defined in Section
302 of ERISA), whether or not waived, involving any Plan; or
(iv) allow or suffer to exist, or permit any Subsidiary to
allow or suffer to exist, any event or condition which
presents a risk of incurring a liability to the PBGC by
reason of termination of any Plan.
(f) Amendments to Tender Offer, Etc. Make any
amendment to the Tender Offer or the Merger Agreement which
is materially adverse from the standpoint of the financing
contemplated hereby, without the prior written consent of
the Majority Banks (which consent shall not be unreasonably
withheld or delayed), it being understood that this
Section 5.02(f) shall be of no further force and effect
after the consummation of the Tender Offer and the other
transactions contemplated by the Merger Agreement in
accordance with the terms and conditions hereof and thereof.
(g) Margin Stock. Permit more than 25%, after
applying the proceeds of each Advance or Special Rate Loan,
of the value of the assets of the Borrower and its
Subsidiaries (as determined in good faith by the Borrower)
that are subject to Section 5.02(a)(i) or Section 5.02(d) to
consist of or be represented by Margin Stock.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
following events ("Events of Default") shall occur and be
continuing:
(a) the Borrower shall fail to pay any principal of
any Advance or Special Rate Loan when the same becomes due
and payable; provided, that if any such failure shall result
from the malfunctioning or shutdown of any wire transfer or
other payment system employed by the Borrower to make such
payment or from an inadvertent error of a technical or
clerical nature by the Borrower or any bank or other entity
employed by the Borrower to make such payment, no Event of
Default shall result under this paragraph (a) during the
<PAGE>
period (not in excess of two Business Days) required by the
Borrower to make alternate payment arrangements; or
(b) the Borrower shall fail to pay any interest on any
Advance or Special Rate Loan or any fee payable hereunder or
under any agreement executed in connection herewith when the
same becomes due and payable and such failure shall remain
unremedied for ten days; or
(c) any representation or warranty made by the
Borrower herein or by the Borrower (or any of its officers)
in connection with this Agreement (including, without
limitation, any representation or warranty deemed made by
the Borrower at the time of any Advance or Special Rate Loan
pursuant to Article III) shall prove to have been incorrect
in any material respect when made or deemed made; or
(d) the Borrower shall fail to perform or observe any
other term, covenant or agreement contained in this Agree-
ment on its part to be performed or observed if such failure
shall remain unremedied for 30 days after written notice
thereof shall have been given to the Borrower by the
Administrative Agent or any Bank; or
(e) an event of default as defined in any mortgage,
indenture or instrument under which there may be issued, or
by which there may be secured or evidenced, any Debt of the
Borrower (other than any such Debt owed to any Bank or an
affiliate of any Bank if such event of default shall relate
solely to a restriction on Margin Stock), whether such Debt
now exists or shall hereafter be created, shall happen and
shall result in Debt of the Borrower in excess of
$20,000,000 principal amount becoming or being declared due
and payable prior to the date on which it would otherwise
become due and payable, and such declaration shall not be
rescinded or annulled; or the Borrower shall fail to pay at
maturity (or within five calendar days after maturity) Debt
of the Borrower in excess of $20,000,000 principal amount;
or
(f) (i) the Borrower or any of the Railroads shall
commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrange-
ment, adjustment, winding-up, liquidation, dissolution,
<PAGE>
composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any of
the Railroads shall make a general assignment for the bene-
fit of its creditors; or (ii) there shall be commenced
against the Borrower or any of the Railroads any case, pro-
ceeding or other action of a nature referred to in clause
(i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period
of 60 days; or (iii) there shall be commenced against the
Borrower or any of the Railroads any case, proceeding or
other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of
an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) the Borrower
or any of the Railroads shall take any action in furtherance
of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i),
(ii) or (iii) above; or (v) the Borrower or any of the
Railroads shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as
they become due;
(g) a Material Plan shall fail to maintain the minimum
funding standards required by Section 412 of the Code for
any plan year or a waiver of such standard is sought or
granted under Section 412(d), or a Material Plan is, shall
have been or will be terminated or the subject of
termination proceedings under ERISA, or the Borrower or any
of its Subsidiaries or any ERISA Affiliate has incurred or
will incur a liability to or on account of a Material Plan
under Sections 4062, 4063 or 4064 of ERISA, and there shall
result from any such event either a liability or a material
risk of incurring a liability to the PBGC or a Material Plan
(or a related trust) which will have a material adverse
effect upon the business, operations or the condition
(financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole; or
(h) the Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that it
has incurred withdrawal liability to such Multiemployer Plan
in an amount which, when aggregated with all other amounts
required to be paid to Multiemployer Plans in connection
<PAGE>
with withdrawal liabilities (determined as of the date of
such notification), will have a material adverse effect upon
the business, operations or the condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a
whole;
then, and in any such event, the Administrative Agent (i) shall
at the request, or may with the consent, of Banks having at least
66-2/3% of the Commitments, by notice to the Borrower, declare
the obligation of each Bank to make Contract Advances (and to
make any Auction Advances and Special Rate Loans that such Bank
has theretofore committed to make) to be terminated, whereupon
the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of Banks owed at least 66-2/3%
of the then aggregate unpaid principal amount of the Advances and
Special Rate Loans owing to Banks, by notice to the Borrower,
declare the Advances and Special Rate Loans, all interest thereon
and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Advances and Special
Rate Loans, all such interest and all such amounts shall become
and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower; provided, however, that in the
event of an actual or deemed entry of an order for relief with
respect to the Borrower or any of its Subsidiaries under the
Federal Bankruptcy Code, (A) the obligation of each Bank to make
Contract Advances (and to make any Auction Advances and Special
Rate Loans that such Bank has theretofore committed to make)
shall automatically be terminated and (B) the Advances and
Special Rate Loans, all such interest and all such amounts shall
automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.
ARTICLE VII
THE ADMINISTRATIVE AGENT, ETC.
SECTION 7.01. Authorization and Action. Each Bank
hereby appoints and authorizes the Administrative Agent to take
such action as administrative agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Adminis-
trative Agent by the terms hereof, together with such powers as
are reasonably incidental thereto. As to any matters not
expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the amounts due here-
under), the Administrative Agent shall not be required to exer-
<PAGE>
cise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the
Majority Banks, and such instructions shall be binding upon all
Banks and all holders of Advances and Special Rate Loans;
provided, however, that the Administrative Agent shall not be
required to take any action which exposes the Administrative
Agent to personal liability or which is contrary to this
Agreement or applicable law. The Administrative Agent agrees to
give to each Bank prompt notice of each notice given to it by the
Borrower pursuant to the terms of this Agreement. Chemical Bank
and Citicorp Securities, Inc., in their capacities as Co-
Arrangers, Chemical Securities, Inc., in its capacity as
Syndication Agent, and Citibank, N.A., in its capacity as
Documentation Agent, shall have no duties, responsibilities or
liabilities whatsoever under this Agreement.
SECTION 7.02. Administrative Agent's Reliance, Etc.
Neither the Administrative Agent nor any of its directors,
officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection
with this Agreement, except for its or their own gross negligence
or wilful misconduct. Without limitation of the generality of
the foregoing, the Administrative Agent: (i) may consult with
legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) makes no warranty or representation
to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations made in or in connec-
tion with this Agreement; (iii) shall not have any duty to ascer-
tain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of this Agreement on the part
of the Borrower or to inspect the property (including the books
and records) of the Borrower; (iv) shall not be responsible to
any Bank for the due execution, legality, validity, enforce-
ability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto; and
(v) shall incur no liability under or in respect of this Agree-
ment by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopy, telegram or
cable) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 7.03. Chemical Bank and Affiliates. With
respect to its Commitment and the Advances and Special Rate Loans
made by it, Chemical Bank shall have the same rights and powers
<PAGE>
under this Agreement as any other Bank and may exercise the same
as though it were not the Administrative Agent; and the term
"Bank" or "Banks" shall, unless otherwise expressly indicated,
include Chemical Bank in its individual capacity. Chemical Bank
and its affiliates may accept deposits from, lend money to, act
as trustee under indentures of, and generally engage in any kind
of business with, the Borrower, any of its subsidiaries and any
Person who may do business with or own securities of the Borrower
or any such subsidiary or affiliate, all as if Chemical Bank were
not the Administrative Agent and without any duty to account
therefor to the Banks.
SECTION 7.04. Bank Credit Decision. Each Bank acknow-
ledges that it has, independently and without reliance upon the
Administrative Agent, any other Co-Agent, either Co-Arranger or
any other Bank and based on the financial statements referred to
in Section 4.01 and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Bank also acknowledges that
it will, independently and without reliance upon the
Administrative Agent, any other Co-Agent, either Co-Arranger or
any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement.
SECTION 7.05. Indemnification. The Banks agree to
indemnify the Administrative Agent, the other Co-Agents and the
Co-Arrangers (to the extent not promptly reimbursed by the
Borrower), ratably as computed as set forth below from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against any of them in any
way relating to or arising out of the Tender Offer or this
Agreement or any action taken or omitted by the Administrative
Agent under this Agreement, provided that no Bank shall be liable
for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or wilful
misconduct of the Administrative Agent. Without limitation of
the foregoing, each Bank agrees to reimburse the Administrative
Agent promptly upon demand for its ratable share of any costs and
expenses payable by the Borrower under Section 8.04, to the
extent that the Administrative Agent is not promptly reimbursed
for such costs and expenses by the Borrower. For purposes of
this Section 7.05, ratable allocations among the Banks shall be
made (i) in respect of any demand by the Administrative Agent
<PAGE>
prior to a declaration made pursuant to clause (ii) of
Section 6.01, according to the respective amounts of their
Commitments and (ii) thereafter according to the respective
principal amounts of the Advances and Special Rate Loans then
outstanding to them (or, if there are no Advances or Special Rate
Loans at the time outstanding, according to the respective
amounts of their Commitments as most recently in effect). Each
Bank agrees that any reasonable allocation by the Administrative
Agent of expenses or other amounts referred to in this paragraph
between this Agreement, the $1,200,000,000 Credit Agreement and
the $1,400,000,000 Credit Agreement shall be conclusive and
binding for all purposes.
SECTION 7.06. Successor Administrative Agent. The
Administrative Agent may resign at any time by giving written
notice thereof to the Banks and the Borrower and may be removed
at any time with or without cause by the Majority Banks. Upon
any such resignation or removal, the Majority Banks shall have
the right to appoint a successor Administrative Agent with the
consent of the Borrower (which consent shall not be required if
at the time of such appointment any Default or Event of Default
has occurred and is continuing). If no successor Administrative
Agent shall have been so appointed by the Majority Banks, and
shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation
or the Majority Banks' removal of the retiring Administrative
Agent, as applicable, then the retiring Administrative Agent may,
on behalf of the Banks, appoint a successor Administrative Agent,
which shall be a commercial bank organized or licensed under the
laws of the United States of America or of any state thereof and
having a combined capital and surplus of at least $50,000,000.
Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor
Administrative Agent shall succeed to and become vested with all
the rights, powers, discretion, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the
provisions of this Article VII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
<PAGE>
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver
of any provision of this Agreement, nor consent to any departure
by the Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Majority Banks,
and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given;
provided, however, that:
(a) no amendment, waiver or consent shall, unless in
writing and signed by all the Banks, do any of the
following: (1) waive any of the conditions specified in
Section 3.01, (2) waive any of the conditions specified in
Section 3.02 (if and to the extent that the Borrowing which
is the subject of such waiver would involve an increase in
the aggregate outstanding amount of Advances over the
aggregate amount of Advances outstanding immediately prior
to such Borrowing), (3) increase the Commitments of the
Banks or subject the Banks to any additional obligations,
(4) reduce the principal of, or interest on, the Contract
Advances or any fees or other amounts payable hereunder,
(5) postpone any date fixed for any payment of principal of,
or interest on, the Contract Advances or any fees or other
amounts payable hereunder, (6) make any change which would
alter the percentage of the Commitments or of the aggregate
unpaid principal amount of the Contract Advances, or the
number of Banks, which shall otherwise be required for the
Banks or any of them to take any action hereunder or
(7) amend this Section 8.01;
(b) no amendment, waiver or consent shall, unless in
writing and signed by the Bank holding an Auction Advance at
such time (1) reduce the principal of, or interest on, such
Auction Advance or any fees or other amounts payable
hereunder or thereunder with respect thereto, (2) postpone
any date fixed for any payment of principal of, or interest
on, such Auction Advance or any fees or other amounts
payable hereunder or thereunder with respect thereto, or
(3) subject such Bank to any additional obligations with
respect to such Bank's Auction Advance;
(c) no amendment, waiver or consent shall, unless in
writing and signed by the Bank holding a Special Rate Loan
at such time (1) reduce the principal of, or interest on,
such Special Rate Loan or any fees or other amounts payable
<PAGE>
with respect thereto, (2) postpone any date fixed for any
payment of principal of, or interest on, such Special Rate
Loan or any fees or other amounts payable with respect
thereto, or (3) subject such Bank to any additional
obligations with respect to such Bank's Special Rate Loan;
(d) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition
to the Banks required above to take such action, affect the
rights or duties of the Administrative Agent under this
Agreement; and
(e) no amendment, waiver or consent shall, unless in
writing and signed by the Co-Arrangers and the Co-Agents,
alter the last sentence of Section 7.01.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing
(including telecopy, telegraphic or cable communication) and
telecopied, mailed, telegraphed, cabled or delivered, if to the
Borrower, at its address at Martin Tower, Eighth and Eaton
Avenues, Bethlehem, Pennsylvania 18018, Attention: Vice
President and Treasurer, telephone number (610) 861-3200,
telecopier number (610) 861-3111; if to any Bank listed on
Schedule I hereto, at its Domestic Lending Office specified
opposite its name on Schedule I hereto; if to any other Bank, at
its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Bank; and if to the
Administrative Agent, at its address at Chemical Bank Agency
Services Corporation, Grand Central Tower, 140 East 45th Street,
29th Floor, New York, New York 10017, Attention: Sandra J.
Miklave, with a copy to Chemical Bank, 270 Park Avenue, 8th
Floor, New York, New York 10017, Attention: Julie S. Long; or,
as to the Borrower, any Bank or the Administrative Agent, at such
other address as shall be designated by such party in a written
notice to the other parties and, as to each other party, at such
other address as shall be designated by such party in a written
notice to the Borrower and the Administrative Agent. All such
notices and communications shall, when telecopied, mailed,
telegraphed or cabled, be effective when sent by telecopy,
deposited in the mails, delivered to the telegraph company or
delivered to the cable company, respectively, except that notices
and communications to the Administrative Agent pursuant to
Article II or VII shall not be effective until received by the
Administrative Agent. The Administrative Agent shall be entitled
to rely on any oral notice made pursuant to Section 2.03(v)
believed by it to be genuine and made by the proper party or
parties, and the Borrower and the Banks, as the case may be,
<PAGE>
agree to be conclusively bound by the Administrative Agent's
records in respect of any such notice.
SECTION 8.03. No Waiver; Remedies. No failure on the
part of any Bank or the Administrative Agent to exercise, and no
delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs, Expenses and Taxes. (a) The
Borrower agrees to pay on demand all costs and expenses in con-
nection with the preparation, execution, delivery, administra-
tion, modification and amendment of this Agreement and the other
documents to be delivered hereunder, including, without limita-
tion, the reasonable fees and out-of-pocket expenses of counsel
for the Administrative Agent with respect thereto and with
respect to advising the Administrative Agent as to its rights and
responsibilities under this Agreement, and all costs and
expenses, if any (including, without limitation, reasonable
counsel fees and expenses), incurred by the Administrative Agent
or any Bank in connection with the "work-out" or other
enforcement (whether through negotiations, legal proceedings or
otherwise) of this Agreement and the other documents to be
delivered hereunder. In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies which arise from the
execution and delivery of this Agreement and agrees to save the
Administrative Agent and each Bank harmless from and against any
and all liabilities with respect to or resulting from any delay
in paying or omission to pay such taxes.
(b) If (i) any payment of principal of any Adjusted CD
Rate Advance or Eurodollar Rate Contract Advance or Auction
Advance or Special Rate Loan is made (1) by the Borrower to or
for the account of a Bank other than on the last day of the
Interest Period for such Contract Advance, or on the maturity
date of such Auction Advance or Special Rate Loan, as the case
may be, or as a result of a payment pursuant to Section 2.07(d),
or as a result of acceleration of the maturity of the Advances
and Special Rate Loans pursuant to Section 6.01 or for any other
reason, or (2) by an Eligible Assignee to a Bank other than on
the last day of the Interest Period (or the final maturity date
in the case of an Auction Advance or Special Rate Loan) for such
Advance or Special Rate Loan upon an assignment of rights and
obligations under this Agreement pursuant to Section 8.07 as a
result of a demand by the Borrower pursuant to Section 8.07(a),
<PAGE>
or an assignment of rights and obligations under this Agreement
pursuant to Section 2.17 as a result of a demand by the Borrower,
or (ii) the Borrower fails to convert or continue any Contract
Advance hereunder after irrevocable notice of such conversion or
continuation has been given pursuant to Section 2.04, then the
Borrower shall, upon demand by the affected Bank (with a copy of
such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Bank any amounts
required to compensate such Bank for any additional losses, costs
or expenses which it may reasonably incur as a result of such
payment or failure, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred
by reason of the liquidation or reemployment of deposits or other
funds acquired by such Bank to fund or maintain such Advance. A
certificate of such Bank setting forth the amount demanded
hereunder and the basis therefor shall, in the absence of
manifest error, be conclusive and binding for all purposes.
SECTION 8.05. Right of Set-off. Upon (i) the
occurrence and during the continuance of any Event of Default and
(ii) the making of the request or the granting of the consent
specified by Section 6.01 to authorize the Administrative Agent
to declare the Advances and Special Rate Loans due and payable
pursuant to the provisions of Section 6.01, each Bank is hereby
authorized at any time and from time to time, 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 and other indebtedness at any time owing
by such Bank to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or
hereafter existing under this Agreement and the Advances and
Special Rate Loans made by such Bank, irrespective of whether or
not such Bank shall have made any demand under this Agreement and
although such obligations may be unmatured. Each Bank agrees
promptly to notify the Borrower and the Administrative Agent
after any such setoff and application made by such Bank, provided
that the failure to give such notice shall not affect the valid-
ity of such set-off and application. The rights of each Bank
under this Section 8.05 are in addition to other rights and
remedies (including, without limitation, other rights of setoff)
which such Bank may have.
SECTION 8.06. Binding Effect. This Agreement shall
become effective when it shall have been executed by the
Borrower, the Administrative Agent, the other Co-Agents and the
Co-Arrangers and when the Administrative Agent shall have been
notified by each Bank that such Bank has executed it and
thereafter shall be binding upon and inure to the benefit of the
<PAGE>
Borrower, the Administrative Agent, the other Co-Agents, the Co-
Arrangers and each Bank and their respective successors and
assigns.
SECTION 8.07. Assignments and Participations.
(a) Each Bank may and, if demanded by the Borrower pursuant to
subsection (g) hereof, shall assign to one or more banks or other
entities all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion
of its Commitment and the Advances and Special Rate Loans owing
to it); provided, however, that (i) each such assignment shall
(except in the case of outstanding Auction Advances and Special
Rate Loans) be of a constant, and not a varying, percentage of
all of the rights and obligations of the Banks under this
Agreement, (ii) the amount of the Commitment of the assigning
Bank being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to
such assignment) shall in no event be less than the lesser of
(x) the amount set forth opposite the name of such Bank on the
signature pages to this Agreement or in the Assignment and
Acceptance pursuant to which the assigning Bank became a Bank,
and (y) $25,000,000, and shall be an integral multiple of
$1,000,000, (iii) each such assignment shall be to an Eligible
Assignee and (iv) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and
Acceptance, together with a processing fee of $2,500. Upon such
execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which
effective date shall be at least three Business Days after the
execution thereof, (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder
and (y) the Bank assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement (and,
in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Bank's rights and obligations
under this Agreement, such Bank shall cease to be a party
hereto), provided that the obligations of the Borrower to the
Bank assignor described in Sections 2.02(b), 2.11, 2.12, 2.15,
8.04 and 8.12 that arose prior to such assignment, and the
obligations of the Bank assignor described in Sections 7.05 and
8.10 that arose prior to such assignment, shall survive the
making of such assignment, notwithstanding that such Bank
assignor may cease to be a "Bank" hereunder. Notwithstanding the
<PAGE>
foregoing, any Bank assigning its rights and obligations under
this Agreement may retain any Auction Advances and any Special
Rate Loans made by it outstanding at such time, and in such case
shall retain its rights hereunder in respect of any Advances and
Special Rate Loans so retained until such Advances and Special
Rate Loans have been repaid in full in accordance with this
Agreement.
(b) By executing and delivering an Assignment and
Acceptance, the Bank assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Bank makes no repre-
sentation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished
pursuant hereto; (ii) such assigning Bank makes no representation
or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under this
Agreement or any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy
of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, any other Co-Agent,
either Co-Arranger, such assigning Bank or any other Bank and
based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit deci-
sions in taking or not taking action under this Agreement; (v)
such assignee confirms that it is an Eligible Assignee, except
for any required consent of the Borrower; (vi) such assignee
appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations
which by the terms of this Agreement are required to be performed
by it as a Bank.
(c) The Administrative Agent shall maintain at its
address referred to in Section 8.02 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the
<PAGE>
recordation of the names and addresses of the Banks and the
Commitment of, and principal amount of the Advances owing to,
each Bank from time to time (the "Register"). Subject to
Section 2.14(f), the entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Banks may treat each
Person whose name is recorded in the Register as a Bank hereunder
for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Bank at any
reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Bank and an assignee representing that
it is an Eligible Assignee, the Administrative Agent shall, if
such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit B hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register, (iii) give prompt notice thereof to the
Borrower and (iv) send a copy thereof to the Borrower.
(e) Each Bank may sell participations to one or more
banks or other entities in or to all or a portion of its rights
and obligations under this Agreement (including, without limita-
tion, all or a portion of its Commitment and the Advances or
Special Rate Loans owing to it); provided, however, that (i) such
Bank's obligations under this Agreement (including, without limi-
tation, its Commitment to the Borrower hereunder) shall remain
unchanged, (ii) such Bank shall remain solely responsible to the
other parties hereto for the performance of such obligations and
(iii) the Borrower, the Administrative Agent and the other Banks
shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this
Agreement; and provided further, however, that such Bank shall
not agree with any such bank or other financial institution to
permit such bank or other financial institution to enforce the
obligations of the Borrower relating to the Advances or any
Special Rate Loan or to approve of any amendment, modification or
waiver of any provision of this Agreement (other than amendments,
modifications or waivers with respect to any decrease in any fees
payable hereunder or the amount of principal or rate of interest
which is payable in respect of such Advances or Special Rate Loan
or any extension of the dates fixed for the payment thereof).
(f) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to
this Section 8.07, disclose to the assignee or participant or
proposed assignee or participant any information relating to the
<PAGE>
Borrower furnished to such Bank by or on behalf of the Borrower;
provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to
preserve the confidentiality of any information relating to the
Borrower, this Agreement or the Tender Offer received by it from
such Bank in accordance with Section 8.10.
(g) If any Bank shall make demand for payment under or
shall notify the Borrower that it is affected by an event
described in Section 2.11 or 2.15 hereunder or shall notify the
Administrative Agent pursuant to Section 2.13 hereunder, then
within 15 days after such demand or such notice, the Borrower may
(i) demand that such Bank assign in accordance with this
Section 8.07 to one or more Eligible Assignees designated by the
Borrower all (but not less than all) of such Bank's Commitment
and the Advances and Special Rate Loans owing to it within the
next succeeding 30 days, provided that, if any such Eligible
Assignee designated by the Borrower shall fail to consummate such
assignment on terms acceptable to such Bank, or if the Borrower
shall fail to designate any such Eligible Assignees for all or
part of such Bank's Commitment, Advances and Special Rate Loans,
then such Bank may assign such Commitment, Advances and Special
Rate Loans to any other Eligible Assignee in accordance with this
Section 8.07 during such 30-day period or (ii) terminate all (but
not less than all) of such Bank's Commitment and repay all (but
not less than all) of such Bank's Advances and Special Rate Loans
not so assigned on or before such 30th day in accordance with
Sections 2.06 and 2.07(d) hereof (but without the requirements
stated therein for ratable treatment of the Banks). Nothing in
this Section 8.07(g) shall relieve the Borrower of its
obligations for payment under Section 2.11 or 2.15 arising prior
to an assignment or termination pursuant hereto.
(h) Any Bank may at any time assign all or any portion
of its rights under this Agreement to a Federal Reserve Bank;
provided that no such assignment shall release a Bank from any of
its obligations hereunder. In connection with any such
assignment or proposed assignment, the Borrower will, promptly
upon the request of any Bank, execute and deliver to such Bank a
note evidencing the Borrower's obligations hereunder, in a form
mutually satisfactory to the Borrower and such Bank; provided
that if the Borrower certifies to such Bank upon such request
that it believes any authorization, approval or other action by
the Interstate Commerce Commission (or any successor agency
having jurisdiction) is required for the issuance of such note,
the Borrower shall not be deemed to be in default under this
Section 8.07(h) so long as the Borrower is diligently seeking
<PAGE>
such authorization, approval or other action, at such Bank's
expense.
(i) This Section 8.07 sets forth the exclusive manner
by which a Bank may assign its rights and obligations hereunder
or sell participations in or to its rights and obligations
hereunder.
(j) Each Bank agrees to notify the Borrower of any
assignment of or grant of a participating interest in any Advance
or Special Rate Loan, and of the identity of the assignee or
participant.
(k) The Borrower may not assign or delegate any rights
or obligations hereunder without the prior written consent of
each Bank.
SECTION 8.08. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
SECTION 8.09. Submission to Jurisdiction; Service of
Process; Jury Trial. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for
the Southern District of New York and of any New York state court
sitting in New York City for the purposes of all legal
proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Borrower shall at all
times continue to be qualified to do business in and maintain an
office in New York or, alternatively, shall maintain an agent for
service of process in New York and shall provide the
Administrative Agent with notice of the identity of such agent,
such appointment to be documented in a manner satisfactory to the
Administrative Agent. The Borrower hereby agrees that service of
process in any such proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to it at its address
referred to in Section 8.02. The Borrower irrevocably waives, to
the fullest extent permitted by applicable law, any objection
that it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in
an inconvenient forum. EACH OF THE BORROWER, THE CO-ARRANGERS,
THE ADMINISTRATIVE AGENT, THE OTHER CO-AGENTS AND THE BANKS
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THIS
AGREEMENT, THE ADVANCES, THE SPECIAL RATE LOANS OR THE ACTIONS OF
<PAGE>
THE BORROWER, THE CO-ARRANGERS, THE ADMINISTRATIVE AGENT, THE
OTHER CO-AGENTS OR ANY BANK IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
SECTION 8.10. Treatment of Certain Information;
Confidentiality. (a) The Borrower acknowledges that from time
to time financial advisory, investment banking and other services
may be offered or provided to the Borrower or one or more of its
Subsidiaries (in connection with this Agreement or otherwise) by
any Bank or by one or more subsidiaries or affiliates of such
Bank and the Borrower hereby authorizes each Bank to share any
information delivered to such Bank by the Borrower and its
Subsidiaries pursuant to this Agreement, or in connection with
the decision of such Bank to enter into this Agreement, with any
such subsidiary or affiliate, it being understood that any such
subsidiary or affiliate receiving such information shall be bound
by the provisions of paragraph (b) below as if it were a Bank
hereunder. Such authorization shall survive the repayment of the
Advances and Special Rate Loans and the termination of the
Commitments.
(b) Each Bank and the Administrative Agent agrees that
it will not disclose without the prior consent of the Borrower
(other than to its affiliates and to its and its affiliates'
directors, employees, auditors and counsel who are informed of
and agree to respect the confidential nature of such information,
and then only on a "need to know" basis in connection with this
Agreement, the Tender Offer or the financing thereof) any
information (the "Information") with respect to the Borrower (or
its business), CNW or the Tender Offer which is furnished by or
on behalf of the Borrower to such Bank or to the Administrative
Agent in connection with this Agreement, the Tender Offer or the
financing thereof; provided, that the Banks and the
Administrative Agent may disclose any such Information (i) that
is or has become generally available to the public (other than as
a result of a disclosure in violation of this Section 8.10 or the
letter referred to in Section 8.10(e)) or is or becomes available
to the Banks and the Administrative Agent on a non-confidential
basis from a source other than the Borrower or its agents
(unless, to the actual knowledge of the recipient Bank or the
Administrative Agent, such information was provided by such
source in violation of a confidentiality agreement), (ii) as may
be required or appropriate in response to any summons or subpoena
or in connection with any litigation, (iii) in order to comply
with any applicable law or regulation, or in accordance with any
order, ruling or regulatory practice of any bank regulatory
agency (including, without limitation, the Board of Governors of
the Federal Reserve System or any foreign bank regulatory agency)
<PAGE>
having or claiming jurisdiction over the relevant Bank or the
Administrative Agent, and (iv) to a proposed assignee or
participant in connection with any proposed assignment or
participation permitted under Section 8.07 as provided in
Section 8.07(f), provided that such proposed assignee or
participant agrees in writing to be bound by the confidentiality
provisions of this Section 8.10.
(c) In the event that any Bank or any Person receiving
Information from such Bank becomes legally compelled to disclose
any of the Information or the existence of this Agreement (other
than to any bank regulatory agency referred to in
Section 8.10(b)(iii) in the course of customary audits of the
relevant Bank), such Bank shall provide the Borrower with notice
of such event promptly upon obtaining knowledge thereof (provided
that such notice is not otherwise prohibited by law) so that the
Borrower may seek a protective order or other appropriate remedy.
In the event that such protective order or other remedy is not
obtained, such Bank shall furnish only that portion of the
Information which in its reasonable opinion it is legally
required to disclose and shall disclose such Information in a
manner reasonably designed to preserve its confidential nature.
(d) Each Bank acknowledges that disclosure of
Information in violation of this Section 8.10 could have serious
consequences, and agrees that, in the event of any breach of this
Section 8.10 by any Bank or its representatives, the Borrower
will be entitled to equitable relief (including injunctive relief
and specific performance) in addition to all other remedies
available to it at law or in equity.
(e) The obligations of each Bank under this
Section 8.10 shall supersede and replace the obligations of such
Bank under the confidentiality letter executed by it in respect
of this financing prior to the date hereof, and the
confidentiality obligations of any proposed assignee that has
executed a confidentiality letter prior to the date on which it
becomes a Bank hereunder pursuant to Section 8.07(a) shall be
superseded by this Section 8.10 upon the date upon which such
assignee becomes a Bank.
(f) Each Bank's obligations and all of the Borrower's
rights and remedies under this Section 8.10 shall survive any
reduction in the Commitments, the termination of this Agreement
or the return or destruction of the Information, in each case
until the date one year after the termination of this Agreement.
<PAGE>
SECTION 8.11. Execution in Counterparts. This
Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
SECTION 8.12. Indemnification. (a) The Borrower
agrees to indemnify and hold harmless the Administrative Agent,
each other Co-Agent, each Co-Arranger and each Bank and each of
their respective officers, directors, employees, agents, advisors
and representatives (each, an "Indemnified Party") from and
against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, fees and disbursements
of counsel), joint or several, that may be incurred by or
asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or relating to any
investigation, litigation or proceeding or the preparation of any
defense with respect thereto, arising out of or in connection
with or relating to this Agreement or the transactions
contemplated hereby (including without limitation the Tender
Offer) or any use made or proposed to be made with the proceeds
of the Advances or Special Rate Loans, whether or not such
investigation, litigation or proceeding is brought by the
Borrower, any of its Subsidiaries, shareholders or creditors, an
Indemnified Party or any other Person, or an Indemnified Party is
otherwise a party thereto, and whether or not the transactions
contemplated hereby are consummated, except to the extent such
claim, damage, loss, liability or expense (i) results from such
Indemnified Party's gross negligence or wilful misconduct or (ii)
arises out of a final, non-appealable judgment against such
Indemnified Party in favor of the Borrower on the basis of a
breach of this Agreement. The foregoing indemnification shall
not cover any such claims, damages, losses, liabilities or
expenses relating to (i) any income, stamp or other taxes,
imports, duties, charges, fees, deductions or withholdings
imposed, levied, collected, withheld or assessed by the United
States or any political subdivision or taxing authority thereof
or therein (including Puerto Rico) or of the country in which any
Bank's principal office or Applicable Lending Office may be
located or any political subdivision or taxing authority thereof
or therein; (ii) any costs (whenever imposed) to any Bank of
agreeing to make or making, funding or maintaining any Advances
or Special Rate Loans; or (iii) any capital required or expected
to be maintained by any Bank or any corporation controlling such
Bank as a result of such Bank's Commitment or its Advances or
Special Rate Loans, but in each case without prejudice to
Sections 2.02(b), 2.11, 2.12, 2.15 and 8.04.
<PAGE>
(b) The Borrower agrees that no Indemnified Party
shall have any liability (whether direct or indirect, in
contract, tort or otherwise) to the Borrower or any of its
Subsidiaries, shareholders or creditors or any other Person for
or in connection with the transactions contemplated hereby,
except to the extent such liability is found in a final non-
appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or wilful
misconduct; provided that nothing in this clause (b) shall be
deemed to constitute a waiver of any claim the Borrower may
hereafter have for breach by any party of this Agreement; and
provided, further, that in no event shall any Indemnified Party
be liable for any indirect or consequential damages.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
UNION PACIFIC CORPORATION
By /s/ Robert M. Knight, Jr.
____________________________
Name: Robert M. Knight, Jr.
Title: Assistant Treasurer
Administrative Agent
--------------------
CHEMICAL BANK, as Administrative
Agent
By /s/ Julie S. Long
____________________________
Name: Julie S. Long
Title: Vice President
Documentation Agent
-------------------
CITIBANK, N.A., as Documentation
Agent
By /s/ Judith Fishlow
____________________________
Name: Judith Fishlow
Title: Attorney-in-Fact
Syndication Agent
-----------------
CHEMICAL SECURITIES, INC., as
Syndication Agent
By /s/ Evelyn M. Aloise
____________________________
Name: Evelyn M. Aloise
Title: Vice President
<PAGE>
CO-ARRANGERS
------------
CHEMICAL BANK, as Co-Arranger
By /s/ Julie S. Long
____________________________
Name: Julie S. Long
Title: Vice President
CITICORP SECURITIES, INC., as
Co-Arranger
By /s/ Robert J. Harrity
____________________________
Name: Robert J. Harrity
Title: Vice President
COMMITMENT BANKS
---------- -----
$62,173,193.00 CHEMICAL BANK
By /s/ Julie S. Long
____________________________
Name: Julie S. Long
Title: Vice President
$62,173,193.00 CITIBANK, N.A.
By /s/ Judith Fishlow
____________________________
Name: Judith Fishlow
Title: Attorney-in-Fact
<PAGE>
$47,826,086.96 ABN AMRO BANK N.V., NEW YORK BRANCH
By /s/ John W. Deegan
____________________________
Name: John W. Deegan
Title: Vice President
By /s/ Olga L. Zoutendijk
____________________________
Name: Olga L. Zoutendijk
Title: Vice President
$47,826,086.96 BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By /s/ Bridget A. Garavalia
____________________________
Name: Bridget A. Garavalia
Title: Vice President
By
____________________________
Name:
Title:
$47,826,086.96 BANK OF MONTREAL
By /s/ David J. Thompson
____________________________
Name: David J. Thompson
Title: Director
<PAGE>
$47,826,086.96 THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION)
By /s/ F.M. Cox, III
____________________________
Name: F.M. Cox, III
Title: Vice President
$47,826,086.96 CREDIT SUISSE
By /s/ Eileen O'Connell Fox
____________________________
Name: Eileen O'Connell Fox
Title: Member of Senior Management
By /s/ Christopher J. Eldin
____________________________
Name: Christopher J. Eldin
Title: Member of Senior Management
$47,826,086.96 THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Gerald F. Mackin
____________________________
Name: Gerald F. Mackin
Title: Vice President
$47,826,086.96 MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By /s/ Laura E. Reim
____________________________
Name: Laura E. Reim
Title: Vice President
<PAGE>
$47,826,086.96 NATIONAL WESTMINSTER BANK PLC, NEW
YORK BRANCH
By /s/ Anne Marie Torre
____________________________
Name: Anne Marie Torre
Title: Vice President
$47,826,086.96 NATIONSBANK, N.A. (CAROLINAS)
By /s/ Michael D. Monte
____________________________
Name: Michael D. Monte
Title: Vice President
$47,826,086.96 UNION BANK OF SWITZERLAND
By /s/ Daniel H. Perron
____________________________
Name: Daniel H. Perron
Title: Vice President
By /s/ Daniel R. Strickford
____________________________
Name: Daniel R. Strickford
Title: Assistant Treasurer
$38,260,869.57 THE BANK OF TOKYO TRUST COMPANY
By /s/ M.R. Marron
____________________________
Name: M.R. Marron
Title: Vice President
<PAGE>
$38,260,869.57 CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Mary E. Collier
____________________________
Name: Mary E. Collier
Title: Vice President
$38,260,869.57 THE INDUSTRIAL BANK OF JAPAN
LIMITED NEW YORK BRANCH
By /s/ John Veltri
____________________________
Name: John Veltri
Title: Senior Vice President
$38,260,869.57 MELLON BANK, N.A.
By /s/ Donald G. Cassidy
____________________________
Name: Donald G. Cassidy
Title: First Vice President
$38,260,869.57 PNC BANK, NATIONAL ASSOCIATION
By /s/ Robert Q. Reilly
____________________________
Name: Robert Q. Reilly
Title: Vice President
$38,260,869.57 SOCIETE GENERALE
By /s/ Jan Wertlieb
____________________________
Name: Jan Wertlieb
Title: Vice President
<PAGE>
$38,260,869.57 THE SUMITOMO BANK, LIMITED, NEW
YORK BRANCH
By /s/ Y. Kawamura
____________________________
Name: Y. Kawamura
Title: Joint General Manager
$38,260,869.57 TORONTO DOMINION (NEW YORK), INC.
By /s/ Jorge Garcia
____________________________
Name: Jorge Garcia
Title: Vice President
$23,913,043.48 THE BANK OF CALIFORNIA, N.A.
By /s/ Harry S. Matthews
____________________________
Name: Harry S. Matthews
Title: Vice President
$23,913,043.48 THE BANK OF NEW YORK
By /s/ Michael V. Flannery, Jr.
____________________________
Name: Michael V. Flannery, Jr.
Title: Vice President
<PAGE>
$23,913,043.48 BANQUE NATIONALE DE PARIS
By /s/ Walter Kaplan
____________________________
Name: Walter Kaplan
Title: Vice President
By /s/ Phil Truesdale
____________________________
Name: Phil Truesdale
Title: Vice President
$23,913,043.48 THE DAI-ICHI KANGYO BANK, LTD.
By /s/ Robert Gallagher
____________________________
Name: Robert Gallagher
Title: Assistant Vice President
$23,913,043.48 THE NORTHERN TRUST COMPANY
By /s/ J. Chip McCall
____________________________
Name: J. Chip McCall
Title: Second Vice President
$23,913,043.48 ROYAL BANK OF CANADA
By /s/ Michael J. Madnick
____________________________
Name: Michael J. Madnick
Title: Manager
<PAGE>
$23,913,043.48 THE YASUDA TRUST AND BANKING
COMPANY LIMITED
By /s/ Robin M. Laudenschlager
____________________________
Name: Robin M. Laudenschlager
Title: Senior Vice President
$11,956,521.74 THE BOATMEN'S NATIONAL BANK OF
ST. LOUIS
By /s/ John C. Solomon
____________________________
Name: John C. Solomon
Title: Vice President
$11,956,521.74 CRESTAR BANK
By /s/ J.F. Jayle, Jr.
____________________________
Name: J.F. Jayle, Jr.
Title: Senior Vice President
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
UNION PACIFIC CORPORATION
Domestic Eurodollar
Name of Bank Lending Office CD Lending Office Lending Office
----------- -------------- ----------------- --------------
<S> <C> <C> <C>
Chemical Bank 270 Park Avenue Same as Domestic Lending Office Same as Domestic Lending Office
New York, New York 10172
Citibank, N.A. 399 Park Avenue Same as Domestic Lending Office Same as Domestic Lending Office
New York, New York 10043
ABN Amro Bank N.V., New York 500 Park Avenue
Branch New York, New York 10022 Same as Domestic Lending Office Same as Domestic Lending Office
Bank of America National Trust 1850 Gateway Boulevard Same as Domestic Lending Office Same as Domestic Lending Office
and Savings Association Concord, California 94520
Bank of Montreal 115 South LaSalle Street Same as Domestic Lending Office Same as Domestic Lending Office
Chicago, Illinois 60603
The Chase Manhattan Bank One Chase Manhattan Plaza Same as Domestic Lending Office Same as Domestic Lending Office
(National Association) New York, New York 10081
Credit Suisse 12 East 49th Street, Same as Domestic Lending Office Same as Domestic Lending Office
42nd Floor
New York, New York 10017
The First National Bank of One First National Plaza Same as Domestic Lending Office Same as Domestic Lending Office
Chicago Chicago, Illinois 60670
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
UNION PACIFIC CORPORATION
Domestic Eurodollar
Name of Bank Lending Office CD Lending Office Lending Office
----------- -------------- ----------------- --------------
<S> <C> <C> <C>
Morgan Guaranty Trust Company 60 Wall Street Same as Domestic Lending Office Morgan Guaranty Trust Company
of New York New York, New York 10260 of New York
Nassau Bahamas Office
c/o J. P. Morgan Services Inc.
Euro-Loan Servicing Unit
500 Stanton Christiana Road
Newark, Delaware 19713
National Westminster Bank Plc, 175 Water Street, Same as Domestic Lending Office Nassau Branch
New York Branch 19th Floor 175 Water Street
New York, NY 10038-4924 New York, NY 10038-4924
NationsBank, N.A. (Carolinas) 100 North Tryon Street, Same as Domestic Lending Office Same as Domestic Lending Office
8th Floor
Charlotte, NC 28255
Union Bank of Switzerland 299 Park Avenue
New York, New York 10171 Same as Domestic Lending Office Same as Domestic Lending Office
The Bank of Tokyo Trust 1251 Avenue of the Americas Same as Domestic Lending Office Same as Domestic Lending Office
Company New York, New York 10116
Credit Lyonnais New York 1301 Avenue of the Americas Credit Lyonnais Cayman Island Same as CD Lending Office
Branch New York, NY 10019 Branch
c/o Credit Lyonnais New York
Branch
1301 Avenue of the Americas
New York, NY 10019
The Industrial Bank of Japan 245 Park Avenue Same as Domestic Lending Office Same as Domestic Lending Office
Limited New York Branch New York, NY 10167-0037
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
UNION PACIFIC CORPORATION
Domestic Eurodollar
Name of Bank Lending Office CD Lending Office Lending Office
----------- -------------- ----------------- --------------
<S> <C> <C> <C>
Mellon Bank, N.A. 7th and Market Streets Same as Domestic Lending Office Same as Domestic Lending Office
Loan Administration
Room 199-5220
Philadelphia, PA 19106
Attn: Dawn Rudd
PNC Bank, National 100 South Broad Street Same as Domestic Lending Office Same as Domestic Lending Office
Association Philadelphia, PA 19110
Societe Generale 1221 Avenue of the Americas Same as Domestic Lending Office Same as Domestic Lending Office
New York, New York 10020
The Sumitomo Bank, Limited, 277 Park Avenue Same as Domestic Lending Office Same as Domestic Lending Office
New York Branch New York, New York 10172
Toronto Dominion (New York), 909 Fannin, Suite 1700 Same as Domestic Lending Office Same as Domestic Lending Office
Inc. Houston, TX 77010
The Bank of California, N.A. 400 California Street, Same as Domestic Lending Office Same as Domestic Lending Office
17th Floor
San Francisco, CA 94104
The Bank of New York One Wall Street Same as Domestic Lending Office Same as Domestic Lending Office
New York, New York 10286
Banque Nationale de Paris 499 Park Avenue Same as Domestic Lending Office Banque Nationale de Paris --
New York, New York 10022 Georgetown
499 Park Avenue
New York, New York 10022
The Dai-Ichi Kangyo Bank, Ltd. 1 World Trade Center Same as Domestic Lending Office Same as Domestic Lending Office
Suite 4911
New York, New York 10048
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
UNION PACIFIC CORPORATION
Domestic Eurodollar
Name of Bank Lending Office CD Lending Office Lending Office
----------- -------------- ----------------- --------------
<S> <C> <C> <C>
The Northern Trust Company 50 South LaSalle Street Same as Domestic Lending Office Same as Domestic Lending Office
Chicago, Illinois 60675
Royal Bank of Canada 1 Financial Square, Same as Domestic Lending Office Same as Domestic Lending Office
Corporate Bkg. East, USA
New York, New York 10005
The Yasuda Trust and Banking 666 Fifth Avenue, Suite 801 Same as Domestic Lending Office Same as Domestic Lending Office
Company Limited New York, New York 10103
The Boatmen's National Bank of One Boatmen's Plaza Same as Domestic Lending Office Same as Domestic Lending Office
St. Louis 800 Market Street
St. Louis, MO 63166-0236
Crestar Bank 919 East Main Street Same as Domestic Lending Office Same as Domestic Lending Office
Richmond, Virginia 23219
</TABLE>
<PAGE>
SCHEDULE II
Union Pacific Corporation
List of Existing Mortgages
None.
<PAGE>
EXHIBIT A-1
Notice of Contract Borrowing
----------------------------
[Date]
Chemical Bank, as Administrative
Agent for the Banks parties
to the Credit Agreement
referred to below
270 Park Avenue
New York, New York 10017
Attention:
Gentlemen:
The undersigned, Union Pacific Corporation, refers to
the $1,100,000,000 Revolving Credit Agreement, dated as of
April 11, 1995 (as amended, the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the
undersigned, certain Banks, Co-Arrangers and Co-Agents parties
thereto and Chemical Bank, as Administrative Agent for said
Banks, and hereby gives you notice, irrevocably, pursuant to
Section 2.02 of the Credit Agreement that the undersigned hereby
requests a Contract Borrowing under the Credit Agreement, and in
that connection sets forth below the information relating to such
Contract Borrowing (the "Proposed Contract Borrowing") as
required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Contract
Borrowing is _________________, 19__.
(ii) The Type of Contract Advances comprising the
Proposed Contract Borrowing is [Adjusted CD Rate Advances]
[Alternate Base Rate Advances] [Eurodollar Rate Contract
Advances].
(iii) The aggregate amount of the Proposed Contract
Borrowing is $_____________.
(iv) The Interest Period for each Contract Advance made
as part of the Proposed Contract Borrowing is [___ days]
[__ months[s]].
Very truly yours,
UNION PACIFIC CORPORATION
By: _____________________
Title:
<PAGE>
EXHIBIT A-2
Notice of Auction Borrowing
---------------------------
[Date]
Chemical Bank, as Administrative
Agent for the Banks parties
to the Credit Agreement
referred to below
270 Park Avenue
New York, New York 10017
Attention:
Gentlemen:
The undersigned, Union Pacific Corporation, refers to
the $1,100,000,000 Revolving Credit Agreement, dated as of
April 11, 1995 (as amended, the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the
undersigned, certain Banks, Co-Arrangers and Co-Agents parties
thereto and Chemical Bank, as Administrative Agent for said
Banks, and hereby gives you notice pursuant to Section 2.03 of
the Credit Agreement that the undersigned hereby requests an
Auction Borrowing under the Credit Agreement, and in that
connection sets forth the terms on which such Auction Borrowing
(the "Proposed Auction Borrowing") is requested to be made:
1. Date of Auction Borrowing _________________
2. Type of Auction Advances
comprising the Proposed
Auction Borrowing
(Eurodollar Rate Auction
Advance or Fixed Rate
Auction Advance) _________________
3. Amount of Auction Borrowing _________________
4. Maturity Date _________________
5. Interest Payment Date(s) _________________
6. Prepayment Provisions _________________
7. _______________________ _________________
8. _______________________ _________________
Very truly yours,
UNION PACIFIC CORPORATION
By: _______________________
Title:
<PAGE>
EXHIBIT B
Assignment and Acceptance
-------------------------
Dated ________________, 19__
Reference is made to the $1,100,000,000 Revolving
Credit Agreement, dated as of April 11, 1995 (as amended, the
"Credit Agreement"), among Union Pacific Corporation, a Utah
corporation (the "Borrower"), the Banks, Co-Arrangers and Co-
Agents (each as defined in the Credit Agreement) and Chemical
Bank, as Administrative Agent for the Banks (the "Administrative
Agent"). Terms defined in the Credit Agreement are used herein
with the same meaning.
___________________ (the "Assignor") and
___________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the
Assignee, without recourse and without any representations and
warranties of the Assignor except as specifically set forth
below, and the Assignee hereby purchases and assumes from the
Assignor, a portion of the Assignor's rights and obligations
under the Credit Agreement as of the Effective Date (as defined
below) equal to a _____%\1\ interest in and to all of the rights
and obligations of the Banks under the Credit Agreement (includ-
ing, without limitation, such percentage interest in the Commit-
ments as in effect on the Effective Date and the [Contract]
Advances [and Special Rate Loans]\2\, if any, outstanding on the
Effective Date).
2. The Assignor (i) represents and warrants that as of
the date hereof its Commitment (without giving effect to
assignments thereof which have not yet become effective) is
$_________ and the aggregate outstanding principal amount of
[Contract] Advances [and Special Rate Loans]\2\ owing to it
(without giving effect to assignments thereof which have not yet
become effective) is $____________; (ii) represents and warrants
that it is the legal and beneficial owner of the interest being
assigned by it hereunder and that such interest is free and clear
of any adverse claim; (iii) makes no representation or warranty
and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant
thereto; (iv) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the
Borrower or any other Person or the performance or observance by
- --------------------
\1\ Specify percentage to no more than four decimal points.
\2\ Include if Special Rate Loans are to be assigned.
<PAGE>
the Borrower of any of its obligations under the Credit Agreement
or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a
copy of the Credit Agreement, together with copies of the finan-
cial statements referred to in Section 4.01 thereof and such
other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, indepen-
dently and without reliance upon the Administrative Agent, any
other Co-Agent, either Co-Arranger, the Assignor or any other
Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee;
(iv) appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers
under the Credit Agreement as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligations which by the
terms of the Credit Agreement are required to be performed by it
as a Bank; and (vi) specifies as its CD Lending Office, Domestic
Lending Office (and address for notices) and Eurodollar Lending
Office the offices set forth beneath its name on the signature
pages hereof.
4. The effective date for this Assignment and
Acceptance shall be ______________________ (the "Effective
Date").\3\ Following the execution of this Assignment and
Acceptance, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent.
5. Upon such acceptance and recording, as of the
Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Bank thereunder
and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released
from its obligations under the Credit Agreement, except as
otherwise expressly provided therein.
6. Upon such acceptance and recording, from and after
the Effective Date, the Administrative Agent shall make all
payments under the Credit Agreement in respect of the interest
assigned hereby (including, without limitation, all payments of
principal, interest and fees with respect thereto) to the
Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods
prior to the Effective Date directly between themselves.
- ----------------------
\3\ See Section 8.07(a) of the Credit Agreement. Such date shall be at least
three Business Days after the execution of this Assignment and Acceptance.
<PAGE>
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
[NAME OF ASSIGNOR]
By: _______________________
Title:
[NAME OF ASSIGNEE]
By: _______________________
Title:
Domestic Lending Office (and
address for notices):
[Address]
CD Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
Accepted this ____ day
of ______________, 19__
CHEMICAL BANK, as Administrative
Agent
By: _____________________
Title:
<PAGE>
EXHIBIT C
[FORM OF OPINION OF COUNSEL FOR THE BORROWER]
___________ __, 199__
To each of the Banks party to the
$1,100,000,000 Revolving Credit
Agreement, dated as of
April 11, 1995, among Union
Pacific Corporation, certain
Co-Arrangers and Co-Agents, said Banks,
and Chemical Bank, as Administrative
Agent for said Banks;
To Chemical Bank and Citicorp
Securities, Inc., as Co-Arrangers;
To Chemical Securities, Inc., as
Syndication Agent;
To Citibank, N.A., as Documentation
Agent; and
To Chemical Bank, as Administrative Agent
I am the Assistant General Counsel of Union Pacific
Corporation, a Utah corporation (the "Borrower"), and have acted
in such capacity in connection with the execution and delivery of
the $1,100,000,000 Revolving Credit Agreement, dated as of
April 11, 1995 (the "Agreement"), among the Borrower, certain Co-
Arrangers and Co-Agents, the banks parties thereto and Chemical
Bank, as Administrative Agent.
This opinion is delivered to you pursuant to
subsection 3.01(c) of the Agreement. Terms used herein which are
defined in the Agreement shall have the respective meanings set
forth in the Agreement, unless otherwise defined herein.
In connection with this opinion, I have examined
executed copies of the Agreement and such corporate documents and
records of the Borrower and its Subsidiaries, certificates of
public officials and officers of the Borrower and its Subsidi-
aries, and such other documents, as I have deemed necessary or
appropriate for the purposes of this opinion. In stating my
opinion, I have assumed the genuineness of all signatures of, and
the authority of, persons signing the Agreement on behalf of
parties thereto other than the Borrower, the authenticity of all
documents submitted to me as originals and the conformity to
authentic original documents of all documents submitted to me as
certified, conformed or photostatic copies.
Based upon the foregoing, I am of the opinion that:
<PAGE>
1. The Borrower is a corporation duly incorporated,
validly existing and in good standing under the laws of the State
of Utah.
2. The execution, delivery and performance by the
Borrower of the Agreement are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate
action, and do not contravene (i) the Borrower's charter or by-
laws or (ii) any law, statute, regulation or order of any
governmental agency or (iii) to the best of my knowledge, any
contractual restriction binding on or affecting the Borrower.
The Agreement has been duly executed and delivered by the
Borrower.
3. No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and
performance by the Borrower of the Agreement.
4. The Agreement is a legal, valid and binding
obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights of creditors
generally and except as the enforceability of the Agreement is
subject to the application of general principles of equity
(regardless of whether considered in a proceeding in equity or at
law), including, without limitation, (a) the possible
unavailability of specific performance, injunctive relief or any
other equitable remedy and (b) concepts of materiality,
reasonableness, good faith and fair dealing.
5. There is no pending or threatened action or
proceeding affecting the Borrower or any of its consolidated
Subsidiaries before any court, governmental agency or arbitrator,
(i) which purports to affect the legality, validity or enforce-
ability of the Agreement, or (ii) which may materially adversely
affect the consummation of the Tender Offer, or (iii) except as
set forth in the Borrower's annual report on Form 10-K for the
fiscal year ended December 31, 1994, which may materially
adversely affect the financial condition or operations of the
Borrower or any of its Subsidiaries, taken as a whole.
The foregoing opinions are subject to the following
comments and qualifications:
(A) The enforceability of Section 8.12 of the
Agreement may be limited by (i) laws rendering unenforceable
indemnification contrary to Federal or state securities laws
and the public policy underlying such laws and (ii) laws
limiting the enforceability of provisions exculpating or
exempting a party, or requiring indemnification of a party
for, liability for its own action or inaction, to the extent
the action or inaction involved gross negligence,
recklessness, wilful misconduct or unlawful conduct.
<PAGE>
(B) The enforceability of provisions in the Agreement
to the effect that terms may not be waived or modified
except in writing may be limited under certain
circumstances.
(C) I express no opinion as to (i) the effect of the
laws of any jurisdiction in which any Bank is located (other
than the State of New York) that limit the interest, fees,
or other charges such Bank may impose, (ii) the last
sentence of Section 2.16 of the Agreement, (iii) the first
sentence of Section 8.09 of the Agreement, insofar as such
sentence relates to the subject matter jurisdiction of the
United States District Court for the Southern District of
New York to adjudicate any controversy relating to the
Agreement, and (iv) the waiver of inconvenient forum set
forth in Section 8.09 of the Agreement with respect to
proceedings in federal courts.
I am a member of the Bar of the State of New York and
do not purport to be an expert on any laws other than the laws of
the State of New York and the federal laws of the United States
of America, and except as provided in the next sentence, this
opinion is limited to the present law of such State and the
present federal law of the United States of America. To the
extent that this opinion relates to matters under the laws of the
State of Utah, I have relied on the opinion of Steven A.
Goodsell, Esq., the General Solicitor in Utah for Union Pacific
Railroad Company and Utah counsel for the Borrower, a copy of
which is attached hereto. Such opinion is satisfactory in form
and substance to me and I believe that you and I are justified in
relying thereon.
Very truly yours,
<PAGE>
EXHIBIT D
[FORM OF OPINION OF SPECIAL
NEW YORK COUNSEL TO THE ADMINISTRATIVE AGENT]
April [__], 1995
To each of the Banks party to the
$1,100,000,000 Revolving Credit
Agreement, dated as of
April 11, 1995, among Union
Pacific Corporation, certain
Co-Arrangers and Co-Agents, said Banks,
and Chemical Bank, as Administrative
Agent for said Banks;
To Chemical Bank and Citicorp
Securities, Inc., as Co-Arrangers;
To Chemical Securities, Inc., as
Syndication Agent;
To Citibank, N.A., as Documentation
Agent; and
To Chemical Bank, as Administrative Agent
Re: Union Pacific Corporation
-------------------------
Ladies and Gentlemen:
We have acted as special New York counsel to Chemical
Bank ("Chemical Bank") as Administrative Agent (as hereinafter
defined) in connection with the Revolving Credit Agreement dated
as of April 11, 1995 (the "Credit Agreement") among Union Pacific
Corporation (the "Borrower"), the banks named therein (the
"Banks"), Chemical Bank and Citicorp Securities, Inc., as Co-
Arrangers (collectively, the "Co-Arrangers"), Chemical
Securities, Inc., as Syndication Agent (the "Syndication Agent")
Citibank, N.A., as Documentation Agent (the "Documentation
Agent"), and Chemical Bank, as administrative agent for the Banks
(in such capacity, the "Administrative Agent"), providing for
loans to be made by the Banks to the Borrower in an aggregate
principal amount not exceeding $1,100,000,000. Terms defined in
the Credit Agreement are used herein as defined therein. This
opinion letter is being delivered pursuant to Section 3.01(d) of
the Credit Agreement.
In rendering the opinions expressed below, we have
examined the following documents, each of which, unless otherwise
indicated, is dated the date hereof:
<PAGE>
(1) A counterpart of the Credit Agreement executed by
the Borrower and the Administrative Agent (we have been
informed by the Administrative Agent that each Co-Arranger,
each Co-Agent and each Bank has executed at least one
counterpart of the Credit Agreement).
(2) A certificate of the Assistant Secretary of the
Borrower with respect to (i) certain resolutions adopted by
the Board of Directors of the Borrower, (ii) the Revised
Articles of Incorporation and the By-laws of the Borrower
and (iii) the incumbency and signatures of certain officers
of the Borrower, delivered pursuant to Sections 3.01(a) and
3.01(b) of the Credit Agreement.
(3) An opinion of Richard T. Ressler, Esq., Assistant
General Counsel of the Borrower, delivered pursuant to
Section 3.01(c) of the Credit Agreement.
(4) Such records of the Borrower and such other
documents as we have deemed necessary as a basis for the
opinions expressed below.
In our examination, we have assumed (x) the genuineness
of all signatures, the authenticity of all documents submitted to
us as originals and the conformity with authentic original
documents of all documents submitted to us as copies, and
(y) that no action, consent or approval of, or registration or
filing with, or any other action by, any governmental authority
is or will be required in connection with the transactions
contemplated by the Credit Agreement, except such as have been
made or obtained and are in full force and effect. When relevant
facts were not independently established, we have relied upon
representations made in or pursuant to the Credit Agreement.
In rendering the opinions expressed below, we have
assumed, with respect to all of the documents referred to in this
opinion letter, that:
(i) such documents have been duly authorized by, have
been duly executed and delivered by, and (except
to the extent set forth in the opinions below as
to the Borrower) constitute legal, valid, binding
and enforceable obligations of, all of the parties
to such documents;
(ii) all signatories to such documents have been duly
authorized; and
(iii) all of the parties to such documents are duly
organized and validly existing and have the power
and authority (corporate or other) to execute,
deliver and perform such documents.
Based upon and subject to the foregoing and subject
also to the comments and qualifications set forth below, having
<PAGE>
considered such questions of law as we have deemed necessary as a
basis for the opinions expressed below, and although we have not
independently considered the matters covered by the opinion
listed in item (3) above to the extent necessary to enable us to
express the conclusions stated therein, we are of the opinion
that:
(i) the certificates and opinion referred to in items
(2) and (3) above, respectively, appear to be substantially
responsive to the requirements of Section 3.01 of the Credit
Agreement; and
(ii) the Credit Agreement constitutes the legal, valid
and binding obligation of the Borrower, enforceable against
the Borrower in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting
the rights of creditors generally and except as the
enforceability of the Credit Agreement is subject to the
application of general principles of equity (regardless of
whether considered in a proceeding in equity or at law),
including, without limitation, (a) the possible
unavailability of specific performance, injunctive relief or
any other equitable remedy and (b) concepts of materiality,
reasonableness, good faith and fair dealing.
The foregoing opinions are subject to the following
comments and qualifications:
(A) The enforceability of Section 8.12 of the Credit
Agreement may be limited by (i) laws rendering unenforceable
indemnification contrary to Federal or state securities laws
and the public policy underlying such laws and (ii) laws
limiting the enforceability of provisions exculpating or
exempting a party, or requiring indemnification of a party
for, liability for its own action or inaction, to the extent
the action or inaction involves gross negligence,
recklessness, wilful misconduct or unlawful conduct.
(B) The enforceability of provisions in the Credit
Agreement to the effect that terms may not be waived or
modified except in writing may be limited under certain
circumstances.
(C) We express no opinion as to (i) the effect of the
laws of any jurisdiction in which any Bank is located (other
than the State of New York) that limit the interest, fees or
other charges such Bank may impose, (ii) the last sentence
of Section 2.16 of the Credit Agreement, (iii) the first
sentence of Section 8.09 of the Credit Agreement, insofar as
such sentence relates to the subject matter jurisdiction of
the United States District Court for the Southern District
of New York to adjudicate any controversy related to the
Credit Agreement, and (iv) the waiver of inconvenient forum
<PAGE>
set forth in Section 8.09 of the Credit Agreement with
respect to proceedings in federal courts.
The foregoing opinions are limited to matters involving
the Federal laws of the United States and the law of the State of
New York, and we do not express any opinion as to the laws of any
other jurisdiction.
At the request of our client, this opinion letter is,
pursuant to Section 3.01(d) of the Credit Agreement, provided to
you by us in our capacity as special New York counsel to the
Administrative Agent and may not be relied upon by any Person for
any purpose other than in connection with the transactions
contemplated by the Credit Agreement without, in each instance,
our prior written consent.
Very truly yours,
WFC/PDR
[EXECUTION COUNTERPART]
- --------------------------------------------------------------------------------
U.S. $1,200,000,000
REVOLVING CREDIT AGREEMENT
Dated as of April 11, 1995
Among
UNION PACIFIC CORPORATION,
as Borrower,
THE BANKS NAMED HEREIN,
as Banks,
CHEMICAL BANK
and
CITICORP SECURITIES, INC.,
as Co-Arrangers,
CHEMICAL SECURITIES, INC.,
as Syndication Agent,
CITIBANK, N.A.,
as Documentation Agent,
and
CHEMICAL BANK,
as Administrative Agent
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms . . . . . . . . . . . 1
SECTION 1.02. Computation of Time Periods . . . . . . . . 11
SECTION 1.03. Accounting Terms. . . . . . . . . . . . . . 11
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND SPECIAL RATE LOANS
SECTION 2.01. The Contract Advances; Special Rate
Loans. . . . . . . . . . . . . . . . . . . 11
SECTION 2.02. Making the Contract Advances. . . . . . . . 12
SECTION 2.03. The Auction Advances. . . . . . . . . . . . 14
SECTION 2.04. Conversion and Continuation of Contract
Borrowings . . . . . . . . . . . . . . . . 17
SECTION 2.05. Fees. . . . . . . . . . . . . . . . . . . . 19
SECTION 2.06. Optional Reduction of the Commitments . . . 19
SECTION 2.07. Repayment of Advances and Special Rate
Loans; Prepayment. . . . . . . . . . . . . 19
SECTION 2.08. Interest. . . . . . . . . . . . . . . . . . 20
SECTION 2.09. Interest Rate Determination . . . . . . . . 21
SECTION 2.10. Alternate Rate of Interest. . . . . . . . . 21
SECTION 2.11. Increased Costs; Increased Capital. . . . . 22
SECTION 2.12. Additional Interest on Eurodollar Rate
Advances . . . . . . . . . . . . . . . . . 24
SECTION 2.13. Change in Legality. . . . . . . . . . . . . 24
SECTION 2.14. Payments and Computations . . . . . . . . . 25
SECTION 2.15. Taxes on Payments . . . . . . . . . . . . . 26
SECTION 2.16. Sharing of Payments, Etc. . . . . . . . . . 29
SECTION 2.17. Removal of a Bank . . . . . . . . . . . . . 29
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial
Borrowing. . . . . . . . . . . . . . . . . 30
SECTION 3.02. Conditions Precedent to Each Borrowing. . . 31
SECTION 3.03. Borrowings for General Corporate
Purposes.. . . . . . . . . . . . . . . . . 31
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower . . . . . . . . . . . . . . . . . 32
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants . . . . . . . . . . . 34
SECTION 5.02. Negative Covenants. . . . . . . . . . . . . 37
<PAGE>
Page
----
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default . . . . . . . . . . . . . 43
ARTICLE VII
THE ADMINISTRATIVE AGENT, ETC.
SECTION 7.01. Authorization and Action. . . . . . . . . . 45
SECTION 7.02. Administrative Agent's Reliance, Etc. . . . 46
SECTION 7.03. Chemical Bank and Affiliates. . . . . . . . 46
SECTION 7.04. Bank Credit Decision. . . . . . . . . . . . 47
SECTION 7.05. Indemnification . . . . . . . . . . . . . . 47
SECTION 7.06. Successor Administrative Agent. . . . . . . 48
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc.. . . . . . . . . . . . . . 48
SECTION 8.02. Notices, Etc. . . . . . . . . . . . . . . . 49
SECTION 8.03. No Waiver; Remedies . . . . . . . . . . . . 50
SECTION 8.04. Costs, Expenses and Taxes . . . . . . . . . 50
SECTION 8.05. Right of Set-off. . . . . . . . . . . . . . 51
SECTION 8.06. Binding Effect. . . . . . . . . . . . . . . 52
SECTION 8.07. Assignments and Participations. . . . . . . 52
SECTION 8.08. GOVERNING LAW . . . . . . . . . . . . . . . 56
SECTION 8.09. Submission to Jurisdiction; Service of
Process; Jury Trial. . . . . . . . . . . . 56
SECTION 8.10. Treatment of Certain Information;
Confidentiality. . . . . . . . . . . . . . 56
SECTION 8.11. Execution in Counterparts . . . . . . . . . 58
SECTION 8.12. Indemnification.. . . . . . . . . . . . . . 58
Schedule I List of Applicable Lending Offices
Schedule II List of Existing Mortgages
Exhibit A-1 Form of Notice of Contract Borrowing
Exhibit A-2 Form of Notice of Auction Borrowing
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Opinion of Counsel for the Borrower
Exhibit D Form of Opinion of Counsel to the Administrative
Agent
<PAGE>
REVOLVING CREDIT AGREEMENT, dated
as of April 11, 1995, among UNION PACIFIC
CORPORATION, a Utah corporation (the
"Borrower"); the banks listed on the
signature pages hereof and any other banks
which from time to time become parties hereto
pursuant to Section 8.07 of this Agreement
(all such banks being referred to herein
collectively as the "Banks"); CHEMICAL BANK
and CITICORP SECURITIES, INC., as Co-
Arrangers (collectively, the "Co-Arrangers");
CHEMICAL SECURITIES, INC., as Syndication
Agent (the "Syndication Agent"); CITIBANK,
N.A., as Documentation Agent (the
"Documentation Agent"); and CHEMICAL BANK, as
agent for the purposes hereinafter provided
(in such capacity, the "Administrative
Agent") for the Banks hereunder.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Adjusted CD Rate" means, for each Adjusted CD Rate
Advance comprising part of the same Contract Borrowing, an
interest rate per annum (rounded upwards, if necessary, to the
next 1/100 of 1%) equal to the sum of (a) a rate per annum equal
to the product of (i) the Fixed CD Rate in effect for the
Interest Period then applicable to such Advance and (ii) 1.00
plus the Domestic Reserve Percentage, plus (b) the Assessment
Rate. For purposes hereof, the term "Fixed CD Rate" shall mean
the arithmetic average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the prevailing rates per annum bid at or
about 10:00 a.m. (New York City time) to each Reference Bank on
the first Business Day of the Interest Period then applicable to
such Contract Borrowing by three New York City negotiable
certificate of deposit dealers of recognized standing for the
purchase at face value of negotiable certificates of deposit of
such Reference Bank in a principal amount approximately equal to
such Reference Bank's portion of such Contract Borrowing and with
a maturity comparable to such Interest Period.
"Adjusted CD Rate Advance" means a Contract Advance
that bears interest based on the Adjusted CD Rate.
"Advance" means any Contract Advance or Auction
Advance.
<PAGE>
"Agreement" means this Agreement, as amended, modified
and supplemented from time to time, including, without limita-
tion, any such supplement in respect of Auction Advances under
Section 2.03(a)(v).
"Alternate Base Rate" means, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the greatest of (a) the Prime Rate in effect on such
day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the
rate of interest per annum publicly announced from time to time
by Chemical Bank as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be
effective on the date such change is publicly announced as
effective. "Base CD Rate" shall mean the sum of (a) the product
of (i) the Three-Month Secondary CD Rate and (ii) 1.00 plus the
Domestic Reserve Percentage and (b) the Assessment Rate. "Three-
Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as
being in effect on such day (or, if such day shall not be a
Business Day, the next preceding Business Day) by the Board of
Governors of the Federal Reserve System through the public
information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of such Board,
be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not
be so reported on such day or such next preceding Business Day,
the average of the secondary market quotations for three-month
certificates of deposit of major money center banks in New York
City received at approximately 10:00 a.m. (New York City time) on
such day (or, if such day shall not be a Business Day, on the
next preceding Business Day) by the Administrative Agent from
three New York City negotiable certificate of deposit dealers of
recognized standing selected by it. "Federal Funds Effective
Rate" shall mean, for any day, the weighted average of the rates
on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quota-
tions for the day of such transactions received by the
Administrative Agent from three Federal funds brokers of
recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to
ascertain the Base CD Rate or the Federal Funds Effective Rate or
both for any reason, including the inability of the
Administrative Agent to obtain sufficient quotations in
accordance with the terms hereof, the Alternate Base Rate shall
be determined without regard to clause (b) or (c), or both, of
the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any
change in the Alternate Base Rate due to a change in the Prime
Rate, the Three-Month Secondary CD Rate or the Federal Funds
<PAGE>
Effective Rate shall be effective on the effective date of such
change in the Prime Rate, the Three-Month Secondary CD Rate or
the Federal Funds Effective Rate, respectively.
"Alternate Base Rate Advance" means a Contract Advance
which bears interest computed at the Alternate Base Rate.
"Applicable Fee Percentage" means on any date 0.060%.
"Applicable Lending Office" means, with respect to each
Bank, such Bank's Domestic Lending Office in the case of an
Alternate Base Rate Advance, such Bank's CD Lending Office in the
case of an Adjusted CD Rate Advance, such Bank's Eurodollar
Lending Office in the case of a Eurodollar Rate Contract Advance
and, in the case of an Auction Advance, the office or affiliate
of such Bank notified by such Bank to the Borrower and the
Administrative Agent as such Bank's Applicable Lending Office
with respect to such Auction Advance.
"Applicable Rate" means:
(i) with respect to Adjusted CD Rate Advances, the
Adjusted CD Rate plus 0.315%;
(ii) with respect to Alternate Base Rate Advances, the
Alternate Base Rate; and
(iii) with respect to Eurodollar Rate Contract Advances,
the Eurodollar Rate plus 0.190%
"Assessment Rate" means for any date the annual rate
(rounded upwards, if necessary, to the next 1/100 of 1%) most
recently estimated by the Administrative Agent as the then
current net annual assessment rate that will be employed in
determining amounts payable by the Administrative Agent to the
Federal Deposit Insurance Corporation (or any successor) for
insurance by such Corporation (or such successor) of time
deposits made in dollars at the Administrative Agent's domestic
offices.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Bank and an Eligible Assignee, and
accepted by the Administrative Agent, in substantially the form
of Exhibit B hereto.
"Auction Advance" means an advance by a Bank to the
Borrower as part of an Auction Borrowing resulting from the
auction bidding procedure described in Section 2.03, and refers
to a Fixed Rate Auction Advance or a Eurodollar Rate Auction
Advance.
"Auction Borrowing" means a Borrowing consisting of
simultaneous Auction Advances of the same Type from each of the
Banks whose offer to make an Auction Advance as part of such
<PAGE>
Borrowing has been accepted by the Borrower under the auction
bidding procedure described in Section 2.03.
"Auction Reduction" means, as to any Bank as at any
date, an amount equal to such Bank's pro rata (in accordance with
the Commitments) share of the aggregate amount of all Auction
Advances outstanding on such date (giving effect to the payment
of any Auction Advances to be made on such date).
"Borrowing" means a Contract Borrowing or an Auction
Borrowing.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City and, if
the applicable Business Day relates to any Eurodollar Rate
Advances, on which dealings in dollar deposits are carried on in
the London interbank market.
"CD Lending Office" means, with respect to any Bank,
the office or affiliate of such Bank specified as its "CD Lending
Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Bank (or,
if no such office or affiliate is specified, its Domestic Lending
Office), or such other office or affiliate of such Bank as such
Bank may from time to time specify to the Borrower and the
Administrative Agent.
"Chemical Bank" means Chemical Bank, a New York banking
corporation, and its successors.
"Closing Date" means the date of this Agreement.
"CNW" means Chicago and North Western Transportation
Company, a Delaware corporation.
"Co-Agents" means, collectively, the Syndication Agent,
the Documentation Agent and the Administrative Agent.
"Code" means the Internal Revenue Code of 1986, as the
same may be amended from time to time.
"Commitment" has the meaning specified in
Section 2.01(a).
"Contract Advance" means an advance by a Bank to the
Borrower as part of a Contract Borrowing and refers to an
Adjusted CD Rate Advance, an Alternate Base Rate Advance or a
Eurodollar Rate Contract Advance.
"Contract Borrowing" means a Borrowing consisting of
simultaneous Contract Advances of the same Type made ratably by
all of the Banks pursuant to Section 2.01(a).
"Debt" means (i) indebtedness for borrowed money,
(ii) obligations evidenced by bonds, debentures, notes or other
<PAGE>
similar instruments, (iii) obligations to pay the deferred pur-
chase price of property (excluding obligations under agreements
for the purchase of goods in the normal course of business, but
including obligations under agreements relating to the issuance
of performance letters of credit or acceptance financing), (iv)
obligations as lessee under leases which shall have been or
should be, in accordance with generally accepted accounting
principles, recorded as capital leases, (v) obligations under
direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in
clauses (i) through (iv) above and (vi) liabilities in respect of
unfunded vested benefits under Plans covered by Title IV of
ERISA; provided, however, that (x) for the purposes of
Section 5.02(a), "Debt" means only indebtedness for borrowed
money (however evidenced) and (y) for the purposes of
Section 6.01(e), "Debt" means only (1) the obligations described
in clauses (i), (ii) and (iii) above and (2) the obligations
described in clause (v) above (to the extent such obligations
relate to Debt described in clause (i) or (ii) above).
"Default" means any condition or event which, after
notice or lapse of time, or both, would constitute an Event of
Default.
"Domestic Lending Office" means, with respect to any
Bank, the office or affiliate of such Bank specified as its
"Domestic Lending Office" opposite its name on Schedule I hereto
or in the Assignment and Acceptance pursuant to which it became a
Bank, or such other office or affiliate of such Bank as such Bank
may from time to time specify to the Borrower and the
Administrative Agent.
"Domestic Reserve Percentage" means, for any Interest
Period, the reserve percentage applicable on the first day of
such Interest Period under regulations issued from time to time
by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including, but not limited to, any emergency, supplemental or
other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with deposits exceeding
one billion dollars with respect to liabilities consisting of or
including (among other liabilities) U.S. dollar nonpersonal time
deposits in the United States with a maturity equal to such
Interest Period.
"Eligible Assignee" means:
(a) any of the following entities approved in writing
by the Borrower in its sole discretion and notified to the
Administrative Agent, and then only to the extent of a proposed
assignment approved in writing by the Borrower in its sole
discretion and notified to the Administrative Agent: (i) a
commercial bank organized under the laws of the United States, or
<PAGE>
any state thereof, and having total assets in excess of
$3,000,000,000 and a combined capital and surplus of at least
$150,000,000; (ii) a commercial bank organized under the laws of
any other country which is a member of the OECD, or a political
subdivision of any such country, and having total assets in
excess of $3,000,000,000 and a combined capital and surplus of at
least $150,000,000, provided that such bank is acting through a
branch or agency located in the United States, in the country in
which it is organized or in another country which is also a
member of the OECD; and (iii) the central bank of any country
which is a member of the OECD; and
(b) an affiliate of the assigning Bank (for which
purposes "affiliate" means a Person controlling, controlled by or
under common control with such assigning Bank).
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether
or not incorporated) which is a member of a group of which the
Borrower is a member and which is under common control within the
meaning of the regulations under Section 414 of the Code.
"Eurocurrency Liabilities" has the meaning assigned to
that term in Regulation D of the Board of Governors of the
Federal Reserve System (or any successor regulation), as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any
Bank, the office or affiliate of such Bank specified as its
"Eurodollar Lending Office" opposite its name on Schedule I
hereto or in the Assignment and Acceptance pursuant to which it
became a Bank (or, if no such office or affiliate is specified,
its Domestic Lending Office), or such other office or affiliate
of such Bank as such Bank may from time to time specify to the
Borrower and the Administrative Agent.
"Eurodollar Rate" means, for each Eurodollar Rate
Advance comprising part of the same Borrowing, an interest rate
per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the average of the rates at which deposits in U.S.
dollars in immediately available funds approximately equal in
principal amount to (i) in the case of a Contract Borrowing, the
portion of such Eurodollar Rate Contract Advance of the Bank
serving as Administrative Agent and (ii) in the case of an
Auction Borrowing, a principal amount that would have been the
portion of such Auction Borrowing of the Bank serving as
Administrative Agent had such Auction Borrowing been a Contract
Borrowing, and for a maturity comparable to (a) in the case of a
Contract Borrowing, the Interest Period then applicable to such
Contract Advance and (b) in the case of an Auction Borrowing, the
maturity of such Auction Advance, are offered to the principal
London offices of the Reference Banks (or if any Reference Bank
does not at the time maintain a London office, the principal
<PAGE>
London office of any affiliate of such Reference Bank) in the
London interbank market at approximately 11:00 a.m. (London time)
two Business Days prior to (x) the commencement of the Interest
Period then applicable to such Contract Advance or (y) the making
of such Auction Advance, as the case may be.
"Eurodollar Rate Advance" means any Eurodollar Rate
Contract Advance or Eurodollar Rate Auction Advance.
"Eurodollar Rate Auction Advance" means an Auction
Advance which bears interest based on the Eurodollar Rate.
"Eurodollar Rate Contract Advance" means a Contract
Advance which bears interest based on the Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" of any Bank for
any Eurodollar Rate Advance means the reserve percentage applic-
able to such Bank on (i) in the case of a Contract Advance, the
first day of the Interest Period then applicable to such Contract
Advance and (ii) in the case of an Auction Advance, the date of
such Auction Advance, under regulations issued from time to time
by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirement (including,
without limitation, any emergency, supplemental or other marginal
reserve requirement) under Regulation D promulgated by the Board
of Governors of the Federal Reserve System, or any successor or
supplemental regulations, then applicable to such Bank with
respect to liabilities or assets consisting of or including Euro-
currency Liabilities having a term equal to such Interest Period
or the term of such Auction Advance, as the case may be.
"Events of Default" has the meaning specified in
Section 6.01.
"Financial Officer" of any corporation shall mean the
chief financial officer, principal accounting officer, Treasurer
or Controller of such corporation.
"Fixed Rate" means an interest rate per annum
(expressed in the form of a decimal to no more than four decimal
places) specified by a Bank making an Auction Advance under the
auction bidding procedure described in Section 2.03.
"Fixed Rate Auction Advance" means an Auction Advance
which bears interest based on the Fixed Rate.
"Interest Period" means, for each Contract Advance
comprising part of the same Contract Borrowing, the period com-
mencing on the date of such Contract Advance or on the last day
of the immediately preceding Interest Period applicable to such
Contract Advance, as the case may be, and ending on the last day
of the period selected by the Borrower pursuant to the provisions
below. The duration of each such Interest Period shall be (a) in
the case of an Alternate Base Rate Advance, until the next suc-
ceeding March 31, June 30, September 30 or December 31, (b) in
<PAGE>
the case of an Adjusted CD Rate Advance, 30, 60, 90 or 180 days
and (c) in the case of a Eurodollar Rate Contract Advance, 1
month or 2, 3 or 6 months, as the Borrower may select (in the
case of clause (b) or (c)) by notice to the Administrative Agent
pursuant to Section 2.02(a); provided, however, that:
(i) Interest Periods commencing on the same date for
Contract Advances comprising part of the same Contract
Borrowing shall be of the same duration;
(ii) subject to clause (iii) below, whenever the last
day of any Interest Period would otherwise occur on a day
other than a Business Day in both New York City and London,
the last day of such Interest Period shall be extended to
occur on the next succeeding Business Day in both such
cities, provided, in the case of any Interest Period for a
Eurodollar Rate Contract Advance, that if such extension
would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business
Day in both such cities; and
(iii) no Interest Period shall end on a date later than
the Maturity Date.
"Majority Banks" means at any time Banks that in the
aggregate (a) represent at least 66-2/3% of the Commitments and
(b) after the expiry or termination of the Commitments, represent
at least 66-2/3% of the aggregate unpaid principal amount of the
Advances and Special Rate Loans.
"Margin Stock" means "margin stock" within the meaning
of Regulation U.
"Material Plan" means either (i) a Plan under which the
present value of the vested benefits exceeds the fair market
value of the assets of such Plan allocable to such benefits by
more than $20,000,000 or (ii) a Plan whose assets have a market
value in excess of $100,000,000.
"Maturity Date" means the date 364 days after the
Closing Date; provided that if such date is not a Business Day,
the Maturity Date shall be the immediately preceding Business
Day.
"Merger Agreement" means the Agreement and Plan of
Merger, dated as of March 16, 1995, by and among the Borrower, UP
Rail, Inc. and CNW, as from time to time amended (without
prejudice to Section 5.02(f)).
"Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which the Borrower or
any ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding three plan
years made or accrued an obligation to make contributions.
<PAGE>
"Notice of Contract Borrowing" has the meaning
specified in Section 2.02(a).
"Notice of Auction Borrowing" has the meaning specified
in Section 2.03(a).
"$1,100,000,000 Agreement" means the $1,100,000,000
Revolving Credit Agreement, dated as of April 11, 1995, among the
Borrower, the banks named therein (which include certain of the
Banks), the co-arrangers, syndication agent and documentation
agent named therein and Chemical Bank, as administrative agent
for said banks, as from time to time amended.
"$1,400,000,000 Credit Agreement" means the
$1,400,000,000 Revolving Credit Agreement, dated as of March 2,
1993, among the Borrower, the banks named therein (which include
certain of the Banks), the co-agents named therein and Chemical
Bank, as administrative agent for said banks, as from time to
time amended.
"OECD" means the Organization for Economic Cooperation
and Development.
"Participating Bank" has the meaning specified in
Section 2.03(a)(v).
"PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Plan" means an employee benefit plan (other than a
Multiemployer Plan) maintained for employees of the Borrower or
any ERISA Affiliate and covered by Title IV of ERISA.
"Railroads" means Union Pacific Railroad Company,
Missouri Pacific Railroad Company, and, after substantially all
shares of the capital stock of CNW (or the surviving corporation
pursuant to the Merger Agreement) shall have been acquired
(directly or indirectly) by the Borrower pursuant to the approval
or exemption (if required) of the Interstate Commerce Commission
(or any successor agency having jurisdiction), Chicago and North
Western Railway Company and Western Railroad Properties,
Incorporated, in each case together with their respective
successors.
"Reference Banks" means Chemical Bank, Citibank, N.A.
and Morgan Guaranty Trust Company of New York, and such other
additional or substitute financial institutions as may be agreed
to by the Borrower, the Administrative Agent and the Majority
Banks from time to time.
<PAGE>
"Register" has the meaning specified in
Section 8.07(c).
"Regulation U" means Regulation U issued by the Board
of Governors of the Federal Reserve System, as from time to time
amended.
"Reportable Event" means an event described in Section
4043(b) of ERISA with respect to which the 30-day notice require-
ment has not been waived by the PBGC.
"Special Rate Loan" means any loan made by a Bank to
the Borrower pursuant to Section 2.01(b).
"Special Rate Loan Reduction" means, as to any Bank as
at any date, an amount equal to such Bank's pro rata (in accor-
dance with the Commitments) share of the aggregate amount of all
Special Rate Loans outstanding on such date (giving effect to the
payment of any Special Rate Loans to be made on such date).
"Subsidiary" of a Person means any corporation or other
similar entity of which more than 50% of the outstanding capital
stock having ordinary voting power to elect a majority of the
Board of Directors of such corporation or entity (irrespective of
whether or not at the time capital stock of any other class or
classes of such corporation or entity shall or might have voting
power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person, by such Person and
one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person.
"Tender Offer" means the offer by UP Rail, Inc., a Utah
corporation and wholly owned Subsidiary of the Borrower, to
purchase for cash all of the shares of common stock of CNW not
otherwise owned by the Borrower or any of its affiliates, dated
March 23, 1995, as from time to time amended (without prejudice
to Section 5.02(f)).
"Tender Offer Materials" means, collectively, (i) the
Offer to Purchase for Cash All Outstanding Shares of Common Stock
of Chicago and North Western Transportation Company at $35.00 Net
Per Share by UP Rail, Inc. dated March 23, 1995, (ii) the related
Letter of Transmittal and (iii) the Tender Offer Statement on
Schedule 14D-1 with respect to the Tender Offer filed with the
Securities and Exchange Commission, as any of the same may be
from time to time amended or extended.
"Termination Date" means the Maturity Date or the
earlier date of termination in whole of the Commitments pursuant
to Section 2.06 or 6.01.
"Termination Event" means (i) a "Reportable Event"
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a "Reportable Event" not subject to the
provision for 30-day notice to the PBGC under such regulations),
<PAGE>
or (ii) the withdrawal of the Borrower or any of its ERISA
Affiliates from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (iii) the filing of a notice of intent to terminate a Plan or
the treatment of a Plan amendment as a termination under Section
4041 of ERISA, or (iv) the institution of proceedings to termi-
nate a Plan by the PBGC, or (v) any other event or condition
which might constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to
administer, any Plan.
"Type", when used in respect of any Advance or
Borrowing, refers to the Rate by reference to which interest on
such Advance or on the Advances comprising such Borrowing is
determined. For purposes hereof, "Rate" shall include the
Eurodollar Rate, the Adjusted CD Rate, the Alternate Base Rate
and the Fixed Rate.
SECTION 1.02. Computation of Time Periods. In this
Agreement in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but
excluding".
SECTION 1.03. Accounting Terms. All accounting terms
not specifically defined herein shall be construed in accordance
with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements
referred to in Section 4.01(e).
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND SPECIAL RATE LOANS
SECTION 2.01. The Contract Advances; Special Rate
Loans. (a) Each Bank severally agrees, on the terms and
conditions hereinafter set forth, to make Contract Advances to
the Borrower from time to time on any Business Day during the
period from the Closing Date until the Termination Date in an
aggregate amount not to exceed at any time outstanding the
excess, if any, of (i) the amount set opposite such Bank's name
on the signature pages to this Agreement, as such amount may be
reduced pursuant to Section 2.06 or increased pursuant to
Section 2.17 or reduced or increased pursuant to Section 8.07
(such Bank's obligation to make such Advances being hereinafter
referred to as such Bank's "Commitment") over (ii) the aggregate
amount of (x) such Bank's Special Rate Loan Reduction, if any,
and (y) such Bank's Auction Reduction, if any; provided, however,
that at no time shall the aggregate outstanding principal amount
of Contract Advances, Auction Advances and Special Rate Loans
exceed the aggregate amount of the Commitments. Each Contract
Borrowing shall be in an aggregate amount not less than
$10,000,000 (subject to the terms of this Section 2.01(a)) or an
<PAGE>
integral multiple of $1,000,000 in excess thereof and shall
consist of Contract Advances of the same Type made on the same
day by the Banks ratably according to their respective
Commitments.
(b) Upon the request of the Borrower, each Bank may,
in its sole discretion, from time to time on any Business Day
during the period from the Closing Date until the Termination
Date, extend loans to the Borrower in an aggregate amount not
less than $10,000,000 or an integral multiple of $1,000,000 in
excess thereof, at an interest rate and upon repayment terms to
be mutually agreed upon between such Bank and the Borrower
("Special Rate Loans"). The amount of any Special Rate Loan made
by a Bank may exceed such Bank's Commitment; provided that at no
time shall the aggregate amount of Contract Advances, Auction
Advances and Special Rate Loans outstanding exceed the aggregate
amount of the Commitments. Notwithstanding any other provision
of this Agreement, (i) any Special Rate Loan shall be made by a
Bank directly to the Borrower; (ii) all payments in respect of
any Special Rate Loan shall be made by the Borrower directly to
the Bank which made such loan; (iii) Special Rate Loans need not
be made on a pro rata basis among the Banks; and (iv) each
Special Rate Loan shall be entitled to the benefits of the
provisions contained in Articles V and VI and Sections 8.05 and
8.07 hereof unless otherwise agreed by the Borrower and the Bank
which made such loan with written notice to the Administrative
Agent. On each date when any Bank makes a Special Rate Loan, the
Borrower and such Bank shall notify the Administrative Agent
thereof (and the Administrative Agent shall promptly notify the
other Banks), specifying the principal amount of such Special
Rate Loan, the interest rate thereon, the repayment terms and the
maturity thereof.
(c) Within the limits and on the conditions set forth
in this Section 2.01, the Borrower may from time to time borrow
under this Section 2.01, repay pursuant to Sections 2.07(a) and
2.07(b), as appropriate, prepay under Section 2.07(d) and
reborrow under this Section 2.01 and borrow under Section 2.03.
SECTION 2.02. Making the Contract Advances. (a) Each
Contract Borrowing shall be made on notice, given (i) in the case
of a Borrowing consisting of Alternate Base Rate Advances, not
later than 10:30 a.m. (New York City time) on the day of the
proposed Borrowing; (ii) in the case of a Borrowing consisting of
Adjusted CD Rate Advances, not later than 10:30 a.m. (New York
City time) on the second Business Day prior to the day of the
proposed Borrowing; and (iii) in the case of a Borrowing
consisting of Eurodollar Rate Contract Advances, not later than
10:30 a.m. (New York City time) on the third Business Day prior
to the date of the proposed Borrowing, by the Borrower to the
Administrative Agent, which shall give to each Bank prompt notice
thereof by cable or telecopy. Each such notice of a Contract
Borrowing (a "Notice of Contract Borrowing") shall be in
substantially the form of Exhibit A-1 hereto, specifying therein
the requested (i) date of such Contract Borrowing, (ii) Type of
<PAGE>
Contract Advances comprising such Contract Borrowing,
(iii) aggregate amount of such Contract Borrowing and
(iv) Interest Period. Each Bank shall, before 12:00 noon (New
York City time) on the date of any such Contract Borrowing, make
available for the account of its Applicable Lending Office to the
Administrative Agent at its address referred to in Section 8.02,
in same-day funds, such Bank's ratable portion of such Contract
Borrowing. Upon the Administrative Agent's receipt of such funds
and upon fulfillment of the applicable conditions set forth in
Article III, the Administrative Agent will make such funds
available to the Borrower at the Administrative Agent's aforesaid
address.
(b) Each Notice of Contract Borrowing shall be
irrevocable and binding on the Borrower. In the case of any
Contract Borrowing which the related Notice of Contract Borrowing
specifies is to be comprised of Eurodollar Rate Contract Advances
or Adjusted CD Rate Advances, the Borrower shall indemnify each
Bank against any loss, cost or expense incurred by such Bank as a
result of any failure by the Borrower to complete such Borrowing
(whether or not due to a failure to fulfill on or before the date
specified in such Notice of Contract Borrowing the applicable
conditions set forth in Article III), such losses, costs and
expenses to include, without limitation, any loss (including loss
of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds
acquired by such Bank to fund the Contract Advance to be made by
such Bank as part of such Contract Borrowing when such Contract
Advance, as a result of such failure, is not made on such date.
(c) Unless the Administrative Agent shall have
received notice from a Bank prior to the date of any Contract
Borrowing that such Bank will not make available to the
Administrative Agent such Bank's ratable portion of such Contract
Borrowing, the Administrative Agent may assume that such Bank has
made such portion available to the Administrative Agent on the
date of such Contract Borrowing in accordance with subsection (a)
of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such
Bank shall not have so made such ratable portion available to the
Administrative Agent, such Bank and the Borrower severally agree
to repay to the Administrative Agent forthwith on demand such
corresponding amount, together with interest thereon, for each
day from the date such amount is made available to the Borrower
until the date such amount is repaid to the Administrative Agent,
at (i) in the case of the Borrower, the interest rate applicable
at the time to Contract Advances comprising such Contract
Borrowing and (ii) in the case of such Bank, an interest rate
equal at all times to the Federal Funds Effective Rate (as
defined in the definition of Alternate Base Rate in
Section 1.01). If such Bank shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Contract Advance as part of such Contract
Borrowing for purposes of this Agreement.
<PAGE>
(d) The failure of any Bank to make the Contract
Advance to be made by it as part of any Contract Borrowing shall
not relieve any other Bank of its obligation, if any, hereunder
to make its Contract Advance on the date of such Contract Borrow-
ing, but no Bank shall be responsible for the failure of any
other Bank to make the Contract Advance to be made by such other
Bank on the date of any Contract Borrowing.
SECTION 2.03. The Auction Advances. (a) Each Bank
severally agrees that the Borrower may make Auction Borrowings
under this Section 2.03 from time to time on any Business Day
during the period from the Closing Date until the Termination
Date, in each case on the terms and conditions hereinafter set
forth; provided, however, that at no time shall the aggregate
amount of Contract Advances, Auction Advances and Special Rate
Loans outstanding exceed the aggregate amount of the Commitments.
Each Auction Borrowing shall consist of Auction Advances of the
same Type made on the same day.
(i) The Borrower may request an Auction Borrowing
under this Section 2.03 by delivering to the Administrative
Agent (A) in the case of a Borrowing consisting of Fixed
Rate Auction Advances, by not later than 10:00 a.m. (New
York City time) one day prior to the day of the proposed
Auction Borrowing, and (B) in the case of a Borrowing
consisting of Eurodollar Rate Auction Advances, by not later
than 10:00 a.m. (New York City time) on the fourth Business
Day prior to the date of the proposed Auction Borrowing, a
notice of an Auction Borrowing (a "Notice of Auction
Borrowing"), in substantially the form of Exhibit A-2 hereto
specifying the proposed (1) date of such Auction Borrowing,
(2) Type of Auction Advances comprising such Auction
Borrowing, (3) aggregate amount (which shall not be less
than $10,000,000 or an integral multiple of $1,000,000 in
excess thereof) of such Auction Borrowing, (4) maturity date
for repayment of each Auction Advance to be made as part of
such Auction Borrowing (which maturity date shall be, in the
case of a Fixed Rate Auction Borrowing, not earlier than
seven days after the date of such Borrowing, and, in the
case of a Eurodollar Rate Auction Borrowing, not later than
1 month or 2, 3 or 6 months after the date of such
Borrowing, as the Borrower shall elect) and (5) any other
terms to be applicable to such Auction Borrowing. The
Administrative Agent shall in turn promptly notify (by cable
or telecopy) each Bank of each request for an Auction
Borrowing received by it from the Borrower and of the terms
contained in such Notice of Auction Borrowing.
(ii) Each Bank shall, if, in its sole discretion, it
elects to do so, irrevocably offer to make one or more
Auction Advances to the Borrower as part of such proposed
Auction Borrowing at a rate or rates of interest specified
by such Bank in its sole discretion, by notifying (by tele-
copy, cable or telephone (in the case of telephone, immedi-
ately confirmed by telecopy)) the Administrative Agent
<PAGE>
(which shall give prompt notice thereof to the Borrower),
(A) in the case of a Fixed Rate Auction Borrowing, before
10:00 a.m. (New York City time) on the date of such proposed
Auction Borrowing specified in the Notice of Auction Borrow-
ing delivered with respect thereto, and (B) in the case of a
Eurodollar Rate Auction Borrowing, before 10:00 a.m. (New
York City time) on the third Business Day prior to the date
of such proposed Auction Borrowing specified in the Notice
of Auction Borrowing delivered with respect thereto, of the
maximum amount of each Auction Advance which such Bank would
be willing to make as part of such proposed Auction
Borrowing (which amount may, subject to the proviso to the
first sentence of this Section 2.03(a), exceed such Bank's
Commitment), the rate or rates of interest therefor (and
whether reserves are included therein) and such Bank's
Applicable Lending Office with respect to each such Auction
Advance and any other terms and conditions required by such
Bank; provided that, if the Bank then acting as
Administrative Agent shall, in its sole discretion, elect to
make any such offer, it shall notify the Borrower of such
offer before 9:45 a.m. (New York City time) on the date
specified herein for notice of offers by the other Banks.
If any Bank shall fail to notify the Administrative Agent,
before the time specified herein for notice of offers, that
it elects to make such an offer, such Bank shall be deemed
to have elected not to make such an offer, and such Bank
shall not be obligated or entitled to, and shall not, make
any Auction Advance as part of such Auction Borrowing. If
any Bank shall provide telephonic notice to the
Administrative Agent of its election to make an offer, but
such telephonic notice has not been confirmed by telecopy to
the Administrative Agent at or before the time specified
herein for notice of offers, the Administrative Agent may,
in its sole discretion and without liability to such Bank or
the Borrower, elect whether or not to provide notice thereof
to the Borrower.
(iii) The Borrower shall, in turn, (A) in the case of a
Fixed Rate Auction Borrowing, before 11:00 a.m. (New York
City time) on the date of such proposed Auction Borrowing
specified in the Notice of Auction Borrowing delivered with
respect thereto, and (B) in the case of a Eurodollar Rate
Auction Borrowing, before 11:00 a.m. (New York City time) on
the third Business Day prior to the date of such proposed
Auction Borrowing specified in the Notice of Auction
Borrowing delivered with respect thereto, either:
(x) cancel such proposed Auction Borrowing by
giving the Administrative Agent notice to that effect,
or
(y) accept one or more of the offers made by any
Bank or Banks pursuant to paragraph (ii) above, in its
sole discretion, by giving notice to the Administrative
Agent of the amount of each Auction Advance (which
<PAGE>
amount shall be equal to or greater than $1,000,000,
and equal to or less than the maximum amount offered by
such Bank, notified to the Borrower by the Administra-
tive Agent on behalf of such Bank for such Auction
Advance pursuant to paragraph (ii) above) to be made by
each Bank as part of such Auction Borrowing, and reject
any remaining offers made by Banks pursuant to para-
graph (ii) above, by giving the Administrative Agent
notice to that effect; provided, however, that the
aggregate amount of such offers accepted by the
Borrower shall be equal at least to $10,000,000 or an
integral multiple of $1,000,000 in excess thereof.
(iv) If the Borrower notifies the Administrative Agent
that such Auction Borrowing is canceled pursuant to para-
graph (iii)(x) above, the Administrative Agent shall give
prompt notice (by cable or telecopy) thereof to the Banks,
and such Auction Borrowing shall not be made.
(v) If the Borrower accepts one or more of the offers
made by any Bank or Banks pursuant to paragraph (iii)(y)
above, such offer or offers and the Notice of Auction
Borrowing in respect thereof shall constitute a supplement
to this Agreement in respect of such Auction Borrowing and
the Auction Advances made pursuant thereto, and the
Administrative Agent shall in turn promptly notify (A) each
Bank that has made an offer as described in paragraph (ii)
above of the date and aggregate amount of such Auction
Borrowing, the interest rate thereon and whether or not any
offer or offers made by such Bank pursuant to paragraph (ii)
above have been accepted by the Borrower and (B) each Bank
that is to make an Auction Advance as part of such Auction
Borrowing (a "Participating Bank" as to such Auction Borrow-
ing) of the amount of each Auction Advance to be made by
such Bank as part of such Auction Borrowing and the maturity
date for the repayment of each such Auction Advance
(together with a confirmation of the Administrative Agent's
understanding of the interest rate and any other terms
applicable to each such Auction Advance; the Administrative
Agent shall assume, unless notified by such Bank to the
contrary, that its understanding of such information is
correct). Each such Participating Bank shall, before 12:00
noon (New York City time) on the date of such Auction
Borrowing specified in the notice received from the
Administrative Agent pursuant to clause (A) of the preceding
sentence, make available for the account of its Applicable
Lending Office to the Administrative Agent at its address
referred to in Section 8.02 such Bank's portion of such
Auction Borrowing, in same-day funds. Upon fulfillment of
the applicable conditions set forth in Article III and after
receipt by the Administrative Agent of such funds, the
Administrative Agent will make such funds available to the
Borrower at the Administrative Agent's aforesaid address.
Promptly after each Auction Borrowing, the Administrative
Agent will notify each Bank of the amount of the Auction
<PAGE>
Borrowing, such Bank's Auction Reduction resulting therefrom
and the date upon which such Auction Reduction commenced and
is anticipated to terminate.
(b) Within the limits and on the conditions set forth
in this Section 2.03, the Borrower may from time to time borrow
under this Section 2.03, repay pursuant to Section 2.07(c),
prepay under Section 2.07(d) and reborrow under this Section 2.03
and borrow under Section 2.01.
SECTION 2.04. Conversion and Continuation of Contract
Borrowings. The Borrower shall have the right at any time upon
prior irrevocable notice to the Administrative Agent (i) not
later than 12:00 noon (New York City time), one Business Day
prior to conversion, to convert any Borrowing consisting of
Eurodollar Rate Contract Advances or Adjusted CD Rate Advances
into a Borrowing consisting of Alternate Base Rate Advances, (ii)
not later than 10:00 a.m. (New York City time), two Business Days
prior to conversion or continuation, to convert any Borrowing
consisting of Eurodollar Rate Contract Advances or Alternate Base
Rate Advances into a Borrowing consisting of Adjusted CD Rate
Advances or to continue any Borrowing consisting of Adjusted CD
Rate Advances for an additional Interest Period, (iii) not later
than 10:00 a.m. (New York City time), three Business Days prior
to conversion or continuation, to convert any Borrowing
consisting of Alternate Base Rate Advances or Adjusted CD Rate
Advances into a Borrowing consisting of Eurodollar Rate Contract
Advances or to continue any Borrowing consisting of Eurodollar
Rate Contract Advances for an additional Interest Period,
(iv) not later than 10:00 a.m. (New York City time), three
Business Days prior to conversion, to convert the Interest Period
with respect to any Borrowing consisting of Eurodollar Rate
Contract Advances to another permissible Interest Period, and
(v) not later than 10:00 a.m. (New York City time), two Business
Days prior to conversion, to convert the Interest Period with
respect to any Borrowing consisting of Adjusted CD Rate Advances
to another permissible Interest Period, subject in each case to
the following:
(a) each conversion or continuation shall be made pro
rata among the Banks in accordance with the respective
principal amounts of the Advances comprising the converted
or continued Contract Borrowing;
(b) if less than all the outstanding principal amount
of any Contract Borrowing shall be converted or continued,
the aggregate principal amount of such Contract Borrowing
converted or continued shall be an amount of $10,000,000 or
an integral multiple of $1,000,000 in excess thereof;
(c) accrued interest on an Advance (or portion
thereof) being converted shall be paid by the Borrower at
the time of conversion;
<PAGE>
(d) if any Borrowing consisting of Eurodollar Rate
Contract Advances or Adjusted CD Rate Advances is converted
at a time other than the end of the Interest Period
applicable thereto, the Borrower shall pay, upon demand, any
amounts due to the Banks pursuant to Section 8.04(b) as a
result of such conversion;
(e) any portion of a Contract Borrowing maturing or
required to be repaid in less than one month may not be
converted into or continued as a Borrowing consisting of
Eurodollar Rate Contract Advances;
(f) any portion of a Borrowing maturing or required to
be repaid in less than 30 days may not be converted into or
continued as a Borrowing consisting of Adjusted CD Rate
Advances;
(g) any portion of a Borrowing consisting of
Eurodollar Rate Contract Advances or Adjusted CD Rate
Advances which cannot be converted into or continued as such
by reason of clauses (e) and (f) above shall be
automatically converted at the end of the Interest Period in
effect for such Borrowing into a Borrowing consisting of
Alternate Base Rate Advances; and
(h) no Interest Period may be selected for any
Borrowing consisting of Eurodollar Rate Contract Advances or
Adjusted CD Rate Advances that would end later than the
Maturity Date.
Each notice pursuant to this Section 2.04 shall be
irrevocable and shall refer to this Agreement and specify (i) the
identity and amount of the Contract Borrowing that the Borrower
requests be converted or continued, (ii) whether such Contract
Borrowing is to be converted to or continued as a Borrowing
consisting of Eurodollar Rate Contract Advances, Adjusted CD Rate
Advances or Alternate Base Rate Advances, (iii) if such notice
requests a conversion, the date of such conversion (which shall
be a Business Day) and (iv) if such Contract Borrowing is to be
converted to or continued as a Borrowing consisting of Eurodollar
Rate Contract Advances or Adjusted CD Rate Advances, the Interest
Period with respect thereto. If no Interest Period is specified
in any such notice with respect to any conversion to or
continuation as a Borrowing consisting of Eurodollar Rate
Contract Advances or Adjusted CD Rate Advances, the Borrower
shall be deemed to have selected an Interest Period of one
month's duration, in the case of a Borrowing consisting of
Eurodollar Rate Contract Advances, or 30 days' duration, in the
case of a Borrowing consisting of Adjusted CD Rate Advances. The
Administrative Agent shall advise the other Banks of any notice
given pursuant to this Section 2.04 and of each Bank's portion of
any converted or continued Contract Borrowing. If the Borrower
shall not have given notice in accordance with this Section 2.04
to continue any Contract Borrowing into a subsequent Interest
Period (and shall not otherwise have given notice in accordance
<PAGE>
with this Section 2.04 to convert such Contract Borrowing), such
Contract Borrowing shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof),
automatically be continued into a new Interest Period as a
Borrowing consisting of Alternate Base Rate Advances.
SECTION 2.05. Fees. The Borrower agrees to pay to
each Bank, through the Administrative Agent, a facility fee equal
to the Applicable Fee Percentage multiplied by the daily average
amount of the Commitment of such Bank, whether used or unused,
during the preceding quarter (or shorter period commencing with
the Closing Date or ending with the Termination Date), payable in
arrears on the last day of each March, June, September and
December during the term of the Commitments and on the
Termination Date.
SECTION 2.06. Optional Reduction of the Commitments.
The Borrower shall have the right, upon at least two Business
Days' irrevocable notice to the Administrative Agent, to termi-
nate in whole or reduce ratably in part the respective Commit-
ments of the Banks; provided, however, that (i) each partial
reduction shall be in the aggregate amount of $10,000,000 or in
an integral multiple of $1,000,000 in excess thereof and (ii) no
such termination or reduction shall be made which would reduce
the Commitments to an amount less than the aggregate outstanding
principal amount of the Advances and Special Rate Loans. The
Administrative Agent shall promptly thereafter notify each Bank
of such termination or reduction.
SECTION 2.07. Repayment of Advances and Special Rate
Loans; Prepayment. (a) The Borrower shall repay to the
Administrative Agent for the account of each Bank the principal
amount of each Contract Advance made by each Bank on the Maturity
Date.
(b) The Borrower shall repay to each Bank making a
Special Rate Loan the principal amount of such Special Rate Loan
on the date when due (as agreed by the Borrower and the Bank
making the relevant Special Rate Loan in accordance with
Section 2.01(b)).
(c) The Borrower shall repay to the Administrative
Agent for the account of each Participating Bank which has made
an Auction Advance on the maturity date of each Auction Advance
(such maturity date being that specified by the Borrower for
repayment of such Auction Advance in the Notice of Auction Bor-
rowing delivered with respect thereto) the then unpaid principal
amount of such Auction Advance.
(d) The Borrower may, on notice given to the
Administrative Agent (i) in the case of Alternate Base Rate
Advances, not later than 10:30 a.m. (New York City time) on the
day of the proposed prepayment, and (ii) in the case of Adjusted
CD Rate Advances and Eurodollar Rate Contract Advances, not later
than 10:30 a.m. (New York City time) on the second Business Day
<PAGE>
prior to the day of the proposed prepayment, stating the proposed
date and aggregate principal amount of the prepayment, and if
such notice is given the Borrower shall, prepay the outstanding
principal amounts of the Contract Advances constituting part of
the same Contract Borrowing in whole or ratably in part;
provided, however, that any such partial prepayment shall be in
an aggregate principal amount not less than $10,000,000, and
provided, further, that any such prepayment of Adjusted CD Rate
Advances or Eurodollar Rate Contract Advances shall be subject to
the provisions of Section 8.04(b) hereof. The Borrower may not
(x) prepay any principal amount of any Auction Advance unless the
Participating Bank making such Auction Advance shall have
expressly agreed thereto or (y) prepay any principal amount of
any Special Rate Loan unless the Bank making such Special Rate
Loan shall have expressly agreed thereto. The Administrative
Agent shall promptly notify each Bank of any prepayments pursuant
to this Section 2.07(d) promptly after any such prepayment. The
Borrower shall have no right to prepay any principal amount of
any Advance except as expressly set forth in this
Section 2.07(d).
SECTION 2.08. Interest. The Borrower shall pay
interest on each Advance and Special Rate Loan made by each Bank
from the date of such Advance or Special Rate Loan, as the case
may be, until paid in full, at the following rates per annum:
(i) Contract Advances. If such Advance is a Contract
Advance, the Applicable Rate from time to time for such
Contract Advance from the date of such Advance until the
last day of the last Interest Period therefor, payable on
the last day of each Interest Period and, in the case of any
Interest Period longer than 90 days (in the case of Adjusted
CD Rate Advances) or three months (in the case of Eurodollar
Rate Contract Advances), on such 90th day or the last day of
such three-month period, as the case may be.
(ii) Auction Advances. If such Advance is an Auction
Advance, a rate per annum equal at all times from the date
of such Advance until the maturity thereof at the rate of
interest for such Auction Advance specified by the Partici-
pating Bank making such Auction Advance in its notice with
respect thereto delivered pursuant to subsection (a)(ii) of
Section 2.03 above, payable on the proposed maturity date
specified by the Borrower for such Auction Advance in the
related Notice of Auction Borrowing delivered pursuant to
subsection (a)(i) of Section 2.03 above, provided, that in
the case of Advances with maturities of greater than three
months, interest shall be payable at the end of each three-
month period for such Advance.
(iii) Special Rate Loans. If such loan is a Special
Rate Loan, a rate per annum equal at all times as agreed to
between the Bank making such Special Rate Loan and the Bor-
rower at the time of the making of the Special Rate Loan by
such Bank in accordance with Section 2.01(b).
<PAGE>
(iv) Default Amounts. In the case of any past-due
amounts of the principal of, or (to the fullest extent
permitted by law) interest on, any Advance or Special Rate
Loan, or any other amount payable under this Agreement, from
the date such amount becomes due until paid in full, payable
on demand, a rate per annum equal at all times to 2% above
the Alternate Base Rate in effect from time to time.
SECTION 2.09. Interest Rate Determination. Each
Reference Bank agrees to furnish to the Administrative Agent
timely information for the purpose of determining each Adjusted
CD Rate or Eurodollar Rate, as applicable. If any one or more of
the Reference Banks shall not furnish such timely information to
the Administrative Agent for the purpose of determining any such
interest rate, the Administrative Agent shall determine such
interest rate on the basis of timely information furnished by the
remaining Reference Banks, subject, however, to Section 2.10(a)
hereof.
SECTION 2.10. Alternate Rate of Interest. (a) If
fewer than two Reference Banks furnish timely information to the
Administrative Agent for determining the Eurodollar Rate for any
Eurodollar Rate Advances or the Adjusted CD Rate for any Adjusted
CD Rate Advances comprising any requested Borrowing, the
Administrative Agent will notify the Banks and the Borrower
thereof, and the right of the Borrower to select Advances of such
Type for such Borrowing or any subsequent Borrowing shall be
suspended until the Administrative Agent shall notify the
Borrower and the Banks that the circumstances causing such
suspension no longer exist, and (i) any request by the Borrower
for a Eurodollar Rate Auction Advance shall be of no force and
effect and shall be denied by the Administrative Agent and (ii)
any request by the Borrower for a Eurodollar Rate Contract
Advance or an Adjusted CD Rate Advance, as the case may be, shall
be deemed to be a request for an Alternate Base Rate Advance; and
(b) If Banks having more than 66-2/3% of the
Commitments shall, at least one Business Day before the date of
any requested Borrowing, notify the Administrative Agent that the
Eurodollar Rate for any Eurodollar Rate Advances or the Adjusted
CD Rate for any Adjusted CD Rate Advances comprising such Borrow-
ing will not adequately reflect the cost to such Banks of making
or funding their respective Advances for such Borrowing, the
Administrative Agent will notify the Banks and the Borrower
thereof, and the right of the Borrower to select Advances of such
Type for such Borrowing or any subsequent Borrowing shall be
suspended until the Administrative Agent shall notify the
Borrower and the Banks that the circumstances causing such
suspension no longer exist, and (i) any request by the Borrower
for a Eurodollar Rate Auction Advance shall be of no force and
effect and shall be denied by the Administrative Agent and (ii)
any request by the Borrower for a Eurodollar Rate Contract
Advance or an Adjusted CD Rate Advance, as the case may be, shall
be deemed to be a request for an Alternate Base Rate Advance.
<PAGE>
SECTION 2.11. Increased Costs; Increased Capital.
(a) If, due to either (i) the introduction after the date hereof
of or any change after the date hereof (other than any change by
way of imposition or increase of reserve requirements, in the
case of Adjusted CD Rate Advances, included in the determination
of the Domestic Reserve Percentage for such Advances or, in the
case of Eurodollar Rate Advances, included in the determination
of the Eurodollar Rate Reserve Percentage for such Advances) in
or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request received from any
central bank or other governmental authority after the date
hereof (whether or not having the force of law), there shall be
any increase in the cost to any Bank of agreeing to make or
making, funding or maintaining Adjusted CD Rate Advances or
Eurodollar Rate Advances, then the Borrower shall from time to
time, upon demand by such Bank (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the
account of such Bank additional amounts sufficient to compensate
such Bank for such increased cost. Increased costs shall not
include income, stamp or other taxes, imposts, duties, charges,
fees, deductions or withholdings imposed, levied, collected,
withheld or assessed by the United States of America or any
political subdivision or taxing authority thereof or therein
(including Puerto Rico) or of the country in which any Bank's
principal office or Applicable Lending Office may be located or
any political subdivision or taxing authority thereof or therein.
Each Bank agrees that, upon the occurrence of any event giving
rise to a demand under this subsection 2.11(a) with respect to
the Eurodollar Lending Office or the CD Lending Office of such
Bank, it will, if requested by the Borrower and to the extent
permitted by law or the relevant governmental authority, endeavor
in good faith and consistent with its internal policies to avoid
or minimize the increase in costs resulting from such event by
endeavoring to change its Eurodollar Lending Office or CD Lending
Office, as appropriate; provided, however, that such avoidance or
minimization can be made in such a manner that such Bank, in its
sole determination, suffers no economic, legal or regulatory
disadvantage. A certificate as to the amount of and specifying
in reasonable detail the basis for such increased cost, submitted
to the Borrower and the Administrative Agent by such Bank, shall
constitute such demand and shall, in the absence of manifest
error, be conclusive and binding for all purposes.
(b) If either (i) the introduction after the date
hereof of, or any change after the date hereof in or in the
interpretation of, any law or regulation or (ii) the compliance
by any Bank with any guideline or request received from any
central bank or other governmental authority after the date
hereof (whether or not having the force of law), affects or would
affect the amount of capital required or expected to be main-
tained by such Bank or any corporation controlling such Bank and
such Bank determines that the amount of such capital is increased
by or based upon the existence of its Advances or Special Rate
Loans or Commitment, then the Borrower shall, from time to time,
upon demand by such Bank (with a copy of such demand to the
<PAGE>
Administrative Agent), immediately pay to the Administrative
Agent for the account of such Bank additional amounts sufficient
to compensate such Bank to the extent that such Bank determined
such increase in capital to be allocable to the existence of such
Bank's Advances or Special Rate Loans or Commitment. A certifi-
cate as to the amount of such increased capital and specifying in
reasonable detail the basis therefor, submitted to the Borrower
and the Administrative Agent by such Bank, shall constitute such
demand and shall, in the absence of manifest error, be conclusive
and binding for all purposes. Each Bank shall use all reasonable
efforts to mitigate the effect upon the Borrower of any such
increased capital requirement and shall assess any cost related
to such increased capital on a nondiscriminatory basis among the
Borrower and other borrowers of such Bank to which it applies and
such Bank shall not be entitled to demand or be compensated for
any increased capital requirement unless it is, as a result of
such law, regulation, guideline or request, such Bank's policy
generally to seek to exercise such rights, where available,
against other borrowers of such Bank.
(c) Notwithstanding the foregoing provisions of this
Section 2.11, (i) the Borrower shall not be required to reimburse
any Bank for any increased costs incurred more than three months
prior to the date that such Bank notifies the Borrower in writing
thereof and (ii) in the event any Bank makes an assignment of, or
grants a participation in, an Advance or Special Rate Loan or its
Commitment pursuant to Section 8.07, the Borrower shall not be
obligated to reimburse for increased costs with respect to such
Advance, Special Rate Loan or Commitment to the extent that the
aggregate amount thereof exceeds the aggregate amount for which
the Borrower would have been obligated (determined, in the case
of an assignment, on the basis of laws and regulations in effect
at the time of such assignment) if such Bank had not made such
assignment or granted such participation.
SECTION 2.12. Additional Interest on Eurodollar Rate
Advances. The Borrower shall pay to the Administrative Agent for
the account of each Bank any costs which such Bank determines are
attributable to such Bank's compliance with regulations of the
Board of Governors of the Federal Reserve System requiring the
maintenance of reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities. Such costs
shall be paid to the Administrative Agent for the account of such
Bank in the form of additional interest on the unpaid principal
amount of each Eurodollar Rate Advance of such Bank, from the
date of such Advance until such principal amount is paid in full,
at an interest rate per annum equal at all times to the remainder
obtained by subtracting (i) the Eurodollar Rate for the applic-
able period for such Advance from (ii) the rate obtained by
dividing such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Bank for such
period, payable on each date on which interest is payable on such
Advance. Such additional interest shall be determined by such
Bank and notified to the Borrower and the Administrative Agent.
A certificate setting forth the amount of such additional inter-
<PAGE>
est, submitted to the Borrower and the Administrative Agent by
such Bank, shall be conclusive and binding for all purposes,
absent manifest error.
SECTION 2.13. Change in Legality. If any Bank shall,
at least three Business Days before the date of any requested
Borrowing consisting of Eurodollar Rate Advances or at least two
Business Days before the date of any requested Borrowing
consisting of Adjusted CD Rate Advances, notify the
Administrative Agent that the introduction of or any change in or
in the interpretation of any law or regulation makes it unlawful,
or that any central bank or other governmental authority asserts
that it is unlawful, for such Bank or its Applicable Lending
Office to perform its obligations hereunder to make, fund or
maintain Eurodollar Rate Advances or Adjusted CD Rate Advances
hereunder, the right of the Borrower to select Advances of such
Type from such Bank for such Borrowing or any subsequent
Borrowing shall be suspended until such Bank shall notify the
Administrative Agent that the circumstances causing such
suspension no longer exist; and during the period when such
obligation of such Bank is suspended, any Borrowing consisting of
Eurodollar Rate Advances or Adjusted CD Rate Advances, as the
case may be, shall not exceed the Commitments of the other Banks
less the aggregate amount of any Special Rate Loans and Auction
Advances then outstanding, and shall be made by the other Banks
pro rata according to their respective Commitments.
SECTION 2.14. Payments and Computations. (a) Except
as expressly provided in Section 2.01(b)(ii), the Borrower shall
make each payment hereunder from a bank account of the Borrower
located in the United States not later than 11:00 a.m. (New York
City time) on the day when due in U.S. dollars to the
Administrative Agent at its address referred to in Section 8.02
in same-day funds, without set-off or counterclaim. The
Administrative Agent will promptly thereafter cause to be
distributed like funds to the Banks entitled thereto for the
account of their respective Applicable Lending Offices, in each
case to be applied in accordance with the terms of this
Agreement.
(b) All computations of interest based on the
Alternate Base Rate shall be made by the Administrative Agent on
the basis of a year of 365 or 366 days, as the case may be, when
determined by reference to the Prime Rate (as defined in the
definition of Alternate Base Rate in Section 1.01) and on the
basis of a year of 360 days at all other times, and all
computations of fees and of interest based on the Adjusted CD
Rate, the Eurodollar Rate or the Fixed Rate shall be made by the
Administrative Agent, and all computations of interest pursuant
to Section 2.09 shall be made by the Reference Banks, on the
basis of a year of 360 days, in each case for the actual number
of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are
payable. Each determination by the Administrative Agent (or, in
the case of Section 2.09, by the Reference Banks) of an interest
<PAGE>
rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(c) Whenever any payment hereunder shall be stated to
be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of
time shall be included in the computation of payment of interest
or fees, as the case may be; provided, however, that, if such
extension would cause payment of interest on or principal of
Eurodollar Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding
Business Day.
(d) Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any
payment is due to the Banks hereunder that the Borrower will not
make such payment in full, the Administrative Agent may assume
that the Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to
each Bank on such due date an amount equal to the amount then due
such Bank. If and to the extent the Borrower shall not have so
made such payment in full to the Administrative Agent, each Bank
shall repay to the Administrative Agent forthwith on demand such
amount distributed to such Bank together with interest thereon,
for each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the
Administrative Agent, at the Federal Funds Effective Rate (as
defined in the definition of Alternate Base Rate in
Section 1.01).
(e) Each Bank shall maintain on its books a loan
account in the name of the Borrower in which shall be recorded
all Advances made by such Bank to the Borrower, the interest rate
and the maturity date of each such Advance and all payments of
principal and interest made by the Borrower with respect to such
Advances. The obligation of the Borrower to repay the Advances
made by each Bank and to pay interest thereon shall be evidenced
by the entries from time to time made in the loan account of such
Bank maintained pursuant to this Section 2.14(e); provided that
the failure to make an entry with respect to an Advance shall not
affect the obligations of the Borrower hereunder with respect to
such Advance. In case of any dispute, action or proceeding
relating to any Advance, the entries in such loan account shall
be prima facie evidence of the amount of such Advance and of any
amounts paid or payable with respect thereto.
(f) The Administrative Agent shall maintain on its
books a set of accounts in which shall be recorded all Advances
made by the Banks to the Borrower, the interest rates and matur-
ity dates of such Advances and all payments of principal and
interest made thereon. In case of any discrepancy between the
entries in the Administrative Agent's books and the entries in
any Bank's books, such Bank's records shall be considered
correct, in the absence of manifest error.
<PAGE>
SECTION 2.15. Taxes on Payments. (a) All payments
made by the Borrower under this Agreement shall be made free and
clear of, and without reduction for or on account of, any income,
stamp or other taxes, imposts, duties, charges, fees, deductions
or withholdings, imposed, levied, collected, withheld or assessed
by the United States of America (or by any political subdivision
or taxing authority thereof or therein) as a result of (i) the
introduction after the date hereof of any law, regulation,
treaty, directive or guideline (whether or not having the force
of law), or (ii) any change after the date hereof in any law,
regulation, treaty, directive or guideline (whether or not having
the force of law), or (iii) any change after the date hereof in
the interpretation or application of any law, regulation, treaty,
directive or guideline (whether or not having the force of law)
or (iv) any such taxes, imposts, duties, charges, fees,
deductions or withholdings being imposed, levied, collected,
withheld or assessed at a greater rate than the rate that would
have been applicable had such an introduction or change not been
made, but only to the extent of the increase in such rate
("Withholding Taxes"). If any Withholding Taxes are required to
be withheld from any amounts payable to or for the account of any
Bank hereunder, the amounts so payable to or for the account of
such Bank shall be increased to the extent necessary to yield to
such Bank (after payment of all Withholding Taxes) interest or
any such other amounts payable hereunder at the rates or in the
amounts payable to or for the account of such Bank under this
Agreement prior to such introduction or change. Whenever any
Withholding Tax is payable by the Borrower, as promptly as
possible thereafter, the Borrower shall send to the
Administrative Agent, for the account of such Bank, a certified
copy of an original official receipt showing payment thereof. If
the Borrower fails to pay any Withholding Taxes when due to the
appropriate taxing authority or fails to remit to the
Administrative Agent for the account of any Bank the required
receipts or other required documentary evidence, the Borrower
shall indemnify such Bank or the Administrative Agent for any
incremental taxes, interest or penalties that may become payable
by such Bank or the Administrative Agent as a result of any such
failure.
(b) At least four Business Days prior to the first
Borrowing or, if the first Borrowing does not occur within thirty
days after the date of execution of this Agreement, by the end of
such thirty day period, each Bank that is organized outside the
United States agrees that it will deliver to the Borrower and the
Administrative Agent two duly completed copies of United States
Internal Revenue Service Form 1001 (or such other documentation
or information as may, under applicable United States federal
income tax statutes or regulations, be required in order to claim
an exemption or reduction from United States income tax withhold-
ing by reason of an applicable treaty with the United States,
such documentation or other information being hereafter referred
to as "Form 1001") or 4224 (or such other documentation or
information as may, under applicable United States federal income
tax statutes or regulations, be required in order to claim an
<PAGE>
exemption from United States income tax withholding for income
that is effectively connected with the conduct of a trade or
business within the United States, such documentation or other
information being hereafter referred to as "Form 4224"), as the
case may be, indicating in each case that such Bank is either
entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income
taxes or, as the case may be, is subject to such limited
deduction or withholding as it is capable of recovering in full
from a source other than the Borrower. Each Bank which delivers
to the Borrower and the Administrative Agent a Form 1001 or 4224
pursuant to the next preceding sentence further undertakes to
deliver to the Borrower and the Administrative Agent two further
copies of the said Form 1001 or 4224, or successor applicable
form or certificate, as the case may be, as and when the previous
form filed by it hereunder shall expire or shall become
incomplete or inaccurate in any respect, unless in any of such
cases an event has occurred prior to the date on which any such
delivery would otherwise be required which renders such form
inapplicable.
(c) If at any time any Bank by reason of payment by
the Borrower of any Withholding Taxes obtains a credit against,
or return or reduction of, any tax payable by it, or any other
currently realized tax benefit, which it would not have enjoyed
but for such payment ("Tax Benefit"), such Bank shall thereupon
pay to the Borrower the amount which such Bank shall certify to
be the amount that, after payment, will leave such Bank in the
same economic position it would have been in had it received no
such Tax Benefit ("Equalization Amount"); provided, however, that
if such Bank shall subsequently determine that it has lost the
benefit of all or a portion of such Tax Benefit, the Borrower
shall promptly remit to such Bank the amount certified by such
Bank to be the amount necessary to restore such Bank to the
position it would have been in if no payment had been made
pursuant to this Section 2.15(c); provided, further, however,
that if such Bank shall be prevented by applicable law from
paying the Borrower all or any portion of the Equalization Amount
owing to the Borrower such payment need not be made to the extent
such Bank is so prevented and the amount not paid shall be
credited to the extent lawful against future payment owing to
such Bank; provided, further, however, that the aggregate of all
Equalization Amounts paid by any Bank shall in no event exceed
the aggregate of all amounts paid by the Borrower to such Bank in
respect of Withholding Taxes plus, in the case of a Tax Benefit
that occurs by reason of a refund, interest actually received
from the relevant taxing authority with respect to such refund.
A certificate submitted in good faith by the Bank pursuant to
this Section 2.15(c) shall be deemed conclusive absent manifest
error.
(d) In the event a Bank shall become aware that the
Borrower is required to pay any additional amount to it pursuant
to Section 2.15(a), such Bank shall promptly notify the
Administrative Agent and the Borrower of such fact and shall use
<PAGE>
reasonable efforts, consistent with legal and regulatory restric-
tions, to change the jurisdiction of its Applicable Lending
Office if the making of such change (i) would avoid the need for
or reduce the amount of any such additional amounts that may
thereafter accrue, (ii) would not, in the good faith
determination of such Bank, be disadvantageous for regulatory or
competitive reasons to such Bank and (iii) would not require such
Bank to incur any cost or forego any economic advantage for which
the Borrower shall not have agreed to reimburse and indemnify
such Bank.
(e) Notwithstanding the foregoing provisions of this
Section 2.15, in the event any Bank makes an assignment of, or
grants a participation in, an Advance or Special Rate Loan or its
Commitment pursuant to Section 8.07, the Borrower shall not be
obligated to pay any taxes, imposts, duties, charges, fees,
deductions or withholdings to the extent that the aggregate
amount thereof exceeds the aggregate amount for which the
Borrower would have been obligated (determined, in the case of an
assignment, on the basis of laws and regulations in effect at the
time of such assignment) if such Bank had not made such
assignment or granted such participation.
SECTION 2.16. Sharing of Payments, Etc. If any Bank
shall obtain any payment (whether voluntary, involuntary, through
the exercise of any right of setoff or otherwise) on account of
the Contract Advances made by it (other than pursuant to
Sections 2.11, 2.12, 2.15, 2.17, 8.04 or 8.07(g) hereof) in
excess of its ratable share of payments on account of the
Contract Advances obtained by all the Banks, then such Bank shall
forthwith purchase from the other Banks through the
Administrative Agent such participations in the Contract Advances
made by them as shall be necessary to cause such purchasing Bank
to share the excess payment ratably with each of them; provided,
however, that, if all or any portion of such excess payment is
thereafter recovered from such purchasing Bank, such purchase
from each Bank shall be rescinded and such Bank shall repay to
the purchasing Bank the purchase price to the extent of such
recovery together with an amount equal to such Bank's ratable
share (according to the proportion of (i) the amount of such
Bank's required repayment to (ii) the total amount so recovered
from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so
recovered. The Borrower agrees that any Bank so purchasing a
participation from another Bank pursuant to this Section 2.16
may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of setoff) with respect to
such participation as fully as if such Bank were the direct
creditor of the Borrower in the amount of such participation.
SECTION 2.17. Removal of a Bank. The Borrower shall
have the right, by giving at least 15 Business Days' prior notice
in writing to the affected Bank and the Administrative Agent, at
any time when no Default or Event of Default has occurred and is
then continuing, to remove as a party hereto any Bank having a
<PAGE>
credit rating of C/D (or its equivalent) or lower by Thomson
BankWatch, Inc. (or any successor thereto), such removal to be
effective as of the date specified in such notice from the
Borrower (a "Removal Date"), which date shall be the last day of
an Interest Period. On any Removal Date, the Borrower shall
repay all the outstanding Contract Advances, Special Rate Loans
and Auction Advances of the affected Bank, together with all
accrued interest, fees and all other amounts owing hereunder to
such Bank. Upon such Removal Date and receipt of the payment
referred to above, the Commitment of such affected Bank shall
terminate and such Bank shall cease thereafter to constitute a
Bank hereunder. The Borrower shall have the right to offer to
one or more Banks the right to increase their Commitments up to,
in the aggregate for all such increases, the Commitment of any
Bank which is removed pursuant to the foregoing provisions of
this Section 2.17 (such Commitment being herein called an
"Unallocated Commitment") effective on the relevant Removal Date,
it being understood that no Bank shall be obligated to increase
its Commitment in response to any such offer. The Borrower shall
also have the right to offer all or any portion of an Unallocated
Commitment to one or more commercial banks not parties hereto
having a credit rating higher than C/D (or its equivalent) by
Thomson BankWatch, Inc. (or any successor thereto), and, upon
each such bank's acceptance of such offer and execution and
delivery of an instrument agreeing to the terms and conditions
hereof, each such bank shall become a Bank hereunder with a
Commitment in an amount specified in such instrument. If the
Bank which is removed pursuant to this Section 2.17 is a Refer-
ence Bank, the Administrative Agent, with the consent of the
Borrower (which shall not be unreasonably withheld), shall
appoint a new Reference Bank from among the Banks. The
obligations of the Borrower described in Sections 2.02(b), 2.11,
2.12, 2.15, 8.04 and 8.12 that arose prior to the date of removal
shall survive for the benefit of any Bank removed pursuant to
this Section 2.17 notwithstanding such removal.
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial
Borrowing. The obligation of each Bank to make an Advance on the
occasion of the initial Borrowing is subject to the following
conditions precedent (each of the documents referred to below to
be in form and substance satisfactory to the Administrative
Agent, dated a date on or within 10 days prior to the date of
such Borrowing and in sufficient copies for each Bank):
(a) The Administrative Agent shall have received, on
behalf of the Banks, certified copies of the resolutions of
the Board of Directors of the Borrower approving this
Agreement and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with
respect to this Agreement.
(b) The Administrative Agent shall have received, on
behalf of the Banks, a certificate of the Secretary or an
<PAGE>
Assistant Secretary of the Borrower certifying the names and
true signatures of the officers of the Borrower authorized
to sign this Agreement and the other documents to be
delivered hereunder.
(c) The Administrative Agent shall have received, on
behalf of the Banks, a favorable opinion of the Senior Vice
President and General Counsel or Assistant General Counsel
of the Borrower, substantially in the form of Exhibit C
hereto and as to such other matters as any Bank through the
Administrative Agent may reasonably request.
(d) The Administrative Agent shall have received, on
behalf of the Banks, a favorable opinion of Milbank, Tweed,
Hadley & McCloy, special New York counsel for the
Administrative Agent, substantially in the form of Exhibit D
hereto.
(e) The Borrower shall not have made any change in the
structure or terms of the Tender Offer disclosed to the
Banks prior to the Closing Date, except for changes that, in
the reasonable opinion of the Majority Banks, are not
materially adverse from the standpoint of the financing
contemplated hereby.
(f) The Borrower shall have certified to the
Administrative Agent that all material conditions to the
Tender Offer have been satisfied (without any waiver thereof
by the Borrower).
(g) The Merger Agreement shall be in substantially the
same form as provided to the Banks prior to the Closing
Date, except for amendments that, in the reasonable opinion
of the Majority Banks, are not materially adverse from the
standpoint of the financing contemplated hereby.
(h) The Borrower shall have paid all fees due and
payable as of or before the Closing Date to the Banks.
SECTION 3.02. Conditions Precedent to Each Borrowing.
The obligation of each Bank to make an Advance in connection with
any Borrowing shall be subject to the further conditions
precedent that on the date of such Borrowing the following
statements shall be true (and each of the giving of the
applicable Notice of Contract Borrowing or Notice of Auction
Borrowing and the acceptance by the Borrower of the proceeds of
such Borrowing shall constitute a representation and warranty by
the Borrower that on the date of such Borrowing such statements
are true):
(i) the representations and warranties contained in
Section 4.01 (excluding those contained in subsections (e)
and (f) thereof and, in the event of a Borrowing for general
corporate purposes, excluding those contained in
subsection (k) thereof) are correct on and as of the date of
<PAGE>
such Borrowing, before and after giving effect to such
Borrowing and to the application of the proceeds therefrom,
as though made on and as of such date; and
(ii) no Default or Event of Default has occurred and is
continuing, or would result from such Borrowing or from the
application of the proceeds therefrom.
SECTION 3.03. Borrowings for General Corporate
Purposes. With respect to any Borrowing the proceeds of which
are to be used in whole or in part for the general corporate
purposes of the Borrower, the conditions precedent set forth in
paragraphs (e), (f) and (g) of Section 3.01 shall be deemed to
have been satisfied upon the consummation of the Tender Offer in
accordance with the terms and conditions hereof and thereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower. The Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Utah.
(b) The execution, delivery and performance by the
Borrower of this Agreement are within the Borrower's corpo-
rate powers, have been duly authorized by all necessary
corporate action and do not contravene (i) the Borrower's
charter or by-laws or (ii) any law or any contractual
restriction binding on or affecting the Borrower.
(c) No authorization or approval or other action by,
and no notice to or filing with, any governmental authority
or regulatory body is required for the due execution,
delivery and performance by the Borrower of this Agreement
except such as have been duly obtained or made and are in
full force and effect.
(d) This Agreement is the legal, valid and binding
obligation of the Borrower enforceable against the Borrower
in accordance with its terms.
(e) The statement of consolidated financial position
of the Borrower and its consolidated Subsidiaries as at
December 31, 1994, and the related statements of consoli-
dated income and consolidated changes in common stock-
holders' equity of the Borrower and its consolidated Sub-
sidiaries for the fiscal year then ended, copies of which
have been furnished to each Bank, fairly present the finan-
cial condition of the Borrower and its consolidated Subsidi-
aries as at such date and the results of the operations of
the Borrower and its consolidated Subsidiaries for the
<PAGE>
period ended on such date, all in accordance with generally
accepted accounting principles consistently applied, and
since December 31, 1994, there has been no material adverse
change in such condition or operations.
(f) There is no pending or threatened action or pro-
ceeding affecting the Borrower or any of its consolidated
Subsidiaries before any court, governmental agency or
arbitrator, (i) which purports to affect the legality,
validity or enforceability of this Agreement, or (ii) which
may materially adversely affect the consummation of the
Tender Offer, or (iii) except as set forth in the Borrower's
annual report on Form 10-K for the fiscal year ended
December 31, 1994 (a copy of which has been furnished to
each Bank), which may materially adversely affect the
financial condition or operations of the Borrower or any of
its Subsidiaries, taken as a whole.
(g) After applying the proceeds of each Advance and
Special Rate Loan, not more than 25% of the value of the
assets of the Borrower and its Subsidiaries (as determined
in good faith by the Borrower) that are subject to
Section 5.02(a)(i) or Section 5.02(d) will consist of or be
represented by Margin Stock.
(h) The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying
Margin Stock, and no proceeds of any Advance or Special Rate
Loan will be used for any purpose which violates the
provisions of the regulations of the Board of Governors of
the Federal Reserve System. If requested by any Bank or the
Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Bank a statement in conformity
with the requirements of Federal Reserve Form U-1 referred
to in Regulation U, the statements made in which shall be
such, in the opinion of each Bank, as to permit the trans-
actions contemplated hereby in accordance with Regulation U.
(i) No Termination Event has occurred nor is
reasonably expected to occur with respect to any Plan which
may materially adversely affect the financial condition or
operations of the Borrower and its Subsidiaries, taken as a
whole. Neither the Borrower nor any of its ERISA Affiliates
has incurred nor reasonably expects to incur any withdrawal
liability under ERISA to any Multiemployer Plan which may
materially adversely affect the financial condition or
operations of the Borrower and its Subsidiaries, taken as a
whole. Schedule B (Actuarial Information) to the 1993
annual report (Form 5500 Series) with respect to each Plan,
copies of which have been filed with the Internal Revenue
Service and furnished to each Bank, is complete and accurate
in all material respects and in all material respects fairly
presents the funding status of each Plan. No Reportable
Event has occurred and is continuing with respect to any
Plan which may materially adversely affect the financial
<PAGE>
condition or operations of the Borrower and its
Subsidiaries, taken as a whole.
(j) The Borrower and its Subsidiaries are in
compliance with all applicable laws and regulations relating
to the environment or to the discharge, transport or storage
of hazardous materials except to the extent that non-
compliance therewith would not have a material adverse
effect on the financial condition or operations of the
Borrower and its Subsidiaries taken as a whole.
(k) (i) True copies of the Tender Offer Materials as
in effect on the date hereof have been delivered to the
Banks; (ii) the Tender Offer is in compliance in all
material respects with applicable law; (iii) all written
information concerning the Borrower and its Subsidiaries
(excluding financial projections) that has been or will
hereafter be made available to the Administrative Agent, any
other Co-Agent, either Co-Arranger or any Bank by the
Borrower or any of its representatives under this Agreement
or in connection with the transactions contemplated hereby
is and will be correct in all material respects and does not
and will not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make
the statements contained therein not misleading in light of
the circumstances under which such statements were or are
made; and (iv) all financial projections concerning the
Borrower and its Subsidiaries that have been or will be
prepared by the Borrower in writing and made available to
the Administrative Agent, any other Co-Agent, either Co-
Arranger or any Bank by the Borrower or any of its
representatives under this Agreement or in connection with
the transactions contemplated hereby have been or will be
prepared in good faith based upon reasonable assumptions (it
being understood that such projections are subject to
significant uncertainties and contingencies, many of which
are beyond the control of the Borrower, and that no
assurance can be given that the projections will be
realized).
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any
Advance or Special Rate Loan shall remain unpaid or any Bank
shall have any Commitment hereunder, the Borrower will, and, in
the case of Section 5.01(a), will cause its Subsidiaries to,
unless the Majority Banks shall otherwise consent in writing:
(a) Keep Books; Corporate Existence; Maintenance of
Properties; Compliance with Laws; Insurance.
<PAGE>
(i) keep proper books of record and account, all
in accordance with generally accepted accounting
principles;
(ii) preserve and keep in full force and effect
its existence, and preserve and keep in full force and
effect its licenses, rights and franchises to the
extent it deems necessary to carry on its business;
(iii) maintain and keep, or cause to be maintained
and kept, its properties in good repair, working order
and condition, and from time to time make or cause to
be made all needful and proper repairs, renewals,
replacements and improvements, in each case to the
extent it deems necessary to carry on its business;
(iv) use its reasonable efforts to comply in all
material respects with all material applicable stat-
utes, regulations and orders of, and all material
applicable restrictions imposed by, any governmental
agency in respect of the conduct of its business and
the ownership of its properties, to the extent it deems
necessary to carry on its business, except such as are
being contested in good faith by appropriate
proceedings; and
(v) insure and keep insured its properties in
such amounts (and with such self-insurance and deduct-
ibles) as it deems necessary to carry on its business
and to the extent available on premiums and other terms
which the Borrower or any Subsidiary, as the case may
be, deems appropriate. Any of such insurance may be
carried by, through or with any captive or affiliated
insurance company or by way of self-insurance as the
Borrower or any Subsidiary, as the case may be, deems
appropriate.
Nothing in this subsection shall prohibit the Borrower or any of
its Subsidiaries from discontinuing any business, forfeiting any
license, right or franchise or discontinuing the operation or
maintenance of any of its properties to the extent it deems
appropriate in the conduct of its business.
(b) Net Worth. Maintain an excess of consolidated
total assets over consolidated total liabilities of the
Borrower and its consolidated Subsidiaries of not less than
$2,250,000,000.
(c) Reporting Requirements. Furnish to each Bank:
(i) as soon as available and in any event within
60 days after the end of each of the first three quar-
ters of each fiscal year of the Borrower, a statement
of the consolidated financial condition of the Borrower
and its consolidated Subsidiaries as at the end of such
<PAGE>
quarter and the related statements of income and re-
tained earnings of the Borrower and its consolidated
Subsidiaries for the period commencing at the end of
the previous fiscal year and ending with the end of
such quarter, certified by a principal financial or
accounting officer of the Borrower; provided, however,
that the Borrower may deliver, in lieu of the fore-
going, the quarterly report of the Borrower for such
fiscal quarter on Form 10-Q filed with the Securities
and Exchange Commission or any governmental authority
succeeding to the functions of such Commission, but
only so long as the financial statements contained in
such quarterly report on Form 10-Q relate to the same
companies and are substantially the same in content as
the financial statements referred to in the preceding
provisions of this clause (i);
(ii) as soon as available and in any event within
90 days after the end of each fiscal year of the
Borrower, a copy of the annual report for such year for
the Borrower and its Subsidiaries, containing the
consolidated financial statements of the Borrower and
its consolidated Subsidiaries for such year and accom-
panied by a report thereon of Deloitte & Touche or
other independent public accountants of nationally
recognized standing;
(iii) promptly after the sending or filing thereof,
copies of all reports which the Borrower sends to its
stockholders generally, and copies of all reports and
registration statements (without exhibits) which the
Borrower files with the Securities and Exchange
Commission or any national securities exchange (other
than registration statements relating to employee
benefit plans);
(iv) promptly after the filing or receiving
thereof, copies of any notices of any of the events set
forth in Section 4043(b) of ERISA or the regulations
thereunder which the Borrower or any Subsidiary files
with the PBGC, or which the Borrower or any Subsidiary
receives from the PBGC to the effect that proceedings
or other action by the PBGC is to be instituted; and
(v) such other information respecting the
condition or operations, financial or otherwise, of the
Borrower or any of its Subsidiaries as any Bank through
the Administrative Agent may from time to time
reasonably request.
(d) Notices. Promptly give notice to the
Administrative Agent and each Bank:
(i) of the occurrence of any Default or Event of
Default; and
<PAGE>
(ii) of the commencement of any litigation,
investigation or proceeding affecting the Borrower or
any of its Subsidiaries before any court, governmental
authority or arbitrator which, in the reasonable judg-
ment of the Borrower, could have a material adverse
effect on the business, operations, property or finan-
cial or other condition of the Borrower and its Sub-
sidiaries, taken as a whole.
Each notice pursuant to this subsection shall be accompanied by a
statement of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower proposes
to take with respect thereto.
(e) Certificates. Furnish to each Bank:
(i) concurrently with the delivery of the finan-
cial statements referred to in Section 5.01(c)(ii), a
letter signed by the independent public accountants
certifying such financial statements to the effect
that, in the course of the examination upon which their
report for such fiscal year was based (but without any
special or additional audit procedures for that purpose
other than review of the terms and provisions of this
Agreement), they did not become aware of any Default or
Event of Default involving financial or accounting
matters, or, if such accountants became aware of any
such Default or Event of Default, specifying the nature
thereof; and
(ii) concurrently with the delivery of the finan-
cial statements or Form 10-Q referred to in Section
5.01(c)(i), a certificate of a principal financial or
accounting officer of the Borrower stating that, to the
best of such officer's knowledge, the Borrower during
such period has observed or performed all of its cove-
nants and other agreements, and satisfied every condi-
tion, contained in this Agreement to be observed, per-
formed or satisfied by it, and that such officer has
obtained no knowledge of any Default or Event of
Default, except as specified in such certificate.
(f) Use of Proceeds. Use the proceeds of the Advances
and Special Rate Loans solely to finance the Tender Offer
and for the general corporate purposes of the Borrower;
provided that neither any Bank nor the Administrative Agent
nor any other Co-Agent or either Co-Arranger shall have any
responsibility for the use of any of the proceeds of the
Advances or Special Rate Loans.
SECTION 5.02. Negative Covenants. So long as any
Advance or Special Rate Loan shall remain unpaid or any Bank
shall have any Commitment hereunder, the Borrower will not,
without the written consent of the Majority Banks:
<PAGE>
(a) Liens, Etc. (i) Create, assume, incur or
suffer to exist, or permit any Subsidiary to create,
assume, incur or suffer to exist, any Mortgage (as
hereinafter defined) upon any stock or indebtedness,
whether now owned or hereafter acquired, of any
Domestic Subsidiary (as hereinafter defined), to secure
any Debt of the Borrower or any other Person (other
than the Advances and Special Rate Loans made
hereunder), without in any such case making effective
provision whereby all of the Advances and Special Rate
Loans made hereunder shall be directly secured equally
and ratably with such Debt, excluding, however, from
the operation of the foregoing provisions of this
paragraph (i) any Mortgage upon stock or indebtedness
of any corporation existing at the time such
corporation becomes a Domestic Subsidiary, or existing
upon stock or indebtedness of a Domestic Subsidiary at
the time of acquisition of such stock or indebtedness,
and any extension, renewal or replacement (or
successive extensions, renewals or replacements) in
whole or in part of any such Mortgage; provided,
however, that the principal amount of Debt secured
thereby shall not exceed the principal amount of Debt
so secured at the time of such extension, renewal or
replacement; and provided, further, that such Mortgage
shall be limited to all or such part of the stock or
indebtedness which secured the Mortgage so extended,
renewed or replaced;
(ii) Create, assume, incur or suffer to exist, or
permit any Restricted Subsidiary (as hereinafter
defined) to create, assume, incur or suffer to exist,
any Mortgage upon any Principal Property (as
hereinafter defined), whether owned or leased on the
date hereof or hereafter acquired, to secure any Debt
of the Borrower or any other Person (other than the
Advances and Special Rate Loans made hereunder),
without in any such case making effective provision
whereby all of the Advances and Special Rate Loans made
hereunder shall be directly secured equally and ratably
with such Debt, excluding, however, from the operation
of the foregoing provisions of this paragraph (ii):
(A) any Mortgage upon property owned or
leased by any corporation existing at the time
such corporation becomes a Restricted Subsidiary;
(B) any Mortgage upon property existing at
the time of acquisition thereof or to secure the
payment of all or any part of the purchase price
thereof or to secure any Debt incurred prior to,
at the time of or within 180 days after the
acquisition of such property for the purpose of
financing all or any part of the purchase price
thereof;
<PAGE>
(C) any Mortgage upon property to secure all
or any part of the cost of exploration, drilling,
development, construction, alteration, repair or
improvement of all or any part of such property,
or Debt incurred prior to, at the time of or
within 180 days after the completion of such
exploration, drilling, development, construction,
alteration, repair or improvement for the purpose
of financing all or any part of such cost;
(D) any Mortgage securing Debt of a
Restricted Subsidiary owing to the Borrower or to
another Restricted Subsidiary;
(E) any Mortgage existing on the date hereof
and set forth on Schedule II hereto; and
(F) any extension, renewal or replacement
(or successive extensions, renewals or replace-
ments) in whole or in part of any Mortgage refer-
red to in the foregoing clauses (A) to (E), inclu-
sive; provided, however, that the principal amount
of Debt secured thereby shall not exceed the prin-
cipal amount of Debt so secured at the time of
such extension, renewal or replacement; and
provided, further, that such Mortgage shall be
limited to all or such part of the property which
secured the Mortgage so extended, renewed or
replaced (plus improvements on such property).
Notwithstanding the foregoing provisions of this
paragraph (ii), the Borrower may, and may permit any
Restricted Subsidiary to, create, assume, incur or
suffer to exist any Mortgage upon any Principal Prop-
erty which is not excepted by clauses (A) through (F),
above, without equally and ratably securing the
Advances and Special Rate Loans, provided that the
aggregate amount of Debt then outstanding secured by
such Mortgage and all similar Mortgages does not exceed
10% of the total consolidated stockholders' equity of
the Borrower as shown on the most recent audited
consolidated balance sheet required to be delivered to
the Banks pursuant to Section 5.01(c). For the purpose
of this paragraph (ii), the following types of
transactions shall not be deemed to create a Mortgage
to secure any Debt:
(A) the sale or other transfer of (y) any
oil or gas or minerals in place for a period of
time until, or in an amount such that, the
purchaser will realize therefrom a specified
amount of money (however determined) or a
specified amount of such oil or gas or minerals,
or (z) any other interest in property of the
<PAGE>
character commonly referred to as a "production
payment"; and
(B) any Mortgage in favor of the United
States of America or any state thereof, or any
other country, or any political subdivision of any
of the foregoing, to secure partial, progress,
advance or other payments pursuant to the provi-
sions of any contract or statute, or any Mortgage
upon property of the Borrower or a Restricted
Subsidiary intended to be used primarily for the
purpose of or in connection with air or water
pollution control, provided that no such Mortgage
shall extend to any other property of the Borrower
or a Restricted Subsidiary.
As used in this Section 5.02(a), the following terms
shall have the following meanings notwithstanding any conflicting
definition set forth in Section 1.01:
"Domestic Subsidiary" means a Subsidiary which is
incorporated or conducting its principal operations within the
United States of America or any state thereof or off the coast of
the United States of America but within an area over which the
United States of America or any state thereof has jurisdiction.
"Mortgage" means any mortgage, pledge, lien, encum-
brance, charge or security interest of any kind.
"Principal Property" means (i) any property owned or
leased by the Borrower or any Subsidiary, or any interest of the
Borrower or any Subsidiary in property, located within the United
States of America or any state thereof (including property
located off the coast of the United States of America held pur-
suant to lease from any Federal, State or other governmental
body), which is considered by the Borrower to be capable of
producing oil or gas or minerals in commercial quantities, and
(ii) any refinery, smelter or processing or manufacturing plant
owned or leased by the Borrower or any Subsidiary and located
within the United States of America or any state thereof, except
(a) facilities related thereto employed in transportation, dis-
tribution or marketing or (b) any refinery, smelter or processing
or manufacturing plant, or portion thereof, which in the opinion
of the Board of Directors of the Borrower is not a principal
plant in relation to the activities of the Borrower and its
Restricted Subsidiaries taken as a whole.
"Restricted Subsidiary" means any Subsidiary which owns
or leases (as lessor or lessee) a Principal Property but does not
include (i) Union Pacific Railroad Company or any other
Subsidiary which is principally a common carrier by rail or truck
engaged in interstate or intrastate commerce and is subject to
regulation of such activities by any Federal, state or other
governmental body, or (ii) any Subsidiary the principal business
of which is leasing machinery, equipment, vehicles or other
<PAGE>
properties none of which is a Principal Property, or financing
accounts receivable, or engaging in ownership and development of
any real property which is not a Principal Property.
(b) Debt to Net Worth Restriction. Create or suffer
to exist, or permit any of its Subsidiaries to create or
suffer to exist, any Debt if, immediately after giving
effect to such Debt and to the receipt and application of
any proceeds thereof, the aggregate amount of Debt of the
Borrower and its consolidated Subsidiaries, on a
consolidated basis, would exceed 200% of the total
consolidated stockholders' equity of the Borrower as shown
on the most recent consolidated balance sheet required to be
delivered to the Banks pursuant to Section 5.01(c).
(c) Restriction on Fundamental Changes. Enter into
any transaction of merger or consolidation, or convey,
transfer or lease its properties and assets substantially as
an entirety to any Person, unless:
(i) the corporation formed by such consolidation
or into which the Borrower is merged or the Person
which acquires by conveyance or transfer, or which
leases, the properties and assets of the Borrower
substantially as an entirety shall be a corporation
organized and existing under the laws of the United
States of America, any state thereof or the District of
Columbia (the "Successor Corporation") and shall
expressly assume, by amendment to this Agreement exe-
cuted by the Borrower and such Successor Corporation
and delivered to the Administrative Agent, the due and
punctual payment of the principal of and interest on
the Advances and Special Rate Loans made hereunder and
all other amounts payable under this Agreement and the
performance or observance of every covenant hereof on
the part of the Borrower to be performed or observed;
(ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have
occurred and be continuing;
(iii) if, as a result of any such consolidation or
merger or such conveyance, transfer or lease, proper-
ties or assets of the Borrower would become subject to
a Mortgage which would not be permitted by Section
5.02(a), the Borrower or the Successor Corporation, as
the case may be, shall take such steps as shall be
necessary effectively to secure the Advances and
Special Rate Loans made hereunder equally and ratably
with (or prior to) all indebtedness secured thereby;
and
(iv) the Borrower shall have delivered to the
Administrative Agent a certificate signed by an
executive officer of the Borrower and a written opinion
<PAGE>
of counsel satisfactory to the Administrative Agent
(who may be counsel to the Borrower), each stating that
such transaction and such amendment to this Agreement
comply with this Section 5.02(c) and that all
conditions precedent herein provided for relating to
such transaction have been satisfied.
(d) Prohibition of Sale of Certain Stock. Convey,
sell, assign or otherwise transfer (or permit any Subsidiary
to do so) any of the shares of capital stock of the
Railroads now owned (directly or indirectly) or at any time
hereafter acquired (directly or indirectly) by the Borrower,
provided that nothing in this Section 5.02(d) will prohibit
transfers of shares of capital stock of a Railroad to
another Railroad or to another Subsidiary of the Borrower or
will prohibit the merger or other consolidation of one
Railroad with or into another Railroad or another Subsidiary
of the Borrower.
(e) Compliance with ERISA. To the extent that any
event or action set forth in clauses (i) through (iv) below
would subject the Borrower and its Subsidiaries taken as a
whole to any material liability to the PBGC or otherwise,
(i) terminate, or permit any Subsidiary to terminate, any
Plan; (ii) engage in, or permit any Subsidiary to engage in,
any "prohibited transaction" (as defined in Section 4975 of
the Code) involving any Plan; (iii) incur or suffer to
exist, or permit any Subsidiary to incur or suffer to exist,
any "accumulated funding deficiency" (as defined in Section
302 of ERISA), whether or not waived, involving any Plan; or
(iv) allow or suffer to exist, or permit any Subsidiary to
allow or suffer to exist, any event or condition which
presents a risk of incurring a liability to the PBGC by
reason of termination of any Plan.
(f) Amendments to Tender Offer, Etc. Make any
amendment to the Tender Offer or the Merger Agreement which
is materially adverse from the standpoint of the financing
contemplated hereby, without the prior written consent of
the Majority Banks (which consent shall not be unreasonably
withheld or delayed), it being understood that this
Section 5.02(f) shall be of no further force and effect
after the consummation of the Tender Offer and the other
transactions contemplated by the Merger Agreement in
accordance with the terms and conditions hereof and thereof.
(g) Margin Stock. Permit more than 25%, after
applying the proceeds of each Advance or Special Rate Loan,
of the value of the assets of the Borrower and its
Subsidiaries (as determined in good faith by the Borrower)
that are subject to Section 5.02(a)(i) or Section 5.02(d) to
consist of or be represented by Margin Stock.
<PAGE>
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
following events ("Events of Default") shall occur and be
continuing:
(a) the Borrower shall fail to pay any principal of
any Advance or Special Rate Loan when the same becomes due
and payable; provided, that if any such failure shall result
from the malfunctioning or shutdown of any wire transfer or
other payment system employed by the Borrower to make such
payment or from an inadvertent error of a technical or
clerical nature by the Borrower or any bank or other entity
employed by the Borrower to make such payment, no Event of
Default shall result under this paragraph (a) during the
period (not in excess of two Business Days) required by the
Borrower to make alternate payment arrangements; or
(b) the Borrower shall fail to pay any interest on any
Advance or Special Rate Loan or any fee payable hereunder or
under any agreement executed in connection herewith when the
same becomes due and payable and such failure shall remain
unremedied for ten days; or
(c) any representation or warranty made by the
Borrower herein or by the Borrower (or any of its officers)
in connection with this Agreement (including, without
limitation, any representation or warranty deemed made by
the Borrower at the time of any Advance or Special Rate Loan
pursuant to Article III) shall prove to have been incorrect
in any material respect when made or deemed made; or
(d) the Borrower shall fail to perform or observe any
other term, covenant or agreement contained in this Agree-
ment on its part to be performed or observed if such failure
shall remain unremedied for 30 days after written notice
thereof shall have been given to the Borrower by the
Administrative Agent or any Bank; or
(e) an event of default as defined in any mortgage,
indenture or instrument under which there may be issued, or
by which there may be secured or evidenced, any Debt of the
Borrower (other than any such Debt owed to any Bank or an
affiliate of any Bank if such event of default shall relate
solely to a restriction on Margin Stock), whether such Debt
now exists or shall hereafter be created, shall happen and
shall result in Debt of the Borrower in excess of
$20,000,000 principal amount becoming or being declared due
and payable prior to the date on which it would otherwise
become due and payable, and such declaration shall not be
rescinded or annulled; or the Borrower shall fail to pay at
maturity (or within five calendar days after maturity) Debt
<PAGE>
of the Borrower in excess of $20,000,000 principal amount;
or
(f) (i) the Borrower or any of the Railroads shall
commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrange-
ment, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any of
the Railroads shall make a general assignment for the bene-
fit of its creditors; or (ii) there shall be commenced
against the Borrower or any of the Railroads any case, pro-
ceeding or other action of a nature referred to in clause
(i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period
of 60 days; or (iii) there shall be commenced against the
Borrower or any of the Railroads any case, proceeding or
other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of
an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) the Borrower
or any of the Railroads shall take any action in furtherance
of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i),
(ii) or (iii) above; or (v) the Borrower or any of the
Railroads shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as
they become due;
(g) a Material Plan shall fail to maintain the minimum
funding standards required by Section 412 of the Code for
any plan year or a waiver of such standard is sought or
granted under Section 412(d), or a Material Plan is, shall
have been or will be terminated or the subject of
termination proceedings under ERISA, or the Borrower or any
of its Subsidiaries or any ERISA Affiliate has incurred or
will incur a liability to or on account of a Material Plan
under Sections 4062, 4063 or 4064 of ERISA, and there shall
result from any such event either a liability or a material
risk of incurring a liability to the PBGC or a Material Plan
(or a related trust) which will have a material adverse
effect upon the business, operations or the condition
(financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole; or
<PAGE>
(h) the Borrower or any ERISA Affiliate shall have
been notified by the sponsor of a Multiemployer Plan that it
has incurred withdrawal liability to such Multiemployer Plan
in an amount which, when aggregated with all other amounts
required to be paid to Multiemployer Plans in connection
with withdrawal liabilities (determined as of the date of
such notification), will have a material adverse effect upon
the business, operations or the condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a
whole;
then, and in any such event, the Administrative Agent (i) shall
at the request, or may with the consent, of Banks having at least
66-2/3% of the Commitments, by notice to the Borrower, declare
the obligation of each Bank to make Contract Advances (and to
make any Auction Advances and Special Rate Loans that such Bank
has theretofore committed to make) to be terminated, whereupon
the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of Banks owed at least 66-2/3%
of the then aggregate unpaid principal amount of the Advances and
Special Rate Loans owing to Banks, by notice to the Borrower,
declare the Advances and Special Rate Loans, all interest thereon
and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Advances and Special
Rate Loans, all such interest and all such amounts shall become
and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower; provided, however, that in the
event of an actual or deemed entry of an order for relief with
respect to the Borrower or any of its Subsidiaries under the
Federal Bankruptcy Code, (A) the obligation of each Bank to make
Contract Advances (and to make any Auction Advances and Special
Rate Loans that such Bank has theretofore committed to make)
shall automatically be terminated and (B) the Advances and
Special Rate Loans, all such interest and all such amounts shall
automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.
ARTICLE VII
THE ADMINISTRATIVE AGENT, ETC.
SECTION 7.01. Authorization and Action. Each Bank
hereby appoints and authorizes the Administrative Agent to take
such action as administrative agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Adminis-
trative Agent by the terms hereof, together with such powers as
are reasonably incidental thereto. As to any matters not
expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the amounts due here-
under), the Administrative Agent shall not be required to exer-
cise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so
<PAGE>
acting or refraining from acting) upon the instructions of the
Majority Banks, and such instructions shall be binding upon all
Banks and all holders of Advances and Special Rate Loans;
provided, however, that the Administrative Agent shall not be
required to take any action which exposes the Administrative
Agent to personal liability or which is contrary to this
Agreement or applicable law. The Administrative Agent agrees to
give to each Bank prompt notice of each notice given to it by the
Borrower pursuant to the terms of this Agreement. Chemical Bank
and Citicorp Securities, Inc., in their capacities as Co-
Arrangers, Chemical Securities, Inc., in its capacity as
Syndication Agent, and Citibank, N.A., in its capacity as
Documentation Agent, shall have no duties, responsibilities or
liabilities whatsoever under this Agreement.
SECTION 7.02. Administrative Agent's Reliance, Etc.
Neither the Administrative Agent nor any of its directors,
officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection
with this Agreement, except for its or their own gross negligence
or wilful misconduct. Without limitation of the generality of
the foregoing, the Administrative Agent: (i) may consult with
legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) makes no warranty or representation
to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations made in or in connec-
tion with this Agreement; (iii) shall not have any duty to ascer-
tain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of this Agreement on the part
of the Borrower or to inspect the property (including the books
and records) of the Borrower; (iv) shall not be responsible to
any Bank for the due execution, legality, validity, enforce-
ability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto; and
(v) shall incur no liability under or in respect of this Agree-
ment by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopy, telegram or
cable) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 7.03. Chemical Bank and Affiliates. With
respect to its Commitment and the Advances and Special Rate Loans
made by it, Chemical Bank shall have the same rights and powers
under this Agreement as any other Bank and may exercise the same
as though it were not the Administrative Agent; and the term
"Bank" or "Banks" shall, unless otherwise expressly indicated,
include Chemical Bank in its individual capacity. Chemical Bank
and its affiliates may accept deposits from, lend money to, act
as trustee under indentures of, and generally engage in any kind
of business with, the Borrower, any of its subsidiaries and any
Person who may do business with or own securities of the Borrower
or any such subsidiary or affiliate, all as if Chemical Bank were
<PAGE>
not the Administrative Agent and without any duty to account
therefor to the Banks.
SECTION 7.04. Bank Credit Decision. Each Bank acknow-
ledges that it has, independently and without reliance upon the
Administrative Agent, any other Co-Agent, either Co-Arranger or
any other Bank and based on the financial statements referred to
in Section 4.01 and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Bank also acknowledges that
it will, independently and without reliance upon the
Administrative Agent, any other Co-Agent, either Co-Arranger or
any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement.
SECTION 7.05. Indemnification. The Banks agree to
indemnify the Administrative Agent, the other Co-Agents and the
Co-Arrangers (to the extent not promptly reimbursed by the
Borrower), ratably as computed as set forth below from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against any of them in any
way relating to or arising out of the Tender Offer or this
Agreement or any action taken or omitted by the Administrative
Agent under this Agreement, provided that no Bank shall be liable
for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or wilful
misconduct of the Administrative Agent. Without limitation of
the foregoing, each Bank agrees to reimburse the Administrative
Agent promptly upon demand for its ratable share of any costs and
expenses payable by the Borrower under Section 8.04, to the
extent that the Administrative Agent is not promptly reimbursed
for such costs and expenses by the Borrower. For purposes of
this Section 7.05, ratable allocations among the Banks shall be
made (i) in respect of any demand by the Administrative Agent
prior to a declaration made pursuant to clause (ii) of
Section 6.01, according to the respective amounts of their
Commitments and (ii) thereafter according to the respective
principal amounts of the Advances and Special Rate Loans then
outstanding to them (or, if there are no Advances or Special Rate
Loans at the time outstanding, according to the respective
amounts of their Commitments as most recently in effect). Each
Bank agrees that any reasonable allocation by the Administrative
Agent of expenses or other amounts referred to in this paragraph
between this Agreement, the $1,100,000,000 Credit Agreement and
the $1,400,000,000 Credit Agreement shall be conclusive and
binding for all purposes.
SECTION 7.06. Successor Administrative Agent. The
Administrative Agent may resign at any time by giving written
notice thereof to the Banks and the Borrower and may be removed
<PAGE>
at any time with or without cause by the Majority Banks. Upon
any such resignation or removal, the Majority Banks shall have
the right to appoint a successor Administrative Agent with the
consent of the Borrower (which consent shall not be required if
at the time of such appointment any Default or Event of Default
has occurred and is continuing). If no successor Administrative
Agent shall have been so appointed by the Majority Banks, and
shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving of notice of resignation
or the Majority Banks' removal of the retiring Administrative
Agent, as applicable, then the retiring Administrative Agent may,
on behalf of the Banks, appoint a successor Administrative Agent,
which shall be a commercial bank organized or licensed under the
laws of the United States of America or of any state thereof and
having a combined capital and surplus of at least $50,000,000.
Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor
Administrative Agent shall succeed to and become vested with all
the rights, powers, discretion, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the
provisions of this Article VII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver
of any provision of this Agreement, nor consent to any departure
by the Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Majority Banks,
and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given;
provided, however, that:
(a) no amendment, waiver or consent shall, unless in
writing and signed by all the Banks, do any of the
following: (1) waive any of the conditions specified in
Section 3.01, (2) waive any of the conditions specified in
Section 3.02 (if and to the extent that the Borrowing which
is the subject of such waiver would involve an increase in
the aggregate outstanding amount of Advances over the
aggregate amount of Advances outstanding immediately prior
to such Borrowing), (3) increase the Commitments of the
Banks or subject the Banks to any additional obligations,
(4) reduce the principal of, or interest on, the Contract
Advances or any fees or other amounts payable hereunder,
(5) postpone any date fixed for any payment of principal of,
or interest on, the Contract Advances or any fees or other
amounts payable hereunder, (6) make any change which would
<PAGE>
alter the percentage of the Commitments or of the aggregate
unpaid principal amount of the Contract Advances, or the
number of Banks, which shall otherwise be required for the
Banks or any of them to take any action hereunder or
(7) amend this Section 8.01;
(b) no amendment, waiver or consent shall, unless in
writing and signed by the Bank holding an Auction Advance at
such time (1) reduce the principal of, or interest on, such
Auction Advance or any fees or other amounts payable
hereunder or thereunder with respect thereto, (2) postpone
any date fixed for any payment of principal of, or interest
on, such Auction Advance or any fees or other amounts
payable hereunder or thereunder with respect thereto, or
(3) subject such Bank to any additional obligations with
respect to such Bank's Auction Advance;
(c) no amendment, waiver or consent shall, unless in
writing and signed by the Bank holding a Special Rate Loan
at such time (1) reduce the principal of, or interest on,
such Special Rate Loan or any fees or other amounts payable
with respect thereto, (2) postpone any date fixed for any
payment of principal of, or interest on, such Special Rate
Loan or any fees or other amounts payable with respect
thereto, or (3) subject such Bank to any additional
obligations with respect to such Bank's Special Rate Loan;
(d) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition
to the Banks required above to take such action, affect the
rights or duties of the Administrative Agent under this
Agreement; and
(e) no amendment, waiver or consent shall, unless in
writing and signed by the Co-Arrangers and the Co-Agents,
alter the last sentence of Section 7.01.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing
(including telecopy, telegraphic or cable communication) and
telecopied, mailed, telegraphed, cabled or delivered, if to the
Borrower, at its address at Martin Tower, Eighth and Eaton
Avenues, Bethlehem, Pennsylvania 18018, Attention: Vice
President and Treasurer, telephone number (610) 861-3200,
telecopier number (610) 861-3111; if to any Bank listed on
Schedule I hereto, at its Domestic Lending Office specified
opposite its name on Schedule I hereto; if to any other Bank, at
its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Bank; and if to the
Administrative Agent, at its address at Chemical Bank Agency
Services Corporation, Grand Central Tower, 140 East 45th Street,
29th Floor, New York, New York 10017, Attention: Sandra J.
Miklave, with a copy to Chemical Bank, 270 Park Avenue, 8th
Floor, New York, New York 10017, Attention: Julie S. Long; or,
as to the Borrower, any Bank or the Administrative Agent, at such
<PAGE>
other address as shall be designated by such party in a written
notice to the other parties and, as to each other party, at such
other address as shall be designated by such party in a written
notice to the Borrower and the Administrative Agent. All such
notices and communications shall, when telecopied, mailed,
telegraphed or cabled, be effective when sent by telecopy,
deposited in the mails, delivered to the telegraph company or
delivered to the cable company, respectively, except that notices
and communications to the Administrative Agent pursuant to
Article II or VII shall not be effective until received by the
Administrative Agent. The Administrative Agent shall be entitled
to rely on any oral notice made pursuant to Section 2.03(v)
believed by it to be genuine and made by the proper party or
parties, and the Borrower and the Banks, as the case may be,
agree to be conclusively bound by the Administrative Agent's
records in respect of any such notice.
SECTION 8.03. No Waiver; Remedies. No failure on the
part of any Bank or the Administrative Agent to exercise, and no
delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs, Expenses and Taxes. (a) The
Borrower agrees to pay on demand all costs and expenses in con-
nection with the preparation, execution, delivery, administra-
tion, modification and amendment of this Agreement and the other
documents to be delivered hereunder, including, without limita-
tion, the reasonable fees and out-of-pocket expenses of counsel
for the Administrative Agent with respect thereto and with
respect to advising the Administrative Agent as to its rights and
responsibilities under this Agreement, and all costs and
expenses, if any (including, without limitation, reasonable
counsel fees and expenses), incurred by the Administrative Agent
or any Bank in connection with the "work-out" or other
enforcement (whether through negotiations, legal proceedings or
otherwise) of this Agreement and the other documents to be
delivered hereunder. In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies which arise from the
execution and delivery of this Agreement and agrees to save the
Administrative Agent and each Bank harmless from and against any
and all liabilities with respect to or resulting from any delay
in paying or omission to pay such taxes.
(b) If (i) any payment of principal of any Adjusted CD
Rate Advance or Eurodollar Rate Contract Advance or Auction
Advance or Special Rate Loan is made (1) by the Borrower to or
for the account of a Bank other than on the last day of the
Interest Period for such Contract Advance, or on the maturity
date of such Auction Advance or Special Rate Loan, as the case
may be, or as a result of a payment pursuant to Section 2.07(d),
or as a result of acceleration of the maturity of the Advances
<PAGE>
and Special Rate Loans pursuant to Section 6.01 or for any other
reason, or (2) by an Eligible Assignee to a Bank other than on
the last day of the Interest Period (or the final maturity date
in the case of an Auction Advance or Special Rate Loan) for such
Advance or Special Rate Loan upon an assignment of rights and
obligations under this Agreement pursuant to Section 8.07 as a
result of a demand by the Borrower pursuant to Section 8.07(a),
or an assignment of rights and obligations under this Agreement
pursuant to Section 2.17 as a result of a demand by the Borrower,
or (ii) the Borrower fails to convert or continue any Contract
Advance hereunder after irrevocable notice of such conversion or
continuation has been given pursuant to Section 2.04, then the
Borrower shall, upon demand by the affected Bank (with a copy of
such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Bank any amounts
required to compensate such Bank for any additional losses, costs
or expenses which it may reasonably incur as a result of such
payment or failure, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred
by reason of the liquidation or reemployment of deposits or other
funds acquired by such Bank to fund or maintain such Advance. A
certificate of such Bank setting forth the amount demanded
hereunder and the basis therefor shall, in the absence of
manifest error, be conclusive and binding for all purposes.
SECTION 8.05. Right of Set-off. Upon (i) the
occurrence and during the continuance of any Event of Default and
(ii) the making of the request or the granting of the consent
specified by Section 6.01 to authorize the Administrative Agent
to declare the Advances and Special Rate Loans due and payable
pursuant to the provisions of Section 6.01, each Bank is hereby
authorized at any time and from time to time, 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 and other indebtedness at any time owing
by such Bank to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or
hereafter existing under this Agreement and the Advances and
Special Rate Loans made by such Bank, irrespective of whether or
not such Bank shall have made any demand under this Agreement and
although such obligations may be unmatured. Each Bank agrees
promptly to notify the Borrower and the Administrative Agent
after any such setoff and application made by such Bank, provided
that the failure to give such notice shall not affect the valid-
ity of such set-off and application. The rights of each Bank
under this Section 8.05 are in addition to other rights and
remedies (including, without limitation, other rights of setoff)
which such Bank may have.
SECTION 8.06. Binding Effect. This Agreement shall
become effective when it shall have been executed by the
Borrower, the Administrative Agent, the other Co-Agents and the
Co-Arrangers and when the Administrative Agent shall have been
notified by each Bank that such Bank has executed it and
thereafter shall be binding upon and inure to the benefit of the
<PAGE>
Borrower, the Administrative Agent, the other Co-Agents, the Co-
Arrangers and each Bank and their respective successors and
assigns.
SECTION 8.07. Assignments and Participations.
(a) Each Bank may and, if demanded by the Borrower pursuant to
subsection (g) hereof, shall assign to one or more banks or other
entities all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion
of its Commitment and the Advances and Special Rate Loans owing
to it); provided, however, that (i) each such assignment shall
(except in the case of outstanding Auction Advances and Special
Rate Loans) be of a constant, and not a varying, percentage of
all of the rights and obligations of the Banks under this
Agreement, (ii) the amount of the Commitment of the assigning
Bank being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to
such assignment) shall in no event be less than the lesser of
(x) the amount set forth opposite the name of such Bank on the
signature pages to this Agreement or in the Assignment and
Acceptance pursuant to which the assigning Bank became a Bank,
and (y) $25,000,000, and shall be an integral multiple of
$1,000,000, (iii) each such assignment shall be to an Eligible
Assignee and (iv) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and
Acceptance, together with a processing fee of $2,500. Upon such
execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which
effective date shall be at least three Business Days after the
execution thereof, (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder
and (y) the Bank assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement (and,
in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Bank's rights and obligations
under this Agreement, such Bank shall cease to be a party
hereto), provided that the obligations of the Borrower to the
Bank assignor described in Sections 2.02(b), 2.11, 2.12, 2.15,
8.04 and 8.12 that arose prior to such assignment, and the
obligations of the Bank assignor described in Sections 7.05 and
8.10 that arose prior to such assignment, shall survive the
making of such assignment, notwithstanding that such Bank
assignor may cease to be a "Bank" hereunder. Notwithstanding the
foregoing, any Bank assigning its rights and obligations under
this Agreement may retain any Auction Advances and any Special
Rate Loans made by it outstanding at such time, and in such case
shall retain its rights hereunder in respect of any Advances and
Special Rate Loans so retained until such Advances and Special
Rate Loans have been repaid in full in accordance with this
Agreement.
<PAGE>
(b) By executing and delivering an Assignment and
Acceptance, the Bank assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Bank makes no repre-
sentation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished
pursuant hereto; (ii) such assigning Bank makes no representation
or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under this
Agreement or any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy
of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without
reliance upon the Administrative Agent, any other Co-Agent,
either Co-Arranger, such assigning Bank or any other Bank and
based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit deci-
sions in taking or not taking action under this Agreement; (v)
such assignee confirms that it is an Eligible Assignee, except
for any required consent of the Borrower; (vi) such assignee
appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under
this Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations
which by the terms of this Agreement are required to be performed
by it as a Bank.
(c) The Administrative Agent shall maintain at its
address referred to in Section 8.02 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Banks and the
Commitment of, and principal amount of the Advances owing to,
each Bank from time to time (the "Register"). Subject to
Section 2.14(f), the entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Banks may treat each
Person whose name is recorded in the Register as a Bank hereunder
for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Bank at any
reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Bank and an assignee representing that
it is an Eligible Assignee, the Administrative Agent shall, if
<PAGE>
such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit B hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register, (iii) give prompt notice thereof to the
Borrower and (iv) send a copy thereof to the Borrower.
(e) Each Bank may sell participations to one or more
banks or other entities in or to all or a portion of its rights
and obligations under this Agreement (including, without limita-
tion, all or a portion of its Commitment and the Advances or
Special Rate Loans owing to it); provided, however, that (i) such
Bank's obligations under this Agreement (including, without limi-
tation, its Commitment to the Borrower hereunder) shall remain
unchanged, (ii) such Bank shall remain solely responsible to the
other parties hereto for the performance of such obligations and
(iii) the Borrower, the Administrative Agent and the other Banks
shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this
Agreement; and provided further, however, that such Bank shall
not agree with any such bank or other financial institution to
permit such bank or other financial institution to enforce the
obligations of the Borrower relating to the Advances or any
Special Rate Loan or to approve of any amendment, modification or
waiver of any provision of this Agreement (other than amendments,
modifications or waivers with respect to any decrease in any fees
payable hereunder or the amount of principal or rate of interest
which is payable in respect of such Advances or Special Rate Loan
or any extension of the dates fixed for the payment thereof).
(f) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to
this Section 8.07, disclose to the assignee or participant or
proposed assignee or participant any information relating to the
Borrower furnished to such Bank by or on behalf of the Borrower;
provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to
preserve the confidentiality of any information relating to the
Borrower, this Agreement or the Tender Offer received by it from
such Bank in accordance with Section 8.10.
(g) If any Bank shall make demand for payment under or
shall notify the Borrower that it is affected by an event
described in Section 2.11 or 2.15 hereunder or shall notify the
Administrative Agent pursuant to Section 2.13 hereunder, then
within 15 days after such demand or such notice, the Borrower may
(i) demand that such Bank assign in accordance with this
Section 8.07 to one or more Eligible Assignees designated by the
Borrower all (but not less than all) of such Bank's Commitment
and the Advances and Special Rate Loans owing to it within the
next succeeding 30 days, provided that, if any such Eligible
Assignee designated by the Borrower shall fail to consummate such
assignment on terms acceptable to such Bank, or if the Borrower
shall fail to designate any such Eligible Assignees for all or
part of such Bank's Commitment, Advances and Special Rate Loans,
then such Bank may assign such Commitment, Advances and Special
<PAGE>
Rate Loans to any other Eligible Assignee in accordance with this
Section 8.07 during such 30-day period or (ii) terminate all (but
not less than all) of such Bank's Commitment and repay all (but
not less than all) of such Bank's Advances and Special Rate Loans
not so assigned on or before such 30th day in accordance with
Sections 2.06 and 2.07(d) hereof (but without the requirements
stated therein for ratable treatment of the Banks). Nothing in
this Section 8.07(g) shall relieve the Borrower of its
obligations for payment under Section 2.11 or 2.15 arising prior
to an assignment or termination pursuant hereto.
(h) Any Bank may at any time assign all or any portion
of its rights under this Agreement to a Federal Reserve Bank;
provided that no such assignment shall release a Bank from any of
its obligations hereunder. In connection with any such
assignment or proposed assignment, the Borrower will, promptly
upon the request of any Bank, execute and deliver to such Bank a
note evidencing the Borrower's obligations hereunder, in a form
mutually satisfactory to the Borrower and such Bank; provided
that if the Borrower certifies to such Bank upon such request
that it believes any authorization, approval or other action by
the Interstate Commerce Commission (or any successor agency
having jurisdiction) is required for the issuance of such note,
the Borrower shall not be deemed to be in default under this
Section 8.07(h) so long as the Borrower is diligently seeking
such authorization, approval or other action, at such Bank's
expense.
(i) This Section 8.07 sets forth the exclusive manner
by which a Bank may assign its rights and obligations hereunder
or sell participations in or to its rights and obligations
hereunder.
(j) Each Bank agrees to notify the Borrower of any
assignment of or grant of a participating interest in any Advance
or Special Rate Loan, and of the identity of the assignee or
participant.
(k) The Borrower may not assign or delegate any rights
or obligations hereunder without the prior written consent of
each Bank.
SECTION 8.08. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the
State of New York.
SECTION 8.09. Submission to Jurisdiction; Service of
Process; Jury Trial. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for
the Southern District of New York and of any New York state court
sitting in New York City for the purposes of all legal
proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. The Borrower shall at all
times continue to be qualified to do business in and maintain an
office in New York or, alternatively, shall maintain an agent for
<PAGE>
service of process in New York and shall provide the
Administrative Agent with notice of the identity of such agent,
such appointment to be documented in a manner satisfactory to the
Administrative Agent. The Borrower hereby agrees that service of
process in any such proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to it at its address
referred to in Section 8.02. The Borrower irrevocably waives, to
the fullest extent permitted by applicable law, any objection
that it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in
an inconvenient forum. EACH OF THE BORROWER, THE CO-ARRANGERS,
THE ADMINISTRATIVE AGENT, THE OTHER CO-AGENTS AND THE BANKS
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THIS
AGREEMENT, THE ADVANCES, THE SPECIAL RATE LOANS OR THE ACTIONS OF
THE BORROWER, THE CO-ARRANGERS, THE ADMINISTRATIVE AGENT, THE
OTHER CO-AGENTS OR ANY BANK IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
SECTION 8.10. Treatment of Certain Information;
Confidentiality. (a) The Borrower acknowledges that from time
to time financial advisory, investment banking and other services
may be offered or provided to the Borrower or one or more of its
Subsidiaries (in connection with this Agreement or otherwise) by
any Bank or by one or more subsidiaries or affiliates of such
Bank and the Borrower hereby authorizes each Bank to share any
information delivered to such Bank by the Borrower and its
Subsidiaries pursuant to this Agreement, or in connection with
the decision of such Bank to enter into this Agreement, with any
such subsidiary or affiliate, it being understood that any such
subsidiary or affiliate receiving such information shall be bound
by the provisions of paragraph (b) below as if it were a Bank
hereunder. Such authorization shall survive the repayment of the
Advances and Special Rate Loans and the termination of the
Commitments.
(b) Each Bank and the Administrative Agent agrees that
it will not disclose without the prior consent of the Borrower
(other than to its affiliates and to its and its affiliates'
directors, employees, auditors and counsel who are informed of
and agree to respect the confidential nature of such information,
and then only on a "need to know" basis in connection with this
Agreement, the Tender Offer or the financing thereof) any
information (the "Information") with respect to the Borrower (or
its business), CNW or the Tender Offer which is furnished by or
on behalf of the Borrower to such Bank or to the Administrative
Agent in connection with this Agreement, the Tender Offer or the
financing thereof; provided, that the Banks and the
Administrative Agent may disclose any such Information (i) that
is or has become generally available to the public (other than as
a result of a disclosure in violation of this Section 8.10 or the
letter referred to in Section 8.10(e)) or is or becomes available
<PAGE>
to the Banks and the Administrative Agent on a non-confidential
basis from a source other than the Borrower or its agents
(unless, to the actual knowledge of the recipient Bank or the
Administrative Agent, such information was provided by such
source in violation of a confidentiality agreement), (ii) as may
be required or appropriate in response to any summons or subpoena
or in connection with any litigation, (iii) in order to comply
with any applicable law or regulation, or in accordance with any
order, ruling or regulatory practice of any bank regulatory
agency (including, without limitation, the Board of Governors of
the Federal Reserve System or any foreign bank regulatory agency)
having or claiming jurisdiction over the relevant Bank or the
Administrative Agent, and (iv) to a proposed assignee or
participant in connection with any proposed assignment or
participation permitted under Section 8.07 as provided in
Section 8.07(f), provided that such proposed assignee or
participant agrees in writing to be bound by the confidentiality
provisions of this Section 8.10.
(c) In the event that any Bank or any Person receiving
Information from such Bank becomes legally compelled to disclose
any of the Information or the existence of this Agreement (other
than to any bank regulatory agency referred to in
Section 8.10(b)(iii) in the course of customary audits of the
relevant Bank), such Bank shall provide the Borrower with notice
of such event promptly upon obtaining knowledge thereof (provided
that such notice is not otherwise prohibited by law) so that the
Borrower may seek a protective order or other appropriate remedy.
In the event that such protective order or other remedy is not
obtained, such Bank shall furnish only that portion of the
Information which in its reasonable opinion it is legally
required to disclose and shall disclose such Information in a
manner reasonably designed to preserve its confidential nature.
(d) Each Bank acknowledges that disclosure of
Information in violation of this Section 8.10 could have serious
consequences, and agrees that, in the event of any breach of this
Section 8.10 by any Bank or its representatives, the Borrower
will be entitled to equitable relief (including injunctive relief
and specific performance) in addition to all other remedies
available to it at law or in equity.
(e) The obligations of each Bank under this
Section 8.10 shall supersede and replace the obligations of such
Bank under the confidentiality letter executed by it in respect
of this financing prior to the date hereof, and the
confidentiality obligations of any proposed assignee that has
executed a confidentiality letter prior to the date on which it
becomes a Bank hereunder pursuant to Section 8.07(a) shall be
superseded by this Section 8.10 upon the date upon which such
assignee becomes a Bank.
(f) Each Bank's obligations and all of the Borrower's
rights and remedies under this Section 8.10 shall survive any
reduction in the Commitments, the termination of this Agreement
<PAGE>
or the return or destruction of the Information, in each case
until the date one year after the termination of this Agreement.
SECTION 8.11. Execution in Counterparts. This
Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
SECTION 8.12. Indemnification. (a) The Borrower
agrees to indemnify and hold harmless the Administrative Agent,
each other Co-Agent, each Co-Arranger and each Bank and each of
their respective officers, directors, employees, agents, advisors
and representatives (each, an "Indemnified Party") from and
against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, fees and disbursements
of counsel), joint or several, that may be incurred by or
asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or relating to any
investigation, litigation or proceeding or the preparation of any
defense with respect thereto, arising out of or in connection
with or relating to this Agreement or the transactions
contemplated hereby (including without limitation the Tender
Offer) or any use made or proposed to be made with the proceeds
of the Advances or Special Rate Loans, whether or not such
investigation, litigation or proceeding is brought by the
Borrower, any of its Subsidiaries, shareholders or creditors, an
Indemnified Party or any other Person, or an Indemnified Party is
otherwise a party thereto, and whether or not the transactions
contemplated hereby are consummated, except to the extent such
claim, damage, loss, liability or expense (i) results from such
Indemnified Party's gross negligence or wilful misconduct or (ii)
arises out of a final, non-appealable judgment against such
Indemnified Party in favor of the Borrower on the basis of a
breach of this Agreement. The foregoing indemnification shall
not cover any such claims, damages, losses, liabilities or
expenses relating to (i) any income, stamp or other taxes,
imports, duties, charges, fees, deductions or withholdings
imposed, levied, collected, withheld or assessed by the United
States or any political subdivision or taxing authority thereof
or therein (including Puerto Rico) or of the country in which any
Bank's principal office or Applicable Lending Office may be
located or any political subdivision or taxing authority thereof
or therein; (ii) any costs (whenever imposed) to any Bank of
agreeing to make or making, funding or maintaining any Advances
or Special Rate Loans; or (iii) any capital required or expected
to be maintained by any Bank or any corporation controlling such
Bank as a result of such Bank's Commitment or its Advances or
Special Rate Loans, but in each case without prejudice to
Sections 2.02(b), 2.11, 2.12, 2.15 and 8.04.
(b) The Borrower agrees that no Indemnified Party
shall have any liability (whether direct or indirect, in
contract, tort or otherwise) to the Borrower or any of its
Subsidiaries, shareholders or creditors or any other Person for
<PAGE>
or in connection with the transactions contemplated hereby,
except to the extent such liability is found in a final non-
appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or wilful
misconduct; provided that nothing in this clause (b) shall be
deemed to constitute a waiver of any claim the Borrower may
hereafter have for breach by any party of this Agreement; and
provided, further, that in no event shall any Indemnified Party
be liable for any indirect or consequential damages.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
UNION PACIFIC CORPORATION
By /s/ Robert M. Knight, Jr.
----------------------------
Name: Robert M. Knight, Jr.
Title: Assistant Treasurer
Administrative Agent
--------------------
CHEMICAL BANK, as Administrative
Agent
By /s/ Julie S. Long
--------------------------
Name: Julie S. Long
Title: Vice President
Documentation Agent
CITIBANK, N.A., as Documentation
Agent
By /s/ Judith Fishlow
--------------------------
Name: Judith Fishlow
Title: Attorney-in-Fact
Syndication Agent
CHEMICAL SECURITIES, INC., as
Syndication Agent
By /s/ Evelyn M. Aloise
--------------------------
Name: Evelyn M. Aloise
Title: Vice President
CO-ARRANGERS
CHEMICAL BANK, as Co-Arranger
By /s/ Julie S. Long
--------------------------
Name: Julie S. Long
Title: Vice President
CITICORP SECURITIES, INC., as
<PAGE>
Co-Arranger
By /s/ Robert J. Harrity
--------------------------
Name: Robert J. Harrity
Title: Vice President
COMMITMENT BANKS
---------- -----
$67,826,087.00 CHEMICAL BANK
By /s/ Julie S. Long
--------------------------
Name: Julie S. Long
Title: Vice President
$67,826,087.00 CITIBANK, N.A.
By /s/ Judith Fishlow
--------------------------
Name: Judith Fishlow
Title: Attorney-in-Fact
$52,173,913.04 ABN AMRO BANK N.V., NEW YORK BRANCH
By /s/ John W. Deegan
--------------------------
Name: John W. Deegan
Title: V.P.
By /s/ Olga L. Zoutendijk
--------------------------
Name: Olga L. Zoutendijk
Title: V.P.
<PAGE>
$52,173,913.04 BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By /s/ Bridget A. Garavalia
--------------------------
Name: Bridget A. Garavalia
Title: Vice President
By___________________________
Name:
Title:
$52,173,913.04 BANK OF MONTREAL
By /s/ David J. Thompson
--------------------------
Name: David J. Thompson
Title: Director
$52,173,913.04 THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION)
By /s/ F.M. Cox, III
--------------------------
Name: F.M. Cox, III
Title: Vice President
$52,173,913.04 CREDIT SUISSE
By /s/ Eileen O'Connell Fox
--------------------------
Name: Eileen O'Connell Fox
Title: Member of Senior
Management
By /s/ Christopher J. Eldin
--------------------------
Name: Christopher J. Eldin
Title: Member of Senior
Management
<PAGE>
$52,173,913.04 THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Gerald F. Mackin
--------------------------
Name: Gerald F. Mackin
Title: Vice President
$52,173,913.04 MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By /s/ Laura E. Reim
--------------------------
Name: Laura E. Reim
Title: Vice President
$52,173,913.04 NATIONAL WESTMINSTER BANK PLC, NEW
YORK BRANCH
By /s/ Anne Marie Torre
--------------------------
Name: Anne Marie Torre
Title: Vice President
$52,173,913.04 NATIONSBANK, N.A. (CAROLINAS)
By /s/ Michael D. Monte
--------------------------
Name: Michael D. Monte
Title: Vice President
$52,173,913.04 UNION BANK OF SWITZERLAND
By /s/ Daniel H. Perron
--------------------------
Name: Daniel H. Perron
Title: Vice President
By /s/ Daniel R. Strickford
--------------------------
Name: Daniel R. Strickford
Title: Assistant Treasurer
<PAGE>
$41,739,130.43 THE BANK OF TOKYO TRUST COMPANY
By /s/ M.R. Marron
--------------------------
Name: M.R. Marron
Title: Vice President
$41,739,130.43 CREDIT LYONNAIS NEW YORK BRANCH
By /s/ Mary E. Collier
--------------------------
Name: Mary E. Collier
Title: Vice President
$41,739,130.43 THE INDUSTRIAL BANK OF JAPAN
LIMITED NEW YORK BRANCH
By /s/ John Veltri
--------------------------
Name: Mr. John Veltri
Title: Senior Vice President
$41,739,130.43 MELLON BANK, N.A.
By /s/ Donald G. Cassidy
--------------------------
Name: Donald G. Cassidy
Title: First Vice President
$41,739,130.43 PNC BANK, NATIONAL ASSOCIATION
By /s/ Robert Q. Reilly
--------------------------
Name: Robert Q. Reilly
Title: Vice President
<PAGE>
$41,739,130.43 SOCIETE GENERALE
By /s/ Jan Wertlieb
--------------------------
Name: Jan Wertlieb
Title: Vice President
$41,739,130.43 THE SUMITOMO BANK, LIMITED, NEW
YORK BRANCH
By /s/ Y. Kawamura
--------------------------
Name: Y. Kawamura
Title: Joint General Manager
$41,739,130.43 TORONTO DOMINION (NEW YORK), INC.
By /s/ Jorge Garcia
--------------------------
Name: Jorge Garcia
Title: Vice President
$26,086,956.52 THE BANK OF CALIFORNIA, N.A.
By /s/ Harry S. Matthews
--------------------------
Name: Harry S. Matthews
Title: Vice President
$26,086,956.52 THE BANK OF NEW YORK
By /s/ Michael V. Flannery, Jr.
--------------------------
Name: Michael V. Flannery, Jr.
Title: Vice President
<PAGE>
$26,086,956.52 BANQUE NATIONALE DE PARIS
By /s/ Walter Kaplan
--------------------------
Name: Walter Kaplan
Title: Vice President
By /s/ Phil Truesdale
--------------------------
Name: Phil Truesdale
Title: Vice President
$26,086,956.52 THE DAI-ICHI KANGYO BANK, LTD.
By /s/ Robert Gallagher
--------------------------
Name: Robert Gallagher
Title: Assistant V.P.
$26,086,956.52 THE NORTHERN TRUST COMPANY
By /s/ J. Chip McCall
--------------------------
Name: J. Chip McCall
Title: Second Vice President
$26,086,956.52 ROYAL BANK OF CANADA
By /s/ Michael J. Madnick
--------------------------
Name: Michael J. Madnick
Title: Manager
$26,086,956.52 THE YASUDA TRUST AND BANKING
COMPANY LIMITED
By /s/ Rohn M. Laudenschlager
--------------------------
Name: Rohn M. Laudenschlager
Title: Senior Vice President
<PAGE>
$13,043,478.26 THE BOATMEN'S NATIONAL BANK OF
ST. LOUIS
By /s/ John C. Solomon
____________________________
Name: John C. Solomon
Title: Vice President
$13,043,478.26 CRESTAR BANK
By /s/ J. F. Jayle, Jr.
--------------------------
Name: J.F. Jayle, Jr.
Title: Senior Vice President
<PAGE>
CLARIFICATION OF
SECTIONS 2.3(b) and 5.4(f)
of
MERGER AGREEMENT
WHEREAS, the parties hereto, Union Pacific Corpora-
tion ("Parent"), UP Rail, Inc. ("Purchaser") and Chicago
and North Western Transportation Company (the "Company"),
have entered into an Agreement and Plan of Merger dated
as of March 16, 1995 (the "Merger Agreement"); and
WHEREAS, the parties hereto desire to clarify their
mutual understanding of how Sections 2.3 and 5.4(f)
should be applied with respect to Company employees whose
employment may be terminated prior to the "Effective
Time" or the date of "Closing" (both terms as defined in
the Merger Agreement); and
WHEREAS, the Company has confirmed that all "Op-
tions" (as defined in Section 2.3 of the Merger Agree-
ment) are either currently exercisable or have associated
with them limited stock appreciation rights which will
become exercisable upon the consummation of the "Offer"
(as defined in the Merger Agreement); and
WHEREAS, consequently, the economic value of all
Options could be realized at, or immediately after, the
consummation of the Offer, while Section 2.3(b) specifi-
cally authorizes a cash payment with respect to Options
only upon their cancellation at the Effective Time;
NOW, THEREFORE, the parties hereto agree as follows:
1. If the employment of a Company employee is
terminated (whether voluntarily or otherwise) prior to
the Effective Time, each Option which is held by such em-
ployee immediately prior to the later of the date of the
consummation of the Offer or the date of such termination
of employment shall be cancelled on the later of such
dates (provided that any required consent to cancellation
has been given by the employee). Promptly upon such
cancellation, the Company shall pay to such employee an
amount equal to the excess, if any, of the Offer Price
(as defined in the Merger Agreement) over the exercise
price per Share (as defined in the Merger Agreement)
subject thereto, multiplied by the number of Shares
subject thereto.
2. The Company will pay to a "Terminated
Employee" (as defined in the next sentence), as soon as
reasonably practical after the date of his or her termi-
<PAGE>
nation of employment, a prorated bonus calculated in
accordance with Section 5.4(f) of the Merger Agreement,
but based on the Company's performance through the end of
the calendar quarter coinciding with or immediately pre-
ceding such termination and a proration of the resulting
bonus amount to the date of such termination. "Termi-
nated Employee" shall mean a Company employee
(i) whose employment is terminated (whether volun-
tarily or otherwise) prior to the Effective Time,
(ii) who does not (either before or after such
termination) enter into a severance agreement with
respect to such employment similar to the agreements
offered to certain Company employees on or about
April 3, 1995 by the Company, Chicago and North
Western Railway Company and Union Pacific Railroad
Company, and
(iii) who was, immediately prior to the execution of
the Merger Agreement, a participant in the Company's
Bonus Plan.
3. This document may be executed in counter-
parts, each of which shall be deemed to be an original
but both of which together shall constitute one and the
same document.
IN WITNESS WHEREOF, Parent, Purchaser and the
Company have caused this document to be signed by their
respective officers thereunto duly authorized as of April
12, 1995.
UNION PACIFIC CORPORATION
By________________________
Name:
Title:
UP RAIL, INC.
By________________________
Name:
Title:
CHICAGO AND NORTH WESTERN
TRANSPORTATION COMPANY
By_______________________
Name:
Title:
2
<PAGE>
[EXECUTION COPY]
April 13, 1995
Chicago and North Western Transportation Company
165 North Canal Street
Chicago, Illinois 60606
Attn: Mr. Robert Schmiege
Chairman, President and CEO
Re: Amendment to Company Stock Option
Agreement
---------------------------------
Dear Ladies and Gentlemen:
Reference is made to the Company Stock Option
Agreement (the "Agreement"), dated as of March 16, 1995,
by and between UP Rail, Inc., a Utah corporation (the
"Purchaser"), and Chicago and North Western Transporta-
tion Company, a Delaware corporation (the "Company").
The Purchaser and the Company hereby agree to amend sub-
section (b) of Paragraph 1 of the Agreement, entitled
"Grant of Option," by changing the reference to the
minimum number of shares of Common Stock, $.01 par value
per share, of the Company which must be owned by the Pur-
chaser in order to exercise the Option from "85%" to
"87.5%." Except as specifically provided herein, the
Agreement shall remain in full force and effect and shall
not be modified in any respect.
Please indicate your acceptance of the provi-
sions hereof by signing the enclosed copy of this Amend-
ment and returning it to Carl W. Von Bernuth, Senior Vice
President and General Counsel, Union Pacific Corporation,
Martin Tower, Eighth and Eaton Avenues, Bethlehem, Penn-
sylvania 18018 (telecopier: 610-861-3137). If you elect
to deliver this Amendment by telecopier, please arrange
<PAGE>
Chicago and North Western Transportation Company
April 13, 1995
Page 2
for the executed original to follow by next-day courier
delivery.
Very truly yours,
UP RAIL, INC.
By
--------------------------------
Name:
Title:
ACCEPTED AND AGREED
on this 13th day of April, 1995:
CHICAGO AND NORTH WESTERN
TRANSPORTATION COMPANY
By
-----------------------
Name:
Title:
<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
HERBERT FEIWEL, IRA ROLLOVER )
ACCOUNT, )
Plaintiff, )
) C.A. No. 14109
-against- )
)
JAMES E. MARTIN, JAMES J. MOSSMAN, )
JAMES R. THOMPSON, ROBERT SCHMIEGE,)
RICHARD K. DAVIDSON, HAROLD A. )
POLING, SAMUEL K. SKINNER, UNION )
PACIFIC COMPANY, CHICAGO AND NORTH )
WESTERN TRANSPORTATION COMPANY and )
UP RAIL INC. )
Defendants. )
- -----------------------------------
KENNETH STEINER, )
)
Plaintiff, )
)
-against- )
) C.A. No. 14111
RICHARD K. DAVIDSON, JAMES E. )
MARTIN, JAMES J. MOSSMAN, )
HAROLD A. POLING, ROBERT SCHMIEGE, )
SAMUEL K. SKINNER, JAMES R. )
THOMPSON, CHICAGO & NORTH WESTERN )
TRANSPORTATION COMPANY, UNION )
PACIFIC COMPANY and UP RAIL, INC., )
)
Defendants. )
)
- -----------------------------------
MOISE KATZ, )
)
Plaintiff, )
)
-against- ) C.A. No. 14112
)
JAMES E. MARTIN, JAMES J. MOSSMAN, )
JAMES R. THOMPSON, ROBERT SCHMIEGE,)
RICHARD K. DAVIDSON, HAROLD A. )
POLING, SAMUEL K. SKINNER, UNION )
PACIFIC COMPANY, CHICAGO AND NORTH )
WESTERN TRANSPORTATION COMPANY and )
<PAGE>
UP RAIL INC. )
Defendants. )
)
)
- -----------------------------------
CHARLES KOWAL and HARRY W. KENT, )
in his Individual Retirement )
Account, on their own behalf and )
on behalf of all others similarly )
)
Plaintiff, )
) C.A. No. 14115
-against- )
)
CHICAGO AND NORTHWESTERN TRANS- )
PORTATION COMPANY, UNION PACIFIC )
CORPORATION, RICHARD K. DAVIDSON, )
JAMES E. MARTIN, JAMES J. MOSSMAN, )
JAMES R. THOMPSON, ROBERT SCHMIEGE,)
HAROLD A. POLING, and SAMUEL K. )
SKINNER, )
Defendants. )
)
)
- -----------------------------------
MICHAEL GERBER, individually and on)
behalf of all others similarly )
situated, )
)
Plaintiff, )
) C.A. No. 14117
-against- )
)
JAMES E. MARTIN, JAMES J. MOSSMAN, )
JAMES R. THOMPSON, ROBERT SCHMIEGE,)
RICHARD K. DAVIDSON, HAROLD A. )
POLING, SAMUEL K. SKINNER, CHICAGO )
& NORTHWESTERN TRANSPORTATION )
COMPANY, UNION PACIFIC COMPANY )
and UP RAIL INC., )
)
Defendants. )
)
- -----------------------------------
2
<PAGE>
MEMORANDUM OF UNDERSTANDING
---------------------------
WHEREAS, plaintiffs in the above-referenced
stockholder class actions (collectively, the "Litiga-
tion") have challenged a proposed merger transaction and
certain ancillary agreements thereto ("the Merger" and
the "Merger Agreement") pursuant to which Chicago and
North Western Transportation Company ("CNW" or the "Com-
pany") would be merged with and into a subsidiary of
Union Pacific Corporation ("UP"); and
WHEREAS, plaintiffs have moved to preliminarily
enjoin the Merger, and the parties have engaged in expe-
dited discovery with respect thereto;
WHEREAS, counsel for the parties have engaged
in extensive, good faith discussions with regard to the
possible settlement of the Litigation; and
WHEREAS, as a result of those discussions,
defendants have agreed to make certain modifications to
the Stock Option Agreement and issue certain supplemental
disclosures with regard to the Merger; NOW, THEREFORE,
IT IS HEREBY AGREED, between and among the
parties hereto, that the following sets forth the terms
of their agreement to the settle the matter:
1. Defendants shall issue or cause to be
issued supplemental disclosures (the "Supplemental Dis-
3
<PAGE>
closures") concerning certain of the matters alleged in
plaintiffs' Amended Class Action Complaint (the "Amended
Complaint"), which Supplemental Disclosures shall be
mutually agreed upon by the counsel for the parties to
the Litigation;
2. Defendants shall cause UP's tender offer
for the publicly held shares of CNW, which offer is
presently scheduled to expire on April 19, 1995, to
remain open for a period of ten calendar days after the
mailing of the Supplemental Disclosures;
3. Defendants shall modify paragraph 1 of the
Company Stock Option Agreement, dated March 16, 1995, to
provide that UP's rights thereunder (or the rights of its
affiliates) shall accrue only upon its ownership of at
least 87.5% of the Company's common shares (assuming
conversion of UP's non-voting CNW common shares into CNW
common shares);
4. Defendants agree not to oppose any appli-
cation by plaintiffs' counsel for an award of attorneys'
fees and expenses in an aggregate amount not to exceed
$525,000. UP and/or CNW shall pay to plaintiffs' counsel
such fees and expenses as may be actually awarded by the
Court to an aggregate limit of $525,000. Defendants ex-
pressly reserve the right to oppose any other application
4
<PAGE>
for an award of attorneys' fees and expenses to be made
to the Court of Chancery or to any other court by, or on
behalf of, plaintiffs' counsel or any other persons. No
Defendant other than UP and CNW shall be liable or re-
sponsible for the payment of any attorneys' fees and
expenses which may be awarded in this Litigation.
5. The parties shall work in good faith to
prepare and submit to the Court of Chancery for approval
at the earliest practicable time, a Stipulation of Set-
tlement of the Litigation (the "Stipulation"). The
Stipulation will expressly provide, inter alia, that:
(a) the defendants have denied, and continue to deny,
that they have committed any violation of law or engaged
in any of the wrongful acts alleged in the Amended Com-
plaint or plaintiffs' motion for a preliminary injunc-
tion; (b) the defendants are entering into the Stipula-
tion solely because the proposed settlement would elimi-
nate the burden and expense of further litigation; and
(c) plaintiffs' counsel, having made a thorough investi-
gation of the facts, believe that the proposed settlement
is fair, reasonable and adequate and in the best inter-
ests of plaintiffs and the proposed class. The Stipula-
tion will further provide for, inter alia: (a) appropri-
ate certification of the class described in the Amended
5
<PAGE>
Complaint; (b) the entry of a judgment in appropriate
form, dismissing the Litigation with prejudice and bar-
ring any claims (including any claims for violation of
federal, state or common law) that have been or might
have been brought in any court, the Interstate Commerce
Commission or any other forum by any member of the pro-
posed class, relating to any matter that was or could
have been asserted in the Amended Complaint; and (c) the
delivery of releases in an appropriate form releasing any
claims for violation of, or arising under, federal, state
or common law, including but not limited to, the Inter-
state Commerce Act.
6. The settlement described herein shall be
subject to the approval of the Court of Chancery. Should
a Stipulation not be executed or not be approved by the
Court, or should the tender offer not be consummated in
accordance with the modified terms described herein, the
proposed settlement shall be null and void and of no
force and effect, and shall not be deemed to prejudice in
any way the position of any party with respect to this
litigation. In such event, neither the existence of this
Memorandum of Understanding nor its contents shall be
admissible in evidence or shall be referred to for any
6
<PAGE>
purpose in this litigation or in any other litigation or
proceeding.
7. This Memorandum of Understanding and the
proposed settlement described herein shall be governed
by, and construed in accordance with, the laws of the
State of Delaware.
8. This Memorandum of Understanding may be
modified or amended only by a writing signed by all of
the signatories hereto.
9. Plaintiffs and plaintiffs' counsel repre-
sent and warrant that none of the plaintiffs' claims or
causes of action referred to in the Amended Complaint or
this Memorandum of Understanding have been assigned,
encumbered or in any manner transferred in whole or in
part.
10. This Memorandum of Understanding shall be
binding upon and shall inure to the benefit of the par-
ties and their respective agents, successors, executors,
heirs and assigns.
11. By signing this Memorandum of Understand-
ing, plaintiffs' counsel represent and warrant that they
have authority to act on behalf of the plaintiffs in the
Litigation.
7
<PAGE>
12. The parties to this Memorandum of Under-
standing agree (a) to use their best efforts to achieve
the dismissal of the Litigation in accordance with the
terms of this Memorandum of Understanding, and (b) to
cause the timely occurrence of all events, transactions,
or other circumstances described herein.
13. This Memorandum of Understanding may be
signed in counterparts.
Dated: April 13, 1995
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
Attorneys for Plaintiff
By: /s/ Joseph A. Rosenthal
---------------------------------
Joseph A. Rosenthal
First Federal Plaza
Suite 214
P.O. Box 1070
Wilmington, DE 19899
(302) 656-4433
MORRIS, NICHOLS, ARSHT & TUNNELL
Attorneys for Chicago & North
Western Transportation Company
and the Individual Defendants
By: /s/ William M. Lafferty
---------------------------------
William M. Lafferty, Esq.
1201 North Market Street
P.O. Box 1347
Wilmington, DE 19899-1347
(302) 658-9200
SKADDEN, ARPS, SLATE, MEAGHER
8
<PAGE>
& FLOM
Attorneys for Union Pacific
Corporation and UP Rail Inc.
By: /s/ Thomas J. Allingham
---------------------------------
Thomas J. Allingham, II
(Members of the Firm)
One Rodney Square
Wilmington, DE 19899
(302) 651-3000
9
<PAGE>
[Union Pacific Corporation Logo] News Release
______________________________________________________________________________
Contact: 610-861-3388
Harvey S. Turner
Director-Public Relations
Martin Tower
Eighth and Eaton Avenues
Bethlehem, PA 18018
FOR IMMEDIATE RELEASE
Bethlehem, PA, April 14, 1995 -- Union Pacific Corporation (NYSE: UNP) and
Chicago and North Western Transportation Company (NYSE: CNW) announced today
that, in order to eliminate the burden and expense of further litigation, they
had entered into a memorandum of understanding providing for the settlement of
the pending class action lawsuits relating to Union Pacific's $35.00 per share
cash tender offer for all outstanding shares of Chicago and North Western
pursuant to their merger agreement. Pursuant to the proposed settlement, Union
Pacific and Chicago and North Western agreed to disseminate certain mutually
agreeable supplemental disclosure to Chicago and North Western's shareholders
and to extend the expiration date of the tender offer to ten (10) calendar days
following the mailing of such disclosure, which is expected to occur later
today. The settlement also provides that Union Pacific and Chicago and North
Western will amend the stock option agreement which was entered into in
connection with the merger agreement to provide that Union Pacific may only
exercise its option to acquire additional Chicago and North Western shares from
CNW (thereby permitting a short-form merger) if Union Pacific acquires more than
87.5% (previously 85%) but less than 90% of Chicago and North Western's shares
in the tender offer. As part of the settlement, the parties cancelled the
hearing previously scheduled in the Delaware Chancery Court.
Union Pacific also said today that it has extended the expiration date of its
tender offer for all outstanding shares of the Common Stock of Chicago and North
Western to 12:00 Midnight, New York City time, on Monday, April 24, 1995. As of
12:00 Midnight, New York City time, on Thursday, April 13, 1995, approximately
5,743,000 shares of Chicago and North Western Common Stock had been tendered in
the offer.
###
