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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 15, 1997
REGISTRATION NO. 333-17121
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
UNION TANK CAR COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 36-3104688
(State or other jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)
</TABLE>
225 WEST WASHINGTON STREET
CHICAGO, ILLINOIS 60606
(312) 372-9500
(Address, including zip code and telephone number, including area code, of
registrant's principal executive offices)
------------------------------
WILLIAM M. HOLZMAN, ESQ.
NEAL, GERBER & EISENBERG
TWO NORTH LASALLE STREET
CHICAGO, ILLINOIS 60602
(312) 269-8000
(Name, address, including zip code, and telephone number including area code, of
agent for service)
COPIES TO:
BARRY P. BIGGAR, ESQ.
MAYER, BROWN & PLATT
1675 BROADWAY
NEW YORK, NEW YORK 10019
(212) 506-2500
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED OFFERING PRICE(1)(2) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Debt Securities and Pass Through
Certificates................................. $400,000,000 $121,213(3)
===================================================================================================
</TABLE>
(1) Estimated in accordance with Rule 457 solely for the purpose of determining
the registration fee.
(2) Any offering of Debt Securities denominated in any foreign currency will be
treated as the equivalent in U.S. dollars based on the exchange rate
applicable to the purchase of such Debt Securities from the registrant.
(3) Previously paid.
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
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EXPLANATORY NOTE
This Registration Statement contains a Prospectus (the "Pass Through
Certificate Prospectus") relating to up to $400,000,000 aggregate principal
amount of pass through certificates of Union Tank Car Company (the "Company")
and a Prospectus (the "Debt Security Prospectus") relating to up to $400,000,000
aggregate principal amount of debt securities of the Company. The aggregate
principal amount of pass through certificates to be offered and sold pursuant to
this Registration Statement is subject to reduction by the aggregate principal
amount of debt securities sold pursuant to this Registration Statement and vice
versa.
Upon the public offering or sale of the pass through certificates or debt
securities registered under this Registration Statement, a Prospectus Supplement
describing the particular terms of such offer or sale will be filed in
accordance with the rules of the Securities and Exchange Commission together
with either the Pass Through Certificate Prospectus or the Debt Security
Prospectus, as applicable.
No offers or sales of pass through certificates or debt securities may be
made unless accompanied by a Prospectus Supplement applicable to the securities
offered thereby.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE
OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE
WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
JANUARY 15, 1997
PROSPECTUS
$400,000,000
UNION TANK CAR COMPANY
PASS THROUGH CERTIFICATES
------------------------
Up to $400,000,000 aggregate principal amount of Pass Through Certificates
may be offered for sale from time to time pursuant to this Prospectus and
related Prospectus Supplements. Pass Through Certificates may be issued in one
or more series in amounts, at prices and on terms to be determined at the time
of the offering. In respect of each offering of Pass Through Certificates, a
separate Union Tank Car Company Pass Through Trust for each series of Pass
Through Certificates being offered (each, a "Trust") will be formed pursuant to
the Pass Through Trust Agreement (the "Basic Agreement") and a supplement
thereto (a "Trust Supplement") relating to such Trust between Union Tank Car
Company (the "Company") and, unless otherwise specified in the Prospectus
Supplement, Harris Trust and Savings Bank (the "Pass Through Trustee"), as pass
through trustee under each Trust. Each Pass Through Certificate in a series will
represent a fractional undivided interest in the related Trust and will have no
rights, benefits or interest in respect of any other Trust. The property of each
Trust will consist of (i) equipment notes (the "Equipment Notes") issued on a
nonrecourse basis by one or more owner trustees pursuant to one of more
leveraged lease transactions to finance or refinance a portion of the equipment
cost of certain railcars ("Equipment Units") which have been or will be leased
to the Company or (ii) equipment trust certificates (the "ETCs") issued pursuant
to one or more equipment trust agreements between the Company and Harris Trust
and Savings Bank, as trustee. Each such equipment trust agreement is hereinafter
referred to as an "Equipment Trust Agreement", and Harris Trust and Savings
Bank, as trustee under each Equipment Trust Agreement, is hereinafter referred
to as the "Equipment Trust Trustee". Amounts payable pursuant to the ETCs will
be fully and unconditionally guaranteed by the Company. The Prospectus
Supplement relating to each offering of Pass Through Certificates will describe
certain terms of the Pass Through Certificates being offered, the Trust or
Trusts relating thereto, the Equipment Notes or ETCs to be purchased by such
Trust or Trusts, the Equipment Units relating to such Equipment Notes and the
leveraged lease transactions, if any, relating thereto.
The Equipment Notes will not be direct obligations of, or guaranteed by, the
Company, but the amounts unconditionally payable by the Company for the lease of
the Equipment Units will be sufficient to pay in full when due all payments
required to be made on such Equipment Notes.
Equipment Notes may be issued in respect of Equipment Units in one or more
series, each series having a different interest rate and final maturity date. A
separate Trust may purchase one or more series of the Equipment Notes issued
with respect to each group of Equipment Units (an "Equipment Group"). All of the
Equipment Notes held in such Trust will have an interest rate equal to the
interest rate applicable to the Pass Through Certificates issued by such Trust
and maturity dates occurring on or before the final distribution date applicable
to such Pass Through Certificates. The Equipment Notes issued with respect to
each Equipment Group will be secured by a security interest in such Equipment
Group and by the lease relating thereto (each, a "Lease"), including the right
to receive rent payable by the Company in respect of such Equipment Group.
Interest paid on the Equipment Notes or ETCs held in each Trust will be
passed through to the holders of the Pass Through Certificates relating to such
Trust on the dates and at the rate per annum set forth in the Prospectus
Supplement relating to such Pass Through Certificates until the final
distribution date for such Trust. Principal paid on the Equipment Notes or ETCs
held in each Trust will be passed through to the holders of the Pass Through
Certificates relating to such Trust in scheduled amounts on the dates set forth
in the Prospectus Supplement relating to such Pass Through Certificates until
the final distribution date for such Trust.
The Pass Through Certificates may be offered through underwriters, dealers
or agents. See "Plan of Distribution." The Prospectus Supplement will set forth
the names of any underwriters, dealers or agents involved in the sale of the
Pass Through Certificates in respect of which this Prospectus is being delivered
and any applicable fee, commission or discount arrangements with them.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
This Prospectus may not be used to consummate a sale of Pass Through
Certificates unless accompanied by a Prospectus Supplement.
The date of this Prospectus is January , 1997.
<PAGE> 4
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Debt Securities. This Prospectus, which forms a part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information pertaining
to the Debt Securities and the Company, reference is made to the Registration
Statement. Any statement contained herein concerning the provisions of any
document is not necessarily complete and, in each instance, reference is made to
the copy of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Commission. Information
concerning the Company can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following Regional Offices of the Commission: Chicago
Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and New York Regional Office, 7 World Trade Center, Suite 1300,
New York, New York 10048. Copies of such material can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such materials also may be accessed
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov.
REPORTS TO CERTIFICATEHOLDERS BY THE TRUSTEE
Harris Trust and Savings Bank, as trustee under the Pass Through Trust
Agreement, will provide to Certificateholders certain periodic statements
concerning distributions made with respect to the Pass Through Trusts. See
"Description of the Pass Through Certificates -- Reports to Certificateholders."
2
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DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995 filed on March 11, 1996, as amended by Form 10-K/A filed on May 3, 1996
and by Form 10-K/A filed on May 17, 1996, and its Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1996, June 30, 1996 and September 30, 1996, as
filed with the Commission pursuant to the Exchange Act, are incorporated herein
by reference.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein, or contained in
this Prospectus, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written request of such person, a copy (without
exhibits) of any or all documents incorporated by reference in this Prospectus.
Requests for such copies should be directed to the General Counsel and
Secretary, Union Tank Car Company, 225 West Washington Street, Chicago, Illinois
60606, telephone (312) 372-9500.
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THE COMPANY
Union Tank Car Company (with its wholly-owned subsidiaries herein
collectively referred to, except as the context otherwise requires, as the
"Company") is principally engaged in the leasing of railway tank cars and other
rail cars to United States, Canadian and Mexican manufacturers and other
shippers of chemical products, including liquid fertilizers, petroleum products,
including liquid petroleum gas, food products and bulk plastics. The Company
owns and operates one of the largest fleets of privately-owned railway tank cars
in the world.
The Company, which was incorporated in Delaware in 1980 and is the
successor to a business which was incorporated in New Jersey in 1891 and
reincorporated in Delaware in 1968, is a wholly-owned subsidiary of Marmon
Industrial Corporation, a wholly-owned subsidiary of Marmon Holdings, Inc.
Substantially all the stock of Marmon Holdings, Inc. is owned, directly or
indirectly, by trusts for the benefit of certain members of the Pritzker family.
As used herein, "Pritzker family" refers to the lineal descendants of Nicholas
J. Pritzker, deceased.
The Company's principal executive offices are located at 225 West
Washington Street, Chicago, Illinois 60606, and its telephone number is (312)
372-9500.
FORMATION OF THE TRUSTS
In respect of each offering of Pass Through Certificates, one or more
Trusts will be formed, and the related Pass Through Certificates will be issued,
pursuant to separate Trust Supplements to be entered into between the Pass
Through Trustee and the Company in accordance with the terms of the Basic
Agreement. All Pass Through Certificates with respect to each Trust will
represent fractional undivided interests in such Trust and the property held in
such Trust and will have no rights, benefits or interest in respect of any other
Trust or the property held therein. Concurrently with the execution and delivery
of each Trust Supplement relating to one or more leveraged lease transactions,
the Pass Through Trustee, on behalf of the Trust formed thereby, will enter into
one or more financing, refinancing, purchase or participation agreements (each
such agreement being herein referred to as a "Participation Agreement") relating
to one or more Equipment Groups described in the applicable Prospectus
Supplement. Concurrently with the execution and delivery of each Trust
Supplement relating to ETCs, the Pass Through Trustee, on behalf of such Trust,
will purchase such ETCs from the Equipment Trust Trustee. Pursuant to the
applicable Participation Agreement or Equipment Trust Agreement, the Pass
Through Trustee, on behalf of the Trust formed in connection with the offering
of Pass Through Certificates, will purchase the Equipment Notes issued with
respect to each such Equipment Group or ETCs so that all of the Equipment Notes
or ETCs held in such Trust will have an interest rate equal to the interest rate
applicable to the Pass Through Certificates issued by such Trust. Unless
otherwise indicated in the Prospectus Supplement, the maturity dates of the
Equipment Notes or ETCs acquired by each Trust will occur on or before the final
distribution date applicable to the Pass Through Certificates issued with
respect to such Trust. The Pass Through Trustee will distribute the amount of
payments of principal, premium, if any, and interest received by it as holder of
the Equipment Notes or ETCs to the Certificateholders of the Pass Through
Certificates with respect to the Trust in which such Equipment Notes or ETCs are
held. See "Description of the Pass Through Certificates", "Description of the
Equipment Notes" and "Description of the ETCs."
USE OF PROCEEDS
The Pass Through Certificates offered pursuant to any Prospectus Supplement
will be issued (i) to facilitate the financing or refinancing of the debt
component of one or more separate leveraged lease transactions entered into by
the Company, as lessee, with respect to the Equipment Units described therein or
(ii) to purchase ETCs. The proceeds from the sale of Pass Through Certificates
relating to one or more leveraged lease transactions will be used by the Pass
Through Trustee on behalf of the applicable Trust or Trusts to purchase, at par,
the Equipment Notes to be issued by the respective Owner Trustee or Owner
Trustees to finance or refinance all or a portion of the equipment cost of such
Equipment Units.
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Simultaneously with the acquisition of such Equipment Units, the respective
Owner Trustee will lease such Equipment Units to the Company. In the case of
ETCs, the proceeds from the sale of Pass Through Certificates will be used by
the Pass Through Trustee on behalf of the applicable Trust or Trusts to
purchase, at par, ETCs. The Company will use the net proceeds from each separate
leveraged lease transaction and from the issuance of ETCs to finance the
addition of railcars to the Company's fleet, for general corporate purposes or
as otherwise specified in the applicable Prospectus Supplement.
The Equipment Notes with respect to each Equipment Group will be issued
under a separate Trust Indenture and Security Agreement (each, an "Indenture")
between a bank or trust company as trustee thereunder (each, an "Indenture
Trustee") and an owner trustee, not in its individual capacity (except as
expressly set forth therein) but solely as trustee (each, an "Owner Trustee"),
of a separate trust for the benefit of one or more institutional or corporate
investors (each, an "Owner Participant"). Each Owner Participant will provide,
from sources other than the Equipment Notes, the balance of the equipment cost
of the related Equipment Group. No Owner Participant, however, will be
personally liable for any amount payable under the related Indenture or the
Equipment Notes issued thereunder. Subject to certain restrictions, each Owner
Participant may transfer its interest in the related Equipment Group.
Because the Company's obligation to make payments (i) under the Leases
relating to the Equipment Notes and (ii) in respect of the ETCs will be
unconditional, and not affected by the financial performance of the railcars
within the related Equipment Groups or subject to the related Equipment Trust
Agreements, the Company believes that historical financial information with
respect to such railcars will not be relevant to purchasers of the Pass Through
Certificates.
DESCRIPTION OF THE PASS THROUGH CERTIFICATES
In connection with each offering of Pass Through Certificates, one or more
separate Trusts will be formed and one or more series of Pass Through
Certificates will be issued pursuant to the Basic Agreement and one or more
Trust Supplements to be entered into between the Company and the Pass Through
Trustee. The following summary relates to the Basic Agreement and each of the
Trust Supplements, the Trusts to be formed thereby and the Pass Through
Certificates to be issued by each Trust except to the extent, if any, described
in the applicable Prospectus Supplement. Citations to the relevant sections of
the Basic Agreement appear below in parentheses. The statements under this
caption are a summary and do not purport to be complete. This summary makes use
of terms defined in and is qualified in its entirety by reference to all of the
provisions of the Basic Agreement, the form of which has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part. The
form of the Trust Supplement relating to each series of Pass Through
Certificates and the forms of the Leases, Participation Agreements, Indentures,
Equipment Notes and Equipment Trust Agreements, if any, relating thereto will be
filed as exhibits to a report by the Company on Form 8-K, 10-Q, or 10-K, as
applicable, to be filed with the Commission following the offering of such
series of Pass Through Certificates.
GENERAL
The Pass Through Certificates of each Trust will be issued in fully
registered form only. Each Pass Through Certificate will represent a fractional
undivided interest in the separate Trust created by the Trust Supplement
pursuant to which such Pass Through Certificate is issued. The property of each
Trust will include the Equipment Notes or ETCs held in such Trust, all monies at
any time paid thereon and all monies due and to become due thereunder and funds
from time to time deposited with the Pass Through Trustee in accounts relating
to such Trust. Each Pass Through Certificate will correspond to a pro rata share
of the outstanding principal amount of the Equipment Notes or ETCs and other
property held in the related Trust and will be issued in denominations of $1,000
or any integral multiple of $1,000. (Sections 2.1 and 3.1)
Except as otherwise provided in the applicable Trust Supplement, Pass
Through Certificates will be registered in the name of Cede & Co. ("Cede") as
the nominee of The Depository Trust Company ("DTC") and no person acquiring an
interest in Pass Through Certificates (a "Certificate Owner") will be entitled
to receive a certificate representing such person's interest in the related
Trust unless "Definitive Certificates" are
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issued as described below. Unless Definitive Certificates are issued, all
references to actions by Certificateholders shall refer to actions taken by DTC
upon instructions from DTC Participants (as defined below), and all references
herein to distributions, notices, reports and statements to Certificateholders
shall refer, as the case may be, to distributions, notices, reports and
statements to DTC or Cede, as the registered holder of the Pass Through
Certificates, or to DTC Participants for distribution to Certificate Owners in
accordance with DTC procedures. See "-- Book-Entry Registration." (Section 3.9)
Interest will be passed through to Certificateholders of each Trust at the
rate per annum set forth on the cover page of the applicable Prospectus
Supplement and will be calculated on the basis of a 360-day year of twelve
30-day months.
The Pass Through Certificates of each series represent interests only in
the related Trust and all payments and distributions shall be made only from the
related Trust Property. (Section 3.8) The Pass Through Certificates do not
represent an interest in or obligation of the Company, the Pass Through Trustee,
the Owner Trustee, if any, in its individual capacity, the Owner Participant, if
any, or any affiliate of any thereof.
The Basic Agreement does not and, except as otherwise described in the
applicable Prospectus Supplement, the Indentures will not, include financial
covenants or "event risk" provisions specifically designed to afford
Certificateholders protection in the event of a highly leveraged transaction
affecting the Company. However, the Certificateholders of each series will have
the benefit of (i) a lien on the specific Equipment Group securing the related
Equipment Notes held in the related Trust or, (ii) in the case of the ETCs held
in the related Trust, the indirect benefit of the Equipment Trust Trustee under
the relevant Equipment Trust Agreement holding title to the equipment securing
the ETCs, as well as the Company's full and unconditional guarantee of the ETCs.
See "Description of the Equipment Notes -- Security" and "Description of the
ETCs -- Guarantee" and "-- Security."
BOOK-ENTRY REGISTRATION
Except as otherwise described in the applicable Prospectus Supplement, Pass
Through Certificates will be subject to the provisions described under this
caption for book-entry registration with DTC.
DTC. DTC has advised the Company that it is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to Section
17A of the Exchange Act. DTC was created to hold securities for its participants
("DTC Participants") and to facilitate the clearance and settlement of
securities transactions between DTC Participants through electronic
book-entries, thereby eliminating the need for physical movement of
certificates. DTC Participants include securities brokers and dealers, banks,
trust companies and clearing corporations. Indirect access to the DTC system
also is available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a DTC Participant
either directly or indirectly ("Indirect Participants").
Certificate Owners that are not DTC Participants or Indirect Participants
but desire to purchase, sell or otherwise transfer ownership of, or other
interests in, Pass Through Certificates may do so only through DTC Participants
and Indirect Participants. In addition, Certificate Owners will receive all
distributions of principal, premium, if any, and interest from the Pass Through
Trustee through DTC Participants or Indirect Participants, as the case may be.
Under a book-entry format, Certificate Owners may experience some delay in their
receipt of payments, because such payments will be forwarded by the Pass Through
Trustee to Cede, as nominee for DTC. DTC will forward such payments to DTC
Participants, which thereafter will forward them to Indirect Participants or
Certificate Owners, as the case may be, in accordance with customary industry
practices. The forwarding of such distributions to the Certificate Owners will
be the responsibility of such DTC Participants. The only "Certificateholder"
will be Cede, as nominee of DTC. Certificate Owners will not be recognized by
the Pass Through Trustee as Certificateholders, as such term is used in the
Basic Agreement, and Certificate Owners will be permitted to exercise the rights
of Certificateholders only indirectly through DTC and DTC Participants.
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Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
Pass Through Certificates among DTC Participants on whose behalf it acts with
respect to the Pass Through Certificates and to receive and transmit
distributions of principal of, premium, if any, and interest on the Pass Through
Certificates. DTC Participants and Indirect Participants with which Certificate
Owners have accounts with respect to the Pass Through Certificates similarly are
required to make book-entry transfers and receive and transmit such payments on
behalf of their respective Certificate Owners. Accordingly, although Certificate
Owners will not possess Pass Through Certificates, the Rules provide a mechanism
by which Certificate Owners will receive payments and will be able to transfer
their interests.
Because DTC can only act on behalf of DTC Participants, who in turn act on
behalf of Indirect Participants, the ability of a Certificate Owner to pledge
Pass Through Certificates to persons or entities that do not participate in the
MC system, or to otherwise act with respect to such Pass Through Certificates,
may be limited due to the lack of a physical certificate for such Pass Through
Certificates.
The Company understands that DTC will take any action permitted to be taken
by Certificateholders only at the direction of one or more DTC Participants to
whose accounts with DTC the Pass Through Certificates are credited.
Additionally, the Company understands that DTC will take such actions with
respect to any specified percentage of the beneficial interest of
Certificateholders held in each Trust only at the direction of and on behalf of
DTC Participants whose holders include undivided interests that satisfy any such
percentage. DTC may take conflicting actions with respect to other undivided
interests to the extent that such actions are taken on behalf of DTC
Participants whose holders include such undivided interests.
Neither the Company nor the Pass Through Trustee will have any liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of the Pass Through Certificates held by Cede, as
nominee for DTC, or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The information contained in this section concerning DTC and DTC's
book-entry system has been obtained from sources that the Company believes to be
reliable, but the Company takes no responsibility for the accuracy thereof.
DEFINITIVE CERTIFICATES. With respect to each Trust, the related Pass
Through Certificates will be issued in fully registered, certificated form
("Definitive Certificates") to Certificate Owners or their nominees, rather than
to DTC or its nominee, only if (i) the Company advises the Pass Through Trustee
in writing that DTC is no longer willing or able to properly discharge its
responsibilities as depository with respect to such Pass Through Certificates
and the Pass Through Trustee or the Company is unable to locate a qualified
successor, (ii) the Company, at its option, elects to terminate the book-entry
system through DTC or (iii) after the occurrence of an Event of Default (as
defined below), Certificate Owners representing an aggregate percentage interest
in such Trust of not less than a majority advise the Pass Through Trustee
through DTC in writing that the continuation of a book-entry system through DTC
(or a successor thereto) is no longer in the Certificate Owners' best interest.
(Section 3.9)
Upon the occurrence of any event described in the immediately preceding
paragraph, the Pass Through Trustee will be required to notify all affected
Certificate Owners through DTC Participants of the availability of Definitive
Certificates. Upon surrender by DTC of the certificates representing the Pass
Through Certificates and receipt of instructions for re-registration, the Pass
Through Trustee will reissue the Pass Through Certificates as Definitive
Certificates to Certificate Owners. (Section 3.9)
Distributions of principal of, premium, if any, and interest on the Pass
Through Certificates will thereafter be made by the Pass Through Trustee in
accordance with the procedures set forth in the Basic Agreement and the
applicable Trust Supplements, directly to holders of Definitive Certificates in
whose names such Definitive Certificates were registered at the close of
business on the applicable record date. Such distributions will be made by check
mailed to the address of each such holder as it appears on the register
maintained with respect to the applicable Trust. The final payment on any Pass
Through Certificate, however,
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will be made only upon presentation and surrender of such Pass Through
Certificate at the office or agency specified in the notice of final
distribution to Certificateholders. (Section 4.2 and 11.1)
Definitive Certificates will be freely transferable and exchangeable at the
office of the Pass Through Trustee upon compliance with the requirements set
forth in the Basic Agreement and the applicable Trust Supplements. No service
charge will be imposed for any registration of transfer or exchange, but payment
of a sum sufficient to cover any tax or other governmental charge shall be
required. (Section 3.4 and 11.1)
SAME-DAY SETTLEMENT AND PAYMENT. Settlement for the Pass Through
Certificates will be required to be made in immediately available funds. So long
as the Pass Through Certificates are registered in the name of Cede, all
payments made by the Company to the Indenture Trustees, as assignees of the
Owner Trustees' rights under the Leases, in the case of Equipment Notes, or by
the Company in respect of ETCs, will be in immediately available funds and will
be passed through by the Pass Through Trustee to DTC in immediately available
funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearinghouse or next-day funds. In contrast, the Pass
Through Certificates will trade in DTC's Same Day Funds Settlement System until
maturity, and secondary market trading activity in the Pass Through Certificates
will therefore be required by DTC to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in immediately
available funds on trading activity in the Pass Through Certificates.
PAYMENTS AND DISTRIBUTIONS
Payments received by the Pass Through Trustee of principal of, premium, if
any, and interest on the Equipment Notes or ETCs held in each Trust will be
distributed by the Pass Through Trustee to the Certificateholders of such Trust
on the date such receipt is confirmed, except in certain cases when some or all
of such Equipment Notes or ETCs are in default. See "-- Events of Default and
Certain Rights Upon an Event of Default."
Payments of principal of, and interest on the unpaid principal amount of,
the Equipment Notes or ETCs held in each Trust will be scheduled to be received
by the Pass Through Trustee on the dates specified in the applicable Prospectus
Supplement (such scheduled payments of principal of, and interest on, the
Equipment Notes or ETCs are herein referred to as "Scheduled Payments," and the
dates specified therefor in the applicable Prospectus Supplement are herein
referred to as "Regular Distribution Dates"). The Pass Through Trustee of each
Trust will distribute on each Regular Distribution Date to the
Certificateholders of such Trust all Scheduled Payments, the receipt of which is
confirmed by the Pass Through Trustee on such Regular Distribution Date. Each
such distribution of Scheduled Payments will be made by the Pass Through Trustee
to the holders of record of the Pass Through Certificates of such Trust on the
fifteenth day immediately preceding such Regular Distribution Date, subject to
certain exceptions. (Sections 4.1 and 4.2) If a Scheduled Payment is not
received by the Pass Through Trustee on a Regular Distribution Date, it will be
distributed on the date received to such holders of record.
Each Certificateholder of each Trust will be entitled to receive a pro rata
share of any distribution in respect of Scheduled Payments of principal and
interest made on the Equipment Notes or ETCs held in such Trust. Scheduled
Payments of principal on the Equipment Notes or ETCs held in each Trust will be
set forth in the applicable Prospectus Supplement. After a partial or full
prepayment or default in respect of some or all of such Equipment Notes or ETCs,
a Certificateholder should refer to the information with respect to the Pool
Balance and the Pool Factor for such Trust reported periodically by the Pass
Through Trustee. See "-- Pool Factors" and "-- Statements to
Certificateholders."
Payments of principal, premium, if any, and interest received by the Pass
Through Trustee on account of a partial or full prepayment, if any, of the
Equipment Notes or ETCs held in a Trust, and payments received by the Pass
Through Trustee following a default in respect of the Equipment Notes or ETCs
held in a Trust (including, in the case of Equipment Notes, payments received by
the Pass Through Trustee on account of their purchase by the related Owner
Trustee or payments received on account of the sale of Equipment Notes
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or ETCs by the Pass Through Trustee) ("Special Payments") will be distributed on
the dates specified therefor in the applicable Prospectus Supplement (a "Special
Distribution Date"). In general, the Pass Through Trustee will mail notice to
the Certificateholders of record of any Trust not less than 15 days prior to the
Special Distribution Date on which any Special Payment is scheduled to be
distributed by the Pass Through Trustee stating such anticipated Special
Distribution Date. (Section 4.2) Each distribution of a Special Payment, other
than a final distribution, on a Special Distribution Date for any Trust will be
made by the Pass Through Trustee to the holders of record of the Pass Through
Certificates of such Trust as of the Record Date preceding such Special
Distribution Date. See "-- Events of Default and Certain Rights Upon an Event of
Default" and "Description of the Equipment Notes -- Prepayments."
The Basic Agreement requires that the Pass Through Trustee establish and
maintain, for each Trust and for the benefit of the Certificateholders of such
Trust, one or more non-interest bearing accounts (the "Certificate Account") for
the deposit of payments representing Scheduled Payments on the Equipment Notes
or ETCs held in such Trust. (Section 4.1) The Basic Agreement also requires that
the Pass Through Trustee establish and maintain, for each Trust and for the
benefit of the Certificateholders of such Trust, one or more accounts (the
"Special Payments Account") for the deposit of payments representing Special
Payments.
Pursuant to the terms of the Basic Agreement, the Pass Through Trustee is
required to deposit any Scheduled Payments relating to the applicable Trust
received by it in the Certificate Account of such Trust and to deposit any
Special Payments so received by it in the Special Payments Account of such
Trust. (Section 4.1) All amounts so deposited will be distributed by the Pass
Through Trustee on a Regular Distribution Date or a Special Distribution Date as
appropriate. (Section 4.2)
At such time, if any, as the Pass Through Certificates of any Trust are
issued in the form of Definitive Certificates and not to Cede, as nominee for
DTC, distributions by the Pass Through Trustee from the Certificate Account or
the Special Payments Account of such Trust on a Regular Distribution Date or a
Special Distribution Date, as appropriate, will be made by check mailed to each
Certificateholder of such Trust of record on the applicable record date at its
address appearing on the register maintained with respect to such Trust.
(Section 4.2) The final distribution for each Trust, however, will be made only
upon presentation and surrender of the Pass Through Certificates for such Trust
at the office or agency of the Pass Through Trustee specified in the notice
given by the Pass Through Trustee of such final distribution. The Pass Through
Trustee will mail such notice of the final distribution to the
Certificateholders of such Trust, specifying the date set for such final
distribution and the amount of such distribution. (Section 11.1) See "--
Termination of the Trusts."
If any Regular Distribution Date or Special Distribution Date is not a
Business Day, distributions scheduled to be made on such Regular Distribution
Date or Special Distribution Date may be made on the next succeeding Business
Day without additional interest. (Section 13.11)
POOL FACTORS
Unless there has been a prepayment, or a default in respect of one or more
issues of the Equipment Notes or ETCs held in a Trust, as described in the
applicable Prospectus Supplement or below in "-- Events of Default and Certain
Rights Upon an Event of Default," the Pool Factor for such Trust will decline in
proportion to the scheduled repayments of principal on the Equipment Notes or
ETCs held in such Trust as described in the applicable Prospectus Supplement. In
the event of a partial or full prepayment or default, the Pool Factor and the
Pool Balance of each Trust so affected will be recomputed after giving effect
thereto and notice thereof will be mailed to Certificateholders of such Trust.
Each Trust will have a separate Pool Factor and Pool Balance.
Unless otherwise described in the applicable Prospectus Supplement, the
"Pool Balance" for each Trust indicates, as of any Regular Distribution Date or
Special Distribution Date, the aggregate unpaid principal amount of the
Equipment Notes or ETCs held in such Trust on such date plus any amounts in
respect of principal on such Equipment Notes or ETCs held by the Pass Through
Trustee and not yet distributed plus the amount of any moneys held in the
related escrow account (other than earnings thereon). The Pool
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Balance for each Trust as of any Regular Distribution Date or Special
Distribution Date shall be computed after giving effect to the payment of
principal, if any, on the Equipment Notes or ETCs held in such Trust and
distribution thereof to be made on that date.
Unless otherwise described in the applicable Prospectus Supplement, the
"Pool Factor" for each Trust, as of any Regular Distribution Date or Special
Distribution Date, is the quotient (rounded to the seventh decimal place)
computed by dividing (i) the Pool Balance of such Trust, by (ii) the aggregate
original principal amount of the Pass Through Certificates issued by such Trust.
The Pool Factor for each Trust as of any Regular Distribution Date or Special
Distribution Date shall be computed after giving effect to the payment of
principal, if any, on the Equipment Notes or ETCs held in such Trust and
distribution thereof to be made on that date. (Section 1.1) The Pool Factor for
each Trust will initially be 1.0000000; thereafter, the Pool Factor for each
Trust will decline as described above to reflect reductions in the Pool Balance
of such Trust. The amount of a Certificateholder's pro rata share of the Pool
Balance of a Trust can be determined by multiplying the original denomination of
the Certificateholder's Pass Through Certificate of such Trust by the Pool
Factor for such Trust as of the applicable Regular Distribution Date or Special
Distribution Date. The Pool Factor and the Pool Balance for each Trust will be
mailed to Certificateholders of record of such Trust on each Regular
Distribution Date and Special Distribution Date.
STATEMENTS TO CERTIFICATEHOLDERS
On each Regular Distribution Date and Special Distribution Date, if any,
the Pass Through Trustee will include with each distribution of a Scheduled
Payment or Special Payment to Certificateholders of record of the related Trust
a statement, giving effect to such distribution to be made on such Regular
Distribution Date or Special Distribution Date, if any, setting forth the
following information (per $1,000 in aggregate principal amount of Pass Through
Certificates for such Trust, as to (i) and (ii) below):
(i) the amount of such distribution allocable to principal and the
amount allocable to premium, if any;
(ii) the amount of such distribution allocable to interest; and
(iii) the Pool Balance and the Pool Factor for such Trust. (Section
4.3)
So long as the Pass Through Certificates of any Trust are registered in the
name of Cede, as nominee for DTC, on the applicable record date prior to each
Regular Distribution Date and Special Distribution Date, the Pass Through
Trustee will request from DTC a securities position listing setting forth the
names of all DTC Participants reflected on DTC's books as holding interests in
the Pass Through Certificates of such Trust on such record date. On each Regular
Distribution Date and Special Distribution Date, the Pass Through Trustee will
mail to each such DTC Participant the statement described above, and will make
available additional copies as requested by such DTC Participant, to be
available for forwarding to Certificate Owners. (Section 3.9)
In addition, after the end of each calendar year, the Pass Through Trustee
will prepare for each Certificateholder of record of each Trust at any time
during the preceding calendar year a report containing the sum of the amounts
determined pursuant to clauses (i) and (ii) above with respect to the Trust for
such calendar year or, in the event such person was a Certificateholder of
record during a portion of such calendar year, for the applicable portion of
such calendar year, and such other items as are readily available to the Pass
Through Trustee and which a Certificateholder shall reasonably request as
necessary for the purpose of such Certificateholder's preparation of its federal
income tax returns (Section 4.3) Such report and such other items shall be
prepared on the basis of information supplied to the Pass Through Trustee by the
DTC Participants, and shall be delivered by the Pass Through Trustee to such DTC
Participants to be available for forwarding by such DTC Participants to
Certificate Owners in the manner described above.
At such time, if any, as the Pass Through Certificates of a Trust are
issued in the form of Definitive Certificates, the Pass Through Trustee will
prepare and deliver the information described above to each Certificateholder of
record of such Trust as the name and period of record ownership of such
Certificateholder appears on the records of the Registrar of the Pass Through
Certificates.
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VOTING OF EQUIPMENT NOTES AND ETCS
The Pass Through Trustee, as holder of the Equipment Notes and ETCs held in
each Trust, has the right to vote and give consents and waivers in respect of
such Equipment Notes and ETCs under the applicable Indenture or Equipment Trust
Agreement. The Basic Agreement sets forth the circumstances in which the Pass
Through Trustee shall direct any action or cast any vote as the holder of the
Equipment Notes and ETCs held in the applicable Trust at its own discretion and
the circumstances in which the Pass Through Trustee shall seek instructions from
the Certificateholders of such Trust. Prior to an Event of Default with respect
to any Trust, the principal amount of the Equipment Notes and ETCs held in such
Trust directing any action or being voted for or against any proposal shall be
in proportion to the principal amount of Pass Through Certificates held by the
Certificateholders of such Trust taking the corresponding position. (Sections
6.1 and 10.1) Whenever the Agreements require or permit actions to be taken
based upon instructions or directions of Certificateholders of such Pass Through
Trust holding a specified percentage interest of a Pass Through Trust, DTC shall
be deemed to represent such percentage interest only to the extent that it has
received instructions to such effect from Certificate Owners and/or DTC
Participants owning or representing, respectively, such required percentage
interest and has delivered such instructions to the Pass Through Trustee.
EVENTS OF DEFAULT AND CERTAIN RIGHTS UPON AN EVENT OF DEFAULT
The Basic Agreement defines an event of default with respect to a Trust (an
"Event of Default") as the occurrence and continuance of an event of default
under one or more of (i) the related Indentures (an "Indenture Event of
Default") or (ii) the related Equipment Trust Agreements (an "Equipment Trust
Event of Default"). The Indenture Events of Default or Equipment Trust Event of
Defaults will be described in the applicable Prospectus Supplement and, in the
case of Equipment Notes, will include events of default under the related Lease.
Because the Equipment Notes issued under an Indenture may be held in more than
one Trust, a continuing Indenture Event of Default under such Indenture would
result in an Event of Default with respect to each such Trust. There will be,
however, no cross-default provisions in the Indentures and events resulting in
an Indenture Event of Default under any particular Indenture (or a default under
any other indebtedness of the Company) will not necessarily result in an
Indenture Event of Default occurring under any other Indenture. If an Indenture
Event of Default occurs in fewer than all of the Indentures related to a Trust,
the Equipment Notes issued pursuant to the related Indentures with respect to
which an Indenture Event of Default has not occurred will continue to be held in
such Trust and payments of principal and interest on such Equipment Notes will
continue to be distributed to the holders of the Pass Through Certificates of
such Trust as originally scheduled.
In the case of Equipment Notes, the Owner Trustee and the Owner Participant
under each Indenture will each have the right under certain circumstances to
cure an Indenture Event of Default that results from the occurrence of a Lease
Event of Default under the related Lease. If the Owner Trustee or the Owner
Participant chooses to exercise such cure right, the Indenture Event of Default
and consequently the Event of Default with respect to the related Trust or
Trusts will be deemed to be cured.
The ability of the holders of the Pass Through Certificates issued with
respect to any one Trust to cause the Indenture Trustee with respect to any
Equipment Notes or the Equipment Trust Trustee with respect to any ETCs held in
such Trust to accelerate the payment on such Equipment Notes under the related
Indenture or Equipment Trust Agreement or to direct the exercise of remedies by
such Indenture Trustee under the related Indenture or Equipment Trust Trustee
under the related Equipment Trust Agreement will depend, in part, upon the
percentage of the aggregate principal amount of all Equipment Notes outstanding
under such Indenture or ETCs outstanding under such Equipment Trust Agreement
that are represented by the Equipment Notes outstanding under such Indenture or
ETCs outstanding under such Equipment Trust Agreement and held in such Trust.
Each Trust will hold Equipment Notes with different terms from those of the
Equipment Notes held in the other Trusts and therefore the Certificateholders of
a Trust may have divergent or conflicting interests from those of the
Certificateholders of any other Trusts that hold Equipment Notes relating to the
same Equipment Group. In addition, so long as the same institution acts as Pass
Through Trustee of each Trust, in the absence of instructions from the
Certificateholders of any such Trust, the Pass Through Trustee for such Trust
could for the same reason be faced with a potential conflict of interest upon an
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Indenture Event of Default or Equipment Trust Event of Default. In such event,
the Pass Through Trustee has indicated that it would resign as trustee of one or
all such Trusts, and a successor trustee for one or all of such Trusts would be
appointed in accordance with the terms of the Basic Agreement.
The Basic Agreement provides that, as long as (i) an Indenture Event of
Default under any Indenture relating to Equipment Notes held in a Trust or (ii)
an Equipment Trust Event of Default under any Equipment Trust Agreement relating
to ETCs held in such Trust shall have occurred and be continuing, the Pass
Through Trustee of such Trust may vote all of the Equipment Notes issued under
such Indenture or all of the ETCs issued under such Equipment Trust Agreement
that are held in such Trust, and upon the direction of the holders of Pass
Through Certificates evidencing fractional undivided interests aggregating not
less than a majority in interest of such Trust, shall vote not less than a
corresponding majority of such Equipment Notes or ETCs in favor of directing the
related Indenture Trustee or Equipment Trust Trustee to declare the unpaid
principal amount of all Equipment Notes issued under such Indenture or ETCs
issued under such Equipment Trust Agreement and any accrued and unpaid interest
thereon to be due and payable. The Basic Agreement also provides that, if (i) an
Indenture Event of Default under any Indenture relating to Equipment Notes held
in a Trust or (ii) an Equipment Trust Event of Default under any Equipment Trust
Agreement relating to ETCs held in such Trust shall have occurred and be
continuing, the Pass Through Trustee of such Trust may, and upon the direction
of the holders of Pass Through Certificates evidencing fractional undivided
interests aggregating not less than a majority in interest of such Trust shall,
subject to certain conditions, vote all of the Equipment Notes issued under such
Indenture or all the ETCs issued under such Equipment Trust Agreement that are
held in such Trust in favor of directing the related Indenture Trustee or
Equipment Trust Trustee as to the time, method and place of conducting any
proceeding for any remedy available to such Indenture Trustee or of exercising
any trust or power conferred on such Indenture Trustee or Equipment Trust
Trustee under such Indenture or Equipment Trust Agreement. (Sections 6.1 and
6.4)
As an additional remedy, if an Indenture Event of Default or Equipment
Trust Event of Default shall have occurred and be continuing, the Basic
Agreement provides that the Pass Through Trustee of a Trust holding Equipment
Notes issued under such Indenture or ETCs issued under such Equipment Trust
Agreement may, and upon the direction of the holders of Pass Through
Certificates evidencing fractional undivided interests aggregating not less than
a majority in interest of such Trust shall, sell all or part of such Equipment
Notes or ETCs for cash to any person. (Sections 6.1 and 6.2) Any proceeds
received by the Pass Through Trustee upon any such sale shall be deposited in
the Special Payments Account for such Trust and shall be distributed to the
Certificateholders of such Trust on a Special Distribution Date. (Sections 4.1
and 4.2) The market for Equipment Notes or ETCs in default may be very limited
and there can be no assurance that they could be sold for a reasonable price.
Furthermore, so long as the same institution acts as Trustee of each Trust, it
may be faced with a conflict in deciding from which Trust to sell Equipment
Notes or ETCs to available buyers. If the Pass Through Trustee sells any such
Equipment Notes with respect to which an Indenture Event of Default exists or
ETCs with respect to which an Equipment Trust Event of Default exists for less
than their outstanding principal amount thereof, the Certificateholders of such
Trust will receive a smaller amount of principal distributions than anticipated
and will not have any claim for the shortfall against the Pass Through Trustee,
the related Owner Trustee, the related Owner Participant, or, except as provided
in the next sentence, the Company. Inasmuch as the Company will fully and
unconditionally guarantee the payment of the principal of and interest on the
ETCs, the Certificateholders will have a claim against the Company for any
shortfall arising from the sale by the Pass Through Trustee of an ETC in
default. (Sections 4.1 and 4.2) See "Description of the ETCs-Guarantee". Neither
the Pass Through Trustee nor the Certificateholders of such Trust could take any
action with respect to any remaining Equipment Notes or ETCs held in such Trust
so long as no Indenture Event of Default or Equipment Trust Event of Default
existed with respect thereto.
Any amount distributed to the Pass Through Trustee of any Trust by (i) the
Indenture Trustee under any Indenture on account of the Equipment Notes held in
such Trust following an Indenture Event of Default under such Indenture or (ii)
the Equipment Trust Trustee under any Equipment Trust Agreement on account of
the ETCs held in such Trust following an Equipment Trust Event of Default shall
be deposited in the Special Payments Account for such Trust and shall be
distributed to the Certificateholders of such Trust on a
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Special Distribution Date. In addition, if, following an Indenture Event of
Default under any Indenture, the related Owner Trustee exercises its option, if
any, to prepay or purchase the outstanding Equipment Notes issued under such
Indenture as described in the related Prospectus Supplement, the price paid by
such Owner Trustee to the Pass Through Trustee of any Trust for the Equipment
Notes issued under such Indenture and held in such Trust shall be deposited in
the Special Payments Account for such Trust and shall be distributed to the
Certificateholders of such Trust on a Special Distribution Date. (Sections 4.1
and 4.2)
Any funds held by the Pass Through Trustee in the Special Payments Account
for a Trust representing either payments received with respect to (i) any
Equipment Notes held in such Trust following an Indenture Event of Default or
(ii) any ETCs held in such Trust following an Equipment Trust Event of Default
or proceeds from the sale by the Pass Through Trustee of any such Equipment
Notes or ETCs, shall, to the extent practicable, be invested and reinvested by
the Pass Through Trustee in Permitted Government Investments pending the
distribution of such funds on a Special Distribution Date. (Sections 4.1 and
4.2)
The Basic Agreement provides that the Pass Through Trustee of each Trust
shall, within 30 days after the occurrence of a default (as defined below) in
respect of such Trust, give to the Certificate holders of such Trust notice,
transmitted by mail, of all uncured or unwaived defaults with respect to such
Trust known to it; provided that, except in the case of default in the payment
of principal of, premium, if any, or interest on any of the Equipment Notes or
ETCs held in such Trust, the Pass Through Trustee shall be protected in
withholding such notice if it in good faith determines that the withholding of
such notice is in the interest of such Certificateholders. The term "default,"
for the purpose of the provision described in this paragraph only, shall mean
the occurrence of any Event of Default with respect to a Trust as specified
above, except that in determining whether any such Event of Default has occurred
any grace period or notice in connection therewith shall be disregarded.
(Section 7.2)
The Basic Agreement contains a provision entitling the Pass Through Trustee
of each Trust, subject to the duty of the Pass Through Trustee during a default
to act with the required standard of care, to obtain security from or be
indemnified by the holders of the Pass Through Certificates of such Trust before
proceeding to exercise any right or power under the Basic Agreement at the
request of such Certificateholders. (Section 7.3)
In certain cases, the holders of Pass Through Certificates of a Trust
evidencing fractional undivided interests aggregating not less than a majority
in interest of such Trust may on behalf of the holders of all Pass Through
Certificates of such Trust waive any past default or Event of Default with
respect to such Trust and thereby annul any direction given by the Pass Through
Trustee on behalf of such holders to the related Indenture Trustee with respect
thereto, except (i) a default in payment of the principal of, premium, if any,
or interest on any of the Equipment Notes or ETCs held in such Trust, and (ii) a
default in respect of any covenant or provision of the Basic Agreement or the
related Trust Supplement that cannot be modified or amended without the consent
of each Certificateholder of such Trust affected thereby. (Section 6.5) Each
Indenture and Equipment Trust Agreement will provide that, with certain
exceptions, the holders of a majority in aggregate unpaid principal amount of
the Equipment Notes or ETCs issued thereunder may on behalf of all such holders
waive any past default or Indenture Event of Default or Equipment Trust Event of
Default under such Equipment Trust Agreement thereunder. In the event of a
waiver with respect to a Trust as described above, the principal amount of the
Equipment Notes issued under the related Indenture or ETCs issued under the
related Equipment Trust Agreement held in such Trust shall be counted as waived
in the determination of the majority in aggregate unpaid principal amount of
Equipment Notes or ETCs required to waive a default or an Indenture Event of
Default under such Indenture or Equipment Trust Event of Default under such
Equipment Trust Agreement. Therefore, if the Certificateholders of a Trust waive
a past default or Event of Default such that the principal amount of the
Equipment Notes or ETCs held in such Trust constitutes the required majority in
aggregate unpaid principal amount under the applicable Indenture or Equipment
Trust Agreement, such past default, Indenture Event of Default under such
Indenture or Equipment Trust Event of Default under such Equipment Trust
Agreement shall be waived. For a discussion of waivers of Indenture Events of
Default under the Indentures and Equipment Trust Events of Default under the
Equipment Trust Agreements, see "Description of the Equipment Notes -- Indenture
Events of Default and Remedies" and "Description of the ETCs -- Events of
Default and Provisions Relating Thereto".
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MODIFICATIONS OF THE BASIC AGREEMENT
The Basic Agreement contains provisions permitting the Company and the Pass
Through Trustee of each Trust to enter into supplemental trust agreements,
without the consent of the holders of any of the Pass Through Certificates of
such Trust, (i) to evidence the succession of another corporation to the Company
and the assumption by such corporation of the Company's obligations under the
Basic Agreement and the applicable Trust Supplement, (ii) to add to the
covenants of the Company for the benefit of the holders of such Pass Through
Certificates, (iii) to cure any ambiguity, to correct any manifest error or to
correct or supplement any defective or inconsistent provision of such Basic
Agreement, the applicable Trust Supplement or any supplemental trust agreement,
or to make any other provisions with respect to matters or questions arising
thereunder, provided such action shall not adversely affect the interest of the
holders of such Pass Through Certificates, (iv) to evidence and provide for a
successor Trustee for some or all of the Trusts, or (v) to make any other
amendments or modifications which shall only apply to Pass Through Certificates
of one or more series to be issued thereafter. (Section 9.1)
The Basic Agreement also contains provisions permitting the Company and the
Pass Through Trustee of each Trust, with the consent of the Certificateholders
of such Trust evidencing fractional undivided interests aggregating not less
than a majority in interest of such Trust, to execute supplemental trust
agreements adding any provisions to or changing or eliminating any of the
provisions of the Basic Agreement, to the extent relating to such Trust, and the
applicable Trust Supplement, or modifying the rights of such Certificateholders,
except that no such supplemental trust agreement may, without the consent of the
holder of each such Pass Through Certificate so affected, (a) reduce in any
manner the amount of, or delay the timing of, any receipt by the Pass Through
Trustee of payments on the Equipment Notes or ETCs held in such Trust, or
distributions in respect of any Pass Through Certificate of such Trust, or make
distributions payable in coin or currency other than that provided for in such
Pass Through Certificates, or impair the right of any Certificateholder of such
Trust to institute suit for the enforcement of any such payment when due, (b)
permit the disposition of any Equipment Note or ETC held in such Trust, except
as provided in the Basic Agreement or the applicable Trust Supplement, or (c)
reduce the percentage of the aggregate fractional undivided interests of the
Trust provided for in the Basic Agreement or the applicable Trust Supplement,
the consent of the holders of which is required for any such supplemental trust
agreement or for any waiver provided for in the Basic Agreement or such Trust
Supplement. (Section 9.2)
MODIFICATION AND CONSENTS AND WAIVERS UNDER THE INDENTURES, THE EQUIPMENT TRUST
AGREEMENTS AND RELATED AGREEMENTS
In the event that the Pass Through Trustee, as the holder of any Equipment
Notes or ETCs held in a Trust, receives a request for its consent to any
amendment, modification or waiver under the Indenture, Lease, if any, or other
document relating to such Equipment Notes, or Equipment Trust Agreement relating
to such ETCs, which requires the consent of the Certificateholders of such
Trust, the Pass Through Trustee shall mail a notice of such proposed amendment,
modification or waiver to each Certificateholder of such Trust as of the date of
such notice. The Pass Through Trustee shall request instructions from the
Certificateholders of such Trust as to whether or not to consent to such
amendment, modification or waiver. The Pass Through Trustee shall vote or
consent with respect to such Equipment Notes or ETCs in such Trust in the same
proportion as the Pass Through Certificates of such Trust were actually voted by
the holders thereof by a certain date. Notwithstanding the foregoing, if an
Event of Default in respect of such Trust shall have occurred and be continuing,
the Pass Through Trustee, subject to the voting instructions referred to under
"-- Events of Default and Certain Rights Upon an Event of Default," may in its
own discretion consent to such amendment, modification or waiver, and may so
notify the Indenture Trustee or equipment trust trustee to which such consent
relates. (Section 10.1)
TERMINATION OF THE TRUSTS
The obligations of the Company and the Pass Through Trustee with respect to
a Trust will terminate upon the distribution to Certificateholders of such Trust
of all amounts required to be distributed to them pursuant to the Basic
Agreement and the applicable Trust Supplement and the disposition of all
property held
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in such Trust. The Pass Through Trustee will mail to each Certificateholder of
record of such Trust notice of the termination of such Trust, the amount of the
proposed final payment and the proposed date for the distribution of such final
payment for such Trust. The final distribution to any Certificateholder of such
Trust will be made only upon surrender of such Certificateholder's Pass Through
Certificates at the office or agency of the Pass Through Trustee specified in
such notice of termination. (Section 11.1)
DELAYED PURCHASE
In the event that, on the date of issuance of any Pass Through
Certificates, all of the proceeds from the sale of such Pass Through
Certificates are not used to purchase the Equipment Notes or ETCs contemplated
to be held in the related Trust, such Equipment Notes or ETCs may be purchased
by the Pass Through Trustee at any time on or prior to the date specified in the
applicable Prospectus Supplement. In such event, the Pass Through Trustee will
hold the proceeds from the sale of such Pass Through Certificates not used to
purchase Equipment Notes or ETCs in an escrow account pending the purchase of
the Equipment Notes or ETCs not so purchased. Such proceeds will be invested in
Specified Investments at the direction and risk of, and for the account of, the
Company. Earnings on Specified Investments in the escrow account for each Trust
will be paid to the Company periodically, and the Company will be responsible
for any losses realized on such Specified Investments. (Section 2.2)
On the Regular Distribution Date occurring after the issuance of such Pass
Through Certificates, the Company will pay to the Pass Through Trustee an amount
equal to the interest that would have accrued on any Equipment Notes or ETCs
which are purchased after the date of the issuance of such Pass Through
Certificates from the date of the issuance of such Pass Through Certificates to,
but excluding, the date of the purchase of such Equipment Notes or ETCs by the
Pass Through Trustee. (Section 2.2)
To the extent that Equipment Notes or ETCs are not purchased by the Pass
Through Trustee on or prior to the date specified in the applicable Prospectus
Supplement, the unexpended proceeds from the sale of such Pass Through
Certificates, together with interest thereon at the rate applicable to such Pass
Through Certificates, will be distributed to the holders of such Pass Through
Certificates as a Special Payment.
THE PASS THROUGH TRUSTEE
Unless otherwise specified in the applicable Prospectus Supplement, Harris
Trust and Savings Bank ("Harris Bank") will be the Pass Through Trustee for each
of the Trusts. The Pass Through Trustee and any of its affiliates may hold Pass
Through Certificates in their own names. (Section 7.5) With certain exceptions,
the Pass Through Trustee makes no representations as to the validity or
sufficiency of the Basic Agreement, the Trust Supplements, the Pass Through
Certificates, the Equipment Notes, the Indentures, the Leases, the ETCs, the
Equipment Trust Agreements or other related documents. (Section 7.4) Unless
otherwise specified in a Prospectus Supplement, Harris Bank will also be the
Indenture Trustee under the Indentures pursuant to which the Equipment Notes are
issued and the equipment trust trustee under the Equipment Trust Agreements
pursuant to which the ETCs are issued.
Under certain circumstances, the Pass Through Trustee could be faced with a
potential conflict of interest as a result of its acting as trustee of one or
more Trusts, as Indenture Trustee with respect to the Equipment Notes and as
Equipment Trust Trustee with respect to the ETCs. In such event, the Pass
Through Trustee either would be required pursuant to the provisions of the Trust
Indenture Act of 1939 to resign as trustee of one or all of the Trusts or has
indicated that it would voluntarily so resign as trustee. See "-- Events of
Default and Certain Rights Upon an Event of Default."
Harris Bank serves as trustee under an Equipment Trust Agreement, dated as
of November 15, 1990, between the Company and Harris Bank and under an
Indenture, dated as of January 15, 1997, between the Company and Harris Bank. In
addition, Harris Bank provides customary banking services to the Company and
certain of its affiliates.
The Pass Through Trustee may resign with respect to any or all of the
Trusts at any time, in which event the Company will be obligated to appoint a
successor trustee. If the Pass Through Trustee ceases to be eligible
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to continue as Trustee with respect to a Trust or becomes incapable of acting as
Trustee or becomes insolvent, the Company may remove such Trustee. In addition,
any holder of Pass Through Certificates of such Trust for at least six months
may in such circumstances, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of such
Trustee and the appointment of a successor trustee. Any resignation or removal
of the Pass Through Trustee with respect to a Trust and appointment of the
successor trustee for such Trust does not become effective until acceptance of
the appointment by the successor trustee. (Section 7.9) Pursuant to such
resignation and successor trustee provisions, it is possible that a different
trustee could be appointed to act as the successor trustee with respect to each
Trust. All references in this Prospectus to the Pass Through Trustee are to the
trustee acting in such capacity under each of the Trusts and should be read to
take into account the possibility that each of the Trusts could have a different
successor trustee in the event of such a resignation or removal.
The Basic Agreement provides that the Company will pay the Pass Through
Trustee's fees and expenses and will indemnify the Pass Through Trustee in
accordance with the Participation Agreement with respect to certain taxes. To
the extent not indemnified by the Company with respect to such taxes, the Pass
Through Trustee may be entitled to be reimbursed by the applicable Trust.
(Section 7.7)
DESCRIPTION OF THE EQUIPMENT NOTES
The statements under this caption are summaries and do not purport to be
complete. Except as otherwise indicated below or as described in the applicable
Prospectus Supplement, the following summaries will apply to the Equipment
Notes, the Indenture, the Lease and the Participation Agreement relating to each
Equipment Group. Additional provisions with respect to the Equipment Notes, the
Indentures, the Leases and the Participation Agreements relating to any
particular Equipment Group will be described in the applicable Prospectus
Supplement.
GENERAL
Each Equipment Note issued under the same Indenture will relate to a single
Equipment Group. The Equipment Notes with respect to each Equipment Group will
be issued under a separate Indenture between the related Indenture Trustee and
the Owner Trustee of a trust for the benefit of the Owner Participant which is
the beneficial owner of such Equipment Group.
The Equipment Notes will be nonrecourse obligations of the related Owner
Trustee. Except in certain circumstances involving the Company's purchase of
Equipment Units and the assumption of the Equipment Notes related thereto, the
Equipment Notes will not be direct obligations of, or guaranteed by, the
Company; however, the Company will be obligated to make or cause to be made
rental and other payments to the related Owner Trustee under the Lease of the
related Equipment Group in amounts that will be at least sufficient to pay when
due all payments required to be made on the Equipment Notes issued with respect
to such Equipment Group. The Company's rental obligations under each Lease will
be general obligations of the Company.
PRINCIPAL AND INTEREST PAYMENTS
Interest paid on the Equipment Notes held in each Trust will be passed
through to the Certificateholders of such Trust on the dates and at the rate per
annum set forth in the applicable Prospectus Supplement until the final
distribution date for such Trust. Principal paid on the Equipment Notes held in
each Trust will be passed through to the Certificateholders of such Trust in
scheduled amounts on the dates set forth in the applicable Prospectus Supplement
until the final distribution date for such Trust.
If any date scheduled for any payment of principal of, premium, if any, or
interest on the Equipment Notes is not a Business Day, such payment may be made
on the next succeeding Business Day without any additional interest.
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PREPAYMENTS
The applicable Prospectus Supplement will describe the circumstances,
whether voluntary or involuntary, under which the related Equipment Notes may be
prepaid or purchased, the premium, if any, related to certain prepayments or
purchases and other terms applying to prepayments or purchases of such Equipment
Notes.
SECURITY
The Equipment Notes issued with respect to an Equipment Group will be
secured by (i) an assignment by the related Owner Trustee to the related
indenture Trustee of such Owner Trustee's rights (except for certain limited
rights described in the Prospectus Supplement) under the Lease with respect to
such Equipment Group, including the right to receive payments of rent thereunder
and (ii) a perfected security interest to such Indenture Trustee in such
Equipment Group, subject to the rights of the Company under such Lease. Unless
and until an Indenture Event of Default with respect to an Equipment Group has
occurred and is continuing, the Indenture Trustee may not exercise the rights of
the Owner Trustee under the related Lease, except the right to receive payments
of rent due thereunder.
The Equipment Notes issued under different Indentures will not be
cross-collateralized and consequently the Equipment Notes issued in respect of
any one Equipment Group will not be secured by any other
Equipment Group or the Lease related to any other Equipment Group.
The Company will be required to file each Indenture, any indenture
supplement, each Lease and any lease supplement with respect to each Equipment
Group with the Surface Transportation Board and will be further required to
deposit such documents with the Registrar General of Canada under the Railway
Act of Canada and to publish notice of such deposit in accordance with such Act.
The filing with the Surface Transportation Board will give the Indenture Trustee
a perfected security interest in each Equipment Unit in such Equipment Group
whenever it is located in the United States and in the Lease. Such deposit and
publication in Canada will be done in order to protect the lien of the Indenture
Trustee in and to the Lease and the Equipment Units subject to the Indenture in
Canada or any province or territory thereof, to the extent provided for in the
Railway Act of Canada.
Each Equipment Unit may be operated by the Company or, subject to certain
limitations, under sublease or interchange arrangements in the United States,
Canada or Mexico. The extent to which the Indenture Trustee's security interest
would be recognized in an Equipment Unit located in countries other than the
United States is uncertain.
Funds, if any, held from time to time by the Indenture Trustee with respect
to any Equipment Units, including funds held as the result of the loss or
destruction of such Equipment Units or termination of the Lease, if any,
relating thereto, will be invested and reinvested by such Indenture Trustee, at
the direction of the Company (except in the case of a Lease Event of Default
under the applicable Lease, if any), in Specified Investments. The Company will
pay the amount of any loss resulting from any such investment directed by it.
The Company will be obligated, at its cost and expense, to maintain, repair
and keep each Equipment Unit in accordance with prudent industry maintenance
practices and in compliance in all material respects with all laws and
regulations.
LIMITATION OF LIABILITY
Except in certain circumstances involving the Company's purchase of
Equipment Units and the assumption of the Equipment Notes related thereto, the
Equipment Notes will not be direct obligations of, or guaranteed by, the Company
or the Owner Trustees. None of the Owner Trustees, the Owner Participants or the
Indenture Trustees, or any affiliates thereof, will be personally liable to any
holder of an Equipment Note or, in the case of the Owner Trustees and the Owner
Participants, to the Indenture Trustees for any amounts payable under the
Equipment Notes or, except as provided in each Indenture, for any liability
under such Indenture. Except in the circumstances described above, all payments
of principal of, premium, if any, and interest on Equipment Notes issued with
respect to any Equipment Group (other than payments made in
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connection with an optional prepayment or purchase by the related Owner Trustee)
will be made only from the assets subject to the lien of the Indenture with
respect to such Equipment Group or the income and proceeds received by the
related Indenture Trustee therefrom (including rent payable by the Company under
the Lease with respect to such Equipment Group).
Except as otherwise provided in the Indentures, each Owner Trustee in its
individual capacity shall not be answerable or accountable under the Indentures
or under the Equipment Notes under any circumstances except for its own wilful
misconduct or gross negligence. None of the Owner Participants will have any
duty or responsibility under any of the Indentures or the Equipment Notes to the
Indenture Trustees or to any holder of any Equipment Note.
INDENTURE EVENTS OF DEFAULT AND REMEDIES
The applicable Prospectus Supplement will describe the Indenture Events of
Default under the related Indentures, the remedies that the Indenture Trustee
may exercise with respect to the related Equipment Group, either at its own
initiative or upon instruction from holders of the related Equipment Notes, and
other provisions relating to the occurrence of an indenture Event of Default and
the exercise of remedies. There will be no cross-default provisions in the
Indentures and events resulting in an indenture Event of Default under any
particular Indenture (or a default under any other indebtedness of the Company)
will not necessarily result in an Indenture Event of Default under any other
Indenture.
In the event of the bankruptcy of an Owner Participant, it is possible
that, notwithstanding that the related Equipment Group is owned by an Owner
Trustee in trust, such Equipment Group and its Lease and the Equipment Notes
related thereto might become part of the bankruptcy proceeding. In such event,
payments on such Equipment Notes might be interrupted and the ability of the
Indenture Trustee to exercise its remedies under the applicable Indenture might
be restricted, although the Indenture Trustee would retain its status as a
secured creditor in respect of such Lease and the related Equipment Group. In
addition, in the event of an Owner Participant bankruptcy, the estate might seek
court approval to reject the related Lease as an executory contract. Such a
Lease rejection, if successful, would leave the Indenture Trustee as a secured
creditor in respect of the related Equipment Group with a claim for damages
against the estate.
THE LEASES
The following provisions will be applicable unless otherwise disclosed in
the Prospectus Supplement.
TERM AND RENTALS. Each Equipment Group will be leased separately by the
related Owner Trustee to the Company for a term commencing on the delivery date
thereof to such Owner Trustee and expiring on a date not earlier than the latest
maturity date of the Equipment Notes issued with respect to such Equipment Group
unless previously terminated as permitted by the related Lease. The basic rental
payments by the Company under each Lease will be payable on the dates specified
in the applicable Prospectus Supplement, and will be assigned by the Owner
Trustee under the related Indenture to provide the funds necessary to make
payments of principal and interest due from such Owner Trustee on the Equipment
Notes issued under such Indenture. Although in certain cases the basic rental
payments under the Leases may be adjusted, under no circumstances will rental
payments be less than the scheduled payments of principal and interest on the
Equipment Notes issued under the Indenture relating to such Lease. The balance
of any basic rental payments under each Lease, after payment of the scheduled
principal and interest on the Equipment Notes issued under the Indenture
relating to such Lease, will be paid over to the related Owner Trustee. The
Company's obligation to pay rent and to cause other payments to be made under
each Lease will be a general obligation of the Company.
NET LEASE. The Company's obligations in respect of each Equipment Group
leased to the Company by an Owner Trustee will be those of a lessee under a "net
lease." Accordingly, the Company will be obligated, at its cost and expense, to
maintain, repair and keep each Equipment Unit in any such Equipment Group in
accordance with prudent industry maintenance practices and in compliance in all
material respects with all laws and regulations and consistent with maintenance
practices used by the Company in respect of equipment owned or leased by the
Company similar in type to such Equipment Unit. Subject to certain exceptions,
the
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Company will, at its expense, make all alterations, replacements or
modifications required to be made by the Association of American Railroads, the
United States Department of Transportation, or any other United States, state or
local governmental agency. The Company reserves the right to contest the
validity or applicability of any required alterations, replacements or
modifications. The Company shall have the right to make alterations,
modifications and improvements with respect to each Equipment Unit in any such
Equipment Group, provided that no such alteration, modification or improvement
shall materially diminish the fair market value, utility or remaining economic
useful life of such Unit.
INSURANCE. Unless waived or otherwise excused by the terms of any Lease,
the Company will be required, at its own expense, to cause to be carried and
maintained insurance in respect of the Equipment in amounts and against such
risks and with deductibles and terms and conditions not less than the insurance,
if any, maintained by the Company in respect of similar equipment owned or
leased by the Company, but in no event shall such coverage be for amounts or
against risks less than the prudent industry standard for companies engaged in
full service leasing of tank and hopper cars. The Company does not maintain
casualty insurance with respect to the Equipment.
LEASE EVENTS OF DEFAULT; REMEDIES. The applicable Prospectus Supplement
will describe the Lease Events of Default under the related Lease, the remedies
that the Owner Trustee, or Indenture Trustee as assignee of the Owner Trustee,
may exercise with respect to an Equipment Group, and other provisions relating
to the occurrence of a Lease Event of Default and the exercise of remedies.
Lease Events of Default under each Lease will include, among other things,
(a) failure by the Company to make rental payments under the Lease, (b) failure
to maintain insurance as required by the Lease, (c) use of the Equipment Group
in contravention of the Lease, (d) breach of any representation or warranty made
by the Company in the Lease or in the related Participation Agreement and (e)
the occurrence of certain events of bankruptcy, reorganization or insolvency of
the Company. Upon the occurrence of a Lease Event of Default under any Lease,
the related Indenture Trustee, as assignee of the related Owner Trustee's rights
under such Lease, will be entitled to repossess the Equipment Units and use or
sell such Equipment Units free and clear of the Company's rights therein.
If the Company were to become a debtor in a bankruptcy or reorganization
case under the Bankruptcy Code, the Company or its bankruptcy trustee could
reject any or all Leases to which it is a party. In such event, there could be
no assurance that the amount of any claim for damages under such Leases that
would be allowed in such bankruptcy case would be in an amount sufficient to
provide for the repayment of the related Equipment Notes. In any case, rejection
of a Lease by the Company or its bankruptcy trustee would not deprive the
related indenture Trustee of its security interest in the related Equipment
Group.
The Company is not a railroad, and the protections against the automatic
stay in bankruptcy under Section 1168 of the Bankruptcy Code which are granted
to lessors, conditional vendors and purchase money financiers of rolling stock
to a common carrier by railroad will not be available to an Indenture Trustee
upon the occurrence of a Lease Event of Default.
THE PARTICIPATION AGREEMENTS
The Company will be required to indemnify the Pass Through Trustee, each
Indenture Trustee, each Owner Participant and each Owner Trustee for certain
losses and claims and for certain other matters. Each Owner Participant will be
required to discharge certain liens or claims on or against the assets subject
to the lien of the related Indenture that arise out of any act of or failure to
act by or claim against such Owner Participant. Subject to certain restrictions,
each Owner Participant may transfer its interest in the related Equipment Group.
DESCRIPTION OF THE ETCS
The statements under this caption are summaries only of the ETCs and the
Equipment Trust Agreements under which they will be issued and do not purport to
be complete. This summary makes use of terms to be defined in the Equipment
Trust Agreements, the form of which has been filed as an exhibit to the
Registration
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Statement of which this Prospectus is a part. Additional provisions relating to
any particular ETCs will be described in the applicable Prospectus Supplement.
GENERAL
The ETCs will be limited to the aggregate principal amount set forth in the
applicable Equipment Trust Agreement. The ETCs will be issued against the
deposit with the Equipment Trust Trustee by the Pass Through Trustee of like
amounts of Deposited Cash. Each ETC will represent an interest equal to its
principal amount in the trust created under the applicable Equipment Trust
Agreement.
PRINCIPAL AND INTEREST PAYMENTS
Interest paid on the ETCs held in each Trust will be passed through to the
Certificateholders of such Trust on the dates and at the rate per annum set
forth in the applicable Prospectus Supplement until the final distribution date
for such Trust. Principal paid on the ETCs held in each Trust will be passed
through to the Certificateholders of such Trust in scheduled amounts on the
dates set forth in the applicable Prospectus Supplement until the final
distribution date for such Trust.
If any date scheduled for any payment of principal of, premium, if any, or
interest on the ETCs is not a Business Day, such payment may be made on the next
succeeding Business Day without any additional interest.
GUARANTEE
The Company will fully and unconditionally guarantee the payment as and
when due of the principal of and interest on each ETC.
PREPAYMENT
The applicable Prospectus Supplement will describe the circumstances,
whether voluntary or involuntary, under which the related ETCs may be prepaid or
purchased, the premium (if any) related to certain prepayments or purchases and
other terms applying to prepayments or purchases of such ETCs.
SECURITY
Except as otherwise set forth in the applicable Prospectus Supplement, the
applicable Equipment Trust Agreement will provide for the sale by the Company to
the Equipment Trust Trustee, as trustee for the holders of ETCs, of railway tank
cars and other rail cars (the "Trust Equipment") of the types used in the
Company's business having an estimated cost of not less than 125% of the
principal amount of the related ETC. For the purpose of determining the cost of
any unit of Equipment built by the Company, so-called "car builder's cost"
(which includes direct cost of labor, material and overhead, but excludes any
manufacturing profit) will be used; otherwise the actual cost to the Company
will be used.
When and as any of the Trust Equipment shall be delivered to the Equipment
Trust Trustee, the Equipment Trust Trustee will pay to the Company, as the
purchase price for such Trust Equipment, out of Deposited Cash an amount which
will not exceed 80% of the aggregate cost (without deduction for depreciation)
of such Trust Equipment (or such other percentage as may be set forth in the
applicable Prospectus Supplement). The balance of the cost will be paid by the
Equipment Trust Trustee from advance rentals required by the applicable
Equipment Trust Agreement to be paid to the Equipment Trust Trustee by the
Company. The advance rental shall equal the amount by which the aggregate cost
of the Trust Equipment exceeds the net proceeds of the sale of the ETCs. Until
so paid out, Deposited Cash and other funds held by the Equipment Trust Trustee
pending delivery to it of Trust Equipment may be invested, at the risk of the
Company in direct obligations of the United States, in certain obligations
guaranteed by the United States, in certificates of deposit or time deposits or
in prime commercial paper.
Each Equipment Trust Agreement will contain provisions requiring the
Company to cause such agreements and each supplement thereto, promptly after the
execution and delivery thereof, to be recorded
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with the Surface Transportation Board and the Registrar General of Canada. In
addition, the Company will be required to take similar actions in all other
jurisdictions required by law or reasonably requested by the Equipment Trust
Trustee for the purposes of proper protection of the Equipment Trust Trustee's
title to the Trust Equipment subject thereto and the rights of the holders of
the ETCs; provided, however, that the Company will not be required to so record
in any jurisdiction if (1) in the opinion of the Company such recording would be
unduly burdensome, and (2) after giving effect to such failure to record, the
Company has taken all action required by law to protect the title of the
Equipment Trust Trustee to Trust Equipment having a value (defined as the
greater of (a) the actual value of such Trust Equipment and (b) the cost thereof
less 1/20th of such cost for each year the Trust Equipment has been in use) of
not less than 90% of the value of all such Trust Equipment.
Each Equipment Trust Agreement will provide for the lease to the Company of
all the Trust Equipment subject to such agreement for a period specified in the
applicable Prospectus Supplement. The rent and other amounts payable by the
Company will be sufficient to enable the Equipment Trust Trustee to pay when due
the principal of and interest on the applicable ETC, as well as all the expenses
of the trust created under the Equipment Trust Agreement and certain other
charges. At the termination of the lease and after all payments due or to become
due from the Company under the Equipment Trust Agreement shall have been fully
made, such payments shall be applied and treated as purchase money as the full
purchase price of the Trust Equipment, and title to all Trust Equipment held in
the trust shall vest in the Company.
Each Equipment Trust Agreement will permit the possession and use of the
Trust Equipment in the Company's business, including the sublease thereof to
others subject to the terms and conditions of such Equipment Trust Agreement.
The Trust Equipment subject to any Equipment Trust Agreement will not
secure the payment of an ETC issued under any other Equipment Trust Agreement.
MAINTENANCE, RELEASE AND SUBSTITUTION OF TRUST EQUIPMENT
The Company will be required to maintain and keep the relevant Trust
Equipment in good order and proper repair unless and until it becomes worn out,
unsuitable for use, lost or destroyed (a "Casualty Occurrence"). Each Equipment
Trust Agreement will provide that, whenever Trust Equipment having a value
specified therein shall have suffered a Casualty Occurrence, the Company shall
either deposit with the Equipment Trust Trustee an amount in cash equal to the
value of such Trust Equipment or convey to the Equipment Trust Trustee
additional Equipment having a value not less than the value of the Trust
Equipment suffering the Casualty Occurrence.
Each Equipment Trust Agreement will provide that if the aggregate cost of
the Trust Equipment initially delivered to the Equipment Trust Trustee by the
Company shall exceed 125% of the aggregate principal amount of the ETC (or such
other percentage as may be specified in the applicable Prospectus Supplement),
the Equipment Trust Trustee, upon request of the Company shall release Trust
Equipment from the relevant trust having an aggregate cost of not more than the
amount of such excess.
Each Equipment Trust Agreement will provide for the release by the
Equipment Trust Trustee of any Trust Equipment upon request of the Company, and
(a) the conveyance to the Equipment Trust Trustee of other Equipment
(irrespective of when first put into use) of value not less than the value of
the Trust Equipment to be released or (b) the payment to the Equipment Trust
Trustee of cash in an amount not less than the value of the Trust Equipment to
be released. Any cash so deposited (and any cash deposited as provided in the
second preceding paragraph) will be paid over by the Equipment Trust Trustee to
the Company against the conveyance to the Equipment Trust Trustee of additional
Equipment having a value not less than the amount of cash to be paid over.
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INFORMATION CONCERNING THE EQUIPMENT TRUST TRUSTEE
Harris Bank will be the Equipment Trust Trustee under each Equipment Trust
Agreement. Harris Bank will also be the Pass Through Trustee and the Indenture
Trustee. See "Description of the Pass Through Certificates -- Information
Concerning the Pass Through Trustee."
EQUIPMENT TRUST EVENTS OF DEFAULT AND PROVISIONS RELATING THERETO
Equipment Trust Events of Default will be defined in each Equipment Trust
Agreement as being: default for more than 10 Business Days in the payment of any
rental payable under an Equipment Trust Agreement; any unauthorized assignment
or transfer of the Company's rights under the Equipment Trust Agreement,
continuing as provided therein; any unauthorized transfer, sublease or parting
with the possession of any Trust Equipment, continuing as provided therein; any
failure or refusal to perform any other covenant in such Equipment Trust
Agreement for the shorter of (i) 60 days after the Equipment Trust Trustee shall
have demanded in writing such performance and (ii) 30 days after the Company has
knowledge of any such failure; certain events of bankruptcy; or the termination
of the lease provided for in an Equipment Trust Agreement by operation of law or
by the Equipment Trust Trustee in the event of any unauthorized assignment or
transfer of the Company's rights under such Equipment Trust Agreement or any
unauthorized transfer or sublease of any of the Trust Equipment. (Section 5.01)
The appointment of a receiver or trustee in bankruptcy or reorganization for the
Company or for its property will be deemed to be an unauthorized assignment if,
prior to the exercise of the remedies of the Equipment Trust Trustee under an
Equipment Trust Agreement, such receiver or trustee shall not be discharged or
duly assume the Company's obligations under such agreement. (Section 4.09) Each
Equipment Trust Agreement will provide that the Equipment Trust Trustee shall,
promptly after the occurrence of any Equipment Trust Event of Default thereunder
known to it, give to the holders of the related ETC notice of the occurrence
thereof. However, unless such default is the failure to make payments in respect
of the principal of or interest on an ETC, the Equipment Trust Trustee shall be
protected in withholding such notice if and so long as it in good faith
determines that the withholding of such notice is in the interest of the holders
of the defaulted ETC. (Section 5.07)
In the event of the bankruptcy or reorganization of the Company, the right
of the Equipment Trust Trustee to repossess or dispose of Trust Equipment
subject to an Equipment Trust Agreement would be subject to the provisions of
the Bankruptcy Code of 1978, as amended, applicable to industrial companies
generally, and not those provisions applicable to railroads, particularly
Section 1168 thereof.
Upon the happening of an Equipment Trust Event of Default, the Equipment
Trust Trustee or the holders of not less than a majority in aggregate principal
amount of the relevant ETC may declare the principal thereof and all accrued
interest thereon to be due and payable. (Section 5.04) Subject to certain
conditions, however, any such declaration may be rescinded by the holders of
66 2/3% in principal amount of such ETC upon payment of all sums then due
otherwise than by acceleration. Prior to such declaration, the holders of a
majority in principal amount of the outstanding ETC may waive any past Equipment
Trust Event of Default, except an Equipment Trust Event of Default in the
payment of rentals due in respect of the principal of or interest on such ETC.
(Section 5.04)
The right of any holder of an ETC to institute action for any remedy under
an Equipment Trust Agreement (except such holder's right to enforce payment of
the principal of and interest on an ETC when due if such enforcement will not
impair the Equipment Trust Trustee's title to the Trust Equipment) will be
subject to certain conditions precedent, including a written request by the
holders of not less than a majority in principal amount of such ETC to the
Equipment Trust Trustee to take action, and an offer to the Equipment Trust
Trustee of reasonable indemnification against liabilities incurred by it in so
doing. (Section 5.09)
Each Equipment Trust Agreement will require the annual filing by the
Company with the Equipment Trust Trustee of a certificate as to the absence of
default and as to compliance with the terms of the relevant equipment trust
agreement. (Section 4.08)
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ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable Prospectus Supplement, Pass
Through Certificates may be purchased by an employee benefit plan (a "Plan")
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). A fiduciary of a Plan must determine that the purchase of a Pass
Through Certificate is consistent with its fiduciary duties under ERISA and does
not result in a non-exempt prohibited transaction as defined in Section 406 of
ERISA or Section 4975 of the Code (as hereinafter defined). Employee benefit
plans which are governmental plans (as defined in Section 3(32) of ERISA) and
certain church plans (as defined in Section 3(33) of ERISA) are not subject to
the fiduciary responsibility provisions of ERISA. Any Plan that purchases a Pass
Through Certificate must be an "accredited investor" as defined in Rule
501(a)(1) of Regulation D promulgated under the Securities Act.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The statements of law and legal conclusions contained in the following
discussion set forth the opinion of Neal, Gerber & Eisenberg, counsel to the
Company, with respect to the anticipated material federal income tax
consequences of the purchase, ownership and disposition of Pass Through
Certificates. This summary is based on laws, regulations, rulings and court
decisions now in effect, all of which are subject to change by legislative,
administrative or judicial action, which change may be retroactive. The
discussion below does not purport to address federal income tax consequences
applicable to particular categories of investors, some of which (for example,
banks, tax exempt organizations, insurance companies or foreign investors) may
be subject to special rules. Investors should consult their own tax advisors in
determining the federal, state, local and foreign tax consequences to them of
the purchase, ownership and disposition of Pass Through Certificates, including
the advisability of making any election discussed below. Prospective investors
should note that no rulings have been or will be sought from the Internal
Revenue Service (the "IRS") with respect to any of the federal income tax
consequences discussed below and no assurance can be given that the IRS will not
take contrary positions. The Pass Through Trusts are not indemnified for any
federal income taxes that may be imposed upon them, the imposition of which
could significantly reduce the amounts available for distribution to the
Certificate Owners. For purposes of this "Material Federal Income Tax
Consequences" section, the terms "Pass Through Certificate" and "Certificate"
also refer to an indirect interest in a Pass Through Certificate held by a
Certificate Owner.
GENERAL
In the opinion of Neal, Gerber & Eisenberg, based upon an interpretation of
analogous authorities under currently applicable law, the Trusts will not be
classified as associations taxable as a corporation, but rather each will be
classified as grantor trusts for purposes of Sections 671 through 679 of the
Internal Revenue Code of 1986, as amended (the "Code"), and each Certificate
Owner of a Trust will be treated as the owner of a pro rata undivided interest
in each of the Equipment Notes, ETCs, if any, or any other property held in such
Trust.
Each Certificate Owner of a Trust will be required to report on its federal
income tax return its pro rata share of the entire income from the Equipment
Notes, ETCs, if any, or any other property in such Trust, in accordance with
such Certificate Owner's method of accounting. A Certificate Owner using the
cash method of accounting should take into account its pro rata share of income
as and when received by the Pass Through Trustee. A Certificate Owner using the
accrual method of accounting should take into account its pro rata share of
income as it accrues or is received by the Pass Through Trustee, whichever is
earlier.
A purchaser of a Pass Through Certificate should be treated as purchasing
an interest in each Equipment Note, ETC, if any, and any other property in a
Trust at a price determined by allocating the purchase price paid for the Pass
Through Certificate among such Equipment Notes, ETCs and other property in
proportion to their fair market values at the time of purchase of the Pass
Through Certificate. When a Trust has acquired all the Equipment Notes, ETCs, if
any, and any other property to be held by such Trust, the purchase price paid
for a Pass Through Certificate by an original purchaser of such certificate will
be allocated among such Equipment Notes, ETCs and any other property in such
Trust in proportion to their respective purchase prices.
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SALES OF PASS THROUGH CERTIFICATES
A Certificate Owner that sells or exchanges a Pass Through Certificate will
recognize gain or loss (in the aggregate) equal to the difference between its
adjusted tax basis in the Pass Through Certificate and the amount realized
(except to the extent attributable to accrued interest, which would be taxable
as interest income). Subject to the market discount provisions of the Code
(described below), if the Certificate Owner held such Pass Through Certificate
as a capital asset, any such gain or loss should be capital gain or loss, which
will be long-term capital gain or loss if the Pass Through Certificate was held
for more than one year (but only to the extent the Trust also held the
underlying Equipment Notes, ETCs, if any, or other property for more than one
year). Any long term capital gains realized on a sale or exchange of Pass
Through Certificates will be taxable under current law to corporate taxpayers at
the rates applicable to ordinary income, and to individual taxpayers at their
applicable marginal rate for capital gains. Any capital losses realized
generally will be deductible by a corporate taxpayer only to the extent of
capital gains and by an individual taxpayer only to the extent of capital gains
plus $3,000 of other income.
ORIGINAL ISSUE DISCOUNT
It is anticipated that neither the Equipment Notes nor the ETCs will be
issued with original issue discount.
MARKET DISCOUNT
A subsequent purchaser of a Pass Through Certificate will be considered to
have acquired an interest in an Equipment Note or ETC, if any, held in a Trust
at a "market discount" to the extent the remaining aggregate principal amount of
such Equipment Note or ETC exceeds the Certificate Owner's tax basis allocable
to such Equipment Note or ETC, provided such excess exceeds a prescribed de
minimis amount. If such excess exceeds the de minimis amount, the Certificate
Owner will be subject to the market discount rules of Section 1276 of the Code
with regard to its interest in such Equipment Note or ETC.
In the case of a sale or other disposition of indebtedness subject to the
market discount rules, Section 1276 of the Code requires that gain, if any, from
such sale or other disposition be treated as ordinary income to the extent such
gain represents market discount that has accrued during the period in which the
indebtedness was held.
In the case of a partial principal payment on indebtedness subject to the
market discount rules, Section 1276 of the Code requires that such payment be
included in gross income as ordinary income to the extent such payment does not
exceed the market discount that has accrued during the period such indebtedness
was held. The amount of any accrued market discount later required to be
included in income upon a disposition, or subsequent partial principal payment,
will be reduced by the amount of accrued market discount previously included in
income.
Market discount generally accrues under either a straight line method or,
at the election of the taxpayer, a constant interest rate method. However, in
the case of installment obligations (which may include certain of the Equipment
Notes and ETCs), determination of the manner in which market discount is to be
accrued has been left to Treasury regulations not yet issued. Until such
Treasury regulations are issued, the Conference Committee Report to the Tax
Reform Act of 1986 (the "Conference Report") indicates that holders of
installment obligations with market discount may elect to accrue market discount
either (i) on the basis of a constant interest rate or (ii) by treating as
accrued market discount an amount equal to total remaining market discount times
a fraction, the numerator of which is the amount of stated interest paid in the
accrual period and the denominator of which is the total amount of stated
interest remaining to be paid on the installment obligation as of the beginning
of such period.
Under Section 1277 of the Code, if in any taxable year interest paid or
accrued on indebtedness incurred or continued to purchase or carry indebtedness
subject to the market discount rules exceeds the interest currently includible
in income with respect to such indebtedness, deduction of the excess interest
must be deferred to the extent of the market discount allocable to the taxable
year. The deferred portion of any interest
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<PAGE> 27
expense will generally be deductible when such market discount is included in
income upon the sale or other disposition (including repayment) of the
indebtedness.
A taxpayer may elect to include market discount in gross income currently.
If such election is made, the rules of Sections 1276 and 1277 (described above)
will not apply to the taxpayer.
PREMIUM
A Certificate Owner will generally be considered to have acquired an
interest in an Equipment Note or ETC, if any, held in a Trust at a premium to
the extent the purchaser's tax basis allocable to such interest exceeds the
remaining aggregate principal amount of the Equipment Note or ETC allocable to
such interest. In that event, a Certificate Owner who holds a Pass Through
Certificate as a capital asset may elect to amortize that premium as an offset
to interest income under Section 171 of the Code, with corresponding reductions
in the Certificate Owner's tax basis in its interest in the Equipment Note or
ETC. Generally, such amortization is on a constant yield basis. However, in the
case of installment obligations, the Conference Report indicates a Congressional
intent that amortization will be in accordance with the same rules that will
apply to the accrual of market discount on installment obligations (see the
discussion above).
In the case of obligations that may be called at a premium prior to
maturity, amortizable bond premium may be determined by reference to an early
call date. Due to the complexities of the amortizable premium rules,
particularly where there is more than one possible call date and the amount of
any premium is uncertain, Certificate Owners are urged to consult their own tax
advisors as to the amount of any amortizable premium.
BACKUP WITHHOLDING
Payments made on the Pass Through Certificates and proceeds from the sale
of the Pass Through Certificates to or through certain brokers may be subject to
a "backup" withholding tax of 31% unless the Certificate Owner complies with
certain reponing procedures or is an exempt recipient under Section 6049(b)(4)
of the Code. Any such withheld amounts will be allowed as a credit against the
Certificate Owner's federal income tax.
CERTAIN ILLINOIS TAXES
The Pass Through Trustee is an Illinois banking corporation with its
principal corporate trust office in Chicago, Illinois. Neal, Gerber & Eisenberg,
counsel to the Company, has advised the Company that, in its opinion, under
currently applicable law, (i) the Trusts will not be subject to any tax
(including, without limitation, net or gross income, tangible or intangible
property, net worth, capital, franchise or doing business tax), fee or other
governmental charge under the laws of the State of Illinois or any political
subdivision thereof and (ii) Certificate Owners who are not residents of or
otherwise subject to tax in Illinois will not be subject to any tax (including,
without limitation, net or gross income, tangible or intangible property, net
worth, capital, franchise or doing business tax), fee or other governmental
charge under the laws of the State of Illinois or any political subdivision
thereof solely as a result of purchasing, holding (including receiving payments
with respect to) or disposing of a Pass Through Certificate, except to the
extent (a) the Indenture Trustee forecloses on the Equipment and any of the
Equipment is located in Illinois, (b) the Equipment Trust Trustee forecloses on
the Trust Equipment and any of the Trust Equipment is located in Illinois or (c)
the Indenture Trust, the trust created under an Equipment Trust Agreement, or
the Pass Through Trust, as applicable, engages in business in Illinois as a
result of such foreclosure. Neither the Trusts nor the Certificate Owners will
be indemnified for any state or local taxes imposed on them, the imposition of
which on a Trust could reduce the amounts available for distribution to the
Certificate Owners of such Trust. In general, should a Certificate Owner or a
Trust be subject to any state or local tax which would not be imposed if the
Pass Through Trustee were located in a different jurisdiction in the United
States, the Pass Through Trustee will resign and a new Pass Through Trustee in
such other jurisdiction will be appointed.
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<PAGE> 28
PLAN OF DISTRIBUTION
The Company may sell the Pass Through Certificates being offered hereby:
(i) through agents, (ii) to or through underwriters, (iii) through dealers or
(iv) through a combination of any such methods of sale.
The distribution of the Pass Through Certificates may be effected from time
to time in one or more transactions either (i) at a fixed price or prices, which
may be changed, or (ii) at market prices prevailing at the time of sale, or
(iii) at prices related to such prevailing market prices, or (iv) at negotiated
prices.
Offers to purchase the Pass Through Certificates may be solicited by agents
designated by the Company from time to time. Any such agent, which may be deemed
to be an underwriter as that term is defined in the Securities Act, involved in
the offer or sale of the Pass Through Certificates in respect of which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the applicable Prospectus
Supplement. Unless otherwise indicated in the Prospectus Supplement, any such
agent will be acting on a best efforts basis for the period of its appointment.
If an underwriter or underwriters are utilized in the sale, the Company
will execute an underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters and the terms of the transaction,
including commissions, discounts and other compensation of the underwriters and
dealers, if any, will be set forth in the Prospectus Supplement, which will be
used by the underwriters to make resales of the Pass Through Certificates in
respect of which this Prospectus is delivered to the public.
If a dealer is utilized in the sale of the Pass Through Certificates in
respect of which this Prospectus is delivered, the Company or the Pass Through
Trustee, as the case may be, will sell such Pass Through Certificates to the
dealer, as principal. The dealer may then resell such Pass Through Certificates
to the public at varying prices to be determined by such dealer at the time of
resale.
Underwriters, dealers, agents and other persons may be entitled, under
agreements which may be entered into with the Company, to indemnification
against certain civil liabilities, including liabilities under the Securities
Act.
Underwriters, dealers and agents may be customers of, engage in
transactions with or perform services for the Company in the ordinary course of
business.
LEGAL OPINIONS
Unless otherwise indicated in the Prospectus Supplement to this Prospectus,
the validity of the Pass Through Certificates will be passed upon for the
Company by Neal, Gerber & Eisenberg, Chicago, Illinois, and for any underwriters
or agents, by Mayer, Brown & Platt, New York, New York. Both Neal, Gerber &
Eisenberg and Mayer, Brown & Platt will rely on the opinion of the Law
Department of Harris Trust and Savings Bank as to matters relating to the
authorization, execution, authentication, issuance and delivery of the Pass
Through Certificates under the Basic Agreement.
EXPERTS
The consolidated financial statements and related schedules of Union Tank
Car Company appearing in Union Tank Car Company's Annual Report (Form 10-K/A)
for the year ended December 31, 1995, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
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APPENDIX I
GLOSSARY OF CERTAIN TERMS
The following is a glossary of certain terms used in this Prospectus
relating to the Pass Through Certificates. The definitions of terms used in this
glossary that are also used in the Basic Agreement, Trust Supplements,
Indentures, Leases or Participation Agreements are qualified in their entirety
by reference to the definitions of such terms contained therein. Additional
terms or changes in the terms defined below may appear in the applicable
Prospectus Supplement.
"Basic Agreement" means the Pass Through Trust Agreement, dated as of
January 15, 1997, between the Company and the Pass Through Trustee.
"Business Day," when used with respect to the Pass Through Certificates of
any series, means any day other than a Saturday, a Sunday, or a day on which
commercial banking institutions in New York, New York, Chicago, Illinois or a
city and state in which the Pass Through Trustee or any related Indenture
Trustee maintains its Corporate Trust Office are authorized or obligated by law,
regulation or executive order to be closed.
"Certificate Account" means the one or more non-interest-bearing accounts
established and maintained by the Pass Through Trustee pursuant to the Basic
Agreement on behalf of the Certificate holders of each Trust for the deposit of
payments representing Scheduled Payments on the Equipment Notes held in such
Trust.
"Certificate Owner" means a person acquiring an interest in a Pass Through
Certificate registered in the name of Cede & Co. as the nominee of The
Depository Trust Company.
"Certificateholder" means the Person in whose name a Pass Through
Certificate is registered.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Company" means Union Tank Car Company and its wholly-owned subsidiaries
(unless the context otherwise requires).
"ETC" means each of the equipment trust certificates to be issued pursuant
to an Equipment Trust Agreement between the Company and the Equipment Trust
Trustee.
"Equipment Group" means all the railcars (which may include various types
or categories of standard gauge rolling stock) in respect of which a particular
series of Equipment Notes is issued.
"Equipment Trust Agreement" means an equipment trust agreement between the
Company and the Equipment Trust Trustee.
"Equipment Trust Event of Default" means each of the events designated as
an Event of Default in an Equipment Trust Agreement, as described in the
applicable Prospectus Supplement.
"Equipment Trust Trustee" means, unless otherwise specified in a Prospectus
Supplement, Harris Trust and Savings Bank, in its capacity as trustee under an
Equipment Trust Agreement, and each other person which may from time to time act
as successor trustee under such agreement.
"Equipment Unit" or "Unit" means an individual railcar.
"Event of Default" means, (i) with respect to the Equipment Notes held in
any Trust, the occurrence and continuance of an Indenture Event of Default under
one or more of the related Indentures, and (ii) with respect to ETCs held in a
Trust, the occurrence and continuance of an Equipment Trust Event of Default
under the related Equipment Trust Agreement.
"Indenture" means each of the separate trust indenture and security
agreements entered into from time to time between an Owner Trustee and an
Indenture Trustee with respect to the issuance of Leased
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Equipment Notes, as each such agreement may be amended or supplemented in
accordance with its respective terms.
"Indenture Event of Default" means each of the events designated as an
event of default in an Indenture, as described in the applicable Prospectus
Supplement.
"Indenture Trustee," when used with respect to any Equipment Note or the
Indenture applicable thereto, means, unless otherwise specified in a Prospectus
Supplement, Harris Trust and Savings Bank, and any successor to such Indenture
Trustee as such trustee.
"Lease" means each of the lease agreements entered into with respect to
Equipment Units between an Owner Trustee and the Company, as each such lease
agreement may from time to time be amended or supplemented.
"Lease Event of Default" means each of the events designated as an event of
default in a Lease, as described in the applicable Prospectus Supplement.
"Leased Equipment" means each Equipment Group leased by an Owner Trustee to the
Company pursuant to a Lease.
"Owner Participant" means each of the owner participants for whose benefit
an Owner Trustee owns an Equipment Group leased to the Company pursuant to a
Lease and its permitted successors and assigns.
"Owner Trustee," when used with respect to any Equipment Note or the
Indenture applicable thereto or the Lease related thereto, means the "Owner
Trustee" referred to in the applicable Indenture, not in its individual capacity
but solely as trustee; and each other Person which may from time to time be
acting as Owner Trustee in accordance with the provisions of the applicable
Indenture, Lease or Participation Agreement.
"Participation Agreement" when used with respect to any Equipment Note,
means the note purchase, participation, refinancing or similar agreement or
agreements referred to in the related Indenture, providing for, among other
things, the purchase of Equipment Notes by the Pass Through Trustee.
"Pass Through Certificate" means each of the Pass Through Certificates to
be issued by each of the Trusts pursuant to the Basic Agreement and the related
Trust Supplement.
"Pass Through Trustee" means, unless otherwise specified in a Prospectus
Supplement, Harris Trust and Savings Bank, in its capacity as Pass Through
Trustee under each Trust, and each other person which may from time to time act
as successor Pass Through Trustee under such Trust.
"Pool Balance" means, for each Trust, as of any date, the aggregate unpaid
principal amount of the Equipment Notes and ETCs, if any, held in such Trust on
such date plus any amounts in respect of principal on such Equipment Notes and
ETCs held by the Pass Through Trustee and not yet distributed plus the amount of
any moneys held in the related escrow account (other than earnings thereon). The
Pool Balance for each Trust as of any Regular Distribution Date or Special
Distribution Date shall be computed after giving effect to the payment of
principal, if any, on the Equipment Notes and ETCs, if any, held in such Trust
and distribution thereof to be made on that date.
"Pool Factor" means, for each Trust, as of any date, the quotient (rounded
to the seventh decimal place) computed by dividing (i) the Pool Balance of such
Trust by (ii) the aggregate original principal amount of the Equipment Notes
held in such Trust. The Pool Factor for each Trust as of any Regular
Distribution Date or Special Distribution Date shall be computed after giving
effect to the payment of principal, if any, on the Equipment Notes and ETCs, if
any, held in such Trust and distribution thereof to be made on that date.
"Regular Distribution Date" means each date on which a Scheduled Payment
will be distributed, as specified in the applicable Prospectus Supplement.
"Scheduled Payment" means each payment of interest or principal on an
Equipment Note scheduled to be received by the Pass Through Trustee on the
Regular Distribution Dates specified in the applicable Prospectus Supplement.
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<PAGE> 31
"Special Distribution Date" means each date on which a Special Payment will
be distributed, as specified in the applicable Prospectus Supplement.
"Special Payment" means (i) any payment of principal, premium, if any, and
interest resulting from the prepayment or purchase of an Equipment Note held in
a Trust, (ii) any payment of principal and interest (including any interest
accruing upon default) on or any other amount in respect of an Equipment Note
held in a Trust upon an Indenture Event of Default in respect of, or upon
acceleration relating to, such Equipment Note, (iii) any payment of principal,
premium, if any, and interest on an Equipment Note which is not in fact paid
within five days of a Regular Distribution Date, (iv) any proceeds from the sale
of any Equipment Note upon an Event of Default, or (v) the amounts available for
distribution from a Trust as a result of the failure to apply such amounts to
the purchase of Equipment Notes on or prior to the date specified in the
applicable Prospectus Supplement.
"Special Payments Account" means the one or more accounts established and
maintained by the Pass Through Trustee pursuant to the Basic Agreement on behalf
of the Certificateholders of each Trust for the deposit of payments representing
Special Payments on the Equipment Notes held in such Trust.
"Specified Investments" when used with respect to any Trust, means, unless
otherwise specified in the related Prospectus Supplement, (i) direct obligations
of the United States of America and agencies thereof for which the full faith
and credit of the United States of America is pledged, (ii) obligations fully
guaranteed by the United States of America, (iii) certificates of deposit issued
by, or bankers' acceptances of, or time deposits with, any bank, trust company
or national banking association incorporated or doing business under the laws of
the United States of America or one of the states thereof having combined
capital and surplus and retained earnings of at least $500,000,000 (including
any Indenture Trustee or Owner Trustee H such conditions are met) and (iv)
repurchase agreements with any financial institution having a combined capital
and surplus of at least $750,000,000 fully collateralized by obligations of the
type described in clauses (i) through (iii) above; provided that if all of the
above investments are unavailable, the entire amounts to be invested may be used
to purchase Federal funds from an entity described in clause (iii) above; and
provided further that no investment shall be eligible as a "Specified
Investment" unless the final maturity or date of return of such investment is 91
days or less from the date of purchase thereof.
"Trust" means each of the Union Tank Car Company Pass Through Trusts to be
formed pursuant to the Basic Agreement and a Trust Supplement.
"Trust Property" means the Equipment Notes and ETCs, if any, held as the
property of a Trust and all funds from time to time deposited in the related
Certificate Account, the related Special Payments Account and any other account
maintained as a part of such Trust, including any proceeds from the sale by the
Pass Through Trustee of any such Equipment Note or ETC in connection with an
Event of Default.
"Trust Supplement" means each of the Pass Through Trust Supplements between
the Company and the Pass Through Trustee, pursuant to each of which a Trust is
formed and a series of Pass Through Certificates is issued to evidence
fractional undivided ownership interests in the Trust Property held in such
Trust.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
SUBJECT TO COMPLETION
JANUARY 15, 1997
PROSPECTUS
$400,000,000
UNION TANK CAR COMPANY
DEBT SECURITIES
------------------------
Union Tank Car Company, a Delaware corporation (the "Company"), may offer
from time to time, in one or more series, up to $400,000,000 aggregate principal
amount (or the equivalent in foreign currencies or currency units) of its debt
securities ("Debt Securities"), on terms to be determined at the time the Debt
Securities are offered for sale. Unless otherwise provided in a Prospectus
Supplement, the Debt Securities of any series may be represented by a single
global certificate registered in the name of a depository's nominee and, if so
represented, beneficial interests in the global certificate will be shown on,
and transfers thereof will be effected only through, records maintained by the
depository and its participants. Debt Securities may be offered through
underwriters, dealers or agents. The names of any underwriters, dealers or
agents and any compensation to such underwriters, dealers or agents will be set
forth in the Prospectus Supplement.
The terms of the Debt Securities, including, where applicable, the specific
designation, aggregate principal amount, authorized denominations, currencies in
which such Debt Securities are issued or payable, maturity, rate (or manner of
calculation thereof) and time of payment of interest, if any, whether the Debt
Securities are issuable in registered form or bearer form or both, whether any
series of the Debt Securities will be represented by a single global
certificate, any terms for redemption or for sinking fund payments, whether the
Debt Securities are convertible into Debt Securities of a different series, the
initial public offering price, the net proceeds to the Company from the sale of
the Debt Securities and any other specific terms in connection with the offering
and sale of the Debt Securities in respect of which this Prospectus is being
delivered will be set forth in a Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
This Prospectus may not be used to consummate a sale of Debt Securities
unless accompanied by a Prospectus Supplement.
------------------------
The date of this Prospectus is January , 1997.
<PAGE> 33
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Debt Securities. This Prospectus, which forms a part of the
Registration Statement, does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information pertaining
to the Debt Securities and the Company, reference is made to the Registration
Statement. Any statement contained herein concerning the provisions of any
document is not necessarily complete and, in each instance, reference is made to
the copy of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Commission. Information
concerning the Company can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following Regional Offices of the Commission: Chicago
Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and New York Regional Office, 7 World Trade Center, Suite 1300,
New York, New York 10048. Copies of such material can be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such materials also may be accessed
electronically by means of the Commission's home page on the Internet at
http://www.sec.gov.
DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995 filed on March 11, 1996, as amended by Form 10-K/A filed on May 3, 1996
and by Form 10-K/A filed on May 17, 1996, and its Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1996, June 30, 1996 and September 30, 1996, as
filed with the Commission pursuant to the Exchange Act, are incorporated herein
by reference.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein, or contained in
this Prospectus, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written request of such person, a copy (without
exhibits) of any or all documents incorporated by reference in this Prospectus.
Requests for such copies should be directed to the General Counsel and
Secretary, Union Tank Car Company, 225 West Washington Street, Chicago, Illinois
60606, telephone (312) 372-9500.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of Debt
Securities will be added to the general funds of the Company and may be used to
finance the addition of railcars to the Company's fleet and other capital
expenditures, to finance acquisitions, to repay outstanding indebtedness, or for
other corporate purposes or as may be described in a Prospectus Supplement. The
Company has not allocated a specific portion of the proceeds for any particular
use at this time. Pending such use, the net proceeds may be temporarily invested
in short-term securities.
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<PAGE> 34
THE COMPANY
Union Tank Car Company (with its wholly-owned subsidiaries herein
collectively referred to, except as the context otherwise requires, as the
"Company") is principally engaged in the leasing of railway tank cars and other
rail cars to United States, Canadian and Mexican manufacturers and other
shippers of chemical products, including liquid fertilizers, petroleum products,
including liquid petroleum gas, food products and bulk plastics. The Company
owns and operates one of the largest fleets of privately-owned railway tank cars
in the world.
The Company, which was incorporated in Delaware in 1980 and is the
successor to a business which was incorporated in New Jersey in 1891 and
reincorporated in Delaware in 1968, is a wholly-owned subsidiary of Marmon
Industrial Corporation, a wholly-owned subsidiary of Marmon Holdings, Inc.
Substantially all the stock of Marmon Holdings, Inc. is owned, directly or
indirectly, by trusts for the benefit of certain members of the Pritzker family.
As used herein, "Pritzker family" refers to the lineal descendants of Nicholas
J. Pritzker, deceased.
The Company's principal executive offices are located at 225 West
Washington Street, Chicago, Illinois 60606, and its telephone number is (312)
372-9500.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms and provisions of the series of Debt Securities offered by a
Prospectus Supplement, including any additional covenants or changes to existing
covenants relating to such series, and the extent to which such general terms
and provisions described below may apply thereto, will be described in the
Prospectus Supplement relating to such series of Debt Securities.
The Debt Securities are to be issued under an Indenture, dated as of
January 15, 1997, as supplemented (the "Debt Indenture"), between the Company
and Harris Trust and Savings Bank, as Trustee (the "Debt Trustee"). The
following summaries of certain provisions of the Debt Securities and the Debt
Indenture do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all provisions of the Debt Securities and the
Debt Indenture, including the definitions therein of certain terms. Particular
sections of the Debt Indenture which are relevant to the discussion are cited
parenthetically. Wherever particular sections or defined terms of the Debt
Indenture are referred to, it is intended that such sections or defined terms
shall be incorporated herein by reference. Capitalized terms not otherwise
defined herein shall have the meaning ascribed to such terms in the Debt
Indenture.
GENERAL
The Debt Indenture does not limit the amount of Debt Securities which can
be issued thereunder or the amount of debt which may otherwise be incurred by
the Company, and additional debt securities may be issued under the Debt
Indenture up to the aggregate principal amount which may be authorized from time
to time by, or pursuant to a resolution of, the Company's Board of Directors or
by a supplemental indenture. Reference is made to the Prospectus Supplement for
the following terms, if applicable, of the particular series of Debt Securities
being offered thereby: (i) the title of the Debt Securities of the series; (ii)
any limit upon the aggregate principal amount of the Debt Securities of the
series; (iii) the date or dates on which the principal of the Debt Securities of
the series will be payable; (iv) the rate or rates (or manner of calculation
thereof), if any, at which the Debt Securities of the series will bear interest,
the date or dates from which any such interest will accrue and on which such
interest will be payable, and, with respect to Debt Securities of the series in
registered form, the record date for the interest payable on any interest
payment date; (v) the place or places where the principal of and interest, if
any, on the Debt Securities of the series will be payable; (vi) any redemption
or sinking fund provisions; (vii) the denominations in which Debt Securities of
the series shall be issuable; (viii) if other than the principal amount thereof,
the portion of the principal amount of Debt Securities of the series which will
be payable upon declaration of acceleration of the maturity thereof; (ix)
whether the Debt Securities of the series will be issuable in registered or
bearer form or both, any
3
<PAGE> 35
restrictions applicable to the offer, sale or delivery of Debt Securities in
bearer form ("bearer Debt Securities") and whether and the terms upon which
bearer Debt Securities will be exchangeable for Debt Securities in registered
form ("registered Debt Securities") and vice versa; (x) any provisions relating
to the conversion of Debt Securities of the series into Debt Securities of a
different series; (xi) whether and under what circumstances the Company will pay
additional amounts on the Debt Securities of the series held by a person who is
not a U.S. person (as defined below) in respect of taxes or similar charges
withheld or deducted and, if so, whether the Company will have the option to
redeem such Debt Securities rather than pay such additional amounts; (xii) the
currencies in which payments of interest, premium or principal are payable with
respect to such Debt Securities; (xiii) whether the Debt Securities of any
series will be issued as one or more Global Securities; (xiv) whether Debt
Securities of the series will be issuable in Tranches; and (xv) any additional
provisions or other terms not inconsistent with the provisions of the Debt
Indenture, including any terms which may be required by or advisable under
United States laws or regulations or advisable in connection with the marketing
of Debt Securities of such series. (Section 2.1 and 2.2) To the extent not
described herein, principal and interest, if any, will be payable, and the Debt
Securities of a particular series will be transferable, in the manner described
in the Prospectus Supplement relating to such series. "Principal" when used
herein includes, when appropriate, the premium, if any, on the Debt Securities.
Each series of Debt Securities will constitute unsecured and unsubordinated
indebtedness of the Company and will rank on a parity with the Company's other
unsecured and unsubordinated indebtedness. There are no covenants or "event
risk" provisions contained in the Debt Indenture that may afford holders of Debt
Securities protection in the event of a highly leveraged transaction involving
the Company.
Debt Securities of any series may be issued as registered Debt Securities
or bearer Debt Securities or both as specified in the terms of the series.
Additionally, Debt Securities of any series may be represented by a single
global note registered in the name of a depository's nominee and, if so
represented, beneficial interests in such global note will be shown on, and
transfers thereof will be effected only through, records maintained by a
designated depository and its participants. Unless otherwise indicated in the
Prospectus Supplement, Debt Securities will be issued in the denomination of
$1,000 and integral multiples thereof and bearer Debt Securities will not be
offered, sold, resold or delivered to U.S. persons in connection with their
original issuance. Debt Securities of any series may be denominated in and
payments of principal and interest may be made in United States dollars or any
other currency, including composite currencies such as the European Currency
Unit. For purposes of this Prospectus, "U.S. person" means a citizen or resident
of the United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof, or any estate or trust the income of which is subject to United States
federal income taxation regardless of its source.
To the extent set forth in the Prospectus Supplement, except in special
circumstances set forth in the Debt Indenture, interest on bearer Debt
Securities will be payable only against presentation and surrender of the
coupons for the interest installments evidenced thereby as they mature at a
paying agency of the Company located outside of the United States and its
possessions. (Section 2.5(c)) The Company will maintain such an agency for a
period of two years after the principal of such bearer Debt Securities has
become due and payable. During any period thereafter for which it is necessary
in order to conform to United States tax laws or regulations, the Company will
maintain a paying agent outside of the United States and its possessions to
which the bearer Debt Securities and coupons related thereto may be presented
for payment and will provide the necessary funds therefor to such paying agent
upon reasonable notice. (Section 2.4)
Bearer Debt Securities and the coupons related thereto will be transferable
by delivery. (Section 2.8(f))
If appropriate, United States federal income tax consequences applicable to
a series of Debt Securities will be described in the Prospectus Supplement
relating thereto.
BOOK-ENTRY REGISTRATION
If the Prospectus Supplement so indicates, the Debt Securities will be
represented by one or more certificates (the "Global Securities"). The Global
Securities representing Debt Securities will be deposited with, or on behalf of,
The Depository Trust Company ("DTC") or other successor depository appointed by
4
<PAGE> 36
the Company (DTC or such other depository is herein referred to as the
"Depository") and registered in the name of the Depository or its nominee. Debt
Securities represented by a Global Security will not be issuable in definitive
form.
DTC currently limits the maximum denomination of any single Global Security
to $200,000,000. Therefore, for purposes hereof, "Global Security" refers to the
Global Security or Global Securities representing the entire issue of Debt
Securities of a particular series.
DTC has advised the Company and any underwriters, dealers or agents named
in the Prospectus Supplement as follows: DTC is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participants ("DTC Participants") and to facilitate the
clearance and settlement of securities transactions between DTC Participants
through electronic book-entry changes in accounts of DTC Participants, thereby
eliminating the need for physical movement of securities certificates. DTC
Participants include securities brokers and dealers, banks, trust companies and
clearing corporations. Indirect access to the DTC book-entry system is also
available to others, such as banks, brokers, dealers and trust companies, that
clear through or maintain a custodial relationship with a DTC Participant,
either directly or indirectly ("Indirect Participants").
Upon the issuance by the Company of Debt Securities represented by a Global
Security, DTC will credit, on its book-entry registration and transfer system,
the respective principal amounts of the Debt Securities represented by such
Global Security to the accounts of DTC Participants. The accounts to be credited
shall be designated by the underwriters, dealers or agents. Ownership of
beneficial interests in the Global Security will be limited to DTC Participants
and Indirect Participants. Ownership of beneficial interests in Debt Securities
represented by the Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by DTC (with respect
to interests of DTC Participants), or by DTC Participants or Indirect
Participants (with respect to persons other than DTC Participants). The laws of
some states require that certain purchasers of securities take physical delivery
of such securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in the Global Security.
So long as the Depository for the Global Security, or its nominee, is the
registered owner of the Global Security, the Depository or its nominee, as the
case may be, will be considered the sole owner or holder of the Debt Securities
represented by such Global Security for all purposes under the Debt Indenture.
Except as provided below, owners of beneficial interests in Debt Securities
represented by the Global Security will not be entitled to have Debt Securities
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of Debt Securities in definitive
form and will not be considered the owners or holders thereof under the Debt
Indenture.
Payments of principal of and interest, if any, on the Debt Securities
represented by the Global Security registered in the name of DTC or its nominee
will be made by the Company through the Debt Trustee under the Debt Indenture or
a paying agent (the "Paying Agent"), which may also be the Debt Trustee under
the Debt Indenture, to DTC or its nominee, as the case may be, as the registered
owner of the Global Security. Neither the Company, the Debt Trustee, nor the
Paying Agent will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company has been advised that DTC, upon receipt of any payment of
principal or interest in respect of a Global Security, will credit immediately
the accounts of DTC Participants with payment in amounts proportionate to their
respective holdings in principal amount of beneficial interest in such Global
Security as shown on the records of DTC. The Company expects that payments by
DTC Participants to owners of beneficial interests in a Global Security will be
governed by standing customer instructions and customary practices, as is now
the case with securities held for the accounts of customers in bearer form or
registered in "street name" and will be the responsibility of such DTC
Participants.
5
<PAGE> 37
If the Depository with respect to a Global Security is at any time
unwilling or unable to continue as Depository and a successor Depository is not
appointed by the Company within 90 days, the Company will issue certificated
notes in exchange for the Debt Securities represented by such Global Security.
The information contained in this section concerning DTC and DTC's
book-entry system has been obtained from sources that the Company believes to be
reliable but the Company takes no responsibility for the accuracy thereof.
SAME-DAY SETTLEMENT
If the Prospectus Supplement so indicates, settlement for the Debt
Securities will be made by the underwriters, dealers or agents in immediately
available funds and all payments of principal and interest on the Debt
Securities will be made by the Company in immediately available funds. Secondary
trading in long-term notes and debentures of corporate issuers is generally
settled in clearinghouse or next-day funds. In contrast, the Debt Securities
subject to settlement in immediately available funds will trade in the
Depository's Same-Day Funds Settlement System until maturity, and secondary
market trading activity in such Debt Securities will therefore be required by
the Depository to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the Debt Securities.
EXCHANGE OF DEBT SECURITIES
Registered Debt Securities may be exchanged, subject to certain specified
restrictions, for an equal aggregate principal amount of registered Debt
Securities of the same series and date of maturity in such authorized
denominations as may be requested upon surrender of the registered Debt
Securities at an agency of the Company maintained for such purpose and upon
fulfillment of all other requirements of such agent. (Section 2.8(a))
To the extent permitted by the terms of a series of Debt Securities
authorized to be issued in registered form and bearer form, bearer Debt
Securities may be exchanged for an equal aggregate principal amount of
registered or bearer Debt Securities of the same series and date of maturity in
such authorized denominations as may be requested upon surrender of the bearer
Debt Securities with all unpaid coupons relating thereto at an agency of the
Company maintained for such purpose and upon fulfillment of all other
requirements of such agent. (Section 2.8(b)) As of the date of this prospectus,
temporary United States Treasury regulations essentially prohibit exchanges of
registered debt securities for bearer debt securities and, unless such
regulations are modified, the terms of a series of debt securities will not
permit registered debt securities to be exchanged for bearer debt securities.
AMENDMENT AND WAIVER
Subject to certain exceptions, the Debt Indenture and the Debt Securities
may be amended or supplemented by the Company and the Debt Trustee with the
written consent of the holders of a majority in principal amount of the
outstanding Debt Securities of each series affected by the amendment or
supplement (with each series voting as a class), or compliance with any
provision may be waived with the consent of the holders of a majority in
principal amount of the outstanding Debt Securities of each series affected by
such waiver (with each series voting as a class). However, without the consent
of each Securityholder affected, an amendment or waiver may not (i) reduce the
amount of Debt Securities whose holders must consent to an amendment or waiver,
(ii) change the rate of or change the time for payment of interest on any Debt
Security; (iii) change the principal of or change the Stated Maturity of any
Debt Security; (iv) reduce any premium payable upon redemption of any Debt
Security; (v) waive a default in the payment of the principal of or interest on
any Debt Security; (vi) make any Debt Security payable in money other than that
stated in the Debt Security; or (vii) impair the right to institute suit for the
enforcement of any payment on or with respect to any Debt Security. (Section
9.02) The Debt Indenture may be amended or supplemented without the consent of
any Securityholder (i) to cure any ambiguity, defect or inconsistency in the
Debt Indenture or in the Debt Securities of any series; (ii) to provide for the
assumption of all the obligations of the Company
6
<PAGE> 38
under the Debt Securities and any coupons appertaining thereto and under the
Debt Indenture by any corporation in connection with a merger, consolidation, or
transfer or lease of the Company's property and assets substantially as an
entirety, as provided for in the Debt Indenture; (iii) to secure the Debt
Securities; (iv) to provide for uncertificated Debt Securities in addition to or
in place of certificated Debt Securities; (v) to make any change that does not
adversely affect the rights of any Securityholder; (vi) to provide for the
issuance of and establish the form and terms and conditions of a series of Debt
Securities or to establish the form of any certifications required to be
furnished pursuant to the terms of the Debt Indenture or any series of Debt
Securities; or (vii) to add to rights of Securityholders. (Section 9.1)
SUCCESSOR ENTITY
The Company may consolidate with, or merge into, or be merged into, or
transfer or lease its property and assets substantially as an entirety to,
another U.S. corporation which assumes all the obligations of the Company under
the Debt Securities and any coupons appertaining thereto and under the Debt
Indenture if, after giving effect thereto, no default under the Debt Indenture
shall have occurred and be continuing. Thereafter, except in the case of a
lease, all such obligations of the Company shall terminate. (Section 5.1 and
Section 5.2)
DEFEASANCE, SATISFACTION AND DISCHARGE OF THE DEBT SECURITIES PRIOR TO MATURITY
Defeasance. Unless provided for otherwise in the Prospectus Supplement, if
the Company shall deposit with the Debt Trustee, in trust, at or before
maturity, lawful money or direct obligations of the United States of America or
obligations the principal of and interest on which are guaranteed by the United
States of America in such amounts and maturing at such times that the proceeds
of such obligations to be received upon the respective maturities and interest
payment dates of such obligations will provide funds sufficient, in the opinion
of a nationally recognized firm of independent public accountants chosen by the
Company, to pay when due the principal of and interest on the Debt Securities to
maturity (such money or direct obligations of, or obligations guaranteed by, the
United States of America, initially deposited or equivalent cash or securities
subsequently exchanged therefor, to be held as security for the payment of such
principal and interest), then the Company may omit to comply with certain of the
terms of the Debt Indenture as they relate to the Debt Securities, and the Event
of Default described in clause (iv) under the caption "Description of Debt
Securities -- Events of Default," and such other Events of Default as may be set
forth in the Prospectus Supplement. Defeasance of the Debt Securities would be
subject to the satisfaction of certain conditions, including, among others, (i)
the absence of an Event of Default at the date of the deposit, (ii) the
perfection of the holders' interest in such deposit and (iii) that such deposit
would not result in a breach of a material instrument by which the Company is
bound. (Section 8.2)
Satisfaction and Discharge. Upon the deposit of money or securities
contemplated above and the satisfaction of certain conditions, the Company may
omit to comply with its obligations duly and punctually to pay the principal of
and interest on the Debt Securities, or with any Events of Default with respect
thereto, and thereafter the holders of Debt Securities shall be entitled only to
payment out of the money or securities deposited with the Debt Trustee. Such
conditions may include, among others, (i) except in certain limited
circumstances involving a deposit made within one year of maturity, (A) the
absence of an Event of Default at the date of deposit or on the 91st day
thereafter, and (B) the delivery to the Debt Trustee by the Company of an
opinion of nationally recognized tax counsel to the effect that holders of Debt
Securities will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit and discharge and will be subject to
Federal income tax on the same amounts and in the same manner and at the same
times as would have been the case if such deposit and discharge had not
occurred, and (ii) the receipt by the Company of an opinion of counsel to the
effect that such satisfaction and discharge will not result in a violation of
the rules of any nationally recognized exchange on which the Debt Securities are
listed. (Section 8.1)
EVENTS OF DEFAULT
The following events are defined in the Debt Indenture as "Events of
Default" with respect to a series of Debt Securities: (i) default in the payment
of interest on any Debt Security of such series for 30 days;
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<PAGE> 39
(ii) default in the payment of the principal of any Debt Security of such
series; (iii) default in the payment of any sinking fund installment required to
be made by the Company with respect to any series of Debt Securities; (iv)
failure by the Company for 90 days after notice to it to comply with any of its
other agreements in the Debt Securities of such series, in the Debt Indenture or
in any supplemental indenture under which the Debt Securities of that series may
have been issued; and (v) certain events of bankruptcy or insolvency. (Section
6.1) If an Event of Default occurs with respect to the Debt Securities of any
series and is continuing, the Debt Trustee or the holders of at least 25% in
principal amount of all of the outstanding Debt Securities of that series may
declare the principal (or, if the Debt Securities of that series are original
issue discount Debt Securities, such portion of the principal amount as may be
specified in the terms of that series) of, and any accrued interest on, all the
Debt Securities of that series to be due and payable. Upon such declaration,
such principal (or, in the case of original issue discount Debt Securities, such
specified amount) and all accrued interest thereon shall be due and payable
immediately. (Section 6.2)
Securityholders may not enforce the Debt Indenture or the Debt Securities,
except as provided in the Debt Indenture. (Section 6.6) The Debt Trustee may
require indemnity satisfactory to it before it enforces the Debt Indenture or
the Debt Securities. (Section 7.1(f)) Subject to certain limitations, holders of
a majority in principal amount of the Debt Securities of each series affected
(with each series voting as a class) may direct the Debt Trustee in its exercise
of any trust power. (Section 6.5) The Debt Trustee may withhold from
Securityholders notice of any continuing default (except a default in payment of
principal or interest) if it determines in good faith that withholding notice is
in their interests. (Section 7.5) The Company is not required under the Debt
Indenture to furnish any periodic evidence as to the absence of default or as to
compliance with the terms of the Debt Indenture.
CONCERNING THE DEBT TRUSTEE
Harris Trust and Savings Bank ("Harris Bank") serves as trustee under an
Equipment Trust Agreement, dated as of November 15, 1990, between the Company
and Harris Bank and under a Pass Through Trust Agreement, dated as of January
15, 1997, between the Company and Harris Bank. In addition, Harris Bank provides
customary banking services to the Company and certain of its affiliates.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities being offered hereby: (i) through
agents, (ii) to or through underwriters, (iii) through dealers or (iv) through a
combination of any such methods of sale.
The distribution of the Debt Securities may be effected from time to time
in one or more transactions either (i) at a fixed price or prices, which may be
changed, or (ii) at market prices prevailing at the time of sale, or (iii) at
prices related to such prevailing market prices, or (iv) at negotiated prices.
Offers to purchase Debt Securities may be solicited directly by agents
designated by the Company from time to time. Any such agent, which may be deemed
to be an underwriter as that term is defined in the Securities Act, involved in
the offer or sale of the Debt Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by the Company to such
agent will be set forth, in the Prospectus Supplement. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
If an underwriter or underwriters are utilized in the sale, the Company
will execute an underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters and the terms of the transaction,
including commissions, discounts and other compensation of the underwriters and
dealers, if any, will be set forth in the Prospectus Supplement, which will be
used by the underwriters to make resales of the Debt Securities in respect of
which this Prospectus is delivered to the public.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to the dealer, as principal. The dealer may then resell such Debt Securities to
the public at varying prices to be determined by such dealer at the time of
resale.
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<PAGE> 40
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Debt Securities from the Company at the public offering
price set forth in the Prospectus Supplement pursuant to contracts providing for
payment and delivery on a specified date in the future. Such contracts will be
subject only to those conditions set forth in the Prospectus Supplement, and the
Prospectus Supplement will set forth the commission payable for solicitation of
such contracts.
Underwriters, dealers, agents and other persons may be entitled, under
agreements which may be entered into with the Company, to indemnification
against certain civil liabilities, including liabilities under the Securities
Act.
Underwriters, dealers and agents may be customers of, engage in
transactions with or perform services for the Company in the ordinary course of
business.
LEGAL OPINIONS
Unless otherwise indicated in the Prospectus Supplement to this Prospectus,
certain legal matters in connection with the Debt Securities offered hereby will
be passed upon for the Company by Neal, Gerber & Eisenberg, Chicago, Illinois,
and for any underwriters or agents, by Mayer, Brown & Platt, New York, New York.
EXPERTS
The consolidated financial statements of Union Tank Car Company appearing
in Union Tank Car Company's Annual Report (Form 10-K/A) for the year ended
December 31, 1995, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
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<PAGE> 41
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses (other than
underwriting discounts and commissions) to be incurred by the registrant in
connection with the offering described in this Registration Statement:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................ $121,213*
Blue Sky filing and counsel fees................................... 8,000
Trustees' fees and expenses........................................ 8,000
Printing expenses.................................................. 65,000
Auditors' fees and expenses........................................ 15,000
Attorneys' fees and expenses....................................... 125,000
Rating agency fees................................................. 200,000
Miscellaneous...................................................... 7,787
--------
Total......................................................... $550,000
========
</TABLE>
- -------------------------
* Actual. All other amounts are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law, Article Sixth of the
Company's Restated Certificate of Incorporation and Article VIII of the
Company's By-Laws authorize and empower the Company to indemnify its directors,
officers, employees and agents against liabilities incurred in connection with,
and related expenses resulting from, any claim, action or suit brought against
any such person as a result of such person's relationship with the Company,
provided that such persons acted in accordance with a stated standard of conduct
in connection with the acts or events on which such claim, action or suit is
based. The finding of either civil or criminal liability on the part of such
persons in connection with such acts or events is not necessarily determinative
of the question of whether such persons have met the required standard of
conduct and are, accordingly, entitled to be indemnified.
Reference is made to Section 8 of the form of Underwriting Agreement filed
as Exhibits 1(a) and 1(b) hereto for provisions regarding indemnification of the
Company and its officers, directors and controlling persons against certain
liabilities.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENTS
- -------- -----------------------------------------------------------------------------
<S> <C> <C>
1(a) -- Form of Underwriting Agreement (Pass Through Certificates).
1(b) -- Form of Underwriting Agreement (Debt Securities).+
4(a)(1) -- Form of Pass Through Trust Agreement between the Company and the Pass Through
Trustee.
4(a)(2) -- Form of Pass Through Certificate (included in Exhibit 4(a)(1)).
4(b) -- Form of Indenture between the Company and the Debt Trustee.+
4(c)(1) -- Form of Equipment Trust Agreement between the Company and the Equipment Trust
Trustee relating to the ETCs.+
4(c)(2) -- Form of ETC (included in Exhibit 4(c)(1)).+
5(a) -- Opinion of Neal, Gerber & Eisenberg, counsel for the Company.+
5(b) -- Opinion of The Law Department of Harris Trust and Savings Bank, counsel for
the Pass Through Trustee.+
</TABLE>
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<PAGE> 42
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENTS
- -------- -----------------------------------------------------------------------------
<S> <C> <C>
8(a) -- Tax Opinion of Neal, Gerber & Eisenberg, counsel for the Company.+
12 -- Computation of Ratios of Earnings to Fixed Charges.*
23(a) -- Consent of Ernst & Young LLP, Independent Auditors.
23(b) -- Consent of Neal, Gerber & Eisenberg (included in Exhibits 5(a) and 8(a)).+
23(c) -- Consent of The Law Department of Harris Trust and Savings Bank (included in
Exhibit 5(b)).+
24 -- Powers of Attorney (included on the signature pages to the Registration
Statement).+
25(a) -- Statement of Eligibility of Pass Through Trustee on Form T-1.+
25(b) -- Statement of Eligibility of Indenture Trustee on Form T-1.+
</TABLE>
- -------------------------
* The computation for each of the five fiscal years ended December 31, 1995,
1994, 1993, 1992 and 1991 is incorporated herein by reference to Exhibit 12 to
the Company's Annual Report on Form 10-K/A for the year ended December 31,
1995.
+ Previously filed.
ITEM 17. UNDERTAKINGS
A. Undertakings Regarding Rule 415 Offering.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. Undertaking Regarding Documents Subsequently Filed Under the Exchange
Act.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this Registration Statement shall be deemed to be a
new
II-2
<PAGE> 43
Registration Statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Undertaking in Respect of Indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the provisions described under Item 15 above, or otherwise,
the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
D. Undertakings Pursuant to Rule 430A.
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act of 1933 shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
E. Undertakings Under the Trust Indenture Act of 1939.
The Company hereby undertakes to file an application for the purpose of
determining the eligibility of the trustee to act under subsection (a) of
Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the
Securities Act of 1933.
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<PAGE> 44
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Union Tank Car
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Amendment No. 2
to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chicago, State of Illinois on the 14th
day of January, 1997.
UNION TANK CAR COMPANY
/s/ K.P. FISCHL
--------------------------------------
K.P. Fischl,
Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed by the following persons in the
capacities indicated on the 14th day of January, 1997.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- ---------------------------------------------
<S> <C>
*JAY A. PRITZKER Chairman of the Board and Director
- ---------------------------------------------
Jay A. Pritzker
*ROBERT A. PRITZKER President and Director
- --------------------------------------------- (principal executive officer)
Robert A. Pritzker
*R.C. GLUTH Executive Vice President, Treasurer and
- --------------------------------------------- Director
Robert C. Gluth (principal financial and accounting officer)
/s/ K.P. FISCHL Director
- ---------------------------------------------
K.P. Fischl
</TABLE>
*By /s/ K.P. FISCHL
---------------------------------
K.P. Fischl
Attorney-in-Fact
II-4
<PAGE> 1
EXHIBIT 1(a)
Union Tank Car Company
$
---------
Pass Through Certificates, Series
-----
Underwriting Agreement
New York, New York
---------
Dear Ladies and Gentlemen:
Union Tank Car Company, a Delaware corporation ("Union" or the "Company")
proposes to cause to be sold to you (the "Underwriters") $______ aggregate
principal amount of Pass Through Certificates, Series ____ and Pass Through
Certificates, Series _____ , with the interest rates and final distribution
dates as set forth in Schedule A hereto (the "Pass Through Certificates"), in
the respective aggregate principal amounts set forth on Schedule B hereto, to be
issued under (i) the Pass Through Trust Agreement ______, dated _______ (the
"Pass Through Trust Agreement #1"), between Union and _______, as Past Through
Trustee (the "Pass Through Trustee") and (ii) the Pass Through Trust Agreement
_____, dated ______ (the "Pass Through Trust Agreement
<PAGE> 2
#2", and together with the Pass Through Trust Agreement #1, the "Pass Through
Trust Agreements") between Union and the Pass Through Trustee,
respectively.
The property to be purchased by the Pass Through Trustee under Pass
Through Agreement #1 and contained in such trust shall consist of $______
principal amount Equipment Notes, Series A to be issued under the Indenture.
The property to be purchased by the Pass Through Trustee under Pass Through
Trust Agreement #2 and contained in such trust shall consist of (i) $______
principal amount Equipment Notes, Series B, (ii) an aggregate of $______
principal amount Equipment Trust Certificates, Series ___ of Union (together
with the guarantee of Union to be endorsed thereon, the "ETCs") to be
issued by Union pursuant to an Equipment Trust Agreement, dated ________, as
may be amended or supplemented from time to time (the "Equipment Trust
Agreement"), between Union and _____________, as trustee (the "Equipment
Trust Trustee").
All capitalized terms used, but not defined herein, shall have the
meanings attributed to them in the Pass Through Trust Agreements. As used in
this Agreement, the term "Operative Agreements" shall have the meaning set
forth in the Participation Agreement. All other capitalized terms used herein
shall, for the purposes hereof, have the meanings attributed to them in this
Agreement.
1. Representations and Warranties. The Company represents and warrants
to, and agree with you, that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"), and has filed with the
Securities and Exchange Commission (the "Commission") a registration
statement (file number 333-17121) on such Form, including a related
Preliminary Prospectus (as hereinafter defined), for the registration
under the Act of the offering and sale of the Pass Through Certificates.
The Company may have filed one or more amendments thereto, including the
related Preliminary Prospectus, each of which has previously been
furnished to you. The Company will next file with the Commission one of
the following: (i) prior to effectiveness of such registration statement,
a further amendment to such registration statement, including the form of
final prospectus or (ii) a final prospectus in accordance with Rules 430A
and 424(b)(1) or (4) under the Act. In the case of clause (ii), the
Companies have included in such registration statement,
- 2 -
<PAGE> 3
as amended at the Effective Date (as hereinafter defined) all information
(other than Rule 430A Information (as hereinafter defined)) required
by the Act and the rules thereunder to be included in the Prospectus (as
hereinafter defined) with respect to the Pass Through Certificates and the
offering thereof. As filed, such amendment and form of final prospectus,
or such final prospectus, shall contain all Rule 430A Information,
together with all other such required information, with respect to the
Pass Through Certificates and the offering thereof and, except to the
extent you shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution
Time (as hereinafter defined) or, to the extent not completed at the
Execution Time, shall contain only such specific additional information
and other changes (beyond that contained in the latest Preliminary
Prospectus) as the Companies have advised you, prior to the Execution
Time, will be included or made therein.
(b) On the Effective Date (as hereinafter defined), the Registration
Statement did or will, and when the Prospectus is first filed (if
required) in accordance with Rule 424(b) and on the Closing Date (as
hereinafter defined), the Prospectus (as hereinafter defined) (and any
supplements thereto) will, comply in all material respects with the
applicable requirements of the Act and the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the respective rules and
regulations thereunder; on the Effective Date, the Registration Statement
(as hereinafter defined) did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; on the Effective Date and on the Closing Date (as hereinafter
defined), the Pass Through Trust Agreements did or will comply in all
material respects with the requirements of the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules thereunder;
and, on the Effective Date, the Prospectus, if not filed pursuant to Rule
424(b), did not or will not, and on the date of any filing pursuant to
Rule 424(b) and on the Closing Date, the Prospectus (together with any
supplement thereto) will not, include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Companies make no
representations or warranties as to (i) that part of the Registration
Statement which shall constitute the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of the Pass Through
Trustee and (ii) the information contained in or omitted from the
Registration Statement or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing to
the Company by you specifically for use in connection with the preparation
of the Registration Statement or the Prospectus (or any supplement
thereto).
(c) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "Effective Date" shall mean each date
that the
- 3 -
<PAGE> 4
Registration Statement and any post-effective amendment or amendments
thereto became or becomes effective. "Execution Time" shall mean the
date and time that this Agreement is executed and delivered by the parties
hereto. "Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph (a) above, and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information. "Prospectus" shall mean the prospectus relating to
the Pass Through Certificates that is first filed pursuant to Rule 424(b)
after the Execution Time or, if no filing pursuant to Rule 424(b) is
required, shall mean the form of final prospectus relating to the Pass
Through Certificates included in the Registration Statement at the
Effective Date. "Registration Statement" shall mean the registration
statement referred to in paragraph (a) above, including incorporated
documents, exhibits and financial statements, as amended at the Execution
Time (or, if not effective at the Execution Time, in the form in which it
shall become effective) and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended. Such term shall include any Rule
430A Information deemed to be included therein at the Effective Date as
provided by Rule 430A. "Rule 424", "Rule 430A" and "Regulation S-K" refer
to such rules or regulation under the Act. "Rule 430A Information" means
information with respect to the Pass Through Certificates and the offering
thereof permitted to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 430A. Any reference herein to the
Registration Statement, a Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the
Exchange Act on or before the Effective Date or the issue date of such
Preliminary Prospectus or the Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date of the
Registration Statement, or, the issue date of any Preliminary Prospectus
or the Prospectus, as the case may be, deemed to be incorporated therein
by reference.
(d) The consolidated financial statements incorporated by reference
in the Registration Statement and Prospectus present fairly the
consolidated financial position of Union and its subsidiaries as at the
dates indicated and the consolidated results of their operations and
cash flows for the periods specified and have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis during the periods involved, except as indicated therein, and the
supporting schedules incorporated by reference in the Registration
Statement present fairly the information required to be stated therein.
(e) The documents incorporated by reference in the Prospectus, at
the time they were or hereafter are filed with the Commission, complied
and will comply in all
- 4 -
<PAGE> 5
material respects with the requirements of the Exchange Act, and the
rules and regulations thereunder.
(f) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein or contemplated thereby, there has been no material adverse
change in the condition, financial or otherwise, results of operations or
general affairs of Union and its subsidiaries, taken as a whole.
(g) Union and each Significant Subsidiary (with such term having the
meaning attributed to it under Rule 405 under the Act) of Union has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized,
with full corporate power and authority to own its properties and conduct
its business as described in the Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business, except in such
jurisdictions in which the failure to so qualify would not have a material
adverse effect on Union and its subsidiaries, taken as a whole.
(h) The execution and delivery by Union of this Agreement, the
Participation Agreement, the Pass Through Trust Agreements, the Lease, the
Equipment Trust Agreement and the other Operative Agreements to which
Union is, or is to be, a party, the consummation by Union of the
transactions herein and therein contemplated, and the compliance by Union
with the terms hereof and thereof do not and will not conflict with, or
result in a breach of any of the terms or provisions of, or constitute a
default under, the Certificate of Incorporation or by-laws, as amended, of
Union or any of its subsidiaries or any material indenture, mortgage, or
other agreement or instrument to which Union or any of its subsidiaries is
a party or by which any of its properties are bound, or any applicable
law, rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over Union or any of its subsidiaries or any of its
properties; and, assuming due authorization, execution and delivery by all
parties thereto other than Union, no consent, approval, authorization,
order or license of, or filing with or notice to any government,
governmental instrumentality, regulatory body or authority or court,
domestic or foreign, is required for the valid authorization, issuance and
delivery of the Pass Through Certificates, the ETCs and the Equipment
Notes, the valid authorization,
- 5 -
<PAGE> 6
execution, delivery and performance by Union of this Agreement, the
Participation Agreement, the Pass Through Trust Agreements, the Equipment
Trust Agreement and the Lease and other Operative Agreements to which Union
is, or is to be, a party, or the consummation by the Companies of the
transactions contemplated by this Agreement, the Participation Agreement,
the Pass Through Trust Agreements, the Equipment Trust Agreement and the
Lease and other Operative Agreements to which Union is, or is to be, a
party, except (w) such as are required under the Act, the Trust Indenture
Act and the securities or Blue Sky laws of the various states, (x) such
filings, recordings or registrations with the Surface Transportation Board
of the Department of Transportation (the "STB") and under Section 90 of the
Railway Act (Canada) as may be required, (y) the filing of Uniform
Commercial Code financing statements in various jurisdictions and the
filing of continuation statements with respect thereto required to be filed
at periodic intervals under the Uniform Commercial Code and (z) such other
filings, recordings or registrations as may be required under the Operative
Agreements.
(i) This Agreement, the Participation Agreement, the Pass Through
Trust Agreements, the Equipment Trust Agreement and the Lease and the
other Operative Agreements to which Union is, or is to be, a party, have
each been duly authorized by Union and, when executed and delivered by
Union will constitute valid and binding obligations of Union, and the Pass
Through Trust Agreements will have been duly qualified under the Trust
Indenture Act. On the Closing Date, the Equipment Trust Agreement, the
Lease and other Operative Agreements to which Union, is, or is to be, a
party will constitute the valid and binding obligations of Union. The
Pass Through Certificates, the ETCs, the Equipment Notes, the Indenture,
the Participation Agreement, the Pass Through Trust Agreements, the
Equipment Trust Agreements and the Lease and the other Operative
Agreements to which Union, is, or is to be, a party will conform in all
material respects to the descriptions thereof in the Prospectus.
(j) Ernst & Young LLP ("Ernst & Young"), who reported on the
consolidated financial statements of Union as of __________ and for the
year then ended, which statements are incorporated by reference in the
Registration Statement and Prospectus, were, as of the date of its report
on such consolidated financial statements, independent auditors as
required by the Act and the rules and regulations thereunder.
(k) The Pass Through Certificates, when duly executed, authenticated
and delivered by the Pass Through Trustee in accordance with the terms of
the Pass Through Trust Agreements and this Agreement, will be duly issued
under the Pass
- 6 -
<PAGE> 7
Through Trust Agreements and will constitute valid and binding obligations
of the Pass Through Trustee; and the holders thereof will be entitled to
the benefits of the Pass Through Trust Agreements.
(l) Assuming due authorization, execution and delivery of the
Equipment Notes to be issued under the Indenture by the Owner Trustee and
due authentication of such Equipment Notes by the Indenture Trustee in
accordance with the terms of the Indenture, the Equipment Notes will be
duly issued under the Indenture and will constitute valid and binding
obligations of such Owner Trustee; and the holders thereof will be
entitled to the benefits of the Indenture.
2. Purchase and Sale. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, Union agrees to
request the Pass Through Trustee to sell to each of you, in the respective
aggregate principal amounts set forth on Schedule B hereto, and each of you
severally, not jointly, agrees to purchase from the Pass Through Trustee, at a
purchase price of 100% of the principal amount thereof, the respective aggregate
principal amounts of Pass Through Certificates set forth on such Schedule B.
As compensation to each of you for its commitment and obligations hereunder
in respect of the Pass Through Certificates, including its undertaking to
distribute the Pass Through Certificates, the Owner Trustee has, pursuant to
Section 2.5 of the Participation Agreement, undertaken to pay, or if the Owner
Trustee does not pay when due, Union will pay when due, to you an amount equal
to the product of .____% times a fraction, the numerator of which is the
aggregate principal amount of Equipment Notes to be purchased by the Pass
Through Trusts and the denominator of which is the original principal amount of
the Pass Through Certificates purchased by you. Union will pay to you when due
an amount equal to .___% of the original aggregate principal amount of the ETCs.
Such payments shall be made simultaneously with the payment by you to the Pass
Through Trustee of the purchase price of the Pass Through Certificates as
specified in Section 3 hereof. Payment of such compensation shall be made by
Federal funds check or other immediately available funds to the order of Salomon
Brothers Inc.
3. Delivery and Payment. Delivery of and payment for the Pass Through
Certificates shall be made at the offices of Neal, Gerber & Eisenberg, Two North
LaSalle Street, Chicago, Illinois, at 10:00 a.m., Chicago time, on _____ or such
later date and time (not later than ____) as Union and you shall determine (such
date and time of delivery and payment for the Pass Through Certificates being
herein called the "Closing Date"). Delivery of the Pass Through Certificates
shall be made to your account at The Depository Trust Company against payment by
you of the purchase price thereof to or upon the order of
- 7 -
<PAGE> 8
the Pass Through Trustee by Federal funds check or other immediately
available funds. The Pass Through Certificates shall be registered in such
names and in such denominations as you may request not less than three full
business days in advance of the Closing Date or such other date as may be
agreed upon.
Union agrees to have the Pass Through Certificates available for
inspection, checking and packaging by you in New York City, not later than 1:00
p.m. (New York City time) on the business day prior to the Closing Date.
4. Offering by Salomon Brothers Inc and Morgan Stanley & Co. Incorporated.
It is understood that, after the Registration Statement becomes effective, each
of you propose to offer the Pass Through Certificates for sale to the public as
set forth in the Prospectus.
5. Agreements. Union agrees with you that:
(a) Union will use its reasonable best efforts to cause
the Registration Statement, if not effective at the Execution Time, and
any amendment thereof, to become effective and the Pass Through Trust
Agreement to be qualified under the Trust Indenture Act. Union will not
file any amendment to the Registration Statement or supplement to the
Prospectus unless Union has furnished you a copy for your review prior to
filing and will not file any such proposed amendment or supplement to
which you reasonably object. Subject to the foregoing sentence, if filing
of the Prospectus is required under Rule 424(b), Union will cause the
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence satisfactory
to you of such timely filing. Union will promptly advise you (i) when
the Registration Statement, if not effective at the Execution Time, and
any amendment thereto, shall have become effective, (ii) when the
Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b), (iii) when, prior
to termination of the offering of the Pass Through Certificates, any
amendment to the Registration Statement shall have been filed or become
effective, (iv) of any request by the Commission for any amendment of the
Registration Statement or supplement to the Prospectus or for any
additional information, (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose (and Union
agrees that it will use its reasonable best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof), (vi) of the receipt by Union of any
notification with respect to the suspension of the qualification of the
Pass Through Certificates for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose and (vii) during the
period when a prospectus relating to the Pass Through Certificates is
- 8 -
<PAGE> 9
required to be delivered under the Act, of the mailing or the delivery to
the Commission for filing of any document to be filed pursuant to
the Exchange Act. (b) If, at any time when a prospectus relating to the
Pass Through Certificates is required to be delivered under the Act, any
event occurs as a result of which the Prospectus as then supplemented
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it
shall be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the Exchange Act or the respective
rules and regulations thereunder, Union promptly will prepare and
file with the Commission, subject to paragraph (a) of this Section 5, an
amendment or supplement which will correct such statement or omission or
an amendment which will effect such compliance.
(c) As soon as practicable, Union will make generally available to
its security holders and to the Underwriters an earnings statement or
statements of Union and its subsidiaries which will satisfy the provisions
of Section 11(a) of the Act and the applicable rules and regulations
thereunder.
(d) Union will furnish to you and your counsel, without
charge, signed copies of the Registration Statement (including exhibits
thereto) and, so long as delivery of a prospectus by you or a dealer may
be required by the Act, as many copies of each Preliminary Prospectus and
the Prospectus and any amendments thereof and supplements thereto as you
may reasonably request. Subject to the provisions of Section 2.5 of the
Participation Agreement, Union will pay the expenses of printing
all documents relating to the offering.
(e) Union will cooperate with you and your special counsel to
arrange for the qualification of the Pass Through Certificates for sale
under the laws of such jurisdictions as you may reasonably designate, will
maintain such qualifications in effect so long as required for the
distribution of the Pass Through Certificates and will arrange for the
determination of the legality of the Pass Through Certificates for
purchase by institutional investors; provided, however, that Union
will not be required to qualify to do business in any jurisdiction in
order to effect such qualification.
(f) Between the date of this Agreement and the Closing Date,
Union will not without your prior written consent offer, sell, or
enter into any agreement to sell, any public debt securities registered
under the Act (other than the Pass Through Certificates).
- 9 -
<PAGE> 10
(g) Union confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, An Act Relating to Disclosure of Doing Business with Cuba, and
Union further agrees that if Union commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba after
the date the Registration Statement becomes or has become effective with
the Commission or with the Florida Department of Banking and Finance
(the "Department"), whichever date is later, or if the information
reported in the Prospectus, if any, concerning Union's business with Cuba
or with any person or affiliate located in Cuba changes in any material
way, Union will provide the Department notice of such business or
change, as appropriate, in a form acceptable to the Department.
6. Conditions to the Obligations of Salomon Brothers Inc and Morgan
Stanley & Co. Incorporated. Your obligations to purchase the Pass Through
Certificates shall be subject to the accuracy of the representations and
warranties on the part of Union contained herein as of the Execution
Time and the Closing Date, to the accuracy of the statements of Union made in
any certificates delivered pursuant to the provisions hereof, to the
performance by Union of its obligations hereunder and to the following
additional conditions:
(a) The Registration Statement shall have become effective not later
than (i) 5:00 p.m., New York City time, on the date of determination of
the public offering price, if such determination occurred at or prior to
3:00 p.m., New York City time, on such date or (ii) 12:00 noon, New York
City time, on the business day following the day on which the public
offering price was determined, if such determination occurred after 3:00
p.m., New York City time, on such date; if filing of the Prospectus, or
any supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in the manner and
within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have
issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) Union shall have furnished to you and to Moody's Investors
Service, Inc. and Standard and Poor's Corporation (together, the "Rating
Agencies"), if requested by you, the opinion of Neal, Gerber & Eisenberg,
special counsel to Union (incorporating and relying upon the opinions of
_______, special Canadian counsel to Union, as to Canadian law matters,
and _______, special STB counsel to Union, as to STB matters), dated the
Closing Date, in form reasonably satisfactory to you and to Mayer, Brown &
Platt, special counsel of the Underwriters, to the effect that:
- 10 -
<PAGE> 11
(i) Each of Union and its Significant Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized,
with full corporate power and authority to own its properties and conduct
its business as described in the Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business, except in such
jurisdictions in which the failure to so qualify would not have a material
adverse effect on Union and its subsidiaries, taken as a whole.
(ii) Union has the corporate power and authority under the laws of
the jurisdiction in which it is organized to perform its obligations
hereunder and under the Participation Agreement, the Pass Through Trust
Agreements, the Equipment Trust Agreement, the Lease and the other
Operative Agreements to which Union is, or is to be, a party;
(iii) subject to the limitations and qualifications set forth in
clause (xvi) of this Section 6(b), assuming that the Pass Through
Certificates have been duly authorized and validly executed,
authenticated, issued and delivered by the Pass Through Trustee pursuant
to the Pass Through Trust Agreements, the holders of
such Pass Through Certificates are entitled to the benefits of the Pass
Through Trust Agreements;
(iv) the Pass Through Certificates conform in all material respects
to the description thereof contained in the Prospectus, and such
description conforms in all material respects to the rights set forth in
the instruments defining the same;
(v) no authorization, approval, consent, order or license of or
filing with or notice to any government, governmental instrumentality,
regulatory body or authority or court is required for the valid
authorization, execution, delivery and performance by the Companies of
this Agreement, the Participation Agreement, the Pass Through Trust
Agreements, the Equipment
- 11 -
<PAGE> 12
Trust Agreement, the Lease and the other Operative Agreements to which
Union is, or is to be, a party, or the consummation by Union of the
transactions contemplated by this Agreement, the Participation Agreement,
the Pass Through Trust Agreements, the Equipment Trust Agreement, the
Lease and the other Operative Agreements to which Union is, or is to be, a
party, except (w)such as are required under the Act, the Trust Indenture
Act and the securities or Blue Sky laws of the various states, (x)such
filings, recordings or registrations with the STB and under Section 90 of
the Railway Act (Canada) as may be required, (y)the filing of Uniform
Commercial Code financing statements in various jurisdictions and the
filing of continuation statements with respect thereto required to be filed
at periodic intervals under the Uniform Commercial Code and (z)such other
filings, recordings or registrations as may be required under the Operative
Agreements;
(vi) to the best knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving Union or any
of its subsidiaries, of a character required to be disclosed in the
Registration Statement or the Prospectus which is not adequately disclosed,
and there is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectus, or to
be filed as an exhibit, which is not described or filed as required;
(vii) the Registration Statement has become effective under the Act;
any required filing of the Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); the Pass Through Trust Agreements have
become qualified under the Trust Indenture Act; to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued, no proceedings for that purpose have been
instituted or threatened, and the Registration Statement, the Prospectus
and each amendment thereof or supplement thereto (other than the financial
statements and related schedules and other financial and statistical
information, including the notes thereto, included or incorporated by
reference therein as to which such counsel need express no opinion) comply
as to form in all material respects with the applicable requirements of the
Act and the Exchange Act and the respective rules and regulations
thereunder; the Pass Through Trust Agreements and the Statement of
Eligibility and Qualification of the Pass Through Trustee on Form T-1
comply as to form in all material respects with the requirements of the
Trust Indenture Act and the rules and regulations thereunder; and each
document filed pursuant to the Exchange Act and incorporated by reference
in the Prospectus
- 12 -
<PAGE> 13
(except for the financial statements, including the notes thereto, and
related schedules and other financial and statistical information included
or incorporated by reference therein, as to which such counsel need express
no opinion) appeared on its face, as of its respective filing date, to
comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder;
(viii) title to the equipment to be subjected to the Lease will, when
such equipment shall have been transferred to the Owner Trustee as
provided in the Participation Agreement, be validly vested in the Owner
Trustee, subject to no liens or encumbrances of record at the STB;
(ix) other than rights of Union under the Equipment Trust
Agreement, title to the equipment to be subjected to the Equipment Trust
Agreement will, when such equipment shall have been transferred to the
Equipment Trust Trustee as provided in the Equipment Trust Agreement, be
validly vested in the Equipment Trust Trustee; the Equipment Trust
Agreement has been duly filed and recorded with the STB and the Registrar
General of Canada and such equipment is subject to no liens or encumbrances
of record at the STB and the Registrar General of Canada;
(x) this Agreement, the Pass Through Trust Agreements, the
Participation Agreement, the Equipment Trust Agreement, the Lease, and all
the other Operative Agreements to which Union is, or is to be, a party have
been duly authorized and, on the Closing Date, assuming due authorization,
execution and delivery by the parties thereto other than Union, upon
execution and delivery by Union will be valid and binding obligations of
Union, enforceable against Union in accordance with their respective
terms, except (i)as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting enforcement of
creditors' rights generally and by general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law), (ii)in the case of the Lease, as limited by applicable laws
which may affect the remedies provided in the Lease, which laws, however,
do not in such counsel's opinion make the remedies provided in the Lease
inadequate for the practical realization of the rights and benefits
provided thereby and (iii)in the case of this Agreement, as to provisions
relating to indemnification or contribution for liabilities arising under
the Act, as to which such counsel need express no opinion;
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<PAGE> 14
(xi) the Pass Through Trust Agreements, the Equipment Notes, the
ETCs, the Indenture, the Participation Agreement, the Equipment Trust
Agreement, the Lease and the other Operative Agreements (to the extent
described therein) conform in all material respects to the descriptions
thereof contained in the Prospectus;
(xii) the execution and delivery by Union of this Agreement, the
Participation Agreement, the Pass Through Trust Agreements, the Equipment
Trust Agreement, the Lease and the other Operative Agreements to which
Union is to be, a party, the consummation by Union of the transactions
herein and therein contemplated and in the manner herein and therein
contemplated and compliance by Union with the terms hereof and thereof, do
not and will not conflict with, or result in a breach by Union of, any of
the terms or provisions of, or constitute a default under, any material
indenture or other agreement or instrument known to such counsel to which
Union is a party or by which Union is bound, or any law, rule, regulation,
judgment or order known to such counsel to be applicable to Union of any
court, regulatory body, administrative agency, government or governmental
body having jurisdiction over Union, except that such counsel need express
no opinion or belief as to the accuracy or completeness of the
Registration Statement or Prospectus except for the opinions expressed in
clauses (iv), (xi), and (xiii) (except that such counsel need not express
any opinion as to any violation of any such law, rule or regulation,
judgment or order (a)which does not materially affect the validity of the
Equipment Notes, the ETCs or the Pass Through Certificates or (b)which
reflects conclusions based on misrepresentations to, concealment of
information from or other fraudulent acts perpetrated on such counsel);
(xiii) the statements in the Registration Statement and Prospectus
under the headings "Material Federal Income Tax Consequences", "Certain
Illinois Taxes", "ERISA Considerations" and "_____", to the extent that
they constitute matters of law or legal conclusions with respect thereto,
have been prepared or reviewed by such counsel and are correct in all
material respects;
(xiv) Union is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(xv) on the Closing Date, assuming due authorization, execution,
issuance and delivery of the ETCs by the Equipment Trust Trustee as
contemplated by the Equipment Trust Agreement, and assuming due
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<PAGE> 15
authorization, execution, issuance and delivery of the Equipment Notes by
the Owner Trustee as contemplated by the Indenture, and due authentication
of such ETCs by the Equipment Trust Trustee and of such Equipment Notes by
the Indenture Trustee, each of the ETCs and the Equipment Notes when issued
will constitute valid and binding obligations of the Equipment Trust
Trustee and the Owner Trustee, respectively, enforceable against the
Equipment Trust Trustee and the Owner Trustee, respectively, in accordance
with their terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting enforcement of
creditors' rights generally and by general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law);
and the holders of the ETCs will be entitled to the benefits of the
Equipment Trust Agreement, and the holders of the Equipment Notes will be
entitled to the benefits of the Indenture;
(xvi) assuming due authorization, execution and delivery of the
Pass Through Trust Agreements by the Pass Through Trustee, each of the
Pass Through Trust Agreements constitutes the valid and binding obligation
of Union enforceable in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting enforcement of creditors' rights generally and by
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law);
(xvii) neither trust created by the Pass Through Trust Agreements
will be classified as an association taxable as a corporation for federal
income tax purposes, but rather, each will be classified as a grantor
trust under subpart E, Part I of Subchapter J of the Internal Revenue Code
of 1986, as amended (the "Code"), and each Certificate Owner will be
treated as the owner of a pro rata undivided interest in each of the ETCs
and Equipment Notes, as the case may be, and any other property held in
such Pass Through Trusts;
(xviii) although counsel is not aware of any judicial authority, the
Pass Through Trusts are not required to be registered under the Investment
Company Act of 1940, as amended;
(xix) assuming due authorization, execution and delivery of the
Indenture by the parties thereto, the Indenture will subject the Indenture
Estate covered by the Indenture to the security interests created thereby;
(xx) there are no taxes, fees or other governmental charges payable
under the laws of the State of Illinois or any political subdivision
thereof in
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<PAGE> 16
connection with the execution and delivery by the Pass Through Trustee, in
its individual capacity or as Pass Through Trustee, the Equipment Trust
Trustee or Indenture Trustee, as the case may be, of the Participation
Agreement, the Pass Through Trust Agreements, the Equipment Trust
Agreement and the Operative Agreements, as the case may be, or in
connection with the issuance, execution, authentication and delivery of the
Pass Through Certificates by the Pass Through Trustee pursuant to the Pass
Through Trust Agreements or the issuance, authentication or delivery of the
ETCs and the Equipment Notes;
(xxi) Except to the extent the Indenture Trustee forecloses on the
Equipment and any of the Equipment is located in Illinois or the Equipment
Trust Trustee forecloses on the Trust Equipment and any of the Trust
Equipment is located in the State of Illinois or to the extent the
Indenture Estate, the trust created by the Equipment Trust Agreement or the
trusts created by the Pass Through Trust Agreements, as applicable, engages
in business in Illinois as a result of such foreclosure:
(I) neither the trusts created by the Pass Through Trust Agreements,
the Equipment Trust Agreement, the Indenture Estate nor the Pass Through
Trustee (either in its individual capacity or as Pass Through Trustee),
nor their respective affiliates, successors or assigns, will be subject to
any tax (including, without limitation, net or gross income, tangible or
intangible property, net worth, capital, franchise or doing business tax),
fee or other governmental charge under the laws of the State of Illinois
or any political subdivision thereof (other than taxes imposed on the fees
received by the Pass Through Trustee for acting as Pass Through Trustee
under the Pass Through Trust Agreements).
(II) Certificate Owners who are not residents of or otherwise subject
to tax in the State of Illinois will not be subject to any tax (including,
without limitation, net or gross income, tangible or intangible property,
net worth, capital, franchise or doing business tax), fee or other
governmental charge under the laws of the State of Illinois or any
political subdivision thereof as a result of purchasing, holding
(including receiving payments with respect to) or selling a Certificate.
(III) There are no applicable taxes under the laws of the State of
Illinois or any political subdivision thereof upon or with respect to
(a)the construction, mortgaging, financing, refinancing, purchase,
acquisition, acceptance, rejection, delivery, nondelivery, transport,
location, ownership, insurance, control, assembly, possession,
repossession, operation, use,
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<PAGE> 17
condition, maintenance, repair, sale, return, abandonment, replacement,
preparation, installation, storage, redelivery, manufacture, leasing,
subleasing, modification, rebuilding, importation, transfer of title,
transfer of registration, exportation or other application or disposition
of the Equipment or any interest in any thereof, (b)payments of Rent or the
receipts, income or earnings arising therefrom or received with respect to
the Equipment or any interest in any thereof or payable pursuant to the
Lease, (c)any amount paid or payable pursuant to any Operative Agreement,
(d)the Equipment or any interest therein or the applicability of the Lease
to the Equipment or any interest thereof, (e)any or all of the Operative
Agreements, any or all of the ETCs or the Equipment Notes or any interest
in any or all thereof or the offering, registration, reregistration,
issuance, acquisition, modification, assumption, reissuance, refinancing or
refunding or any or all thereof, and any other documents contemplated
hereby or thereby and amendments and supplements hereto and thereto, (f)the
payment of the principal of, or interest or premium on, or other amounts
payable with respect to, any or all of the ETCs or the Equipment Notes,
whether as originally issued or pursuant to any refinancing, refunding,
assumption, modification, or reissuance, or any other obligation evidencing
any loan in replacement of the loan evidenced by any or all of the ETCs or
the Equipment Notes, (g)the property, or the income, earnings, receipts or
other proceeds received with respect to the property, held by the Indenture
Trustee under the Indenture or held by the Equipment Trust Trustee under
the Equipment Trust Agreement or (h)otherwise with respect to
or in connection with the transactions contemplated by the Operative
Agreements, which would not have been imposed if the Indenture Trustee or
the Equipment Trust Trustee had not had their principal place of business
in, had not performed (either in its individual capacity or as Indenture
Trustee) any or all of their administrative duties under the Operative
Agreements in, and had not engaged in any activities unrelated to the
transactions contemplated by the Operative Agreements in, the State of
Illinois; and
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<PAGE> 18
(xxii) the Union Equipment Trust Agreement cannot be terminated by
Union so long as the Union ETC is outstanding.
In passing on the form of the Registration Statement and the Prospectus and each
amendment and supplement thereof, such counsel may state that it has not
independently verified the accuracy, completeness or fairness of the statements
made or included therein and takes no responsibility therefor and that such
opinion is based upon such counsel's examination of the Registration Statement,
the Prospectus as amended or supplemented, its activities in connection with the
preparation thereof and its participation in conferences with certain officers
and employees of Union and its subsidiaries and with representatives of Ernst &
Young and any others referred to in such opinion, and subject to the same
qualifications, such counsel may also state that, although they are not passing
upon, and do not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectus and have not made any independent check or verification thereof,
nothing has come to their attention in their examination of the Registration
Statement, their participation in the preparation thereof and participation in
the above-referenced conferences that has caused them to believe that the
Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
the Prospectus, as of its date and as of the Closing Date, contained an untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. In rendering such opinion, such counsel may state
that it expresses no opinion as to the laws of any jurisdiction other than the
State of Illinois, the General Corporation Law of the State of Delaware and the
Federal law of the United States of America and may rely (A)as to matters
involving the application of (x)laws of Canada or its Provinces and (y)laws,
rules and regulations with respect to the STB to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel of good standing
whom such counsel believes to be reliable and who are satisfactory to you and
your counsel; and (B)as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of the Company and public officials, and
may assume for purposes of its opinion with respect to this Agreement set forth
in Section 6(b)(xi) that the laws of the State of New York are identical to the
laws of the State of Illinois.
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<PAGE> 19
(c) You shall have received from ___________, counsel for ____,
individually, as Pass Through Trustee, Equipment Trust Trustee and
Indenture Trustee, an opinion, dated the Closing Date, in form and
substance reasonably satisfactory to you and Mayer, Brown & Platt,
your special counsel to the effect that:
(i) The ________ is an Illinois banking corporation
validly existing and holding a valid certificate to do
business as an Illinois banking corporation with trust powers,
and, in its individual capacity or as Pass Through Trustee,
Equipment Trust Trustee or Indenture Trustee, as the case may
be, has full corporate power and authority to execute, deliver
and carry out the terms of the Indenture, the Equipment Trust
Agreement, the Participation Agreement, the Pass Through Trust
Agreements and the other Operative Agreements to which it is a
party;
(ii) The ___________ (in its individual capacity, to the
extent provided therein), the Pass Through Trustee, the
Equipment Trust Trustee or the Indenture Trustee, as the case
may be, has duly authorized, executed and delivered the
Indenture, the Participation Agreement, the Equipment Trust
Agreements, the Pass Through Trust Agreement and the other
Operative Agreements
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<PAGE> 20
to which it is a party and each of such agreements constitutes the
valid and binding obligations of ____________ (in its individual capacity,
to the extent provided therein), the Pass Through Trustee, the
Equipment Trust Trustee or the Indenture Trustee, as the case may be,
enforceable against __________ (in its individual capacity, to the extent
provided therein), the Pass Through Trustee, the Equipment Trust Trustee
or the Indenture Trustee, as the case may be, in accordance with their
respective terms, except as limited by bankruptcy, insolvency, moratorium
reorganization, receivership, fraudulent conveyance or other similar laws
affecting enforcement of creditors' rights generally, and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law);
(iii) the Pass Through Certificates have been duly authorized and
validly executed, authenticated, issued and delivered by the Pass Through
Trustee pursuant to the Pass Through Trust Agreements; and the holders of
the Pass Through Certificates are entitled to the benefits of the Pass
Through Trust Agreements;
(iv) the authorization, execution, delivery and performance by
________ (in its individual capacity, to the extent provided therein), the
Pass Through Trustee, the Equipment Trust Trustee or the Indenture
Trustee, as the case may be, of the Indenture, the Participation
Agreement, the Equipment Trust Agreement, the Pass Through Trust
Agreements and the other Operative Agreements to which it is or will be
party and the consummation of the transactions therein contemplated and
compliance with the terms thereof and issuance of the Pass Through
Certificates thereunder do not and will not result in the violation of the
provisions of the Articles of Association or By-Laws of _____________, and
do not and will not conflict with, or result in a breach of any terms or
provisions of, or constitute a default under, or result in the creation or
the imposition of any lien, charge or encumbrance upon any property or
assets of ____________, the Pass Through Trustee, the Equipment Trust
Trustee or the Indenture Trustee, as the case may be, under any indenture,
mortgage or other agreement or instrument known to such counsel to which
the Pass Through Trustee, the Equipment Trust Trustee or the Indenture
Trustee, as the case may be, is a party or by which it or any of its
property is bound, or any Illinois or Federal law, rule or regulation
governing ______________, the Pass Through Trustee's, the Equipment Trust
Trustee's or the Indenture Trustee's banking or trust powers, or of any
judgment, order of decree known to such counsel to be applicable to
____________, the Pass Through Trustee, the Equipment Trust Trustee or the
Indenture Trustee, as the case may be, of any court, regulatory body,
administrative agency, government or governmental body having jurisdiction
over ______________, the Pass
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<PAGE> 21
Through Trustee, the Equipment Trust Trustee or the Indenture Trustee
or its respective properties;
(v) no authorization, approval, consent, license or order of,
giving of notice to, registration with, or taking of any other action
in respect of, any Federal or state governmental authority or agency
pursuant to any Federal or Illinois law governing the banking or trust
powers of __________, the Pass Through Trustee, the Equipment Trust
Trustee or the Indenture Trustee is required for the authorization,
execution, delivery and performance by _____________, (in its
individual capacity, to the extent provided therein), the Pass Through
Trustee, the Equipment Trust Trustee or the Indenture Trustee of the
Indenture, the Participation Agreement, the Equipment Trust
Agreement, the Pass Through Trust Agreement and the other Operative
Agreements to which it is or will be a party or the consummation of
any of the transactions by the Pass Through Trustee, the Equipment
Trust Trustee or Indenture Trustee contemplated thereby or the
issuance of the Pass Through Certificates under the Pass Through Trust
Agreements (except as shall have been duly obtained, given or taken);
and such authorization, execution, delivery, performance, consummation
and issuance do not conflict with or result in a breach of the
provisions of any such law.
In giving such opinion, __________, counsel for ________ (A) may state that no
opinion is expressed as to laws other than the laws of the State of Illinois
and the Federal law of the United States of America, (B)may assume as to the
opinions expressed in clause (ii) relating to any of the Operative Agreements,
insofar as they involve matters relating to the laws of any jurisdiction other
than Illinois, that such Operative Agreements constitute legal, valid and
binding instruments under such laws and (C)may include such other reasonable
assumptions as are customary in legal opinions delivered in connection with
transactions of this type.
(d) You shall have received from Mayer, Brown & Platt, your special
counsel, such opinion or opinions, dated the Closing Date, with respect to
the issuance and sale of the Pass Through Certificates, the Pass
Through Trust Agreements, the Registration Statement, the Prospectus and
other related matters as you may reasonably require, and the Companies
shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(e) You shall have been furnished with a certificate of Union, signed
by the President or any Vice President and the principal financial
officer of Union, dated the Closing Date, to the effect that the signers
of such certificate have carefully examined the Registration Statement,
the Prospectus and this Agreement and that:
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<PAGE> 22
(i) the representations and warranties of Union in this Agreement
are true and correct in all material respects on and as of the Closing
Date with the same effect as if made on the Closing Date and Union has
complied with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and, to Union's knowledge, no proceedings for
that purpose have been instituted or threatened; and
(iii) since the date of the most recent financial statements
incorporated by reference in the Prospectus, there has been no material
adverse change in the condition (financial or other), earnings, business
or properties of Union and its subsidiaries, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Prospectus.
(f) The representations and warranties of Union contained in the
Equipment Trust Agreement, the Participation Agreement, the Lease and
the other Operative Agreements to which it is a party shall be true and correct
in all material respects on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of such
date, and Union shall have delivered to you a certificate, dated the Closing
Date, signed by its President or any Vice President and its principal financial
or accounting officer to the effect that the signers of such certificate have
carefully examined the Equipment Trust Agreement the Participation Agreement,
the Lease and the other Operative Agreements to which it is a party, the
Registration Statement, the Preliminary Prospectus and the Prospectus and that:
(i) the representations and warranties of Union in the Equipment
Trust Agreement, Participation Agreement, the Lease and the other
Operative Agreements to which it is a party are true and correct in all
material respects on and as of the Closing Date as if made on and as of
the Closing Date;
(ii) Union has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied on or prior to
the Closing Date pursuant to the terms of the Equipment Trust Agreements,
the Participation Agreement, the Lease and other Operative Agreements to
which it is a party; and
(iii) nothing has come to the attention of such person that would
lead him or her to believe that the Registration Statement contains any
untrue
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<PAGE> 23
statement of material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(g) At the Execution Time and at the Closing Date, Ernst & Young shall
have furnished to you a letter or letters, dated, respectively, as of the
Execution Time and as of the Closing Date, in form and substance satisfactory
to you, confirming that:
(i) they are independent auditors within the meaning of the Act and
the applicable published rules and regulations thereunder and stating in
effect that in their opinion the audited consolidated financial statements
and schedules thereto incorporated by reference in the Registration
Statement and the Prospectus and reported on by them comply as to form in
all material respects with the applicable accounting requirements of the
Act and the applicable published rules and regulations thereunder with
respect to registration statements on Form S-3; and that nothing came to
their attention which caused them to believe that the amounts under the
caption "Selected Financial Information" for each of the five years ended
________ incorporated by reference in the Registration Statement, do not
agree with the corresponding amounts in the audited financial statements
from which such amounts were derived; and as to the periods for which it
served as Union's independent auditor, such financial statements were
covered by unqualified reports issued by them; and
(ii) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
Union) set forth in the Registration Statement and the Prospectus,
including the information set forth under the captions "Selected Financial
Information", and in Exhibit 12 to the Registration Statement agrees
with the accounting records and schedules of the Company and its
subsidiaries, excluding any questions of legal interpretation.
(h) In addition, Ernst & Young shall have furnished to you a letter or
letters, dated, respectively, as of the Execution Time and as of the Closing
Date, in form and substance satisfactory to you, to the effect that on the
basis of a reading of the unaudited condensed financial statements of Union
contained in Union's Quarterly Reports on Form 10-Q for the quarter ended
_______ incorporated by reference in the Registration Statement, the amounts
set forth under the caption "Selected Financial Information" incorporated by
reference in the Registration Statement and the Prospectus and of the latest
unaudited consolidated financial statements made available to them by Union
and its subsidiaries; carrying out certain specified procedures (but
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<PAGE> 24
not an audit in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the meetings of
the stockholders, directors and executive committees of Union and its
subsidiaries; and inquiries of certain officials of Union who have
responsibility for financial and accounting matters of Union and its
subsidiaries as to transactions and events subsequent to _______ nothing came
to their attention which caused them to believe that (A) the unaudited
consolidated financial statements of Union incorporated by reference in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the Exchange Act and the
rules and regulations thereunder as they apply to Form 10-Q or are not
presented in conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited consolidated
financial statements of Union incorporated by reference in the Registration
Statement, and (B)with respect to the period subsequent to __________, there
were any changes, at a specified date not more than five business days prior to
the date of the letter, in the borrowed debt of Union and its subsidiaries or
capital stock of Union or decreases in the stockholder's equity of Union and
its subsidiaries as compared with the amounts shown on the __________,
unaudited consolidated balance sheet data included in "Selected Financial
Information" incorporated by reference in the Registration Statement and the
Prospectus, or for the period from _________ to such specified date, there were
any decreases, as compared with the corresponding period in the preceding year,
in total revenues from net sales and services, or in income before income taxes
or net income, of Union and its subsidiaries, except in all instances for
changes or decreases set forth in such letter, in which case the letter shall
be accompanied by an explanation by Union as to the significance thereof unless
said explanation is not deemed necessary by you.
References to the Prospectus in paragraphs (g) and (h) include any supplement
thereto at the date of the letter.
(i) Subsequent to the Execution Time or, if earlier, the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there shall not have been (i)any change or decrease specified in
the letters referred to in paragraphs (f) and (g) of this Section 6 or (ii)any
change, or any development involving a prospective change, in or affecting the
business or properties of Union and its subsidiaries taken as a whole the
effect of which, in any case referred to in clause (i) or (ii) above, is, in
your judgment, so material and adverse as to make it impractical or inadvisable
to proceed with the public offering or the delivery of the Pass Through
Certificates as contemplated by the Registration Statement and the Prospectus.
(k) Subsequent to the Execution Time and prior to the Closing Date, there
shall not have occurred any downgrading, nor shall any notice have been given
of (i)any intended or potential downgrading or (ii)any review or possible
change in the
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<PAGE> 25
rating accorded Union's debt securities by the Rating Agencies as of the
Execution Time.
(k) Prior to the Closing Date, Union shall have furnished to you
and the Rating Agencies such further information, certificates and
documents as you and they may reasonably request.
(l) The Pass Through Certificates shall have received ratings of "A2
senior secured" by Moody's Investors Service, Inc. and "A+" by Standard &
Poor's Corporation.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or
if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to you and your counsel, this Agreement and all your obligations
hereunder may be canceled at, or at any time prior to, the Closing Date by you.
Notice of such cancellation shall be given to Union in writing or by telephone
or telegraph confirmed in writing.
7. Reimbursement of the Underwriters' Expenses. If the sale of the Pass
Through Certificates provided for herein is not consummated because any
condition to your obligation set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 9 hereof or because of any
refusal, inability or failure on the part of Union to perform any agreement
herein or comply with any provision hereof other than by reason of a default by
you, Union will reimburse you upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by you in connection with the proposed purchase and sale of the Pass
Through Certificates.
8. Indemnification and Contribution. (a) Union agrees to indemnify and
hold harmless you and each person who controls you within the meaning of either
the Act or the Exchange Act from and against any and all losses, claims,
damages or liabilities, joint or several, to which you or any of them may
become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Pass Through Certificates as originally filed or in any amendment thereof,
or in any Preliminary Prospectus or the Prospectus, or in any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse you and
each such controlling person for any legal or other expenses reasonably
incurred by you or such controlling person in connection with
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<PAGE> 26
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (i)Union will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to Union by or on behalf of you specifically for
use in connection with the preparation thereof, and (ii)such indemnity with
respect to any Preliminary Prospectus shall not inure to your benefit (or to the
benefit of any person controlling you) if the person asserting any such loss,
claim, damage or liability purchased the Pass Through Certificates which are the
subject thereof did not receive a copy or the Prospectus (or the Prospectus as
amended or supplemented) excluding documents incorporated therein by reference
at or prior to the confirmation of the sale of such Pass Through Certificates to
such person in any case where such delivery is required by the Act and the
untrue statement or omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus (or the Prospectus as amended or
supplemented). This indemnity agreement will be in addition to any liability
which Union may otherwise have.
(b) You severally (and not jointly) agree to indemnify and hold harmless
Union, each of its directors, each of its officers who signs the Registration
Statement, and each person who controls Union within the meaning of either the
Act or the Exchange Act, to the same extent as the foregoing indemnity from
Union to you, but only with reference to written information relating to you
furnished to Union by or on behalf of you specifically for use in the
preparation of the documents referred to in clause (a) of this Section 8. This
indemnity agreement will be in addition to any liability which you may otherwise
have. Union acknowledges that the statements set forth in the last paragraph of
the cover page and under the heading "Underwriting" in any Preliminary
Prospectus and the Prospectus and the stabilization language included on the
inside front cover of any Preliminary Prospectus and the Prospectus constitute
the only information furnished in writing by or on behalf of you for inclusion
in any Preliminary Prospectus or the Prospectus, and you confirm that such
statements are correct.
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
this Section 8, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Section 8. In case any such action is brought against any
indemnified party, and the indemnified party notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to appoint
counsel satisfactory to such indemnified party to represent the indemnified
party in such action; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the
- 26 -
<PAGE> 27
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of the indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by you in the case of subparagraph (a),
representing the indemnified parties under subparagraph (a) who are parties to
such action), (ii)the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii)the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) of
this Section 8 is due in accordance with its terms but is for any reason held
by a court to be unavailable from Union on grounds of policy or otherwise,
Union and you shall contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) to which Union and you may be
subject in such proportion so that each of you are responsible only for that
portion represented by the percentage that the aggregate underwriting
commission in respect of the Pass Through Certificates appearing on the cover
page of the Prospectus attributable to Pass Through Certificates sold by you
bears to the aggregate public offering price in respect of such Pass Through
Certificates appearing thereon and Union is responsible for the balance;
provided, however, that (y)in no case shall you be responsible for any amount in
excess of such respective underwriting commissions and (z)no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls you within the meaning of the Act shall have the same rights to
contribution as you, and each person who controls Union within the
meaning of the Act, each officer of Union who shall have signed the
Registration Statement and each director of Union shall have the same
rights to contribution as Union, subject in each case to clauses (y) and
(z) of this paragraph (d). Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this paragraph (d), notify such party or
parties from whom contribution may be sought, but the omission to so notify
- 27 -
<PAGE> 28
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (d).
9. Termination. This Agreement shall be subject to termination in your
absolute discretion by notice given to Union prior to delivery of and payment
for the Pass Through Certificates, if prior to such time (i) trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (ii) a
banking moratorium shall have been declared either by Federal, New York State or
Illinois State authorities or (iii) there shall have occurred any outbreak or
material escalation of hostilities or other calamity or crisis the effect of
which on the financial markets of the United States is such as to make it, in
your judgment, impracticable to market the Pass Through Certificates.
10. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of Union or its
officers and of you set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of you or Union or any of its officers, directors or controlling persons
referred to in Section 8 hereof, and will survive delivery of and payment for
the Pass Through Certificates. The provisions of Sections 7 and 8 hereof shall
survive the termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to you, will be mailed, delivered or telegraphed
and confirmed in the case of Salomon Brothers Inc at 7 World Trade Center, New
York, New York 10048, Attention: Legal Department; in the case of Morgan
Stanley & Co. Incorporated at 1585 Broadway, New York, New York 10036,
Attention: Legal Department; or, if sent to Union, will be mailed, delivered or
telegraphed and confirmed to it at 225 West Washington Street, Chicago, Illinois
60606, Attention: Secretary.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
<PAGE> 29
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and you.
Very truly yours,
UNION TANK CAR COMPANY
By
------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted as of the
date first written above.
By
------------------------
Name:
Title:
<PAGE> 30
Schedule A
Pass Through Principal Final Distribution
Certificate Amount Interest Rates Dates
<PAGE> 31
Schedule B
Pass Through Certificate Pass Through Certificate
Series _____ Series ______
Aggregate Principal Aggregate Principal
Amount Amount
------------------------ ------------------------
Total
<PAGE> 1
PASS THROUGH TRUST AGREEMENT _____
Dated _________
among
UNION TANK CAR COMPANY
and
HARRIS TRUST AND SAVINGS BANK,
as Pass Through Trustee
$________
______________
_______ Pass Through Trust
Pass Through Certificates,
Series _______
<PAGE> 2
TABLE OF CONTENTS TO PASS THROUGH TRUST AGREEMENT _____
<TABLE>
<CAPTION>
Section Page
- ------- ----
ARTICLE I
DEFINITIONS
<S> <C> <C>
SECTION 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.2. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . 12
SECTION 1.3. Form of Documents Delivered to Pass Through Trustee . . . . . . . . . 13
SECTION 1.4. Acts of Certificateholders. . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE II
ACQUISITION OF EQUIPMENT NOTES AND ETCs;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.1. Issuance of Certificates; Acquisition of Equipment Notes and ETCs . . 15
SECTION 2.2. Declaration of Trust; Acceptance By Pass Through Trustee . . . . . . . 18
SECTION 2.3. Limitation of Powers . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.4. Sale of Equipment Notes Under Certain Circumstances . . . . . . . . . 18
ARTICLE III
THE CERTIFICATES
SECTION 3.1. Form, Denomination and Execution of Certificates . . . . . . . . . . . 19
SECTION 3.2. Authentication of Certificates . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.3. Temporary Certificates . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.4. Registration of Transfer and Exchange of Certificates . . . . . . . . 20
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . . . 21
SECTION 3.6. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.7. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.8. Limitation of Liability for Payments . . . . . . . . . . . . . . . . . 22
SECTION 3.9. Book-Entry and Registered Certificates . . . . . . . . . . . . . . . . 22
</TABLE>
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
-i-
<PAGE> 3
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
SECTION 4.1. Certificate Account and Special Payments Account . . . . . . . . . . . 24
SECTION 4.2. Distribution from Certificate Account and Special Payments Account . . 25
SECTION 4.3. Statements to Certificateholders . . . . . . . . . . . . . . . . . . . 27
SECTION 4.4. Investment of Special Payment Money . . . . . . . . . . . . . . . . . 27
ARTICLE V
THE COMPANY
SECTION 5.1. Maintenance of Corporate Existence . . . . . . . . . . . . . . . . . . 28
SECTION 5.2. Consolidation, Merger or Sale of Assets Permitted . . . . . . . . . . 28
ARTICLE VI
DEFAULT
SECTION 6.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 6.2. Incidents of Sale of Equipment Notes and ETCs . . . . . . . . . . . . 30
SECTION 6.3. Judicial Proceedings Instituted by Pass Through Trustee . . . . . . . 31
SECTION 6.4. Control by Certificateholders . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.5. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.6. Undertaking to Pay Court Costs . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.7. Right of Certificateholders to Receive Payments Not to Be Impaired . . 33
SECTION 6.8. Certificateholders May Not Bring Suit Except Under Certain
Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.9. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VII
THE PASS THROUGH TRUSTEE
SECTION 7.1. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . 34
SECTION 7.2. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.3. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.4. Not Responsible for Recitals or Issuance of Certificates . . . . . . . 37
SECTION 7.5. May Hold Certificates . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.6. Money Held in Pass Through Trust . . . . . . . . . . . . . . . . . . . 37
SECTION 7.7. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . 38
SECTION 7.8. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . 39
SECTION 7.9. Resignation and Removal; Appointment of Successor . . . . . . . . . . 40
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
SECTION 7.10. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . 41
SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business. . . . . 42
SECTION 7.12. Maintenance of Agencies . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.13. Money for Certificate Payments to Be Held in Pass Through Trust . . 44
SECTION 7.14. Registration of Equipment Notes and ETCs in Pass Through
Trustee's Name . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.15. Representations and Warranties of Pass Through Trustee . . . . . . . 45
SECTION 7.16. Withholding Taxes; Information Reporting . . . . . . . . . . . . . . 45
SECTION 7.17. Trustee's Liens . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 7.18. Preferential Collection of Claims . . . . . . . . . . . . . . . . . 46
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY PASS THROUGH TRUSTEE
SECTION 8.1. The Company to Furnish Pass Through Trustee with Names and
Addresses of Certificateholders. . . . . . . . . . . . . . . . . . 46
SECTION 8.2. Preservation of Information; Communications to Certificateholders . 47
SECTION 8.3. Reports by Pass Through Trustee . . . . . . . . . . . . . . . . . . 47
SECTION 8.4. Reports by the Company . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE IX
SUPPLEMENTS TO PASS THROUGH TRUST AGREEMENT
SECTION 9.1. Supplements to Pass Through Trust Agreement Without Consent of
Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.2. Supplements to Pass Through Trust Agreement with Consent of
Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 9.3. Documents Affecting Immunity or Indemnity . . . . . . . . . . . . . 50
SECTION 9.4. Execution of Supplements to Pass Through Trust Agreements . . . . . 50
SECTION 9.5. Effect of Supplements to Pass Through Trust Agreement . . . . . . . 50
SECTION 9.6. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . 50
SECTION 9.7. Reference in Certificates to Supplements to Pass Through Trust
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<CAPTION>
Section Page
- ------- ----
ARTICLE X
AMENDMENTS TO INDENTURE, NOTE DOCUMENTS,
EQUIPMENT TRUST AGREEMENTS AND ETC DOCUMENTS
ARTICLE XI
TERMINATION OF PASS THROUGH TRUST
ARTICLE XII
MISCELLANEOUS PROVISIONS
<S> <C> <C>
SECTION 12.1. Limitation on Rights of Certificateholders . . . . . . . . . . . . . . 52
SECTION 12.2. Certificates Nonassessable and Fully Paid . . . . . . . . . . . . . . 52
SECTION 12.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 12.4. Communication by Certificateholder with Other Certificateholders . . . 54
SECTION 12.5. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 12.6. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 12.7. Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . 54
SECTION 12.8. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . 55
SECTION 12.9. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 12.10. Benefits of Pass Through Trust Agreement . . . . . . . . . . . . . . . 55
SECTION 12.11. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 12.12. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
</TABLE>
<TABLE>
<S> <C> <C>
Exhibit A - Form of Certificate
Exhibit B - Guarantee
Exhibit C - Form of DTC Letter of Representations
Schedule I - Description of Equipment Notes to be Issued under the Indenture
Schedule II - Description of ETCs to be Issued under Equipment Trust Agreements
</TABLE>
-iv-
<PAGE> 6
This PASS THROUGH TRUST AGREEMENT _______, dated __________, is made
with respect to the formation of the Union Tank Car Company ______ Pass Through
Trust, among UNION TANK CAR COMPANY, a Delaware corporation ("Union") and
HARRIS TRUST AND SAVINGS BANK, an Illinois banking corporation, solely as Pass
Through Trustee and not in its individual capacity.
WITNESSETH:
[WHEREAS, a $_______ aggregate principal amount Equipment Trust
Certificate, Series ___ (together with the guarantee of Union to be endorsed
thereon, the "Union ETCs"), will be issued pursuant to an Equipment Trust
Agreement, dated ______ as may be amended or supplemented from time to time
(the "Union Equipment Trust Agreement"), between Union and ___________, as
trustee (the "Union Equipment Trust Trustee");]
[WHEREAS, the Union Equipment Trust Trustee will issue the Union ETCs
in connection with the financing of railway tank cars and other rail cars of
the type used in Union's business (the "Union Trust Equipment");
[WHEREAS, pursuant to the terms of this Pass Through Trust Agreement,
the Union Equipment Trust Agreement, the Union ETCs are to be sold upon their
issuance to the Pass Through Trustee, and the Pass Through Trustee shall
purchase the ETCs upon their issuance and shall hold such ETCs in trust for the
benefit of the Certificateholders;]
WHEREAS, a certain Owner Trustee, on behalf of a certain Owner
Participant, will purchase certain Equipment (as defined) from Union;
WHEREAS, the Owner Trustee will lease the Equipment to Union pursuant
to the Lease;
WHEREAS, such Owner Trustee will issue on a nonrecourse basis
Equipment Notes, under the Indenture, in order to finance not more than 80% of
the purchase price to be paid to Union for the Equipment subject to the Lease;
WHEREAS, pursuant to the terms and conditions of this Pass Through
Trust Agreement and the Participation Agreement, such agreements to be entered
into by the Pass Through Trustee contemporaneously with the execution and
delivery of this Pass Through Trust Agreement, certain Equipment Notes are to
be sold, from time to time, to the Pass Through Trustee, and the Pass Through
Trustee shall purchase, from time to time, such Equipment Notes and shall hold
such Equipment Notes in trust for the benefit of the Certificateholders;
<PAGE> 7
WHEREAS, the Pass Through Trustee, upon execution and delivery of this
Pass Through Trust Agreement, hereby declares the creation of this Pass Through
Trust for the benefit of the Certificateholders, and the initial
Certificateholders as the grantors of the Pass Through Trust, by their
respective acceptances of the Certificates, join in the creation of this Pass
Through Trust with the Pass Through Trustee;
WHEREAS, to facilitate the sale of the [ETCs] [and] [certain Equipment
Notes] to the Pass Through Trustee and the purchase of such [ETCs] [and]
[Equipment Notes] by the Pass Through Trustee, Union has duly authorized the
execution and delivery of this Pass Through Trust Agreement as an "issuer", as
such term is defined in and solely for purposes of the Securities Act of 1933,
as amended, of the Certificates being issued hereunder and as an "obligor", as
such term is defined in and solely for purposes of the Trust Indenture Act of
1939, as amended, with respect to the Certificates and is undertaking to
perform certain administrative and ministerial duties hereunder and is also
undertaking to pay the fees and expenses of the Pass Through Trustee; and
WHEREAS, this Pass Through Trust Agreement is subject to the
provisions of the Trust Indenture Act of 1939, as amended, and shall, to the
extent applicable, be governed by such provisions;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.
(a) For all purposes of this Pass Through Trust Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(i) the terms used herein that are defined in this Article
have the meanings assigned to them in this Article, and include the
plural as well as the singular;
(ii) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(iii) all references in this Pass Through Trust Agreement to
designated "Articles", "Sections" and other subdivisions are to the
designated Articles, Sections and other subdivisions of this Pass
Through Trust Agreement; and
-2-
<PAGE> 8
(iv) the words "herein", "hereof " and "hereunder" and other
words of similar import refer to this Pass Through Trust Agreement as
a whole and not to any particular Article, Section or other
subdivision.
(b) For all purposes of this Pass Through Trust Agreement, the
following capitalized terms have the following respective meanings:
"Act," with respect to any Certificateholder, has the meaning
specified in Section 1.4.
"Affiliate" of any Person shall mean any other Person which directly
or indirectly controls, or is controlled by, or is under a common control with,
such Person. The term "control", as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Authorized Agent" means any Paying Agent or Registrar.
"Avoidable Tax" has the meaning specified in Section 7.9(e).
"Book-Entry Certificates" means a beneficial interest in the
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 3.9.
"Business Day" means any day other than a Saturday or a Sunday or a
day on which commercial banking institutions or trust company are authorized or
required by law, regulation or executive order to be closed in New York, New
York, Chicago, Illinois or, so long as any Certificate is outstanding, a city
and state in which the respective Corporate Trust Office of the Owner Trustee,
the Pass Through Trustee, the Indenture Trustee, any Equipment Trust Trustee or
Paying Agent is located.
"Certificate" means any one of the certificates executed and
authenticated by the Pass Through Trustee, substantially in the form of Exhibit
A hereto.
"Certificate Account" means the account or accounts created and
maintained pursuant to Section 4.1(a).
"Certificateholder" means the Person in whose name a Certificate is
registered in the Register.
"Certificate Owner" means, when used in Section 3.9, the Person who
owns a Book Entry Certificate.
-3-
<PAGE> 9
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects, directly or indirectly, book-entry transfers and pledges of
securities deposited with the Clearing Agency.
"Closing Date" means _______.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
or, if at any time after the execution of this instrument such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"Company" means Union Tank Car Company, a Delaware corporation, or its
successors in interest pursuant to Section 5.2, or any other obligor with
respect to the Certificates (within the meaning of the Trust Indenture Act).
"Corporate Trust Office" means, with respect to the Pass Through
Trustee, any Equipment Trustee and the Indenture Trustee, the office of such
trustee in the city at which at any particular time its corporate trust
business shall be principally administered.
"De Minimis Certificate" has the meaning specified in Section 3.1.
"Direction" has the meaning specified in Section 1.4(c).
"Equipment" means, with respect to the ETCs, all of the Union Trust
Equipment, and with respect to the Equipment Notes, all of the Units covered by
the Lease; or as the context may require, all of the Equipment covered by the
ETCs and the Equipment Notes.
"Equipment Note" means any one of the Equipment Notes (as defined in
the Indenture) described on Schedule I attached hereto, including any Equipment
Note (as so defined) issued under the Indenture as a replacement or
substitution therefor, held by the Pass Through Trustee.
"Equipment Trust Agreement" means the Union Equipment Trust Agreement
dated ________, as such Equipment Trust Agreement may be amended or
supplemented from time to time in accordance with its terms.
"Equipment Trust Default" means, with respect to either Equipment
Trust Agreement, any Event of Default (as such term is defined in such
Equipment Trust Agreement).
"Equipment Trust Trustee" means the Union Equipment Trust Trustee.
-4-
<PAGE> 10
"ETC" means any one of the Equipment Trust Certificates described in
Schedule II attached hereto, including any ETC (as so defined) issued under the
applicable Equipment Trust Agreement as a replacement or substitution therefor,
held by the Pass Through Trustee.
"ETC Documents", with respect to an ETC, means the applicable
Equipment Trust Agreement.
"Guarantee" means the guarantee of Union set forth in Article XII
hereof and on each of the Certificates.
"Escrow Account" has the meaning specified in Section 2.1(b).
"Escrowed Funds" has the meaning specified in Section 2.1(b).
"Event of Default" means an event described in Section 6.1.
"Fractional Undivided Interest" means the undivided interest in the
Pass Through Trust that is evidenced by an Outstanding Certificate expressed as
a fraction of the total undivided interests in the Pass Through Trust
represented by all Outstanding Certificates.
"Indenture" means the Trust Indenture and Security Agreement (UTC
Trust No. _____) (___), dated _______, between the Owner Trustee and the
Indenture Trustee, as the Indenture may be amended or supplemented from time to
time in accordance with its terms. The term "Indenture" includes each
Indenture Supplement entered into pursuant to the terms of the Indenture.
"Indenture Default" means, with respect to the Indenture, any
Indenture Event of Default (as such term is defined in the Indenture).
"Indenture Trustee" means Harris Trust and Savings Bank, in its
capacity as indenture trustee under the Indenture, and any other Person which
may from time to time be acting as Indenture Trustee in accordance with the
provisions of the Indenture.
"Initial Cut-off Date" means _________.
"Issuance Date" means the date of the issuance of the Certificates.
"Lease" means the Equipment Lease Agreement (UTC Trust No. ______)
(____) with respect to the Equipment between the Owner Trustee, as the lessor,
and Union, as the lessee, as the Lease may be amended or supplemented from time
to time in accordance with its terms. Such term shall include each Lease
Supplement entered into pursuant to the terms of the Lease.
-5-
<PAGE> 11
"Lease Event of Default" means, with respect to the Lease, an Event of
Default under the Lease as specified in Section 14 thereof.
"Lease Supplement" has the meaning assigned to that term in the Lease.
"Letter of Representations" means the agreement among, the Pass
Through Trustee and the initial Clearing Agency substantially in the form
attached hereto as Exhibit C.
"Make-Whole Amount" has the meaning assigned to that term in the
Indenture.
"Note Documents," with respect to any Equipment Note, means the
Indenture, the Lease and the Participation Agreement.
"Officer's Certificate" means a certificate signed, (a) in the case of
the Company, by (i) the Treasurer, any Assistant Treasurer, the Controller or
any Assistant Controller of such Company, signing alone, or (ii) any Vice
President signing together with the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer of such Company, or (b) in the case of the
Owner Trustee, an Equipment Trust Trustee or the Indenture Trustee, a
Responsible Officer of such Owner Trustee, Equipment Trust Trustee or Indenture
Trustee.
"Opinion of Counsel" means a written opinion of legal counsel, who (i)
in the case of counsel for the Company may be (A) a lawyer employed by the
Company, (B) Neal, Gerber & Eisenberg, or (C) such other counsel designated by
the Company and reasonably acceptable to the Pass Through Trustee and (ii) in
the case of the Owner Trustee, any Equipment Trust Trustee or the Indenture
Trustee, such counsel as may be designated by any of them whether or not such
counsel is an employee of any of them, and who shall be acceptable to the Pass
Through Trustee.
"Outstanding," with respect to Certificates, means, as of the date of
determination, all Certificates theretofore authenticated and delivered under
this Pass Through Trust Agreement, except:
(i) Certificates theretofore canceled by the Registrar or
delivered to the Pass Through Trustee or the Registrar for
cancellation;
(ii) Certificates for which money in the full amount required
to make the final distribution payment to be made pursuant to Section
11.1
hereof has been theretofore deposited with the Pass Through
Trustee in trust for the Certificateholders as provided in Section 4.1
pending distribution of such money to the Certificateholders pursuant
to such final distribution payment; and
(iii) Certificates in exchange for or in lieu of which other
Certificates have been authenticated and delivered pursuant to this
Pass Through Trust Agreement.
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"Owner Participant" means the "Owner Participant" referred to in the
Participation Agreement and any permitted successor or assign of any such Owner
Participant.
"Owner Trustee," with respect to any Equipment Note or the Indenture
or the Lease, means _______________, not in its individual capacity but solely
as owner trustee of an owner trust for the benefit of the Owner Participant,
and each other Person which may from time to time be acting as Owner Trustee in
accordance with the provisions of the Note Documents.
"Participation Agreement" means the Participation Agreement (UTC Trust
No. ______) (____), dated _________, and to which the Pass Through Trustee, the
Owner Trustee, the Indenture Trustee, the Owner Participant, and Union are
parties, as the Participation Agreement may be amended or supplemented from
time to time in accordance with its respective terms.
"Pass Through Trust" means the trust created by this Pass Through
Trust Agreement, the estate of which consists of the Trust Property.
"Pass Through Trust Agreement" means this Pass Through Trust
Agreement, as it may be amended from time to time in accordance with the terms
hereof.
"Pass Through Trustee" means the institution executing this Pass
Through Trust Agreement as Pass Through Trustee, or its successor in interest,
and any successor trustee appointed as provided herein.
"Paying Agent" means the paying agent maintained and appointed
pursuant to Section 7.12.
"Permitted Investments" means each of (i) direct obligations of the
United States of America and agencies thereof; (ii) obligations fully
guaranteed by the United States of America; (iii) certificates of deposit
issued by, or bankers' acceptances of, or time deposits with, any bank, trust
company or national banking association incorporated or doing business under
the laws of the United States of America or one of the states thereof having
combined capital and surplus and retained earnings of at least $100,000,000,
having general obligations rated at least A1 by Moody's Investors Service, Inc.
or A+ by Standard & Poor's Corporation (but excluding any new investment as to
which there is a public announcement by the rating agency providing a rating
thereon that such rating is under consideration for a possible downgrade below
A1 or A+, as the case may be), including the Owner Trustee in its individual
capacity or the Indenture Trustee in its individual capacity if such conditions
are met; (iv) commercial paper of any holding company of a bank, trust company
or national banking association described in clause (iii); (v) bearer note
deposits with, or certificates of deposit issued by, or promissory notes of,
any subsidiary incorporated under the laws of Canada (or any province thereof)
of any bank, trust company or national banking association described in clause
(iii); (vi) commercial paper of company having a rating of A-l/P-l or better
assigned to such commercial paper by Standard & Poor's Corporation
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or Moody's Investors Service, Inc. (or, if neither such organization shall
rate such commercial paper at any time, by any nationally recognized rating
organization in the United States of America); (vii) U.S. dollar-denominated
certificates of deposit issued by, or time deposits with, the European
subsidiaries of any bank, trust company or national banking association
described in clause (iii); (viii) Canadian Treasury Bills fully hedged to U.S.
dollars; (ix) bonds, notes or other obligations of any state of the United
States of America, or any political subdivision of any such state, or any
agencies or other instrumentalities of any such state, including, but not
limited to, industrial development bonds, pollution control revenue bonds,
public power bonds, housing bonds, other revenue bonds or any general
obligation bonds; provided that, at the time of their purchase, such
obligations are rated in the highest rating category by Standard & Poor's
Corporation or Moody's Investors Service, Inc. (or, if neither such
organization shall rate such obligations at such time, by any nationally
recognized rating organization in the United States of America); or (x) bonds
or other debt instruments of any company, if such bonds or other debt
instruments, at the time of their purchase, are rated in the highest rating
category by Standard & Poor's Corporation or Moody's Investors Service, Inc.
(or, if neither such organization shall rate such obligations at such time, by
any nationally recognized rating organization in the United States of America);
provided that no investment shall be eligible as and included within the
definition of the term "Permitted Investment" unless either (x) the final
maturity or date of return of such investment is equal to one year or less from
the date of purchase thereof, or (y) in the case of any investment referred to
in the foregoing clause (i) or (ii) only, such investment has a final maturity
or date of return greater than one year from the date of purchase thereof and
closing prices on a national securities exchange or bid and asked prices,
closing prices or yields to maturity for such investment are reported in The
Wall Street Journal (or if The Wall Street Journal is not at the time published
or ceases to report such prices, such prices are reported by any other
publication of nationally recognized standing of general circulation in New
York City).
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization,
or government or any agency or political subdivision thereof.
"Pool Balance" means, as of any date, the aggregate unpaid principal
amount of the ETCs and the Equipment Notes held in the Pass Through Trust on
such date plus the amount of the principal payments on the ETCs and the
Equipment Notes held by the Pass Through Trustee and not yet distributed plus
the amount of any moneys held in the Escrow Account (other than earnings
thereon). The Pool Balance as of any Regular Distribution Date or Special
Distribution Date shall be computed after giving effect to the payment of
principal, if any, on the Equipment Notes held in the Pass Through Trust and
distribution thereof to be made on that date.
"Pool Factor" means, as of any date, the quotient (rounded to the
seventh decimal place) computed by dividing (i) the Pool Balance by (ii) the
aggregate original principal amount of the Certificates issued under the Pass
Through Trust. The Pool Factor as of any Regular Distribution Date or Special
Distribution Date shall be computed after giving effect to the payment of
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principal, if any, on the ETCs and the Equipment Notes held in the Pass Through
Trust and distribution thereof to be made on that date.
"Postponed Notes" means the Equipment Notes or ETCs as to which a
Postponement Notice shall have been delivered pursuant to Section 2.1(b).
"Postponement Notice" means a certificate of Union signed by an
officer of Union (i) requesting that the Pass Through Trustee execute and
deliver the Participation Agreement but temporarily postpone payment of the
purchase price of the Equipment Notes or ETCs to a date later than the Issuance
Date, (ii) identifying the amount of the purchase price of each Equipment Note
or ETC and the aggregate purchase price of all such Equipment Notes or ETCs,
(iii) setting forth the reasons for such postponement and (iv) with respect to
the Participation Agreement referred to in clause (i), either (A) setting or
resetting a new Closing Date (which shall be on or prior to the Initial Cut-off
Date) for payment by the Pass Through Trustee of such purchase price and
issuance of the Equipment Note or ETC, or (B) indicating that such new Closing
Date (which shall be on or prior to the Initial Cut-Off Date) will be set by
subsequent written notice not less than one Business Day prior to such new
Closing Date.
"Record Date" means the Business Day preceding a Regular Distribution
Date or a Special Distribution Date, as applicable.
"Register" has the meaning specified in Section 3.4.
"Registered Certificates" has the meaning specified in Section 3.1.
"Registrar" has the meaning specified in Section 3.4.
"Regular Distribution Date" means, with respect to distributions of
Scheduled Payments, _______ and _______ of each year, commencing on __________,
until payment of all the Scheduled Payments to be made under the Equipment
Notes and the ETCs has been made.
"Request" means a request by Union, setting forth the subject matter
of the request accompanied by an Officer's Certificate and an Opinion of
Counsel as provided in Section 1.2 of this Pass Through Trust Agreement.
"Responsible Officer" means (i) with respect to the initial Pass
Through Trustee, any initial Equipment Trust Trustee or the initial Indenture
Trustee, any officer in the Corporate Trust Office or any other office at which
the Pass Through Trustee, any Equipment Trust Trustee or the Indenture Trustee
conducts corporate trust business; and (ii) with respect to any successor Pass
Through Trustee, successor Equipment Trust Trustee, successor Indenture Trustee
or the Owner Trustee, the chairman or vice-chairman of the board of directors
or trustees, the chairman or vice-chairman of the executive or standing
committee of the board of directors or trustees, the
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president, the chairman of the committee on trust matters, any vice-president,
any second vice-president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
trust officer or assistant trust officer, the comptroller and any assistant
comptroller. Responsible Officer also means, with respect to the Pass Through
Trustee, any Equipment Trust Trustee, the Indenture Trustee and the Owner
Trustee, any other officer of the Pass Through Trustee, the Owner Trustee, such
Equipment Trust Trustee or the Indenture Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
any of the above designated officers, and with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Scheduled Payment" means, with respect to a Regular Distribution
Date, any payment (other than a Special Payment) of interest on or principal of
and interest on: (i) an Equipment Note due from the Owner Trustee which issued
such Equipment Note, which payment represents the installment of principal at
the stated maturity of such installment of principal on such Equipment Note, or
the payment of regularly scheduled interest accrued on the unpaid principal
amount of such Equipment Note, or both, to be made on such Regular Distribution
Date pursuant to the terms of such Equipment Note; or (ii) an ETC, to be made
on such Regular Distribution Date pursuant to the terms of such ETC.
"Special Distribution Date" means (i) in the case of prepayments with
respect to a voluntary termination of the Lease, the purchase of any Units by
Union pursuant to Section 22.1 of the Lease or an ordinary Event of Loss under
the Lease, on a Regular Distribution Date, (ii) in the case of prepayments with
respect to a Multiple Loss under the Lease, a refunding or refinancing of the
Equipment Notes or a purchase of the Equipment by Union from an Owner Trustee
of a competitor Owner Participant, on any Business Day following 15 days notice
from the Pass Through Trustee to The Depository Trust Company and (iii) in the
case of payments received following a default in respect of any Equipment Note,
on the second day of any month, and (iv) with respect to an ETC, the earliest
day of a month for which it is practicable for the Pass Through Trustee to give
notice pursuant to Section 4.2(c) 20 days prior thereto.
"Special Payment" means (i) with respect to an Equipment Note (or
portion thereof), any payment of principal of, Make-Whole Amount, if any, and
interest on such Equipment Note (or portion thereof) resulting from the
prepayment of such Equipment Note (or portion thereof) pursuant to Section 2.10
of the applicable Indenture, (ii) with respect to an Equipment Note, any
payment of principal of and interest (including any interest accruing upon
default) on, or any other amount in respect of, such Equipment Note upon an
Indenture Default in respect thereof, including payments received on account of
the purchase by the Owner Trustee of such Equipment Notes, (iii) the amounts
required to be distributed pursuant to the fifth paragraph of Section 2.1(b),
(iv) any proceeds from the sale of any Equipment Note by the Pass Through
Trustee pursuant to Article VI hereof; (v) with respect to an ETC, any payment
of principal of and interest (including any interest accruing upon default) on,
or any other amount in respect of,
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such ETC upon an Equipment Trust Default in respect thereof or upon an
acceleration under the Equipment Trust Agreement relating to such ETC, or (vi)
any proceeds from the sale of an ETC by the Pass Through Trustee pursuant to
Article VI hereof; and "Special Payments" means all of such Special Payments.
"Special Payments Account" means the account or accounts created and
maintained pursuant to Section 4.1(b).
"Specified Investments" means (i) direct obligations of the United
States of America and agencies thereof for which the full faith and credit of
the United States of America is pledged, (ii) obligations fully guaranteed by
the United States of America, (iii) certificates of deposit issued by, or
bankers' acceptances of, or time deposits (including overnight deposits) with,
any bank, trust company or national banking association incorporated or doing
business under the laws of the United States of America or one of the States
thereof having combined capital and surplus and retained earnings of at least
$500,000,000 (including the Indenture Trustee or Owner Trustee, in their
respective individual capacities, if such conditions are met), (iv) commercial
paper of company, banks, trust company or national banking associations
incorporated or doing business under the laws of the United States of America
or one of the States thereof and in each case having a rating of A-l/P-l or
better assigned to such commercial paper by Standard & Poor's Corporation or
Moody's Investors Service, Inc. (or, if neither such organization shall rate
such commercial paper at any time, by any nationally recognized rating
organization in the United States of America) and (v) repurchase agreements
with any financial institution described in clause (iii) above having a
combined capital and surplus of at least $750,000,000 fully collateralized by
obligations of the type described in clauses (i) through (iv) above; provided,
however, that if all of the above investments are unavailable, the entire
amount to be invested may be used to purchase Federal Funds from an entity
described in clause (iii) above; and provided further that no investment shall
be eligible as a "Specified Investment" unless the final maturity or date of
return of such investment occurs no later than _______.
"Subsequent Cut-off Date" means __________.
"Trust Indenture Act" means, except as otherwise provided in Section
9.6, the Trust Indenture Act of 1939 as in force at the date as of which this
instrument was executed.
"Trust Property" means the Union ETCs, the Guarantee and the Equipment
Notes held as the property of the Pass Through Trust and all moneys at any time
paid thereon and all moneys due and to become due thereunder, funds from time
to time deposited in the Escrow Account (other than earnings on Specified
Investments), the Certificate Account and the Special Payments Account and any
proceeds from the sale by the Pass Through Trustee pursuant to Article VI
hereof of any Equipment Note.
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"Trustee's Liens" means any Lien (within the meaning specified in
Appendix A to the Participation Agreement) arising as a result of (a) any claim
against the Pass Through Trustee or Harris Trust and Savings Bank, in its
individual capacity, respectively, not resulting from the actions contemplated
by the Operative Agreements (within the meaning specified in Appendix A to the
Participation Agreement), (b) the gross negligence or willful misconduct of, or
the falsity or inaccuracy of any representation or warranty of the Pass Through
Trustee or Harris Trust and Savings Bank, in their individual capacities,
respectively, (c) any claim against the Pass Through Trustee or Harris Trust
and Savings Bank, in their individual capacities, respectively, with respect to
Taxes (within the meaning specified in Appendix A to the Participation
Agreement) or Transaction Costs (within the meaning specified in Appendix A to
the Participation Agreement) against which Union is not required to indemnify
the Pass Through Trustee or Harris Trust and Savings Bank, in their individual
capacities, respectively, pursuant to the Participation Agreement or (d) any
claim arising out of any transfer by the Pass Through Trustee, of all or any
portion of its interests in the Equipment, the Trust Property or the Operative
Agreements other than the transfer of title to or possession of any Equipment
by the Pass Through Trustee pursuant to and in accordance with the applicable
Equipment Trust Agreement or the Indenture or pursuant to the exercise of the
remedies set forth in the Lease; provided, however, that any Trustee Lien which
is attributable solely to the Pass Through Trustee or Harris Trust and Savings
Bank, in their individual capacities, respectively, and would otherwise
constitute a Trustee Lien shall not constitute a Trustee Lien so long as (i)
the existence of such Trustee Lien poses no material risk of the sale,
forfeiture or loss of any Unit or any interest therein, including Equipment
Notes, (ii) the existence of such Trustee Lien does not interfere in any way
with the quiet enjoyment of any Unit by Union, as lessee and (iii) the Pass
Through Trustee or Harris Trust and Savings Bank, in their individual
capacities, respectively, is diligently contesting such Trustee Lien by
appropriate proceedings.
"Unit" has the meaning assigned to that term in the Lease.
"Union Equipment Trust Trustee" means ____________, in its capacity as
trustee under the Union Equipment Trust Agreement, and any other Person which
may from time to time be acting as Equipment Trust Trustee in accordance with
the provisions of the Union Equipment Trust Agreement.
SECTION 1.2. Compliance Certificates and Opinions. Upon any
application or request by Union to the Pass Through Trustee to take any action
under any provision of this Pass Through Trust Agreement, Union shall furnish
to the Pass Through Trustee an Officer's Certificate stating that, in the
opinion of the signers, all conditions precedent, if any, provided for in this
Pass Through Trust Agreement relating to the proposed action have been complied
with and an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, except that in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Pass Through Trust
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Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Pass Through Trust Agreement (other
than a certificate provided pursuant to Section 8.4(d)) shall include:
(i) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are used;
(iii) a statement that, in the opinion of each such
individual, he or she has made such examination or investigation as
necessary to enable him or her to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 1.3. Form of Documents Delivered to Pass Through Trustee. In
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any Opinion of Counsel stated to be based on the opinion of other
counsel shall be accompanied by a copy of such other opinion.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Pass Through Trust Agreement, they may, but need not, be
consolidated and form one instrument.
SECTION 1.4. Acts of Certificateholders.
(a) Any direction, consent, waiver or other action provided by this
Pass Through Trust Agreement to be given or taken by Certificateholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Certificateholders in person or by an agent duly appointed
in writing; and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Pass
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Through Trustee and, where it is hereby expressly required, to Union, any
Equipment Trust Trustee or the Indenture Trustee. Such instrument or
instrument (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Certificateholders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Pass Through Trust Agreement and conclusive in favor of the Pass Through
Trustee, Union, any Equipment Trust Trustee and the Indenture Trustee, if made
in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the certificate of any notary public or
other officer of any jurisdiction authorized to take acknowledgments of deeds
or administer oaths that the Person executing such instrument acknowledged to
him the execution thereof, or by an affidavit of a witness to such execution
sworn to before any such notary or such other officer and where such execution
is by an officer of a corporation or association or a member of a partnership,
on behalf of such corporation, association or partnership, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact
and date of the execution of any such instrument or writing, or the authority
of the Person executing the same, may also be proved in any other reasonable
manner which the Pass Through Trustee deems sufficient. In the absence of bad
faith on the part of the Pass Through Trustee, an Officer's Certificate may be
deemed to be conclusively proved.
(c) In determining whether the Certificateholders of the requisite
Fractional Undivided Interests of Certificates Outstanding have given any
direction, consent or waiver (a "Direction"), under this Pass Through Trust
Agreement, Certificates owned by Union, the Owner Trustee, the Owner
Participant or any Affiliate of any such Person shall be disregarded and deemed
not to be Outstanding under this Pass Through Trust Agreement for purposes of
any such determination. In determining whether the Pass Through Trustee shall
be protected in relying upon any such Direction, only Certificates which the
Pass Through Trustee knows to be so owned shall be so disregarded.
Notwithstanding the foregoing, (i) if any such Person owns 100% of the
Certificates Outstanding, such Certificates shall not be so disregarded as
aforesaid, and (ii) if any amount of Certificates so owned by any such Person
have been pledged in good faith, such Certificates shall not be disregarded as
aforesaid if the pledgee establishes to the satisfaction of the Pass Through
Trustee the pledgee's right so to act with respect to such Certificates and
that the pledgee is not either of the Company, the Owner Trustee, the Pass
Through Trustee, the Owner Participant or any Affiliate of any such Person.
(d) Union, on behalf of the Company, may at its option by delivery of
an Officer's Certificate to the Pass Through Trustee set a record date to
determine the Certificateholders entitled to give any consent, request, demand,
authorization, direction, notice, waiver or other Act. Notwithstanding Section
316(c) of the Trust Indenture Act, such record date shall be the record date
specified in such Officer's Certificate which shall be a date not more than 30
nor less than 15 days prior to the first solicitation of Certificateholders in
connection therewith. If such a record date is fixed, such consent, request,
demand, authorization, direction, notice, waiver or
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other Act may be given before or after such record date, but only the
Certificateholders of record at the close of business on such record date shall
be deemed to be Certificateholders for the purposes of determining whether
Certificateholders of the requisite proportion of Outstanding Certificates have
authorized or agreed or consented to such consent, request, demand,
authorization, direction, notice, waiver or other Act, and for that purpose the
Outstanding Certificates shall be computed as of such record date; provided
that no such consent, request, demand, authorization, direction, notice, waiver
or other act by the Certificateholders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Agreement not later than one year after the record date.
(e) Any direction, consent, waiver or other action by the
Certificateholder of any Certificate shall bind the Certificateholder of every
Certificate issued upon the transfer thereof or in exchange thereof or in lieu
thereof, whether or not notation of such action is made upon such Certificate.
(f) Except as otherwise provided in Section 1.4(c), Certificates
owned by or pledged to any Person shall have an equal and proportionate benefit
under the provisions of this Pass Through Trust Agreement, without preference,
priority, or distinction as among all of the Certificates.
ARTICLE II
ACQUISITION OF EQUIPMENT NOTES AND ETCs;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.1. Issuance of Certificates; Acquisition of Equipment Notes
and ETCs.
(a) Upon request of Union, the Pass Through Trustee shall execute,
authenticate and deliver Certificates with an aggregate principal amount
equalling the aggregate principal amount of the Equipment Notes and ETCs, as
the case may be, to be purchased by the Pass Through Trustee pursuant to the
Equipment Trust Agreements, this Pass Through Trust Agreement and the
Participation Agreement and evidencing the entire ownership of the Pass Through
Trust. The Pass Through Trustee, not in its individual capacity but solely as
Pass Through Trustee, shall issue and sell such Certificates, in authorized
denominations and in such Fractional Undivided Interests, so as to result in
the receipt of consideration in an amount equal to the aggregate principal
amount of the Equipment Notes and ETCs to be issued from time to time, as
contemplated by the Participation Agreement and the Equipment Trust Agreements,
respectively, and, concurrently therewith, the Pass Through Trustee shall
purchase, in the case of the Equipment Notes pursuant to the terms and
conditions of the Participation Agreement, the Equipment Notes (except
Postponed Notes, if any) then issued and, in the case of the ETCs pursuant to
the terms and conditions of the Union Equipment Trust Agreement, the ETCs
(except
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Postponed Notes, if any) then issued, at a purchase price equal to the amount
of consideration received by the Pass Through Trustee with respect to such
Equipment Notes and ETCs, respectively. Upon the issuance after the Issuance
Date of any Equipment Notes and Union ETCs not previously purchased by the Pass
Through Trustee, the Pass Through Trustee shall purchase at such time such
Equipment Notes and Union ETCs at a purchase price equal to the amount of
consideration received by the Pass Through Trustee with respect to such
Equipment Notes and Union ETCs. Except as provided in Sections 3.4 and 3.5
hereof, the Pass Through Trustee shall not execute, authenticate or deliver
Certificates in excess of the aggregate amount specified in this paragraph.
The provisions of this Subsection (a) are subject to the provisions of
Subsections (b) and (c) below.
(b) If Union shall deliver to the Pass Through Trustee on or prior
to the Issuance Date a Postponement Notice, the Pass Through Trustee shall
postpone the purchase of the Equipment Notes or ETCs (the "Postponed Notes")
referred to in such Postponement Notice and shall promptly deposit into an
escrow account (the "Escrow Account") an amount equal to the purchase price of
such Postponed Notes (the "Escrowed Funds"). The Escrowed Funds so deposited
into the Escrow Account shall be invested by the Pass Through Trustee at the
written direction and risk of, and for the benefit of, Union in Specified
Investments maturing (i) no later than the Initial Cut-off Date or (ii) if
Union has given notice to the Pass Through Trustee that the Postponed Notes
will not be issued, on the next Special Distribution Date, if such investments
are reasonably available for purchase. The Pass Through Trustee shall make
withdrawals from the Escrow Account only as provided in this Pass Through Trust
Agreement. An account statement delivered by the Pass Through Trustee to Union
shall be deemed written confirmation by Union that the investment transactions
identified therein accurately reflect the investment directions given to the
Pass Through Trustee by Union, unless Union notifies the Pass Through Trustee
in writing to the contrary within thirty (30) days of receipt of such
statement.
The Pass Through Trustee shall hold all Specified Investments until
the maturity thereof and will not sell or otherwise transfer such Specified
Investments. If Specified Investments held in the Escrow Account mature prior
to the Initial Cut-off Date, any proceeds received on the maturity of such
Specified Investments (other than any earnings thereon) shall be reinvested by
the Pass Through Trustee at the written direction and risk of, and for the
benefit of, Union in Specified Investments maturing (i) no later than the
Initial Cut-off Date or (ii) if Union has given notice to the Pass Through
Trustee that the Postponed Notes will not be issued, on the next Special
Distribution Date, if such investments are reasonably available for purchase.
Any earnings on Specified Investments received from time to time by
the Pass Through Trustee shall be promptly distributed to Union to an account
specified in writing by Union. Union shall pay to the Pass Through Trustee for
deposit to the Escrow Account an amount equal to any losses on Specified
Investments as incurred.
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On or prior to the Initial Cut-off Date, upon the written request of
Union and the satisfaction of the closing conditions specified in the
Participation Agreement and the Union Equipment Trust Agreement, as the case
may be, the Pass Through Trustee shall purchase the Postponed Notes with the
Escrowed Funds. The purchase price shall equal the principal amount of such
Postponed Notes.
If any of the Postponed Notes will not be issued on or prior to the
Initial Cut-off Date for any reason, Union shall so notify the Pass Through
Trustee and Union shall pay to the Pass Through Trustee on _______ for deposit
in the Special Payments Account, in immediately available funds, an amount
equal to the interest that would have accrued on such Postponed Notes at a rate
or rates equal to the interest rate or rates applicable to the Certificates
issued under the Pass Through Trust from the Issuance Date to, but not
including, ______ and the Pass Through Trustee shall transfer an amount equal
to that amount of Escrowed Funds that would have been used to purchase such
Postponed Notes and the amount paid by Union under this paragraph to the
Special Payments Account for distribution as a Special Payment in accordance
with the provisions hereof.
(c) Notwithstanding the foregoing Subsection (b), with respect to
amounts received by the Pass Through Trustee for the purchase of Equipment
Notes and Union ETCs to be issued after the Initial Cut-off Date pursuant to
the terms and conditions of the Participation Agreement or the Union Equipment
Trust Agreement, the Pass Through Trustee shall promptly deposit into the
Escrow Account an amount equal to the purchase price of such Equipment Notes or
Union ETCs. The Escrowed Funds so deposited into the Escrow Account shall be
invested by the Pass Through Trustee at the written direction and risk of, and
for the benefit of, Union in Specified Investments maturing (i) no later than
the Subsequent Cut-off Date or (ii) if Union has given notice to the Pass
Through Trustee that the aforementioned Equipment Notes or Union ETCs will not
be issued, on the next Special Distribution Date, if such investments are
reasonably available for purchase. The Pass Through Trustee shall make
withdrawals from the Escrow Account only as provided in this Pass Through Trust
Agreement. An account statement delivered by the Pass Through Trustee to Union
shall be deemed written confirmation by Union that the investment transactions
identified therein accurately reflect the investment directions given to the
Pass Through Trustee by Union, unless Union notifies the Pass Through Trustee
in writing to the contrary within thirty (30) days of receipt of such
statement.
The Pass Through Trustee shall hold all Specified Investments until
the maturity thereof and will not sell or otherwise transfer such Specified
Investments. If Specified Investments held in the Escrow Account mature prior
to the Subsequent Cut-off Date, any proceeds received on the maturity of such
Specified Investments (other than any earnings thereon) shall be reinvested by
the Pass Through Trustee at the written direction and risk of, and for the
benefit of, Union in Specified Investments maturing (i) no later than the
Subsequent Cut-off Date or (ii) if Union has given notice to the Pass Through
Trustee that the aforementioned Equipment Notes or Union
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ETCs will not be issued, on the next Special Distribution Date, if such
investments are reasonably available for purchase.
Any earnings on Specified Investments received from time to time by
the Pass Through Trustee shall be promptly distributed to Union to an account
specified in writing by Union. Union shall pay to the Pass Through Trustee for
deposit to the Escrow Account an amount equal to any losses on Specified
Investments as incurred.
On or prior to the Subsequent Cut-off Date, upon the written request
of Union and the satisfaction of the closing conditions specified in the
Participation Agreement and the Union Equipment Trust Agreement, the Pass
Through Trustee shall purchase the applicable Equipment Notes and Union ETCs
with the Escrowed Funds. The purchase price shall equal the principal amount
of such Postponed Notes.
If any of the applicable Equipment Notes or Union ETCs will not be
issued on or prior to the Subsequent Cut-off Date for any reason, Union shall
so notify the Pass Through Trustee and Union shall pay to the Pass Through
Trustee on _______ for deposit in the Special Payments Account, in immediately
available funds, an amount equal to the interest that would have accrued on
such Equipment Notes or Union ETCs, as the case may be, at a rate or rates
equal to the interest rate or rates applicable to the Certificates issued under
the Pass Through Trust from the Issuance Date to, but not including, ________
and the Pass Through Trustee shall transfer an amount equal to that amount of
Escrowed Funds that would have been used to purchase such Equipment Notes or
Union ETCs and the amount paid by Union under this paragraph to the Special
Payments Account for distribution as a Special Payment in accordance with the
provisions hereof.
SECTION 2.2. Declaration of Trust; Acceptance By Pass Through Trustee.
The Pass Through Trustee, upon the execution and delivery of this Pass Through
Trust Agreement, acknowledges its acceptance of all right, title, and interest
in and to the Equipment Notes and the ETCs, as the case may be, acquired
pursuant to Section 2.1 hereof and, in the case of the Equipment Notes, the
Participation Agreement, and declares that the Pass Through Trustee holds and
will hold such right, title, and interest, together with all other property
constituting the Trust Property, for the benefit of all present and future
Certificateholders, upon the trusts herein set forth. By its payment for and
acceptance of each Certificate issued to it hereunder, each initial
Certificateholder as grantor of the Trust thereby joins in the creation and
declaration of the Trust.
SECTION 2.3. Limitation of Powers. The Pass Through Trust is
constituted solely for the purpose of making the investment in the Equipment
Notes and the ETCs, and, except as set forth herein, the Pass Through Trustee
is not authorized or empowered to acquire any other investments or engage in
any other activities and, in particular, the Pass Through Trustee is not
authorized or empowered to do anything that would cause the Pass Through Trust
to fail to qualify as a "grantor trust" for federal income tax purposes
(including as subject to this restriction,
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acquiring any Equipment (as defined in the Indenture) by bidding the Equipment
Notes, the ETCs or otherwise, or taking any action with respect to any such
Equipment once acquired).
SECTION 2.4. Sale of Equipment Notes Under Certain Circumstances. If
Union elects, in accordance with Section 10.2 of the Participation Agreement,
to refund or refinance Equipment Notes, the Pass Through Trustee shall, upon
satisfaction of the conditions set forth in Section 10.2 of the Participation
Agreement, transfer such Equipment Notes to the Person designated by Union and
will take any other action reasonably required to effect such refunding.
ARTICLE III
THE CERTIFICATES
SECTION 3.1. Form, Denomination and Execution of Certificates. The
Certificates shall be issued in fully registered form without coupons and shall
be substantially in the form attached hereto as Exhibit A, together with the
Guarantee of Union attached thereto in substantially the form attached hereto
as Exhibit B, with such omissions, variations and insertions as are permitted
by this Pass Through Trust Agreement, and may have such letters, numbers or
other marks of identification and such legends or endorsements printed,
lithographed, typewritten or engraved thereon, as may be required to comply
with the rules of any securities exchange on which the Certificates may be
listed or to conform to any usage in respect thereof, or as may, consistently
herewith, be prescribed by the Pass Through Trustee or by the officer executing
such Certificates, such determination by such officer to be evidenced by his or
her signing of the Certificates.
Except as provided in Section 3.9, the definitive Certificates (the
"Registered Certificates") shall be printed, lithographed, typewritten or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Certificates may be listed, all as determined by the officer executing such
Certificates, as evidenced by his execution of such Certificates.
The Certificates shall be issued in minimum denominations of $1,000 or
any integral multiple of $1,000 in excess thereof, except that one Certificate
may be issued in a denomination of less than $1,000 (the "De Minimis
Certificate").
The Certificates shall be executed on behalf of the Pass Through
Trustee by manual or facsimile signature of a Responsible Officer of the Pass
Through Trustee. Certificates bearing the manual or facsimile signature of an
individual who was, at the time when such signature was affixed, authorized to
sign on behalf of the Pass Through Trustee shall be valid and binding
obligations of the Pass Through Trustee, notwithstanding that such individual
has ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such office at the date of such Certificates. No
Certificate shall be entitled to any benefit under this Pass
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Through Trust Agreement, or be valid for any purpose, unless there appears on
such Certificate a certificate of authentication substantially in the form set
forth in Exhibit A hereto executed by the Pass Through Trustee by manual
signature, and such certificate of authentication upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the
date of their authentication.
SECTION 3.2. Authentication of Certificates. The Pass Through Trustee
shall duly authenticate and deliver Certificates in authorized denominations
equalling in the aggregate principal amount of the Equipment Notes and the
ETCs, as the case may be, to be purchased by the Pass Through Trustee pursuant
to the Equipment Trust Agreements, this Pass Through Trust Agreement and the
Participation Agreement, and evidencing the entire ownership of the Trust.
SECTION 3.3. Temporary Certificates. Pending the preparation of
Registered Certificates, the Pass Through Trustee may execute, authenticate and
deliver temporary Certificates which are printed, lithographed, typewritten, or
otherwise produced, in any denomination, containing substantially the same
terms and provisions as set forth in Exhibit A, except for such appropriate
insertions, omissions, substitutions and other variations relating to their
temporary nature as the officer executing such temporary Certificates may
determine, as evidenced by their execution of such temporary Certificates.
The Company will cause Registered Certificates to be prepared without
unreasonable delay after such Registered Certificates are required to be issued
pursuant to Section 3.9(d). After the preparation of Registered Certificates,
the temporary Certificates shall be exchangeable for Registered Certificates
upon surrender of the temporary Certificates at the Corporate Trust Office of
the Pass Through Trustee, or at the office or agency of the Pass Through
Trustee maintained in accordance with Section 7.12, without charge to the
holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Pass Through Trustee shall execute, authenticate and deliver
in exchange therefor Registered Certificates of authorized denominations of a
like aggregate Fractional Undivided Interest; shall destroy any such temporary
Certificate(s) theretofore delivered and exchanged; and shall certify, in
writing, to the Company such destruction. Until so exchanged, such temporary
Certificates shall in all respects be entitled to the same benefits under this
Pass Through Trust Agreement as Registered Certificates.
SECTION 3.4. Registration of Transfer and Exchange of Certificates.
The Pass Through Trustee shall cause to be kept at the Corporate Trust Office
or the office or agency to be maintained by it in accordance with the
provisions of Section 7.12 a register (the "Register") in which, subject to
such reasonable regulations as it may prescribe, the Pass Through Trustee shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. The Pass Through Trustee shall initially be
the registrar (the "Registrar") for the purpose of registering Certificates and
transfers and exchanges of Certificates as herein provided.
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Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office or such other office or agency, the Pass Through Trustee
shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates in authorized
denominations of a like aggregate Fractional Undivided Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of authorized denominations of a like aggregate
Fractional Undivided Interest, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Pass Through Trustee shall execute, authenticate
and deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Pass Through Trustee
and the Registrar duly executed by the Certificateholder thereof or its
attorney duly authorized in writing.
No service charge shall be made to a Certificateholder for any
registration of transfer or exchange of Certificates, but the Pass Through
Trustee shall require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
All Certificates surrendered for registration of transfer and exchange
shall be canceled and subsequently destroyed by the Pass Through Trustee. The
Pass Through Trustee shall provide the Company with written certification as to
the destruction of all such Certificates.
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Registrar, or the Registrar
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (b) there is delivered to the Registrar and the Pass Through
Trustee such security, indemnity or bond, as may be required by them to save
each of them harmless, then, in the absence of notice to the Registrar or the
Pass Through Trustee that such Certificate has been acquired by a bona fide
purchaser, the Pass Through Trustee shall execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Fractional Undivided Interest with the
same final Regular Distribution Date. In connection with the issuance of any
new Certificate under this Section 3.5, the Pass Through Trustee shall require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Pass Through Trustee and the Registrar) connected
therewith. Any duplicate Certificate issued pursuant to this Section 3.5 shall
constitute conclusive evidence of the appropriate Fractional Undivided Interest
in the Pass Through Trust, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.
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SECTION 3.6. Persons Deemed Owners. Prior to due presentation of a
Certificate for registration of transfer, the Pass Through Trustee, the
Registrar, and any Paying Agent of the Pass Through Trustee may treat the
person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions pursuant to Section 4.2
and for all other purposes whatsoever, and neither the Pass Through Trustee,
the Registrar, nor any Paying Agent of the Pass Through Trustee shall be
affected by any notice to the contrary.
SECTION 3.7. Cancellation. All Certificates surrendered for payment
or transfer or exchange shall, if surrendered to any Person party hereto other
than the Registrar, be delivered to the Registrar for cancellation. No
Certificates shall be authenticated in lieu of or in exchange for any
Certificates canceled as provided in this Section, except as expressly
permitted by this Pass Through Trust Agreement. All canceled Certificates held
by the Registrar shall be destroyed and a certification of their destruction
delivered to the Pass Through Trustee and the Company.
SECTION 3.8. Limitation of Liability for Payments. All payments or
distributions made to Certificateholders under this Pass Through Trust
Agreement shall be made only from the Trust Property and only to the extent
that the Pass Through Trustee shall have sufficient income or proceeds from the
Trust Property to make such payments in accordance with the terms of Article IV
of this Pass Through Trust Agreement. Each Certificateholder, by its
acceptance of a Certificate, agrees that it will look solely to the income and
proceeds from the Trust Property to the extent available for distribution to
the Certificateholder thereof as provided in this Pass Through Trust Agreement.
SECTION 3.9. Book-Entry and Registered Certificates.
(a) Except for the De Minimis Certificate (if any), the Certificates
may be issued in the form of one or more typewritten Certificates representing
the Book-Entry Certificates, to be delivered to The Depository Trust Company,
the initial Clearing Agency, by, or on behalf of, the Certificate Owners. In
such case, the Certificates delivered to The Depository Trust Company shall
initially be registered on the Register in the name of Cede & Co., the nominee
of the initial Clearing Agency, and no Certificate Owner will receive a
Registered Certificate representing such Certificate Owner's interest in the
Certificates, except as provided above and in Subsection (d) below. Except
with respect to the De Minimis Certificate (if any), unless and until
Registered Certificates have been issued pursuant to Subsection (d) below:
(i) the provisions of this Section 3.9 shall be in full force
and effect;
(ii) the Company, the Paying Agent, the Registrar and the
Pass Through Trustee may deal with the Clearing Agency for all
purposes (including the making of distributions on the Certificates)
as the authorized representative of the Certificate Owners;
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(iii) to the extent that the provisions of this Section 3.9
conflict with any other provisions of this Pass Through Trust
Agreement, the provisions of this Section 3.9 shall control;
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and shall be limited to those established
by law and agreements between such Certificate Owners and the Clearing
Agency Participants; and until Registered Certificates are issued
pursuant to Subsection (d) below, the Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and
receive and transmit distributions of principal and interest and
Make-Whole Amount, if any, on the Certificates to such Clearing Agency
Participants; and
(v) whenever this Pass Through Trust Agreement requires or
permits actions to be taken based upon instructions or directions of
Certificateholders holding Certificates evidencing a specified
percentage of the Fractional Undivided Interests, the Clearing Agency
shall be deemed to represent such percentage only to the extent that
it has received instructions to such effect from Certificate Owners
and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in
Certificates and has delivered such instructions to the Pass
Through Trustee. The Pass Through Trustee shall have no obligation to
determine whether the Clearing Agency has in fact received any such
instructions.
(b) Except with respect to the De Minimis Certificate (if any),
whenever notice or other communication to the Certificateholders is required
under this Pass Through Trust Agreement, unless and until Registered
Certificates shall have been issued pursuant to Subsection (d) below, the Pass
Through Trustee shall give all such notices and communications specified herein
to be given to Certificateholders to the Clearing Agency and/or the Clearing
Agency Participants, and shall make available additional copies as requested by
such Clearing Agency Participants.
(c) Unless and until Registered Certificates are issued pursuant to
Subsection (d) below, on the Record Date prior to each Regular Distribution
Date and Special Distribution Date, the Pass Through Trustee will request from
the Clearing Agency a Securities Position Listing setting forth the names of
all Clearing Agency Participants reflected on the Clearing Agency's books as
holding interests in the Certificates on such Record Date. The Pass Through
Trustee will mail to each such Clearing Agency Participant the statements
described in Section 4.3 hereof.
(d) If (i) Union, on behalf of the Company, advises the Pass Through
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities and the Pass Through Trustee or Union,
on behalf of the Company is unable to locate a qualified successor, (ii) Union,
on behalf of the Company, at its option, advises the Pass Through Trustee in
writing that it elects to terminate the book-entry system through the Clearing
Agency or (iii) after the occurrence of an Event of Default, Certificate Owners
of Book-Entry Certificates
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evidencing Fractional Undivided Interests aggregating not less than a majority
in interest in the Pass Through Trust, by act of such Certificate Owners
delivered to the Company, and the Pass Through Trustee, advise the Pass Through
Trustee and the Clearing Agency through the Clearing Agency Participants in
writing that the continuation of a book-entry system through the Clearing
Agency is no longer in the best interests of the Certificate Owners, then the
Pass Through Trustee shall notify all Certificate Owners, through the Clearing
Agency, of the occurrence of any such event and of the availability of
Registered Certificates. Upon surrender to the Pass Through Trustee of all the
Certificates held by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration of Registered
Certificates in the names of Certificate Owners, the Pass Through Trustee shall
issue and deliver the Registered Certificates in accordance with the
instructions of the Clearing Agency. Upon the issuance of Registered
Certificates pursuant to this Section 3.9(d), the Record Date with respect to
such Registered Certificates shall be the fifth Business Day preceding a
Regular Distribution Date or Special Distribution Date, as applicable. Neither
the Company, the Registrar, the Paying Agent nor the Pass Through Trustee shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such registration instructions.
Upon the issuance of Registered Certificates, the Pass Through Trustee shall
recognize the Persons in whose name the Registered Certificates are registered
as the Certificateholders hereunder. Neither the Company nor the Pass Through
Trustee shall be liable if the Pass Through Trustee or Union, on behalf of the
Company is unable to locate a qualified successor Clearing Agency.
(e) The Pass Through Trustee shall enter into the Letter of
Representations and fulfill its responsibilities thereunder.
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
SECTION 4.1. Certificate Account and Special Payments Account.
(a) The Pass Through Trustee shall establish and maintain on behalf
of the Certificateholders the Certificate Account as one or more accounts,
which shall be non-interest bearing accounts. The Pass Through Trustee shall
hold the Certificate Account in trust for the benefit of the
Certificateholders, and shall make or permit withdrawals therefrom only as
provided in this Pass Through Trust Agreement. On each day when a Scheduled
Payment is made under the Indenture or an Equipment Trust Agreement to the Pass
Through Trustee, as holder of either the Equipment Notes or the ETCs issued
under the Indenture or such Equipment Trust Agreement, as the case may be, the
Pass Through Trustee upon receipt shall immediately deposit the aggregate
amount of such Scheduled Payment in the Certificate Account.
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(b) The Pass Through Trustee shall establish and maintain on behalf
of the Certificateholders the Special Payments Account as one or more accounts,
which shall be non-interest bearing except as provided in Section 4.4. The
Pass Through Trustee shall hold the Special Payments Account in trust for the
benefit of the Certificateholders, and shall make or permit withdrawals
therefrom only as provided in this Pass Through Trust Agreement. On each day
when one or more Special Payments (other than a Special Payment that represents
the proceeds of any sale pursuant to Article VI by the Pass Through Trustee of
an Equipment Note) are made under an Equipment Trust Agreement or the Indenture
to the Pass Through Trustee, as holder of either the Equipment Notes or the
ETCs issued under the Indenture or such Equipment Trust Agreement, as the case
may be, the Pass Through Trustee upon receipt shall immediately deposit the
aggregate amounts of such Special Payments in the Special Payments Account. On
the day Union makes the payment to the Pass Through Trustee described in the
fifth paragraph of Section 2.1(b), the Pass Through Trustee upon receipt shall
immediately deposit the aggregate amount thereof in the Certificate Account.
Upon the sale of any Equipment Note or ETC by the Pass Through Trustee pursuant
to Article VI and the realization of any proceeds thereof, the Pass Through
Trustee shall deposit the aggregate amount of such proceeds as a Special
Payment in the Special Payments Account.
(c) The Pass Through Trustee shall present to the Indenture Trustee
to which an Equipment Note relates such Equipment Note on the date of its
stated final maturity, or in the case of any Equipment Note which is to be
prepaid in whole pursuant to the relevant Indenture, on the applicable
prepayment date under the Indenture.
(d) The Pass Through Trustee shall present to the Equipment Trust
Trustee to which an ETC relates such ETC on the date of its stated final
maturity.
SECTION 4.2. Distribution from Certificate Account and Special Payments
Account.
(a) On each Regular Distribution Date or as soon thereafter as the
Pass Through Trustee has confirmed receipt of the payment of the Scheduled
Payments due with respect to the Equipment Notes or ETCs on such date, the Pass
Through Trustee shall distribute to the Certificateholders of the Pass Through
Trust out of the Certificate Account the entire amount deposited therein
pursuant to Section 4.1(a). There shall be so distributed to each
Certificateholder of record on the Record Date with respect to such Regular
Distribution Date (other than as provided in Section 11.1 concerning the final
distribution) by check mailed to such Certificateholder at the address
appearing in the Register, such Certificateholder's pro rata share (based on
the aggregate Fractional Undivided Interest held by such Certificateholder) of
the aggregate amount in the Certificate Account; provided, however, that prior
to the time that any Certificates are issued in the form of Registered
Certificates, each Certificateholder may request in writing that such amounts
be distributed by wire transfer of immediately available funds to an account
specified by such Certificateholder. If a Scheduled Payment is not received by
the Pass Through Trustee on a Regular Distribution Date but is received on a
later date, it shall be
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distributed on the date received in the manner described in the preceding
sentence to the Certificateholders of record on the Record Date with respect to
such Regular Distribution Date.
(b) On each Special Distribution Date with respect to any Special
Payment or as soon thereafter as the Pass Through Trustee has confirmed receipt
of the Special Payments due on the Equipment Notes or ETCs or realized upon the
sale of any Equipment Note or ETCs, the Pass Through Trustee shall distribute
out of the Special Payments Account the entire amount deposited therein
pursuant to Section 4.1(b) of such Special Payment. There shall be so
distributed to each Certificateholder of record on the Record Date with respect
to such Special Distribution Date (other than as provided in Section 11.1
concerning the final distribution) by check mailed to such Certificateholder at
the address appearing in the Register, such Certificateholder's pro rata share
(based on the aggregate Fractional Undivided Interest held by such
Certificateholder) of the aggregate amount in the Special Payments Account on
account of such Special Payment; provided, however, that prior to the time that
any Certificates are issued in the form of Registered Certificates, each
Certificateholder may request in writing that such amount be distributed by
wire transfer of immediately available funds to an account specified by such
Certificateholder.
(c) The Pass Through Trustee shall at the expense of the Company
cause notice of each Special Payment to be mailed to each Certificateholder at
his address as it appears in the Register. In the case of a Special Payment
other than pursuant to the fifth paragraph of Section 2.1(b) or the fifth
paragraph of Section 2.1(c), such notice shall be mailed not less than 15 days
prior to the date any such Special Payment is scheduled to be distributed. In
the case of a Special Payment pursuant to the fifth paragraph of Section 2.1(b)
or the fifth paragraph of Section 2.1(c) such notice should be given as
promptly as practicable after the receipt of notice from the Company that
Postponed Notes or the Equipment Notes or Union ETCs referred to in Section
2.1(c) will not be issued. In the case of any other Special Payments, such
notice shall be mailed as soon as practicable after the Pass Through Trustee
has confirmed that it has received funds for such Special Payment. Notices
mailed by the Pass Through Trustee shall set forth:
(i) the Special Distribution Date and the Record Date
therefor (except as otherwise provided in Section 11.1),
(ii) the amount of the Special Payment for each $1,000 face
amount Certificate (taking into account any payment to be made by the
Company pursuant to
Section 2.1(b) or (c), as applicable) and the
amount thereof constituting principal, Make-Whole Amount, if any, and
interest,
(iii) the reason for the Special Payment, and
(iv) if the Special Distribution Date is the same date as a
Regular Distribution Date, the total amount to be received on such
date for each $1,000 face amount Certificate.
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If the amount of Make-Whole Amount, if any, payable upon the
prepayment of an Equipment Note has not been calculated at the time that the
Pass Through Trustee mails notice of a Special Payment, it shall be sufficient
if the notice sets forth the other amounts to be distributed and states that
any Make-Whole Amount received will also be distributed.
If any prepayment of the Equipment Notes is canceled, the Pass Through
Trustee, as soon as possible after learning thereof, shall cause notice thereof
to be mailed to each Certificateholder at its address as it appears on the
Register.
SECTION 4.3. Statements to Certificateholders.
(a) On each Regular Distribution Date and Special Distribution Date,
the Pass Through Trustee will include with each distribution of a Scheduled
Payment or a Special Payment to Certificateholders a statement, giving effect
to such distribution to be made on such Regular Distribution Date or Special
Distribution Date, as the case may be, setting forth the following information
(for each $1,000 face amount Certificate as to (i) and (ii) below):
(i) The amount of such distribution allocable to principal
and the amount allocable to Make-Whole Amount, if any;
(ii) The amount of such distribution allocable to interest; and
(iii) The Pool Balance and the Pool Factor.
(b) Within a reasonable period of time after the end of each calendar
year but not later than the latest date permitted by law, the Pass Through
Trustee shall furnish to each Person who at any time during such calendar year
was a Certificateholder of record a statement containing the sum of the amounts
determined pursuant to clauses (a)(i) and (a)(ii) of this Section 4.3 with
respect to the Pass Through Trust for such calendar year or, in the event such
Person was a Certificateholder of record during a portion of such calendar
year, for the applicable portion of such year, and such other items as are
readily available to the Pass Through Trustee and which a Certificateholder
shall reasonably request as necessary for the purpose of such
Certificateholder's preparation of its Federal income tax returns. Such report
and such other items shall be prepared on the basis of information supplied to
the Pass Through Trustee by the Clearing Agency Participants and shall be
delivered by the Pass Through Trustee to such Clearing Agency Participants to
be available for forwarding by such Clearing Agency Participants to Certificate
Owners.
SECTION 4.4. Investment of Special Payment Money. Any money received
by the Pass Through Trustee pursuant to Section 4.1(b) representing a Special
Payment which is not to be promptly distributed shall, to the extent
practicable, be invested in Permitted Investments by the Pass Through Trustee
pending distribution of such Special Payment pursuant to Section 4.2. Any
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investment made pursuant to this Section 4.4 shall be in such Permitted
Investments having maturities not later than the date that such moneys are
required to be used to make the payment required under Section 4.2 on the
applicable Special Distribution Date and the Pass Through Trustee shall hold
any such Permitted Investments until maturity. The Pass Through Trustee shall
have no liability with respect to any investment made pursuant to this Section
4.4, other than by reason of the willful misconduct or gross negligence of the
Pass Through Trustee. All income and earnings from such investments shall be
distributed to the Certificateholders on such Special Distribution Date as part
of such Special Payment.
ARTICLE V
THE COMPANY
SECTION 5.1. Maintenance of Corporate Existence. Each of the
Company, at its own cost and expense, will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate
existence, rights and franchises, except as otherwise specifically permitted in
Section 5.2; provided, however, that neither of the Company shall be required
to preserve any right or franchise if it shall determine that the preservation
thereof is no longer desirable in the conduct of its business.
SECTION 5.2. Consolidation, Merger or Sale of Assets Permitted.
(a) Union shall not consolidate with or merge into any other
corporation or sell or convey all or substantially all of its assets to any
Person, unless the corporation formed by such consolidation or into which Union
is merged or the Person which acquires by sale or conveyance all or
substantially all of the assets of Union, shall be a corporation organized and
existing under the laws of the United States of America or any State or the
District of Columbia, and shall execute and deliver to the Pass Through Trustee
an agreement in form reasonably satisfactory to the Pass Through Trustee
containing an assumption by such successor corporation of the due and punctual
performance and observance of each covenant and condition of this Agreement to
which Union is a party.
(b) Immediately after giving effect to such transaction, no Event of
Default, no Indenture Default, no Equipment Trust Default, and no event that,
after notice or lapse of time, or both, would become an Event of Default, an
Indenture Default or an Equipment Trust Default, shall have occurred and be
continuing.
Upon any consolidation or merger, or any sale or conveyance, of all or
substantially all of the assets of Union, the successor corporation formed by
such consolidation or into which Union, is merged or to which such sale or
conveyance is made shall succeed to, and be substituted for, and may exercise
every right and power of, Union, under this Agreement with the same effect
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as if such successor corporation had been named as Union, herein. No such sale
or conveyance of all or substantially all of the assets of Union, as an
entirety shall have the effect of releasing Union, or any successor corporation
which shall theretofore have become such from its liability hereunder.
(c) The Pass Through Trustee may accept an Officer's Certificate and
an Opinion of Counsel of Union, on behalf of the Company, as conclusive
evidence that any such consolidation, merger, sale, lease or conveyance, and
any such assumption complies with the provisions of this Section 5.2.
ARTICLE VI
DEFAULT
SECTION 6.1. Events of Default. If an Indenture Default under the
Indenture or an Equipment Trust Default under either Equipment Trust Agreement
(an "Event of Default") shall occur and be continuing, then, and in each and
every case, so long as such Event of Default shall be continuing, the Pass
Through Trustee may vote all of the Equipment Notes issued under the Indenture
or ETCs issued under either of the Equipment Trust Agreements, as the case may
be, to which such Event of Default relates that are held in the Trust Property,
and upon the direction of the Certificateholders holding Certificates
evidencing Fractional Undivided Interests aggregating not less than a majority
in interest in the Pass Through Trust, the Trustee shall vote a corresponding
majority of such Equipment Notes or such ETCs, as the case may be, in favor of
directing the Indenture Trustee under the Indenture or the Equipment Trust
Trustee under such Equipment Trust Agreement, as the case may be, to declare
the unpaid principal amount of all Equipment Notes then outstanding under the
Indenture or the ETCs then outstanding under such Equipment Trustee Agreement,
as the case may be, and accrued interest thereon to be due and payable under,
and in accordance with the provisions of, the Indenture or such Equipment Trust
Agreement, as the case may be. In addition, if an Indenture Default shall have
occurred and be continuing under the Indenture or an Equipment Trust Default
shall have occurred and be continuing under either Equipment Trust Agreement,
the Pass Through Trustee may, and upon the direction of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Pass Through Trust, shall, vote all of
the Equipment Notes issued under such Indenture or the ETCs issued under such
Equipment Trust Agreement, as the case may be, to which such Event of Default
relates that are held in the Pass Through Trust to direct such Indenture
Trustee or such Equipment Trust Trustee, as the case may be, regarding the
exercise of remedies provided in Article V of the Indenture or Article V of
such Equipment Trust Agreement, as the case may be.
In addition, after an Event of Default shall have occurred and be
continuing with respect to any Equipment Notes or ETCs, the Pass Through
Trustee may in its discretion, and upon the
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direction of the Certificateholders holding Certificates evidencing Fractional
Undivided Interests aggregating not less than a majority in interest in the
Pass Through Trust shall, by such officer or agent as it may appoint, sell,
convey, transfer and deliver (to the extent permitted by applicable law) all or
part of such Equipment Notes or ETCs, without recourse to or warranty by the
Pass Through Trustee or any Certificateholder, to any Person. In any such
case, the Pass Through Trustee shall sell, assign, contract to sell or
otherwise dispose of and deliver such Equipment Note or Equipment Notes or ETC
or ETCs in one or more parcels at public or private sale or sales, at any
location or locations at the option of the Pass Through Trustee, all upon such
terms and conditions as it may reasonably deem advisable and at such prices as
it may reasonably deem advisable, for cash. If the Pass Through Trustee so
decides or is required to sell or otherwise dispose of any Equipment Note or
ETC pursuant to this Section, the Pass Through Trustee shall take such of the
actions described above as it may reasonably deem most effectual to complete
the sale or other disposition of such Equipment Note or ETC, so as to provide
for the payment in full of all amounts due on the Certificates.
If, with respect to any Equipment Notes, an Indenture Default shall
have occurred and be continuing and the Owner Trustee, which is a party to the
Indenture has elected, in accordance with the provisions of Section 5.04(b) of
the Indenture, to purchase all of the then outstanding Equipment Notes issued
under the Indenture at a price equal to the aggregate unpaid principal amount
thereof, together with accrued interest thereon to the date of such purchase,
then the Pass Through Trustee shall sell to such Owner Trustee all of the
Equipment Notes issued under the Indenture held in the Pass Through Trust at a
price equal to the aggregate unpaid principal amount thereof, together with
accrued interest thereon to the date of such sale.
In no event shall (i) an Indenture Default constitute an Equipment
Trust Default or (ii) an Equipment Trust Default constitute an Indenture
Default.
SECTION 6.2. Incidents of Sale of Equipment Notes and ETCs. Upon any
sale of all or any part of the Equipment Notes or ETCs, as the case may be,
made either under the power of sale given under this Pass Through Trust
Agreement or otherwise for the enforcement of this Pass Through Trust
Agreement, the following shall be applicable:
(i) Certificateholders and Pass Through Trustee May Purchase
Equipment Notes or ETCs. Any Certificateholder, the Pass Through
Trustee in its individual or any other capacity or any other Person
may bid for and purchase any of the Equipment Notes or ETCs, as the
case may be, and upon compliance with the terms of sale, may hold,
retain, possess and dispose of such Equipment Notes or ETCs, as the
case may be, in their own absolute right without further
accountability; provided, however, that this provision shall not apply
to the sale of Equipment Notes or ETCs, as the case may be, pursuant
to the last paragraph of Section 6.1.
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(ii) Receipt of Pass Through Trustee Shall Discharge
Purchaser. The receipt of the Pass Through Trustee or of the officer
making such sale shall be a sufficient discharge to any purchaser for
his purchase money, and, after paying such purchase money and
receiving such receipt, such purchaser or its personal representative
or assigns shall not be obliged to see to the application of such
purchase money, or be in any way answerable for any loss,
misapplication or non-application thereof.
(iii) Application of Moneys Received Upon Sale. Any moneys
collected by the Pass Through Trustee upon any sale made either under
the power of sale given by this Pass Through Trust Agreement or
otherwise for the enforcement of this Pass Through Trust Agreement,
shall be applied as provided in Section 4.2(b).
SECTION 6.3. Judicial Proceedings Instituted by Pass Through Trustee.
(a) Pass Through Trustee May Bring Suit. If there shall be a failure
to make payment of the principal of, Make-Whole Amount, if any, or interest on
any Equipment Note or ETC, or if there shall be any failure to pay Rent (as
defined in the Lease) under the Lease when due and payable, then the Pass
Through Trustee, in its own name, and as trustee of an express trust, as holder
of such Equipment Notes or ETC, shall be, to the extent permitted by and in
accordance with the terms of the Note Documents or ETC Documents, entitled and
empowered to institute any suits, actions or proceedings at law, in equity or
otherwise, for the collection of the sums so due and unpaid on such Equipment
Notes or ETCs or under the Lease and may prosecute any such claim or proceeding
to judgment or final decree with respect to the whole amount of any such sums
so due and unpaid.
(b) Pass Through Trustee May File Proofs of Claim; Appointment of
Pass Through Trustee as Attorney-in-Fact in Judicial Proceedings. The Pass
Through Trustee in its own name, or as trustee of an express trust, or as
attorney-in-fact for the Certificateholders, or in any one or more of such
capacities (irrespective of whether distributions on the Certificates shall
then be due and payable, or the payment of the principal on the Equipment Notes
or ETCs, as the case may be, shall then be due and payable, as therein
expressed or by declaration or otherwise and irrespective of whether the Pass
Through Trustee shall have made any demand to the Indenture Trustee for the
payment of overdue principal, Make-Whole Amount (if any) or interest on
Equipment Notes or ETCs, as the case may be), shall be entitled and empowered
to file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Pass Through Trustee and of the
Certificateholders allowed in any receivership, insolvency, bankruptcy,
liquidation, readjustment, reorganization or any other judicial proceedings
relative to the Company, the Owner Trustee, the Owner Participant, the
Equipment Trust Trustees or their respective creditors or property. Any
receiver, assignee, trustee, liquidator, sequestrator (or similar official) in
any judicial proceeding is hereby authorized by each Certificateholder to make
payments in respect of such claim to the Pass Through Trustee and, in the event
that the Pass Through Trustee shall consent to the making of such payments
directly to the
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Certificateholders, to pay to the Pass Through Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the Pass
Through Trustee, its agents and counsel. Nothing contained in this Pass
Through Trust Agreement shall be deemed to give to the Pass Through Trustee any
right to accept or consent to any plan of reorganization or otherwise by action
of any character in any such proceeding to waive of change in any way any right
of any Certificateholder.
SECTION 6.4. Control by Certificateholders. Subject to Section 2.3,
the Certificateholders holding Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the Pass Through
Trust shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Pass Through Trustee, or
exercising any trust or power conferred on the Pass Through Trustee under this
Pass Through Trust Agreement, including any right of the Pass Through Trustee
as holder of the Equipment Notes or ETCs, provided that:
(i) such direction shall not be in conflict with any rule of
law or with this Pass Through Trust Agreement and would not involve
the Pass Through Trustee in personal liability or expense,
(ii) the Pass Through Trustee shall not determine that the
action so directed would be unjustly prejudicial to the
Certificateholders not taking part in such direction, it being
understood that (subject to Section 7.1) the Pass Through Trustee
shall have no duty to ascertain whether or not such actions or
forebearances are unjustly prejudicial to such certificateholders,
(iii) the Pass Through Trustee may take any other action
deemed proper by the Pass Through Trustee which is not inconsistent
with such direction, and
(iv) if an Indenture Default under the Indenture or an
Equipment Trust Default under either Equipment Trust Agreement shall
have occurred and be continuing, such direction shall not obligate the
Trustee to vote more than a corresponding majority of the related
Equipment Notes or ETCs, as the case may be, held by the Trust in
favor of directing any action by the Indenture Trustee with respect to
such Indenture Default or by the Equipment Trust Trustee with respect
to such Equipment Trust Default, as the case may be.
SECTION 6.5. Waiver of Past Defaults. The Certificateholders holding
Certificates evidencing Fractional Undivided Interests aggregating not less
than a majority in interest in the Pass Through Trust may on behalf of all of
the Certificateholders waive any past Event of Default hereunder and its
consequences or may instruct the Pass Through Trustee to waive any past default
under the Indenture, either Equipment Trust Agreement or this Agreement and its
consequences, except a default (i) in the payment of the principal of,
Make-Whole Amount, if
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any, or interest on any Equipment Notes or ETCs, as the case may be, or (ii) in
respect of a covenant or provision hereof which under Article IX hereof cannot
be modified or amended without the consent of the Certificateholder holding
each Outstanding Certificate affected.
Upon any such waiver, such default shall cease to exist with respect
to this Pass Through Trust Agreement, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this Pass
Through Trust Agreement and any direction given by the Pass Through Trustee on
behalf of such Certificateholders to the Indenture Trustee or Equipment Trust
Trustee, as the case may be, shall be annulled with respect thereto; but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon. Upon any such waiver, the Pass Through
Trustee shall vote all the Equipment Notes issued under the Indenture or ETCs
issued under the relevant Equipment Trust Agreement, as the case may be, to
waive the corresponding Default.
SECTION 6.6. Undertaking to Pay Court Costs. All parties to this
Pass Through Trust Agreement, and each Certificateholder by his acceptance of a
Certificate, shall be deemed to have agreed that any court may in its
discretion require, in any suit, action or proceeding for the enforcement of
any right or remedy under this Pass Through Trust Agreement, or in any suit,
action or proceeding against the Pass Through Trustee for any action taken or
omitted by it as Pass Through Trustee hereunder, the filing by any party
litigant in such suit, action or proceeding of an undertaking to pay the costs
of such suit, action or proceeding, and that such court may, in its discretion,
assess reasonable costs, including reasonable attorney's fees, against any
party litigant in such suit, action or proceeding, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
provided, however, that the provisions of this Section shall not apply to (a)
any suit, action or proceeding instituted by any Certificateholder or group of
Certificateholders evidencing Fractional Undivided Interests aggregating more
than 10% of the Pass Through Trust, (b) any suit, action or proceeding
instituted by any Certificateholder for the enforcement of the distribution of
payments pursuant to Section 4.2 hereof on or after the respective due dates
expressed herein or (c) any suit, action or proceeding instituted by the Pass
Through Trustee or as to which the Pass Through Trustee is made a party.
SECTION 6.7. Right of Certificateholders to Receive Payments Not to
Be Impaired. Anything in this Pass Through Trust Agreement to the contrary
notwithstanding, including without limitation Section 6.8 hereof, the right of
any Certificateholder to receive distributions of payments required pursuant to
Section 4.2 hereof on the Certificates when due, or to institute suit for
the enforcement of any such payment on or after the applicable Regular
Distribution Date or Special Distribution Date, shall not be impaired or
affected without the consent of such Certificateholder.
SECTION 6.8. Certificateholders May Not Bring Suit Except Under
Certain Conditions. A Certificateholder shall not have the right to institute
any suit, action or proceeding at law or in equity or otherwise with respect to
this Pass Through Trust Agreement, for the appointment of
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a receiver or for the enforcement of any other remedy under this Pass Through
Trust Agreement, unless:
(i) such Certificateholder previously shall have given
written notice to the Pass Through Trustee of a continuing Event of
Default;
(ii) the Certificateholders holding Certificates evidencing
Fractional Undivided Interests aggregating not less than 25% of the
Pass Through Trust shall have requested the Pass Through Trustee in
writing to institute such action, suit or proceeding and shall have
offered to the Pass Through Trustee indemnity as provided in
Section 7.3(v);
(iii) the Pass Through Trustee shall have refused or
neglected to institute any such action, suit or proceeding for 60 days
after receipt of such notice, request and offer of indemnity; and
(iv) no direction inconsistent with such written request has
been given to the Pass Through Trustee during such 60-day period by
the Certificateholders holding Certificates evidencing Fractional
Undivided Interests aggregating not less than an a majority in
interest in the Pass Through Trust.
It is understood and intended that no one or more of the
Certificateholders shall have any right in any manner whatever hereunder or
under the Certificates to (x) surrender, impair, waive, affect, disturb or
prejudice any property in the Trust Property or the lien of the Indenture or
any Equipment Trust Agreement on any property subject thereto, or the rights of
the Certificateholders or the holders of the Equipment Notes or ETCs, as the
case may be, (y) obtain or seek to obtain priority over or preference to any
other such Certificateholder or (z) enforce any right under this Pass Through
Trust Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all the Certificateholders subject to the
provisions of this Pass Through Trust Agreement.
SECTION 6.9. Remedies Cumulative. Every remedy given hereunder to the
Pass Through Trustee or to any of the Certificateholders shall not be exclusive
of any other remedy or remedies, and every such remedy shall be cumulative and
in addition to every other remedy given hereunder or now or hereafter given by
statute, law, equity or otherwise.
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ARTICLE VII
THE PASS THROUGH TRUSTEE
SECTION 7.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(i) the Pass Through Trustee undertakes to perform only such
duties as are specifically set forth in this Pass Through Trust
Agreement, and no implied covenants, duties or obligations shall be
read into this Pass Through Trust Agreement against the Pass Through
Trustee; and
(ii) in the absence of bad faith on its part, the Pass
Through Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Pass Through Trustee and
conforming to the requirements of this Pass Through Trust Agreement;
but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Pass Through Trustee, the Pass Through Trustee shall be under a duty
to examine the form of the same to determine whether or not they
substantially conform to the requirements of this Pass Through Trust
Agreement, but shall be under no duty to investigate the facts
contained therein.
(b) In case an Event of Default has occurred and is continuing, the
Pass Through Trustee shall exercise such of the right and powers vested in it
by this Pass Through Trust Agreement, and use the same degree of care and skill
in its exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
(c) No provision of this Pass Through Trust Agreement shall be
construed to relieve the Pass Through Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that
(i) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(ii) the Pass Through Trustee shall not be liable for any
error of judgement made in good faith by a Responsible Officer of the
Pass Through Trustee;
(iii) the Pass Through Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Certificateholders evidencing
Fractional Undivided Interests aggregating not less than a majority in
interest in the Pass Through Trust relating to the time, method and
place of
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conducting any proceeding for any remedy available to the Pass Through Trustee,
or exercising any trust or power conferred upon the Pass Through Trustee, under
this Pass Through Trust Agreement; and
(iv) no provision of this Pass Through Trust Agreement shall
require the Pass Through Trustee to expend or risk its own funds in
the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that payment of such funds or adequate indemnity against
such risk is not reasonably assured to it.
(d) Whether or not herein expressly so provided, every provision of
this Pass Through Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Pass Through Trustee shall be
subject to the provisions of this Section.
SECTION 7.2. Notice of Defaults. As promptly as practicable after,
and in any event within 30 days after, the occurrence of any default (as such
term is defined below) hereunder, the Pass Through Trustee shall transmit by
mail to the Certificateholders, the Company, the Owner Trustee, the Equipment
Trust Trustees and the Indenture Trustees in accordance with Section 313(c) of
the Trust Indenture Act, notice of such default hereunder known to the Pass
Through Trustee, unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of the principal
of (or Make-Whole Amount, if any) or interest on any Equipment Note or ETC, as
the case may be, the Pass Through Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee
or a trust committee of directors and/or Responsible Officers of the Pass
Through Trustee in good faith determine that the withholding of such notice is
in the interests of the Certificateholders. For the purpose of this Section,
the term "default" means the occurrence of any Event of Default, except that in
determining whether any such Event of Default has occurred for the purposes of
this paragraph any grace period or notice in connection therewith shall be
disregarded.
SECTION 7.3. Certain Rights of Trustee. Except as otherwise provided
in Section 7.1:
(i) the Pass Through Trustee may rely and shall be protected
in acting or refraining from acting in reliance upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Request;
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(iii) whenever in the administration of this Pass Through
Trust Agreement the Pass Through Trustee shall deem it desirable that
a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Pass Through Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officer's Certificate of Union, on
behalf of the Company, the Owner Trustee, the Equipment Trust Trustee
or the Indenture Trustee;
(iv) Before the Pass Through Trustee acts or refrains from
acting;
(v) the Pass Through Trustee may consult with counsel and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(vi) the Pass Through Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Pass Through
Trust Agreement at the request or direction of any of the
Certificateholders pursuant to this Pass Through Trust Agreement,
unless such Certificateholders shall have offered to the Pass Through
Trustee reasonable security or indemnity against the cost, expenses
and liabilities which might be incurred by it in compliance with such
request or direction;
(vii) the Pass Through Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture or other paper or document;
(viii) the Pass Through Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or
by or through agents or attorneys and the Pass Through Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
(ix) to the extent the provisions of this Section 7.3 are
inconsistent with the duties of the Pass Through Trustee as required
by Section 315 of the Trust Indenture Act, the requirements of such
Section 315 shall prevail;
(x) The Pass Through Trustee shall not be required to give
any bond or surety in respect of the performance of its powers and
duties hereunder; and
(xi) the permissive rights of the Pass Through Trustee shall
not be construed as a duty.
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SECTION 7.4. Not Responsible for Recitals or Issuance of
Certificates. The recitals contained herein and in the Certificates, except
the certificates of authentication, shall not be taken as the statements of the
Pass Through Trustee, and the Pass Through Trustee assumes no responsibility
for their correctness. Subject to Section 7.15, the Pass Through Trustee makes
no representations as to the validity or sufficiency of this Pass Through
Trust Agreement, any Note Document, any ETC Document, the Participation
Agreement, the Equipment Notes, the ETCs or the Certificates, except that the
Pass Through Trustee hereby represents and warrants that this Pass Through
Trust Agreement has been, and each Certificate will be, executed and delivered
by one of its officers who is duly authorized to execute and deliver such
document on its behalf.
SECTION 7.5. May Hold Certificates. The Pass Through Trustee, any
Paying Agent, Registrar or any of their Affiliates or any other agent, in their
respective individual or any other capacity, may become the owner or pledgee of
Certificates and, subject to Sections 310(b) and 311 of the Trust Indenture
Act, may otherwise deal with the Company, the Owner Trustee, the Equipment
Trust Trustees or the Indenture Trustee with the same rights it would have if
it were not Pass Through Trustee, Paying Agent, Registrar or such other agent.
SECTION 7.6. Money Held in Pass Through Trust. Money held by the Pass
Through Trustee or the Paying Agent in trust hereunder need not be segregated
from other funds except to the extent required herein or by law and neither the
Pass Through Trustee nor the Paying Agent shall have any liability for interest
upon any such moneys except as provided for herein.
SECTION 7.7. Compensation and Reimbursement. The Company agree,
severally and jointly:
(i) to pay, or cause to be paid, pursuant to separate
agreements between the Company and the Pass Through Trustee to the
Pass Through Trustee from time to time reasonable compensation for all
services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust), except for the Pass Through Trustee's
initial fees, which fees shall be paid by the Owner Trustee;
(ii) except as otherwise expressly provided herein, to
reimburse, or cause to be reimbursed, the Pass Through Trustee upon
its request for all reasonable out-of-pocket expenses, disbursements
and advances incurred or made by the Pass Through Trustee in
accordance with any provision of this Pass Through Trust Agreement
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence, or
willful misconduct or as may be incurred due to the Pass Through
Trustee's breach of its representations and warranties set forth in
Sections 7.4 and 7.15 and except for the initial reasonable actual
disbursements made by the Pass Through Trustee, which disbursements
shall be reimbursed by the Owner Trustee;
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(iii) to indemnify, or cause to be indemnified, the Pass
Through Trustee, in its individual and trust capacities, for, and to
hold it harmless against, any loss, liability or expense (other than
for or with respect to any tax) incurred without negligence or willful
misconduct on its part, arising out of or in connection with the
acceptance or administration of this Pass Through Trust, including the
costs and expenses of defending itself against or investigating any
claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder, except for any such loss,
liability or expense incurred by reason of the Pass Through Trustee's
breach of its representations and warranties set forth in Sections 7.4
and 7.15. The Pass Through Trustee shall notify the Company promptly
of any claim for which it may seek indemnity. The Company shall
defend the claim and the Pass Through Trustee shall cooperate in the
defense. The Pass Through Trustee may have separate counsel with the
consent of the Company, and the Company will pay the reasonable fees
and expenses of such counsel. The Company need not pay for any
settlement made without their consent; and
(iv) to indemnify, or cause to be indemnified, the Pass
Through Trustee, solely in its individual capacity, for, and to hold
it harmless against, any tax (other than for or with respect to any
tax referred to in the next paragraph, provided that no
indemnification shall be available with respect to any tax
attributable to the Pass Through Trustee's compensation for serving as
such) incurred without negligence or willful misconduct on its part,
arising out of or in connection with the acceptance or administration
of this Pass Through Trust, including any costs and expenses
reasonably incurred in contesting the imposition of any such tax. The
Pass Through Trustee, in its individual capacity, shall notify the
Company promptly of any tax for which it may seek indemnity. The
Company shall defend against the imposition of such tax and the Pass
Through Trustee, in its individual capacity, shall cooperate in the
defense. The Pass Through Trustee, in its individual capacity, may
have separate counsel with the consent of the Company, and the Company
will pay the reasonable fees and expenses of such counsel. The
Company need not pay for any taxes paid, in settlement or otherwise,
without their consent.
In addition, the Pass Through Trustee shall be entitled to
reimbursement from, and shall have a lien prior to the Certificates upon, all
property and funds held or collected by the Pass Through Trustee in its
capacity as Pass Through Trustee for any tax incurred without negligence or
willful misconduct, on its part, arising out of or in connection with the
acceptance or administration of this Pass Through Trust (other than any tax
attributable to the Pass Through Trustee's compensation for serving as such),
including any costs and expenses reasonably incurred in contesting the
imposition of any such tax. If the Pass Through Trustee reimburses itself for
any such tax, it will within 30 days mail a brief report setting forth the
circumstances thereof to all Certificateholders as their names and addresses
appear in the Register.
The Pass Through Trustee shall have a lien prior to the Certificates
upon all property and funds held or collected by the Pass Through Trustee in
its capacity as Pass Through Trustee.
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If the Pass Through Trustee incurs expenses or renders services after
an Event of Default specified in Section 6.1 occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.8. Corporate Trustee Required; Eligibility. This Agreement
shall at all times have a Pass Through Trustee which shall be eligible to act
as a trustee under Section 310(a) of the Trust Indenture Act and shall have a
combined capital and surplus of at least $100,000,000 and the obligations of
which, whether now in existence or hereafter incurred, are fully and
unconditionally guaranteed by a corporation organized and doing business under
the laws of the United States of America, any State or Territory thereof or of
the District of Columbia and having a combined capital and surplus of at least
$100,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or the requirements of Federal, State, Territorial or
District of Columbia supervising or examining authority, then for the purposes
of this Section 7.8, the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.
The Pass Through Trustee shall comply with Section 310(b) of the Trust
Indenture Act.
In case at any time the Pass Through Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.8, the Pass
Through Trustee shall resign immediately in the manner and with the effect
specified in Section 7.9.
SECTION 7.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Pass Through Trustee and no
appointment of a successor Pass Through Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Pass
Through Trustee under Section 7.10.
(b) The Pass Through Trustee may resign at any time by giving written
notice thereof to the Company, the Authorized Agents, the Owner Trustees, the
Equipment Trust Trustees and the Indenture Trustee. If an instrument of
acceptance by a successor Pass Through Trustee shall not have been delivered to
the Company, the Owner Trustee, the Equipment Trust Trustees and the Indenture
Trustee within 30 days after the giving of such notice of resignation, the
resigning Pass Through Trustee may petition any court of competent jurisdiction
for the appointment of a successor Pass Through Trustee.
(c) The Pass Through Trustee may be removed at any time by Act of the
Certificateholders holding Certificates evidencing Fractional Undivided
Interests aggregating not less than a majority in interest in the Pass Through
Trust delivered to the Pass Through Trustee and to the Company, the Owner
Trustee, the Equipment Trustee Trustees and the Indenture Trustee.
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(d) If at any time:
(i) the Pass Through Trustee shall fail to comply with
Section 310 of the Trust Indenture Act after written request therefor
by the Company or by any Certificateholder who has been a bona fide
Certificateholder for at least six months; or
(ii) the Pass Through Trustee shall cease to be eligible
under Section 7.8 and shall fail to resign after written request
therefor by the Company or by any such Certificateholder; or
(iii) the Pass Through Trustee shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a receiver of
the Pass Through Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Pass Through
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any case, (x) the Company may remove the Pass Through Trustee or (y)
subject to Section 6.6, any Certificateholder who has been a bona fide
Certificateholder for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Pass Through Trustee and the appointment of a successor Pass
Through Trustee.
(e) If a Responsible Officer of the Pass Through Trustee shall obtain
actual knowledge of an Avoidable Tax (as hereinafter defined) which has been or
is likely to be asserted, the Pass Through Trustee shall promptly notify the
Company and the Owner Trustee thereof and shall, within 30 days of such
notification, resign hereunder unless within such 30-day period the Pass
Through Trustee shall have received notice that the Company or the Owner
Trustees have agreed to pay such tax. The Company shall promptly appoint a
successor Pass Through Trustee in a jurisdiction where there are no Avoidable
Taxes. As used herein, an "Avoidable Tax" means a state or local tax: (i) upon
(w) the Pass Through Trust, (x) the Trust Property, (y) Certificateholders or
(z) the Pass Through Trustee for which the Pass Through Trustee is entitled to
seek reimbursement from the Trust Property, and (ii) which would be avoided if
the Pass Through Trustee were located in another state, or jurisdiction within
a state, within the United States. A tax shall not be an Avoidable Tax if the
Company or the Owner Trustee shall agree to pay, and shall pay, such tax.
(f) If the Pass Through Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Pass
Through Trustee for any cause, Union shall promptly appoint a successor Pass
Through Trustee. If, within one year after such resignation, removal or
incapacity, or the occurrence of such vacancy, a successor Pass Through Trustee
shall be appointed by Act of the Certificateholders holding Certificates
evidencing Fractional Undivided Interests aggregating not less than a majority
in interest in the Pass Through Trust delivered to
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the Company, the Owner Trustee, the Indenture Trustee, the Equipment Trust
Trustees and the retiring Pass Through Trustee, the successor Pass Through
Trustee so appointed shall, forthwith upon its acceptance of such appointment,
become the successor Pass Through Trustee and supersede the retiring Pass
Through Trustee. If no successor Pass Through Trustee shall have been so
appointed as provided above and accepted appointment in the manner hereinafter
provided, any Certificateholder who has been a bona fide Certificateholder for
at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Pass Through Trustee.
(g) The successor Pass Through Trustee shall give notice of the
resignation and removal of the Pass Through Trustee and appointment of the
successor Pass Through Trustee by mailing written notice of such event by
first-class mail, postage prepaid, to the Certificateholders as their names and
addresses appear in the Register. Each notice shall include the name of such
successor Pass Through Trustee and the address of its Corporate Trust Office.
SECTION 7.10. Acceptance of Appointment by Successor. Every
successor Pass Through Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and the retiring Pass Through Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Pass Through Trustee shall become effective and such successor Pass
Through Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Pass
Through Trustee; but, on request of the Company or the successor Pass Through
Trustee, such retiring Pass Through Trustee shall execute and deliver an
instrument transferring to such successor Pass Through Trustee all the rights,
powers and trusts of the retiring Pass Through Trustee and shall duly assign,
transfer and deliver to such successor Pass Through Trustee all property and
money held by such retiring Pass Through Trustee hereunder, subject
nevertheless to its lien, if any, provided for in Section 7.7. Upon request of
any such successor Pass Through Trustee, Union, the retiring Pass Through
Trustee and such successor Pass Through Trustee shall execute and deliver any
and all instruments containing such provisions as shall be necessary or
desirable to transfer and confirm to, and for more fully and certainly vesting
in, such successor Pass Through Trustee all such rights, powers and trusts.
No successor Pass Through Trustee shall accept its appointment unless
at the time of such acceptance such successor Pass Through Trustee shall be
qualified and eligible under this Article.
SECTION 7.11. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Pass Through Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Pass Through Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Pass Through Trustee, shall be the
successor of the Pass Through Trustee hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on
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the part of any of the parties hereto. In case any Certificates shall have
been authenticated, but not delivered, by the Pass Through Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Pass Through Trustee may adopt such authentication and deliver
the Certificates so authenticated with the same effect as if such successor
Pass Through Trustee had itself authenticated such Certificates.
SECTION 7.12. Maintenance of Agencies.
(a) There shall at all times be maintained in the Borough of
Manhattan, The City of New York, an office or agency where Certificates may be
presented or surrendered for registration of transfer or for exchange, and for
payment thereof and where notices and demands to or upon the Pass Through
Trustee in respect of the Certificates or of this Pass Through Trust Agreement
may be served. Such office or agency shall be initially at Harris Trust and
Savings Bank, Harris Trust Company of New York, 77 Water Street, 4th Floor, New
York, New York 10005. Written notice of the location of each such other
office or agency and of any change of location thereof shall be given by the
Pass Through Trustee to Union, the Owner Trustee, the Indenture Trustee, the
Equipment Trust Trustees and the Certificateholders. In the event that no such
office or agency shall be maintained or no such notice of location or of change
of location shall be given, presentations and demands may be made and notices
may be served at the Corporate Trust Office of the Pass Through Trustee.
(b) There shall at all times be a Registrar and a Paying Agent
hereunder. Each such Authorized Agent shall be a bank or trust company, shall
be a corporation organized and doing business under the laws of the United
States of America or any State or Territory thereof or of the District of
Columbia, with a combined capital and surplus of at least $75,000,000, or, if
the Pass Through Trustee shall be acting as the Registrar or Paying Agent
hereunder, a corporation the obligations of which are guaranteed by a
corporation organized and doing business under the laws of the United States of
America or any State or Territory thereof or of the District of Columbia, with
a combined capital and surplus of at least $75,000,000, and shall be authorized
under such laws to exercise corporate trust powers, subject to supervision by
Federal or state authorities. The Pass Through Trustee shall initially be the
Paying Agent and, as provided in Section 3.4, Registrar hereunder. Each
Registrar shall furnish to the Pass Through Trustee, at stated intervals of not
more than six months, and at such other times as the Pass Through Trustee may
request in writing, a copy of the Register.
(c) Any corporation into which any Authorized Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authorized Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authorized Agent, shall be the successor of such Authorized Agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the parties hereto or such Authorized Agent or such successor
corporation.
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(d) Any Authorized Agent may at any time resign by giving written
notice of resignation to the Pass Through Trustee, the Company, the Owner
Trustee, the Equipment Trust Trustees and the Indenture Trustee. The Company
may, and at the request of the Pass Through Trustee shall, at any time
terminate the agency of any Authorized Agent by giving written notice of
termination to such Authorized Agent and to the Pass Through Trustee. Upon the
resignation or termination of an Authorized Agent or in case at any time any
such Authorized Agent shall cease to be eligible under this Section (when, in
either case, no other Authorized Agent performing the functions of such
Authorized Agent shall have been appointed), the Company shall promptly appoint
one or more qualified successor Authorized Agents, reasonably satisfactory to
the Pass Through Trustee, to perform the functions of the Authorized Agent
which has resigned or whose agency has been terminated or who shall have ceased
to be eligible under this Section. Union shall give written notice of any such
appointment made by them to the Pass Through Trustee, the Owner Trustee, the
Equipment Trust Trustees and the Indenture Trustee; and in each case the Pass
Through Trustee shall mail notice of such appointment to all Certificateholders
as their names and addresses appear on the Register.
(e) The Company agree, severally and not jointly, to pay, or cause to
be paid, pursuant to separate agreements from time to time to each Authorized
Agent reasonable compensation for its services and to reimburse it for its
reasonable expenses.
SECTION 7.13. Money for Certificate Payments to Be Held in Pass
Through Trust. All moneys deposited with any Paying Agent for the purpose of
any payment on Certificates shall be deposited and held in trust for the
benefit of the Certificateholders entitled to such payment, subject to the
provisions of this Section. Moneys so deposited and held in trust shall
constitute a separate trust fund for the benefit of the Certificateholders with
respect to which such money was deposited.
The Pass Through Trustee will cause each Paying Agent other than the
Pass Through Trustee to execute and deliver to it an instrument in which such
Paying Agent shall agree with the Pass Through Trustee, subject to the
provisions of this Section, that such Paying Agent will:
(i) hold all sums held by it for payments on Certificates in
trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
(ii) give the Pass Through Trustee notice of any default by
any obligor upon the Certificates in the making of any such payment;
and
(iii) at any time during the continuance of any such default,
upon the written request of the Pass Through Trustee, forthwith pay to
the Pass Through Trustee all sums so held in trust by such Paying
Agent.
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The Pass Through Trustee may at any time, for the purpose of
obtaining the satisfaction and discharge of this Pass Through Trust Agreement
or for any other purpose, direct any Paying Agent to pay to the Pass Through
Trustee all sums held in trust by such Paying Agent, such sums to be held by
the Pass Through Trustee upon the same trusts as those upon which such sums
were held by such Paying Agent; and, upon such payment by any Paying Agent to
the Pass Through Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
SECTION 7.14. Registration of Equipment Notes and ETCs in Pass
Through Trustee's Name. The Pass Through Trustee agrees that all Equipment
Notes, ETCs, Permitted Investments, if any, and Specified Investments, if any,
shall be issued in the name of the Pass Through Trustee or its nominee and held
by the Pass Through Trustee, or, if not so held, the Pass Through Trustee or
its nominee shall be reflected as the owner of such Equipment Notes, ETCs,
Permitted Investments, or Specified Investments, as the case may be, in the
register of the issuer of such Equipment Notes, ETCs, Permitted Investments or
Specified Investments. In no event shall the Pass Through Trustee invest in,
or hold, Equipment Notes, ETCs, Permitted Investments or Specified Investments
in a manner that would cause the Pass Through Trustee not to have the ownership
interest in such Equipment Notes, ETCs, Permitted Investments or Specified
Investments under the applicable provisions of the Uniform Commercial Code in
effect where the Pass Through Trustee holds such Equipment Notes, ETCs,
Permitted Investments or Specified Investments or other applicable law then in
effect.
SECTION 7.15. Representations and Warranties of Pass Through Trustee.
The Pass Through Trustee hereby represents and warrants that:
(i) the Pass Through Trustee is an Illinois banking
corporation validly existing and holding a valid certificate to
conduct business as an Illinois banking corporation with trust powers
under the laws of the State of Illinois;
(ii) the Pass Through Trustee has full power, authority and
legal right to execute, deliver, and perform this Pass Through Trust
Agreement and the Participation Agreement and has taken all necessary
action to authorize the execution, delivery, and performance by it of
this Pass Through Trust Agreement and the Participation Agreement;
(iii) the execution, delivery and performance by the Pass
Through Trustee of this Pass Through Trust Agreement and the
Participation Agreement (a) will not violate any provision of any
United States or Illinois law or regulation governing the banking and
trust powers of the Pass Through Trustee or any order, writ, judgment,
or decree of any court, arbitrator, or governmental authority
applicable to the Pass Through Trustee or any of its assets, (b) will
not violate any provision of the articles of association or by- laws
of the Pass Through Trustee, or (c) will not violate any provision of,
or constitute, with or without notice or lapse of time, a default
under, or result in the creation or imposition of any lien on any
properties included in the Trust Property pursuant to the provisions
of any
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mortgage, indenture, contract, agreement or other undertaking to which
it is a party, which violation, default or lien could reasonably be
expected to have an adverse effect on the Pass Through Trustee's
performance or ability to perform its duties hereunder or thereunder or
on the transactions contemplated herein or therein;
(iv) the execution, delivery and performance by the Pass
Through Trustee of this Pass Through Trust Agreement and the
Participation Agreement will not require the authorization, consent,
or approval of, the giving of notice to, the filing or registration
with, or the taking of any other action in respect of, any United
States or Illinois governmental authority or agency regulating the
banking and corporate trust activities of the Pass Through Trustee,
other than any such authorization, consent or approval as has been
duly obtained or given and is in full force and effect; and
(v) this Pass Through Trust Agreement and the Participation
Agreement have been duly executed and delivered by the Pass Through
Trustee and constitute the legal, valid, and binding agreements of the
Pass Through Trustee, enforceable against it in accordance with their
respective terms, provided that enforceability may be limited by (x)
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and (y)
general principles of equity.
SECTION 7.16. Withholding Taxes; Information Reporting. The Pass
Through Trustee, as trustee of a grantor trust, shall exclude and withhold from
each distribution of principal, Make-Whole Amount, if any, and interest and
other amounts due hereunder or under the Certificates any and all withholding
taxes applicable thereto as required by law. The Pass Through Trustee agrees
to act as such withholding agent and, in connection therewith, whenever any
present or future taxes or similar charges are required to be withheld with
respect to any amounts payable in respect of the Certificates, to withhold such
amounts and timely pay the same to the appropriate authority in the name of and
on behalf of the Certificateholders, that it will file any necessary
withholding tax returns or statements when due, and that, as promptly as
possible after the payment thereof, it will deliver to each Certificateholder
appropriate documentation showing the payment thereof, together with such
additional documentary evidence as such Certificateholders may reasonably
request from time to time. The Pass Through Trustee agrees to file any other
information reports as it may be required to file under United States law. To
the extent that the Pass Through Trustee fails, with respect to any
Certificateholder, to withhold and pay over any such taxes to the appropriate
taxing authority, the Pass Through Trustee shall, upon a claim being made for
such taxes by such authority, and before making any claim to Union for
indemnification under Section 7.1 of the Participation Agreement (if such
indemnification would otherwise be permissible thereunder), take all reasonable
steps to recover such taxes from such Certificateholder, including, without
limitation, withholding the amount of such taxes from subsequent distributions,
if any, to such Certificateholder. To the extent that the Pass Through Trustee
receives any amount from Union for indemnification of such taxes which the Pass
Through Trustee thereafter recovers from the appropriate Certificateholder
(including by
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withholding from subsequent distributions to such Certificateholder), the Pass
Through Trustee shall reimburse Union therefor. The Pass Through Trustee shall
be permitted to rely upon any certificate presented by a Certificateholder
claiming an exemption from withholding absent negligence or willful misconduct
on the part of the Pass Through Trustee.
SECTION 7.17. Trustee's Liens. The Pass Through Trustee in its
individual capacity agrees that it will at its own cost and expense promptly
take such actions as may be necessary to duly discharge and satisfy in full all
Trustee's Liens.
SECTION 7.18. Preferential Collection of Claims. The Pass Through
Trustee shall comply with Sections 311(a) and (b) of the Trust Indenture Act,
excluding any creditor relationship arising under Section 311(b) of the Trust
Indenture Act. A Pass Through Trustee who has resigned or been removed shall
be subject to Section 311(a) of the Trust Indenture Act to the extent
indicated.
ARTICLE VIII
CERTIFICATEHOLDERS' LISTS AND REPORTS BY PASS THROUGH TRUSTEE
SECTION 8.1. The Company to Furnish Pass Through Trustee with Names
and Addresses of Certificateholders. The Company will furnish to the Pass
Through Trustee within 15 days after each Record Date with respect to a
Scheduled Payment, and at such other times as the Pass Through Trustee may
request in writing, within 30 days after receipt by the Company of any such
request, a list, in such form as the Pass Through Trustee may reasonably
require, of all information in the possession or control of the Company as to
the names and addresses of the Certificateholders, in each case as of a date
not more than 15 days prior to the time such list is furnished; provided,
however, that so long as the Pass Through Trustee is the sole Registrar, no
such list need be furnished; and provided further, however, that no such list
need be furnished for so long as a copy of the Register is being furnished to
the Pass Through Trustee pursuant to Section 7.12.
SECTION 8.2. Preservation of Information; Communications to
Certificateholders. The Pass Through Trustee shall preserve, in as current a
form as is reasonably practicable, the names and addresses of
Certificateholders contained in the most recent Register or list furnished to
the Pass Through Trustee as provided in Section 7.12 or Section 8.1, as the
case may be, and the names and addresses of Certificateholders received by the
Pass Through Trustee in its capacity as Registrar, if so acting. The Pass
Through Trustee may destroy any Register or list furnished to it as provided in
Section 7.12 or Section 8.1, as the case may be, upon receipt of a new Register
or list so furnished.
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SECTION 8.3. Reports by Pass Through Trustee.
(a) Within 60 days after May 15 of each year commencing with the year
1997, the Pass Through Trustee shall transmit to the Certificateholders, as
provided in Section 313(c) of the Trust Indenture Act, a report dated as of
such May 15, if required by Section 313(a) of the Trust Indenture Act. The
Pass Through Trustee shall also comply with Section 313(b) of the Trust
Indenture Act.
(b) A copy of each such report shall, at the time of transmission to
Certificateholders, be filed by the Pass Through Trustee with each stock
exchange (if any) upon which the Certificates are listed, and also with the
Commission. The Company will notify the Pass Through Trustee when the
Certificates are listed on any stock exchange and any subsequent change with
respect thereto.
SECTION 8.4. Reports by the Company. Union shall:
(a) file with the Pass Through Trustee, within 30 days after it is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which it is required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934,
as amended; or if it is not required to file information, documents or reports
pursuant to either of such sections, then to file with the Pass Through Trustee
and the Commission, in accordance with rules and regulations prescribed by the
Commission pursuant to Section 314(a)(1) of the Trust Indenture Act, such of
the supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended, in respect of a security listed and registered on a national
securities exchange as may be prescribed in such rules and regulations;
(b) file with the Pass Through Trustee and the Commission, in
accordance with the rules and regulations prescribed by the Commission, such
additional information, documents and reports with respect to compliance by it
with the conditions and covenants provided for in this Agreement, as may be
required by such rules and regulations, including, in the case of annual
reports, if required by such rules and regulations, certificates or opinions of
independent public accountants, conforming to the requirements of Section 1.2;
(c) transmit to all Certificateholders, in the manner and to the
extent provided in Section 313(c) of the Trust Indenture Act such summaries of
any information, documents and reports required to be filed by Union pursuant
to subsections (a) and (b) of this Section 8.4 as may be required by rules and
regulations prescribed by the Commission; and
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(d) furnish to the Pass Through Trustee, not less often than
annually, a certificate from the principal executive officer, principal
financial officer or principal accounting officer thereof as to his or her
knowledge of Union's compliance with all conditions and covenants under this
Agreement. For purposes of this subsection (d), such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Agreement.
ARTICLE IX
SUPPLEMENTS TO PASS THROUGH TRUST AGREEMENT
SECTION 9.1. Supplements to Pass Through Trust Agreement Without
Consent of Certificateholders. Without the consent of the Certificateholders,
the Company may, and the Pass Through Trustee (subject to Section 9.3) shall,
at any time and from time to time enter into one or more agreements
supplemental hereto, in form satisfactory to the Pass Through Trustee, for any
of the following purposes:
(i) to evidence the succession of another corporation to
Union and the assumption by any such successor of the covenants of
Union herein contained;
(ii) to add to the covenants of either of the Company for the
benefit of the Certificateholders, or to surrender any right or power
herein conferred upon the Company;
(iii) to cure any ambiguity, to correct any manifest error to
correct or supplement any provision herein which may be defective or
inconsistent with any other provision herein or to make any other
provisions with respect to matters or questions arising under this
Pass Through Trust Agreement, provided that any such action shall not
adversely affect the interests of the Certificateholders; or
(iv) to modify, eliminate or add to the provisions of this
Pass Through Trust Agreement to such extent as shall be necessary to
continue the qualification of this Pass Through Trust Agreement
(including any supplemental agreement) under the Trust Indenture Act,
or under any similar Federal statute hereafter enacted, and to add to
this Pass Through Trust Agreement such other provisions as may be
expressly permitted by the Trust Indenture Act, excluding, however,
the provisions referred to in Section 316(a)(2) of the Trust Indenture
Act as in effect at the date as of which this instrument was executed
or any corresponding provision in any similar Federal statute
hereafter enacted.
SECTION 9.2. Supplements to Pass Through Trust Agreement with Consent
of Certificateholders. With the consent of the Certificateholders holding
Certificates evidencing Fractional Undivided Interests aggregating not less
than a majority in interest, by Act of such
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Certificateholders delivered to the Company and the Pass Through Trustee, the
Company may (with the consent of the Owner Trustee, if any, such consent not to
be unreasonably withheld), and the Pass Through Trustee (subject to Section
9.3) shall, enter into an agreement or agreements supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Pass Through Trust Agreement or of modifying in
any manner the rights and obligations of the Certificateholders under this Pass
Through Trust Agreement; provided, however, that no such supplemental agreement
shall, without the consent of each Certificateholder of an Outstanding
Certificate affected thereby:
(i) reduce in any manner the amount of, or delay the timing
of, any receipt by the Pass Through Trustee of payments on the
Equipment Notes or the ETCs held in the Pass Through Trust or
distributions that are required to be made herein on any Certificate,
or change any date of payment on any Certificate, or change the place
of payment where, or the coin or currency in which, any Certificate is
payable, or impair the right to institute suit for the enforcement of
any such payment or distribution on or after the Regular Distribution
Date or Special Distribution Date applicable thereto;
(ii) permit the disposition of any Equipment Note or ETCs in
the Trust Property except as permitted by this Pass Through Trust
Agreement, or otherwise deprive any Certificateholder of the
beneficial ownership of the Equipment Notes or ETCs in the Pass
Through Trust;
(iii) reduce the percentage of the aggregate Fractional
Undivided Interests of the Pass Through Trust required for any such
supplemental agreement, or reduce such percentage required for any
waiver (of compliance with certain provisions of this Pass Through
Trust Agreement or certain defaults hereunder and their consequences)
provided or in this Pass Through Trust Agreement;
(iv) modify Article XII or otherwise release Union from its
obligations under the Guarantee; or
(v) modify any of the provisions of this Section or Section
6.5, except to increase any such percentage or to provide that certain
other provisions of this Pass Through Trust Agreement cannot be
modified or waived without the consent of the Certificateholder of
each Certificate affected thereby.
It shall not be necessary for any Act of Certificateholders under this
Section to approve the particular form of any proposed supplemental agreement,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.3. Documents Affecting Immunity or Indemnity. If in the
opinion of the Pass Through Trustee any document required to be executed by it
pursuant to the terms of
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Section 9.1 or 9.2 affects any interest, right, duty, obligation, immunity or
indemnity in favor of the Pass Through Trustee under this Pass Through Trust
Agreement, the Pass Through Trustee may in its discretion decline to execute
such document.
SECTION 9.4. Execution of Supplements to Pass Through Trust
Agreements. In executing, or accepting the additional trusts created by, any
supplemental agreement permitted by this Article or the modifications thereby
of the trusts created by this Pass Through Trust Agreement, the Pass Through
Trustee shall be entitled to receive, and shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
agreement is authorized or permitted by this Pass Through Trust Agreement.
SECTION 9.5. Effect of Supplements to Pass Through Trust Agreement.
Upon the execution of any supplemental agreement under this Article, this Pass
Through Trust Agreement shall be modified in accordance therewith, and such
supplemental agreement shall form a part of this Pass Through Trust Agreement
for all purposes; and every Certificateholder of Certificates theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 9.6. Conformity with Trust Indenture Act. Every supplemental
agreement executed pursuant to this Article shall conform to the requirements
of the Trust Indenture Act as then in effect.
SECTION 9.7. Reference in Certificates to Supplements to Pass Through
Trust Agreements. Certificates authenticated and delivered after the execution
of any supplemental agreement pursuant to this Article may bear a notation in
form approved by the Pass Through Trustee as to any matter provided for in such
supplemental agreement, and, in such case, suitable notation may be made upon
Outstanding Certificates after proper presentation and demand.
ARTICLE X
AMENDMENTS TO INDENTURE, NOTE DOCUMENTS,
EQUIPMENT TRUST AGREEMENTS AND ETC DOCUMENTS
In the event that the Pass Through Trustee, as holder of any Equipment
Note or an ETC in trust for the benefit of the Certificateholders, receives a
request for a consent to any amendment, modification, waiver or supplement
under the Indenture, other Note Document, either Equipment Trust Agreement,
other ETC Document or the Participation Agreement, the Pass Through Trustee
shall forthwith send a notice of such proposed amendment modification, waiver
or supplement, to each Certificateholder registered on the Register as of such
date. The Pass Through Trustee shall request from the Certificateholders
Directions as to (a) whether or not to direct the Indenture Trustee or such
Equipment Trust Trustee, as the case may be, to take or refrain from taking any
action which a holder of such Equipment Note or ETC, as the case may
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be, has the option to direct, (b) whether or not to give or execute any
waivers, consents, amendments, modifications or supplements as a holder of such
Equipment Note or ETC, as the case may be, and (c) how to vote any Equipment
Note or ETC, as the case may be, if a vote has been called for with respect
thereto. Provided such a request for Certificateholder Direction shall have
been made, in directing any action or casting any vote or giving any consent as
the holder of any Equipment Note or ETC, as the case may be, the Pass Through
Trustee shall vote or consent with respect to such Equipment Note or ETC, as
the case may be, in the same proportion as the Certificates were actually voted
by Acts of Certificateholders delivered to the Pass Through Trustee prior to
two Business Days before the Pass Through Trustee directs such action or casts
such vote or gives such consent. Notwithstanding the foregoing, but subject to
Section 6.4, in the case that an Event of Default hereunder shall have occurred
and be continuing, the Pass Through Trustee may, in its own discretion and at
its own direction, consent and notify the Indenture Trustee or Equipment Trust
Trustee of such consent to any amendment, modification, waiver or supplement
under the Indenture, and other Note Document, any Equipment Trust Agreement,
any other ETC Document or the Participation Agreement.
ARTICLE XI
TERMINATION OF PASS THROUGH TRUST
The respective obligations and responsibilities of the Company and the
Pass Through Trustee created hereby and the Pass Through Trust created hereby
shall terminate upon the distribution to all Certificateholders and the Pass
Through Trustee of all amounts required to be distributed to them pursuant to
this Pass Through Trust Agreement and the disposition of all property held as
part of the Trust Property; provided, however, that in no event shall the trust
created hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of John D. Rockefeller, father of Nelson
Rockefeller, former Vice President of the United States, living on the date of
this Pass Through Trust Agreement.
Notice of any termination, specifying the Regular Distribution Date
(or Special Distribution Date, as the case may be) upon which the
Certificateholders may surrender their Certificates to the Pass Through Trustee
for payment of the final distribution and cancellation, shall be mailed
promptly by the Pass Through Trustee to Certificateholders not earlier than the
60th day and not later than the 20th day next preceding such final
distribution, specifying (a) the Regular Distribution Date (or Special
Distribution Date, as the case may be) upon which the proposed final payment of
the Certificates will be made upon presentation and surrender of Certificates
at the office or agency of the Pass Through Trustee therein specified, (b) the
amount of any such proposed final payment, and (c) that the Record Date
otherwise applicable to such Regular Distribution Date (or Special Distribution
Date, as the case may be) is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office or agency of the
Pass Through Trustee therein specified. The Pass Through Trustee shall give
such
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<PAGE> 58
notice to the Registrar at the time such notice is given to Certificateholders.
Upon presentation and surrender of the Certificates, the Pass Through Trustee
shall cause to be distributed to Certificateholders amounts distributable on
such Regular Distribution Date (or Special Distribution Date, as the case may
be) pursuant to Section 4.2.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned written notice, the Pass Through Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. In the event that any money held by the Pass Through Trustee for the
payment of distributions on the Certificates shall remain unclaimed for two
years and 11 months after the final distribution date with respect thereto, the
Pass Through Trustee shall pay to the Indenture Trustee or each Equipment Trust
Trustee the appropriate amount of money relating to the Indenture Trustee or
such Equipment Trust Trustee and shall give written notice thereof to the Owner
Trustee and Union.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.1. Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this Pass
Through Trust Agreement or the Pass Through Trust, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a partition or
winding up of the Pass Through Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
SECTION 12.2. Certificates Nonassessable and Fully Paid.
Certificateholders shall not be personally liable for obligations of the Pass
Through Trust, the Fractional Undivided Interests represented by the
Certificates shall be nonassessable for any losses or expenses of the Pass
Through Trust or for any reason whatsoever, and Certificates upon
authentication thereof by the Pass Through Trustee pursuant to Section 3.2 are
and shall be deemed fully paid. No Certificateholder shall have any right
(except as expressly provided herein) to vote or in any manner otherwise
control the operation and management of the Trust Property, the Pass Through
Trust established hereunder, or the obligations of the parties hereto, nor
shall anything set forth herein, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association.
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<PAGE> 59
SECTION 12.3. Notices.
(a) Unless otherwise expressly specified or permitted by the terms
hereof, all communications and notices provided for herein shall be in writing,
and any such notice shall become effective (i) upon personal delivery thereof,
including, without limitation by overnight mail and courier service, (ii) in
the case of notice by United States mail, certified or registered, postage
prepaid, return receipt requested, three days after being so deposited in the
United States mail, or (iii) in the case of notice by facsimile transmission,
upon transmission thereof, provided such transmission is promptly confirmed
(which conformation may be mechanical), in each case addressed to each party
here to at the addresses set forth below:
if to Union, to:
Union Tank Car Company
225 West Washington Street
Chicago, Illinois 60606
Attention: Robert W. Webb, Secretary
Facsimile: (312) 845-5305
Telephone: (312) 372-9500
if to the Pass Through Trustee, to:
Harris Trust and Savings Bank
311 West Monroe Street
Chicago, Illinois 60606
Attention: Indenture Trust Division\Dan Donovan
Facsimile: (312) 461-3525
Telephone: (312) 461-2908
(b) The Company and the Pass Through Trustee, by notice to the other
parties, may designate additional or different addresses for subsequent notices
or communications.
(c) Any notice or communication to Certificateholders shall be mailed
by first-class mail to the addresses for Certificateholders shown on the
Register kept by the Registrar and to addresses filed with the Pass Through
Trustee for Certificate Owners. Failure so to mail a notice or communication
or any defect in such notice or communication shall not affect its sufficiency
with respect to other Certificateholders.
(d) If a notice or communication is mailed in the manner provided
above within the time prescribed, it is conclusively presumed to have been duly
given, whether or not the addressee receives it.
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<PAGE> 60
(e) If the Company mail a notice or communication to the
Certificateholders, it shall mail a copy to the Pass Through Trustee and to
each Paying Agent at the same time.
(f) Notwithstanding the foregoing, all communications or notices to
the Pass Through Trustee shall be deemed to be given only when received by a
Responsible Officer of the Pass Through Trustee.
(g) The Pass Through Trustee shall promptly furnish the Company with
a copy of any demand, notice or written communication received by the Pass
Through Trustee hereunder from any Certificateholder, the Owner Trustee, any
Equipment Trust Trustee or the Indenture Trustee.
SECTION 12.4. Communication by Certificateholder with Other
Certificateholders. Certificateholders may communicate pursuant to Section
312(b) of the Trust Indenture Act with other Certificateholders with respect to
their rights under this Pass Through Trust Agreement or under the Certificates,
and the Pass Through Trustee shall comply with Section 312(b) of the Trust
Indenture Act. The Company and the Pass Through Trustee shall have the
protection of Section 312(c) of the Trust Indenture Act.
SECTION 12.5. Governing Law. THIS PASS THROUGH TRUST AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OF CONFLICT OF LAW PROVISION OR
RULE AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 12.6. Severability of Provisions. Whenever possible, each
provision of this Pass Through Trust Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Pass Through Trust Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Pass Through Trust Agreement.
SECTION 12.7. Trust Indenture Act Controls. This Agreement is
subject to the provisions of the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions.
SECTION 12.8. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 12.9. Successors and Assigns. All covenants, agreements,
representations and warranties in this Pass Through Trust Agreement by the Pass
Through Trustee, the Company shall
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<PAGE> 61
bind and, to the extent permitted hereby, shall inure to the benefit of and be
enforceable by their respective successors and assigns, whether so expressed or
not.
SECTION 12.10. Benefits of Pass Through Trust Agreement. Nothing in
this Pass Through Trust Agreement or in the Certificates, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, and the Certificateholders, any benefit or any legal or equitable
right, remedy or claim under this Pass Through Trust Agreement.
SECTION 12.11. Legal Holidays. In any case where any Regular
Distribution Date or Special Distribution Date relating to any Certificate
shall not be a Business Day, then (notwithstanding any other provision of this
Pass Through Trust Agreement) payment need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on such Regular Distribution Date or Special Distribution Date, and no
interest shall accrue during the intervening period.
SECTION 12.12. Counterparts. For the purpose of facilitating the
execution of this Pass Through Trust Agreement and for other purposes, this
Pass Through Trust Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
all of which counterparts shall constitute but one and the same instrument.
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<PAGE> 62
IN WITNESS WHEREOF, Union and the Pass Through Trustee have caused
this Pass Through Trust Agreement to be duly executed by their respective
officers, duly attested, all on the day and year first above written.
UNION TANK CAR COMPANY
Attest: By ______________________________
Title:
_________________________
Title:
HARRIS TRUST AND SAVINGS BANK,
as Pass Through Trustee
Attest: By ______________________________
Title:
_________________________
Title:
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<PAGE> 63
EXHIBIT A
FORM OF CERTIFICATE
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to issuers or
their agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch the registered owner hereof,
Cede & Co., has an interest herein.
UNION TANK CAR COMPANY
_______ PASS THROUGH TRUST
Pass Through Certificate,
Series _______
Final Distribution Date: ________________
evidencing a fractional undivided interest in a trust, the
property of which includes certain equipment notes (the "Equipment
Notes") and Equipment Trust Certificates ("ETCs") each secured by
equipment leased to Union Tank Car Company.
Certificate
No. ___ $ __________ Fractional Undivided Interest
representing 100% of the Trust
THIS CERTIFIES THAT Cede & Co., for value received, is the
registered owner of a $___________ (___________________________________________
____________________________________________________________________ dollars)
Fractional Undivided Interest in the Union Tank Car Company ______ Pass Through
Trust (the "Trust") created by _______________, a national banking association,
as trustee (the "Pass Through Trustee"), pursuant to a Pass Through Trust
Agreement ______ dated _______ (the "Pass Through Trust Agreement") among the
Pass Through Trustee, Union Tank Car Company, a Delaware corporation ("Union"),
a summary of certain of the pertinent provisions of which is set forth below.
To the extent not otherwise defined herein, the capitalized terms used herein
have the meanings assigned to them in the Pass Through Trust Agreement. This
Certificate is one of the
<PAGE> 64
duly authorized Certificates designated as "Pass Through Certificates, Series
______" (herein called the "Certificates"). This Certificate is issued under
and is subject to the terms, provisions, and conditions of the Pass Through
Trust Agreement, to which Pass Through Trust Agreement the Certificateholder of
this Certificate by virtue of the acceptance hereof assents and by which such
Certificateholder is bound. The property of the Pass Through Trust (the "Trust
Property") includes certain Equipment Notes and ETCs. Each issue of Equipment
Notes and ETCs is secured by, among other things, a security interest in
Equipment leased to Union or conditionally sold to Procor, as the case may be.
Subject to and in accordance with the terms of the Pass
Through Trust Agreement, from funds then available to the Pass Through Trustee,
there will be distributed on _______ and ______ of each year (each a "Regular
Distribution Date"), commencing on _________, to the Person in whose name this
Certificate is registered at the close of business on the Business Day
preceding the Regular Distribution Date, an amount in respect of the Scheduled
Payments on the Equipment Notes and the ETCs due on such Regular Distribution
Date, the receipt of which has been confirmed by the Pass Through Trustee,
equal to the product of the percentage interest in the Pass Through Trust
evidenced by this Certificate and an amount equal to the sum of such Scheduled
Payments. Subject to and in accordance with the terms of the Pass Through
Trust Agreement, in the event that Special Payments on the Equipment Notes or
the ETCs are received by the Pass Through Trustee, from funds then available to
the Pass Through Trustee, there shall be distributed on the applicable Special
Distribution Date, to the Person in whose name this Certificate is registered
at the close of business on the Business Day preceding the Special Distribution
Date, an amount in respect of such Special Payments on the Equipment Notes or
the ETCs, the receipt of which has been confirmed by the Pass Through Trustee,
equal to the product of the percentage interest in the Pass Through Trust
evidenced by this Certificate and an amount equal to the sum of such Special
Payments so received. If a Regular Distribution Date or Special Distribution
Date is not a Business Day, distribution shall be made on the immediately
following Business Day with the same force and effect as if made on such
Regular Distribution Date or Special Distribution Date and no interest shall
accrue during the intervening period. The Special Distribution Date shall be
the second day of the month, or such other date, if any, determined as provided
in the Pass Through Trust Agreement. The Pass Through Trustee shall mail
notice of each Special Payment and the Special Distribution Date therefor to
the Certificateholder of this Certificate.
Distributions on this Certificate will be made by the Pass Through
Trustee by wire transfer of funds to the Person entitled thereto, without the
presentation or surrender of this Certificate or the making of any notation
hereon, provided, however, that in the event Certificates are issued in the
form of Registered Certificates, distributions on this Certificate will be made
by check mailed to the Person entitled thereto. Except as otherwise provided
in the Pass Through Trust Agreement and notwithstanding the above, the final
distribution on this Certificate will be made after notice mailed by the Pass
Through Trustee of the pendency of such distribution and only
A-2
<PAGE> 65
upon presentation and surrender of this Certificate at the office or agency of
the Pass Through Trustee specified in such notice.
THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Pass Through Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pass Through Trust Agreement or be valid for
any purpose.
IN WITNESS WHEREOF, the Pass Through Trustee has caused this
Certificate to be duly executed.
UNION TANK CAR COMPANY
_______ PASS THROUGH TRUST
By: ___________________,
as Pass Through Trustee
By: ________________________________________
Title:
A-3
<PAGE> 66
[Reverse of Certificate]
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by (except to the extent provided in the Pass Through
Trust Agreement), or an interest in Union, the Pass Through Trustee, in its
individual or trust capacities, any Owner Participant, any Owner Trustee in its
individual capacity, either Equipment Trust Trustee in its individual capacity,
or any affiliate of any thereof. The Certificates are limited in right of
payment, all as more specifically set forth on the face hereof and in the Pass
Through Trust Agreement. All payments or distributions made to
Certificateholders under the Pass Through Trust Agreement shall be made only
from the Trust Property and only to the extent that the Pass Through Trustee
shall have sufficient income or proceeds from the Trust Property to make such
payments in accordance with the terms of the Pass Through Trust Agreement.
Each Certificateholder of this Certificate, by its acceptance hereof, agrees
that it will look solely to the income and proceeds from the Trust Property to
the extent available for distribution to such Certificateholder as provided in
the Pass Through Trust Agreement. This Certificate does not purport to
summarize the Pass Through Trust Agreement and reference is made to the Pass
Through Trust Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds, and duties evidenced hereby. A copy of the
Pass Through Trust Agreement may be examined during normal business hours at
the principal office of the Pass Through Trustee, and at such other places, if
any, designated by the Pass Through Trustee, by any Certificateholder upon
request.
The Pass Through Trust Agreement permits, with certain exceptions
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Certificateholders under the
Pass Through Trust Agreement at any time by the Company and the Pass Through
Trustee with the consent of the Certificateholders holding Certificates
evidencing Fractional Undivided Interests aggregating not less than a majority
in interest in the Pass Through Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate
and of any Certificate issued upon the transfer hereof or in exchange hereof or
in lieu hereof whether or not notation of such consent is made upon this
Certificate. The Pass Through Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the
Certificateholders of any of the Certificates.
As provided in the Pass Through Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Register upon surrender of this Certificate for registration of transfer
at the offices or agencies maintained by the Pass Through Trustee in its
capacity as Registrar, or by any successor Registrar, in the Borough of
Manhattan, the City of New York, duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Pass Through Trustee and the
Registrar duly executed by the Certificateholder hereof or such
Certificateholder's attorney duly authorized in writing, and thereupon one or
more
A-4
<PAGE> 67
new Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Pass Through Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in minimum denominations of $1,000 and $1,000 integral multiples
thereof, except that one Certificate may be in a denomination of less than
$1,000. As provided in the Pass Through Trust Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Pass Through Trust, as requested by the
Certificateholder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Pass Through Trustee shall require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Pass Through Trustee, the Registrar, and any agent of the Pass
Through Trustee or the Registrar may treat the person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Pass Through Trustee, the Registrar, nor any such agent shall be affected by
any notice to the contrary.
The obligations and responsibilities created by the Pass Through Trust
Agreement and the Pass Through Trust created thereby shall terminate upon the
distribution to Certificateholders of all amounts required to be distributed to
them pursuant to the Pass Through Trust Agreement and the disposition of all
property held as part of the Trust Property.
A-5
<PAGE> 68
[FORM OF THE PASS THROUGH TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
Dated:
This is one of the Certificates referred to in the
within-mentioned Pass Through Trust Agreement.
_____________________,
as Pass Through Trustee
By:______________________________
Authorized Officer
A-6
<PAGE> 69
EXHIBIT C
FORM OF DTC
LETTER OF REPRESENTATIONS
<PAGE> 70
SCHEDULE I
<TABLE>
<CAPTION>
Equipment Notes
to be Issued under Principal
the Indenture: Amount Maturity
---------------------- ---------------- ---------------
<S> <C> <C>
On the Issuance Date $
Subsequent to the
Issuance Date
Total Notes $
Equipment Trust Certificates to be
issued under
Equipment Trust Agreements
On the Issuance Date
UTC $
Subsequent to the
Issuance Date
UTC $
Total ETC's $
Total Notes and ETC's $
</TABLE>
<PAGE> 71
SCHEDULE II
<TABLE>
<CAPTION>
ETCs
to be Issued under Principal
Equipment Trust Agreements Amount Maturity
- -------------------------- ---------------- ---------------
<S> <C> <C>
$
Total $
</TABLE>
<PAGE> 72
Reconciliation and tie between Pass Through Trust Agreement _____ dated
________ and the Trust Indenture Act of 1939. This reconciliation does not
constitute part of the Pass Through Trust Agreement.
<TABLE>
<CAPTION>
Trust Indenture Act Pass Through Trust
of 1939 Section Agreement Section
- ------------------- -------------------
<S> <C>
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2; 6.3 (a) & (b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8; 7.9; 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.18
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.18
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9; 8.1; 8.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4
313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(d)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.6
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . 1.4(c)
(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4(d)
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3(a)
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.13
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.7
</TABLE>
<PAGE> 1
EXHIBIT 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Experts" in
Amendment No. 2 to the Registration Statement (Form S-3 No. 333-17121) and
related Prospectus of Union Tank Car Company for the registration of
$400,000,000 of Pass Through Certificates and $400,000,000 of Debt Securities,
and to the incorporation by reference therein of our report dated March 7,
1996, with respect to the consolidated financial statements of Union Tank Car
Company included in its Annual Report (Form 10-K/A) for the year ended December
31, 1995, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Chicago, Illinois
January 14, 1997
