<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 28, 1998
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
__________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
UNION TANK CAR COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 36-3104688
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
___________________
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 [ ].
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==========================================================================================
Proposed
Maximum Amount of
Title of Each Class of Aggregate Registration
Securities to be Registered Offering Price (1)(2) Fee
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Debt Securities and Pass Through Certificates $300,000,000 $88,500
==========================================================================================
</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.
------------------
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 $300,000,000 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
$300,000,000 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, DATED JANUARY __, 1998
PROSPECTUS
$300,000,000
UNION TANK CAR COMPANY
PASS THROUGH CERTIFICATES
______________________
Up to $300,000,000 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 or 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.
_____________________
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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 February , 1998.
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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 Pass Through Certificates. 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 Pass Through Certificates 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."
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DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, its Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997, and its Current Reports
on Form 8-K dated January 30, 1997, June 3, 1997 and October 31, 1997, 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 Pass Through Certificates 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. 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
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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 the related 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, Equipment Trust Agreements and ETCs, 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 issued as
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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, the Equipment Trust Trustee, if any, or any affiliate of
any thereof.
The Basic Agreement does not and, except as otherwise described in the
applicable Prospectus Supplement, neither the Indentures nor the Equipment
Trust Agreements will 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
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"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.
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
DTC 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)
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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, 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
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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 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
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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 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
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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.
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 Events
of Default 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.
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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 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
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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 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 Certificateholders 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
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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".
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
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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 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,
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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 16, 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 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 Indenture, the Lease and the Participation Agreement
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
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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.
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 (i) each Equipment Unit in such
Equipment Group whenever it is located in the United States and (ii) 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.
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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 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.
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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 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.
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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 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.
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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 and, in certain
circumstances, a nominal 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 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.
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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.
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
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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 or with assets of 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 a grantor trust 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
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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.
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 mid-term capital gain or loss if the Pass Through Certificate was held
for more than one year but not more than 18 months or long-term capital gain if
held for more than 18 months (but only to the extent the Trust also held the
underlying Equipment Notes, ETCs, if any, or other property for the applicable
period). Any mid-term or 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 mid-term or
long-term capital gains, as the case may be. 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.
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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 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 reporting 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
Units and any such Units are 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
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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.
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 of Union Tank Car Company appearing
in Union Tank Car Company's Annual Report (Form 10-K) for the year ended
December 31, 1996, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by
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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 to be entered
into 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 Note" means each of the equipment notes to be issued pursuant
to an Indenture to finance or refinance all or a portion of the equipment cost
of the Equipment Units.
"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.
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"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 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
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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.
"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 if 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
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<PAGE> 35
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 __, 1998
PROSPECTUS
$300,000,000
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 $300,000,000 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 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 Debt Securities
unless accompanied by a Prospectus Supplement.
The date of this Prospectus is February , 1998.
<PAGE> 37
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, 1996, its Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997, and its Current Reports
on Form 8-K dated January 30, 1997, June 3, 1997 and October 31, 1997, 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.
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.
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 16, 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
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<PAGE> 39
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 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
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<PAGE> 40
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 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.
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<PAGE> 41
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.
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.
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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 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)
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<PAGE> 43
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; (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 is expected to serve as trustee under a Pass Through Trust
Agreement to be entered into 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.
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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.
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) for the year ended
December 31, 1996, 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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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 .. $ 88,500*
Blue Sky filing and counsel fees ..................... 6,000
Trustees' fees and expenses .......................... 8,000
Printing expenses .................................... 50,000
Auditors' fees and expenses .......................... 15,000
Attorneys' fees and expenses ......................... 100,000
Rating agency fees ................................... 150,000
Miscellaneous ........................................ 12,500
--------
Total ........................................... $430,000
========
</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.
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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) -- Indenture dated as of January 16, 1997, between the Company and the Debt Trustee.(1)
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.
8(a) -- Tax Opinion of Neal, Gerber & Eisenberg, counsel for the Company.
12 -- Computation of Ratios of Earnings to Fixed Charges.(2)
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.(3)
</TABLE>
(1) Incorporated herein by reference to Exhibit 4(b)(1) to the Company's
Current on Form 8-K dated January 30, 1997.
(2) The computation for each of the five fiscal years ended December 31,
1996, 1995, 1994, 1993 and 1992 is incorporated herein by reference to
Exhibit 12 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1996.
(3) Incorporated herein by reference to Exhibit 25(b) to the Company's
Registration Statement on Form S-3 (No. 333-17121).
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<PAGE> 47
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 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
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<PAGE> 48
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.
II-4
<PAGE> 49
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
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Chicago, State of Illinois on the 28th day of
January, 1998.
UNION TANK CAR COMPANY
/s/ R.C. Gluth
----------------------------
Robert C. Gluth,
Executive Vice President,
Treasurer and Director
Each person whose signature appears below hereby constitutes and appoints
Robert C. Gluth, Robert W. Webb and Kenneth P. Fischl, and each of them, the
true and lawful attorneys-in-fact and agents of the undersigned, with full
power of substitution and resubstitution, for and in the name, place and stead
of the undersigned and to file the same, with all exhibits thereto, in any and
all capabilities, to sign any and all amendments and any registration statement
filed pursuant to Rule 462(b) of the Securities Act of 1933, as amended
(including post-effective amendments thereto and other documents in connection
therewith), with the Securities and Exchange Commission, and hereby grants to
such attorneys-in-fact and agents, and each of them, full power and authority
to do and perform each and every act and thing requisite and necessary to be
done, as fully to all intents and purposes as the undersigned might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitutes, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 28th day of January, 1998.
Signature Title
--------- -----
/s/ Jay A. Pritzker Chairman of the Board
---------------------- and Director
Jay A. Pritzker
/s/ Robert A. Pritzker President and Director
---------------------- (principal executive officer)
Robert A. Pritzker
/s/ 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
II-5
<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 (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 the Company 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 the Company 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 $__________
principal amount Equipment Notes, Series B.
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-________) 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
Company has included in such registration statement,
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<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 Company has 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 Company makes 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 the Company 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 the Company and its subsidiaries, taken as a whole.
(g) The Company and each Significant Subsidiary (with such term
having the meaning attributed to it under Rule 405 under the Act) of the
Company 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
and the other Operative Agreements to which the Company is, or is to be,
a party, the consummation by the Company of the transactions herein and
therein contemplated, and the compliance by the Company 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 the
Company 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 the Company, 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 and the Equipment
Notes, the valid authorization,
- 5 -
<PAGE> 6
execution, delivery and performance by the Company of this Agreement, the
Participation Agreement, the Pass Through Trust Agreements, the Lease and
other Operative Agreements to which the Company is, or is to be, a party,
or the consummation by the Company of the transactions contemplated by
this Agreement, the Participation Agreement, the Pass Through Trust
Agreements, the Lease and other Operative Agreements to which the Company
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) if
required, 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 Lease and the other Operative Agreements to
which the Company 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 the Company, is, or is to be, a party
will constitute the valid and binding obligations of the Company. The
Pass Through Certificates, the Equipment Notes, the Indenture,
the Participation Agreement, the Pass Through Trust Agreements,
the Lease and the other Operative Agreements to which the Company, 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 the Company as of December 31, 199_
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, the Company agrees to
request the Pass Through Trustee to sell to 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, the Company 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. Such payment 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 ______________________.
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 the Company 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.
The Company 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 the Underwriters. 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. The Company agrees with you that:
(a) The Company 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. The Company
will not file any amendment to the Registration Statement or supplement
to the Prospectus unless the Company 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), the
Company 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. The Company
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
the Company 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, the Company 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, the Company will make generally
available to its security holders and to the Underwriters an
earnings statement or statements of the Company and its subsidiaries which
will satisfy the provisions of Section 11(a) of the Act and the applicable
rules and regulations thereunder.
(d) The Company 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, the Company will pay the expenses of printing
all documents relating to the offering.
(e) The Company 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 the Company
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,
the Company 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) The Company 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
the Company further agrees that if the Company 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 the Company's
business with Cuba or with any person or affiliate located in Cuba changes
in any material way, the Company 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 the Underwriters. Your obligations
to purchase the Pass Through Certificates shall be subject to the accuracy
of the representations and warranties on the part of the Company contained
herein as of the Execution Time and the Closing Date, to the accuracy of the
statements of the Company made in any certificates delivered pursuant to the
provisions hereof, to the performance by the Company 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) The Company 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 the Company (incorporating and relying upon the
opinion of Osler, Hoskin & Harcourt, special Canadian counsel to the
Company, as to Canadian law matters, and Hogan & Hartson, special STB
counsel to the Company, 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 the Company 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 the Company and its
subsidiaries, taken as a whole.
(ii) The Company 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 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 Company of
this Agreement, the Participation Agreement, the Pass Through Trust
Agreements,
- 11 -
<PAGE> 12
the Lease and the other Operative Agreements to which the Company is, or
is to be, a party, or the consummation by the Company of the transactions
contemplated by this Agreement, the Participation Agreement, the Pass
Through Trust Agreements, the Lease and the other Operative Agreements to
which the Company 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) if required, 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 the Company 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
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<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) this Agreement, the Pass Through Trust Agreements, the
Participation Agreement, the Lease and all the other Operative Agreements
to which the Company 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 the Company, upon execution and
delivery by the Company will be valid and binding obligations of the
Company, enforceable against the Company 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
(x) the Pass Through Trust Agreements, the Equipment Notes,
the Indenture, the Participation 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;
(xi) the execution and delivery by the Company of this Agreement,
the Participation Agreement, the Pass Through Trust Agreements,
the Lease and the other Operative Agreements to which the Company is to
be, a party, the consummation by the Company 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 the Company 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
the Company is a party or by which the Company is bound, or any law, rule,
regulation, judgment or order known to such counsel to be applicable to
the Company of any court, regulatory body, administrative agency,
government or governmental body having jurisdiction over the Company,
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), (x), and (xii) (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 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);
(xii) the statements in the Registration Statement and Prospectus
under the headings "Material Federal Income Tax Consequences", "Certain
Illinois Taxes" and "ERISA Considerations", 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;
(xiii) the Company 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;
(xiv) on the Closing Date, 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 Equipment Notes by the Indenture Trustee, each of the Equipment
Notes when issued will constitute valid and binding obligations of the
Owner Trustee, enforceable against the Owner Trustee 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 Equipment Notes will be entitled to the
benefits of the Indenture;
(xv) 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 the Company 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);
(xvi) 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
Equipment Notes and any other property held in such Pass Through Trusts;
(xvii) 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;
(xviii) 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;
(xix) 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, or the Indenture
Trustee, as the case may be, of the Participation Agreement, the Pass
Through Trust Agreements, 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 Equipment Notes; and
(xx) Except to the extent the Indenture Trustee forecloses on the
Equipment and any of the Equipment is located in Illinois or to the extent
the Indenture Estate 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 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 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
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 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
(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 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.
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<PAGE> 18
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 the
Company 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)(ix) 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 The Law Department of Harris
Trust and Savings Bank 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) Harris Trust and Savings Bank 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 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 Participation
Agreement, the Pass Through Trust Agreements and the other
Operative Agreements to which it is a party;
(ii) Harris Trust and Savings Bank (in its individual
capacity, to the extent provided therein), the Pass Through
Trustee or the Indenture Trustee, as the case may be, has
duly authorized, executed and delivered the Indenture, the
Participation Agreement, 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 Harris Trust and Savings Bank (in its
individual capacity, to the extent provided therein), the Pass
Through Trustee or the Indenture Trustee, as the case may be, enforceable
against Harris Trust and Savings Bank (in its individual capacity, to the
extent provided therein), the Pass Through 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
Harris Trust and Savings Bank (in its individual capacity, to the extent
provided therein), the Pass Through Trustee or the Indenture Trustee,
as the case may be, of the Indenture, the Participation 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
Harris Trust and Savings Bank, 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 Harris Trust and Savings Bank,
the Pass Through 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 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 Harris
Trust and Savings Bank, the Pass Through 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 Harris Trust and Savings Bank,
the Pass Through Trustee or the Indenture Trustee, as the case may be, of
any court, regulatory body, administrative agency, government or
governmental body having jurisdiction over Harris Trust and Savings Bank,
the Pass
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<PAGE> 21
Through Trustee or the Indenture Trustee or any of their 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 Harris Trust and Savings Bank, the Pass Through Trustee
or the Indenture Trustee is required for the authorization,
execution, delivery and performance by Harris Trust and Savings Bank,
(in its individual capacity, to the extent provided therein), the Pass
Through Trustee or the Indenture Trustee of the Indenture, the
Participation 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 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, The Law Department of Harris Trust and Savings
Bank (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 Company
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 the Company,
signed by the President or any Vice President and the principal
financial officer of the Company, 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 the Company 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 the
Company 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 the Company'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 the Company 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 the Company contained in
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
the Company 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 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 the Company in the
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) the Company 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 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
December 31, 199_ 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 the Company'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
the Company) 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 the Company contained in the Company'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 the Company 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 the
Company and its subsidiaries; and inquiries of certain officials of the
Company who have responsibility for financial and accounting matters of
the Company 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 the Company
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 the Company 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 the Company and its subsidiaries or capital stock of the Company or
decreases in the stockholder's equity of the Company 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 the Company 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 the Company 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.
(j) 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 the Company's debt securities by the Rating Agencies as of
the Execution Time.
(k) Prior to the Closing Date, the Company 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 "A1
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 the Company to perform any
agreement herein or comply with any provision hereof other than by reason
of a default by you, the Company 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) The Company 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)the Company 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 the Company 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
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to you, but only with reference to written
information relating to you furnished to the Company 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. The Company 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 the Company on grounds of policy or otherwise,
the Company 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 the Company 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 the Company 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 the Company within the
meaning of the Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, 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 the Company 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 the Company
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 _______________________ , Attention:
___________________; in the case of _________________________, Attention:
___________________________ or, if sent to the Company, 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.
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<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:
-29-
<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
EXHIBIT 1(b)
Union Tank Car Company
$_________
_____% ___________
[(Series ___)]
Underwriting Agreement
New York, New York
__________
Dear Ladies and Gentlemen:
Union Tank Car Company, a Delaware corporation (the "Company"), proposes
to cause to be sold to you the underwriters (the "Underwriters") $_______
aggregate principal amount of _____% _________ [(Series ___)], due _______,
with the interest rate and principal installment payments as set forth in
Schedule A hereto (the certificates, [together with the guaranty to be endorsed
thereon by the Company,] being herein referred to as the "Securities"), to be
issued under the Indenture, dated as of January 16, 1997 (the "Indenture"),
between the Company and Harris Trust and Savings Bank, as trustee (the
"Trustee").
1. Representations and Warranties. The Company represents and warrants
to, and agrees with you, that:
<PAGE> 2
(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-______) on such Form, including a related
Preliminary Prospectus (as hereinafter defined), for the registration
under the Act of the offering and sale of the Securities. 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 Company
has included in such registration statement, 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 Securities 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 Securities 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 Company has advised you, prior to the
Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement (as hereinafter
defined) did or will, and when the Prospectus is first filed in accordance
with Rule 424(b) (if required) and on the Closing Date (as hereinafter
defined), the Prospectus (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 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, the Indenture
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,
-2-
<PAGE> 3
that the Company makes 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 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 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
Securities 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 Securities 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 Securities
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.
-3-
<PAGE> 4
(d) The consolidated financial statements incorporated by reference in
the Registration Statement and Prospectus present fairly the consolidated
financial position of the Company 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 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 the Company and its subsidiaries, taken as a whole.
(g) The Company and each Significant Subsidiary (with such term having
the meaning attributed to it under Rule 405 under the Act) of the Company
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 the Company and its
subsidiaries taken as a whole. The Company owns either directly or
indirectly, all of the issued and outstanding capital stock of its
subsidiaries, free and clear of any lien, adverse claim, security
interest or other encumbrance.
(h) The execution and delivery by the Company of this Agreement, the
Indenture and the Securities, the consummation by the Company of
the transactions herein and therein contemplated, and the compliance by
the Company 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 the Company, or any of its subsidiaries, or any material
indenture, mortgage, or other agreement or instrument to which the Company
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
-4-
<PAGE> 5
government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any of its subsidiaries or
any of its properties; and, assuming due authorization, execution and
delivery by all parties thereto other than the Company, 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 Securities, the valid authorization,
execution, delivery and performance by the Company of this Agreement and
the Indenture or the consummation by the Company of the
transactions contemplated by this Agreement, the Indenture and the
Securities, 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 ("STB") and under Section 90 of the Railway Act of
Canada as may be required and (y) such other filings, recordings or
registrations as may be required under the Indenture or the Securities.
(i) This Agreement and the Indenture, assuming due authorization,
execution and delivery by the other parties thereto, have each been
duly authorized by the Company and, when executed and delivered by the
Company, will constitute valid and binding obligations of the Company.
The Securities and the Indenture will conform in all material respects
to the descriptions thereof in the Prospectus.
(j) Ernst & Young LLP, who reported on the consolidated financial
statements of the Company as of December 31, 199_ 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, and are, as of the date hereof,
independent auditors as required by the Act and the rules and regulations
thereunder.
(k) The Securities have been duly authorized by the Company and when
duly executed and delivered by the Trustee and the Company in accordance
with the terms of the Indenture and this Agreement, will be duly
issued under such Indenture and will constitute valid and binding
obligations of the Company, 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, the Company agrees to
cause to be sold to you, and you agree to purchase, from the Trustee at a
purchase price of 100% of the principal amount thereof, the Securities.
As compensation to you, for your commitment and obligations hereunder in
respect of the Securities, the Company will pay to you when due an amount equal
to ____% of the
-5-
<PAGE> 6
original aggregate principal amount of the Securities. The Company's
payments under this paragraph shall be made simultaneously with the payment by
you to the Trustee 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 ____________________________________.
3. Delivery and Payment. Delivery of and payment for the Securities shall
be made at the office of Neal, Gerber & Eisenberg, Two North LaSalle Street,
Chicago, Illinois, at 9:00 a.m., Chicago time, on ________, or such later date
(not later than _______) as you shall designate, which date and time may be
postponed by agreement between you and the Company (such date and time of
delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall be made to you against payment by you
of the purchase price thereof to or upon the order of the Trustee by Federal
funds check or other immediately available funds. Certificates for the
Securities 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.
The Company agrees to have the Securities available for inspection,
checking and packaging by you in New York, New York, not later than 1:00 p.m.
on the business day prior to the Closing Date.
4. Offering by the Underwriters. It is understood that, after the
Registration Statement becomes effective, each of you propose to offer the
Securities for sale to the public as set forth in the Prospectus.
5. Agreements. The Company agrees with you that:
(a) The Company 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 Indenture to be
qualified under the Trust Indenture Act. The Company will not file any
amendment to the Registration Statement or supplement to the Prospectus
unless the Company 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), the Company 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. The Company 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 Securities, any amendment to the
Registration Statement shall have been
-6-
<PAGE> 7
filed or become effective, (iv) of any request by the Commission for any
amendment to 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 the Company 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) and (vi) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities 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
Securities is 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 Securities 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, the Company 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, the Company will make generally available
to its security holders and to the Underwriters an earnings statement or
statements of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and the applicable rules and
regulations thereunder.
(d) The Company 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. The Company will pay the expenses of printing all
documents relating to the offering.
(e) The Company will cooperate with you and your special counsel to
arrange for the qualification of the Securities 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
Securities and will cooperate with you and your counsel to arrange for the
determination of the legality of the Securities for purchase by
institutional investors; provided, however, that the Company will not
-7-
<PAGE> 8
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, the
Company 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 Securities).
(g) The Company 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 the Company
further agrees, if necessary, that if the Company 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 the Company's
business with Cuba or with any person or affiliate located in Cuba changes
in any material way, the Company 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 the Underwriters. Your obligations
to purchase the Securities shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as
of the Execution Time and the Closing Date, to the accuracy of the statements
of the Company made in any certificates delivered pursuant to the provisions
hereof, to the performance by the Company 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 been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have furnished to you and to Moody's Investors,
Inc. Service and Standard and Poor's Corporation (together, the "Rating
Agencies") if requested by you, the opinion of Neal, Gerber & Eisenberg,
special counsel to the Company (incorporating and relying upon the
opinions of Osler, Hoskin & Harcourt, special
-8-
<PAGE> 9
Canadian counsel to the Company, as to Canadian law matters, and Hogan
& Hartson special STB counsel to the Company, as to STB matters),
dated the Closing Date, to the effect that:
(i) the Company and each of 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 the Company and its
subsidiaries taken as a whole;
(ii) all the outstanding shares of capital stock of each of the
Company's subsidiaries have been duly and validly authorized and issued
and are fully paid and nonassessable, and, all such capital stock is owned
directly or indirectly by the Company, free and clear of any perferected
security interest and, to the knowledge of such counsel, after due
inquiry, any other security interest, claims, liens or encumbrances;
(iii) the Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act, and assuming due authorization, execution and delivery
thereof by the Trustee, the Indenture constitutes a legal, valid and
binding obligation of the Company enforceable against the Company 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);
(iv) 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 the Company or any
of its subsidiaries, of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectus, 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;
-9-
<PAGE> 10
(v) 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); to the best 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 or supplement thereto (other than the financial statements and
related schedules and other financial and statistical information
contained 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;
(vi) other than the rights of the Company under the Indenture,
title to the equipment to be subjected to the Indenture will, when
such equipment shall have been transferred to the Trustee as provided in
the Indenture, be validly vested in the Trustee; the Indenture 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;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery by you, constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its 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) and
(ii) as to provisions of this Agreement relating to indemnification or
contribution for liabilities arising under the Act, as to which such
counsel need express no opinion;
(viii) 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 Company of the
Securities, this Agreement and the Indenture or the consummation by
the Company of the transactions contemplated by this Agreement and the
Indenture, except such as have been obtained under the Act and the
Trust Indenture Act and such as may be required under the blue sky laws of
any
-10-
<PAGE> 11
jurisdiction in connection with the purchase and distribution of
the Securities by you and such other approvals (specified in such opinion)
as have been obtained;
(ix) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in a breach of,
or constitute a default under the charter or by-laws of the Company or the
terms of any indenture or other agreement or instrument known to such
counsel and to which the Company or any of its subsidiaries is a party or
bound, or any order or regulation known to such counsel to be applicable
to the Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having jurisdiction
over the Company or any of its subsidiaries;
(x) the Company 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;
(xi) on the Closing Date, assuming due execution and delivery of the
Securities by the Trustee and the Company, the Securities when issued
against payment therefor as provided herein will constitute valid and
binding obligations of the Company, enforceable against the Company, 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 Securities will be entitled to
the benefits of the Indenture;
(xii) the Indenture and the Securities conform in all material
respects to the descriptions thereof contained in the Prospectus; and
(xiii) the Indenture cannot be terminated by the Company for
so long as the Securities are outstanding.
In passing on the form of the Registration Statement and the Prospectus and
each amendment and supplement thereto, such counsel may state that it has not
-11-
<PAGE> 12
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 the
Company, its subsidiaries and its affiliates and with representatives of
Ernst & Young LLP 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 Interstate Commerce
Commission 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 set forth in Section 6(b)(vi) that the laws of
the State of New York are identical to the laws of the State of Illinois.
(c) 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 Securities, the Indenture, the Registration
Statement, the Prospectus and other related matters as you may reasonably
require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(d) The Company shall have furnished to you a certificate of the
Company, signed by the President or any Vice President and the principal
financial officer of the Company, dated the Closing Date, to the effect
that the signers of such certificate have
-12-
<PAGE> 13
carefully examined the Registration Statement, the Prospectus and this
Agreement and that:
(i) the representations and warranties of the Company 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 the Company 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 the Company's
knowledge, no proceedings for that purpose have been instituted or
threatened; and
(iii) since the date of the most recent financial statements
included and/or incorporated by reference in the Prospectus, there
has been no material adverse change in the condition (financial or
other), earnings, business or properties of the Company 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.
(e) At the Execution Time and at the Closing Date, Ernst & Young LLP
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 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
FormES-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 December 31, 199 _ included
in the Registration Statement and the Prospectus, 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
the Company's independent auditor, such financial statements were covered
by unqualified reports issued by them; and that 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 the Company) set forth in
the Registration Statement and the Prospectus, including the information
set forth under the captions "Selected Financial Information",
-13-
<PAGE> 14
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.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) In addition, Ernst & Young LLP 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 the Company contained in the
Company's Quarterly Reports on Form 10-Q for the quarters ended
________, ________ and ________ incorporated by reference in the
Registration Statement, the amounts set forth under the captions
"Selected Financial Information" and "Capitalization" included in
the Registration Statement and the Prospectus and of the latest
unaudited consolidated financial statements made available to them
by the Company and its subsidiaries; carrying out certain specified
procedures (but 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 the Company and its
subsidiaries; and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of the
Company 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 the Company 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 the Company 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 the Company and its subsidiaries or capital
stock of the Company or decreases in the stockholder's equity of
the Company and its subsidiaries as compared with the amounts shown
on the _________, unaudited consolidated balance sheet data
included in
-14-
<PAGE> 15
"Selected Financial Information" 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 the Company 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 the Company as to the significance thereof unless said
explanation is not deemed necessary by you.
(g) 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 letter or letters referred to in paragraphs (e) and (f)
of this Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting the business or properties of the
Company 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 Securities as contemplated
by the Registration Statement and the Prospectus.
(h) 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 rating accorded the Company's debt securities by
the Rating Agencies as of the Execution Time.
(i) Prior to the Closing Date, the Company shall have furnished to you
and the Rating Agencies such further information, certificates and
documents as you and they may reasonably request.
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 the Company in
writing or by telephone or telegraph confirmed in writing.
7. Reimbursement of the Underwriters' Expenses. If the sale of the
Securities 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 the Company to perform any
-15-
<PAGE> 16
agreement herein or comply with any provision hereof other than by reason
of a default by you, the Company 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 Securities.
8. Indemnification and Contribution. (a) The Company 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 Securities 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 light of the circumstances under
which they were made, not misleading, and agree 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 investigating or defending any
such loss, claim, damage, liability or action; provided, however, that (i) the
Company 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 the Company 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 Securities which are the subject thereof did
not receive a copy of 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 Securities 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 the Company
may otherwise have.
(b) You severally (and not jointly) agree to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to you, but only with reference to written
information relating to you furnished to the Company by or on behalf of you
specifically for use in the preparation of the documents referred to in clause
(a) of this
-16-
<PAGE> 17
Section 8. This indemnity agreement will be in addition to any liability which
you may otherwise have. The Company 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 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 the Company on grounds of
-17-
<PAGE> 18
policy or otherwise, the Company 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 the Company 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 Securities appearing on the
cover page of the Prospectus bears to the aggregate public offering price in
respect of such Securities appearing thereon and the Company is responsible for
the balance; provided, however, that (y) in no case shall you be responsible
for any amount in excess of such aggregate underwriting commission 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 the Company within
the meaning of the Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, 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
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 the Company prior to delivery of and
payment for the Securities, 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 Securities.
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
the Company 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 the Company or any of its officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 7 and 8 hereof
shall survive the termination or cancellation of this Agreement.
-18-
<PAGE> 19
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 _________________ at ________________,
Attention: ________________; in the case of _________________ at ____________,
Attention: _____________; or, if sent to the Company, 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.
-19-
<PAGE> 20
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
between 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:
-20-
<PAGE> 21
Schedule A
Aggregate Principal Interest Principal Installment
[Name of Security] Amount Rate Payments
- --------------------------------------------------------------------------------
$ % $
<PAGE> 1
EXHIBIT 4(a)(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
- ------- ----
<S> <C> <C>
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions...........................................................2
SECTION 1.2. Compliance Certificates and Opinions.................................12
SECTION 1.3. Form of Documents Delivered to Pass Through Trustee..................12
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]..14
SECTION 2.2. Declaration of Trust; Acceptance By Pass Through Trustee.............17
SECTION 2.3. Limitation of Powers.................................................17
SECTION 2.4. Sale of Equipment Notes Under Certain Circumstances..................18
ARTICLE III
THE CERTIFICATES
SECTION 3.1. Form, Denomination and Execution of Certificates.....................18
SECTION 3.2. Authentication of Certificates.......................................19
SECTION 3.3. Temporary Certificates...............................................19
SECTION 3.4. Registration of Transfer and Exchange of Certificates................19
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates....................20
SECTION 3.6. Persons Deemed Owners................................................20
SECTION 3.7. Cancellation.........................................................21
SECTION 3.8. Limitation of Liability for Payments.................................21
SECTION 3.9. Book-Entry and Registered Certificates...............................21
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
SECTION 4.1. Certificate Account and Special Payments Account.....................23
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
SECTION 4.2. Distribution from Certificate Account and Special Payments
Account.....................................................24
SECTION 4.3. Statements to Certificateholders.....................................25
SECTION 4.4. Investment of Special Payment Money..................................26
ARTICLE V
THE COMPANY
SECTION 5.1. Maintenance of Corporate Existence...................................26
SECTION 5.2. Consolidation, Merger or Sale of Assets Permitted....................27
ARTICLE VI
DEFAULT
SECTION 6.1. Events of Default....................................................27
SECTION 6.2. Incidents of Sale of Equipment Notes [and ETCs]......................29
SECTION 6.3. Judicial Proceedings Instituted by Pass Through Trustee..............29
SECTION 6.4. Control by Certificateholders........................................30
SECTION 6.5. Waiver of Past Defaults..............................................31
SECTION 6.6. Undertaking to Pay Court Costs.......................................31
SECTION 6.7. Right of Certificateholders to Receive Payments Not to Be
Impaired....................................................31
SECTION 6.8. Certificateholders May Not Bring Suit Except Under Certain
Conditions..................................................32
SECTION 6.9. Remedies Cumulative..................................................32
ARTICLE VII
THE PASS THROUGH TRUSTEE
SECTION 7.1. Certain Duties and Responsibilities..................................33
SECTION 7.2. Notice of Defaults...................................................34
SECTION 7.3. Certain Rights of Trustee............................................34
SECTION 7.4. Not Responsible for Recitals or Issuance of Certificates.............35
SECTION 7.5. May Hold Certificates................................................35
SECTION 7.6. Money Held in Pass Through Trust.....................................36
SECTION 7.7. Compensation and Reimbursement.......................................36
SECTION 7.8. Corporate Trustee Required; Eligibility..............................37
SECTION 7.9. Resignation and Removal; Appointment of Successor....................38
SECTION 7.10. Acceptance of Appointment by Successor...............................39
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business..........40
SECTION 7.12. Maintenance of Agencies..............................................40
SECTION 7.13. Money for Certificate Payments to Be Held in Pass Through Trust......41
SECTION 7.14. Registration of Equipment Notes [and ETCs] in Pass Through
Trustee's Name..............................................42
SECTION 7.15. Representations and Warranties of Pass Through Trustee...............42
SECTION 7.16. Withholding Taxes; Information Reporting.............................43
SECTION 7.17. Trustee's Liens......................................................44
SECTION 7.18. Preferential Collection of Claims....................................44
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..............................44
SECTION 8.2. Preservation of Information; Communications to Certificateholders....45
SECTION 8.3. Reports by Pass Through Trustee......................................45
SECTION 8.4. Reports by the Company...............................................45
ARTICLE IX
SUPPLEMENTS TO PASS THROUGH TRUST AGREEMENT
SECTION 9.1. Supplements to Pass Through Trust Agreement Without Consent of
Certificateholders..........................................46
SECTION 9.2. Supplements to Pass Through Trust Agreement with Consent of
Certificateholders..........................................47
SECTION 9.3. Documents Affecting Immunity or Indemnity............................47
SECTION 9.4. Execution of Supplements to Pass Through Trust Agreements............48
SECTION 9.5. Effect of Supplements to Pass Through Trust Agreement................48
SECTION 9.6. Conformity with Trust Indenture Act..................................48
SECTION 9.7. Reference in Certificates to Supplements to Pass Through Trust
Agreements..................................................48
</TABLE>
-iii-
<PAGE> 5
ARTICLE X
AMENDMENTS TO INDENTURE AND NOTE DOCUMENTS[,
EQUIPMENT TRUST AGREEMENT AND ETC DOCUMENTS]
ARTICLE XI
TERMINATION OF PASS THROUGH TRUST
ARTICLE XII
MISCELLANEOUS PROVISIONS
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
SECTION 12.1. Limitation on Rights of Certificateholders...........................50
SECTION 12.2. Certificates Nonassessable and Fully Paid............................50
SECTION 12.3. Notices .............................................................50
SECTION 12.4. Communication by Certificateholder with Other Certificateholders.....51
SECTION 12.5. Governing Law........................................................52
SECTION 12.6. Severability of Provisions...........................................52
SECTION 12.7. Trust Indenture Act Controls.........................................52
SECTION 12.8. Effect of Headings and Table of Contents.............................52
SECTION 12.9. Successors and Assigns...............................................52
SECTION 12.10. Benefits of Pass Through Trust Agreement.............................52
SECTION 12.11. Legal Holidays.......................................................52
SECTION 12.12. Counterparts.........................................................53
Exhibit A - Form of Certificate
Exhibit B - Form of DTC Letter of Representations
Schedule I - Description of Equipment Notes to be Issued under the Indenture [and ETCs
to be issued under the Equipment Trust Agreement]
</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 (the "Company") 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 the Company to be
endorsed thereon, the "ETCs"), will be issued pursuant to an Equipment Trust
Agreement, dated ______ as may be amended or supplemented from time to time
(the "Equipment Trust Agreement"), between the Company and ___________, as
trustee (the "Equipment Trust Trustee");]
[WHEREAS, the Equipment Trust Trustee will issue the ETCs in
connection with the financing of railway tank cars and other rail cars of the
type used in the Company's business (the "Trust Equipment");]
[WHEREAS, pursuant to the terms of this Pass Through Trust Agreement,
the Equipment Trust Agreement, the 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 the Company;
WHEREAS, the Owner Trustee will lease the Equipment to the Company
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 the Company 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;
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;
<PAGE> 7
WHEREAS, to facilitate the sale of [the ETCs and] the Equipment Notes
to the Pass Through Trustee and the purchase of such [ETCs and] Equipment Notes
by the Pass Through Trustee, the Company 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
(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:
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"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.
"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 _______.
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<PAGE> 9
"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 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 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 Harris Trust and Savings Bank, in its
capacity as Equipment Trust Trustee under the 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 Equipment Trust Agreement.]
["ETC" means any one of the Equipment Trust Certificates described in
Schedule I 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.]
"Escrow Account" has the meaning specified in Section 2.1(b).
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<PAGE> 10
"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 the Company, 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.
"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.
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<PAGE> 11
"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.
"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 the Company
are parties, as the Participation Agreement may be amended or supplemented from
time to time in accordance with its respective terms.
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<PAGE> 12
"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 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
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<PAGE> 13
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
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 the Company signed by an
officer of the Company (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.
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<PAGE> 14
"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 the Company, 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 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].
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<PAGE> 15
"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
the Company 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 the
Company 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, 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
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<PAGE> 16
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 ETCs 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.
"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 the Company 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
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 the Company, 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.
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<PAGE> 17
"Unit" has the meaning assigned to that term in the Lease.
SECTION 1.2. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Pass Through Trustee to take any
action under any provision of this Pass Through Trust Agreement, the Company
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 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.
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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 Through Trustee and, where it is hereby expressly required, to the
Company[, 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, the Company[, 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 the Company, 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
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<PAGE> 19
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) 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 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 the Company, 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 Agreement,] 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
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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 Agreement, 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
Equipment Trust Agreement, the ETCs (except 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 ETCs] not previously purchased by the Pass Through Trustee, the Pass
Through Trustee shall purchase at such time such Equipment Notes [and ETCs] at
a purchase price equal to the amount of consideration received by the Pass
Through Trustee with respect to such Equipment Notes [and 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 the Company 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, the Company in Specified
Investments maturing (i) no later than the Initial Cut-off Date or (ii) if the
Company 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 the
Company shall be deemed written confirmation by the Company that the investment
transactions identified therein accurately reflect the investment directions
given to the Pass Through Trustee by the Company, unless the Company 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, the Company in Specified Investments maturing (i) no later than the
Initial Cut-off Date or (ii) if the Company 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.
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<PAGE> 21
Any earnings on Specified Investments received from time to time by
the Pass Through Trustee shall be promptly distributed to the Company to an
account specified in writing by the Company. The Company 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 Initial Cut-off Date, upon the written request of
the Company and the satisfaction of the closing conditions specified in the
Participation Agreement [and the 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, the Company shall so notify the Pass
Through Trustee and the Company 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 the Company 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 ETCs] to be issued after the Initial Cut-off Date pursuant to the
terms and conditions of the Participation Agreement [or the 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
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, the Company in Specified Investments maturing (i) no later
than the Subsequent Cut-off Date or (ii) if the Company has given notice to the
Pass Through Trustee that the aforementioned Equipment Notes [or 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 the
Company shall be deemed written confirmation by the Company that the investment
transactions identified therein accurately reflect the investment directions
given to the Pass Through Trustee by the Company, unless the Company 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, the
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Company in Specified Investments maturing (i) no later than the Subsequent
Cut-off Date or (ii) if the Company has given notice to the Pass Through
Trustee that the aforementioned Equipment Notes [or 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 the Company to an
account specified in writing by the Company. The Company 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 the Company and the satisfaction of the closing conditions specified in the
Participation Agreement [and the Equipment Trust Agreement], the Pass Through
Trustee shall purchase the applicable Equipment Notes [and 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 ETCs] will not be issued
on or prior to the Subsequent Cut-off Date for any reason, the Company shall so
notify the Pass Through Trustee and the Company 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 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 ETCs] and
the amount paid by the Company 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
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restriction, 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
the Company 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 the Company 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, 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 Through Trust
Agreement, or be valid for any purpose, unless there appears on such
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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 Agreement,] 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.
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
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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.
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.
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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;
(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
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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) 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 the Company is unable to
locate a qualified successor, (ii) 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 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
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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 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.
(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 [the 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 the Company 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
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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 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.
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(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 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.
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):
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(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
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. 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 the Company shall not 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.
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SECTION 5.2. Consolidation, Merger or Sale of Assets Permitted.
(a) The Company 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 the
Company is merged or the Person which acquires by sale or conveyance all or
substantially all of the assets of the Company, 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 the Company 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 the Company, the successor corporation
formed by such consolidation or into which the Company, 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, the Company, under this Agreement with
the same effect as if such successor corporation had been named as the Company,
herein. No such sale or conveyance of all or substantially all of the assets of
the Company, as an entirety shall have the effect of releasing the Company, 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 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 the 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 the Equipment Trust Agreement, 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
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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 the 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 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.
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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.
(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
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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 Trustee] 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 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 the 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
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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[, the Equipment Trust Agreement] or this Agreement and its
consequences, except a default (6) in the payment of the principal of,
Make-Whole Amount, if any, or interest on any Equipment Notes [or ETCs, as the
case may be,] or (7) 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
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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 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 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
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(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
Trustee] 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;
(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 the Company,
the Owner Trustee[, the Equipment Trust Trustee] or the Indenture
Trustee;
(iv) Before the Pass Through Trustee acts or refrains from
acting;
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(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.
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
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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 Trustee] 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;
(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
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(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.
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.
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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 Trustee] 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 Trustee] 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 Trust Trustee] and the Indenture Trustee.
(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
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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, the Company 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 the Company, the Owner
Trustee, the Indenture Trustee[, the Equipment Trust Trustee] 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,
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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, the Company, 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 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 the Company, the Owner Trustee, the Indenture Trustee[, the
Equipment Trust Trustee 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
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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.
(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 Trustee 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. The Company shall give written notice of any
such appointment made by them to the Pass Through Trustee, the Owner Trustee[,
the Equipment Trust Trustee] 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
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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.
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:
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(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
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
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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 the Company 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 the Company for
indemnification of such taxes which the Pass Through Trustee thereafter recovers
from the appropriate Certificateholder (including by withholding from subsequent
distributions to such Certificateholder), the Pass Through Trustee shall
reimburse the Company 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
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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.
SECTION 8.3. Reports by Pass Through Trustee.
(a) Within 60 days after May 15 of each year commencing with the year
1997, the P ass 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. The Company 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
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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 the Company pursuant
to subsections (a) and (b) of this Section 8.4 as may be required by rules and
regulations prescribed by the Commission; and
(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 the
Company'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
the Company and the assumption by any such successor of the covenants
of the Company 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
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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 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; or
(iv) 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 AND NOTE DOCUMENTS[,
EQUIPMENT TRUST AGREEMENT 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[, 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 be, has the
option to direct, (b) whether or not to give or execute any waivers, consents,
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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[, the 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 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.
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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 the 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 the Company.
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.
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:
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if to the Company, 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.
(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[, the 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
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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 [ILLINOIS]
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 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.
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<PAGE> 58
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> 59
IN WITNESS WHEREOF, the Company 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> 60
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") between the Pass Through
Trustee and Union Tank Car Company, a Delaware corporation (the "Company"), 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 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
<PAGE> 61
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 the Company.
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 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 [ILLINOIS].
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.
A-2
<PAGE> 62
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> 63
[Reverse of Certificate]
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in the Company, the Pass Through
Trustee, in its individual or trust capacities, any Owner Participant, any Owner
Trustee in its individual capacity[, the 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 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.
A-4
<PAGE> 64
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> 65
[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> 66
EXHIBIT B
FORM OF DTC
LETTER OF REPRESENTATIONS
B-1
<PAGE> 67
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 Agreement
- --------------------------------------------------------------------------------
On the Issuance Date $
- --------------------------------------------------------------------------------
Subsequent to the $
Issuance Date
- --------------------------------------------------------------------------------
Total ETCs] $
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Notes [and ETCs] $
- --------------------------------------------------------------------------------
================================================================================
</TABLE>
<PAGE> 68
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 4(c)(1)
================================================================================
UNION TANK CAR COMPANY
EQUIPMENT TRUST
SERIES __
-----------------------
EQUIPMENT TRUST AGREEMENT
Dated ____________
Between
HARRIS TRUST AND SAVINGS BANK,
Trustee,
and
UNION TANK CAR COMPANY
-----------------------
================================================================================
Filed with the Surface Transportation Board of the Department of
Transportation pursuant to 49 U.S.C. Section 11301 on ______ __, _____, at
[________ a.m./p.m.], recordation number _________, and deposited in the Office
of the Registrar General of Canada pursuant to Section 90 of the Railway Act
(Canada) on _______ __, ____, at [________ a.m./p.m.]
<PAGE> 2
TABLE OF CONTENTS*
ARTICLE ONE Definitions . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . 6
ARTICLE TWO Trust Certificates and Issuance;
Interests Represented and Maturity . . . . . . . . . . . 9
SECTION 2.01. Issuance of Trust Certificates . . . . . . . . . 9
SECTION 2.02. Interests Represented by Trust
Certificates; Interest Payments;
Maturity . . . . . . . . . . . . . . . . . . . 10
SECTION 2.03. Form, Execution and Characteristics
of Trust Certificates . . . . . . . . . . . . . 10
SECTION 2.04. Replacement of Lost Trust Certificates . . . . . 11
ARTICLE THREE Acquisition of Trust Equipment by
Trustee: Deposited Cash . . . . . . . . . . . . . . . . 12
SECTION 3.01. Acquisition of Equipment by Trustee . . . . . . . 12
SECTION 3.02. Payment of Deposited Cash . . . . . . . . . . . . 13
SECTION 3.03. Payment of Deficiency . . . . . . . . . . . . . . 13
SECTION 3.04. Supporting Papers . . . . . . . . . . . . . . . . 13
ARTICLE FOUR Lease of Trust Equipment to the Company . . . . . . . . . 14
SECTION 4.01. Lease of Trust Equipment to the Company . . . . . 14
SECTION 4.02. Equipment Automatically Subjected . . . . . . . . 14
SECTION 4.03. Additional and Substituted Equipment
Subject Hereto . . . . . . . . . . . . . . . . 14
SECTION 4.04. Rental Payments . . . . . . . . . . . . . . . . . 15
SECTION 4.05. Termination of Trust . . . . . . . . . . . . . . 16
SECTION 4.06. Indemnity . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.07. Substitution and Replacement of
Trust Equipment . . . . . . . . . . . . . . . . 17
SECTION 4.08. Maintenance of Trust Equipment;
Casualty Occurrences . . . . . . . . . . . . . 19
__________________________________
* This Table of Contents has been included in the document for
convenience only and does not form a part of, or affect any
construction or interpretation of, this document.
-i-
<PAGE> 3
SECTION 4.09. Possession of Trust Equipment . . . . . . . . . . 20
SECTION 4.10. Marking of Trust Equipment . . . . . . . . . . . 21
ARTICLE FIVE Events of Default and Remedies . . . . . . . . . . . . . . 21
SECTION 5.01. Events of Default . . . . . . . . . . . . . . . . 21
SECTION 5.02. Remedies . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.03. Application of Proceeds . . . . . . . . . . . . . 25
SECTION 5.04. Waivers of Default . . . . . . . . . . . . . . . 25
SECTION 5.05. Obligations of Company Not Affected
by Remedies . . . . . . . . . . . . . . . . . . 26
SECTION 5.06. Company To Deliver Trust Equipment
to Trustee . . . . . . . . . . . . . . . . . . 26
SECTION 5.07. Trustee To Give Notice of Default . . . . . . . . 26
SECTION 5.08. Control by Holders of Trust
Certificates . . . . . . . . . . . . . . . . . 27
SECTION 5.09. Limitations on Suits by Holders of
Trust Certificates . . . . . . . . . . . . . . 27
SECTION 5.10. Unconditional Right of Holders of
Trust Certificates To Sue for
Principal and Interest . . . . . . . . . . . . 27
SECTION 5.11. Remedies Cumulative; Subject to
Mandatory Requirements of Law . . . . . . . . . 27
ARTICLE SIX Additional Agreements by the Company . . . . . . . . . . . 28
SECTION 6.01. Guarantee of the Company . . . . . . . . . . . . 28
SECTION 6.02. Discharge of Liens . . . . . . . . . . . . . . . 28
SECTION 6.03. Further Assurances . . . . . . . . . . . . . . . 29
SECTION 6.04. Payment of Expenses; Recording . . . . . . . . . 29
ARTICLE SEVEN Concerning the Holders of Trust Certificates . . . . . . . 30
SECTION 7.01. Evidence of Action Taken by Holders
of Trust Certificates . . . . . . . . . . . . . 30
SECTION 7.02. Proof of Execution of Instruments and
of Holding of Trust Certificates . . . . . . . 30
SECTION 7.03. Trust Certificates Owned by Company . . . . . . . 30
SECTION 7.04. Right of Revocation of Action Taken . . . . . . . 30
SECTION 7.05. Amendment or Waiver . . . . . . . . . . . . . . . 31
-ii-
<PAGE> 4
ARTICLE EIGHT The Trustee . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 8.01. Acceptance of Trust . . . . . . . . . . . . . . .31
SECTION 8.02. Duties and Responsibilities of the
Trustee . . . . . . . . . . . . . . . . . . . .31
SECTION 8.03. Application of Rentals . . . . . . . . . . . . .32
SECTION 8.04. Funds May be Held by Trustee;
Investments . . . . . . . . . . . . . . . . . .33
SECTION 8.05. Trustee Not Liable for Delivery Delays
or Defects in Equipment or Title . . . . . . .34
SECTION 8.06. Resignation and Removal; Appointment
of Successor Trustee . . . . . . . . . . . . .34
SECTION 8.07. Acceptance of Appointment by Successor
Trustee . . . . . . . . . . . . . . . . . . . .35
SECTION 8.08. Merger or Consolidation of Trustee . . . . . . .35
SECTION 8.09. Return of Certain Moneys to Company . . . . . . .35
ARTICLE NINE Miscellaneous . . . . . . . . . . . . . . . . . . . . . .36
SECTION 9.01. Rights Confined to Parties and Holders . . . . .36
SECTION 9.02. No Recourse . . . . . . . . . . . . . . . . . . .36
SECTION 9.03. Binding Upon Assigns . . . . . . . . . . . . . .36
SECTION 9.04. Notices . . . . . . . . . . . . . . . . . . . . .36
SECTION 9.05. Effect of Headings: Date Executed;
and Governing Law . . . . . . . . . . . . . . .37
SECTION 9.06. Legal Holidays . . . . . . . . . . . . . . . . .37
SECTION 9.07. Counterparts . . . . . . . . . . . . . . . . . .37
SCHEDULE I - List of Equipment (initial closing)
-iii-
<PAGE> 5
EQUIPMENT TRUST AGREEMENT dated _______ __, _____, between
HARRIS TRUST AND SAVINGS BANK, solely in its capacity as Trustee, an Illinois
banking corporation (the "Trustee"), and UNION TANK CAR COMPANY, a Delaware
corporation (the "Company");
WHEREAS Union Tank Car Company Equipment Trust Certificates, Series __
(the "Trust Certificates"), are to be issued and sold from time to time, at a
price not less than their principal amount, in an aggregate principal amount
not exceeding $__________; and
WHEREAS the proceeds of the sale of the Trust Certificates together
with such other cash, if any, as may be required to be deposited by the Company
as hereinafter provided are to constitute a fund, to be known as Union Tank Car
Company Equipment Trust, Series __, to be applied by the Trustee from time to
time in part payment of the Cost (as hereinafter defined) of the Trust
Equipment (as hereinafter defined), the remainder of the Cost thereof to be
paid out of advance rentals to be paid by the Company as provided herein; and
WHEREAS title to such Trust Equipment is to be vested in and is to be
retained by the Trustee, and such Trust Equipment is to be leased to the
Company hereunder until title is transferred under the provisions hereof; and
WHEREAS the texts of the Trust Certificates and the guaranty to be
endorsed on the Trust Certificates by the Company are to be substantially in
the following form:
-1-
<PAGE> 6
[Form of Trust Certificate]
THIS CERTIFICATE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
No. R-__________ $___________
UNION TANK CAR COMPANY
Equipment Trust Certificate, Series 26
Total Authorized Issue $
HARRIS TRUST AND SAVINGS BANK
Trustee
HARRIS TRUST AND SAVINGS BANK, as Trustee under an Equipment Trust
Agreement (the "Agreement") dated ________ __, _____, between HARRIS TRUST AND
SAVINGS BANK, as Trustee (the "Trustee"), and Union Tank Car Company, a
Delaware corporation (the "Company"), hereby certifies that
or registered assigns is entitled to an interest in the principal amount of
Dollars ($ ) in Union Tank Car Company Equipment Trust, Series __,
due and payable on or before __________, ___, ___, and to interest on the amount
of unpaid principal from time to time due and owing pursuant to this Trust
Certificate from the date hereof at the rate of _____% per annum (and, if
applicable, the additional amounts that may become payable under Section 4.04
of the Agreement). Interest on this Trust Certificate shall be calculated on
the basis of a 360-day year of twelve 30-day months.
This Trust Certificate shall be payable as follows (unless payment is
hereof accelerated pursuant to Article Five of the Agreement): the outstanding
principal amount hereof shall be paid on [describe principal payments] and
interest payments on the outstanding principal shall be made [describe interest
payments] on ___________ and ____________ in each year commencing
_________, ___, ______. Interest on any overdue installment of interest and on
any overdue payment of principal, to the extent legally enforceable, shall be
payable at the rate per annum of 1% over the rate specified above. Payments of
principal and interest shall be made by the Trustee to the registered holder
hereof at the corporate trust office of the Trustee in ___________,
___________, in such coin or currency of the United States of America as, at
the time of payment, shall be legal tender for the payment of public and
private debts. Each of such payments shall be made only from and solely out of
rentals or other moneys received by the Trustee and applicable to such payment
under the provisions of the Agreement.
-2-
<PAGE> 7
This Trust Certificate is one of an authorized issue of Trust
Certificates in an aggregate principal amount not exceeding the Total
Authorized Issue set forth above, issued under the Agreement, pursuant to which
certain railroad equipment leased to the Company (or cash or obligations
defined in the Agreement as "Investments" in lieu thereof, as provided in the
Agreement) is held by the Trustee in trust for the equal and ratable benefit of
the registered holders of the Trust Certificates issued thereunder. Reference
is made to the Agreement (a copy of which is on file with the Trustee at its
corporate trust office) for a more complete statement of the terms and
provisions thereof, to all of which the registered holder hereof, by accepting
this Trust Certificate, assents.
This Trust Certificate is transferable in whole or in part by the
registered holder hereof in person or by its duly authorized attorney upon
presentment hereof for registration of transfer to the Trustee at its said
office accompanied by an appropriate instrument of assignment and transfer,
duly executed by the registered holder in person or by such attorney, in form
satisfactory to the Trustee, and thereupon a new fully registered Trust
Certificate or Certificates of the same maturity in authorized denominations
for the then aggregate unpaid principal amount hereof will be issued in the
name of such person or persons as may be designated by such holder. Prior to
due presentment for registration of transfer, the Trustee and the Company may
deem and treat the person in whose name this Trust Certificate is registered as
the absolute owner hereof for the purpose of receiving payment of principal and
interest and for all other purposes and shall not be affected by any notice to
the contrary.
In case of the happening of an Event of Default (as defined in the
Agreement) the principal amount represented by this Trust Certificate may
become or be declared due and payable in the manner and with the effect
provided in the Agreement.
This Trust Certificate shall not be deemed a promise to pay of
Harris Trust and Savings Bank in its individual capacity and payment by Harris
Trust and Savings Bank shall be made as Trustee only from and solely out of
rentals or other moneys received by the Trustee and applicable to such payment
and the provisions of this Agreement.
-3-
<PAGE> 8
IN WITNESS WHEREOF, the Trustee has caused this Trust Certificate to
be signed by one of its duly authorized officers, by his/her signature or a
facsimile thereof, and its corporate seal or a facsimile thereof to be hereunto
affixed or imprinted hereon and to be attested by one of its duly authorized
officers, by his/her signature. Neither this Trust Certificate nor the
guaranty endorsed hereon shall be valid or enforceable for any purpose until
this Trust Certificate shall have been so signed by a duly authorized officer
and the corporate seal so attested by such duly authorized officer.
Dated ,
Harris Trust and Savings Bank, as
Trustee
By
------------------------------------
Authorized Officer
[Corporate Seal]
Attest:
- ----------------------------------------------
Authorized Officer
-4-
<PAGE> 9
UNION TANK CAR COMPANY, for valuable consideration, hereby
unconditionally and irrevocably guarantees to the registered holder of the
within Trust Certificate the prompt payment when due of the principal of said
Trust Certificate and of the interest thereon specified in said Trust
Certificate, with interest on any overdue principal and on any overdue
interest, to the extent legally enforceable, at the rate specified in such
Trust Certificate, all in accordance with the terms of said Trust Certificate
and the Equipment Trust Agreement referred to therein.
UNION TANK CAR COMPANY
By
------------------------------------
-5-
<PAGE> 10
WHEREAS it is desired to secure to the holders of the Trust
Certificates the payment of the principal thereof when due, whether by
declaration or otherwise, and interest thereon as hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, the parties hereto hereby agree as follows:
ARTICLE ONE
Definitions
-----------
SECTION 1.01. Definitions. The following terms (except as
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Agreement shall have the respective meanings hereinafter
specified:
Affiliate of any corporation shall mean any corporation which,
directly or indirectly, controls or is controlled by, or is under
common control with, such corporation. For the purposes of this
definition, control (including controlled by and under common control
with), as used with respect to any corporation, shall mean the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such corporation,
whether through the ownership of voting securities or by contract or
otherwise.
Business Day shall mean any day, other than a Saturday or
Sunday or a day on which commercial banking institutions or trust
companies are authorized or required by law, regulation or executive
order to be closed in New York, New York or Chicago, Illinois or, so
long as any Trust Certificate is outstanding, a city and state in
which the Corporate Trust Office of the Trustee is located.
Company shall mean Union Tank Car Company, a Delaware
corporation (whose chief place of business and chief executive office
is currently located at 225 West Washington Street, Chicago, Illinois
60606), and any successor or successors to it complying with the
provisions of Section 4.09.
Corporate Trust Office shall mean the principal office of the
Trustee, at which the corporate trust business of the Trustee shall,
at the time in question, be administered, which office is, on the date
of execution of this Agreement, located at 111 West Monroe Street,
Chicago, Illinois 60603.
Cost, when used in respect of Equipment not built by the
Company or any Affiliate of the Company, shall mean the actual cost
thereof to the Company and, in respect of Equipment built by the
Company or any such Affiliate, shall mean an amount
-6-
<PAGE> 11
not in excess of "car builder's cost", including direct cost of labor,
material and overhead and, in certain circumstances, a nominal
manufacturing profit.
Default shall mean
(1) any Event of Default; and
(2) any event which, with the giving of notice or the
passage of time or both, could constitute an Event of Default.
The Company shall be considered to "be in Default" if a Default shall
have occurred and be continuing.
Deposited Cash shall mean the aggregate of (a) the proceeds
from the sale of the Trust Certificates deposited with the Trustee
pursuant to Section 2.01 and, when required or indicated by the
context, any Investments purchased by the use of such proceeds
pursuant to the provisions of Section 8.04, and (b) any sums restored
to Deposited Cash from rentals pursuant to Section 4.04(B)(l)(b) and
on deposit with the Trustee.
Engineer's Certificate shall mean a certificate signed by a
person appointed by the Company who shall be an engineer, appraiser or
other expert, as the case may require. Such person may be an officer
or employee of the Company except where this Agreement specifically
requires the signature of an independent engineer, appraiser or other
expert.
Equipment shall mean standard-gauge railroad tank cars and
covered hopper cars, which tank cars and covered hopper cars are
rolling stock used or intended for use in connection with interstate
commerce and which were first put into use on or after __________,
199_; provided, however, in the case of Equipment sold to the Trustee
pursuant to Section 4.07, it shall not include any railroad equipment
first put into use prior to __________.
Event of Default shall mean any event specified in Section
5.01 to be an Event of Default.
The word "holder", when used with respect to Trust
Certificates, shall include the plural as well as the singular number.
Independent Engineer shall mean an engineer, appraiser or
other expert appointed by the Company and approved by the Trustee in
the exercise of reasonable care, who (a) is in fact independent, (b)
does not have any substantial interest, direct or indirect, in the
Company or in any other obligor on the Trust Certificates or in any
Affiliate of the Company or any such other obligor and (c) is not
connected with the Company or any other obligor on the Trust
Certificates or any Affiliate of the Company or any such other
-7-
<PAGE> 12
obligor as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
Investments shall mean (a) bonds, notes or other direct
obligations of the United States of America or obligations for which
the full faith and credit of the United States is pledged to provide
for the payment of the interest and principal and which mature within
one year of the date of purchase, (b) open market commercial paper of
any company incorporated and doing business under the laws of the
United States of America or one of the States thereof given a rating
of "A-1" by Standard & Poor's Corporation or "prime-1" or better by
NCO/Moody's Commercial Paper Division of Moody's Investors Service,
Inc. or an equivalent rating by a successor thereto or a similar
nationally recognized rating service substituted therefor, (c)
certificates of deposit or time deposits in banks or trust companies,
including the Trustee, incorporated and doing business under the laws
of the United States of America or one of the States thereof having a
capital and surplus aggregating at least $250,000,000 and (d) The
First National Bank of Chicago Corporate Trust Short Term Investment
Fund, so long as the shares of such fund are rated by Standard &
Poor's Ratings Group and Moody's Investors Service, Inc. in one of the
two highest rating categories (without regard to any refinement or
gradation of rating category by numerical modifier or otherwise)
assigned by Standard & Poor's Ratings Group and Moody's Investors
Service, Inc. for obligations of that nature.
Officers' Certificate shall mean a certificate signed by the
Chairman of the Board, or the President or any Vice President and by
the Treasurer or any Assistant Treasurer or the Secretary or any
Assistant Secretary of the Company, which officer is in a position to
know the truth and accuracy thereof.
Opinion of Counsel shall mean an opinion in writing signed by
legal counsel who shall be acceptable to the Trustee and who may,
unless in a particular instance the Trustee shall otherwise require,
be an employee of or counsel to the Company. The acceptance by the
Trustee of, and its action on, an Opinion of Counsel shall be
sufficient evidence that such counsel is satisfactory to the Trustee.
Owner shall mean the manufacturer or other person transferring
title to any of the Equipment to the Trustee.
Penalty Rate shall mean 1% per annum over the rate specified
in the Trust Certificates.
Request shall mean a written request for the action therein
specified, delivered to the Trustee, dated not more than 10 days prior
to the date of delivery to the Trustee and signed on behalf of the
Company by the Chairman of the Board, the President, a Vice President
or the Treasurer of the Company.
-8-
<PAGE> 13
Trust Certificates shall mean the Equipment Trust Certificates
issued hereunder.
Trust Equipment shall mean all Equipment at the time subject
to the terms of this Agreement.
Trustee shall mean Harris Trust and Savings Bank, solely
in its capacity as Trustee, and, subject to the provisions of Article
Eight, any successor as trustee hereunder.
Value, as used herein, shall mean an amount determined as
follows:
(1) the Value of any unit of Trust Equipment
assigned or transferred by the Trustee as provided in Section
4.07, and as used in Sections 5.01 and 6.05 in respect of
Trust Equipment, shall be deemed to be the greater of (a) the
fair market value thereof and (b) the Cost thereof (as
theretofore certified to the Trustee) less 1/20 of such Cost
for each full year elapsed between the date such unit was
first put into use (as theretofore so certified) and the date
as of which Value is to be determined;
(2) the Value of any unit of Equipment conveyed
to the Trustee as provided in Article Three and in Section
4.07 shall be deemed to be the lesser of (a) the fair market
value thereof and (b) the Cost of such unit or, in the case of
any unit of Equipment not new, the Cost thereof less 1/20 of
such Cost for each full year elapsed between the date such
unit was first put into use and the date of the transfer
thereof to the Trustee; and
(3) the Value of any Unit of Equipment as used in
Section 4.08 shall be deemed to be the cost thereof less
1/20th of such Cost for each full year elapsed between the
date such Unit was first put into use and the date as of which
Value is to be determined.
The words herein, hereof, hereby, hereto, hereunder and words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, paragraph or subdivision hereof.
ARTICLE TWO
Trust Certificates and Issuance;
--------------------------------
Interests Represented and Maturity
----------------------------------
SECTION 2.01. Issuance of Trust Certificates. Upon the sale from
time to time of any of the Trust Certificates, an amount equal to the principal
amount of the Trust Certificates so sold shall, forthwith upon the issuance
thereof, be deposited in cash with the Trustee.
-9-
<PAGE> 14
Thereupon the Trustee shall issue and deliver, as the Company shall
direct by Request, Trust Certificates in the aggregate principal amount so
sold.
The aggregate principal amount of Trust Certificates which shall be
executed and delivered by the Trustee under this Section shall not exceed the
Total Authorized Issue specified in the form of Trust Certificate, and the
aggregate principal amount represented by all the Trust Certificates shall be
payable as hereinafter set forth.
SECTION 2.02. Interests Represented by Trust Certificates; Interest
Payments; Maturity; No Redemption. Each of the Trust Certificates shall
represent an interest in the principal amount therein specified in the trust
created hereunder. The Trust Certificates shall bear interest at _____% per
annum and shall be payable as follows (unless payment thereof is accelerated
pursuant to Article Five of this Agreement): the outstanding principal amount
thereof shall be paid on [describe principal payments], and interest payments
on the outstanding principal shall be paid in [describe interest payments] on
_________ and __________ in each year commencing ___, ___,____, 199[6]. The
Trust Certificates are not redeemable prior to maturity. Interest on the Trust
Certificates shall accrue from the date of original issue and shall be
calculated on the basis of a 360-day year of twelve 30-day months. Interest
shall be payable on overdue installments of interest and on any overdue payment
of principal, to the extent legally enforceable, interest at the Penalty Rate.
Payment of the principal of and interest on the Trust Certificates
shall be made by the Trustee at the Corporate Trust Office in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, but only from and
solely out of rentals or other moneys received by the Trustee and applicable to
such payment under the provisions of this Agreement.
SECTION 2.03. Form, Execution and Characteristics of Trust
Certificates. (a) The Trust Certificates and the guaranty to be endorsed on
the Trust Certificates by the Company as provided in Section 6.01 shall be in
substantially the forms hereinbefore set forth.
(b) The Trust Certificates shall be signed in the name and on
behalf of the Trustee by the manual or facsimile signature of one of its duly
authorized officers and its corporate seal or a facsimile thereof shall be
affixed or imprinted thereon and attested by the manual signature of one of its
duly authorized officers. In case any officer of the Company or the Trustee
whose signature, whether facsimile or not, shall appear on any of the Trust
Certificates shall cease to be such officer of the Company or the Trustee
before the Trust Certificates shall have been issued and delivered by the
Trustee or shall not have been acting in such capacity on the date of the Trust
Certificates, such Trust Certificates may be adopted by the Company, Union or
the Trustee and be issued and delivered as though such person had not ceased to
be or had then been such officer of the Company, Union or the Trustee.
(c) The Trust Certificates (i) shall be issuable in denominations
of U.S. $1,000 or any multiple thereof; (ii) shall be registered, as to both
principal and interest, in the name of the
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holders; (iii) shall be transferable in whole or in part upon presentation and
surrender thereof for transfer at the Corporate Trust Office, accompanied by
appropriate instruments of assignment and transfer, duly executed by the
registered holder of the surrendered Trust Certificate or Certificates or by
duly authorized attorney, in form satisfactory to the Trustee; (iv) shall be
dated as of the date of issue unless issued in exchange for another Trust
Certificate or Certificates bearing unpaid interest from an earlier date, in
which case they shall be dated as of such earlier date; (v) shall entitle the
registered holder to interest from the date thereof; and (vi) shall be
exchangeable for an aggregate principal amount of Trust Certificates of
authorized denominations of like tenor and maturity equal to the then unpaid
principal amount of Trust Certificates being exchanged.
(d) Anything contained herein to the contrary notwithstanding,
prior to due presentment for registration of transfer, the parties hereto may
deem and treat the registered holder of any Trust Certificates as the absolute
owner of such Trust Certificates for all purposes and shall not be affected by
any notice to the contrary.
(e) The Trustee shall cause to be kept at the Corporate Trust
Office books for the registration of transfer of the Trust Certificates and,
upon presentation of the Trust Certificates for such purpose, the Trustee shall
register any transfer as hereinabove provided, and under such reasonable
regulations as it may prescribe.
(f) For any registration, transfer or exchange, the Trustee shall
require the payment of a sum sufficient to reimburse it for any governmental
charge connected therewith.
(g) Each Trust Certificate delivered pursuant to any provision of
this Agreement in exchange or substitution for, or upon the transfer of the
whole or any part, as the case may be, of one or more other Trust Certificates
shall carry all the rights to principal and to interest accrued and unpaid and
to accrue, which were carried by the whole or such part, as the case may be, of
such one or more other Trust Certificates, and, notwithstanding anything
contained in this Agreement, such Trust Certificate shall be so dated that
neither gain nor loss in interest or principal shall result from such exchange,
substitution or transfer and a notation of all previous principal payments
shall be endorsed on the reverse side thereof.
(h) The Trustee shall not be required to issue, transfer or
exchange Trust Certificates for a period of 10 days next preceding any interest
payment date.
SECTION 2.04. Replacement of Lost Trust Certificates. In case any
Trust Certificate shall become mutilated or defaced or be lost, destroyed or
stolen, then on the terms herein set forth, and not otherwise, the Trustee
shall execute and deliver a new Trust Certificate in the then unpaid principal
amount of the predecessor Trust Certificate and bearing such identifying number
or designation as the Trustee may determine, in exchange and substitution for,
and upon cancellation of, the mutilated or defaced Trust Certificate, or in
lieu of and in substitution for the same if lost, destroyed or stolen. The
Company shall execute its guaranty on any Trust Certificates to be so
delivered. The applicant for a new Trust Certificate pursuant
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<PAGE> 16
to this Section shall furnish to the Trustee and to the Company evidence to
their satisfaction of the loss, destruction or theft of such Trust Certificate
alleged to have been lost, destroyed or stolen and of the ownership and
authenticity of such mutilated, defaced, lost, destroyed or stolen Trust
Certificate, and also shall furnish such security or indemnity as may be
required by the Trustee and the Company in their discretion, and shall pay all
expenses and charges of such substitution or exchange. In the case of each of
the original purchasers of Trust Certificates or any institutional investor
transferee, a letter of indemnity in form reasonably satisfactory to the
Company and the Trustee from such purchaser shall be sufficient security and
indemnity. All Trust Certificates are held and owned upon the express
condition that the foregoing provisions are exclusive in respect of the
replacement of mutilated, defaced, lost, destroyed or stolen Trust Certificates
and shall preclude any and all other rights and remedies, any law or statute
now existing or hereafter enacted to the contrary notwithstanding.
ARTICLE THREE
Acquisition of Trust Equipment by
---------------------------------
Trustee: Deposited Cash
-----------------------
SECTION 3.01. Acquisition of Equipment by Trustee. The Company shall
cause to be sold to the Trustee, as trustee for the holders of the Trust
Certificates, as soon as practicable, all of the Equipment described in Schedule
I hereto; provided, however, that if the aggregate Cost of the Trust Equipment
delivered to the Trustee or its agent or agents pursuant to this Article Three,
as specified in the Officers' Certificate theretofore delivered to the Trustee
pursuant to Section 3.04, shall exceed _______% of the aggregate principal
amount of Trust Certificates issued under Section 2.01, upon Request the Trustee
shall execute and deliver to the Company a supplement hereto excluding from this
Agreement Equipment having a Cost in excess of such amount so that the aggregate
Cost of the Trust Equipment shall not exceed _______% of the aggregate principal
amount of the Trust Certificates issued pursuant to Section 2.01. The Trust
Equipment sold to the Trustee shall be delivered to the person or persons
designated by the Trustee as its agent or agents to accept such delivery (who
may be one or more of the officers or agents of the Company) and the certificate
of any such agent or agents as to such delivery and acceptance shall be
conclusive evidence of such delivery.
In the event that the Company shall deem it necessary or desirable to
procure for the use of the Company, and to include in the trust hereby created,
other Equipment in lieu of any units of the Equipment specifically described in
Schedule I hereto prior to the acceptance of such Equipment by the Trustee or
its agent or agents, or in the event that any unit of the Equipment described in
Schedule I hereto shall suffer a Casualty Occurrence as defined in Section
4.08, prior to such acceptance, the Company may cause to be sold to the Trustee
other Equipment, to be substituted under the trust.
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If the aggregate Cost, as specified in the Officers' Certificate
theretofore delivered to the Trustee pursuant to Section 3.04, of the Trust
Equipment delivered to the Trustee or its agent or agents pursuant to this
Article Three shall be less than _______% of the principal amount of the Trust
Certificates issued pursuant to Section 2.01, the Company will cause to be sold
to the Trustee additional Equipment in such amount and of such Cost that such
aggregate final Cost of the Trust Equipment will be at least _______% of the
principal amount of the Trust Certificates issued pursuant to Section 2.01.
SECTION 3.02. Payment of Deposited Cash. From time to time, when
and as any Equipment shall have been accepted by the Trustee or its agent or
agents pursuant to Section 3.01, the Trustee shall (subject to the provisions
of Sections 3.03 and 3.04) pay, upon Request, to the Owner of the accepted
Equipment out of Deposited Cash an amount not exceeding __% of the aggregate
Cost of such Trust Equipment, as specified in the Officers' Certificate
furnished to the Trustee pursuant to Section 3.04(b).
SECTION 3.03. Payment of Deficiency. The Company covenants that,
contemporaneously with any payment by the Trustee pursuant to Section 3.02, it
will either (a) pay to the Trustee the advance rental provided in Section
4.04(A), and thereupon the Trustee shall, upon Request, pay to the Owner of the
delivered Trust Equipment, by the use of such advance rental, the portion of
the Cost of the delivered Trust Equipment not paid out of Deposited Cash as
provided for in Section 3.02 or (b) deliver to the Trustee an executed
counterpart of a receipt from such Owner evidencing the direct payment by the
Company to such Owner of that portion of the Cost of such Trust Equipment equal
to the amount of advance rental required to be paid to the Trustee pursuant to
clause (a) of this sentence in respect of such Trust Equipment or, if the
Company is the Owner of the delivered Trust Equipment, a statement to such
effect; the intention being that the Company shall ultimately pay not less than
__% of the Cost of all the Trust Equipment delivered to the Trustee pursuant to
this Article Three, and the Trustee and the Company shall at any time, if
occasion arises, adjust their accounts and payments to the end that the Trustee
shall pay with Deposited Cash not more than __% of the Cost, and the Company
shall pay as advance rental the remainder, to be not less than __% of such
Cost.
SECTION 3.04. Supporting Papers. The Trustee shall not pay out any
Deposited Cash against the delivery of any of the Trust Equipment unless and
until it shall have received:
(a) a certificate of the agent or agents designated by
the Trustee to receive delivery of the Trust Equipment, stating that
the Trust Equipment described and specified therein by number or
numbers has been delivered to such agent or agents (the date of such
certificate to be presumed conclusively as the date of such delivery);
(b) an Officers' Certificate which shall state (i) that
such Trust Equipment is Equipment as herein defined, (ii) the date
each unit of such Trust Equipment was first put into use or that such
Trust Equipment was first put into use not earlier than a specified
date, (iii) that the Cost of such Trust Equipment is the amount
therein specified
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<PAGE> 18
or is not less than the amount therein specified, (iv) the Value to
the Company, in the opinion of the signers, of such Trust Equipment as
of the date of the Section 3.02 Request and (v) that, in the opinion
of the signers, all conditions precedent provided in this Agreement
relating to the payment in question have been complied with;
(c) (i) an invoice or invoices from the Owner of such
Trust Equipment, if other than the Company, and (ii) a bill or bills
of sale of such Trust Equipment from the Owner thereof to the Trustee,
which bill or bills of sale shall contain a warranty or guaranty to
the Trustee that the title to the Trust Equipment described therein is
free from all liens and encumbrances (except as permitted herein)
other than the rights of the Company hereunder; and
(d) an Opinion of Counsel to the effect (i) that such
bill or bills of sale are valid and effective, either alone or in
connection with any other instrument referred to in and accompanying
such opinion, to vest in the Trustee title to such Trust Equipment
free from all liens, security interests and other encumbrances (except
as permitted herein) other than the rights of the Company hereunder,
(ii) that in the case of any Trust Equipment not specifically
described herein, a proper supplement hereto in respect of such Trust
Equipment has been duly executed by the Trustee and the Company and
filed and recorded in accordance with Section 6.05 and (iii) that, in
the opinion of such counsel, all conditions precedent provided for in
this Agreement relating to the payment in question have been complied
with.
Any Officers' Certificate delivered pursuant to this Section may state
that the Cost of the Trust Equipment therein referred to is tentatively
determined, subject to final adjustment to be evidenced in a final Officers'
Certificate to be delivered to the Trustee.
ARTICLE FOUR
Lease of Trust Equipment to the Company
---------------------------------------
SECTION 4.01. Lease of Trust Equipment to the Company. The Trustee
does hereby let and lease to the Company all the Trust Equipment from and after
the respective dates such Trust Equipment is acquired by the Trustee hereunder
to the date on which the final payment of principal and interest on any Trust
Certificate is due.
SECTION 4.02. Equipment Automatically Subjected. As and when any
Equipment shall from time to time be transferred to the Trustee hereunder, the
same shall, ipso facto and without further instrument of lease or transfer,
become subject to all the terms and provisions hereof.
SECTION 4.03. Additional and Substituted Equipment Subject Hereto.
In the event that the Company shall, as provided in Section 3.01 or 4.07, cause
to be transferred to the
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<PAGE> 19
Trustee other Equipment in addition to or in substitution for any of the
Equipment herein specifically described or subjected hereto, such other
Equipment shall be included as part of the Trust Equipment by supplement hereto
to be executed by the Trustee and the Company and shall be subject to all the
terms and conditions hereof in all respects as though it had been part of the
Equipment herein specifically described.
SECTION 4.04. Rental Payments. The Company hereby accepts the
lease of all the Trust Equipment, and covenants and agrees to accept delivery
and possession hereunder of the Trust Equipment; and the Company covenants and
agrees to pay to the Trustee at the Corporate Trust Office (or, in the case of
taxes, to the proper taxing authority), in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts, rental hereunder which shall be sufficient
to pay and discharge the following items, when and as the same shall become due
and payable (whether or not any of such items shall become due and payable
prior to the acceptance of delivery of any unit of the Trust Equipment).
(A) The Company shall pay to the Trustee, as hereinafter
provided, as advance rental hereunder, sums which in the aggregate
shall be equal to the difference between the aggregate Cost of the
Trust Equipment (other than Trust Equipment subjected hereto pursuant
to Section 4.07) and the portion of such Cost to be provided out of
the proceeds (excluding accrued interest, if any) of the sale of the
Trust Certificates, the intention being that, when all such Trust
Equipment shall have been transferred to the Trustee, the Company
shall have paid or shall pay to the Trustee, as advance rental
hereunder, a sum equal to the amount by which the aggregate Cost of
such Trust Equipment exceeds such proceeds of the sale of the Trust
Certificates. The Company agrees to pay such advance rental as
follows:
(1) at the time of issue of any Trust Certificate
pursuant to Section 2.01 a sum which, when added to the
proceeds of the sale of such Trust Certificate deposited with
or to the credit of the Trustee, will make the total sum
deposited equal to the principal amount of such Trust
Certificate; and
(2) upon delivery of any such Trust Equipment, a
sum equal to the portion of the Cost of such delivered Trust
Equipment not paid out of Deposited Cash as provided for in
Section 3.02, but not less than __% of such Cost.
(B) In Addition to such advance rental the Company shall
pay to the Trustee, as rental for the Trust Equipment (notwithstanding
that any of the Trust Certificates shall have been acquired by the
Company or shall not have been presented for payment), the following:
(1) from time to time upon demand of the Trustee,
(a) the reasonable expenses of the trust hereby created,
including, without limitation, reasonable compensation to the
Trustee and all expenses provided for herein, and (b) an
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<PAGE> 20
amount equal to any expenses incurred or loss of principal
(including interest accrued thereupon at time of purchase) in
connection with any purchase, sale or redemption by the
Trustee of Investments;
(2) from time to time upon demand of the Trustee,
any and all taxes, assessments, and governmental charges which
the Trustee as such may be required to pay, including, without
limitation, all taxes, assessments and governmental charges
upon or on account of the income or property of the Trust, or
upon or on account of this Agreement;
(3) (a) the amounts of interest payable on the
Trust Certificates, when and as the same shall become payable,
and (b) interest at the Penalty Rate from the due date, upon
the amount of any installments of rental payable in respect of
the principal of and interest on the Trust Certificates which
shall not be paid when due, to the extent legally enforceable;
and
(4) the principal of the Trust Certificates, when
and as the same shall become payable, whether upon the date of
maturity thereof or by declaration or otherwise.
Nothing contained herein or in the Trust Certificates shall be deemed
to impose on the Trustee or on the Company any obligation to pay to the
registered holder of any Trust Certificate any tax, assessment or governmental
charge required by any present or future law of the United States of America,
or of any state, county, municipality or other taxing authority thereof, to be
paid on behalf of, or withheld from the amount payable to, the holder of any
Trust Certificate.
The Company shall not be required to pay any tax, assessment or
governmental charge so long as it shall in good faith and by appropriate legal
proceedings contest the validity thereof; provided, however, that in the
judgment of the Trustee and as set forth in an Opinion of Counsel which shall
have been furnished to the Trustee by the Company, the rights or interests of
the Trustee or of the holders of the Trust Certificates will not be endangered
thereby.
SECTION 4.05. Termination of Trust. After all payments which are
required to be made pursuant to this Agreement have been completed and fully
made to the Trustee (1) such payments shall be applied and treated as purchase
money as the full purchase price of the Trust Equipment from the Trustee, (2)
any moneys remaining in the hands of the Trustee after providing for all
outstanding Trust Certificates and after paying the expenses of the Trustee,
including its reasonable compensation, shall be paid to the Company, (3) title
to all the Trust Equipment shall vest in the Company and (4) the Trustee shall
execute for record in public offices, at the expense of the Company, such
instrument or instruments in writing as reasonably shall be requested by the
Company in order to make clear upon public records the Company's title to all
the Trust Equipment under the laws of any jurisdiction; provided, however, that
(except as otherwise provided herein) until that time title to the Trust
Equipment shall not pass
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<PAGE> 21
to or vest in the Company, but title to and ownership of all the Trust
Equipment shall be and remain with the Trustee, notwithstanding the delivery
thereof to and the possession and use thereof by the Company pursuant to this
Agreement.
SECTION 4.06. Indemnity. The Company covenants and agrees to
indemnify the Trustee against any and all claims arising out of or connected
with the ownership or use of any of the Trust Equipment, and particularly
against any and all claims arising out of the use of any patented inventions in
and about the Trust Equipment, and to comply in all respects with the laws of
the United States of America and of all the states and other jurisdictions in
which the Trust Equipment, or any unit thereof, may be operated, and with all
lawful acts, rules, regulations and orders of any commissions, boards and other
legislative, executive, administrative or judicial bodies or officers having
power to regulate or supervise any of the Trust Equipment, including without
limitation all lawful acts, rules, regulations and orders of any body having
competent jurisdiction relating to automatic coupler devices or attachments,
air brakes or other appliances; provided, however, that the Company may in good
faith contest the validity of any such law, act, rule, regulation or order, or
the application thereof to the Trust Equipment or any part thereof, in any
manner which will not in the judgment of the Trustee endanger the rights or
interests of the Trustee or of the holders of the Trust Certificates. The
Company shall not be relieved from any of its obligations hereunder by reason
of the assertion or enforcement of any such claims or the commencement or
prosecution of any litigation in respect thereof. The Company's obligation to
indemnify the Trustee under this Section 4.06 shall survive the termination of
this Agreement.
SECTION 4.07. Substitution and Replacement of Trust Equipment.
Upon Request, the Trustee shall, at any time and from time to time, execute and
deliver a bill of sale assigning and transferring to the transferee named by
the Company all the right, title and interest of the Trustee in and to any of
the units of Trust Equipment as provided herein; provided, however, that, at
the option of the Company, (a) there shall be paid to the Trustee cash in an
amount not less than the Value, as of the date of such Request, of the units of
Trust Equipment to be assigned or transferred by the Trustee or (b) there shall
be conveyed to the Trustee, at the time of assignment or transfer of any units
of Trust Equipment, other units of Equipment and of a Value not less than the
Value, as of the date of such Request, of the units of Trust Equipment to be
assigned or transferred.
At the time of delivery of any Request pursuant to the first paragraph
of this Section, the Company shall, if other Equipment is to be conveyed to the
Trustee in substitution for the Trust Equipment to be assigned or transferred
by the Trustee, deliver to the Trustee the following papers:
(1) an Officers' Certificate stating (i) the Value, as of
the date of said Request, of the Trust Equipment so to be assigned or
transferred by the Trustee and the date such Trust Equipment was first
put into use (or that such Trust Equipment was first put into use not
later than a specified date), (ii) that the requested assignment or
transfer by the Trustee will not impair the security under this
Agreement in contravention of the
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<PAGE> 22
provisions hereof, (iii) the Value of such substituted Equipment as of such
date and the date such substituted Equipment was first put into use (or that
such substituted Equipment was first put into use not earlier than a specified
date), (iv) that each unit of Equipment so to be substituted has been marked as
provided in Section 4.10, (v) that each such unit so to be substituted is
Equipment as herein defined and (vi) that the Company is not in Default;
(2) a certificate and a bill or bills of sale in respect
of such substituted Equipment as provided for in subparagraphs (a) and
(c) of the first paragraph of Section 3.04;
(3) an Opinion of Counsel to the effect that (i) such
bill or bills of sale are valid and effective, either alone or
together with any other instruments referred to in and accompanying
such opinion, to vest in the Trustee title to such substituted
Equipment free from all claims, liens, security interests and other
encumbrances (except as permitted herein) other than the rights of the
Company hereunder and (ii) a proper supplement hereto in respect of
each substituted unit of Equipment has been duly executed by the
Trustee and the Company and has been filed with the Surface
Transportation Board of the Department of Transportation pursuant to
the requirements of ___ U.S.C. Section ______ and as otherwise
required by Section 6.05 and has been deposited with the Registrar
General of Canada pursuant to Section 90 of the Railway Act (Canada)
and publication of notice of such deposit in The Canada Gazette in
accordance with said Section 90 has been provided for; and
(4) if the Cost of the Trust Equipment to be assigned or
transferred by the Trustee, less 1/20th of such Cost for each full
year elapsed between the date such Trust Equipment was first put into
use (as previously so certified) and the date as of which the Value
thereof is to be determined hereunder, plus the Cost of all other
Trust Equipment so assigned or transferred within the prior twelve
months, less 1/20th of such Cost for each full year elapsed between
the date such other Trust Equipment was first put into use (as
previously so certified) and the date as of which the Value thereof
was determined, as set forth in the certificate or certificates
required by this Section 4.07, is more than 10% of the principal
amount of Trust Certificates then outstanding, a certificate by an
Independent Engineer stating, as of the date of said Request, both the
Value of the Trust Equipment so to be assigned or transferred by the
Trustee and the Value of such substituted Equipment.
At the time of delivery of any Request pursuant to the first paragraph
of this Section, the Company shall, if cash is to be paid to the Trustee in
respect of the Trust Equipment to be assigned or transferred by the Trustee,
deliver to the Trustee an Officers' Certificate stating to the effect set forth
in clauses (i), (ii) and (vi) of subparagraph (1) of the second paragraph of
this Section.
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<PAGE> 23
Cash deposited with the Trustee pursuant to this Section or Section
4.08 shall, from time to time, be paid over by the Trustee to the Company upon
Request, against conveyance to the Trustee of units of Equipment having a
Value, as of the date of said Request, not less than the amount of cash so
paid, and upon delivery to the Trustee of papers corresponding to those set
forth in the second paragraph of this Section, with such appropriate
modifications as may be approved by the Trustee.
SECTION 4.08. Maintenance of Trust Equipment; Casualty Occurrences.
The Company agrees that it will maintain and keep all the Trust Equipment in
good order and proper repair at its own cost and expense, unless and until it
becomes worn out, unsuitable for use or lost or destroyed (such occurrences
being hereinafter called Casualty Occurrences). Whenever any of the Trust
Equipment shall suffer a Casualty Occurrence, the Company shall on or before
the next following May 15, deliver to the Trustee an Engineer's Certificate
describing such Trust Equipment and stating the Value thereof as of the date
such Trust Equipment suffered such Casualty Occurrence. When the total Value
of all units of the Trust Equipment having suffered a Casualty Occurrence
(exclusive of units having suffered a Casualty Occurrence in respect of which a
payment shall have been made to the Trustee pursuant to this Section) shall
exceed $250,000, the Company, within 30 days after it shall have been informed
of such event, shall deliver to the Trustee an Engineer's Certificate
describing such Trust Equipment and stating the Value thereof as of the date
such Trust Equipment suffered such Casualty Occurrence and either (i) deposit
with the Trustee an amount in cash equal to the Value of such units as of the
date of the Casualty Occurrence in respect of each thereof or (ii) convey to
the Trustee, in accordance with the procedures and requirements of Section
4.07, units of Equipment with a Value, as of the date of such conveyance, not
less than the Value of the units suffering such Casualty Occurrence(s), as of
the date of the Casualty Occurrence in respect of each thereof. The rights and
remedies of the Trustee to enforce or to recover any of the rental payments
shall not be affected by reason of any Casualty Occurrence. Cash deposited
with the Trustee pursuant to this Section shall be held and applied as provided
in the fourth paragraph of Section 4.07.
Upon the deposit of cash with the Trustee pursuant to this Section
4.08, the Trustee shall execute and deliver a bill of sale in the form
reasonably requested by the Company assigning and transferring to the
transferee named by the Company all the right, title and interest of the
Trustee in and to the Trust Equipment which has suffered a Casualty Occurrence
and in respect of which such deposit is made.
The Company agrees to furnish to the Trustee on or before May 15 in
every calendar year commencing May 15, ____, and during the continuance of the
lease provided for herein, an Officers' Certificate, dated as of the preceding
February 14, (1) stating the description and numbers of all units of Trust
Equipment that may have suffered a Casualty Occurrence or which have been
withdrawn from use pending major repairs (other than running repairs) since the
date of the last preceding statement (or the date of this Agreement in the case
of the first such statement), (2) that in the case of all the Trust Equipment
repainted or repaired since the date f the last preceding statement (or the
date of this Agreement in the case of the first statement) the plates or
markers required by Section 4.10 have been preserved, or that such Trust
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<PAGE> 24
Equipment when repainted or repaired has been again plated or marked as
required thereby, (3) that no Event of Default has occurred and is continuing,
(4) that, in the opinion of the signers, the Company is in compliance with all
of the terms of this Agreement and (5) covering such other matters as the
Trustee may reasonably request.
The Trustee, by its agents, shall have the right at any reasonable
time (which may be more frequent than once in each calendar year), but shall be
under no duty, to inspect the Trust Equipment at the then existing locations
thereof.
SECTION 4.09. Possession of Trust Equipment. Except as provided in
this Section 4.09, without first obtaining the written consent of the Trustee,
the Company will not (a) assign or transfer its rights hereunder, (b) transfer
the Trust Equipment or any part thereof or (c) part with the possession of, or
suffer or allow to pass out of its possession and control, any of the Trust
Equipment. An assignment or transfer to any corporation which shall acquire
all or substantially all the property of the Company (by merger, consolidation
or otherwise) and which, by execution of an appropriate instrument satisfactory
to the Trustee, shall assume and agree to perform each and all the obligations
and covenants of the Company hereunder and under the guarantee endorsed on the
Trust Certificates shall not be deemed a breach of this covenant and such
assignment, transfer or assumption shall have the effect of releasing the
Company from its obligations hereunder and from its obligations as guarantor of
the Trust Certificates. The appointment of a receiver or receivers in equity
or reorganization or a trustee or trustees in bankruptcy or reorganization for
the Company or for its property shall not be deemed an unauthorized assignment
if, prior to any action by the Trustee to exercise the remedies herein
provided, such receiver or receivers or trustee or trustees shall, pursuant to
court order or decree, in writing duly assume and agree to pay or perform each
and all of the obligations and covenants of the Company hereunder and under the
guaranty endorsed on the Trust Certificates, in such manner that such
obligations shall have the same status as obligations incurred by such receiver
or receivers or trustee or trustees.
Notwithstanding the foregoing, so long as the Company shall not be in
Default, the Company and any of its Affiliates shall be entitled to the
possession and use of the Trust Equipment in accordance with the terms hereof,
and the Company or such Affiliates may also (a) furnish the Trust Equipment or
any part thereof to railroad companies for use upon the lines of railroad owned
or operated by them or over which they have trackage rights and upon connecting
and other railroads in the usual interchange of traffic, or to other than
railroad companies for use in their business, and (b) sublet or contract to
others located in the United States[, Mexico] and Canada all or any part of the
Trust Equipment, but only, in either case, upon and subject to all the terms
and conditions of this Agreement.
Any such sublease or contract may provide that the party acquiring the
use of units of the Trust Equipment, so long as it shall not be in default
under such sublease or contract, shall be entitled, subject to the rights of
the Trustee hereunder, to the possession of such units and the use thereof and,
subject to the provisions of Section 4.10 hereof, may provide for lettering or
marking upon such Equipment for convenience of identification of the leasehold
interest of
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<PAGE> 25
such sublessee therein. Every such lease or contract shall contain provisions
which have the effect of subjecting the rights of the party acquiring the use
of units of the Trust Equipment under such lease or contract to the rights and
remedies of the Trustee in respect of such units.
The Trustee shall have the right to declare the lease provided for
herein terminated in case of any unauthorized assignment or transfer of the
Company's rights hereunder or in case of any unauthorized transfer or sublease
of any of the Trust Equipment. The election of the Trustee to terminate the
lease provided for herein shall have the same effect as the retaking of the
Trust Equipment by the Trustee as hereinafter provided.
SECTION 4.10. Marking of Trust Equipment. The Company shall not
change, or permit to be changed, the numbers of any of the Trust Equipment at
any time covered hereby (or any numbers which may have been substituted as
herein provided) except in accordance with a statement of new numbers to be
substituted therefor which previously shall have been filed with the Trustee by
the Company and which shall be filed and recorded in like manner as this
Agreement.
The Trust Equipment may be lettered, "Union Tank Car Company", "UTLX",
or in some other appropriate manner for convenience of identification of the
leasehold interest of the Company therein, and may also be lettered, in case of
a sublease of any equipment made pursuant to Section 4.09 hereof, in such
manner as may be appropriate for convenience of identification of the
subleasehold interest therein; but the Company, during the continuance of the
lease provided for herein, will not allow any lettering or designation to be
placed on any of the Trust Equipment claiming ownership thereof by the Company
or by any person, firm, association or corporation other than the Trustee.
ARTICLE FIVE
Events of Default and Remedies
SECTION 5.01. Events of Default. The Company covenants and agrees
that in case:
(a) the Company shall default in the payment of any part
of the rental payable hereunder for more than 10 Business Days after
the same shall have become due and payable, or
(b) the Company shall make or suffer any unauthorized
assignment or transfer of its rights hereunder or shall make any
unauthorized transfer or sublease (including, for the purpose of this
clause, contracts for the use thereof) of any of the Trust Equipment,
or, except as herein authorized, shall part with the possession of any
of the Trust Equipment, and shall fail or refuse either to cause such
assignment or transfer or sublease to be canceled by agreement of all
parties having any interest therein and recover possession of such
Trust Equipment within 30 days after the Trustee shall have
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<PAGE> 26
demanded in writing such cancellation and recovery of possession, or
within said 30 days to deposit with the Trustee a sum in cash equal to
the Value, as of the date of such unauthorized action, of such Trust
Equipment (any sum so deposited to be returned to the Company upon the
cancellation of such assignment, transfer or sublease and the recovery
of possession by the Company of such Trust Equipment), or
(c) the Company shall fail or refuse to comply with any
other of the terms and covenants hereof on its part to be kept and
performed, or to make provision satisfactory to the Trustee for such
compliance, for a period which is the shorter of (i) 60 days after the
Trustee shall have demanded in writing performance thereof and (ii) 30
days after the Company has knowledge of any failure on its part to so
comply, or
(d) the lease provided for herein shall be terminated by
operation of law or pursuant to the last paragraph of Section 4.09, or
(e) any order, judgment or decree is entered under any
bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction (herein called the "Bankruptcy Law") adjudicating the
Company bankrupt or insolvent, or the Company petitions or applies to
any tribunal for, or consents to, the appointment of, or taking
possession by, a trustee, receiver, custodian, liquidator or similar
official, of the Company or of substantially all the assets of the
Company or commences a voluntary case under the Bankruptcy Law or any
proceedings relating to the Company under the Bankruptcy Law, whether
now or hereafter in effect; or any such petition or application is
filed, or any such proceedings are commenced, against the Company and
the Company by any act or failure to act indicates its approval
thereof, consent thereto or acquiescence therein, or an order for
relief is entered in an involuntary case against the Company under the
Bankruptcy Law, as now or hereafter constituted, or an order, judgment
or decree is entered appointing any such trustee, receiver, custodian,
liquidator or similar official, or approving the petition in any such
proceedings, and such order, judgment or decree remains unstayed and
in effect for more than 60 days, or
[(f) the Company shall fail to perform under its guarantee
of certain obligations of Procor Limited ("Procor") contained in
Section ____ of Trust Supplement dated _____ __,____ to the Pass
Through Trust Agreement, dated as of January 15, 1997, among the
Company, Procor and Harris Trust and Savings Bank, ______________,
as Pass Through Trustee, and endorsed on the certificates issued
thereunder.]
then, in any such case (herein sometimes called an "Event of Default"), the
Trustee in its discretion may, and upon the written request of the holders of
more than 50% in principal amount of the then outstanding Trust Certificates
shall, by notice in writing delivered to the Company, declare to be due and
payable forthwith the unpaid principal amount of all Trust Certificates then
outstanding and the entire amount of the rentals thereafter (including any
unpaid advance rental, but not including rentals required for the payment of
interest accruing after the
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date of such declaration) payable by the Company as set forth in Section 4.04
and not theretofore paid. Thereupon the entire amount of such principal and
rentals shall forthwith become and shall be due and payable immediately without
further demand, together with interest at the Penalty Rate, to the extent
legally enforceable, on any portion thereof overdue.
In case the Company shall fail to pay any installment of rental
payable pursuant to Section 4.04 in respect of the principal of, or interest
on, the Trust Certificates when and as the same shall have become due and
payable hereunder, and such Default shall have continued for a period of more
than ten Business Days, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any action or
proceedings at law or in equity for the collection of the rentals so due and
unpaid, and may prosecute any such action or proceedings to judgment or final
decree, and may enforce any such judgment or final decree against the Company
or other obligor upon the Trust Certificates and collect in the manner provided
by law out of the property of the Company or other obligor upon the Trust
Certificates wherever situated the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor upon the Trust
Certificates under the Bankruptcy Law or any other applicable law, or in case a
receiver or trustee shall have been appointed for the property of the Company
or such other obligor, or in case of any other judicial proceedings relative to
the Company or such other obligor, or to the creditors or property of the
Company or such other obligor, the Trustee, irrespective of whether the rental
payments hereunder or the principal amount of the Trust Certificates shall then
be due and payable as herein or therein expressed whether by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand or
declaration pursuant to the provisions of this Section, shall be entitled and
empowered by intervention in such proceedings or otherwise, to file and prove a
claim or claims for the entire amount of the rentals then or thereafter payable
(including any unpaid advance rental, but not including rentals required for
the payment of interest accruing after the date of such declaration) and to
file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for reasonable
compensation to the Trustee, its agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances made,
by the Trustee except as a result of its negligence or willful misconduct) and
of the holders of the Trust Certificates allowed in such proceedings and to
collect and receive any moneys or other property payable or deliverable on any
such claims, and to distribute all amounts received with respect to the claims
of the holders of the Trust Certificates and of the Trustee on their behalf;
and any receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the holders of the Trust Certificates to make payments to
the Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to the holders of the Trust Certificates, to pay to the
Trustee such amount as shall be sufficient to cover reasonable compensation to
the Trustee, its agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee except as a result
of its negligence or willful misconduct.
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<PAGE> 28
All rights of action and to assert claims under this Agreement, or
under any of the Trust Certificates, may be enforced by the Trustee without the
possession of any of the Trust Certificates or the production thereof on any
trial or other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall be for the ratable benefit of
the holders of the Trust Certificates. In any proceedings brought by the
Trustee (and also any proceedings involving the interpretation of any provision
of this Agreement to which the Trustee shall be a party) the Trustee shall be
held to represent all the holders of the Trust Certificates, and it shall not
be necessary to make any holders of the Trust Certificates parties to such
proceedings.
SECTION 5.02. Remedies. In case of the happening and continuance
of any Event of Default, the Trustee may by its agents enter upon the premises
of the Company and any of its Affiliates or sublessees (or other person having
acquired the use of the Trust Equipment) where any of the Trust Equipment may
be and take possession of all or any part of the Trust Equipment and withdraw
the same from said premises, retaining all payments which up to that time may
have been made on account of rental for the Trust Equipment and otherwise, and
shall be entitled to collect, receive and retain all unpaid mileage, hourly or
other charges of any kind earned by the Trust Equipment or any part thereof,
and may lease or otherwise contract for the use of the Trust Equipment or any
part thereof, or with or without retaking possession thereof (but only after
declaring due and payable the entire amount of rentals payable by the Company
and the principal of all the then outstanding Trust Certificates, as provided
in Section 5.01) may sell the same or any part thereof, free from any and all
claims of the Company at law or in equity in one lot and as an entirety or in
separate lots, at public or private sale, for cash or upon credit, in its
discretion, and may proceed otherwise to enforce its rights and the rights of
the holders of then outstanding Trust Certificates, all subject to any
mandatory requirements of law applicable thereto. Upon any such sale, the
Trustee itself may bid for the property offered for sale or any part thereof.
Any such sale may be held or conducted at such place and at such time as the
Trustee may specify, or as may be required by law, and without gathering at the
place of sale the Trust Equipment to be sold, and in general in such manner as
the Trustee may determine, but so that the Company may and shall have a
reasonable opportunity to bid at any such sale. Upon such taking possession or
withdrawal or lease or sale of the Trust Equipment, the Company shall cease to
have any rights or remedies ln respect of the Trust Equipment hereunder, but
all such rights and remedies shall be deemed thenceforth to have been waived
and surrendered by the Company, and no payments theretofore made by the Company
for the rent or use of the Trust Equipment or any of it shall give to the
Company any legal or equitable interest or title in or to the Trust Equipment
or any of it or any cause or right of action at law or in equity in respect of
the Trust Equipment against the Trustee or the holders of interests hereunder.
No such taking possession, withdrawal, lease or sale of the Trust Equipment by
the Trustee shall be a bar to the recovery by the Trustee from the Company of
rentals then or thereafter due and payable, or of principal and interest in
respect of the Trust Certificates, and the Company shall be and remain liable
for the same until such sums have been realized as, with the proceeds of the
lease or sale of the Trust Equipment, shall be sufficient for the discharge and
payment in full of all the obligations of the Company under this Agreement.
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<PAGE> 29
SECTION 5.03. Application of Proceeds. If the Trustee shall
exercise any of the powers conferred upon it by Sections 5.01 and 5.02, all
payments made by the Company to the Trustee, and the proceeds of any judgment
collected from the Company by the Trustee, and the proceeds of every sale or
lease by the Trustee of any of the Trust Equipment, together with any other
sums which may then be held by the Trustee under any of the provisions hereof
(other than sums held in trust for the payment of specific Trust Certificates
or a part thereof, or interest thereon), shall be applied by the Trustee to the
payment, in the following order of priority, (a) of all proper charges,
expenses or advances made or incurred by the Trustee in accordance with the
provisions of this Agreement and (b) of the interest then due, with interest on
overdue interest at the Penalty Rate, to the extent legally enforceable, and of
the principal of all the outstanding Trust Certificates, with interest thereon
at the Penalty Rate, to the extent legally enforceable, from the last preceding
interest payment date, whether such Trust Certificates shall have then matured
by their terms or not, all such payments to be pro rata and in full if such
proceeds shall be sufficient, and if not sufficient, then first to interest and
then to principal.
After all such payments shall have been made in full, the title to any
of the Trust Equipment remaining unsold shall be conveyed by the Trustee to the
Company free from any further liabilities or obligations to the Trustee
hereunder. If after applying all such sums of money realized by the Trustee as
aforesaid there shall remain any amount due to the Trustee under the provisions
hereof, the Company agrees to pay the amount of such deficit to the Trustee.
If after applying as aforesaid the sums of money realized by the Trustee there
shall remain a surplus in the possession of the Trustee, such surplus shall be
paid to the Company.
SECTION 5.04. Waivers of Default. Prior to the declaration of the
acceleration of the maturity of the rentals due hereunder and of the maturity
of all the Trust Certificates as provided in Section 5.01, the holders of more
than 50% in aggregate unpaid principal amount of the Trust Certificates at the
time outstanding may on behalf of the holders of all the Trust Certificates
waive any past Default and its consequences, except a Default in the payment of
any installment of rental then due and payable pursuant to Section 4.04 in
respect of the principal of, or interest on, the Trust Certificates, but no
such waiver shall extend to or affect any subsequent Default or impair any
right consequent thereon.
If at any time after the principal of all the Trust Certificates shall
have been declared and become due and payable or if at any time after the
entire amount of rentals shall have been declared and become due and payable,
all as provided in Section 5.01, all arrears of rent (with interest at the
Penalty Rate upon any overdue installments, to the extent legally
enforceable), the expenses and reasonable compensation of the Trustee, together
with all expenses of the trust occasioned by the Company's Default, and all
other sums which shall have become due and payable hereunder shall be paid by
the Company before any sale or lease by the Trustee of any of the Trust
Equipment, and every other Default shall be made good or secured to the
satisfaction of the Trustee and the holders of the Trust Certificates, or
provision deemed by the Trustee to be adequate shall be made therefor, then,
and in every such case, the Trustee, if so requested by the holders of more
than 50% in aggregate unpaid principal amount of the Trust Certificates then
outstanding according to their terms, shall by written notice to the Company
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<PAGE> 30
waive the Default by reason of which there shall have been such declaration or
declarations and the consequences of such Default, but no such waiver shall
extend to or affect any subsequent Default or impair any right consequent
thereon.
SECTION 5.05. Obligations of Company Not Affected by Remedies. No
retaking of possession of the Trust Equipment by the Trustee, or any
withdrawal, lease or sale thereof, nor any action or failure or omission to act
against the Company or in respect of the Trust Equipment, on the part of the
Trustee or on the part of the holder of any Trust Certificate, nor any delay or
indulgence granted to the Company by the Trustee or by any such holder, shall
affect the obligations of the Company hereunder or the obligations of the
Company under its guarantee endorsed on the Trust Certificates. The Company
hereby waives presentation and demand in respect of any of the Trust
Certificates and waive notice of presentation, of demand and of any Default in
the payment of the principal of and interest on the Trust Certificates.
SECTION 5.06. Company To Deliver Trust Equipment to Trustee. In
case the Trustee shall rightfully demand possession of any of the Trust
Equipment in pursuance of this Agreement, the Company will, at its own expense,
forthwith and in the usual manner and at usual speed, cause such Trust
Equipment to be drawn to such point or points as shall reasonably be designated
by the Trustee and will there deliver or cause to be delivered the same to the
Trustee; or, at the option of the Trustee, the Trustee may keep such Trust
Equipment, at the expense of the Company, on any lines of railroad or premises
approved by the Trustee until the Trustee shall have leased, sold or otherwise
disposed of the same. The performance of the foregoing covenant is of the
essence of this Agreement and upon application to any court having jurisdiction
in the premises, the Trustee shall be entitled to a decree against the Company
requiring the specific performance thereof.
SECTION 5.07. Trustee To Give Notice of Default. Promptly after
the occurrence thereof, the Trustee shall give to the registered holders of the
Trust Certificates notice of each Default hereunder known to any officer of the
Trustee assigned by it to perform corporate trust administration functions with
respect to this Agreement.
SECTION 5.08. Control by Holders of Trust Certificates. The
holders of more than 50% in aggregate unpaid principal amount of the
outstanding Trust Certificates, by an instrument or instruments in writing
executed and delivered to the Trustee, shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; provided,
however, that the Trustee shall have the right to decline to follow any such
direction if the Trustee shall be advised by counsel that the action so
directed may not lawfully be taken.
SECTION 5.09. Limitations on Suits by Holders of Trust
Certificates. No holder of any Trust Certificate shall have any right by
virtue or by availing of any provision of this Agreement to institute any
action or proceeding at law or in equity or in bankruptcy or otherwise, upon or
under or with respect to this Agreement, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless such holder previously
shall have given
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to the Trustee written notice of a Default and of the continuance thereof, as
herein provided, and unless also the holders of more than 50% in aggregate
principal amount of the Trust Certificates then outstanding shall have made
written request to the Trustee to institute such action or proceeding in its
own name as trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 30 days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action or proceeding and no direction inconsistent
with such written request shall have been given to the Trustee pursuant to
Section 5.08; and no one or more holders of Trust Certificates shall have any
right in any manner whatever to affect or prejudice the rights of any other
holder of Trust Certificates, or to obtain or seek to obtain priority over any
other such holder or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Trust Certificates. For the protection and enforcement of the
provisions of this Section, each and every holder of a Trust Certificate and
the Trustee shall be entitled to such relief as can be given either at law or
in equity.
SECTION 5.10. Unconditional Right of Holders of Trust Certificates
To Sue for Principal and Interest. Notwithstanding any other provision in this
Agreement, the right of any holder of any Trust Certificate to receive payment
of the principal of and interest on such Trust Certificate, on or after the due
date expressed in such Trust Certificate, or to institute suit for the
enforcement of any such payment on or after such date, shall not be impaired or
affected without the consent of such holder, except no such suit shall be
instituted if and to the extent that the institution or prosecution thereof or
the entry of judgment therein would, under applicable law, result in the
surrender, impairment, waiver or loss of the title reserved under this
Agreement upon any property subject hereto.
SECTION 5.11. Remedies Cumulative; Subject to Mandatory
Requirements of Law. The remedies in this Agreement provided in favor of the
Trustee and the holders of the Trust Certificates shall not be deemed
exclusive, but shall be cumulative, and shall be in addition to all other
remedies in their favor existing at law or in equity; and such remedies shall
be subject in all respects to any mandatory requirements of law at the time
applicable thereto, to the extent such requirements may not be waived on the
part of the Company.
ARTICLE SIX
Additional Agreements by the Company
SECTION 6.01. Guarantee of the Company. The Company guarantees
that the holder of each of the Trust Certificates shall receive the principal
amount thereof, in such coin or currency of the United States of America as, at
the time of payment, shall be legal tender for the payment of public and
private debts, when and as the same shall become due and payable in accordance
with the provisions thereof or of this Agreement (and, if not so paid, with
interest thereon until paid at the Penalty Rate, to the extent legally
enforceable), and shall receive
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interest thereon in like money at the rate specified therein, at the times and
place and otherwise as expressed in the Trust Certificates and this Agreement
(and, if not so paid, with interest thereon until paid at the Penalty Rate, to
the extent legally enforceable); and the Company agrees to endorse upon each of
the Trust Certificates, at or before the issuance and delivery thereof by the
Trustee, its guarantee of the prompt payment of the principal thereof and of
the interest thereon, in substantially the form herein set forth. Said
guarantee so endorsed shall be signed in the name and on behalf of the Company
by the manual or facsimile signature of its President, a Vice President or
Treasurer. In case any officer of the Company whose signature shall appear on
said guaranty shall cease to be such officer before the Trust Certificates
shall have been issued and delivered by the Trustee, or shall not have been
acting in such capacity on the date of the Trust Certificates, such guarantee
shall nevertheless be as effective and binding upon the Company as though the
person who signed said guarantee had not ceased to be or had then been such
officer.
SECTION 6.02. Discharge of Liens. The Company agrees that it will
pay and discharge, or make adequate provision for the payment or discharge of,
any debt, tax, charge, assessment, obligation or claim which if unpaid might
become a lien or charge upon or against any of the Trust Equipment; but this
provision shall not require the payment of any such debt, tax, charge,
assessment, obligation or claim so long as the validity thereof shall be
contested in good faith and by appropriate legal proceedings that do not
materially endanger the rights or interests of the Trustee or of the holders of
the Trust Certificates and the Company shall have furnished the Trustee with an
Opinion of Counsel to such effect.
If the Company does not forthwith pay and discharge, or cause to be
paid and discharged, or make adequate provision for the satisfaction or
discharge of, any such debt, tax, charge, assessment, obligation or claim as
required by this Section, the Trustee may, but shall not be obligated to, pay
and discharge the same and any amounts so paid shall be secured by and under
this Agreement until reimbursed by the Company.
SECTION 6.03. Further Assurances. The Company agrees to do all
such acts and execute all such instruments of further assurance as it shall be
reasonably requested by the Trustee to do or execute for the purpose of fully
carrying out and effectuating this Agreement and the intent hereof.
SECTION 6.04. Payment of Expenses; Recording. The Company agrees
to pay the expenses incident to the preparation and execution of the Trust
Certificates to be issued hereunder, or connected with the preparation,
execution, recording and filing of this Agreement and of any instruments
executed under the provisions hereof. The Company shall, promptly after the
execution and delivery of this Agreement (and prior to the delivery of any of
the Trust Equipment hereunder pursuant to Section 3.01 hereof) and each
supplement hereto, respectively, cause this Agreement and such supplement, as
the case may be, to be duly filed with the Surface Transportation Board of the
Department of Transportation in accordance with ___ U.S.C. Section _____ and to
be duly deposited with the Registrar General of Canada pursuant to Section 90
of the Railway Act (Canada) and shall provide for publication of notice of such
deposit in The
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Canada Gazette in accordance with said Section 90. The Company will from time
to time reregister, refile and rerecord this Agreement and each supplement
hereto and do and perform any other act and will execute, acknowledge, deliver,
file, register and record any and all further instruments required by the law
of any jurisdiction in which use of the Equipment is permitted by Section 4.09
hereof or reasonably requested by the Trustee for the purpose of proper
protection of the title of the Trustee and the rights of the holders of the
Trust Certificates and of fully carrying out and effectuating this Agreement
and the intent hereof; provided, however, that the Company shall not be
required to take any such action if (1) such action is unduly burdensome and
(2) after giving effect to the failure to take such action, the Company has
taken all action required by law so as to protect the title of the Trustee to
units of Trust Equipment having a Value of not less than 908 of the aggregate
Value of all the Trust Equipment.
Promptly after the execution and delivery of this Agreement and each
supplement hereto, the Company shall furnish to the Trustee an Opinion of
Counsel stating that, in the opinion of such counsel, this Agreement or such
supplement, as the case may be, has been properly recorded, filed and deposited
in compliance with the preceding paragraph of this Section and reciting the
details of such action and no other filing or recordation or refiling or
rerecordation or depositing or redepositing is necessary for the protection of
the rights of the Trustee in the United States of America, any State thereof or
the District of Columbia or Canada or any subdivision thereof. The Company
shall furnish to the Trustee, not later than August 1 in each year, commencing
with the year ___, an Opinion of Counsel stating that, in the opinion of such
counsel, either (i) such action has been taken with respect to the recording,
filing, registering and depositing and rerecording, refiling, reregistering and
redepositing of this Agreement and each supplement hereto as is necessary to
comply with the preceding paragraph of this Section and reciting the details of
such action or (ii) no such action is necessary for such purpose. In rendering
any such opinion, such counsel may conclusively rely upon an Officers'
Certificate as to the location of the Trust Equipment.
ARTICLE SEVEN
Concerning the Holders of Trust Certificates
--------------------------------------------
SECTION 7.01. Evidence of Action Taken by Holders of Trust
Certificates. Whenever in this Agreement it is provided that the holders of a
specified percentage in aggregate unpaid principal amount of the Trust
Certificates may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action the holders of
such specified percentage have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed by holders of
Trust Certificates in person or by agent or proxy appointed in writing.
SECTION 7.02. Proof of Execution of Instruments and of Holding of
Trust Certificates. The execution of any instrument by a holder of Trust
Certificates or his agent or
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proxy may be proved by the certificate of any notary public or other officer of
any jurisdiction within the United States of America or Canada authorized to
take acknowledgments of deeds to be recorded in such jurisdiction 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 other such officer.
The ownership of Trust Certificates may be proved by the register of
such Trust Certificates or by a certificate of the registrar thereof.
SECTION 7.03. Trust Certificates Owned by Company. In determining
whether the holders of the requisite principal amount of the Trust Certificates
have concurred in any direction, request, consent, amendment or waiver under
this Agreement, Trust Certificates which are owned by the Company or by any
other obligor on the Trust Certificates or by an Affiliate of the Company or
any such other obligor shall be disregarded, except that for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, request or consent, only Trust Certificates which the Trustee
actually knows are so owned shall be disregarded.
SECTION 7.04. Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
7.01, of the taking of any action by the holders of the required percentage in
aggregate unpaid principal amount of the Trust Certificates specified in this
Agreement, any holder of a Trust Certificate may, by filing written notice with
the Trustee at the Corporate Trust Office and upon proof of holding as provided
in Section 7.02, revoke such action insofar as concerns such Trust Certificate.
Except as aforesaid, any such action taken by the holder of any Trust
Certificate shall be conclusive and binding upon such holder and upon all
future holders and owners of such Trust Certificate and of any Trust
Certificate issued in exchange or substitution therefor, irrespective of
whether or not any notation in regard thereto is made upon such Trust
Certificate. Any action taken by the holders of the required percentage in
aggregate unpaid principal amount of the Trust Certificates specified in this
Agreement shall be conclusive and binding upon the Company, the Trustee and the
holders of all the Trust Certificates.
SECTION 7.05. Amendment or Waiver. Any provision of this Agreement
may be amended or waived with the written consent of the holders of not less
than 66-2/3% of the aggregate unpaid principal amount of the Trust Certificates
then outstanding; provided, however, that without the consent of the holders of
100% of the aggregate unpaid principal amount of Trust Certificates then
outstanding, no such amendment or waiver shall (1) change the amount of
principal, change the amount or dates of payment of installments of principal
or reduce the rate or extend the time of payment of interest with respect to
the Trust Certificates without the consent of the holders of each Trust
Certificate so affected, (2) reduce the amount of or extend the time of payment
of any rentals payable under this Agreement or release or provide for the
release of any of the Trust Equipment or any other property or cash held by the
Trustee in trust, otherwise than as expressly permitted by the present terms of
this Agreement, or (3) reduce the
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percentage of the aggregate unpaid principal amount of Trust Certificates then
outstanding, theholders of which are required to approve any amendment or to
effect any waiver.
ARTICLE EIGHT
The Trustee
-----------
SECTION 8.01. Acceptance of Trust. The Trustee hereby accepts the
trust imposed upon it by this Agreement and agrees to perform the same as
herein expressed.
SECTION 8.02. Duties and Responsibilities of the Trustee. In case
an Event of Default has occurred (which has not been cured), the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default and
after the curing of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee
shall be determined solely by the express provisions of this
Agreement, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against the
Trustee; and
(2) in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this
Agreement; but in the case of any such certificates or
opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Agreement;
(b) the Trustee shall not be liable for any error of
judgment made in good faith, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts or that its
action or inaction was contrary to the express provisions of this
Agreement;
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<PAGE> 36
(c) the 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 holders of more than 50% in aggregate unpaid
principal amount of the then outstanding Trust Certificates relating
to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement;
(d) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, Trust
Certificate, guarantee or other paper or.document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(e) the Trustee may consult with counsel, and any Opinion
of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered by it hereunder in good faith
and in accordance with such Opinion of Counsel and not contrary to any
express provisions of this Agreement;
(f) the Trustee shall be under no obligation to exercise
any of its rights or powers vested in it by this Agreement at the
request, order or direction of any of the holders of the Trust
Certificates, pursuant to the provisions of this Agreement, unless
such holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred therein or thereby; and
(g) the Trustee shall not be liable for any action taken
by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement.
SECTION 8.03. Application of Rentals. The Trustee agrees to apply
the rentals received by it under Section 4.04(B) when and as the same shall be
received, and to the extent that such rentals shall be sufficient therefor, for
the purposes specified in Section 4.04(B). In the event that rentals received
by the Trustee under Sections 4.04(B)(3) or 4.04(B)(4) are not sufficient to
pay in full the interest or principal then due and owing on the Trust
Certificates, such rentals shall be applied by the Trustee pro rata to each of
the Trust Certificates first to interest and then to principal then due and
payable.
The Trustee shall not be required to undertake any act or duty in the
way of insuring, taking care of or taking possession of the Trust Equipment or
to undertake any other act or duty under this Agreement until fully indemnified
by the Company or by one or more of the holders of the Trust Certificates
against all liability and expenses; and the Trustee shall not be responsible
for the filing or recording or refiling or rerecording of this Agreement or of
any supplement hereto or statement of new numbers.
SECTION 8.04. Funds May be Held by Trustee; Investments. Any funds
at any time paid to or held by the Trustee hereunder until paid out by the
Trustee as herein provided
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<PAGE> 37
may be carried by the Trustee on deposit with itself, and the Trustee will not
be obligated to pay interest on such funds.
At any time, and from time to time, if at the time no Event of Default
shall have occurred and be continuing, the Trustee, on Request, shall invest
and reinvest Deposited Cash held by it or cash deposited with it pursuant to
Section 4.07 or Section 4.08 (hereinafter in this Section called "Replacement
Funds") in Investments, at such prices, not in excess of fair market value at
the time of investment, including any premium and accrued interest, as are set
forth in such Request, such Investments to be held by the Trustee in trust for
the benefit of the holders of the Trust Certificates.
The Trustee shall, on Request, or the Trustee may, in the event funds
are required for payment against delivery of Trust Equipment or for payment of
the principal of or interest on any Trust Certificate, or in the event of a
Default, sell such Investments, or any portion thereof, and restore to
Deposited Cash or Replacement Funds, as the case may be, the proceeds of any
such sale up to the amount paid for such Investments, including accrued
interest, or apply such proceeds to the payment of said principal and interest
if and to the extent such proceeds are needed therefor. The Trustee shall not
be deemed responsible for any loss resulting from the purchase and sale of such
Investments on Request unless such loss results from the misconduct or
negligence of the Trustee, and upon demand of the Trustee the Company will
reimburse the Trustee for any such loss for which the Trustee is not
responsible.
The Trustee shall restore to Deposited Cash or Replacement Funds, as
the case may be, out of rent received by it for that purpose under the
provisions of Section 4.04(B)(1), an amount equal to any expenses reasonably
incurred in connection with any purchase or sale of Investments and also an
amount equal to any loss of principal incident to the sale or redemption of any
Investments for a sum less than the amount paid therefor, including accrued
interest.
The Company, if not to the knowledge of the Trustee in Default, shall
be entitled to receive any interest allowed as provided in the first paragraph
of this Section and any interest (in excess of accrued interest paid from
Deposited Cash at the time of purchase) or other profit which may be realized
from any sale or redemption of Investments.
SECTION 8.05. Trustee Not Liable for Delivery Delays or Defects in
Equipment or Title. The Trustee shall not be liable to anyone for any delay in
the delivery of any of the Trust Equipment, or for any default on the part of
the manufacturers thereof or of the Company, or for any defect in any of the
Trust Equipment or in the title thereto, nor shall anything herein be construed
as a warranty on the part of the Trustee in respect thereof or as a
representation on the part of the Trustee in respect of the value thereof or in
respect of the title thereto or otherwise.
The Trustee may perform its powers and duties with respect to the
delivery and acceptance of the Trust Equipment by or through such attorneys,
agents and servants as it shall appoint, and shall be answerable only for its
own acts, negligence and willful defaults and not
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<PAGE> 38
for the default or misconduct of any attorney, agent or servant appointed by it
in respect thereof with reasonable care.
The Trustee shall be entitled to receive payment of all of its
reasonable expenses and disbursements hereunder, including reasonable counsel
fees, and to receive reasonable compensation for all services rendered by it in
the execution of the trust hereby created, all of which shall be paid by the
Company.
The Trustee in its individual capacity may own, hold and dispose of
Trust Certificates.
Any moneys at any time held by the Trustee or any paying agent
hereunder shall until paid out or invested by the Trustee or any paying agent
as herein provided, be held by it in trust as herein provided for the benefit
of the holders of the Trust Certificates.
SECTION 8.06. Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee may resign and be discharged of the trust created by
this Agreement by giving 30 days' written notice to the Company and such
resignation shall take effect upon the earlier of 30 days after the delivery
thereof to the Company or receipt by the Trustee of an instrument of acceptance
executed by a successor trustee as hereinafter provided in Section 8.07.
(b) The Trustee may be removed at any time by an instrument in
writing signed by the holders of more than 50% in principal amount of the Trust
Certificates then outstanding, delivered to the Trustee and to the Company.
(c) If at any time the Trustee shall resign or be removed or
otherwise become incapable of acting or, if at any time a vacancy shall occur
in the office of the Trustee for any other cause, a successor trustee may be
appointed by the holders of more than 50% of the aggregate principal amount of
the then outstanding Trust Certificates by an instrument in writing delivered
to the Company and the Trustee. Until a successor trustee shall be appointed
by the holders of Trust Certificates as herein authorized, the Company by an
instrument in writing executed by order of its Board of Directors shall appoint
a trustee to fill such vacancy. A successor trustee so appointed by the
Company shall immediately and without further act be superseded by a successor
trustee appointed by the holders of Trust Certificates in the manner provided
above. Every successor trustee appointed pursuant to this Section shall be a
national bank, or a bank or trust company 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 capital and surplus of not less than
$250,000,000, if there be such an institution willing, qualified and able to
accept the trust upon reasonable or customary terms.
(d) The Company shall give notice of each resignation, removal or
incapacity of the then Trustee or of a vacancy occurring in the office of the
Trustee for any other cause and of each appointment by the Company of a
successor trustee pursuant to paragraph (c) of this Section by mailing written
notice of such event by first-class mail, postage prepaid, to the holders of
all outstanding Trust Certificates.
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<PAGE> 39
SECTION 8.07. Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 8.06 shall execute,
acknowledge and deliver to the Company and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligations of its predecessor hereunder,
with like effect as if originally named as Trustee herein; but, nevertheless,
on the written request of the Company or of the successor trustee, upon payment
of its charges then unpaid, the trustee ceasing to act shall execute and
deliver an instrument transferring to such successor trustee all the rights and
powers of the trustee so ceasing to act. Upon request of any such successor
trustee, the Company shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all
such rights and powers. Any trustee ceasing to act shall, nevertheless, retain
a lien upon all property or funds held or collected by such trustee to secure
any amounts then due it pursuant to the provisions of Section 8.05.
SECTION 8.08. Merger or Consolidation of Trustee. Any corporation
qualified under the provisions of Section 8.06 into which the Trustee may be
merged or with which it may be consolidated or any such corporation resulting
from any merger or consolidation to which the Trustee shall be a party or to
which all or substantially all the corporate trust business of the Trustee
shall be transferred shall be the successor of the Trustee hereunder, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding.
SECTION 8.09. Return of Certain Moneys to Company. Notwithstanding
any provision of this Agreement, any moneys paid to the Trustee which are
applicable to the payment of the principal of or interest on any Trust
Certificates which remain unclaimed for two years after the day when such
moneys were due and payable shall then be repaid to the Company upon Request,
and the holders of such Trust Certificates shall thereafter be entitled to look
only to the Company for payment thereof and all liability of the Trustee with
respect to such moneys shall thereupon cease.
ARTICLE NINE
Miscellaneous
-------------
SECTION 9.01. Rights Confined to Parties and Holders. Nothing
expressed or implied herein shall be construed to confer upon any person, firm
or corporation, other than the parties hereto and the holders of the Trust
Certificates, any right, remedy or claim under or by reason of this Agreement
or of any term, agreement or condition herein, and all the terms, covenants and
conditions herein shall be for the sole and exclusive benefit of the parties
hereto and their successors and of the holders of the Trust Certificates.
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<PAGE> 40
SECTION 9.02. No Recourse. No recourse under this Agreement, or
under the guaranty endorsed on any Trust Certificate, shall be had against any
person, solely by reason of the fact that he is a stockholder, officer or
director of the Company, as such, by the enforcement of any assessment or by
any legal or equitable proceeding, by virtue of any statute or otherwise; it
being expressly agreed that this Agreement and said guaranty are solely
corporate obligations, and that no personal liability whatever shall attach to
or be incurred by any person, solely by reason of the fact that he is a
stockholder, officer or director of the Company, under or by reason of any of
the terms, agreements or conditions contained in this Agreement or in said
guarantee, or implied therefrom, and that any and all such personal liability,
either at common law or in equity, or by statute or constitution, is hereby
expressly waived as a condition of and consideration for the execution of this
Agreement and said guarantee.
SECTION 9.03. Binding Upon Assigns. Except as otherwise provided
herein, the provisions of this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns.
SECTION 9.04. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been received by the
addressee on the date of actual receipt (if such date is a Business Day,
otherwise on the next Business Day), if transmitted by mail, telex, telecopy
(confirmed by hard copy) or similar transmission, or by hand, addressed as
follows: (a) in the case of the Company, 225 West Washington Street, Chicago,
Illinois 60606, facsimile: (312) 845-5305 marked to the attention of its
Treasurer, or such other address as may hereafter be furnished to the Trustee
in writing by the Company, (b) in the case of the Trustee, the address set
forth in the definition of Corporate Trust Office in Section 1.01 or such other
address as may hereafter be furnished to the Company in writing by the Trustee,
facsimile: (312) 461-3525, and (c) in the case of any holder of Trust
Certificates, at its address shown on the registry books maintained by the
Trustee or at such other address as such holder may from time to time furnish
to the Trustee for such purpose. An affidavit by any person representing or
acting on behalf of the Company or the Trustee, as to such mailing, having the
registry receipt attached, shall be conclusive evidence of the giving of such
demand, notice or communication.
SECTION 9.05. Effect of Headings: Date Executed; and Governing Law.
(a) The Article and Section headings herein are for convenience only and shall
not affect the construction hereof.
(b) This Agreement shall be deemed to have been executed on the
date of the acknowledgment thereof by the officer of the Trustee who signed it
on behalf of the Trustee.
(c) This Agreement shall be governed by the laws of the State of
Illinois.
SECTION 9.06. Legal Holidays. In any case where any date for
payment of interest, date for payment of rental or date of maturity of any
installment of principal on the
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<PAGE> 41
Trust Certificates shall not be a Business Day, then, notwithstanding any other
provision of this Agreement or the Trust Certificates, 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 date for payment of interest, date for
payment of rental or date of maturity of any installment of principal on the
Trust Certificates, and if payment is made on such next succeeding Business Day
no interest shall accrue on the amount of such payment for the period from and
after such date for payment of interest, or for payment of rental or date of
maturity of any installment of principal on the Trust Certificates, as the case
may be, to and including such next succeeding Business Day.
SECTION 9.07. Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this 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> 42
IN WITNESS WHEREOF, the Company and the Trustee have caused their
names to be signed hereto by their respective officers thereunto duly
authorized and their respective corporate seals, duly attested, to be hereunto
affixed on the day and year first above written.
HARRIS TRUST AND SAVINGS BANK
Trustee
By
---------------------------------------
Title:
Attest:
- ------------------------------------
Authorized Officer
UNION TANK CAR COMPANY
By
----------------------------------------
Title:
Attest:
- ----------------------------------
Secretary
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<PAGE> 43
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On this, _____ day of _________,______, before me personally appeared
________________, to me personally known, who, being by me duly sworn, says that
such person is ____________________ of HARRIS TRUST AND SAVINGS BANK, and that
said instrument was signed on behalf of said bank by authority of its Board of
Directors and he acknowledged that the execution of the foregoing instrument was
the free act and deed of said bank.
_________________________________________
Notary Public
[Notarial Seal]
My Commission expires ________
-39-
<PAGE> 44
STATE OF ILLINOIS )
) ss.:
COUNTY OF COOK )
On this _____ day of _________,_____, before me personally appeared
_______________, to me personally known, who, being by me duly sworn, says that
he is __________________ of UNION TANK CAR COMPANY, and that said instrument
was signed on behalf of said corporation by authority of its Board of Directors
and he acknowledged that the execution of the foregoing instrument was the free
act and deed of said corporation.
_____________________________________
Notary Public
[Notarial Seal]
My Commission expires ________________
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<PAGE> 1
EXHIBIT 5(a)
January 28, 1998
Union Tank Car Company
225 West Washington Street
Chicago, Illinois 60606
Re: Shelf Registration of $300,000,000 of
Debt Securities and Pass Through Certificates
Ladies and Gentlemen:
We have acted as counsel to Union Tank Car Company, a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Act"), of a Registration Statement on Form S-3 (the "Registration
Statement"). The Registration Statement relates to the public offering of up
to $300,000,000 aggregate principal amount of debt securities (the "Debt
Securities") and pass through certificates (the "Pass Through Certificates")
that may be issued in one or more series from time to time. Each series of
Debt Securities will be issued under an Indenture dated as of January 16, 1997
(as supplemented from time to time, the "Indenture") between the Company and
Harris Trust and Savings Bank, as Trustee (the "Indenture Trustee"). Each
series of Pass Through Certificates will be issued under a Pass Through Trust
Agreement (as supplemented from time to time, the "Basic Agreement") to be
entered into between the Company and Harris Trust and Savings Bank, as Trustee
(the "Pass Through Trustee"), as supplemented by a trust supplement relating to
such series of Pass Through Certificates (each, a "Trust Supplement").
As such counsel, we have examined the Indenture and the proposed form
of the Basic Agreement and such other papers, documents and certificates of
public officials and certificates of officers of the Company as we have deemed
relevant and necessary as a basis for the opinions hereinafter expressed. In
such examinations, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
to original documents of all documents submitted to us as conformed or
photostatic copies. We have also assumed that the Basic Agreement will, when
executed and delivered, be
<PAGE> 2
Union Tank Car Company
Page 2
January 28, 1998
substantially in the form submitted to us for examination and that the specific
terms and provisions of each series of Debt Securities and Pass Through
Certificates will be approved by or pursuant to appropriate action of the Board
of Directors of the Company, as contemplated by the Indenture and the Basic
Agreement.
Based upon and subject to the foregoing, it is our opinion that:
1. Subject to the approval of the specific terms and
provisions of each series of Debt Securities by appropriate action of
the Board of Directors of the Company and assuming the due
authorization, execution and delivery by the Indenture Trustee of the
Indenture and each supplement thereto, the Debt Securities will have
been duly authorized for issuance and, when the Debt Securities are
duly executed, authenticated, issued and delivered and upon receipt of
payment therefor, the Debt Securities will constitute valid and
legally binding obligations of the Company entitled to the benefits of
the Indenture, except as enforceability may be limited by (a)
applicable bankruptcy, insolvency, moratorium, reorganization or other
similar laws relating to or affecting enforcement of creditors' rights
generally and (b) general principles of equity (regardless of whether
such enforceability is considered in a proceeding at law or in
equity).
2. Assuming the due authorization, execution and
delivery by the Pass Through Trustee of the Basic Agreement and the
Trust Supplement relating to each series of Pass Through Certificates
and the due authorization, execution, issuance, authentication and
delivery of each series of Pass Through Certificates by the Pass
Through Trustee in accordance with the terms of the Basic Agreement
and the Trust Supplement relating to each such series, each series of
Pass Through Certificates will constitute valid and binding
obligations of the Pass Through Trustee (to the extent set forth in
the Basic Agreement and the Trust Supplement relating to such series)
entitling the holders thereof to the benefits of the Basic Agreement
and the Trust Supplement relating to such series, except as
enforceability may be limited by (a) applicable bankruptcy,
insolvency, moratorium, reorganization or other similar laws relating
to or affecting enforcement
<PAGE> 3
Union Tank Car Company
Page 3
January 28, 1998
of creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a
proceeding at law or in equity).
We are members of the Bar of the State of Illinois, and we express no
opinion herein concerning any laws other than the law of the State of Illinois,
the Delaware General Corporation Law and the Federal law of the United States
of America.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to our firm under the caption
"Legal Opinions" in the Prospectuses that constitute a part of the Registration
Statement.
Very truly yours,
/s/ Neal, Gerber & Eisenberg
NEAL, GERBER & EISENBERG
<PAGE> 1
EXHIBIT 5(b)
[HARRIS TRUST AND SAVINGS BANK LETTERHEAD]
January 28, 1998
Union Tank Car Company
225 West Washington Street
Chicago, Illinois 60606
Re: Union Tank Car Company Pass Through Certificates (the "Certificates")
Ladies and Gentlemen:
We are the internal legal counsel for Harris Trust and Savings Bank (the
"Trustee"), and give the opinion stated below in connection with (i) the Pass
Through Trust Agreement to be entered into (the "Pass Through Trust Agreement")
by and between the Trustee and Union Tank Car Company (the "Company") and (ii)
the Certificates to be issued under the Pass Through Trust Agreement from time
to time. Capitalized terms used and not defined herein shall have the meanings
assigned to them in the Pass Through Trust Agreement.
In connection with the opinion expressed below, we have relied upon the
representations and warranties contained in the Pass Through Trust Agreement
(other than those of the Trustee), and we have relied upon originals or
certified copies of such documents, certificates and other statements as we
have deemed relevant and necessary as a basis for such opinion, and we have not
attempted to independently verify or establish the factual matters set forth
therein. We have also assumed the genuineness of all signatures by or on
behalf of all parties to the documents referenced in this opinion (other than
those of the Trustee), the legal capacity of natural persons to deliver the
certificates or documents referred to herein (other than those of the Trustee),
the authenticity of all documents submitted to us as originals and the
conformity to authentic original documents of all documents submitted to us as
certified, conformed or photostatic copies.
<PAGE> 2
January 28, 1998
Page 2
Based on the foregoing, it is our opinion that:
(1) The Trustee is a duly created and lawfully existing banking
corporation created and existing under the laws of Illinois and has
full power to execute and deliver the Pass Through Trust Agreement.
(2) The Trustee has duly authorized the execution and delivery of the
Pass Through Trust Agreement and the Certificates and assuming
due authorization, execution and delivery of the Pass Through Trust
Agreement by the Company, constitute the valid, legal and binding
obligations of the Trustee enforceable in accordance with its terms
except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights in general and by general principles of equity
(regardless of whether such enforcement is considered in a proceeding
in equity or at law).
(3) Upon the due execution, authentication, issuance and delivery
thereof in accordance with the requirements of the Pass Through
Trust Agreement, the Certificates will have been duly and validly
issued pursuant to the terms of the Pass Through Trust Agreement.
(4) Neither the execution nor delivery by the Trustee of the Pass Through
Trust Agreement nor the consummation of the transactions by the
Trustee contemplated thereunder requires the consent or approval of,
the giving of notice to, the registration with or the taking of any
other action with respect to, any governmental authority or agency
under any existing federal law, rule or regulation governing the
banking or trust powers of the Trustee.
We are attorneys licensed to practice law in the State of Illinois and do not
purport to be experts on the laws of any state other than the State of
Illinois. Consequently, with regard to the foregoing opinion, no opinion is
expressed as to matters relating to the laws of any jurisdiction other than the
law of the State of Illinois and the Federal laws of the United States, and no
opinion is expressed herein as to the Securities Act of 1933, as amended, the
Trust Indenture Act of 1939, as amended, or any state securities or so-called
"blue sky" laws.
Subject to the terms of the following paragraph, we hereby consent to the
filing of this opinion as an Exhibit to the Registration Statement of the
Company pursuant to which the Certificates are being registered under the
Securities Act of 1933 and to the reference to the Law Department of Harris
Trust and Savings Bank under the caption "Legal Opinions" in the Registration
Statement.
<PAGE> 3
January 28, 1998
Page 3
This opinion is furnished to you solely for your benefit in connection with the
transactions contemplated by the Pass Through Trust Agreement and may not be
used, circulated, quoted or otherwise referred to without our prior written
consent.
Respectfully submitted,
Harris Trust and Savings Bank
Law Department
<PAGE> 1
EXHIBIT 8(A)
January 28, 1998
Union Tank Car Company
225 West Washington Street
Chicago, Illinois 60606
Re: Shelf Registration of $300,000,000 of
Debt Securities and Pass Through Certificates
Ladies and Gentlemen:
We have acted as counsel to Union Tank Car Company, a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, of a Registration Statement on Form S-3 (the "Registration Statement").
The Registration Statement relates to the public offering of up to $300,000,000
aggregate principal amount of debt securities and pass through certificates (the
"Pass Through Certificates") that may be issued in one or more series from time
to time. Each series of Pass Through Certificates will be issued under a Pass
Through Trust Agreement (as supplemented from time to time, the "Basic
Agreement") to be entered into between the Company and Harris Trust and Savings
Bank, as Trustee (the "Pass Through Trustee"), as supplemented by a trust
supplement relating to such series of Pass Through Certificates.
In rendering this opinion, we have relied upon the Internal Revenue
Code of 1986, as amended, legislative history, Treasury regulations, judicial
authorities, published positions of the Internal Revenue Service and such other
authorities as we have considered relevant, all as in effect on the date hereof
and all of which are subject to change, which change may be retroactive, or
different interpretations, which interpretations may have retroactive
application. This opinion is subject to the explanations and qualifications set
forth under the captions "Material Federal Income Tax Consequences" and "Certain
Illinois Taxes" in the Prospectus relating to the Pass Through Certificates
which constitutes a part of the Registration Statement.
On the basis of and subject to the foregoing, we are of the opinion
that the discussions in the Prospectus relating to the Pass Through Certificates
under the captions "Material Federal Income
<PAGE> 2
Tax Consequences" and "Certain Illinois Taxes", insofar as they relate to
statements of law or legal conclusions, are correct in all material respects.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to our firm under the captions
"Material Federal Income Tax Consequences" and "Certain Illinois Taxes" in the
Prospectus relating to the Pass Through Certificates that constitutes a part of
the Registration Statement.
Very truly yours,
/s/ Neal, Gerber & Eisenberg
NEAL, GERBER & EISENBERG
<PAGE> 1
EXHIBIT 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectuses of Union Tank Car
Company for the registration of $300,000,000 of debt securities and pass through
certificates and to the incorporation by reference therein of our report dated
March 11, 1997, with respect to the consolidated financial statements of Union
Tank Car Company included in its Annual Report (Form 10-K) for the year ended
December 31, 1996, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Chicago, Illinois
January 26, 1998
<PAGE> 1
EXHIBIT 25(a)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act of 1939
of a Corporation Designated to Act as
Trustee
Check if an Application to Determine
Eligibility of a Trustee Pursuant to Section
305(b)(2) _______________
HARRIS TRUST AND SAVINGS BANK
(Name of Trustee)
Illinois 23-1614034
(I.R.S. Employer
(State of Incorporation) Identification No.)
111 West Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices)
Daniel G. Donovan, Harris Trust and Savings Bank,
111 West Monroe Street, Chicago, Illinois, 60603
312-461-2908
(Name, address and telephone number for agent for service)
UNION TANK CAR COMPANY
(Name of Obligor)
Delaware 36-3104688
(I.R.S. Employer
(State of Incorporation) Identification No.)
225 West Washington Street
Chicago, Illinois 60606
(Address of principal executive offices)
Pass Through Certificates
(Title of indenture securities)
<PAGE> 2
1. GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Commissioner of Banks and Trust Companies, State of Illinois,
Springfield, Illinois; Chicago Clearing House Association, 164
West Jackson Boulevard, Chicago, Illinois; Federal Deposit
Insurance Corporation, Washington, D.C.; The Board of
Governors of the Federal Reserve System,Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Harris Trust and Savings Bank is authorized to exercise
corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the
Trustee, describe each such affiliation.
The Obligor is not an affiliate of the Trustee.
3. thru 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the Trustee as now in
effect which includes the authority of the trustee to commence
business and to exercise corporate trust powers.
A copy of the Certificate of Merger dated April 1, 1972 between
Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc.
which constitutes the articles of association of the Trustee as
now in effect and includes the authority of the Trustee to
commence business and to exercise corporate trust powers was filed
in connection with the Registration Statement of Louisville Gas
and Electric Company, File No. 2-44295, and is incorporated herein
by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was filed in
connection with the Registration Statement of Commercial Federal
Corporation, File No. 333-20711, and is incorporated herein by
reference.
3. The consents of the Trustee required by Section 321(b) of the Act.
(included as Exhibit A on page 2 of this statement)
4. A copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or
examining authority.
(included as Exhibit B on page 3 of this statement)
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the
laws of the State of Illinois, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago, and State of Illinois, on the 27th day of January 1998.
HARRIS TRUST AND SAVINGS BANK
By: /s/ DGDonovan
------------------------------
D. G. Donovan
Assistant Vice President
EXHIBIT A
The consents of the Trustee required by Section 321(b) of the Act.
Harris Trust and Savings Bank, as the Trustee herein named, hereby consents
that reports of examinations of said trustee by Federal and State authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ DGDonovan
------------------------------
D.G. Donovan
Assistant Vice President
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EXHIBIT B
Attached is a true and correct copy of the statement of condition of Harris
Trust and Savings Bank as of September 30, 1997, as published in accordance
with a call made by the State Banking Authority and by the Federal Reserve Bank
of the Seventh Reserve District.
[HARRIS BANK LOGO]
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of
business on September 30, 1997, a state banking institution organized and
operating under the banking laws of this State and a member of the Federal
Reserve System. Published in accordance with a call made by the Commissioner of
Banks and Trust Companies of the State of Illinois and by the Federal Reserve
Bank of this District.
Bank's Transit Number 71000288
<TABLE>
<CAPTION>
THOUSANDS
ASSETS OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and coin............................ $1,188,709
Interest bearing balances...................................................... $550,173
Securities:.................................................................................
a. Held-to-maturity securities $0
b. Available-for-sale securities $3,685,983
Federal funds sold and securities purchased under agreements to resell $396,400
Loans and lease financing receivables:
Loans and leases, net of unearned income....................................... $8,401,048
LESS: Allowance for loan and lease losses..................................... $107,180
-------------------
Loans and leases, net of unearned income, allowance, and reserve
(item 4.a minus 4.b)........................................................... $8,293,868
Assets held in trading accounts............................................................. $98,368
Premises and fixed assets (including capitalized leases).................................... $213,612
Other real estate owned..................................................................... $778
Investments in unconsolidated subsidiaries and associated companies......................... $86
Customer's liability to this bank on acceptances outstanding................................ $41,205
Intangible assets........................................................................... $283,839
Other assets................................................................................ $603,886
--------------------
TOTAL ASSETS $15,356,907
====================
</TABLE>
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LIABILITIES
<TABLE>
<S> <C> <C>
Deposits:
In domestic offices..................................................................... $8,374,055
Non-interest bearing........................................................... $2,770,029
Interest bearing............................................................... $5,604,026
In foreign offices, Edge and Agreement subsidiaries, and IBF's.......................... $1,991,659
...
Non-interest bearing........................................................... $27,364
Interest bearing............................................................... $1,964,295
Federal funds purchased and securities sold under agreements to repurchase in domestic
offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's:
Federal funds purchased & securites sold under agreements to repurchase................. $2,549,328
Trading Liabilities 62,186
Other borrowed money:.......................................................................
$630,911
a. With remaining maturity of one year or less $0
b. With remaining maturity of more than one year
Bank's liability on acceptances executed and outstanding $41,205
Subordinated notes and debentures........................................................... $325,000
Other liabilities........................................................................... $132,188
---------------------------
TOTAL LIABILITIES $14,106,532
===========================
EQUITY CAPITAL
Common stock................................................................................ $100,000
Surplus..................................................................................... $600,853
a. Undivided profits and capital reserves.................................................. $553,257
b. Net unrealized holding gains (losses) on available-for-sale securities.................. ($3,735)
---------------------------
TOTAL EQUITY CAPITAL $1,250,375
===========================
Total liabilities, limited-life preferred stock, and equity capital......................... $15,356,907
===========================
</TABLE>
I, Pamela Piarowski, Vice President of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
PAMELA PIAROWSKI
10/29/97
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us and, to the
best of our knowledge and belief, has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
the Commissioner of Banks and Trust Companies of the State of Illinois and is
true and correct.
EDWARD W. LYMAN,
ALAN G. McNALLY,
JAMES J. GLASSER
Directors.
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