<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1994 Commission File Number 1-7654
------------------ -----------
XTRA CORPORATION
- - -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 06-0954158
- - ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
60 State Street
Boston, Massachusetts 02109
- - ------------------------------- -------------------
(Address of principal (Zip Code)
executive offices)
</TABLE>
Registrant's telephone number, including area code (617) 367-5000
------------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
Class Outstanding at August 5, 1994
- - ----------------------- -----------------------------
<S> <C>
Common Stock, Par Value 16,935,884
$.50 Per Share
</TABLE>
<PAGE> 2
XTRA CORPORATION AND SUBSIDIARIES
---------------------------------
<TABLE>
INDEX
-----
<CAPTION>
Page No.
--------
<S> <C> <C>
Part I. Financial Information
---------------------
Management Representation . . . . . . . . . . . . . . . . . . . . . . . 3
Item 1. Financial Statements
Consolidated Balance Sheets
June 30, 1994 and September 30, 1993 . . . . . . . . . . . . . . . . . 4
Consolidated Income Statements
For the Three and Nine Months Ended
June 30, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . 5
Consolidated Statements of Cash Flows
For the Nine Months Ended
June 30, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . 6
Consolidated Statements of Stockholders' Equity
For the Period September 30, 1992
Through June 30, 1994 . . . . . . . . . . . . . . . . . . . . . . . . 7
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . 8 - 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . . 11 - 16
Part II. Other Information
-----------------
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . 17
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
------------------------------
XTRA CORPORATION AND SUBSIDIARIES
---------------------------------
MANAGEMENT REPRESENTATION
-------------------------
The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. The Company believes, however, that the disclosures are adequate
to make the information presented not misleading.
The Board of Directors carries out its responsibility for the financial
statements included herein through its Audit Committee, composed of non-employee
Directors. During the year, the committee meets periodically with both
management and the independent public accountants to ensure that each is
carrying out its responsibilities. The independent public accountants have full
and free access to the Audit Committee and meet with its members, with and
without management being present, to discuss auditing and financial reporting
matters.
These financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Company's latest
Annual Report on Form 10-K.
This financial information reflects, in the opinion of management, all
adjustments consisting of only normal recurring adjustments necessary to present
fairly the results for the interim periods. The results of operations for such
interim periods are not necessarily indicative of the results to be expected for
the full year.
<PAGE> 4
<TABLE>
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------------------------
(Thousands of dollars except per share and share amounts)
<CAPTION>
June 30,
1994 September 30,
(Unaudited) 1993
----------- -------------
<S> <C> <C>
ASSETS
- - ------
Cash $ 33,619 $ 9,046
Trade receivables, net 47,754 49,437
Lease contracts receivable 27,568 33,981
Property and equipment , at cost
Revenue equipment 1,208,943 1,082,970
Land, buildings and other 49,269 50,212
---------- ----------
1,258,212 1,133,182
Less - Accumulated depreciation (419,977) (391,479)
---------- ----------
Net property and equipment 838,235 741,703
---------- ----------
Other assets 24,468 23,864
---------- ----------
$ 971,644 $ 858,031
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- - ------------------------------------
LIABILITIES
Accounts payable $ 11,385 $ 5,478
Other accrued expenses 57,137 42,037
Debt 429,053 359,130
Deferred income taxes 158,312 141,960
---------- ----------
Total liabilities 655,887 548,605
---------- ----------
COMMITMENTS AND CONTINGENCIES
SERIES C CUMULATIVE REDEEMABLE EXCHANGEABLE
PREFERRED STOCK (liquidation preference $30 million);
issued and outstanding: 300 shares at September 30, 1993 - 29,149
---------- ----------
STOCKHOLDERS' EQUITY
Preferred Stock, without par value; total
authorized: 3,000,000 shares; Series authorized:
Series C (classified above Stockholders' Equity)
Common Stock, par value $.50 per share; authorized:
30,000,000 shares; issued and outstanding:
16,935,884 shares at June 30, 1994 and
16,886,992 at September 30, 1993 8468 8,443
Capital in excess of par value 124,756 124,196
Retained earnings 184,000 148,161
Cumulative translation adjustment (1,467) (523)
---------- ----------
Total stockholders' equity 315,757 280,277
---------- ----------
$ 971,644 $ 858,031
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 5
<TABLE>
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
----------------------------------------------
(Thousands of dollars except per share amounts)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
--------------------- ---------------------
1994 1993 1994 1993
------- ------- -------- --------
<S> <C> <C> <C> <C>
REVENUES $90,002 $81,206 $261,259 $245,049
OPERATING EXPENSES
Depreciation on rental equipment 24,556 23,526 71,542 70,967
Rental equipment lease financing 1,301 3,600 6,390 10,847
Rental equipment operating expense 22,336 19,478 61,418 57,299
Selling & administrative expense 8,572 7,802 24,067 24,776
------- ------- -------- --------
56,765 54,406 163,417 163,889
------- ------- -------- --------
Operating income 33,237 26,800 97,842 81,160
INTEREST EXPENSE 8,289 9,142 25,028 30,050
------- ------- -------- --------
Income from operations before
provision for income taxes 24,948 17,658 72,814 51,110
PROVISION FOR INCOME TAXES 10,351 7,110 30,214 20,491
------- ------- -------- --------
NET INCOME 14,597 10,548 42,600 30,619
Less: Preferred dividends - (963) - (3,695)
------- ------- -------- --------
Net income available to common
stockholders $14,597 $ 9,585 $ 42,600 $ 26,924
======= ======= ======== ========
EARNINGS PER COMMON SHARE:
Primary $ 0.86 $ 0.56 $ 2.50 $ 1.82
Fully diluted $ 0.86 $ 0.56 $ 2.50 $ 1.74
Weighted average number of common
shares outstanding (in thousands):
Primary 17,023 16,972 17,015 14,764
Fully diluted 17,024 16,973 17,018 15,966
Cash dividends declared $ 0.14 $ 0.12 $ 0.40 $ 0.34
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 6
<TABLE>
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Thousands of dollars)
(Unaudited)
<CAPTION>
For the Nine Months
ended June 30,
-------------------
1994 1993
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATIONS
Net Income $ 42,600 $ 30,619
Add non-cash income and expense items:
Depreciation & amortization, net 72,970 70,616
Deferred income taxes 16,484 13,113
Bad debt expense 3,348 3,692
Add other cash items:
Net change in receivables, other assets,
payables and accrued expenses 16,640 1,154
Cash receipts from lease contracts receivable 13,211 20,861
Recovery of property and equipment net book value 15,662 10,215
-------- --------
TOTAL CASH PROVIDED FROM OPERATIONS 180,915 150,270
-------- --------
CASH USED FOR INVESTMENT ACTIVITIES
Additions to property and equipment (189,910) (28,717)
Purchase of Strick Lease * - (110,543)
-------- --------
TOTAL CASH USED FOR INVESTMENT ACTIVITIES (189,910) (139,260)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings of long-term debt 79,613 161,500
Payments of long-term debt (39,284) (255,622)
Net proceeds from issuance of Common Stock - 63,840
Costs of converting Series B Preferred Stock to Common Stock - (667)
Net proceeds from issuance of Series C Preferred Stock - 28,298
Dividends paid (6,761) (7,754)
-------- --------
TOTAL CASH (USED FOR)/PROVIDED FROM FINANCING ACTIVITIES 33,568 (10,405)
-------- --------
NET INCREASE IN CASH 24,573 605
======== ========
CASH AT BEGINNING OF PERIOD 9,046 9,869
======== ========
CASH AT END OF PERIOD 33,619 10,474
======== ========
Total Interest Paid $ 24,819 $ 27,497
======== ========
Total Income Taxes Paid (net of refunds) $ 8,014 $ 8,201
======== ========
<FN>
* Does not include $235,937 of Strick Lease debt assumed on October 2, 1992, the acquisition date.
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 7
<TABLE>
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
-----------------------------------------------
(Thousands of dollars)
(Unaudited)
<CAPTION>
Cumulative Common
Convertible Stock Capital in Cumulative
Preferred $.50 Excess of Retained Translation
Stock Par Value Par Value Earnings Adjustment
--------- --------- --------- -------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE AT SEPTEMBER 30, 1992 $62,450 $5,871 $ 262 $122,077 $ -
Net income - - - 37,811 -
Common Stock cash dividends
declared at $.46 per share - - - (7,069) -
Series B Preferred Stock cash dividends
accrued at $.322917 per share - - - (806) -
Conversion of Series B Preferred Stock (62,450) 1,805 60,645 - -
Issuance of Common Stock - 747 62,385 - -
Dividends accrued on and accretion of
issuance costs of Series C Cumulative
Redeemable Exchangeable Preferred Stock - - - (3,852) -
Options exercised and related tax benefits, net
of shares forfeited under restricted stock plan - 20 904 - -
Translation adjustment - - - - (523)
--------- --------- --------- -------- -----------
BALANCE AT SEPTEMBER 30, 1993 - 8,443 124,196 148,161 (523)
Net income - - - 42,600 -
Common Stock cash dividends
declared at $.40 per share - - - (6,761) -
Options exercised and related tax benefits, net - - - - -
of shares forfeited under restricted stock plan - 25 560 - -
Translation adjustment - - - - (944)
--------- --------- --------- -------- -----------
BALANCE AT JUNE 30, 1994 $ - $8,468 $124,756 $184,000 $(1,467)
========= ========= ========= ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 8
XTRA CORPORATION AND SUBSIDIARIES
---------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(1) The consolidated financial statements include the accounts of XTRA
Corporation and its wholly-owned subsidiaries ("the Company"). All
material intercompany accounts and transactions have been eliminated.
In fiscal 1994, the Company adopted an unclassified balance sheet
format in which no distinction is made between current and long-term
assets and liabilities. Certain amounts in the prior periods
financial statements have been reclassified to be consistent with the
current periods presentation.
(2) The Company declared on March 16, 1993 a two-for-one stock split of
its common stock as a 100% stock dividend. The stock dividend was
paid on May 18, 1993, to common stockholders of record on April 27,
1993. The stated par value per share of the common stock remained at
$.50. All share and per share data presented in these financial
statements and notes have been restated for the effect of the stock
split.
(3) The computation of primary earnings per common share is based on net
income after deduction of $1.9375 Series B Cumulative Convertible
Preferred Stock dividends and dividends on and accretion of issuance
costs of Series C Cumulative Redeemable Exchangeable Preferred Stock,
divided by the weighted average number of outstanding common shares
plus common stock equivalents. The $1.9375 Series B Cumulative
Convertible Preferred Stock was called for redemption by the Company
on December 29, 1992. Fully diluted earnings per share assume the
conversion of the $1.9375 Series B Cumulative Convertible Preferred
Stock as of the beginning of the periods presented for which it is
applicable. Earnings per share have been calculated giving
retroactive effect to the two-for-one stock split described in Note 2
above.
(4) In October 1993, the Company exercised its option to exchange the
outstanding Series C Preferred shares for subordinated debt with a
coupon of 10%. This subordinated debt is subject to the following
mandatory redemption schedule: $7.5 million on October 1, 1995, $7.5
million on October 1, 1996, and $15.0 million on October 1, 1997.
The Company has the option to prepay the issue in whole or in part on
October 1, 1994, or thereafter. The holders of the subordinated notes
have the option to require the Company to redeem the issue in whole or
in part on January 1, 1995, or thereafter.
8
<PAGE> 9
(5) The effective income tax rates used in the interim financial
statements are estimates of the fiscal years' rates. The effective
income tax rate for fiscal year 1993 was 48% reflecting the required
restatement of deferred tax liabilities and assets as a result of the
higher tax rate associated with the enactment, in August 1993, of the
Revenue Reconciliation Bill of 1993. Absent the required adjustment
for prior years, the effective income tax rate for 1993 would have
been approximately 41%. For the nine months ended June 30, 1993, the
Company recorded a provision for income taxes using an estimated
effective income tax rate of approximately 40%. For the nine months
ended June 30, 1994, the Company has recorded a provision for income
taxes using an estimated effective income tax rate of approximately
42%.
The Company's effective income tax rate for fiscal 1993 and its
estimated effective income tax rate for fiscal 1994 are higher than
the statutory U.S. Federal income tax rate due primarily to state
income taxes.
(6) The Company's long-term debt includes a current portion of $65.5
million at June 30, 1994 and $36.1 million at September 30, 1993.
(7) On June 10, 1994, the Company purchased substantially all of the
assets of Caravan Trailer Rental Co., Ltd., a Canadian lessor of
transportation equipment. The total consideration for the purchase
was $37 million. The total rental fleet consists of approximately
4,300 units of transportation equipment, primarily over-the-road
trailers. On July 29, 1994, the Company acquired the assets of
Integrated Transportation Services, Ltd., for approximatley $5
million which added approximately 750 over-the-road trailers to its
Canadian leasing fleet.
(8) On August 2, 1994, the Company declared a quarterly cash dividend of
$.14 per share, payable on August 31, 1994, to common stockholders of
record on August 15, 1994.
9
<PAGE> 10
<TABLE>
(9) The consolidated financial data for XTRA, Inc. included in the
XTRA Corporation consolidated balance sheets dated June 30,
1994 and September 30, 1993 and consolidated income statements
for the three and nine months ended June 30, 1994 and 1993 are
summarized below:
<CAPTION>
Selected Balance Sheet Data: June 30, September 30,
(Thousands of Dollars) 1994 1993
-------- --------
<S> <C> <C>
Cash $ 33,615 $ 9,044
Receivables, net 75,322 83,656
Property and equipment, net 838,235 741,703
Other assets 24,468 23,864
-------- --------
Total assets $971,640 $858,267
========= ========
Other liabilities $ 69,253 $ 47,901
Total debt 429,053 359,130
Deferred income taxes 158,312 141,960
-------- --------
Total liabilities 656,618 548,991
-------- --------
Stockholders' equity 315,022 309,276
-------- --------
Total liabilities and stockholders' equity $971,640 $858,267
======== ========
Income Statement Data:
----------------------
(Thousands of Dollars)
For the three months ended June 30, 1994 1993
---- ----
Revenues $ 90,002 $ 81,206
Income before provision for income taxes 24,948 17,658
Net income 14,597 10,548
For the nine months ended June 30, 1994 1993
---- ----
Revenues $261,259 $245,049
Income before provision for income taxes 72,814 51,110
Net income 42,600 30,619
</TABLE>
10
<PAGE> 11
XTRA CORPORATION AND SUBSIDIARIES
---------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
The Third Quarter of 1994
- - -------------------------
Versus the Third Quarter of 1993
- - --------------------------------
Revenues
- - --------
Revenues are generated by two leasing divisions, XTRA Lease which
primarily includes over-the-road trailers as well as storage trailers and XTRA
Intermodal which includes intermodal trailers, chassis and domestic containers.
Revenues are primarily a function of fleet size, utilization and lease rates.
Revenues increased by 11% or $8.8 million for the three months ended
June 30, 1994, over the same period a year ago, due principally to higher
demand for the Company's equipment which was in part due to a union strike at
certain national trucking companies in April and May. The strike resulted in
strong incremental demand for equipment by nonunion trucking companies and
railroad customers.
XTRA Lease revenues increased by 14% or $6.6 million primarily due to
an increase in working units as a result of increased demand for the Company's
over-the-road equipment. XTRA Intermodal revenues increased by 7% or $2.2
million due mainly to an increase in working units resulting from increased
demand for the Company's intermodal equipment as well as an increase in average
lease rates.
11
<PAGE> 12
<TABLE>
The following table sets forth, for each division, average equipment
utilization and average fleet size in units (including units held under
operating leases) during the three months ended June 30:
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
XTRA Lease
Utilization 93% 85%
Units 65,700 65,300
XTRA Intermodal
Utilization 95% 90%
Units 57,200 57,600
</TABLE>
Operating Expenses
- - ------------------
Total operating expenses increased by 4% or $2.4 million from the
third quarter of fiscal 1993.
Depreciation expense increased by 4% or $1.0 million primarily due to
new additions to the fleet and the purchase of previously leased in equipment.
Rental equipment lease financing expense decreased by 64% or $2.3
million primarily due to the purchase of previously leased in equipment.
Rental equipment operating expense increased by 15% or $2.9 million
due principally to higher repair, maintenance and tire costs related to higher
equipment utilization.
Interest Expense
- - ----------------
Interest expense decreased by 9% or $.9 million for the three months
ended June 30, 1994, primarily due to a decrease in the average effective
interest rate.
12
<PAGE> 13
Income from Operations Before
- - -----------------------------
Provision for Income Taxes
- - --------------------------
Pretax income from operations for the three months ended June 30,
1994, increased by 41% or $7.3 million over the same period of the prior year
due primarily to higher equipment utilization.
The Nine Months Ended June 30, 1994
- - -----------------------------------
Versus the Nine Months Ended June 30, 1993
- - ------------------------------------------
Revenues
- - --------
Revenues increased by 7% or $16.2 million for the nine months ended
June 30, 1994, over the same period a year ago. XTRA Lease revenues increased
by 9% or $12.4 million primarily due to an increase in working units despite a
smaller average fleet size. XTRA Intermodal revenues increased by 4% or $3.8
million primarily due to an increase in average lease rates.
<TABLE>
The following table sets forth, for each division, average equipment
utilization and average fleet size in units (including units held under
operating leases) during the nine months ended June 30:
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
XTRA Lease
Utilization 90% 84%
Units 65,200 66,500
XTRA Intermodal
Utilization 94% 91%
Units 56,900 59,100
</TABLE>
13
<PAGE> 14
Operating Expenses
- - ------------------
Total operating expenses were relatively unchanged from the same
period of fiscal 1993.
Rental equipment lease financing expense decreased by 41% or $4.6
million primarily due to the purchase of equipment previously leased in.
Rental equipment operating expense had a net increase of increase of
7% or $4.1 million due principally to higher repair, maintenance and tire costs
related to higher equipment utilization, offset by cost savings realized from
the consolidation of branches acquired with the Strick Lease business.
Selling and administrative expenses decreased by 3% or $.7 million due
principally to cost savings realized from the integration of the Strick Lease
business.
Interest Expense
- - ----------------
Interest expense decreased by 17% or $5.0 million for the nine months
ended June 30, 1994, primarily due to a decrease in average net debt
outstanding.
Income from Operations Before
- - -----------------------------
Provision for Income Taxes
- - --------------------------
Pretax income from operations for the nine months ended June 30, 1994,
increased by 42% or $21.7 million over the same period of the prior year due
primarily to higher equipment utilization, reduced interest expense and cost
savings realized from combining two large over-the-road leasing businesses.
14
<PAGE> 15
Provision for Income Taxes
- - --------------------------
The effective income tax rates used in the interim financial
statements are estimates of the fiscal years' rates. The effective income tax
rate for fiscal year 1993 was 48% reflecting the required restatement of
deferred tax liabilities and assets as a result of the higher tax rate
associated with the enactment, in August 1993, of the Revenue Reconciliation
Bill of 1993. Absent the required adjustment for prior years, the effective
income tax rate for 1993 would have been approximately 41%. For the nine
months ended June 30, 1993, the Company recorded a provision for income taxes
using an estimated effective income tax rate of approximately 40%. For the
nine months ended June 30, 1994, the Company has recorded a provision for
income taxes using an estimated effective income tax rate of approximately 42%.
The Company's effective income tax rate for fiscal 1993 and its
estimated effective income tax rate for fiscal 1994 are higher than the
statutory U.S. Federal income tax rate due primarily to state income taxes.
Liquidity and Capital Resources
- - -------------------------------
During the nine months ended June 30, 1994, the Company generated cash
flows from operations of $180.9 million. During the same period XTRA invested
$189.9 million in property and equipment and paid dividends of $6.8 million.
Net debt outstanding (debt less cash) increased $15.4 million. For purposes of
determining the reduction of net debt outstanding, the Series C Preferred Stock
is considered debt at September 30, 1993.
Committed capital expenditures for fiscal 1994 currently amount to
approximately $232 million, which includes equipment acquisitions and the
recent acquisitions of Caravan Trailer Rental Co., Ltd., and Integrated
Transportation Services, Ltd., (see Note 7). Presently, committed capital
expenditures for fiscal 1995 are approximately $139 million. The Company may
increase its 1995 capital spending if conditions warrant.
15
<PAGE> 16
On January 14, 1994, the Company amended one of its Revolving Credit
and Term Loan Agreements to extend the agreement by one year to a final
maturity of December 31, 2000 and increase the banks' lending commitment from
$65 million to $90 million. This increase brings the total bank commitments
under the Company's two revolving credit agreements to $180 million.
On May 27, 1994, the Company amended its second Revolving Credit and
Term Loan Agreement, also extending that agreement by one year to a final
maturity of May 31, 2001. At July 29, 1994, the Company had $65 million of
unused credit available under its Revolving Credit Agreements.
In April 1994, the Company issued $30 million of Medium Term Notes at
a weighted average rate of 7.3% and a weighted average life of 5.8 years.
On July 26, 1994 the Company filed a Shelf Registration Statement for
$500 million of securities with the Securities and Exchange Commission. The
Shelf Registration offers the Company additional financing flexibility by
allowing for the issuance of senior and subordinated debt as well as various
types of preferred stock and common equity.
16
<PAGE> 17
Part II - OTHER INFORMATION
---------------------------
<TABLE>
Item 6. Exhibits and Reports on Form 8-K
- - -----------------------------------------
(a) Exhibits
--------
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.1 Revolving Credit and Term Loan Agreement, dated as of May 31, 1991, amended and restated as of
April 7, 1992, and further amended and restated as of May 27, 1994, among XTRA, Inc., The First
National Bank of Boston, as Agent, and the other banks named therein.
4.1.1 Guaranty, dated as of May 31, 1991, restated as of April 7, 1992, and further confirmed as of May
27, 1994, pursuant to which XTRA Corporation guarantees the obligations of XTRA, Inc. under the
Revolving Credit and Term Loan Agreement identified in Exhibit No. 4.1 above
10.1 Individual Pension Agreement, dated as of July 1, 1994, by and between XTRA Corporation and Lewis
Rubin.
11.1 Statement of the calculation of earnings per share for the three and nine months ended June 30,
1994 and 1993.
12.1 Statement of the calculation of earnings to fixed charges for the nine months ended June 30, 1994
and 1993 for XTRA Corporation.
12.2 Statement of the calculation of earnings to fixed charges for the nine months ended June 30, 1994
and 1993 for XTRA, Inc.
12.3 Statement of the calculation of earnings to fixed charges and preferred stock dividends for the
nine months ended June 30, 1994 and 1993 for XTRA, Corporation.
<FN>
(b) Reports on Form 8-K
-------------------
Registrant filed a Current Report on Form 8-K dated August 3, 1994, which disclosed the Company's
earnings for the quarter ended June 30, 1994.
</TABLE>
17
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
XTRA CORPORATION
----------------------------
(Registrant)
Date: August 12, 1994 /s/Michael J. Soja
---------------- ----------------------------
Michael J. Soja
Vice President and
Chief Financial Officer
Date: August 12, 1994 /s/Robert B. Blakeley
---------------- ----------------------------
Robert B. Blakeley
Controller and
Chief Accounting Officer
18
<PAGE> 19
EXHIBIT INDEX
-------------
EXHIBIT NO.
- - -----------
<TABLE>
A. EXHIBITS:
-------------
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.1 Revolving Credit and Term Loan Agreement, dated as of May 31,
1991, amended and restated as of April 7, 1992, and further
amended and restated as of May 27, 1994, among XTRA, Inc.,
The First National Bank of Boston, as Agent, and the other banks
named therein.
4.1.1 Guaranty, dated as of May 31, 1991, restated as of April 7, 1992,
and further confirmed as of May 27, 1994, pursuant to which XTRA
Corporation guarantees the obligations of XTRA, Inc. under the
Revolving Credit and Term Loan Agreement identified in Exhibit
No. 4.1 above.
10.1 Individual Pension Agreement, dated as of July 1, 1994, by and
between XTRA Corporation and Lewis Rubin.
11.1 Statement of the calculation of earnings per share for the three and
nine months ended June 30, 1994 and 1993.
12.1 Statement of the calculation of earnings to fixed charges for the
nine months ended June 30, 1994 and 1993 for XTRA Corporation.
12.2 Statement of the calculation earnings to fixed charges for the
nine months ended June 30, 1994 and 1993 for XTRA, Inc.
12.3 Statement of the calculation of earnings to fixed charges and
preferred stock dividends for the nine months ended June 30,
1994 and 1993 for XTRA, Corporation.
</TABLE>
19
<PAGE> 1
EXHIBIT 4.1
AMENDED AND RESTATED REVOLVING CREDIT
AND TERM LOAN AGREEMENT
dated as of May 27, 1994
among
XTRA, INC.
and
THE FIRST NATIONAL BANK OF BOSTON
THE BANK OF CALIFORNIA, N. A.
ABN AMRO BANK N. V.
NATIONAL WESTMINSTER BANK USA
THE FIRST NATIONAL BANK OF BOSTON,
as Agent
<PAGE> 2
-2-
BOS-
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C> <C>
Section 1. DEFINITIONS 1
Section 2. THE REVOLVING CREDIT LOANS 14
2.1. Commitment to Make Revolving Credit Loans 14
2.2. Making the Revolving Credit Loans 14
2.3. Promissory Notes 14
2.4. Funding of Revolving Credit Loans 14
Section 3. TERM LOANS 15
3.1. Term Conversion Date; Term Loans 15
Section 4. CONVERSION, INTEREST, PAYMENTS AND COSTS 16
4.1. Conversion of Loans 16
4.2. Interest 16
4.3. Overdue Principal and Interest 17
4.4. Interest Period Selection; Alternative Interest Rates 17
4.5. Illegality or Impossibility 18
4.6. Indemnification 18
4.7. Prepayments 19
4.8. Payments and Computations 20
4.9. Payments to be Free of Deductions 21
4.10. Taxes 21
4.11. Additional Amounts Payable on Account of Credit
Facilities 22
4.12. Additional Costs and Expenses; Reserve Requirements 23
4.13. Failure to Make Funds Available 24
4.14. Prepayment of Eurodollar Loans 24
4.15. Interest Limitation 25
4.16. Extension Periods 25
</TABLE>
<PAGE> 3
-3-
BOS-
<TABLE>
<S> <C> <C>
Section 5. FEES; REDUCTION OF TOTAL COMMITMENT 26
5.1. Reduction and Termination of Commitment by the
Company 26
5.2 Non-Use Fee 26
Section 6. EFFECTIVE DATE; CONDITIONS TO EFFECTIVENESS 27
6.1. Documentation 27
6.2. Representations and Warranties 27
6.3. Performance; No Default 27
6.4. Corporate Action 27
6.5. Proceedings and Documents 28
6.6. Other Consents and Approvals 28
6.7. Guaranty 28
6.8. Fee Letter Agreement 28
6.9. Other Fees; Competitive Bid Advances 28
Section 7. CONDITIONS OF BORROWINGS 29
7.1. Representations and Warranties 29
7.2. Performance; No Default 29
7.3 Notice of Borrowing 29
Section 8. REPRESENTATIONS AND WARRANTIES 29
8.1. Corporate Existence and Good Standing 29
8.2. Corporate Power; Consents; Absence of Conflict with
Other Agreements 30
8.3. Title to Properties 30
8.4. Financial Statements 30
8.5. [Intentionally Omitted] 31
8.6. Holding Company and Investment Company Acts 31
8.7. Litigation 31
8.8. No Materially Adverse Contracts 31
8.9. Compliance with Other Instruments, Laws 32
8.10. Taxes 32
8.11. No Default 32
8.12. Use of Proceeds 32
</TABLE>
<PAGE> 4
-4-
BOS-
<TABLE>
<S> <C> <C>
8.13. Pension Plan 32
8.14. Subsidiaries 32
8.15. Guaranty 32
8.16. Debt Rating 32
Section 9. AFFIRMATIVE COVENANTS 33
9.1. Punctual Payment. 33
9.2. Financial Statements 33
9.3. Notification of Defaults and Events of Default 34
9.4. Conduct of Business 34
9.5. Taxes 34
9.6. Maintenance of Properties 34
9.7. Maintenance of Insurance 34
9.8. Records and Accounts 35
9.9. Inspection 35
9.10. Notice of Litigation 35
9.11. Pension Plans 35
9.12. Depreciation Schedule 36
9.13. Debt Rating 36
Section 10. CERTAIN NEGATIVE COVENANTS 36
10.1. Consolidated Cash Flow Coverage 37
10.2. Liens 37
10.3. Maximum Leverage 38
10.4. Maximum Equipment Indebtedness 38
10.5. Maximum Secured Equipment Indebtedness 39
10.6. Liens on Parent 39
10.7. Investments in Parent 39
10.8. Consolidated Net Earnings Available for Interest
Charges 39
10.9. Restricted Payments 39
10.10. Minimum Asset Composition 39
Section 11. EVENTS OF DEFAULT; ACCELERATION 39
Section 12. NOTICE AND WAIVERS OF DEFAULT 42
</TABLE>
<PAGE> 5
-5-
BOS-
<TABLE>
<S> <C> <C>
12.1. Notice of Default 42
12.2. Waivers of Default 42
Section 13. REMEDIES ON DEFAULT, ETC 42
13.1. Rights of Banks 42
13.2. Setoff; Sharing 42
Section 14. GUARANTY 43
Section 15. THE AGENT 43
15.1. Appointment of the Agent, Powers and Immunities 43
15.2. Reliance by Agent 44
15.3. Indemnification 44
15.4. Reimbursement 44
15.5. Documents and Notice 45
15.6. Non-Reliance on Agent and Other Banks 45
15.7. Resignation or Removal of the Agent 46
15.8. Withholding Tax Forms 46
Section 16. ASSIGNMENTS; PARTICIPATIONS 46
Section 17. CONSENT TO JURISDICTION 48
Section 18. BINDING EFFECT 48
Section 19. EXPENSES 48
Section 20. SURVIVAL OF COVENANTS 48
Section 21. NOTICE 49
Section 22. GOVERNING LAW 49
Section 23. MISCELLANEOUS 49
Section 24. ENTIRE AGREEMENT 50
</TABLE>
<PAGE> 6
-6-
BOS-
<TABLE>
<S> <C> <C>
Section 25. CONSENTS, AMENDMENTS, WAIVERS 50
Section 26. AGREEMENT AS TO BROKERS 50
Exhibits:
- - --------
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Term Note
Exhibit C-1 - Form of Legal Opinion - Special Counsel
Exhibit C-2 - Form of Legal Opinion - Maine Special Counsel
Exhibit C-3 - Form of Legal Opinion - Vice President/General Counsel
Exhibit D - Form of Compliance Certificate
Exhibit E - Form of Guaranty
Exhibit F - Form of Assignment and Acceptance
Schedules:
- - ---------
Schedule 1.1 - Applicable Margin
Schedule 1.2 - Depreciation Schedule
Schedule 1.3 - Terms of Subordination
Schedule 8.14 - Subsidiaries
</TABLE>
<PAGE> 7
-1-
XTRA, INC.
AMENDED AND RESTATED REVOLVING CREDIT
AND TERM LOAN AGREEMENT
AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT, dated as
of May 27, 1994, among XTRA, INC., a Maine corporation (the "Company"), THE
FIRST NATIONAL BANK OF BOSTON ("FNBB"), THE BANK OF CALIFORNIA, N. A., ABN AMRO
BANK N. V., NATIONAL WESTMINSTER BANK USA, such other banks as may become
parties to this Agreement from time to time in accordance with the provisions
hereof (collectively, the "Banks", and each, singularly, a "Bank"), and THE
FIRST NATIONAL BANK OF BOSTON as agent for the Banks (the "Agent").
WHEREAS, pursuant to that certain Revolving Credit and Term Loan
Agreement, dated as of May 31, 1991 and amended and restated as of April 7,
1992, as amended (as so amended, the "Prior Credit Agreement"), the Banks have
made loans to the Company for the purposes described therein; and
WHEREAS, the Company and the Banks wish to amend and restate the Prior
Credit Agreement in order to make certain changes to the terms and provisions of
the Prior Credit Agreement;
NOW, THEREFORE, the parties hereto agree that from and after the
Effective Date, the Prior Credit Agreement shall be amended and restated in its
entirety as set forth herein and shall be in full force and effect as provided
herein and Loans as defined under the Prior Credit Agreement shall be Loans
under this Agreement.
Section 1. DEFINITIONS. The following terms shall have the
meanings assigned to them below in this Section 1 or in the provisions of this
Agreement and the exhibits referred to below:
ACQUIRED EQUIPMENT INDEBTEDNESS - with respect to any Person, all
Indebtedness (including all Lease Obligations) of the Person in question if such
Indebtedness (a) is Secured Equipment Indebtedness and (b) was incurred by
another Person prior to the time the Person in question acquired the
Transportation Equipment or Transportation Equipment leases securing such
Secured Equipment Indebtedness from such other Person or prior to the time the
Person in question acquired such other Person (but only to the extent such
Indebtedness does not exceed the fair value of the Transportation Equipment or
leases of Transportation Equipment securing the Indebtedness at the time such
Transportation Equipment, or Transportation Equipment leases or such other
Person was acquired) and shall include all extensions, renewals and refinancings
<PAGE> 8
-2-
of such Indebtedness not in excess of the principal amount thereof outstanding
immediately prior to such extension, renewal or refinancing.
ADJUSTED BASE RATE - as at any date of determination, an interest rate
per annum equal to the sum of the Base Rate for such day PLUS the Applicable
Margin.
AGENT - see the preamble.
AGENT'S FEE - has the meaning set forth for such term in the Fee Letter
Agreement.
AGREEMENT - this Amended and Restated Revolving Credit and Term Loan
Agreement, including the exhibits and schedules hereto, as amended, supplemented
or modified from time to time.
APPLICABLE LENDING OFFICE - each Bank's Domestic Lending Office(s),
except in the case of a Eurodollar Advance, each Bank's Eurodollar Lending
Office(s).
APPLICABLE MARGIN - the percentages set forth in SCHEDULE 1.1 attached
hereto corresponding to the Type of Revolving Credit Loan or Term Loan and, at
any time of determination, the rating (or lack thereof) of the Company's long-
term senior unsecured debt by Moody's and S&P (with the understanding that the
term "rating" as used herein shall include "preliminary" or "indicative" senior
debt ratings or their equivalents). Any change in the Applicable Margin
resulting from a change in the rating of the Company's long-term senior
unsecured debt shall become effective as of the earlier of (i) the second
Business Day after the Agent receives notice of such change pursuant to Section
9.13 hereunder or (ii) the seventh Business Day after the effective date of such
change. In the event that the provisions of this definition result in excess
amounts of interest being paid or additional amounts of interest being owed
hereunder, any such excess amounts will be credited against interest payable on
the next date interest would otherwise be payable hereunder or, at the
Borrower's option, will be refunded to the Borrower, and any additional amounts
of interest owed will be payable on the next date interest would otherwise be
payable hereunder.
ASSIGNMENT AND ACCEPTANCE - see Section 16.
BALANCE SHEET DATE - September 30, 1993.
BANKS - see the preamble.
BASE RATE - for any day, a fluctuating rate per annum (rounded upwards,
if necessary, to the next 1/8 of 1%) equal to the greater of the rate of
interest announced from time to time
<PAGE> 9
-3-
by FNBB at its head office as its "base rate", as in effect on such day, or the
Federal Funds Effective Rate in effect on such day PLUS 1/2%. For purposes of
this Agreement, any change in the Base Rate due to a change in FNBB's "base
rate" shall be effective on the effective date of such change in FNBB's "base
rate". If the Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including, without limitation, the
inability or failure of the Agent to obtain sufficient bids or publications in
accordance with the terms hereof, the Base Rate shall be FNBB's "base rate" as
in effect at the applicable time until the circumstances giving rise to such
inability no longer exist.
BASE RATE ADVANCE - see Revolving Credit Loan.
BASE RATE LOANS - all or a portion of any Revolving Credit Loans or Term
Loans hereunder, the interest rate on which is calculated by reference to the
Adjusted Base Rate.
BASE RATE TERM LOAN - see Term Loan.
BORROWING - an advance of a Revolving Credit Loan by a Bank or
simultaneous advances of Revolving Credit Loans of the same Type to the Company
by the Banks.
BORROWING DATE - in relation to any Revolving Credit Loan, the day on
which that Revolving Credit Loan is made or is to be made to the Company.
BUSINESS DAY - any day on which commercial banking institutions in
Boston, Massachusetts are open for the transaction of banking business, and, if
the applicable Business Day relates to a Eurodollar Loan, a day on which
dealings are carried on in the Eurodollar interbank market used for the
determination of the Euro Rate by the Agent.
CAPITALIZED LEASE - a lease the obligations under which are required to
be capitalized and included in determining total liabilities in accordance with
Financial Accounting Standard No. 13 of the Financial Accounting Standards Board
as in effect on the Balance Sheet Date.
CASH FLOW - for any period and with respect to any Person, the sum of
(a) Cash Flow From Continuing Operations of such Person for such period, PLUS
(b) all Interest Charges of such Person for such period, plus (c) all payments
under Lease Obligations of such Person (other than payments in respect of
obligations under Capitalized Leases) for such period.
CASH FLOW FROM CONTINUING OPERATIONS - for any period and with respect
to any Person, cash flow from continuing operations of such Person for such
period, as determined in accordance with GAAP as in effect on the Balance Sheet
Date, less the aggregate amount of the
<PAGE> 10
-4-
cash portion of all charges as extraordinary items of expense (if any) made
during such period.
CASH REQUIREMENTS - for any period and with respect to any Person, the
sum of (a) the amount of Interest Charges of such Person for such period (but
excluding imputed interest, accrued original issue discount and interest payable
in kind), PLUS (b) the amount of payments (excluding optional prepayments) which
were due under all Lease Obligations of such Person (other than payments in
respect of obligations under Capitalized Leases) for such period, PLUS (c) the
amount of all scheduled payments of principal on long-term Indebtedness of such
Person (including current maturities of long-term Indebtedness, but excluding
optional prepayments) which are due and payable during such period pursuant to
any agreement or instrument to which such Person is a party relating to the
borrowing of money or the obtaining of credit (including any such principal
payments on Lease Obligations which are obligations in respect of Capitalized
Leases).
COMMITMENT - in relation to any Bank, such Bank's commitment to
participate in the revolving credit facility provided under this Agreement upon
the terms and subject to the conditions of this Agreement up to and including
the amount set opposite its name below (such amount to be deemed reduced by the
amount of any reductions of such Bank's Commitment in accordance with the terms
of this Agreement), which commitment shall, subject to the terms of Section
4.16, terminate on May 31, 1996.
<TABLE>
<CAPTION>
Bank Commitment
---- ----------
<S> <C>
The First National Bank $30,000,000
of Boston
ABN AMRO Bank N. V. $20,000,000
National Westminster Bank USA $20,000,000
The Bank of California, N. A. $20,000,000
-----------
Total $90,000,000
</TABLE>
COMMITMENT PERCENTAGE(S) - with respect to each Bank, the percentage set
forth beside its name below (subject to adjustment permitted by the terms
hereof):
<TABLE>
<CAPTION>
Commitment
Bank Percentage
---- ------------
<S> <C>
The First National Bank 33.33333334%
of Boston
ABN AMRO Bank N.V. 22.22222222%
</TABLE>
<PAGE> 11
-5-
<TABLE>
<S> <C>
National Westminster Bank USA 22.22222222%
The Bank of California, N.A. 22.22222222%
-------------
Total 100.00000000%
</TABLE>
COMPLIANCE CERTIFICATE - see Section 9.2(a).
COMPANY- see the preamble.
CONFIRMATION AGREEMENT - see Section 14.
CONSOLIDATED OR CONSOLIDATED - with reference to each such term, that
term as applied to the accounts of the Person in question and its Subsidiaries
consolidated in accordance with generally accepted accounting principles, after
eliminating all intercompany items.
CONTRIBUTION OF CAPITAL - an amount equal to the aggregate net proceeds
received by Parent from the issuance of its capital stock or upon cancellation
of its indebtedness by the holders thereof in exchange for capital stock of
Parent.
CONVERT, CONVERSION, AND CONVERTED - refers to (i) the conversion of
Base Rate Loans or Eurodollar Loans to Loans of another Type, and (ii)
conversion of Revolving Credit Loans to Term Loans on the Term Conversion Date.
DEFAULT(S) - see Section 11.
DOMESTIC LENDING OFFICE - with respect to any Bank other than FNBB, such
office or affiliate of such Bank as that Bank may from time to time specify in
writing to the Agent and the Company as its "Domestic Lending Office". With
respect to FNBB, FNBB's head office, or such other office or affiliate of FNBB
as FNBB may, from time to time, specify in writing to the Agent and the Company
as its "Domestic Lending Office".
EFFECTIVE DATE - see Section 6.
EQUIPMENT INDEBTEDNESS - with respect to any Person, all Indebtedness of
such Person except for Indebtedness secured by real property or improvements
thereon, but for purposes of such exception, only to the extent that the amount
of such excepted Indebtedness does not exceed the greater of the cost or
appraised value of such real property and improvements at the time such excepted
Indebtedness was incurred.
ERISA - means the Employee Retirement Income Security Act of 1974, as
amended from
<PAGE> 12
-6-
time to time.
EURORATE - with respect to each Interest Period, in the case of
Eurodollar Loans, the rate per annum at which deposits in Dollars are offered to
FNBB for delivery on the first day of the applicable Interest Period in whatever
Eurodollar interbank market may be selected by FNBB, in its sole discretion,
acting in good faith, at or about ll:00 a.m., local time in such interbank
market, two Business Days prior to the first day of the applicable Interest
Period for a period equal to the period of such Interest Period and in an amount
substantially equal to the unpaid principal amount of such Eurodollar Loan.
EURODOLLAR LENDING OFFICE - with respect to any Bank other than FNBB,
such office or affiliate of such Bank as that Bank may from time to time specify
in writing to the Agent and the Company as its "Eurodollar Lending Office".
With respect to FNBB, FNBB's head office, or such other office or affiliate of
FNBB as FNBB may, from time to time, specify in writing to the Agent and the
Company as its "Eurodollar Lending Office".
EURODOLLAR LIABILITIES - has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
EURODOLLAR ADVANCE - see Revolving Credit Loan.
EURODOLLAR LOAN - all or a portion of any Revolving Credit Loans or Term
Loans, the interest rate on which is calculated by reference to the Euro Rate.
EURODOLLAR RATE - with respect to any Interest Period for each
Eurodollar Loan, an interest rate per annum equal at all times during such
Interest Period to the sum of (i) the Euro Rate plus (ii) the Reserve Charge for
such period, plus (iii) the Applicable Margin.
EURODOLLAR RATE TERM LOAN - see Term Loan.
EVENT(S) OF DEFAULT - see Section 11.
FEE LETTER AGREEMENT - that certain letter agreement, dated as of the
date hereof, between the Company and the Agent.
FEDERAL FUNDS EFFECTIVE RATE - for any day, a fluctuating interest rate
per annum equal for such day to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is
<PAGE> 13
-7-
a Business Day, the average of the quotations for such day on such transactions
received by the Agent from three Federal funds brokers of recognized standing
selected by it.
FNBB- see the preamble.
GAAP or GENERALLY ACCEPTED ACCOUNTING PRINCIPLES - generally accepted
accounting principles which are (a) consistent with the principles promulgated
or adopted by the Financial Accounting Standards Board and its predecessors as
in effect on the Balance Sheet Date, (b) such that a certified public accountant
would, insofar as the use of accounting principles is pertinent, be in a
position to deliver an unqualified opinion as to financial statements in which
such principles as in effect on the Balance Sheet Date have been properly
applied, and (c) applied on a basis consistent with prior periods, PROVIDED that
for purposes of the financial statements required to be delivered pursuant to
Section 9.2 and for purposes of the covenants in Section 9.8, generally accepted
accounting principles shall mean generally accepted accounting principles in
effect from time to time.
GUARANTEED PENSION PLAN - any pension plan maintained by the Company or
any Subsidiary or to which any of them contributes, the benefits under which are
guaranteed in whole or in part by the Pension Benefit Guaranty Corporation.
GUARANTY - see Section 14 hereof.
INDEBTEDNESS- (a) the principal of all indebtedness (i) for borrowed
money or (ii) for the deferred purchase price of property unless the price
thereof was payable in full within twelve months from the date on which the
obligation was created or (iii) evidenced by notes, bonds or other instruments,
(b) all Lease Obligations and (c) all guaranties and other contingent
obligations in respect of the principal of Indebtedness of others; PROVIDED,
HOWEVER, that Indebtedness shall not include Subordinated Indebtedness.
INDEPENDENT ACCOUNTANT - a firm of independent public accountants of
national reputation selected by the Company or by its parent company which is
"independent" as that term is defined in Rule 2.01 of Regulation S-X promulgated
by the Securities and Exchange Commission.
INSTALLMENT PAYMENT DATE - see Section 3.1(c).
INTER-COMPANY ADVANCES - see Net Worth.
INTEREST CHARGES - for any period and with respect to any Person, the
expenses (net of any interest income earned during such period) of such Person
accrued for such period for interest
<PAGE> 14
-8-
(including, without limitation, imputed interest, accrued original issue
discount and interest payable in kind) on all Indebtedness (including
Indebtedness consisting of Lease Obligations in respect of Capitalized Leases
but excluding Indebtedness consisting of Lease Obligations other than
Capitalized Leases) and on all Subordinated Indebtedness, determined in
accordance with generally accepted accounting principles.
INTEREST PAYMENT DATE - with respect to any Interest Period, the last
day of such Interest Period.
INTEREST PERIOD - with respect to each Eurodollar Advance or Eurodollar
Rate Term Loan:
(i) initially, the period (A) commencing on the date of such Eurodollar
Advance or on the Term Conversion Date or, in the case of a Conversion to a
Eurodollar Loan pursuant to Section 4.1, commencing on the date of such
Conversion, and (B) ending one, two, three, six or nine months thereafter, as
the case may be, as determined in accordance with the provisions of this
Agreement; and
(ii) thereafter, each subsequent Interest Period for such Eurodollar
Loan shall begin on the last day of the preceding Interest Period for such Loan
and shall end one, two, three, six or nine months thereafter as the Company may
select pursuant to Section 4.4. The number of days in each Interest Period and
the particular day on which each Interest Period ends and the next begins shall
be fixed by the Agent in accordance with the Agent's generally accepted practice
in the applicable foreign currency deposits market; PROVIDED that (A) any
Interest Period which would otherwise end on a day which is not a Business Day,
shall end and the next Interest Period shall commence on the next preceding or
the next succeeding day which is a Business Day as determined conclusively by
the Agent in accordance with the then current bank practice in the applicable
Eurodollar market and (B) no Interest Period for a Eurodollar Advance or a
Eurodollar Rate Term Loan shall end after the Termination Date.
INVESTMENT - with respect to any Person, any loans, capital
contributions, transfers of assets (other than transfers for fair value as
determined by the transferring Person in good faith) and any purchases and
other acquisitions for consideration of evidences of indebtedness, capital stock
or other securities. With respect to a parent corporation's investment in a
Consolidated Subsidiary, "Investment" shall also include any retained earnings
of such Subsidiary reflected on the Consolidated balance sheet of the parent and
its Subsidiaries.
LEASE OBLIGATION - with respect to any Person, all rental obligations
under leases of property (other than electronic data processing and computer
equipment and leases of office space by such Person) either (a) which are
Capitalized Leases, or (b) if not Capitalized Leases, which are leases of
equipment which had an initial term of more than three years (including any
<PAGE> 15
-9-
renewal terms at the option of the lessor). The amount of Lease Obligations
shall be equal to the aggregate value of rentals payable (other than rentals
consisting of taxes, indemnities, maintenance items, replacements and other
similar charges which are in addition to the basic financial rent for the use
of the property) by the lessee thereof during the remaining term thereof,
including periods of renewal at the option of the lessor, discounted to present
value using the lessee's "incremental borrowing rate at the inception of the
lease" in accordance with Financial Accounting Standard No. 13 of the Financial
Accounting Standards Board in effect on the Balance Sheet Date.
LIABILITIES - with respect to any Person, an amount equal to the sum
(without duplication) of (a) all liabilities of such Person, as determined as at
the date as of which Liabilities are to be determined in accordance with
generally accepted accounting principles, plus (b) all Indebtedness of such
Person as at the date as of which Indebtedness is to be determined, plus (c) the
aggregate amount of such Person's reimbursement obligations in respect of
letters of credit, minus (d) the aggregate deferred income tax liability of such
Person, minus (e) the aggregate amount of Subordinated Indebtedness of such
Person.
LIENS - see Section 10.2.
LOAN DOCUMENTS - this Agreement, the Notes, the Fee Letter Agreement,
the Guaranty and such other documents as the parties hereto designate in writing
to be Loan Documents.
LOANS - collectively, the Revolving Credit Loans and Term Loans made or
to be made by the Banks to the Company upon the terms and subject to the
conditions contained in this Agreement, and Loan means any one of such Loans.
MAJORITY BANKS - at the time any determination thereof is to be made,
Banks whose Commitments aggregate to at least 66% of the Total Commitment, or,
if the Total Commitment has been terminated (pursuant to the terms of Section 11
hereof or otherwise), the holders of Notes evidencing at least 66% of the
aggregate unpaid principal amount of the Loans.
MAXIMUM RATE - see Section 4.15 hereof.
MOODY'S - Moody's Investors Service, Inc. or any successor thereto
performing the same function.
NET BOOK VALUE - with respect to the Transportation Equipment of any
Person, (a) in the case of Transportation Equipment owned by such Person and
leased by such Person as lessor under leases the rentals from which are carried
as a finance lease receivable on the balance sheet of the Person in question in
accordance with generally accepted accounting principles, the sum
<PAGE> 16
-10-
of (i) the net amounts carried as receivables on the balance sheet of such
Person in respect of such leases, plus (ii) the residual value of all
Transportation Equipment subject to such lease, all computed in accordance with
generally accepted accounting principles, (b) in the case of other
Transportation Equipment owned by such Person, the initial cost of the
Transportation Equipment to such Person as carried on the balance sheet of such
Person depreciated by such Person in accordance with generally accepted
accounting principles and in accordance with the depreciation schedule for such
Transportation Equipment set forth on SCHEDULE 1.2 attached hereto, (c) in the
case of Transportation Equipment leased by such Person as lessee under a
Capitalized Lease the amount shown on the asset side of the balance sheet of
such Person in accordance with Financial Accounting Standard No. 13 adopted by
the Financial Accounting Standards Board, as in effect on the Balance Sheet
Date, in respect of such Transportation Equipment, and (d) in the case of
Transportation Equipment leased by a Person as lessee under a lease which is
not a Capitalized Lease but which is included as a Lease Obligation under this
Agreement, the amount of such Lease Obligation.
NET EARNINGS AVAILABLE FOR INTEREST CHARGES - for any period and with
respect to the Company, an amount equal to the sum of (a) Net Income of the
Company for such (after excluding therefrom all Net Income of the Company during
such period which is attributable to earnings of the Subsidiaries of the
Company), plus (b) Interest Charges for the Company for such period, plus (c)
the aggregate amount of all taxes accrued with respect to such period by the
Company as determined in accordance with generally accepted accounting
principles.
NET INCOME - the net income or loss, as the case may be, of a Person for
any period as determined in accordance with generally accepted accounting
principles, after eliminating all extraordinary items of income.
NET WORTH - with respect to any Person, at any date as of which the
amount thereof shall be determined, the sum of the following amounts which would
be set forth on a balance sheet of such Person at such date, determined in each
case in accordance with generally accepted accounting principles: (a) the par
value (or values stated on the books of such Person) of the capital stock of all
classes of such Person other than capital stock held in the treasury of such
Person, PLUS (b) the amount of the surplus, whether capital or earned, of such
Person, PLUS (c) Subordinated Indebtedness of such Person, LESS (d) the amount
which would be carried in the asset side of such balance sheet of such Person in
respect of goodwill, trade names, trademarks, patents, unamortized debt
issuance expense and other intangibles, LESS (e) any increase in the net book
value of fixed assets arising from a revaluation thereof after September 30,
1993. For purposes of computations of the Net Worth of the Company for the
covenants set forth in Sections 10.3(b) and 10.5 hereof, there shall also
be deducted (i) that amount, if any, by which the aggregate amount of net
inter-company loans ("Inter-Company Advances") from the Company to its
Subsidiaries, to the Parent, to Subsidiaries of the Parent and to any affiliates
of the
<PAGE> 17
-11-
Company or the Parent which are outstanding on such date of determination
exceeds $40,000,000, and (ii) that amount, if any, by which the aggregate
amount of Investments (other than Inter-Company Advances) of the Company in its
Subsidiaries, in the Parent, in Subsidiaries of the Parent and in any
affiliates of the Company or the Parent which are outstanding on such date of
determination exceeds an amount equal to $120,000,000 PLUS the amount of any
increase in or minus the amount of any decrease in the aggregate amount of
Investments (if any) of the Company which is a result of changes in the
retained earnings of Subsidiaries of the Company since December 31, 1992 (as
reflected on the Consolidated balance sheet of the Company and its
Subsidiaries); PROVIDED, HOWEVER, Inter-Company Advances or Investments (as
measured by the lesser of their cost or fair market value) in capital stock or
debt instruments of the Parent of a class which is publicly traded on a
nationally recognized market and as to which there is an active trading market
on the date of determination up to an aggregate amount of $10,000,000 shall not
be included as Inter-Company Advances or Investments in computing the amounts
described in clauses (i) or (ii) of this sentence.
NON-USE FEE - see Section 5.2.
NON-USE FEE RATE - see Section 5.2.
NOTES - collectively, the Revolving Credit Notes and the Term Notes.
NOTICE OF BORROWING - see Section 2.2.
NOTICE OF CONVERSION - See Section 4.1.
OBLIGATIONS- all unsatisfied indebtedness, obligations and liabilities
of the Company to the Banks or the Agent arising or incurred under this
Agreement or in respect of Loans made and any notes or other instruments at any
time evidencing any of the foregoing, whether such be direct or indirect, joint
or several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise.
OTHER TAXES - see Section 4.10(b).
PARENT - XTRA Corporation, a Delaware corporation.
PENSION BENEFIT GUARANTY CORPORATION - the Pension Benefit Guaranty
Corporation created by Section 4002 of ERISA and any successor entities having
similar responsibilities.
PERSON - any individual, corporation (including a business trust),
partnership, trust, unincorporated association, joint stock company or other
legal entity or organization and any
<PAGE> 18
-12-
government or agency or political subdivision thereof.
PREPAYMENT DATE - in relation to any prepayment of Loans hereunder
pursuant to the terms of Section 4.7, the date on which such prepayment is made
or to be made.
PRIOR CREDIT AGREEMENT - see the preamble.
PURCHASE MONEY EQUIPMENT INDEBTEDNESS - with respect to any Person, all
Indebtedness of such Person which is Secured Equipment Indebtedness and which is
incurred to finance the purchase of Transportation Equipment if such
Indebtedness (a) shall have been incurred within 180 days of the acquisition of
such Transportation Equipment by the Person whose Purchase Money Equipment
Indebtedness is being determined and (b) does not exceed in principal amount the
initial cost of such Transportation Equipment and shall include all extensions,
renewals and refinancings of such Indebtedness not in excess of the principal
amount thereof outstanding immediately prior to such extension, renewal or
refinancing. The initial cost of Transportation Equipment may include, in
addition to the purchase price thereof and the purchase price of all accessories
and equipment installed thereon, all freight, delivery and handling charges,
excise, sales and use taxes and all other amounts which may be capitalized and
included in the cost of the equipment under generally accepted accounting
principles.
REEMPLOYMENT PERIOD - see Section 4.6.
REGISTER - see Section 16.
RESERVE CHARGE - with respect to any Interest Period for any Eurodollar
Loan, the reserve charge (which may be zero) on each Eurodollar Loan for the
Interest Period thereof, calculated at an annual rate (based on a year of 360
days) equal to the remainder of (i) a fraction, the numerator of which is the
Euro Rate (expressed as a decimal) and the denominator of which is one minus the
Reserve Rate, minus (ii) the Euro Rate (as so expressed).
RESERVE RATE - the rate (expressed as a decimal) at which the Agent
would be required to maintain reserves under Regulation D of the Board of
Governors of the Federal Reserve System against Eurodollar Liabilities if such
liabilities were outstanding.
RESTRICTED PAYMENT - with respect to any Person, any payment in cash,
property, or other assets upon or in respect of any shares of any class of
capital stock of the Company or the Parent, including but not limited to, (i)
payments as dividends, payments for repurchasing any capital stock of any class
or making any other distribution in respect of any such shares of stock,
excluding, however, any dividends or other payments which may be made solely in
common stock, and (ii) the aggregate principal amount of all Indebtedness paid
or delivered in exchange
<PAGE> 19
-13-
for, or upon conversion or repayment of, any shares of preferred stock.
REVOLVING CREDIT LOAN - any loan made or to be made to the Company
pursuant to the terms of Section 2 hereof, whether bearing interest at the
Adjusted Base Rate (a "Base Rate Advance") or bearing interest at a Eurodollar
Rate (a "Eurodollar Advance") (each of which shall be a Type of Revolving Credit
Loan).
REVOLVING CREDIT NOTE - see Section 2.
S&P - Standard & Poors Corporation or any successor thereto performing
the same function.
SECURED EQUIPMENT INDEBTEDNESS - with respect to any Person, all
Indebtedness which is secured by any security interest, mortgage, charge, deed
of trust, or other similar lien on Transportation Equipment or on leases of any
such Transportation Equipment by the owner thereof and includes all Lease
Obligations. Transportation Equipment which is subject to a lease or contract
which is included as a Lease Obligation is deemed to secure the Indebtedness
evidenced thereby.
SUBORDINATED INDEBTEDNESS - as of any date of determination thereof,
that portion of Indebtedness of the Company or Parent which (i) does not in the
aggregate exceed an amount equal to 30% of the sum of the amounts referred to in
clauses (a) and (b) minus the amounts referred to in clauses (d) and (e) as set
forth in the definition of Net Worth, and (ii) is expressly subordinated to the
payment and performance of the Obligations upon substantially the terms set
forth in SCHEDULE 1.3 attached hereto, and (iii) is not due and payable within
three (3) years of such date of determination.
SUBSIDIARY - with respect to the Company or Parent, a corporation more
than 50% of the voting stock of which is owned by the Company or Parent and/or
one or more Subsidiaries of the Company or Parent.
TAXES - see Section 4.10.
TERM CONVERSION DATE - see Section 2.1.
TERM LOAN(S) - Loan(s) made or to be made by the Banks on the Term
Conversion Date as follows:
<PAGE> 20
-14-
BASE RATE TERM LOAN - a Term Loan bearing interest at the Adjusted Base
Rate.
EURODOLLAR RATE TERM LOAN - a Term Loan bearing interest at the
Eurodollar Rate.
(each of which shall be a TYPE of Term Loan).
TERM LOAN NOTICE - see Section 3.1(b).
TERM NOTES - see Section 3.1(c).
TERMINATION DATE - the date which occurs five calendar years from the
Term Conversion Date, or such earlier date as this Agreement may be terminated
pursuant to Section 5.1.
TOTAL COMMITMENT - the aggregate Commitments of the Banks at any time of
the determination thereof.
TRANSPORTATION EQUIPMENT - containers, trucks, tractors, trailers,
chassis, cranes, portable ramps, lifting equipment, railroad rolling stock,
modular office units and mobile office trailers and includes all accessories and
attachments thereto.
U.S. PERSON - see Section 15.8.
Section 2. THE REVOLVING CREDIT LOANS.
Section 2.1. COMMITMENT TO MAKE REVOLVING CREDIT LOANS. Upon the terms
and subject to the conditions set forth in this Agreement, the Banks, in
accordance with their respective Commitment Percentages, hereby severally agree
to make Revolving Credit Loans to the Company from time to time on any Business
Day during the period from the date hereof to the date the Total Commitment
shall terminate (the "Term Conversion Date") as requested by the Company in an
aggregate amount outstanding at any time not to exceed the amount of the Total
Commitment. In no event shall the aggregate outstanding principal balance of
all Revolving Credit Loans exceed the Total Commitment in effect at any one
time. Each Borrowing shall be in integral multiples of $1,000,000. Subject to
the terms of this Agreement, the Company may borrow, prepay pursuant to Section
4.7 and reborrow under this Section 2.1.
Section 2.2. MAKING THE REVOLVING CREDIT LOANS. (a) (i) Each Borrowing
of a Revolving Credit Loan under this Section 2 shall be made on notice given to
the Agent from the Company not
<PAGE> 21
-15-
later than 12:00 noon (Boston time) (1) on the date of the proposed Borrowing
in the case of a proposed Borrowing comprised of Base Rate Advances, and (2) on
the third Business Day prior to the date of the proposed Borrowing in the case
of a proposed Borrowing of Eurodollar Advances. Each such notice of a
Borrowing (a "Notice of Borrowing") shall be by telephone, telex or cable, in
each case confirmed immediately in the manner specified in Section 21, by the
Company specifying therein (A) the requested date of such Borrowing, (B) the
requested Type of Revolving Credit Loan comprising such Borrowing, (C) in the
case of a Borrowing comprised of a Eurodollar Advance, the initial Interest
Period for such Revolving Credit Loan, and (D) the amount of such Borrowing.
Notwithstanding anything to the contrary herein, the obligation of the Banks to
make any and all Revolving Credit Loans hereunder is subject to the terms of
Section Section 4.4 and 4.5.
(ii) A Notice of Borrowing with respect to a Eurodollar Advance shall
be irrevocable and binding on the Company.
(b) If after giving a Notice of Borrowing the Company fails to
borrow any Eurodollar Advance on the date specified in such Notice of Borrowing,
the Company shall indemnify the Banks against any loss or expense incurred by
the Banks as a result of such failure including, without limitation, any loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by the Banks to fund or maintain a Revolving Credit Loan to
be made by the Banks, including without limitation compensation as provided for
in Section 4.6.
Section 2.3. PROMISSORY NOTES. (a) The Indebtedness of the Company
resulting from the Revolving Credit Loans made to the Company shall be evidenced
by separate restated promissory notes (the "Revolving Credit Notes") executed
and delivered by the Company to each of the Banks on the date of this Agreement
in substantially the form of Exhibit A attached hereto, representing the
obligation of the Company to pay the applicable Bank an amount equal to such
Bank's Commitment (as in effect on the date hereof), or, if less, the aggregate
unpaid principal amount of all Revolving Credit Loans made by such Bank to the
Company hereunder, plus interest accrued thereon.
(b) All Revolving Credit Loans made to the Company by the Banks shall
be recorded by the Banks on the Revolving Credit Notes and all payments made on
account of principal thereof shall be similarly recorded. Any failure of a Bank
or the Agent to record a transaction in a timely fashion shall not affect or
impair the validity of any Obligation.
Section 2.4. FUNDING OF REVOLVING CREDIT LOANS. Not later than 2:00
p.m. (Boston time) on the Borrowing Date for any Revolving Credit Loan specified
in the applicable Notice of Borrowing received by the Agent as set forth in
Section 2.2, each of the Banks will make available to the Agent, in immediately
available funds, such Bank's Commitment Percentage of the Revolving Credit Loans
to be loaned by it on such Borrowing Date at the Agent's head office.
<PAGE> 22
-16-
Upon receipt from the applicable Bank of the amount of its Revolving Credit
Loan, and subject to the provisions of Section 2.1 and upon fulfillment of the
applicable conditions of Section 7, the Agent shall make available to the
Company, in immediately available funds, the amount of funds so specified in
the applicable Notice of Borrowing at the Agent's head office.
Section 3. TERM LOANS.
Section 3.1. TERM CONVERSION DATE; TERM LOANS. (a) Subject to the terms
and conditions of this Agreement, and upon execution and delivery of the Term
Notes, all outstanding Revolving Credit Loans shall automatically Convert into a
Term Loan in an amount equal to the amount of the Revolving Credit Loans
outstanding (a "Term Loan").
(b) The Company shall give the Agent irrevocable notice (which must
be received by the Agent prior to 12:00 p.m. (Boston time) five Business Days
prior to the Term Conversion Date) requesting the Banks to make the Term Loan
on the Term Conversion Date. Such notice shall specify: (i) the amount of the
Revolving Credit Loans outstanding and the amount thereof being requested to be
converted into a Term Loan, (ii) the requested Type of Term Loan, and (iii) the
length of the initial Interest Period in the case of a Eurodollar Rate Term Loan
(the "Term Loan Notice"). Each such Term Loan Notice shall be by telephone,
telex or cable, in each case confirmed immediately in the manner provided in
Section 21, by the Company. Promptly upon receipt of the Term Loan Notice, the
Agent shall notify each of the Banks thereof.
(c) The obligation of the Company to pay the Term Loan and to pay
interest thereon and other sums which may be payable with respect thereto shall
be evidenced by separate promissory notes (the "Term Notes") substantially in
the form of EXHIBIT B attached hereto, appropriately completed in accordance
with this Section 3.1(c), payable to the order of each of the Banks. Each Term
Note shall be in the principal amount equal to the payee-Bank's Commitment
Percentage (as in effect on the Term Conversion Date) multiplied by the
principal amount of the Term Loan, and shall be dated the Term Conversion Date.
Provided that no Event of Default has occurred and is continuing, the Term Loan
shall be payable in twenty (20) consecutive, substantially equal quarterly
installments of principal, due and payable on the last Business Day of each
three-month period following the Term Conversion Date (each an "Installment
Payment Date", and collectively, "Installment Payment Dates") with a final
maturity on the Termination Date, PROVIDED, that the last such installment shall
in any case be in the amount necessary to repay in full the outstanding
principal amount of the Term Loan.
(d) On the Term Conversion Date, the Company shall pay to the Agent
any fees payable to the Agent for the account of the Banks pursuant to Section
5.2 hereunder.
(e) Notwithstanding any provision to the contrary contained herein,
if on the Term
<PAGE> 23
-17-
Conversion Date the outstanding Revolving Credit Loans are not Converted to the
Term Loan pursuant to the terms of Section 3 hereof, the Revolving Credit
Loans, plus all accrued and unpaid interest thereon shall be due and payable on
the Term Conversion Date.
Section 4. CONVERSION, INTEREST, PAYMENTS AND COSTS.
Section 4.1. CONVERSION OF LOANS. Subject to the terms and conditions
of this Agreement, upon notice given to the Agent not later than 12:00 noon
(Boston time) (a) in the case of Conversions into Base Rate Loans on the date of
the proposed Conversion, and (b) in the case of Conversions into Eurodollar
Loans on the third Business Day prior to the date of the proposed Conversion,
the Company may Convert, on any Business Day, Loans of one Type made to the
Company into Loans of another Type, PROVIDED, HOWEVER, that any Conversion of
Eurodollar Loans may be made only on the last day of the respective Interest
Period for such Loans. Each such notice of Conversion (a "Notice of
Conversion") shall, within the restrictions specified above, specify (i) the
date of such Conversion, (ii) the Loans to be Converted, and (iii) if such
Conversion is to Eurodollar Loans, the duration of the initial Interest Period
for such Loans. Each Notice of Conversion with respect to a Eurodollar Loan
shall be irrevocable and binding on the Company.
Section 4.2. INTEREST. The Company shall pay interest on the unpaid
principal amount of each Revolving Credit Loan from the date of such Revolving
Credit Loan until the Term Conversion Date, and on each Term Loan from the Term
Conversion Date until such principal amount is paid in full, at such interest
rates, and payable at such times as follows:
(a) on Base Rate Advances and Base Rate Term Loans, at the Adjusted
Base Rate, such interest to be payable quarterly in arrears on the last day of
each June, September, December and March and on the Term Conversion Date and on
the date the Base Rate Term Loans shall be paid in full; and
(b) on Eurodollar Advances and Eurodollar Rate Term Loans, at the
Eurodollar Rate, such interest to be payable on each Interest Payment Date,
provided that if the duration of any such Interest Period is longer than three
months, the Company shall pay the accrued interest on the last Business Day of
each successive three-month period within such Interest Period and on the
Interest Payment Date relating thereto.
Section 4.3. OVERDUE PRINCIPAL AND INTEREST. Any amount of principal of
any Loan which is not paid when due (whether at stated maturity, by acceleration
or otherwise) and, to the extent permitted by law, any amount of interest on any
Loan which is not paid when due, shall bear interest, from the date on which
such amount shall have become due and payable by
<PAGE> 24
-18-
the Company until payment in full (whether before or after judgment), payable
on demand, at a rate equal to 2% per annum above the higher of (i) the Base
Rate or (ii) the rate of interest which would otherwise be in effect.
Section 4.4. INTEREST PERIOD SELECTION; ALTERNATIVE INTEREST RATES. (a)
The Company shall have the option to select Interest Periods (i) in accordance
with Section 2.2 with respect to the duration of an initial Revolving Credit
Loan; and (ii) in accordance with Section 4.1 with respect to the duration of a
Converted Loan; and (iii) in accordance with Section 3.1 with respect to the
duration of initial Term Loans. As to subsequent Interest Periods applicable to
Eurodollar Loans, the Company may select the duration of the Interest Period by
giving notice to the Agent on the third Business Day prior to the first day of
such subsequent Interest Period. If no such notice is received with respect to
an outstanding Loan, the Company shall be deemed to have elected to Convert the
Loan into a Base Rate Loan.
(b) The Company's ability to select Interest Periods shall be
limited to the extent necessary to insure that on any Installment Payment Date,
an Interest Payment Date with respect to an amount at least equal to the amount
by which the principal installment then due exceeds the aggregate principal
amount of Base Rate Loans then outstanding shall coincide with such Installment
Payment Date.
(c) In the event the Agent shall reasonably and in good faith
determine that, by reason of circumstances affecting the applicable Eurodollar
interbank market, adequate and reasonable methods do not exist for ascertaining
the Euro Rate which would otherwise be applicable during any Interest Period,
the Agent shall forthwith give notice to the Company and the Banks of such
determination as soon as the Agent has made such determination (which shall be
conclusive and binding on the Company and the Banks). In such event: (i) any
Notice of Borrowing, Notice of Conversion or Term Loan Notice with respect to
any Eurodollar Loan shall be automatically converted into a request for a Base
Rate Loan; (ii) each Eurodollar Loan will automatically, on the last day of the
then current Interest Period thereof, Convert into a Base Rate Loan; and (iii)
the obligations of the Banks to make Eurodollar Loans shall be suspended until
the Agent determines that the circumstances giving rise to such suspension no
longer exist, whereupon the Agent shall promptly notify the Company and the
Banks.
Section 4.5. ILLEGALITY OR IMPOSSIBILITY. Notwithstanding any other
provision of this Agreement, (a) if the introduction of or any change in any law
or regulation (or change in the interpretation thereof) applicable to any Bank
or its Eurodollar Lending Office shall make it unlawful, or any central bank or
other governmental authority having jurisdiction over such Bank or its
Eurodollar Lending Office shall assert that it is unlawful, for such Bank or its
Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Loans to the Company or to continue to fund or maintain Eurodollar
Loans to the Company hereunder or (b) if the
<PAGE> 25
-19-
Majority Banks determine after making all reasonable efforts, that deposits of
the relevant amount and for the relevant Interest Period for Eurodollar Loans
to the Company are not available to such Banks in the relevant Eurodollar
interbank market, then, on notice thereof by such Banks to the Agent and the
Company, (i) the obligation of the Banks to the Company to make Eurodollar
Loans and to Convert Loans into Eurodollar Loans shall terminate, and (ii) if
it shall be unlawful for any Bank to continue to fund or maintain any
outstanding Eurodollar Loan, within five Business Days after such Bank gives
such notice of the unlawfulness of the funding or maintaining of such Loan, the
Company shall prepay in full all such Eurodollar Loans then outstanding,
together with interest accrued thereon, unless the Company elects to Convert
all its outstanding Eurodollar Loans to Loans of another Type.
Section 4.6. INDEMNIFICATION. If, due to payments or Conversions to
Types of Loans made by the Company pursuant to this Agreement or due to
acceleration of the maturity of the Loans pursuant to Section 11 or due to any
other reason, including without limitation the events specified in Section 4.5,
a Bank receives payments of principal of a Eurodollar Loan, or is subject to a
Conversion of a Eurodollar Rate Loan into another Type of Loan other than on the
last day of an Interest Period relating thereto, or the Company fails to borrow
or Convert (as the case may be) any amount after an irrevocable request
therefor, the Company shall, upon demand by such Bank, pay to such Bank any
amounts required to compensate such Bank for any losses, costs or expenses which
it may reasonably incur as a result of such payment, Conversion or failure to
borrow, as the case may be, including, without limitation, any loss, costs or
expenses incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Bank to fund or maintain such Loans. Such
compensation shall include, without limitation, an amount calculated as follows:
(i) First, such Bank shall determine the amount by which (A) the total
amount of interest which would have otherwise accrued hereunder (calculated at
the rate of interest otherwise in effect less the Applicable Margin) on each
installment of principal so paid or not borrowed, during the period beginning on
the date of such payment or failure to borrow and ending on the date such
installment would have been due (the "Reemployment Period"), exceeds (B) the
total amount of interest which would accrue, during the Reemployment Period, on
any readily marketable bond or other obligation of the United States of America
designated by such Bank in its sole discretion at or about the time of such
payment, such bond or other obligation of the United States of America to be in
an amount equal (as nearly as may be) to the amount of principal so paid or not
borrowed and to have a maturity comparable to the Reemployment Period, and the
interest to accrue thereon to take account of amortization of any discount from
par or accretion of premium above par at which the same is selling at the time
of designation. Each such amount is hereafter referred to as an "Installment
Amount".
<PAGE> 26
-20-
(ii) Second, each Installment Amount shall be treated as payable as of
the date on which the related principal installment would have been payable by
the Company had such principal installment not been prepaid or not borrowed.
(iii) Third, the amount to be paid on each such date shall be the
present value of the Installment Amount determined by discounting the amount
thereof from the date on which such Installment Amount is to be treated as
payable, at the same annual interest rate as that payable upon the bond or other
obligation of the United States of America designated as aforesaid by such Bank.
Section 4.7. PREPAYMENTS. (a) The Company may, on any Business Day,
upon written notice given by the Company to the Agent not less than (y) three
days prior to the proposed Prepayment Date in the case of a prepayment of
Eurodollar Loans, and (z) one day prior to the proposed Prepayment Date in the
case of a prepayment of Base Rate Loans, prepay the outstanding aggregate
principal amount of a Type of Loan extended to the Company, in whole at any
time, or ratably in part from time to time, with accrued interest to the date of
such prepayment on the principal amount prepaid; PROVIDED, HOWEVER, that: (i)
each partial prepayment shall be in an integral multiple of $5,000,000, and (ii)
if any such prepayment of Eurodollar Loans shall be made on any day other than
the last day of any Interest Period applicable thereto, the Company shall
indemnify the Banks as provided in Section 4.6.
(b) Each partial prepayment of principal of the Term Loans shall be
applied to an installment or installments of principal of the Term Loans in the
inverse order of their maturity.
(c) If, at any time, the aggregate principal amount of all Loans
then outstanding exceeds the Total Commitment then in effect, the Company shall
immediately prepay an aggregate principal amount of such Loans to the Agent, for
the account of the Banks in proportion to the then outstanding principal amount
of each Bank's Loans, in an amount at least equal to such excess, with accrued
interest to the date of prepayment on the principal amount prepaid.
Notwithstanding the foregoing, at no time shall the Company request a Revolving
Credit Loan or Revolving Credit Loans which, if consummated, would cause the
aggregate principal amount of all Revolving Credit Loans then outstanding (and
after giving effect to the refinancing of any Revolving Credit Loan with any
other Revolving Credit Loan) to exceed the Total Commitment then in effect.
Section 4.8. PAYMENTS AND COMPUTATIONS. (a) The Company shall make each
payment to be made by it hereunder not later than 12:00 noon (Boston time) on
the day when due in lawful money of the United States of America to the Agent,
at its address set forth in Section 21 in immediately available funds. Promptly
after receipt the Agent will cause to be distributed like funds relating to the
payment of principal or interest in respect of Revolving Credit Loans, the Term
Loans or fees (other than fees to be retained by the Agent for its own account
pursuant
<PAGE> 27
-21-
to the terms of this Agreement) ratably to the Banks, in accordance with their
applicable shares of such payments, for the account of the respective
Applicable Lending Offices, to be applied in accordance with the terms of this
Agreement. The Agent shall be entitled to debit any general account of the
Company with the Agent in the amount of any payment to be made by the Company
when due in order to effect timely payment thereof; PROVIDED THAT, the Agent
shall promptly notify the Company that its account has been so debited.
(b) Except for computations of interest on Base Rate Loans and any
fees payable hereunder (which shall be made on the basis of a year of 365 or 366
days, as the case may be), all computations hereunder shall be made by the Agent
on the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) elapsed. The outstanding amount of the
Loans as reflected on the Agent's records from time to time shall be presumed to
be correct and binding on the Company unless within ten (10) days after receipt
by the Company of any notice from the Agent of such outstanding amount, the
Company notifies the Agent to the contrary.
(c) Any change in the rate of interest payable hereunder resulting
from a change in the Base Rate shall become effective as of the opening of
business on the day on which such change in the Base Rate becomes effective.
The Agent will promptly notify the Company and the Banks of each change in the
Base Rate.
(d) Each determination of an interest rate by the Agent pursuant to
this Agreement shall be conclusive and binding on the Company and the Banks in
the absence of manifest error.
(e) Whenever any payment to be made hereunder shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day (except as provided in the definition of Interest
Period), and such extension of time shall in such case be included in the
computation of any payment of interest or fees, as the case may be.
Section 4.9. PAYMENTS TO BE FREE OF DEDUCTIONS. Except as provided in
subsection (b) of this Section 4.9, all payments by the Company hereunder shall
be made without set-off or counterclaim and free and clear of and without
deduction unless the Company is required by law to make such deductions. If any
such obligation is imposed upon the Company with respect to any amount payable
by it hereunder, it will pay to each affected Bank, on the date on which such
amount becomes due and payable hereunder, such additional amount as shall be
necessary to enable such Bank to receive the same net amount which it would
have received on such due date had no such obligation been imposed upon the
Company.
Section 4.10. TAXES. (a) Any and all payments by the Company
hereunder including principal, interest, the Agent's Fee, the Non-Use Fee and
any other payments hereunder shall
<PAGE> 28
-22-
be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, EXCLUDING, in the case of a Bank, taxes
imposed on its net income and franchise taxes imposed on it except in a
jurisdiction in which such Bank is not doing any business except making Loans
to the Company hereunder (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Company shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to a Bank (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
4.10) such Bank receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Company shall make such deductions and
(iii) the Company shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law. Each Bank
agrees that if, after payment by the Company of any such additional amount, any
amount identifiable as a part thereof is subsequently recovered or used as a
credit by such Bank, such Bank shall reimburse the Company to the extent of
such amount so recovered or used. A certificate of any officer of such Bank
setting forth the amount of such Taxes or recovery or use and the basis
therefor shall, in the absence of manifest error, be conclusive. The
provisions of the first sentence and clause (i) of the second sentence of this
Section 4.10 shall not apply to any Bank which fails to comply with the
provisions of Section 15.8 hereof.
(b) In addition, the Company agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies, EXCLUDING, in the case of a Bank, taxes imposed on it by the
jurisdiction under the laws of which such Bank is organized or any political
subdivision thereof and, in the case of a Bank, taxes imposed on its net income
and franchise taxes imposed on it except in a jurisdiction in which such Bank is
not doing any business except making Loans to the Company hereunder, which arise
from any payment made by it hereunder or from the execution, delivery or
registration of, or otherwise with respect to this Agreement (hereinafter
referred to as "Other Taxes").
(c) The Company will indemnify each Bank on demand for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable by the Company under
this Section 4.10) paid by such Bank or any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto whether or not
such Taxes or Other Taxes were correctly or legally asserted. Such Bank shall
promptly notify the Company of Taxes or Other Taxes or the filing of a tax
return which creates liability for Taxes or Other Taxes for which the Company
has an obligation of indemnification hereunder.
(d) Within 30 days after the date of any payment of Taxes by the
Company, the Company will furnish to each Bank, at its respective address
referred to in Section 21, the original or
<PAGE> 29
-23-
a certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of the
Company hereunder, the agreements and obligations of the Company contained in
this Section 4.10 shall survive the payment in full of principal and interest
hereunder.
Section 4.11. ADDITIONAL AMOUNTS PAYABLE ON ACCOUNT OF CREDIT
FACILITIES. If any Bank shall have determined that any present or future
applicable law, rule, regulation, guideline, directive or request (whether or
not having force of law) regarding capital requirements for banks or bank
holding companies, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by such Bank with any of the foregoing, imposes or increases a
requirement by such Bank to allocate capital resources to such Bank's commitment
to make, or to such Bank's maintenance of, loans hereunder, which has or would
have the effect of reducing the return on such Bank's capital to a level below
that which such Bank could have achieved (taking into consideration such Bank's
then existing policies with respect to capital adequacy and assuming full
utilization of such Bank's capital) but for such applicability, change,
interpretation, administration or compliance, by any amount deemed by such Bank
to be material, such Bank shall promptly after its determination of such
occurrence give notice to the Company of (i) the occurrence thereof and (ii) the
additional amount payable hereunder by the Company which in such Bank's
reasonable determination will compensate such Bank for such reduction and,
subject to the further terms of this paragraph, such amount shall be due and
payable by the Company to such Bank at the time of such notice. If at the time
of notice to the Company that amounts are due under this Section 4.11 the
Company and such Bank disagree as to the amounts payable, then the Company and
such Bank shall thereafter attempt to negotiate in good faith an adjustment to
the compensation payable hereunder which will adequately compensate such Bank
for such reduction. If the Company and such Bank are unable to agree to such
adjustment, then, unless the Total Commitment shall have been terminated and any
Loans on which adjustments are to be made under this Section 4.11 have been
prepaid in full, commencing on the thirty-first day following such notice (but
not earlier than the effective date of any such applicability, change,
interpretation, administration or compliance), the fees payable hereunder shall
increase by an amount which will, in such Bank's reasonable determination,
compensate such Bank for such reduction, such Bank's determination of such
amount to be conclusive and binding on the Company, absent manifest error. In
determining such amount, such Bank may use any reasonable methods of averaging,
allocating or attributing such reduction among its customers.
Section 4.12. ADDITIONAL COSTS AND EXPENSES; RESERVE REQUIREMENTS. (a)
Anything herein to the contrary notwithstanding, if any present or future
applicable law (which expression, as used herein, includes statutes, rules and
regulations thereunder and interpretations thereof by any
<PAGE> 30
-24-
competent court or by any governmental or other regulatory body or official
charged with the administration or the interpretation thereof and requests,
directives, instructions and notices at any time or from time to time hereafter
made upon or otherwise issued to any Bank by any central bank or other fiscal,
monetary or other authority, whether or not having the force of law) shall:
(i) impose or increase or render applicable any special deposit or
reserve or similar requirements (whether or not having the force of law and
which are not already reflected in any amounts payable by the Company hereunder)
against assets held by, or deposits in or for the account of, or loans by an
office of such Bank with respect to such Bank's commitment to make Loans bearing
interest based on the Eurodollar Rate or such Bank's Loans bearing interest
based on the Eurodollar Rate; or
(ii) impose on such Bank any other condition or requirement (not
already provided for in the calculation of any amounts payable by the Company
hereunder) with respect to such Bank's commitment to make Loans bearing interest
based on the Eurodollar Rate or such Bank's Loans bearing interest based on the
Eurodollar Rate or any class of loans of which any of the Loans bearing interest
based on the Eurodollar Rate forms a part,
and the result of any of the foregoing is:
(A) to increase the cost to such Bank attributable to the making,
funding or maintaining of Loans bearing interest based on the Eurodollar Rate;
or
(B) to reduce the amount of principal, interest or other amount
payable to such Bank hereunder; or
(C) to require such Bank to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or foregone
interest or other sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank from the Company hereunder;
then, and in each such case, the Company will, upon demand made by such Bank at
any time and from time to time as often as the occasion therefor may arise, pay
to such Bank such additional amounts as will be sufficient, in the good faith
opinion of such Bank, to compensate such Bank for such additional costs,
reduction, payment or foregone interest or other sum.
Section 4.13. FAILURE TO MAKE FUNDS AVAILABLE. (a) The failure or
refusal of any of the Banks to make available to the Agent that portion of a
Revolving Credit Loan to be made by such Bank shall not relieve any other Bank
from its obligations hereunder to fund such Revolving Credit Loan in the amount
of its Commitment Percentage of the Revolving Credit Loan requested, but no Bank
shall be responsible for the failure of any other Bank to make the Revolving
Credit Loan to be made by such other Bank.
<PAGE> 31
8
-25-
(b) The Agent may (unless notified to the contrary by a Bank prior
to a Borrowing Date) assume that each Bank has made available to the Agent on
such Borrowing Date such Bank's applicable portion of the Revolving Credit Loans
to be made on such Borrowing Date, and the Agent may (but it shall not be
required to), in reliance upon such assumption, make available to the Company a
corresponding amount. If such amount is made available to the Agent on a date
after such Borrowing Date, such Bank shall pay to the Agent on demand an amount
equal to the product of (i) the average computed for the period referred to in
clause (iii) below, of the weighted average interest rate paid by the Agent for
Federal funds acquired by the Agent during each day included in such period,
TIMES (ii) the amount equal to such Bank's applicable portion of such borrowing,
TIMES (iii) a fraction, the numerator of which is the number of days that
elapse from and including such Borrowing Date to the date on which such Bank's
applicable portion of such borrowing shall become immediately available to the
Agent, and the denominator of which is 360. A statement of the Agent submitted
to any Bank with respect to any amounts owing under this paragraph shall be
PRIMA FACIE evidence of the amount due and owing.
(c) The Commitments and the other obligations of the Banks under
this Agreement are several and are not joint or joint and several.
Section 4.14. PREPAYMENT OF EURODOLLAR LOANS. When any prepayment of
any Loan is made under this Agreement, the Company may specify that such
prepayment shall be applied to Eurodollar Loans or Base Rate Loans. Upon any
prepayments by the Company pursuant to this Section 4.14 of any Eurodollar Loans
on any date other than the last day of the Interest Period relating thereto
(whether such prepayment is optional or mandatory or as a consequence of
acceleration pursuant to Section 11 or otherwise), the Company shall, upon
demand made by any Bank at any time, pay to such Bank the additional amounts, if
any, determined in accordance with the provisions of Section 4.6, which shall be
in addition to all other amounts payable under this Agreement as a result of
such prepayment.
Section 4.15. INTEREST LIMITATION. Notwithstanding any other term of
this Agreement or the Notes or any other document referred to herein or therein,
the maximum amount of interest which may be charged to or collected from any
Person liable hereunder or under the Notes by any Bank, shall be absolutely
limited to, and shall in no event exceed, the maximum amount of interest (the
"Maximum Rate") which could lawfully be charged or collected under applicable
law (including, to the extent applicable, the provisions of Section 5197 of the
Revised Statutes of the United States of America, as amended, 12 U.S.C. Section
85, as amended), so that the maximum of all amounts constituting interest under
applicable law, howsoever computed, shall never exceed as to any Person liable
therefor the Maximum Rate, and any term of this Agreement or the Notes or any
other document referred to herein or therein which could be construed as
providing for interest in excess of such lawful maximum shall be and hereby is
<PAGE> 32
-26-
made expressly subject to and modified by the provisions of this paragraph. If,
in any month, the effective interest rate on any amounts owing pursuant to this
Agreement, the Notes or any of the other documents referred to herein or
therein, absent the Maximum Rate limitation contained herein, would have
exceeded the Maximum Rate, and if in the future months, such effective interest
rate would otherwise be less than the Maximum Rate, then the effective interest
rate for such month shall be increased to the Maximum Rate until such time as
the amount of interest paid hereunder equals the amount of interest which would
have been paid if the same had not been limited by the Maximum Rate. In the
event that, upon payment in full of the Company's Obligations pursuant to this
Agreement or the Notes, the total amount of interest paid or accrued under the
terms of this Agreement is less than the total amount of interest which would
have been paid or accrued had the interest not been limited hereby to the
Maximum Rate, then the Company shall, to the extent permitted by such applicable
federal, state or other law, pay to the Banks hereunder or under the Notes an
amount equal to the excess, if any, of (i) the lesser of (A) the amount of
interest which would have been charged if the Maximum Rate had, at all times,
been in effect with respect to the Obligations hereunder or under the Notes and
(B) the amount of interest which would have accrued had the effective interest
rate applicable not been limited hereunder by the Maximum Rate over (ii) the
amount of interest actually paid or accrued under this Agreement.
Section 4.16. EXTENSION PERIODS. Upon (a) the written request of the
Company to the Agent and (b) the written consent of all the Banks (such consent
to be given at the sole discretion of each Bank), the Commitment of each Bank
may be extended for successive two-year periods. Promptly after the Agent's
receipt of any such request, the Agent shall notify the Banks of the submission
thereof by the Company.
Section 5. FEES; REDUCTION OF TOTAL COMMITMENT.
Section 5.1. REDUCTION AND TERMINATION OF COMMITMENT BY THE COMPANY.
The Company may, at any time and from time to time, permanently reduce ratably
in part (in multiples of $5,000,000) or terminate in whole the unused portion of
the Total Commitment (as in effect at such time) on not less than three Business
Days' notice in writing or telegraphic or telephonic notice to the Agent,
confirmed in the manner provided in Section 21 in writing to the Agent. At the
time of reduction or termination of the Total Commitment, as the case may be,
the Company shall pay to the Agent, for the account of the Banks in proportion
to the then outstanding principal amount of each Bank's Loans, the amount, if
any, by which the aggregate unpaid principal amount of Revolving Credit Loans
exceeds the then reduced or terminated Total Commitment. Subject to the terms
of Section 4.6, any such termination or reduction may be effected by the Company
without penalty. No termination or reduction of the Commitment by the Company
shall be subject to reinstatement.
<PAGE> 33
-27-
Section 5.2. NON-USE FEE. (a) The Company agrees to pay to the Agent,
for the account of the Banks in accordance with their respective Commitment
Percentages, a non-use fee (the "Non-Use Fee") during the period from the
Effective Date until the Term Conversion Date at the rates per annum set forth
on SCHEDULE 1.1 attached hereto corresponding to the rating (or lack thereof) of
the Company's long-term senior unsecured debt by Moody's and S&P (the "Non-Use
Fee Rate") on the daily average amount during each calendar quarter or portion
thereof by which the Total Commitment exceeded the sum of the aggregate
principal balance of Revolving Credit Loans outstanding. Any change in the
Non-Use Fee payable hereunder resulting from a change in the rating of the
Company's long-term senior unsecured debt shall become effective as of the
earlier of (i) the second Business Day after the Agent receives notice of such
change pursuant to Section 9.13 hereunder or (ii) the seventh Business Day after
the effective date of such change. In the event that the provisions of this
Section 5.2(a) result in excess amounts of the Non-Use Fee being paid or
additional amounts of the Non-Use Fee being owed hereunder, any such excess
amounts will be credited against the Non-Use Fee payable on the next date on
which the Non-Use Fee would otherwise be payable hereunder or, at the Borrower's
option, will be refunded to the Borrower, and any additional amounts of the
Non-Use Fee owed will be payable on the next date on which the Non-Use Fee would
otherwise be payable hereunder. The Agent will promptly notify the Banks of
each change in the Non-Use Fee Rate.
(b) The Non-Use Fee shall be payable quarterly in arrears on the last
day of each March, June, September and December of each year for the immediately
preceding calendar quarter or portion thereof then ended, commencing on June 30,
1994, and on the Term Conversion Date.
Section 6. EFFECTIVE DATE; CONDITIONS TO EFFECTIVENESS. This
Agreement shall not become effective and the Prior Credit Agreement shall remain
in full force and effect, unless and until the date (the "Effective Date") that
each of the conditions precedent specified in this Section 6 is satisfied. The
execution of this Agreement by all of the parties hereto shall indicate that the
conditions precedent specified in this Section 6 have been satisfied.
Section 6.1. DOCUMENTATION. The Company shall have executed and
delivered to the Agent this Agreement and the Revolving Credit Notes. The Agent
shall have received the following documents in form and substance satisfactory
to the Agent: (i) a certificate of the Clerk or an Assistant Clerk of the
Company certifying (A) the votes of the Board of Directors of the Company
approving this Agreement and the Notes, (B) the by-laws (or the equivalent
thereof) of the Company, and (C) the names and true signatures of the officers
of the Company authorized to sign the Loan Documents to which the Company is a
party; (ii) the certified Charter documents of the Company and a legal existence
certificate with respect to the Company, in each case issued by the Secretary of
State of the State of Maine; and (iii) a favorable opinion of Ropes & Gray,
special counsel to the Company, in the form of EXHIBIT C-1
<PAGE> 34
-28-
attached hereto, a favorable opinion of Pierce, Atwood, Scribner, Allen, Smith &
Lancaster, special Maine counsel to the Company, in the form of EXHIBIT C-2
attached hereto, and a favorable opinion of the Vice President and General
Counsel of the Company, in the form of EXHIBIT C-3 attached hereto, each of such
opinions to be in form and substance satisfactory to the Agent and its counsel;
and (iv) all documents evidencing other necessary corporate action and
governmental approvals, if any, for the execution, delivery and performance by
the Company of the Loan Documents to which it is a party.
Section 6.2. REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in Section 8 shall have been correct in all respects as of
the Effective Date.
Section 6.3. PERFORMANCE; NO DEFAULT. The Company shall have performed
and complied with all terms and conditions herein required to be performed or
complied with by it prior to or at the Effective Date and, on the Effective Date
there shall exist no Default or Event of Default. The Banks shall have received
a closing certificate dated the Effective Date, in form and substance
satisfactory to the Banks, in which the Company certifies that the conditions
precedent set forth in Section Section 6.2 and 6.3 hereof were satisfied at and
as of the Effective Date.
Section 6.4. CORPORATE ACTION. All corporate action required by law
which is necessary for the valid execution, delivery and performance by the
Company and the Parent of each of the Loan Documents to which such Person is a
party and for the consummation by the Company of the transactions contemplated
herein and therein shall have been duly and effectively taken.
Section 6.5. PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the transactions contemplated by this Agreement and all documents incident
thereto shall be satisfactory in substance and in form to the Agent and to its
special counsel, and the Agent shall have received all information and such
counterpart originals or certified or other copies of such documents and such
other approvals, opinions or documents as it may reasonably request.
Section 6.6. OTHER CONSENTS AND APPROVALS. The Agent shall have
received waivers or consents from any source reasonably requested by it, in form
satisfactory to the Agent and its special counsel, in connection with the
transactions contemplated by this Agreement.
Section 6.7. GUARANTY. The Parent shall have duly executed and
delivered the Guaranty to the Agent and the Guaranty shall constitute the
legally binding obligation of Parent, enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors' rights generally, and by
general principles of equity. The Agent shall have received the following
documents in form and substance satisfactory to the Agent: (i) a certificate of
the Secretary or an Assistant Secretary of Parent certifying (A) the votes of
the Executive Committee of the Board of Directors of
<PAGE> 35
-29-
Parent approving the Guaranty, (B) the by-laws (or the equivalent thereof) of
the Parent, and (C) the names and true signatures of the officers of Parent
authorized to sign the Guaranty; (ii) the certified Charter documents of Parent
and legal existence certificate with respect to Parent, in each case issued by
the Secretary of State of the State of Delaware; (iii) the certificate of an
officer of Parent with respect to the Guaranty; and (iv) all documents
evidencing other necessary corporate action and governmental approvals, if any,
for the execution, delivery and performance by Parent of the Guaranty.
Section 6.8. FEE LETTER AGREEMENT. The Company shall have duly executed
and delivered the Fee Letter Agreement.
Section 6.9. OTHER FEES; COMPETITIVE BID ADVANCES. (a) The Agent shall
have received from the Company, for the account of the Banks in accordance with
their respective Commitment Percentages, (i) the Facility Fee (as defined in the
Prior Credit Agreement) payable to the Banks pursuant to Section 6.1 of the
Prior Credit Agreement through the date immediately preceding the Effective Date
and (ii) the Commitment Fee (as defined in the Prior Credit Agreement) payable
to the Banks pursuant to Section 6.4 of the Prior Credit Agreement through the
date immediately preceding the Effective Date.
(b) The Borrower shall have repaid in full all Competitive Bid Advances
(as defined in the Prior Credit Agreement) to the applicable Banks and as at the
Effective Date no Competitive Bid Advances (as defined in the Prior Credit
Agreement) shall be outstanding.
Section 7. CONDITIONS OF BORROWINGS. The obligation of the Banks
to make any Revolving Credit Loan to the Company is subject to the following
conditions precedent:
Section 7.1. REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in Section 8 and otherwise made by the Company in
connection with the transactions contemplated by this Agreement subsequent to
the Effective Date shall have been correct in all material respects as of the
date on which made and shall also be correct in all material respects at and as
of the date of the Revolving Credit Loan with the same effect as if made at and
as of such time, except to the extent that the facts upon which such
representations and warranties are based may be changed by the transactions
permitted or contemplated hereby and except to the extent that such
representations and warranties relate expressly to an earlier date.
Section 7.2. PERFORMANCE; NO DEFAULT. The Company shall have performed
and complied with all terms and conditions herein required to be performed or
complied with by it prior to or at the time of the Borrowing of such Revolving
Credit Loan and at the time of the Borrowing of such Revolving Credit Loan there
shall exist no Default or Event of Default, and no Default or Event of Default
shall be created upon consummation of the Borrowing of such Revolving
<PAGE> 36
-30-
Credit Loan.
Section 7.3. NOTICE OF BORROWING. (a) The Agent shall have received a
Notice of Borrowing from the Company as required by Section 2.2 hereof.
(b) Each giving of a Notice of Borrowing by the Company shall be
deemed to be a representation and warranty by the Company on the date of such
notice or acceptance, as the case may be, that the statements in Section
Section 7.1 and 7.2 hereof are accurate and correct.
Section 8. REPRESENTATIONS AND WARRANTIES. The Company represents
and warrants to the Banks that:
Section 8.1. CORPORATE EXISTENCE AND GOOD STANDING. The Company and each
Subsidiary, (i) are corporations duly organized, validly existing and in good
standing under the laws of the respective jurisdictions in which they are
incorporated, (ii) have corporate power to own their property and conduct their
respective businesses as now conducted and as presently contemplated, and (iii)
are duly qualified to do business and in good standing as foreign corporations
in each jurisdiction where the conduct of their business or the nature of their
assets require such qualification and as to which failure so to be qualified
would have a materially adverse effect upon the business or operations of the
Company and its Subsidiaries taken as a whole.
Section 8.2. CORPORATE POWER; CONSENTS; ABSENCE OF CONFLICT WITH OTHER
AGREEMENTS. The execution, delivery and performance of this Agreement and the
Notes by the Company and the borrowings and transactions contemplated hereby:
(a) are within the corporate powers of the Company, have been duly
authorized by all necessary corporate action, and do not and will not contravene
any provision of law applicable to it or any contractual restriction binding on
or affecting it;
(b) do not require any approval or consent of, or filing with, any
governmental agency or authority bearing on the validity of such instruments and
borrowings which is required by law or the regulation of any such agency or
authority except for those which have been duly obtained or made and are in full
force and effect, are not in contravention of the terms of the Company's charter
documents or by-laws, or any amendment thereof, and are not in contravention of
the terms of any Subsidiary's charter or by-laws, or any amendment thereof;
(c) will not conflict with or result in any breach or contravention
of or the creation of any lien (other than liens permitted under Section 10.2)
under any indenture, agreement, lease, instrument or undertaking to which the
Company or any Subsidiary is a party or by which it is bound and which is
material to the Company and its
<PAGE> 37
-31-
Subsidiaries taken as a whole; and
(d) are and will be valid and legally binding obligations of the
Company and are and will be enforceable in accordance with their respective
terms, except as limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting generally the enforcement of creditors'
rights.
Section 8.3. TITLE TO PROPERTIES. The Company and each Subsidiary has
good and valid title to all properties, assets and rights of every name and
nature now purported to be owned by it which are material to the business of the
Company and its Subsidiaries, on a consolidated basis, free from all defects,
liens, charges and encumbrances whatsoever other than insubstantial defects in
title which do not materially detract from the value or impair the use of the
affected properties and liens, charges or encumbrances permitted under Section
10.2. The Company and its Subsidiaries possess all patents, patent
applications, patent licenses, copyrights, trademarks, service marks and trade
names and rights with respect to the foregoing necessary for the conduct of the
businesses of the Company and its Subsidiaries substantially as now conducted
without any known conflict with the rights of others except conflicts which are
not in the aggregate material to the business of the Company and its
Subsidiaries, on a consolidated basis.
Section 8.4. FINANCIAL STATEMENTS. The Company has furnished to the
Banks the following: (a) (i) consolidated balance sheet as at the Balance Sheet
Date and related consolidated statements of operations, stockholders' equity and
cash flows of Parent and its Subsidiaries for the fiscal year then ended, all
certified by Parent's Independent Accountants, (ii) consolidating balance sheet
as at the Balance Sheet Date and related consolidating statement of operations
of Parent and its Subsidiaries, (iii) consolidated and consolidating balance
sheets as at the Balance Sheet Date of the Company and its Subsidiaries, and
related statement of operations, and (b) as at December 31, 1993, or for the
fiscal period then ended (i) a consolidated balance sheet and related
consolidated statements of operations, stockholders' equity and cash flows of
Parent and its Subsidiaries, (ii) a consolidating balance sheet and a
consolidating related statement of operations of Parent and its Subsidiaries for
the portion of the fiscal year then ended and (iii) consolidated and
consolidating balance sheets and statement of operations of the Company and its
Subsidiaries. The balance sheets, statements of operations, stockholders'
equity and cash flows described above (i) have been prepared in conformity with
GAAP applied on a consistent basis throughout the periods specified except where
such principles are inconsistent with the applicable provisions of regulatory
authorities having jurisdiction in the premises (and such exception has been
noted to the Banks and explained in reasonable detail in the applicable
statements), and (ii) present fairly the financial position of Parent and its
Subsidiaries and the Company and its Subsidiaries as at the dates thereof
subject, with respect to unaudited statements, to year-end audit adjustments.
Section 8.5. [INTENTIONALLY OMITTED.]
<PAGE> 38
-32-
Section 8.6 HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the
Company nor any Subsidiary is a "registered holding company" or a "subsidiary
company" of a "registered holding company", or any "affiliate" of a "registered
holding company" or of a "subsidiary company" of a "registered holding company",
as such terms are defined in the Public Utility Holding Company Act of 1935, as
amended. Neither the Company nor any Subsidiary is a "registered investment
company" or an "affiliated company" or a "principal underwriter" of a
"registered investment company", as such terms are defined in the Investment
Company Act of 1940, as amended.
Section 8.7. LITIGATION. There is no action, suit, investigation or
proceeding pending, or to the knowledge of its officers, threatened against the
Company or any Subsidiary before any court or administrative agency which, by
itself or taken together with other such litigation, involves an amount not
covered by insurance material to the Company and its Subsidiaries, on a
consolidated basis, nor is any substantial basis for any such litigation known
to exist.
Section 8.8. NO MATERIALLY ADVERSE CONTRACTS. Neither the Company nor
any of its Subsidiaries is subject to any indenture, agreement or charter,
corporate or other legal restriction, or any judgment, decree, order, rule or
regulation which could have a materially adverse effect on the business, assets
or financial condition of the Company and its Subsidiaries, on a consolidated
basis. Neither the Company nor any of its Subsidiaries is a party to any
contract or agreement which has or is expected to have any materially adverse
effect on the business of the Company and its Subsidiaries, on a consolidated
basis, except as reflected in adequate reserves.
Section 8.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS. Neither the
Company nor any of its Subsidiaries is in violation of any provision of its
charter documents or by-laws or any agreement or instrument by which it or any
of its properties may be bound or any decree, order, judgment, or, to the
knowledge of the Company's officers, any statute, license, rule or regulation,
in each case in a manner which could (i) result in the imposition in each case
of substantial penalties material to the Company and its Subsidiaries or (ii)
materially and adversely affect the financial condition, properties or business
of the Company and its Subsidiaries, on a consolidated basis.
Section 8.10. TAXES. All federal, state and other tax returns of the
Company and the Subsidiaries required by law to be filed have been filed, and
all federal, state and other taxes, assessments and other governmental charges
upon the Company and the Subsidiaries or their properties which are due and
payable have been paid. The Company has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods for which such returns have been filed, to the extent such provisions
are required by GAAP.
<PAGE> 39
-33-
Section 8.11. NO DEFAULT. No Default or Event of Default exists at the
delivery of this Agreement.
Section 8.12. USE OF PROCEEDS. The proceeds of the Revolving Credit
Loans shall be used for general corporate purposes.
Section 8.13. PENSION PLAN. The funding of any Guaranteed Pension Plan
of the Company and its Subsidiaries, or any of them, complies with the minimum
funding standards of Section 412 of the Internal Revenue Code of 1986, as
amended.
Section 8.14. SUBSIDIARIES. Schedule 8.14 attached hereto correctly
identifies all Subsidiaries. All of the issued and outstanding shares of the
capital stock of each Subsidiary are duly issued and outstanding, fully paid and
non- assessable and except for directors' qualifying shares and shares issued
solely for the purpose of satisfying local requirements concerning the minimum
number of shareholders, are owned by the Company or a Subsidiary free and clear
of any mortgage, pledge, lien, encumbrance, charge or restriction on transfer.
Section 8.15. GUARANTY. The Guaranty is in full force and effect.
Section 8.16. DEBT RATING. On the Effective Date the Company's
long-term senior unsecured debt is rated Baa2 by Moody's and BBB by S&P.
Section 9. AFFIRMATIVE COVENANTS. The Company covenants and agrees
that, so long as any portion of the Total Commitment remains outstanding or
until such date as the Loans and all other Obligations have been paid and
satisfied in full, whichever shall later occur, it will and each of its
Subsidiaries will:
Section 9.1. PUNCTUAL PAYMENT. Duly and punctually pay or cause to be
paid principal and interest and all other sums due under this Agreement in
accordance with the terms hereof.
Section 9.2. FINANCIAL STATEMENTS. Furnish to the Banks:
(a) as soon as practicable and in any event within 90 days after the
end of each of the first three quarterly periods of each fiscal year of Parent
and the Company, the financial statements set forth in Section 8.4(b) as at the
end of each of such quarterly periods or for the respective fiscal periods then
ended and for the period from the beginning of the current fiscal year to the
end of such period, setting forth in comparative form the figures for the
corresponding periods of the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP, subject to changes resulting from audit and
year- end adjustments, by the principal financial officer of Parent or the
Company, as the case may be, who shall also provide a certificate in the form of
EXHIBIT D hereto as to the computations evidencing compliance by Parent or the
Company, as the case may be, with Section 10.1
<PAGE> 40
-34-
and Sections 10.3 through 10.5 (inclusive) and Sections 10.8 through 10.10
(inclusive) of this Agreement (the "Compliance Certificate");
(b) as soon as practicable and in any event within 120 days after
the end of each fiscal year, the financial statements set forth in Section
8.4(a) as at the end of such year and for the fiscal year then ended, setting
forth in comparative form the figures for the previous fiscal year, all in
reasonable detail, prepared in accordance with GAAP applied on a consistent
basis and, with respect to Parent, such consolidated balance sheet being
accompanied by a report and opinion of the Independent Accountant, which report
and opinion shall have been prepared in accordance with generally accepted
auditing standards, and all such financial statements shall be certified by the
principal financial officer of the Company;
(c) promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent by Parent, the Company or
any Subsidiary to stockholders, and of all regular and periodic reports filed by
Parent, the Company or any Subsidiary with any securities exchange or with the
Securities and Exchange Commission or any governmental authority succeeding to
any or all of the functions of said Commission; and
(d) from time to time any such information regarding the financial
and other affairs of Parent, the Company, or any Subsidiary as may reasonably be
requested by the Banks.
At the time of each delivery of financial statements pursuant to
paragraph (b) of this Section 9.2, the Company shall furnish (A) a statement of
Independent Accountant that such accountant has caused the provisions of this
Agreement to be reviewed, and that such accountant has no knowledge of the
existence of any Default or Event of Default, or if such accountant has such
knowledge, specifying the nature and period of existence thereof and reasons
therefor, and (B) a Compliance Certificate evidencing compliance with the
covenants described therein as at the end of the fiscal year covered by such
financial statements.
Section 9.3. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. If the
Company or any of its Subsidiaries shall at any other time obtain knowledge of
the existence of any Default or Event of Default, the Company shall forthwith
deliver to the Agent (for transmittal to the Banks) a certificate specifying the
nature and period of existence thereof and what action the Company proposes to
take with respect thereto.
Section 9.4. CONDUCT OF BUSINESS. Cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence, corporate
rights and franchises; effect and maintain its foreign qualifications,
licensing, domestication or authorization except as terminated by its Board of
Directors in the exercise of its reasonable judgment; use its best efforts to
comply with all applicable laws; and shall not become obligated under any
contract or binding arrangement which, at the time it was entered into would
materially adversely impair the financial condition of the Company and the
Subsidiaries, on a consolidated basis.
<PAGE> 41
-35-
Section 9.5. TAXES. Duly pay and discharge, or cause to be paid and
discharged, before the same shall become in arrears, all taxes, assessments and
other governmental charges imposed upon it and its properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies which if unpaid might by
law become a lien or charge upon any of its property, except such of those items
as are being in good faith appropriately contested by it if in such case the
Company shall have set aside on its books reserves deemed by it to be adequate
with respect to such tax, assessment, or other charge.
Section 9.6. MAINTENANCE OF PROPERTIES. Maintain and keep the
properties used or deemed by it to be useful in its business in good repair,
working order and condition, and make or cause to be made all necessary and
proper repairs thereto and replacements thereof.
Section 9.7. MAINTENANCE OF INSURANCE. Maintain with financially sound
and reputable insurers, insurance with respect to properties and business of the
Company and its Subsidiaries against such casualties and contingencies and in
such types and amounts as shall be in accordance with sound business practices
for companies in similar businesses similarly situated.
Section 9.8. RECORDS AND ACCOUNTS. Keep true records and books of
account in which full, true and correct entries will be made in accordance with
GAAP and with the requirements of regulatory authorities having jurisdiction in
the premises and maintain adequate accounts and reserves for all taxes
(including income taxes), all depreciation, depletion, obsolescence and
amortization of its properties, all other contingencies, and all other proper
reserves.
Section 9.9. INSPECTION. (a) Permit any officer designated by any Bank,
at such Bank's expense, to visit and inspect any of its properties and to
examine its books of account and discuss the affairs, finances and accounts of
the Company or any Subsidiary with its officers, all at such reasonable times,
in a reasonable manner and as often as such Bank may reasonably request.
(b) All confidential information and documents concerning Parent,
the Company, or any Subsidiary supplied by the Company to such Bank pursuant to
the terms of this Agreement shall be held in confidence by such Bank and such
Bank shall not disclose such information and documents, except the Company
hereby authorizes such Bank to disclose any information obtained pursuant to
this Agreement (i) to any bank regulatory authority, (ii) to any independent
auditor or counsel or participant or potential assignee or potential participant
of such Bank provided that such independent auditor or counsel or participant or
potential assignee or potential participant enters into a confidentiality
agreement with the Company substantially similar to such Bank's agreement in
this section, and (iii) to all other appropriate governmental regulatory
authorities to the extent required of such Bank by law or subpoena, but only to
the extent
<PAGE> 42
-36-
permitted by applicable laws and regulations, including those applying to
classified material. Upon receipt of a notice of any requirement to disclose
any information to such governmental authorities, such Bank will promptly
notify, unless prohibited by applicable law and regulations, the Company of such
notice, and unless otherwise required by law, will not disclose such
information until the Company has been afforded an opportunity to contest the
requirement of such disclosure.
Section 9.10. NOTICE OF LITIGATION. Promptly notify the Agent of the
commencement of any litigation against the Company or any Subsidiary which might
have a material adverse effect on the Company and its Subsidiaries on a
consolidated basis.
Section 9.11. PENSION PLANS. (a) Fund and cause each Subsidiary to
fund any Guaranteed Pension Plan, if maintained by the Company or any
Subsidiary, as required by the provisions of Section 302 of ERISA and Section
412 of the Internal Revenue Code of 1986, as amended (the "Code"), or, if
maintained by a third party, in the amounts and at the times required by
applicable law. The Company and each Subsidiary will deliver to the Agent,
copies of any request for waiver from the funding standards or extension of the
amortization periods required by Section Section 303 and 304 of ERISA or Section
412 of the Internal Revenue Code of 1986, as amended, promptly following the
date on which the request is submitted to the Internal Revenue Service.
(b) Upon request made by any Bank, send to such Bank copies of all
Forms 5500, Forms 5500-R and/or Forms 5500-C relating to a Guaranteed Pension
Plan together with all attachments thereto, including any actuarial statement
required to be made under Section 103(d) of ERISA, promptly following the date
on which any such form is filed with the Internal Revenue Service, except, in
the case of any multi-employer plans, the Company will cause such Forms and all
such attachments thereto to be sent to such Bank within a reasonable time after
receipt thereof by the Company and after such Forms are filed with the Internal
Revenue Service.
(c) The Company or the applicable Subsidiary will furnish to the
Agent forthwith upon filing or receipt, as the case may be, a copy of (i) any
notice by the Company or any Subsidiary of a Guaranteed Pension Plan termination
sent to the Pension Benefit Guaranty Corporation under Section 4041(a) of ERISA,
or (ii) the Company report, or demand sent or received by the Company or any
Subsidiary under Section Section 4041, 4042, 4043, 4063, 4065, 4066, or 4068 of
ERISA.
(d) The Company shall cause any Guaranteed Pension Plan maintained
by the Company or any Subsidiary to pay all benefits guaranteed by the Pension
Benefit Guaranty Corporation when due, except where the obligation to pay such
benefits is being contested in good faith by the Company or any of its
Subsidiaries.
<PAGE> 43
-37-
Section 9.12. DEPRECIATION SCHEDULE. For purposes of calculation of
all of the financial covenants contained in this Agreement, the Company will,
and will cause Parent and each of the Company's Subsidiaries to, (a) calculate
depreciation on such Person's Transportation Equipment and all other depreciable
assets in accordance with the depreciation schedules for such assets set forth
in SCHEDULE 1.2 attached hereto, and (b) with respect to depreciable assets
acquired from and after the Effective Date, calculate depreciation for such
assets in accordance with depreciation schedules similar to those set forth in
said SCHEDULE 1.2 for similar assets.
Section 9.13. DEBT RATING. Notify the Agent, by telephone, telex or
cable, in each case confirmed immediately in the manner specified in Section 21,
of any change in the rating of the Company's long-term senior unsecured debt by
S&P or Moody's within five Business Days of such change.
Section 10. CERTAIN NEGATIVE COVENANTS. The Company covenants and
agrees that, so long as any portion of the Total Commitment remains outstanding
or until such date as the Loans and all other Obligations have been paid and
satisfied in full, whichever shall later occur, the following covenants will be
complied with:
Section 10.1. CONSOLIDATED CASH FLOW COVERAGE. The Company will not
permit the ratio of (a) Consolidated Cash Flow of the Company and its
Subsidiaries for the four fiscal quarters ending on the last day of any fiscal
quarter to (b) the Consolidated Cash Requirements of the Company and its
Subsidiaries for the four fiscal quarters ending on the last day of such fiscal
quarter to be less than 1.25:1.
Section 10.2. LIENS. The Company will not create or permit to exist
any mortgage, pledge, deed of trust, financing lease or security interest
("Liens") on any of its property, whether owned at the date hereof or hereafter
acquired other than:
(a) Liens on Transportation Equipment securing Acquired Equipment
Indebtedness;
(b) Liens on Transportation Equipment securing Purchase Money
Equipment Indebtedness, but only on the Transportation Equipment in respect to
the purchase of which such Purchase Money Equipment Indebtedness shall have been
incurred;
(c) Liens on real property;
(d) Liens incurred or deposits made in the ordinary course of
business (i) in connection with workman's compensation, unemployment insurance,
social security and other like laws, or (ii) to secure the performance of
letters of credit, bids, tenders, sales contracts, leases, statutory
obligations, surety appeal and performance bonds and other similar obligations
<PAGE> 44
-38-
not incurred in connection with Indebtedness or (iii) in connection with the
opening of commercial letters of credit naming the Company as account party;
(e) Liens on Transportation Equipment securing Lease Obligations;
PROVIDED, HOWEVER, that no such Lease Obligations shall arise out of the sale
and leaseback of Transportation Equipment unless the sale and leaseback in
question is entered into prior to, at the time of or within 180 days of the
acquisition of the Transportation Equipment being sold and leased back; and
PROVIDED, FURTHER, that the leasing of Transportation Equipment which has been
remanufactured so that it is the substantial equivalent of new equipment shall
be considered the leasing of new equipment and not of used equipment which was
remanufactured and subsequently sold and leased back; and
(f) Liens to secure Indebtedness and other obligations (excluding
Subordinated Indebtedness) which are not referred to as permitted Liens in
sub-paragraphs (a), (b), (c), (d) or (e) above; provided, however, that the
aggregate principal amount of Indebtedness and other obligations secured thereby
at any one time outstanding shall not exceed 3% of the Consolidated Net Worth of
the Company;
unless prior to or simultaneously with the inception of any such Lien which is
not referred to as a permitted Lien in sub-paragraphs (a), (b), (c), (d), (e) or
(f) above, the Company shall have executed and delivered to a Security Trustee
(as hereinafter defined), a security agreement or security agreements and such
other documents as the Security Trustee may reasonably request, each in form and
substance reasonably satisfactory to the Agent, granting to the Security Trustee
a security interest in such property subject to such Lien, such security
interest to be for the equal and ratable benefit of the Banks and such other
holder or holders of Indebtedness with which the Company has agreed to permit
such holders to share in such Lien. Such security agreement or security
agreements may provide, at the option of the Company, that the security interest
to the Security Trustee thereby shall terminate upon the termination of all
other Liens for the benefit of such other holder or holders of Indebtedness.
The Security Trustee shall be such Person as may be selected by the Company, or
any holder of Indebtedness to whom the Company has specifically granted the
right to select such Security Trustee and who shall be entitled to act without
qualification or who, if required, shall qualify to act as such under the Trust
Indenture Act of 1939, as amended.
Notwithstanding any provision contained herein to the contrary, no term
of this Agreement shall prevent the Company from incurring any lien on the
capital stock of Parent which has been acquired by the Company.
Section 10.3. MAXIMUM LEVERAGE. (a) The Company will not permit the
ratio of (i) Consolidated Liabilities of the Parent and its Subsidiaries to (ii)
Consolidated Net Worth of the
<PAGE> 45
-39-
Parent and its Subsidiaries to exceed (A) 4.00 to 1 at any time prior to the
Term Conversion Date, and (B) 3.50 to 1 at any time on or after the Term
Conversion Date.
(b) The Company will not permit the ratio of (i) Liabilities of the
Company to (ii) Net Worth of the Company to exceed (A) 4.00 to 1 at any time
prior to the Term Conversion Date and (B) 3.50 to 1 at any time on or after the
Term Conversion Date.
Section 10.4. MAXIMUM EQUIPMENT INDEBTEDNESS. The Company will not
permit its Equipment Indebtedness at the end of any fiscal quarter of any fiscal
year of the Company to exceed 90% of the sum of (a) the Net Book Value of its
Transportation Equipment at the end of such fiscal quarter plus (b) the amount
of its cash and cash equivalents at the end of such fiscal quarter. The Company
will not permit its Equipment Indebtedness (less Secured Equipment Indebtedness)
at the end of any fiscal quarter of any fiscal year of the Company to exceed 90%
of the sum of (a) the Net Book Value of its Transportation Equipment (less the
Net Book Value of Transportation Equipment which secures or which is subject to
leases which secure Secured Equipment Indebtedness) at the end of such fiscal
quarter PLUS (b) the amount of its cash and cash equivalents at the end of such
fiscal quarter.
Section 10.5. MAXIMUM SECURED EQUIPMENT INDEBTEDNESS. The Company will
not permit its Secured Equipment Indebtedness (including Lease Obligations) to
exceed 15% of its Net Worth as determined at the end of any fiscal quarter of
any fiscal year of the Company.
Section 10.6. LIENS ON PARENT. The Parent will not create or suffer to
exist any mortgage, pledge, deed of trust or security interest on the capital
stock (or any indebtedness convertible into capital stock) of any of its
Subsidiaries.
Section 10.7. INVESTMENTS IN PARENT. The Company shall not acquire any
of the capital stock of Parent except for the purpose of the immediate
retirement of any such capital stock.
Section 10.8. NET EARNINGS AVAILABLE FOR INTEREST CHARGES. As at the
end of each fiscal quarter in each fiscal year of the Company, the Company will
not permit its Net Earnings Available for Interest Charges for the period
consisting of any four of the five most recent consecutive fiscal quarters of
the Company ending with the fiscal quarter ending on such date to be less than
120% of the sum of (i) Interest Charges PLUS (ii) interest capitalized in
accordance with Financial Accounting Standard No. 34 of the Financial Accounting
Standards Board as in effect on the Balance Sheet Date (but excluding therefrom
any amortization of such capitalized interest during such period), in each case
of the Company for the period consisting of the four fiscal quarters ending with
the fiscal quarter ending on such date.
Section 10.9. RESTRICTED PAYMENTS. Neither the Company nor the Parent
will, nor will either
<PAGE> 46
-40-
permit any of its Subsidiaries to, make any Restricted Payment unless
immediately after such Restricted Payment the sum of Restricted Payments made by
the Parent for the period subsequent to September 30, 1993 would not exceed
an amount equal to the sum of (a) $174,000,000 PLUS (b) Contribution of Capital
to the Parent subsequent to September 30, 1993, PLUS or MINUS as the case may
be, (c) the cumulative Consolidated Net Income of the Parent and its
Subsidiaries for the period subsequent to September 30, 1993.
Section 10.10. MINIMUM ASSET COMPOSITION. The Company will not permit
less than 90% of all assets of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP, to be (i) engaged in or related to
the business of leasing Transportation Equipment or (ii) cash or cash
equivalents.
Section 11. EVENTS OF DEFAULT; ACCELERATION. If any of the following
events EVENTS OF DEFAULT or, if notice or lapse of time or notice and lapse of
time is required, then, prior to such notice and/or lapse of time, DEFAULTS)
shall occur:
(a) if the Company shall default in any payment of any principal
amount outstanding hereunder when due and payable, whether at maturity or at any
date fixed for payment or prepayment or by declaration or otherwise; or
(b) if the Company shall fail to pay any interest with respect to
principal outstanding hereunder or any fee pursuant to the terms of Section 5 or
the Fee Letter Agreement within five (5) Business Days after when due and
payable, whether at maturity or at any date fixed for payment or prepayment or
by declaration or otherwise other than due to a failure of the Agent to charge
an account of the Company having a sufficient credit balance; or
(c) if there shall be a default in the performance of or compliance
with any term contained in Section 10; or
(d) if the Company shall default in the performance of or compliance
with any term contained herein other than those referred to above in this
Section 11, and such default shall not have been remedied within 30 Business
Days after the occurrence thereof; or
(e) if any representation or warranty made in writing by or on
behalf of the Company herein or in connection with any of the transactions
contemplated hereby shall prove to have been false or incorrect in any material
respect on the date as of which made; or
(f) if the Company or any Subsidiary or Parent shall default (as
principal or guarantor or other surety) in the payment of any principal or
premium, if any, or interest or fees on any other Indebtedness or Subordinated
<PAGE> 47
-41-
Indebtedness to any Bank, or any other Indebtedness or Subordinated Indebtedness
in respect of borrowed money in an aggregate principal amount of $1,000,000 or
more (which default is in payment thereof at its stated maturity or shall
result in such Indebtedness or Subordinated Indebtedness becoming or being
declared due prior to the scheduled maturity thereof) or if the Company or any
Subsidiary shall fail to comply (and such failure to comply has not been cured
or waived) with any of the terms of any evidence of such Indebtedness or
Subordinated Indebtedness or any mortgage, pledge, assignment, indenture or
other agreement relating thereto, and as a consequence of any of the foregoing
the holder of such Indebtedness or Subordinated Indebtedness shall have the
right to declare all amounts payable with respect thereto to be due and payable
by reason of such default prior to the scheduled maturity thereof or demand
payment of all amounts payable in respect of any Indebtedness payable on demand;
or
(g) if the Company or any Subsidiary makes an assignment for the
benefit of creditors, or petitions or applies for the appointment of a
liquidator or receiver of the Company or any Subsidiary or of any substantial
part of the assets of the Company or any Subsidiary or commences any proceeding
relating to the Company or any Subsidiary under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect; or
(h) if any such petition or application is filed or any such
proceeding is commenced against the Company or any Subsidiary, and the Company
or any Subsidiary indicates its approval thereof, consent thereto or
acquiescence therein or any such petition, application or proceeding remains
undischarged for 30 days, or an order is entered appointing any such liquidator
or receiver, or adjudicating the Company or any Subsidiary bankrupt or
insolvent, or approving a petition in any such proceeding; or
(i) if any order is entered in any proceeding by or against the
Company or any Subsidiary decreeing or permitting the dissolution or split-up of
the Company or any Subsidiary or the winding-up of its affairs; or
(j) if there shall be in force, undischarged, unsatisfied and
unstayed, for more than 30 days, whether or not consecutive, any final judgment
(from which all appeals have been taken and determined or as to which all time
for the taking of appeals has lapsed) in excess of $1,000,000 against the
Company or any Subsidiary in an aggregate amount; or
(k) if the Company shall cease being a wholly-owned subsidiary,
directly or indirectly, of Parent; or
(l) if Parent shall default in respect of any of its obligations
under the Guaranty or if the Guaranty shall cease to be in full force and effect
without the prior written consent of all of the Banks;
then and in any such event (unless all Defaults and Events of Default shall
theretofore have been remedied), except for those events set forth in Section
11(g), (h) or (i), the Agent may, and upon the request of the Majority Banks,
the Agent shall, by notice to the Company declare the obligation of the Banks
to make Revolving Credit Loans and/or Term Loans to the Company to be
terminated, whereupon the same shall terminate, and the Agent may, and upon the
request of the Majority Banks, shall declare the Loans, all interest thereon
and all other amounts payable under
<PAGE> 48
-42-
this Agreement to be forthwith due and payable, whereupon such Loans, all such
interest and all such amounts shall become and be forthwith due and payable
without presentment, demand, protest or notice, all of which are hereby
expressly waived by the Company. If an Event of Default specified in Section
11(g), (h) or (i) occurs, the obligations of the Banks to make Revolving Credit
Loans and/or the Term Loans to the Company shall terminate and all amounts
owing hereunder shall IPSO FACTO become immediately due and payable without any
declaration or other act on the part of the Agent or the Banks.
Section 12. NOTICE AND WAIVERS OF DEFAULT.
Section 12.1. NOTICE OF DEFAULT. If any Person shall give any notice
or take any other action in respect of a claimed Default (whether or not
constituting an Event of Default) under this Agreement or any other note,
evidence of indebtedness, indenture or other obligation as to which the Company
or any of its Subsidiaries is a party, or obligor, whether as principal or
surety, the Company shall forthwith give written notice thereof to the Agent,
describing the notice or action and the nature of the claimed Default.
Section 12.2. WAIVERS OF DEFAULT. Any Default or Event of Default may
be waived as provided in Section 25. Any Default or Event of Default so waived
shall be deemed to have been cured and to be not continuing; but no such waiver
shall extend to or affect any subsequent like default or impair any rights
arising therefrom.
Section 13. REMEDIES ON DEFAULT.
Section 13.1. RIGHTS OF BANKS. In case any one or more of the Events
of Default specified in Section 11 shall have occurred and be continuing, and
whether or not all amounts owing with respect to the Loans have been declared
due and payable pursuant to Section 11, each Bank, if owed any amount with
respect to the Loans, may proceed to protect and enforce its rights by suit in
equity, action at law and/or other appropriate proceeding, whether for the
specific performance of any covenant or agreement contained in this Agreement,
including to the extent legally available the obtaining of the EX PARTE
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank.
Section 13.2. SET OFF; SHARING. (a) (i) Regardless of the adequacy of
any collateral, to the fullest extent permitted by applicable law, any deposits
or other sums credited by or due from any Bank to the Company may be applied to
or set off against the payment of the Obligations hereunder and under the Notes
and any and all other liabilities, direct, or indirect, absolute or contingent,
due or to become due, now existing or hereafter arising, of the Company to such
Bank hereunder or under the Notes at any time after the occurrence and during
the continuance of any Event of Default. Each Bank agrees that it will notify
the Agent and each other Bank prior to exercising any of its set-off rights
under this Section 13.2 (which notice may be by telephone,
<PAGE> 49
-43-
telex or facsimile, confirmed in writing).
(ii) Each Bank agrees with the other Banks (A) if an amount to be set
off is to be applied to indebtedness of the Company to a Bank, other than
indebtedness evidenced by this Agreement, such amount shall be applied ratably
to such other indebtedness and to the indebtedness evidenced by this Agreement,
and (B) that if such Bank shall receive from the Company or any other source
whatsoever, whether by voluntary payment, exercise of the right of set off,
counterclaim, cross-action or enforcement of any claim evidenced by the Notes or
this Agreement, or by proof thereof in bankruptcy, reorganization, liquidation,
receivership or similar proceedings or otherwise, and retain and apply to the
payment of the amounts owing with respect to the Notes or to any amounts due to
such Bank under this Agreement any amount which is in excess of its ratable
portion of the payments received by all of the Banks, then such Bank will make
such dispositions and arrangements with each other Bank with respect to such
excess, either by way of distribution until the amount of such excess has been
exhausted, assignment of claims, subrogation or otherwise, as shall result in
each such Bank receiving in respect of its Notes and the amounts due such Bank
under this Agreement its ratable share of such payments; PROVIDED, HOWEVER, that
if all or any part of such excess payment is thereafter recovered from such
Bank, such disposition and arrangements shall be rescinded and the amount
restored to the extent of such recovery, but without interest.
(b) Except as otherwise expressly provided in this Agreement (i) each
payment or prepayment of principal by the Company and each payment of interest
by the Company with respect to the Loans shall be allocated PRO RATA among the
Banks in accordance with the respective principal amounts of the Loans extended
by the Banks and (ii) each cancellation of the Commitments shall be made PRO
RATA among the Banks in accordance with their respective Commitments immediately
prior to such cancellation. Recoveries by any Bank (whether by direct payment,
by exercise of any right of set off, combination of accounts or lien, or
otherwise) in respect of the total sum which has become due to it from the
Company under this Agreement before that time shall be applied PRO RATA to all
Obligations outstanding.
Section 14. GUARANTY. The Obligations shall continue to be guaranteed
by Parent pursuant to the terms of an unlimited unconditional restated limited
guaranty substantially in the form of EXHIBIT E hereto, as confirmed pursuant to
that certain Confirmation Agreement (the "Confirmation Agreement") dated as of
the Effective Date (as so confirmed, the "Guaranty").
Section 15. THE AGENT.
Section 15.1. APPOINTMENT OF AGENT, POWERS AND IMMUNITIES. Each Bank
hereby irrevocably appoints and authorizes FNBB as the Agent to act as its agent
hereunder and each Bank irrevocably authorizes the Agent to take such action on
behalf of each of the Banks and
<PAGE> 50
-44-
to exercise all such powers as are expressly delegated to the Agent hereunder
and all related documents, together with such other powers as are reasonably
incidental thereto. The Agent shall not have any duties or responsibilities or
any fiduciary relationship with any Bank except those expressly set forth in
this Agreement. Neither the Agent nor any of its affiliates shall be
responsible to the Banks for any recitals, statements, representations or
warranties made by the Company or any other person whether contained herein or
otherwise or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, any other document referred to
or provided for herein or therein or for any failure by the Company or any
other person to perform its obligations hereunder or thereunder or in respect
of the Notes. The Agent may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither the Agent nor
any of its directors, officers, employees or agents shall be responsible for
any action taken or omitted to be taken by it or them hereunder or in
connection herewith, except for its or their own gross negligence or willful
misconduct. The Agent in its separate capacity as a Bank shall have the same
rights and powers hereunder as any other Bank.
Section 15.2. RELIANCE BY AGENT. The Agent shall be entitled to rely
upon any certificate, notice or other document (including any cable, telegram or
telex) believed by it to be genuine and correct and to have been signed or sent
by or on behalf of the proper person or persons, and upon advice and statements
of legal advisers, independent accountants and other experts selected by the
Agent. As to any matters not expressly provided for in this Agreement or in any
other document referred to herein, the Agent shall in all cases be fully
protected in acting, or in refraining from acting, in accordance with the
written instructions of the Majority Banks, and such instructions of the
Majority Banks and any action taken or failure to act pursuant thereto shall be
binding on all of the Banks. The Agent shall be fully justified in failing or
refusing to take action under this Agreement or any other document referred to
herein on behalf of any Bank unless it shall first receive such advice or
undertaking from such Banks as it deems appropriate or it shall first be
indemnified to its satisfaction by such Bank against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.
Section 15.3. INDEMNIFICATION. Without limiting the obligations of the
Company hereunder or under any other document referred to herein, the Banks
agree to indemnify the Agent, ratably in accordance with their respective
Commitment Percentages, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against the Agent in any way relating to or arising out of this
Agreement or any other documents contemplated by or referred to herein or the
transactions contemplated hereby or thereby or the enforcement of any of the
terms hereof or of any such other documents; PROVIDED, THAT no Bank shall be
liable for any of the foregoing to the extent they arise from the
<PAGE> 51
-45-
Agent's gross negligence or willful misconduct. The Agent shall be fully
justified in failing or refusing to take action under this Agreement on behalf
of any Bank unless it shall first receive such advice or undertaking from the
Banks as it deems appropriate or it shall first be indemnified, with
appropriate bond or security, to its satisfaction against any and all liability
which may be incurred by it by reason of taking or continuing to take any such
action.
Section 15.4. REIMBURSEMENT. (a) Without limiting the provisions of
Section 15.3, the Banks and the Agent hereby agree that the Agent shall not be
obliged to make available to any Person any sum which the Agent is expecting to
receive for the account of that Person until the Agent has determined that it
has received that sum. The Agent may, however, disburse funds prior to
determining that the sums which the Agent expects to receive have been finally
and unconditionally paid to the Agent, if the Agent wishes to do so. If and to
the extent that the Agent does disburse funds and it later becomes apparent that
the Agent did not then receive a payment in an amount equal to the sum paid out,
then any Person to whom the Agent made the funds available shall, on demand from
the Agent, refund to the Agent the sum paid to that Person.
(b) If, in the reasonable opinion of the Agent, the distribution to
the Banks of any amount received by it in such capacity hereunder or under other
documents referred to herein might involve it in liability, it may refrain from
making distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the Agent
is to be repaid, each Person to whom any such distribution shall have been made
shall either repay to the Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
Section 15.5. DOCUMENTS AND NOTICE. The Agent will forward to each
Bank, promptly after the receipt thereof, a copy of each notice or other
document furnished to the Agent for such Bank hereunder. The Agent will
promptly notify the Banks of (a) any notice of an Event of Default which the
Agent delivers to the Company or (b) any Default or Event of Default of which
such the Agent has actual knowledge.
Section 15.6. NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank
represents that it has, independently and without reliance on the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of the financial condition and affairs of
the Company and decision to enter into this Agreement and the other documents
referred to herein and agrees that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own appraisals and
decisions in taking or not taking action under this Agreement or any other
documents referred to herein. The Agent shall not be
<PAGE> 52
-46-
required to keep informed as to the performance or observance by the Company of
this Agreement or any other document referred to or provided for herein or by
any other person of any other agreement or to make inquiry of, or to inspect
the properties or books of, any person. Except for notices, reports and other
documents and information expressly required to be furnished to the Banks by
the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning any person
which may come into the possession of the Agent or any of its affiliates. Each
Bank shall have access to all documents relating to the Agent's performance of
its duties hereunder at such Bank's request. Unless any Bank shall promptly
object to any action taken by the Agent hereunder (other than actions to which
the provisions of Section 25 are applicable and other than actions which
constitute gross negligence or willful misconduct by the Agent), such Bank
shall conclusively be presumed to have approved the same.
Section 15.7. RESIGNATION OR REMOVAL OF THE AGENT. The Agent may resign
at any time by giving 30 days prior written notice thereof to the Banks and the
Company. Upon any such resignation, the Banks shall have the right to appoint a
successor Agent, who shall be one of the Banks, or, if not one of the Banks,
shall be reasonably acceptable to the Company. If no successor Agent shall have
been so appointed by the Banks and shall have accepted such appointment within
30 days after the retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a financial institution having a combined capital and surplus in excess
of $300,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this
Agreement shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent.
Section 15.8. WITHHOLDING TAX FORMS. Each Bank represents and
warrants, for the benefit of the Company and the Agent, that it is and will
remain during the terms of this Agreement either incorporated under the laws of
the United States of America or a state thereof (a "U.S. Person") or otherwise
entitled to receive interest payments and all other payments due hereunder
without withholding or deduction of any income or other taxes with respect to
any jurisdiction. Each Bank that is not a U.S. Person shall deliver to the
Company and the Agent, on or before the Effective Date, or, in the case of a
Bank which becomes a Bank pursuant to an Assignment and Acceptance, on the date
on which such Assignment and Acceptance becomes effective, two (2) original
United States Internal Revenue Service Forms 1001 or 4224 or any successor to
either of such forms, as appropriate, properly completed and claiming complete
exemption from withholding and deduction of all United States income taxes.
<PAGE> 53
-47-
Section 16. ASSIGNMENTS; PARTICIPATIONS. (a) Except as provided
herein, each Bank may, with the prior written consent of the Company (such
consent not to be unreasonably withheld) and of the Agent, assign to one or more
banks or other financial institutions all or a portion of its interests, rights
and obligations under this Agreement (including, without limitation, all or a
portion of its Commitment Percentage and Commitment hereunder and the Note or
Notes held by it); PROVIDED, HOWEVER, that (i) each such assignment shall be of
a fixed, and not a varying, percentage of all the assigning Bank's rights and
obligations under this Agreement, (ii) the amount of the assigning Bank's
portion of the Total Commitment or the aggregate principal amount of the Term
Loan, as the case may be, subject to each such assignment (determined as of the
date of the Assignment with respect to such assignment) shall in no event be
less than $5,000,000 and shall be in an amount which is an integral multiple of
$1,000,000, and (iii) the parties to such assignment shall execute and deliver
to the Agent, for recording in the Register, an Assignment and Acceptance,
substantially in the form of Exhibit F hereto (the "Assignment"), together with
any Note or Notes subject to such assignment and together with payment by the
assigning Bank to the Agent, for the account of the Agent an assignment
administration fee in the amount of $2,500. Upon such execution, delivery,
acceptance and recording, from and after the date of each Assignment, the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment, have the rights and obligations of a Bank hereby.
(b) The Agent shall maintain a copy of each Assignment delivered to
it and a register for the recordation of the names and addresses of the Banks
and the Commitment Percentages of the Banks from time to time (the "Register").
The entries in the Register shall be conclusive, in the absence of manifest
error, and the Company, the Agent and the Banks may treat each person whose name
is recorded in the Register as a Bank hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Company or the
Banks at any reasonable time and from time to time upon reasonable prior notice.
(c) Promptly upon the Agent's receipt of an Assignment executed by
the parties thereto and the assignment administration fee described in Section
16(a), the Agent shall (i) record the information contained therein in the
Register, and (ii) give prompt notice thereof to the Company and the Banks.
(d) The Company, at its own expense, shall immediately execute and
deliver to the Agent, for subsequent delivery to the applicable Bank or Banks,
in exchange for the surrendered Note or Notes, a new Note or Notes to the order
of the applicable assignee in an amount equal to the amount assumed by such
assignee pursuant to such Assignment and if the assigning Bank has retained some
portion of its obligations hereunder, a new Note or Notes to the order of the
assigning Bank in an amount equal to the amount retained by it hereunder. The
aggregate principal amount of such new Note or Notes shall be equal to the
aggregate principal amount
<PAGE> 54
-48-
of the surrendered Note or Notes, shall be dated the date of such Assignment
and shall otherwise be in substantially the form of the assigned Notes.
Notwithstanding the first sentence of this subsection (d), the Company shall
not be liable for the payment of any transfer taxes incurred by any party to an
assignment as the result of transfer or issuance of any Note in connection
therewith.
(e) Contemporaneously with the delivery of the new Note or Notes to
the Agent, as specified in (d) above, the surrendered Note or Notes shall be
cancelled and returned to the Company.
(f) Each Bank may without the consent of the Company or the Agent
sell participations to one or more banks or other entities in all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment hereunder, the Term Loan owing to
it and the Note or Notes held by it); PROVIDED, HOWEVER, that the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of this Agreement shall be the
right to approve waivers, amendments, or modifications which require the
consent of all of the Banks as provided in Section 25 hereof.
Section 17. CONSENT TO JURISDICTION. (a) The Company hereby
irrevocably submits to the jurisdiction of any Massachusetts state or federal
court sitting in Boston over any action or proceeding arising out of or relating
to this Agreement and the Company hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in such
Massachusetts state or federal court. Service of copies of the summary and
complaint and any other process in any action or proceeding may be made to the
Company by mailing or delivering a copy of such process to the Company at the
Company's address as specified in Section 21 hereof. The Company agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(b) Nothing in this Section 17 shall affect the right of any Bank to
serve legal process in any other manner permitted by law or affect the right of
any Bank to bring any action of proceeding against the Company or its property
in the courts of any other jurisdictions.
Section 18. BINDING EFFECT. This Agreement shall become effective when
it shall have been executed by all the parties hereto and shall be binding upon
and inure to the benefit of the Company, the Banks and the Agent and their
respective successors and assigns, except that the Company shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Banks.
<PAGE> 55
-49-
Section 19. EXPENSES. Whether or not the transactions contemplated
hereby are consummated, the Company will pay (a) the cost of (i) preparing this
Agreement and related documents, (ii) any stamp taxes (including any interest
and penalties in respect thereof), payable on or with respect to the
transactions contemplated by this Agreement (the Company hereby agreeing to
indemnify the Banks with respect thereto), and (iii) monitoring the Company's
performance of and compliance with the terms hereof; (b) the reasonable fees,
expenses and disbursements of the Agent's special counsel incurred in connection
with the preparation of this Agreement, related documents, and amendments,
modifications, approvals, consents or waivers hereto; and (c) all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and costs) incurred
by the Agent in connection with the enforcement of this Agreement. The
covenants of this Section 19 shall survive payment or satisfaction of payment of
amounts owing with respect to the Loans.
Section 20. SURVIVAL OF COVENANTS. All covenants, agreements,
representations and warranties made herein and in any certificates or other
papers delivered by or on behalf of the Company pursuant hereto are material and
shall be deemed to have been relied upon by the Agent and the Banks
notwithstanding any investigation heretofore or hereafter made by the Agent or
the Banks, and shall survive the making by the Banks of the Loans as herein
contemplated and shall continue in full force and effect so long as any Loans or
other amounts due under this Agreement remains outstanding and unpaid. All
statements contained in any certificate or other paper delivered to the Agent or
the Banks at any time by or on behalf of the Company pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Company hereunder.
Section 21. NOTICE. Except as otherwise specified herein, all notices
and other communications made or required to be given pursuant to this Agreement
shall be in writing and shall be either delivered by hand or mailed by United
States of America first-class mail, postage prepaid, or sent by telegraph
confirmed by letter, addressed as follows:
(a) If to the Company, at 60 State Street, Boston, Massachusetts
02109, Attention: Michael J. Soja, Vice President, Finance and Treasurer, or at
such other address for notice as the Company shall last have furnished in
writing to the Person giving the notice;
(b) if to the Agent, at 100 Federal Street, Boston, MA 02110,
Attention: Iain C. A. Whitfield, Managing Director, or such other address for
notice as the Agent shall last have furnished in writing to the Person giving
the notice; and
(c) if to any Bank, at the address set forth opposite such Bank's
signature hereto, or such other address for notice as such Bank shall last have
furnished in writing to the Person giving the notice.
<PAGE> 56
-50-
All such notices and communication shall, when mailed, telexed or
cabled, be effective when deposited in the mails or delivered to the telex or
cable system, respectively, except the notices and communications to the Agent
or the Banks pursuant to Section Section 2, 3, 4 and 5 shall not be effective
until received by such Person. The Agent or the Banks shall be deemed to have
received notices given by telephone upon receipt of such telephone call
PROVIDED, that such Person receives a confirming facsimile or telex on the same
day such telephone call is received.
Section 22. GOVERNING LAW. This Agreement shall be deemed to be a
sealed contract under the laws of the Commonwealth of Massachusetts and shall
for all purposes be construed in accordance with and governed by the laws of the
Commonwealth.
Section 23. MISCELLANEOUS. The rights and remedies herein expressed
are cumulative and not exclusive of the other rights which the Banks would
otherwise have. Any instruments required by any of the provisions hereof to be
in the form annexed hereto as an exhibit shall be substantially in such form
with such changes therefrom, if any, as may be approved by the Majority Banks
and the Company. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof. This
Agreement or any amendment may be executed in separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
together shall constitute one instrument. In proving this Agreement, it shall
not be necessary to produce or account for more than one Agreement, executed by
each of the parties hereto.
Section 24. ENTIRE AGREEMENT. This Agreement and any other documents
executed in connection herewith express the entire understanding of the parties
with respect to the transactions contemplated hereby. Neither this Agreement
nor any term hereof may be changed, waived, discharged or terminated orally or
in writing, except as provided in Section 25.
Section 25. CONSENTS, AMENDMENTS, WAIVERS. Except as otherwise
expressly provided in this Section 25 and except with respect to the Fee Letter
Agreement (which may be amended or modified with the approval of the parties
thereto), any action to be taken or any consent or approval required or
permitted by this Agreement to be given by the Banks may be given, and any term
of this Agreement or any other instrument, document or agreement related to this
Agreement may be amended and the performance or observance by the Company or any
other person of any of the terms thereof and any Default or Event of Default (as
defined in any of the above-referenced documents or instruments may be waived
(either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Majority Banks;
PROVIDED, HOWEVER, that no such consent or amendment which affects the rights,
duties or liabilities of the Agent shall be effective without the written
consent of the Agent. Notwithstanding the foregoing, no amendment, waiver or
consent shall, unless in writing and signed by all of the Banks, do any of the
following (a) increase the principal
<PAGE> 57
-51-
amount of the Loans (or subject the Banks to any additional obligations), (b)
reduce the principal of or interest on the Notes or any fees payable hereunder,
(c) extend or postpone any date fixed for any payment in respect of principal
of, or interest on, the Loans, or any fees payable hereunder, (d) change the
definition of "Majority Banks" or the aggregate Commitment Percentage, or the
aggregate amount of Loans, or number of Banks which shall be required for the
Banks or any of them to take any action under this Agreement or any other
document referred to herein; (e) amend Sections 16, 19, or this Section
25 or (f) change the Commitment Percentage of any Bank, except by assignments
pursuant to and in accordance with the terms of Section 16 hereof.
No waiver shall extend to or affect any obligation not expressly waived
or impair any right consequent thereon. No course of dealing or delay or
omission on the part of the Banks in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto. No notice to or demand upon
the Company shall entitle the Company to other or further notice or demand in
similar or other circumstances.
Section 26. AGREEMENT AS TO BROKERS. The Company hereby agrees to
indemnify and hold the Banks harmless against and in respect of any claim for
brokerage or other commissions relating to this Agreement or the transactions
contemplated hereby resulting from the Company's dealings with any broker in
connection with this transaction. The Banks agree to indemnify and hold the
Company harmless against and in respect of any claim for brokerage or other
commissions relating to this Agreement or the transactions contemplated hereby
resulting from the Banks' dealings with any broker in connection with this
transaction.
<PAGE> 58
-52-
Signed, sealed and delivered, as of the date set forth at the beginning
of this Agreement, by the Company, the Agent and the Banks.
XTRA, INC.
/s/ Christopher P. Joyce
By: ________________________________
Title: Treasurer
THE FIRST NATIONAL BANK OF BOSTON
/s/ Iain C.A. Whitfield
By:_________________________________
Title: Managing Director
Address: 100 Federal Street
Boston, MA 02110
Attention: Iain C. A. Whitfield, Managing Director
THE BANK OF CALIFORNIA, N. A.
/s/ Alison Mason
By:_________________________________
<PAGE> 59
-53-
Title: Vice President
Address: 400 California Street,
16th Floor
San Francisco, California 94104
Attention: Alison Mason,
Vice President
ABN AMRO BANK, N. V.
/s/ James E. Davis
By:__________________________________
Title: Vice President
Address: 53 State Street
Boston, Massachusetts
02109
Attention: James E. Davis,
Vice President
NATIONAL WESTMINSTER BANK USA
<PAGE> 60
-54-
/s/ Harris Mehos
By:_________________________________
Title: Vice President
Address: 175 Water Street
New York, New York 10038
Attention: Harris Mehos,
Vice President
THE FIRST NATIONAL BANK OF BOSTON, AS AGENT
/s/ Iain C.A. Whitfield
By:__________________________________
Title: Managing Director
<PAGE> 1
-1-
EXHIBIT 4.1.1
RESTATED LIMITED GUARANTY
-------- ------- --------
GUARANTY, dated as of May 31, 1991 and restated as of April 7, 1992 by
XTRA CORPORATION (the "Guarantor"), in favor of the Banks (as defined in the
Credit Agreement referred to below). In consideration of the Banks giving, in
their discretion, time, credit or banking facilities or accommodations to XTRA,
Inc. and its successors (the "Customer"), the Guarantor agrees as follows:
1. GUARANTY OF PAYMENT AND PERFORMANCE. The Guarantor hereby
guarantees to the Banks the full and punctual payment when due (whether at
maturity, by acceleration or otherwise), and the performance, of all
liabilities, agreements and other obligations of the Customer to the Banks,
whether direct or indirect, absolute or contingent, due or to become due,
secured or unsecured, now existing or hereafter arising under the Revolving
Credit and Term Loan Agreement (as the same may be amended from time to time,
the "Credit Agreement") dated as of May 31, 1991 and amended and restated as of
April 7, 1992 between the Customer, The First National Bank of Boston as Bid
Agent, Continental Bank, N.A. as Administrative Agent and the banks which are
or may become parties thereto (the "Obligations"). Capitalized terms used
herein without definition which are defined in the Credit Agreement shall have
the same meanings herein as in the Credit Agreement. This Guaranty is an
absolute, unconditional and continuing guaranty of the full and punctual
payment and performance of the Obligations and not of their collectibility only
and is in no way conditioned upon any requirement that any Bank first attempt
to collect any of the Obligations from the Customer or resort to any security
or other means of obtaining payment of the Obligations which the Banks now have
or may acquire after the date hereof, or upon any other contingency whatsoever.
Should the Customer default in the full and punctual payment or performance of
any of the Obligations, the liabilities and obligations of the Guarantor
hereunder shall become immediately due and payable to the Banks, without demand
or notice of any nature, all of which are expressly waived by the Guarantor.
Payments by the Guarantor hereunder may be required by the Banks on any number
of occasions.
2. GUARANTOR'S AGREEMENT TO PAY. The Guarantor further agrees, as
the principal obligor and not as a guarantor only, to pay to the Banks, on
demand, all costs and expenses (including court costs and legal expenses)
incurred or expended by the Banks in connection with the Obligations, this
Guaranty and the enforcement thereof.
3. LIMITED GUARANTY. The liability of the Guarantor shall be
<PAGE> 2
-2-
limited to the Obligations.
4. WAIVERS BY GUARANTOR; BANKS' FREEDOM TO ACT. The Guarantor
agrees that the Obligations will be paid and performed strictly in accordance
with their respective terms regardless of any law, regulation or order now or
<PAGE> 3
-3-
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any Bank with respect thereto. The Guarantor waives presentment,
demand, protest, notice of acceptance, notice of Obligations incurred and all
other notices of any kind, all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter in
effect, any right to require the marshalling of assets of the Customer, and all
suretyship defenses generally. Without limiting the generality of the
foregoing, the Guarantor agrees to the provisions of any instrument evidencing,
securing or otherwise executed in connection with any Obligation and agrees
that the obligations of the Guarantor hereunder shall not be released or
discharged, in whole or in part, or otherwise affected by (i) the failure of
any Bank to assert any claim or demand or to enforce any right or remedy
against the Customer; (ii) any extensions or renewals of any Obligation; (iii)
any rescissions, waivers, amendments or modifications of any of the terms or
provisions of any agreement evidencing, securing or otherwise executed in
connection with any Obligation; (iv) the substitution or release of any entity
primarily or secondarily liable for any Obligation; (v) the adequacy of any
rights any Bank may have against any collateral or other means of obtaining
repayment of the Obligations; (vi) the impairment of any collateral securing
the Obligations, including without limitation the failure to perfect or
preserve any rights any Bank might have in such collateral or the substitution,
exchange, surrender, release, loss or destruction of any such collateral; or
(vii) to the fullest extent permitted by applicable law, any other act or
omission which might in any manner or to any extent vary the risk of the
Guarantor or otherwise operate as a release or discharge of the Guarantor, all
of which may be done without notice to the Guarantor.
5. UNENFORCEABILITY OF OBLIGATIONS AGAINST CUSTOMER. If for any
reason the Customer has no legal existence or is under no legal obligation to
discharge any of the Obligations undertaken or purported to be undertaken by it
or on its behalf, or if any of the Obligations have become irrecoverable from
the Customer by operation of law or for any other reason, this Guaranty shall
nevertheless be binding on the Guarantor to the same extent as if the Guarantor
at all times had been the principal obligor on all such Obligations. In the
event that acceleration of the time for payment of the Obligations is stayed
upon the insolvency, bankruptcy or reorganization of the Customer, or for any
other reason, all such amounts otherwise subject to acceleration under the
terms of any agreement evidencing, securing or otherwise executed in connection
with any Obligation shall be immediately due and payable by the Guarantor.
6. SUBROGATION; SUBORDINATION. Until the payment and performance
in full of all Obligations, the Guarantor shall not exercise any rights against
the Customer arising as a result of payment by the Guarantor hereunder and will
not prove any claim in competition with any Bank in respect of any payment
hereunder in bankruptcy or insolvency proceedings of any nature; the Guarantor
will not claim any set-off or counterclaim against the Customer in respect of
any liability of the Guarantor to the Customer; and the Guarantor waives any
benefit of and any right to participate in any collateral which may
<PAGE> 4
-4-
be held by any Bank. The payment of any amounts due with respect to any
indebtedness of the Customer now or hereafter held by the Guarantor is hereby
subordinated to the prior payment in full of the Obligations. The Guarantor
agrees that after the occurrence of any default in the payment or performance
of the Obligations, the Guarantor will not demand, sue for or otherwise attempt
to collect any such indebtedness of the Customer to the Guarantor until the
Obligations shall have been paid in full. If, notwithstanding the foregoing
sentence, the Guarantor shall collect, enforce or receive any amounts in
respect of such indebtedness, such amounts shall be collected, enforced and
received by the Guarantor as trustee for the Banks and be paid over to the
Banks on account of the Obligations without affecting in any manner the
liability of the Guarantor under the other provisions of this Guaranty.
7. SETOFF. Each Bank is hereby authorized at any time and from
time to time, without notice to the Guarantor (any such notice being expressly
waived by the Guarantor) and to the fullest extent permitted by law, to set off
and apply such deposits and other sums against the obligations of the Guarantor
under this Guaranty.
8. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Guarantor hereby
represents, warrants, and covenants to and with the Bank that:
8.1. (a) CORPORATE STATUS. The Guarantor is a corporation duly
formed, validly existing and in good standing under the laws of the State of
Delaware and has the power and authority to own its property, conduct its
business as now being conducted and to make and perform this Guaranty and the
transactions contemplated hereby, and is duly qualified to do business and in
good standing as a foreign corporation in each jurisdiction where the nature
and extent of the business conducted by it, or property owned by it, and
applicable law required such qualification, except where the failure to so
qualify would not have a material adverse effect on the Guarantor and its
Subsidiaries, taken as a whole.
(b) AUTHORIZATION. The execution, delivery and performance of
this Guaranty by the Guarantor have been duly authorized by all necessary
corporate action and will not violate any provision of law or any order of any
court or governmental agency or the charter, or other incorporation papers or
bylaws (or the equivalent thereof) of the Guarantor or conflict with, or result
in a breach of, or constitute (with or without notice or lapse of time or both)
a default under, or result in the creation of any security interest, lien,
charge or encumbrance upon any property or assets of the Guarantor pursuant to
any agreement, indenture or other instrument to which it is a party or by which
it may be bound which would have a material adverse effect upon the financial
condition or operations of the Guarantor and its Subsidiaries, taken as a
whole.
(c) LITIGATION. Except as disclosed to the Banks in writing prior
to the execution hereof, no action, suit, investigation or proceeding is
pending or known to be threatened against or affecting the Guarantor which, if
<PAGE> 5
-5-
adversely determined, would have a material adverse effect upon the financial
condition or operations of the Guarantor and its Subsidiaries, taken as a
whole.
(d) ABSENCE OF DEFAULT. The Guarantor is not in default under any
provision of its charter, or other incorporation papers, bylaw (or the
equivalent thereof) or stock provisions or any amendment of any thereof, or any
provision of law, or of any agreement, note, indenture or other instrument to
which it is a party or by which it or any of its property is bound, or of any
order of any court or public body or authority by which it or any of its
property is bound, which would have a material adverse effect upon the
financial condition or operations of the Guarantor and its Subsidiaries, taken
as a whole.
(e) NO CONSENTS REQUIRED. No license, consent or approval of or
filing with any governmental body or other regulatory authority is required for
the making and performance of this Guaranty by the Guarantor or any instrument
or transaction contemplated herein. The Guarantor holds all certificates and
authorizations of all governmental agencies and authorities required by law to
enable it to engage in the business currently transacted by it, except where
the failure to obtain such certificates and authorization would not have a
material adverse effect upon the financial condition or operations of the
Guarantor and its Subsidiaries, taken as a whole.
(f) ENFORCEABILITY. This Guaranty is the valid and legally
binding obligation of the Guarantor, enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting generally the enforcement of creditors'
rights.
(g) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of the Guarantor made herein shall survive until
payment in full of all of the Obligations.
8.2. CERTAIN NEGATIVE COVENANTS. The Guarantor covenants and agrees
that, until all of the Obligations have been paid and satisfied in full, the
following covenants will be complied with:
(a) The Guarantor will not permit at any time the ratio of (a)
Consolidated Liabilities of the Guarantor and its Subsidiaries to (b)
Consolidated Net Worth of the Guarantor and its Subsidiaries to exceed 3.50 to
1.
(b) The Guarantor will not create or suffer to exist any mortgage,
pledge, deed of trust or security interest on the capital stock (or any
indebtedness convertible in capital stock) of any of its Subsidiaries.
9. TERMINATION; REINSTATEMENT. The obligations of the Guarantor
under this Guaranty shall remain in full force and effect until each Bank is
given written notice of the Guarantor's intention to discontinue this Guaranty,
<PAGE> 6
-6-
notwithstanding any intermediate or temporary payment or settlement of the
whole or any part of the Obligations. No such notice shall be effective unless
received and acknowledged by an officer of each Bank at its head office or at
the branch of such Bank where this Guaranty is given. No such notice shall
affect any rights of any Bank or of any affiliate hereunder including, without
limitation, the rights set forth in Sections 4 and 6, with respect to
Obligations incurred prior to the receipt of such notice or Obligations
incurred pursuant to any contract or commitment in existence prior to such
receipt, and all checks, drafts, notes, instruments (negotiable or otherwise)
and writings made by or for the account of the Customer and drawn on any Bank
or any of its agents purporting to be dated on or before the date of receipt of
such notice, although presented to and paid or accepted by such Bank after that
date, shall form part of the Obligations. This Guaranty shall continue to be
effective or be reinstated, notwithstanding any such notice, if at any time any
payment made or value received with respect to an Obligation is rescinded or
must otherwise be returned by a Bank upon the insolvency, bankruptcy or
reorganization of the Customer, or otherwise, all as though such payment had
not been made or value received.
10. SUCCESSORS AND ASSIGNS. The Guaranty shall be binding upon the
Guarantor, its successors and assigns, and shall inure to the benefit of and be
enforceable by each Bank and its successors, transferees and assigns. Without
limiting the generality of the foregoing sentence, each Bank may assign or
otherwise transfer any agreement or any note held by it evidencing, securing or
otherwise executed in connection with the Obligations, or sell participations
in any interest therein, to any other person or entity and such other person or
entity shall thereupon become vested to the extent set forth in the agreement
evidencing such assignment, transfer or participation, with all the rights in
respect thereof granted to such Bank herein.
11. AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Guaranty nor consent to any departure by the Guarantor
therefrom shall be effective unless made in writing and the same shall be
signed by the Co-Agents. No failure on the part of any Bank to exercise, and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right.
12. NOTICES. All notices and other communications called for
hereunder shall be made in accordance with Section 22 of the Credit Agreement
(and shall be deemed to be effective at the times provided therein), addressed
as follows: if to the Guarantor, at the address set forth beneath the
appropriate signature line hereto, and if to the Banks, at the addresses set
forth for the Banks in the Credit Agreement, or at such address as any party
may designate in writing.
13. GOVERNING LAW; CONSENT TO JURISDICTION. This Guaranty is
intended to take effect as a sealed instrument and shall be governed by, and
construed in accordance with the laws of the Commonwealth of Massachusetts.
The Guarantor agrees that any suit for the enforcement of this Guaranty may be
<PAGE> 7
-7-
brought in the courts of the Commonwealth of Massachusetts or any Federal Court
sitting therein and consents to the non-exclusive jurisdiction of such court
and to service of process in any such suit being made upon the Guarantor by
mail at the address of the Customer specified in Section 22 of the Credit
Agreement. The Guarantor hereby waives any objection that it may now or
hereafter have the venue of any such suit or any such court or that such suit
was brought in an inconvenient court.
14. MISCELLANEOUS. This Guaranty constitutes the entire agreement
of the Guarantor with respect to the matters set forth herein. The rights and
remedies herein provided are cumulative and not exclusive of any remedies
provided by law or any other agreement, and this Guaranty shall be in addition
to any other guaranty of the Obligations. The invalidity or unenforceability
of any one or more sections of this Guaranty shall not affect the validity or
enforceability of its remaining provisions. Captions are for the ease of
reference only and shall not affect the meaning of the relevant provisions.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered by its duly authorized officer as of the date first
written above.
XTRA CORPORATION
/s/ Michael J. Soja
By:____________________________________
Title: Vice President Finance and
Treasurer
Address:
Accepted and agreed to:
THE FIRST NATIONAL BANK OF BOSTON
/s/ Iain C.A. Whitfield
By:___________________________________
Title: Director
CONTINENTAL BANK, N.A.
/s/ Bonita J. Althoff
By:____________________________________
Title: Vice President
THE BANK OF CALIFORNIA, N.A.
/s/ Robert J. Vernagallo
By:____________________________________
Title: Vice President
<PAGE> 8
-9-
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
/s/ Scott Shannon
By:____________________________________
Title: Vice President
NATIONAL WESTMINSTER BANK USA
/s/ Michael McGrann
By:____________________________________
Title: Assistant Treasurer
<PAGE> 9
CONFIRMATION AGREEMENT
This CONFIRMATION AGREEMENT (the "Agreement"), dated as of May 27,
1994, by and among XTRA Corporation (the "Guarantor"), The First National Bank
of Boston, The Bank of California, N. A., ABN AMRO Bank N. V., National
Westminster Bank USA (collectively, the "Banks") and The First National Bank of
Boston, as agent for the Banks (the "Agent").
WHEREAS, pursuant to that certain Restated Limited Guaranty, dated as
of May 31, 1991 and restated as of April 7, 1992 (the "Guaranty"), from the
Guarantor in favor of each of the Banks, the Guarantor has guaranteed to the
Banks the full and punctual payment when due and the performance of all
liabilities, agreements and other obligations of XTRA, Inc. (the "Customer") to
the Banks under that certain Revolving Credit and Term Loan Agreement, dated as
of May 31, 1991 and amended and restated as of April 7, 1992, as amended (as so
amended, the "Original Credit Agreement") among the Customer, the Banks and the
Agent; and
WHEREAS, the Original Credit Agreement has been amended and restated in
its entirety on the date hereof pursuant to that certain Amended and Restated
Revolving Credit and Term Loan Agreement (the "Credit Agreement"), among the
Customer, the Banks and the Agent; and
WHEREAS, in order to induce the Banks and the Agent to enter into such
amendment and restatement and as a condition precedent thereto, the Guarantor
has agreed to confirm the continuation of its guaranty of the Obligations (as
defined in the Guaranty);
NOW THEREFORE, the Guarantor, the Agent and the Banks hereby agree as
follows:
Section 1. DEFINED TERMS. Capitalized terms which are used
herein without definition and which are defined in the Guaranty shall have the
same meanings herein as in the Guaranty.
Section 2. CONFIRMATION OF THE GUARANTY. The Guarantor hereby
acknowledges the provisions of the Credit Agreement, including, without
limitation, the extension of each Bank's Commitment (as defined in the Credit
Agreement), subject to the terms of the Credit Agreement, to May 31, 1996. The
Guarantor hereby confirms that Obligations (as defined in the Guaranty)
includes all liabilities, agreements and obligations of the Customer to the
Banks under the Credit Agreement, whether direct or indirect, absolute or
contingent, due or to become due, secured or unsecured, now existing or
hereafter arising, and the Guarantor further confirms its absolute and
unconditional guarantee of the Obligations (as so defined) to the Banks, as
more fully described in the Guaranty.
Section 3. MISCELLANEOUS PROVISIONS. (a) This Agreement is
intended to take effect as an agreement under seal and shall be construed
according to and governed by the laws of The Commonwealth of Massachusetts.
(footnote continued to next page)
<PAGE> 10
(b) This Agreement may be executed in any number of counterparts,
but all such counterparts shall together constitute but one instrument. In
making proof of this Agreement it shall not be necessary to produce or account
for more than one counterpart signed by each party hereto by and against which
enforcement hereof is sought.
IN WITNESS WHEREOF, the Guarantor has executed this Agreement as of the
date first written above.
XTRA CORPORATION
/s/ Christopher P. Joyce
By:_____________________________________
Title: Treasurer
Accepted and agreed to:
THE FIRST NATIONAL BANK OF
BOSTON, AS AGENT
/s/ Iain C.A. Whitfield
By:_________________________________
Title: Managing Director
THE FIRST NATIONAL BANK
OF BOSTON
/s/ Iain C.A. Whitfield
By:_________________________________
Title: Managing Director
THE BANK OF CALIFORNIA, N. A.
/s/ Alison Mason
By:_________________________________
Title: Corporate Banking Officer
ABN AMRO BANK N. V.
(footnote continued to next page)
<PAGE> 11
/s/ James E. Davis
By:______________________________
Title: Vice President
NATIONAL WESTMINSTER BANK
USA
/s/ Harris Mehos
By:______________________________
Title: Vice President
(footnote continued to next page)
<PAGE> 1
Exhibit 10.1
INDIVIDUAL PENSION AGREEMENT
INDIVIDUAL PENSION AGREEMENT, dated as of July 1, 1994, by and between
XTRA CORPORATION, a Delaware corporation (the "Corporation"), and LEWIS RUBIN,
an individual residing at Boston, Massachusetts (the "Executive").
W I T N E S S E T H
WHEREAS the Executive presently serves as the President and Chief
Executive Officer of the Corporation and as a member of the Corporation's Board
of Directors;
WHEREAS, in recognition of the Executive's services to the Corporation
and as an inducement for continued service by the Executive to the Corporation,
the Corporation now wishes to provide the Executive with supplemental
retirement benefits, subject to the terms and conditions hereinafter set forth,
and the Executive wishes to accept such benefits;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises, terms, provisions and conditions set forth in this Agreement,
the parties hereby agree:
Section 1. RETIREMENT BENEFIT. Provided the Executive continues to
serve as Chief Executive Officer of the Corporation until attainment of age 65,
but subject to Section 2 below, the
<PAGE> 2
Corporation shall pay the Executive in equal monthly installments, commencing
on the first day of the month following the later of (i) the day on which the
Executive attains age 65, or (ii) the day the Executive's employment with the
Corporation terminates, and continuing for the remainder of his life, an annual
amount of $100,000.
Section 2. CHANGE OF CONTROL. In the event the Corporation
terminates, with or without cause, the Executive's employment as Chief
Executive Officer within the two year period following the date of a Change of
Control as defined in Appendix A attached hereto and prior to the Executive's
attainment of age 65, the Corporation shall pay the Executive in a single lump
sum as soon as practicable after such termination the present value, determined
in accordance with such reasonable interest rate assumptions as the Corporation
in its discretion may adopt for purposes of this Agreement, of an annual
annuity of $100,000, payable in equal monthly installments, commencing
immediately and continuing for a 120-month period.
Section 3. SURVIVOR BENEFIT.
(a) In the event the Executive dies while serving as Chief
Executive Officer of the Corporation but before becoming entitled to
benefits under Section 1 or 2 above, the Corporation shall pay the
surviving spouse, if any, of the Executive in a single lump sum as
soon as practicable after such death the present value, determined in
accordance with such reasonable interest rate assumptions as the
-2-
<PAGE> 3
Corporation in its discretion may adopt, of an annual annuity of
$100,000, payable in equal monthly installments, commencing
immediately and continuing for a 120-month period. In the event that
no spouse survives the Executive, no payments shall be made after the
death of the Executive under this subsection (a).
(b) In the event the Executive dies after becoming entitled
to benefits under either Section 1 or 2 above but prior to the payment
or the commencement of payments under such Sections, as the case may
be, the Corporation shall pay the Executive's surviving spouse, if
any, in equal monthly installments, commencing on the first day of the
month following the date of the Executive's death and continuing for a
120-month period, an annual amount of $100,000. No further payments
shall be made under this subsection (b) after the death of such
spouse, if any, prior to the expiration of such 120-month period. The
Corporation may, in its discretion and at any time, pay the present
value of such benefit to the surviving spouse in a single lump sum
determined in accordance with such reasonable interest rate
assumptions as the Corporation in its discretion may adopt.
(c) In the event the Executive dies after benefits commence
being paid under Section 1 above but prior to the expiration of the
120-month period which begins on the date on which payment commences,
payments shall continue to be made in the equal monthly installments
which the Executive
-3-
<PAGE> 4
was receiving prior to his death to the Executive's surviving spouse,
or, if none or in the event of the subsequent death of such surviving
spouse, to the Executive's estate for the remainder of such 120-month
period; provided, however, that the Corporation may, in its discretion
and at any time, pay the present value of such remaining payments in a
single lump sum determined in accordance with such reasonable interest
rate assumptions as the Corporation in its discretion may adopt for
purposes of this Agreement.
Section 4. FORFEITURE OF BENEFITS. Notwithstanding any provision of
this Agreement to the contrary, the Executive shall forfeit the benefits
otherwise payable under Section 1 or 2 of this Agreement in the event he
confesses to, or is convicted of, any act of fraud, theft or dishonesty arising
in the course of, or in connection with, his employment with the Corporation.
In the event of such forfeiture, no survivor benefits shall be payable under
Section 3 above upon the death of the Executive.
In addition, in the event the Executive joins the board of directors
or becomes an executive officer of a competitor of the Corporation within two
years after the termination of his employment with the Corporation, he shall
forfeit any remaining benefits otherwise payable under this Agreement, and no
survivor benefits shall be payable after the death of the Executive under
Section 3 above. In the event, however, of a Change of Control while the
Executive is employed by the Corporation, the
-4-
<PAGE> 5
provisions of the preceding sentence shall lapse and shall have no further
force or effect.
The decision by the Board of Directors of the Corporation as to the
applicability of this Section 4 in any case shall be fixed and binding on all
persons.
Section 5. NO FUNDING. The Corporation shall not be required to
create a trust, set aside or segregate any assets of any kind, purchase any
insurance contract, or in any other way to fund the future payment of any
benefits hereunder currently. The Agreement constitutes a mere promise by the
Corporation to pay benefits in the future, and is intended to be unfunded for
tax purposes. Consistent with the foregoing, the Corporation reserves the
right in its sole discretion to purchase a policy of insurance or otherwise
provide for its obligations hereunder, and the Corporation shall be the owner
and beneficiary of any such policy or other investment. If the Corporation
purchases life insurance or annuity policies on the life of the Executive, the
Executive shall sign any papers that may reasonably be required for that
purpose and undergo any medical examination or tests that may be reasonably
necessary and generally cooperate with the Corporation in securing such
policies.
Any benefits which become payable hereunder shall be paid from the
general assets of the Corporation, and any rights which the Executive may have
on account of this Agreement shall be those of a general unsecured creditor of
the Corporation. At no time shall the Executive be deemed to have any right,
title or
-5-
<PAGE> 6
interest in or to any specified asset or assets of the Corporation, including
without limitation any insurance or annuity contract or contracts or their
proceeds.
Section 6. LIMITATION OF RIGHTS. This Agreement shall not give the
Executive the right to be retained in the employ of the Corporation or any
other right or interest with respect to the Corporation other than as expressly
provided herein.
Section 7. NONASSIGNABILITY. None of the benefits, payments, proceeds
or claims of the Executive shall be subject to any claim of any creditor and,
in particular, the same shall not be subject to attachment or garnishment or
other legal process by any creditor, nor shall the Executive have any right to
alienate, anticipate, commute, pledge, encumber or assign any of the benefits
or payments or proceeds which he may expect to receive, contingently or
otherwise, under this Agreement.
Section 8. AMENDMENT AND TERMINATION. This Agreement may be amended
or terminated, with the written consent of the Executive, by resolution of the
Board of Directors of the Corporation. Any such amendment or termination shall
be stated in writing and executed by the Corporation and the Executive in the
same manner as this Agreement.
Section 9. WITHHOLDING AND OTHER PAYMENTS. Each payment due under
this Agreement shall be reduced by withholding taxes and other legally required
deductions.
-6-
<PAGE> 7
Section 10. GOVERNING LAW. This Agreement shall be construed,
administered, and governed in all respects under and by the laws of the
Commonwealth of Massachusetts.
Section 11. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement between the parties and supersedes any and all prior communications,
agreements and understandings, written or oral, with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Individual
Pension Agreement as of the date and year first written above.
XTRA CORPORATION
/s/ Robert B. Goergen
By: _______________________________
Title: Chairman of the Board
/s/ Lewis Rubin
___________________________________
LEWIS RUBIN
-7-
<PAGE> 8
APPENDIX A
----------
A Change of Control will occur for purposes of this Plan if (i) any
individual, corporation, partnership, company or other entity (a "Person")
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of securities of the Corporation representing more than
40% of the combined voting power of the Corporation's then-outstanding
securities (other than as a result of acquisitions of such securities from the
Corporation), (ii) there is a change of control of the Corporation of a kind
which would be required to be reported under Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934 (the
"Act") (or a similar item in a similar schedule or form), whether or not the
Corporation is then subject to such reporting requirement, (iii) the
Corporation is a party to, or the stockholders approve, a merger,
consolidation, or other reorganization (other than (a) a merger, consolidation
or other reorganization which would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to represent,
either by remaining outstanding or by being converted into vesting securities
of the surviving entity, more than 50% of the combined voting power of the
voting securities of the Corporation or such surviving entity outstanding
immediately after such merger, consolidation, or other reorganization, or (b) a
merger, consolidation, or other reorganization effected to implement a
recapitalization of the Corporation, or similar transaction, in which no Person
acquires more than 20% of the combined voting power of the Corporation's then
outstanding securities), a sale of all or substantially all assets, or a plan
of liquidation, or (iv) individuals who, at the date hereof, constitute the
Board cease for any reason to constitute a majority thereof, PROVIDED, HOWEVER,
that any director who is not in office at the date hereof but whose election by
the Board or whose nomination for election by the Corporation's shareholders
was approved by a vote of at least a majority of the directors then still in
office who either were directors at the date hereof or whose election or
nomination for election was previously so approved (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Directors of the Corporation, as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Act) shall be deemed to have been in
office at the date hereof for purposes of this definition.
Notwithstanding the foregoing provisions of this Exhibit A, a "Change
of Control" will not be deemed to have occurred solely because of the
acquisition of securities of the Corporation (or any reporting requirement
under the Act relating thereto) by an employee benefit plan maintained by the
Corporation for its employees.
-8-
<PAGE> 1
<TABLE>
Exhibit 11.1
(page 1 of 1)
XTRA Corporation
Earnings Per Share Calculations
-------------------------------
(Thousands of dollars except per share amounts)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
----------------- -----------------
1994 1993 1994 1993
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Income $14,597 $10,548 $42,600 $30,619
Dividends on and accretion of issuance costs
of Series C Cumulative Redeemable
Exchangeable Preferred Stock - (963) - (2,889)
------- ------- ------- -------
Net Income before dividends
on Series B Preferred Stock $14,597 $ 9,585 $42,600 $27,730
Less: Preferred Stock Dividends - Series B - - - (806)
------- ------- ------- -------
Net Income Available to Common Stockholders $14,597 $ 9,585 $42,600 $26,924
======= ======= ======= =======
Primary EPS
- - ------------
Primary Shares Outstanding (in thousands): 17,023 16,972 17,015 14,764
Primary Earnings Per Share $ 0.86 $ 0.56 $ 2.50 $ 1.82
======= ======= ======= =======
Fully Diluted EPS
- - ------------------
Fully Diluted Shares Outstanding (in thousands): 17,024 16,973 17,018 15,966
Fully Diluted Earnings Per Share $ 0.85 $ 0.56 $ 2.50 $ 1.74
======= ======= ======= =======
</TABLE>
<PAGE> 2
<TABLE>
Exhibit 11.1
(page 2 of 3)
XTRA Corporation
Calculation of Weighted Average Shares Outstanding
--------------------------------------------------
For the three months ended June 30, 1994 and 1993
(Thousands of shares)
(Unaudited)
<CAPTION>
1994 1993
------- -------
<S> <C> <C>
Computation of Primary Shares Outstanding
- - -----------------------------------------
Weighted average common shares outstanding 16,914 16,837
Common stock equivalents for primary EPS:
Stock options outstanding 109 135
Weighted average number of common ------- -------
shares outstanding (primary) 17,023 16,972
======= =======
Computation of Fully Diluted Shares Outstanding
- - -----------------------------------------------
Weighted average common shares outstanding 16,914 16,837
Common stock equivalents for fully diluted EPS:
Stock options outstanding 110 136
Weighted average number of common ------- -------
Shares outstanding (fully diluted) 17,024 16,973
======= =======
</TABLE>
<PAGE> 3
<TABLE>
Exhibit 11.1
(page 3 of 3)
XTRA Corporation
Calculation of Weighted Average Shares Outstanding
--------------------------------------------------
For the nine months ended June 30, 1994 and 1993
(Thousands of shares)
(Unaudited)
<CAPTION>
1994 1993
------- ------
<S> <C> <C>
Computation of Primary Shares Outstanding
- - -----------------------------------------
Weighted average common shares outstanding 16,890 14,634
Common stock equivalents for primary EPS:
Stock options outstanding 125 130
Weighted average number of common ------- ------
shares outstanding (primary) 17,015 14,764
======= ======
Computation of Fully Diluted Shares Outstanding
- - -----------------------------------------------
Weighted average common shares outstanding 16,890 14,634
Common stock equivalents for fully diluted EPS:
$1.9375 Series B Cumulative Convertible Preferred Stock, issued 7/17/87
Conversion rate of 1.445 per common share (converted 12/29/92)
Per each preferred share
2,498 shares X 1.445 X 90/273 (post-split) - 1,190
Stock options outstanding 128 142
Weighted average number of common ------- ------
Shares outstanding (fully diluted) 17,018 15,966
======= ======
</TABLE>
Note: The 1.9375 Series B Cumulative Convertible Preferred Stock shares
are not common stock equivalents since they were issued to yield 7.75%
which is more than 2/3 of the average Aa corporate bond yield (2/3 of
9.68% = 6.45%) on the day of issuance. However they do enter into the
computation of fully diluted earnings per share because of potential
dilution.
<PAGE> 1
<TABLE>
Exhibit 12.1
XTRA CORPORATION
STATEMENT OF THE CALCULATION OF EARNINGS TO FIXED CHARGES
---------------------------------------------------------
For the nine months ended June 30, 1994 and 1993
(Thousands of dollars)
(Unaudited)
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
EARNINGS
Income from operations before provision for income taxes $72,814 $51,110
Add: Fixed charges (below) 27,121 33,890
------- -------
$99,935 $85,000
======= =======
FIXED CHARGES
Interest expense $25,028 $30,050
Interest portion of rent expense 2,093 3,840
------- -------
$27,121 $33,890
======= =======
Ratio of Earnings to Fixed Charges 3.7 2.5
======= =======
</TABLE>
Note: For purposes of computing the ratio of earnings to fixed charges,
"earnings" represents income from operations before taxes plus fixed
charges. "Fixed charges" for operations consist of interest on
indebtedness and the portion of rental expense which represents
interest.
<PAGE> 1
<TABLE>
Exhibit 12.2
XTRA INC.
STATEMENT OF THE CALCULATION OF EARNINGS TO FIXED CHARGES
---------------------------------------------------------
For the nine months ended June 30, 1994 and 1993
(Thousands of dollars)
(Unaudited)
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
EARNINGS
Income from operations before provision for income taxes $72,814 $51,110
Add: Fixed charges (below) 27,121 33,890
------- -------
$99,935 $85,000
======= =======
FIXED CHARGES
Interest expense $25,028 $30,050
Interest portion of rent expense 2,093 3,840
------- -------
$27,121 $33,890
======= =======
Ratio of Earnings to Fixed Charges 3.7 2.5
======= =======
</TABLE>
Note: For purposes of computing the ratio of earnings to fixed charges,
"earnings" represents income from operations before taxes plus fixed
charges. "Fixed charges" for operations consist of interest on
indebtedness and the portion of rental expense which represents
interest.
<PAGE> 1
<TABLE>
Exhibit 12.3
XTRA CORPORATION
STATEMENT OF THE CALCULATION OF EARNINGS TO FIXED CHARGES
---------------------------------------------------------
AND PREFERRED STOCK DIVIDENDS
-----------------------------
For the nine months ended June 30, 1994 and 1993
(Thousands of dollars)
(Unaudited)
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
EARNINGS
Income from operations before provision for income taxes $72,814 $51,110
Add: Fixed charges (below) 27,121 40,969
------- -------
$99,935 $92,079
======= =======
FIXED CHARGES
Interest expense $25,028 $30,050
Interest portion of rent expense 2,093 3,840
Pretax earnings required to cover
preferred dividend requirements 0 7,079
------- -------
$27,121 $40,969
======= =======
Ratio of Earnings to Fixed Charges 3.7 2.2
======= =======
</TABLE>
Note: For purposes of computing the ratio of earnings to fixed charges,
"earnings" represents income from operations before taxes plus fixed
charges. "Fixed charges" for operations consist of interest on
indebtedness, the portion of rental expense which represents
interest and the amount of pretax income necessary to cover
preferred stock dividends.
