<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 16, 1994
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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GENERAL AMERICAN TRANSPORTATION CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 36-2827991
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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500 West Monroe Street
Chicago, Illinois 60661-3676
(312) 621-6200
(Address, including zip code and telephone number, including area code, of
registrant's principal executive offices)
Paul A. Heinen, Esq., Secretary
General American Transportation Corporation
500 West Monroe Street
Chicago, Illinois 60661-3676
(312) 621-6200
(Name, address, including zip code, and telephone number including area code, of
agent for service)
Copies to:
Robert E. Curley, Esq. F. Ellen Duff, Esq.
Mayer, Brown & Platt Winston & Strawn
190 South LaSalle Street 35 West Wacker Drive
Chicago, Illinois 60603 Chicago, Illinois 60601
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PER UNIT(3) PRICE(3) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Debt Securities................... (1)(2) 100%(1) (1)(2) (1)
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Pass Through Certificates......... (1) 100%(1) (1) (1)
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Total............................. $389,862,000(1)(2) 100%(1) $389,862,000(1)(2) $134,436
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</TABLE>
(1) Pursuant to Rule 457(o) under the Securities Act of 1933, which permits the
registration fee to be calculated on the basis of the maximum offering price
of all the securities listed, the table does not specify by each class
information as to the amount to be registered, proposed maximum offering
price per unit or proposed maximum aggregate offering price. There are being
registered hereunder such presently indeterminate principal amount of Debt
Securities and Pass Through Certificates as may be offered from time to
time, with an aggregate initial offering price not to exceed $389,862,000.
(2) If any Debt Securities are issued at an original issue discount, such
greater amount as shall result in the initial offering prices for the Debt
Securities aggregating $389,862,000. Any offering of Debt Securities
denominated in any foreign currencies or foreign currency units will be
treated as the equivalent in U.S. dollars based on the exchange rate
applicable to the purchase of such Debt Securities from the Registrant.
(3) Estimated in accordance with Rule 457 solely for the purpose of calculating
the registration fee.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUSES
CONTAINED HEREIN CONSTITUTE COMBINED PROSPECTUSES RELATING ALSO TO AN AGGREGATE
OF $260,138,000 UNSOLD PRINCIPAL AMOUNT OF PREVIOUSLY REGISTERED DEBT SECURITIES
AND PASS THROUGH CERTIFICATES, $127,000,000 REGISTERED PURSUANT TO REGISTRATION
STATEMENT NO. 33-33073 AND $133,138,000 REGISTERED PURSUANT TO REGISTRATION
STATEMENT NO. 33-48475. THIS REGISTRATION STATEMENT CONSTITUTES POST-EFFECTIVE
AMENDMENT NO. 1 TO EACH OF SAID PRIOR REGISTRATION STATEMENTS AND EACH SUCH
POST-EFFECTIVE AMENDMENT SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY WITH THE
EFFECTIVENESS OF THIS REGISTRATION STATEMENT AND IN ACCORDANCE WITH SECTION 8(C)
OF THE SECURITIES ACT OF 1933.
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<PAGE> 2
EXPLANATORY NOTE
This Registration Statement contains a Prospectus (the "Pass Through
Certificate Prospectus") relating to up to $650,000,000 aggregate principal
amount of pass through certificates of General American Transportation
Corporation (the "Company"), a Prospectus (the "Debt Security Prospectus")
relating to up to $650,000,000 aggregate principal amount of debt securities of
the Company and a Prospectus Supplement (the "MTN Prospectus Supplement")
relating to the offering of up to $650,000,000 of such debt securities as
Medium-Term Notes, Series E, to be offered by the Company beginning immediately
upon the effectiveness of this Registration Statement. The aggregate principal
amount of pass through certificates to be offered and sold pursuant to this
Registration Statement is subject to reduction by the aggregate principal amount
of debt securities sold pursuant to this Registration Statement and vice versa.
Pricing information and certain other matters will be included in one or
more Pricing Supplements to the MTN Prospectus Supplement as Medium-Term Notes
are offered and sold thereunder. Upon the public offering or sale of the
remaining pass through certificates or debt securities registered under this
Registration Statement, a Prospectus Supplement describing the particular terms
of such offer or sale will be filed in accordance with the rules of the
Securities and Exchange Commission incorporating either the Pass Through
Certificate Prospectus or the Debt Security Prospectus, as applicable.
<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time that the registration
statement becomes effective. This prospectus shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be any sale
of these securities in any State in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such State.
SUBJECT TO COMPLETION, DATED FEBRUARY 16, 1994
PROSPECTUS
$650,000,000 [LOGO]
GENERAL AMERICAN TRANSPORTATION CORPORATION
PASS THROUGH CERTIFICATES
Up to $650,000,000 aggregate principal amount of Pass Through Certificates may
be offered for sale from time to time pursuant to this Prospectus and related
Prospectus Supplements. Pass Through Certificates may be issued in one or more
series in amounts, at prices and on terms to be determined at the time of the
offering. In respect of each offering of Pass Through Certificates, a separate
General American Transportation Corporation Pass Through Trust for each series
of Pass Through Certificates being offered (each, a "Trust") will be formed
pursuant to the Pass Through Trust Agreement (the "Basic Agreement") and a
supplement thereto (a "Trust Supplement") relating to such Trust between General
American Transportation Corporation ("GATC" or the "Company") and, unless
otherwise specified in the Prospectus Supplement, The First National Bank of
Chicago (the "Pass Through Trustee"), as pass through trustee under each Trust.
Each Pass Through Certificate in a series will represent a fractional undivided
interest in the related Trust and will have no rights, benefits or interest in
respect of any other Trust. The property of each Trust will consist of equipment
notes (the "Equipment Notes") issued on a nonrecourse basis by one or more owner
trustees pursuant to separate leveraged lease transactions to finance a portion
of the equipment cost to such owner trustee of certain railcars (the "Equipment
Units") that will be acquired by such owner trustee and leased to GATC. The
Prospectus Supplement relating to each offering of Pass Through Certificates
will describe certain terms of the Pass Through Certificates being offered, the
Trust relating thereto, the Equipment Notes to be purchased by such Trust and
the leveraged lease transactions and Equipment Units relating to such Equipment
Notes.
Equipment Notes may be issued in respect of Equipment Units in one or more
series, each series having a different interest rate and final maturity date. A
separate Trust will purchase one or more series of the Equipment Notes issued
with respect to each group of Equipment Units (an "Equipment Group"). All of the
Equipment Notes held in such Trust will have an interest rate equal to the
interest rate applicable to the Pass Through Certificates issued by such Trust
and maturity dates occurring on or before the final distribution date applicable
to such Pass Through Certificates. The Equipment Notes issued with respect to
each Equipment Group will be secured by a security interest in such Equipment
Group and by the Lease relating thereto, including the right to receive rentals
payable in respect of such Equipment Group by GATC. Although neither the Pass
Through Certificates nor the Equipment Notes will be direct obligations of, or
guaranteed by, GATC, the amounts unconditionally payable by GATC for lease of
the Equipment Group will be sufficient to pay in full when due all payments of
principal of, premium, if any, and interest on the related Equipment Notes held
in the related Trust.
Interest paid on the Equipment Notes held in each Trust will be passed through
to the holders of the Pass Through Certificates relating to such Trust on the
dates and at the rate per annum set forth in the Prospectus Supplement relating
to such Pass Through Certificates until the final distribution date for such
Trust. Principal paid on the Equipment Notes held in each Trust will be passed
through to the holders of the Pass Through Certificates relating to such Trust
in scheduled amounts on the dates set forth in the Prospectus Supplement
relating to such Pass Through Certificates until the final distribution date for
such Trust.
The Pass Through Certificates may be sold through underwriters, dealers or
agents or directly to purchasers. See "Plan of Distribution." The Prospectus
Supplement will set forth the names of any underwriters, dealers or agents
involved in the sale of the Pass Through Certificates in respect of which this
Prospectus is being delivered and any applicable fee, commission or discount
arrangements with them.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is February , 1994
<PAGE> 4
AVAILABLE INFORMATION
General American Transportation Corporation, a New York corporation ("GATC"
or the "Company") is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information filed by GATC
with the Commission can be inspected and copied at the Public Reference Section
of the Commission, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the public reference facilities of the
Commission's Regional Offices at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661, and Seven World Trade Center, New York, New York 10048. Copies
of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. GATC has filed with the Commission a registration statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement.
DOCUMENTS INCORPORATED BY REFERENCE
GATC's Annual Report on Form 10-K for the year ended December 31, 1992, its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1993, June 30,
1993, and September 30, 1993, respectively, and its Current Report on Form 8-K
dated July 28, 1993 heretofore filed with the Commission pursuant to the
Exchange Act, are hereby incorporated by reference.
All documents filed by GATC pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the securities offered hereby shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified and superseded, to constitute a part of
this Prospectus.
GATC will provide without charge to each person, including any beneficial
owner, to whom this Prospectus is delivered, upon the written or oral request of
such person, a copy of any or all of the foregoing documents incorporated herein
by reference (other than exhibits unless specifically incorporated therein).
Requests for such documents should be directed to General American
Transportation Corporation, 500 West Monroe Street, Chicago, Illinois
60661-3676, Attention: Secretary (telephone 312-621-6200).
THE COMPANY
GATC is a wholly owned subsidiary of GATX Corporation ("GATX") and is
principally engaged in railcar leasing and management. GATX Terminals
Corporation ("Terminals"), a wholly owned subsidiary of the Company, is engaged
in the operation of public bulk liquid terminals and domestic pipeline systems.
The Company is the largest lessor of railroad tank cars in the United States,
and Terminals is one of the largest independent operators of public bulk liquid
terminals in the world. The principal offices of the Company are located at 500
West Monroe Street, Chicago, Illinois 60661-3676 (telephone: (312) 621-6200).
The Company leases specialized railcars, primarily tank cars and to a
lesser extent Airslide(R) covered hoppers and plastic pellet cars, under full
service leases. The Company's railcars have a useful life of approximately 30 to
33 years. The average age of the railcars in the Company's fleet is
approximately
2
<PAGE> 5
15 years. The Company's customers typically lease new equipment for a term of
five years or longer, whereas renewals or leases of used cars are typically for
periods ranging from less than a year to seven years with an average lease term
of about three years. Under its full service leases, the Company maintains and
services its railcars, pays ad valorem taxes and provides many ancillary
services.
Terminals is engaged in the storage, handling and intermodal transfer of
petroleum and chemical commodities at key points in the bulk liquid distribution
chain. Terminals owns and operates terminals in the United States and the United
Kingdom; Terminals also has joint venture interests in facilities in Europe and
the Pacific Rim. All of its terminals are located near major distribution and
transportation points and most are capable of receiving and shipping bulk
liquids by ship, rail, barge and truck. Many of the terminals are also linked
with major interstate pipelines. In addition to storing, handling and
transferring bulk liquids, Terminals also provides blending and testing services
at most of its facilities.
RELATIONSHIP WITH GATX
All of the Company's outstanding common stock is owned by GATX. GATX is
also the parent of American Steamship Company, a shipping company which operates
self-unloading vessels on the Great Lakes, GATX Logistics, Inc., which provides
distribution and logistics support services throughout North America and
develops and operates warehouses, and GATX Financial Services, which through its
principal subsidiary, GATX Capital Corporation as well as its subsidiaries and
joint ventures, arranges and services the financing of equipment and other
capital assets on a worldwide basis.
GATX will not guarantee the Pass Through Certificates and does not
guarantee any other indebtedness of the Company. The Company, in the normal
course of business, pays dividends to GATX to provide for GATX's normal
operating expenses. Additional amounts have been advanced to GATX from time to
time for general corporate purposes, the redemption of GATX preferred stock and
the retirement of debt. In addition, GATX may make advances to subsidiaries of
the Company in the normal course of business. These advances have no fixed
maturity date.
3
<PAGE> 6
FORMATION OF THE TRUSTS
In respect of each offering of Pass Through Certificates, one or more
Trusts will be formed, and the related Pass Through Certificates will be issued,
pursuant to separate Trust Supplements to be entered into between the Pass
Through Trustee and GATC in accordance with the terms of the Basic Agreement.
All Pass Through Certificates with respect to each Trust will represent
fractional undivided interests in such Trust and the property held in such
Trust, and will have no rights, benefits or interest in respect of any other
Trust or the property held therein. Concurrently with the execution and delivery
of each Trust Supplement, the Pass Through Trustee, on behalf of the Trust
formed thereby, will enter into one or more participation agreements (each such
agreement being herein referred to as a "Participation Agreement") relating to
one or more Equipment Groups described in the applicable Prospectus Supplement.
Pursuant to the applicable Participation Agreement, the Pass Through Trustee, on
behalf of such Trust, will purchase the Equipment Notes issued with respect to
each such Equipment Group so that all of the Equipment Notes held in such Trust
will have an interest rate equal to the interest rate applicable to the Pass
Through Certificates issued by such Trust. The maturity dates of the Equipment
Notes acquired by each Trust will occur on or before the final distribution date
applicable to the Pass Through Certificates issued with respect to such Trust.
The Pass Through Trustee will distribute the amount of payments of principal,
premium, if any, and interest received by it as holder of the Equipment Notes to
the Certificateholders of the Pass Through Certificates with respect to the
Trust in which such Equipment Notes are held. See "Description of the Pass
Through Certificates" and "Description of the Equipment Notes."
USE OF PROCEEDS
The Pass Through Certificates offered pursuant to any Prospectus Supplement
will be issued in order to facilitate the financing of the debt portion of one
or more separate leveraged lease transactions entered into by GATC, as lessee,
with respect to one or more separate Equipment Groups described in such
Prospectus Supplement. The proceeds from the sale of such Pass Through
Certificates will be used by the Pass Through Trustee on behalf of the
applicable Trust to purchase, at par, the Equipment Notes to be issued by the
respective Owner Trustee or Owner Trustees to finance a portion (as specified in
the applicable Prospectus Supplement) of the equipment cost of such Equipment
Group or Groups. Simultaneously with the acquisition of each such Equipment
Group, the respective Owner Trustee will lease such Equipment Group to GATC.
Unless otherwise specified in the applicable Prospectus Supplement, GATC will
use the proceeds of each separate leveraged lease transaction for general
corporate purposes.
The Equipment Notes with respect to each Equipment Group will be issued
under a separate Trust Indenture and Security Agreement (each, an "Indenture")
between a bank or trust company as trustee thereunder (each, an "Indenture
Trustee") and an owner trustee, not in its individual capacity (except as
expressly set forth therein) but solely as trustee (each, an "Owner Trustee"),
of a separate trust for the benefit of one or more institutional or corporate
investors (each, an "Owner Participant"). Each Owner Participant will provide,
from sources other than the Equipment Notes, the balance of the equipment cost
of the related Equipment Group. No Owner Participant, however, will be
personally liable for any amount payable under the related Indenture or the
Equipment Notes issued thereunder. Subject to certain restrictions, each Owner
Participant may transfer its interest in the related Equipment Group.
Except as otherwise described in the Prospectus Supplement, each Equipment
Group will be purchased by the Owner Trustee from GATC and will consist of
railroad tank cars and freight cars of relatively recent manufacture that have
been, or are to be, subleased to GATC's customers, but which are otherwise not
subject to any encumbrances. Because the railcars within each Equipment Group
will be of relatively recent manufacture, they will not have had any significant
operating history at the time of the leveraged lease transaction. In light of
the foregoing, and because GATC's obligation under the leases to make payments
sufficient to pay in full the Equipment Notes will be unconditional, and not
affected by the financial performance of the railcars within the related
Equipment Group, GATC believes that historical financial information with
respect to the Equipment Groups will not be relevant to purchasers of the Pass
Through Certificates.
4
<PAGE> 7
DESCRIPTION OF THE PASS THROUGH CERTIFICATES
In connection with each offering of Pass Through Certificates, a separate
Trust will be formed and a series of Pass Through Certificates will be issued
pursuant to the Basic Agreement and a Trust Supplement to be entered into
between GATC and the Pass Through Trustee. The following summary relates to the
Basic Agreement and each of the Trust Supplements, the Trusts to be formed
thereby and the Pass Through Certificates to be issued by each Trust except to
the extent, if any, described in the applicable Prospectus Supplement. Citations
to the relevant sections of the Basic Agreement appear below in parentheses. The
statements under this caption are a summary and do not purport to be complete.
This summary makes use of terms defined in and is qualified in its entirety by
reference to all of the provisions of the Basic Agreement, the form of which has
been filed as an exhibit to the Registration Statement of which this Prospectus
is a part. The form of the Trust Supplement relating to each series of Pass
Through Certificates and the forms of the Leases, Participation Agreements,
Indentures and Equipment Notes relating thereto will be filed as exhibits to a
report by the Company on Form 8-K, 10-Q, or 10-K, as applicable, to be filed
with the Commission following the offering of such series of Pass Through
Certificates.
GENERAL
The Pass Through Certificates of each Trust will be issued in fully
registered form only. Each Pass Through Certificate will represent a fractional
undivided interest in the separate Trust created by the Trust Supplement
pursuant to which such Pass Through Certificate is issued. The property of each
Trust will include the Equipment Notes held in such Trust, all monies at any
time paid thereon and all monies due and to become due thereunder and funds from
time to time deposited with the Pass Through Trustee in accounts relating to
such Trust. Each Pass Through Certificate will correspond to a pro rata share of
the outstanding principal amount of the Equipment Notes and other property held
in the related Trust and will be issued in denominations of $1,000 or any
integral multiple of $1,000. (Sections 2.01, 2.02 and 3.01)
Except as otherwise provided in the applicable Trust Supplement, Pass
Through Certificates will be registered in the name of Cede & Co. ("Cede") as
the nominee of The Depository Trust Company ("DTC") and no person acquiring an
interest in Pass Through Certificates (a "Certificate Owner") will be entitled
to receive a certificate representing such person's interest in the related
Trust unless "Definitive Certificates" are issued as described below. Unless
Definitive Certificates are issued, all references to actions by
Certificateholders shall refer to actions taken by DTC upon instructions from
DTC Participants (as defined below), and all references herein to distributions,
notices, reports and statements to Certificateholders shall refer, as the case
may be, to distributions, notices, reports and statements to DTC or Cede, as the
registered holder of the Pass Through Certificates, or to DTC Participants for
distribution to Certificate Owners in accordance with DTC procedures. See
"Description of the Pass Through Certificates -- Book-Entry Registration."
(Section 3.09)
Interest will be passed through to Certificateholders of each Trust at the
rate per annum set forth on the cover page of the applicable Prospectus
Supplement and will be calculated on the basis of a 360-day year of twelve
30-day months.
The Pass Through Certificates of each series represent interests only in
the related Trust and all payments and distributions shall be made only from the
related Trust Property. (Section 3.08) The Pass Through Certificates do not
represent an interest in or obligation of GATC, the Pass Through Trustee, any
Owner Trustee in its individual capacity, any Owner Participant or any affiliate
of any thereof.
The Basic Agreement does not and, except as otherwise described in the
applicable Prospectus Supplement, the Indentures will not, include financial
covenants or "event risk" provisions specifically designed to afford
Certificateholders protection in the event of a highly leveraged transaction
affecting GATC. However, the Certificateholders of each series will have the
benefit of a lien on the specific Equipment Group securing the related Equipment
Notes held in the related Trust, as discussed under the caption "Description of
the Equipment Notes -- Security."
5
<PAGE> 8
BOOK-ENTRY REGISTRATION
Except as otherwise described in the applicable Prospectus Supplement, Pass
Through Certificates will be subject to the provisions described under this
caption for book-entry registration with DTC.
DTC. DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to Section 17A of the Exchange Act. DTC
was created to hold securities for its participants ("DTC Participants") and to
facilitate the clearance and settlement of securities transactions between DTC
Participants through electronic book-entries, thereby eliminating the need for
physical movement of certificates. DTC Participants include securities brokers
and dealers, banks, trust companies and clearing corporations. Indirect access
to the DTC system also is available to others such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a DTC Participant either directly or indirectly ("Indirect Participants").
Certificate Owners that are not DTC Participants or Indirect Participants
but desire to purchase, sell or otherwise transfer ownership of, or other
interests in, Pass Through Certificates may do so only through DTC Participants
and Indirect Participants. In addition, Certificate Owners will receive all
distributions of principal, premium, if any, and interest from the Pass Through
Trustee through DTC Participants or Indirect Participants, as the case may be.
Under a book-entry format, Certificate Owners may experience some delay in their
receipt of payments, because such payments will be forwarded by the Pass Through
Trustee to Cede, as nominee for DTC. DTC will forward such payments to DTC
Participants, which thereafter will forward them to Indirect Participants or
Certificate Owners, as the case may be, in accordance with customary industry
practices. The forwarding of such distributions to the Certificate Owners will
be the responsibility of such DTC Participants. The only "Certificateholder"
will be Cede, as nominee of DTC. Certificate Owners will not be recognized by
the Pass Through Trustee as Certificateholders, as such term is used in the
Basic Agreement, and Certificate Owners will be permitted to exercise the rights
of Certificateholders only indirectly through DTC and DTC Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
Pass Through Certificates among DTC Participants on whose behalf it acts with
respect to the Pass Through Certificates and to receive and transmit
distributions of principal of, premium, if any, and interest on the Pass Through
Certificates. DTC Participants and Indirect Participants with which Certificate
Owners have accounts with respect to the Pass Through Certificates similarly are
required to make book-entry transfers and receive and transmit such payments on
behalf of their respective Certificate Owners. Accordingly, although Certificate
Owners will not possess Pass Through Certificates, the Rules provide a mechanism
by which Certificate Owners will receive payments and will be able to transfer
their interests.
Because DTC can only act on behalf of DTC Participants, who in turn act on
behalf of Indirect Participants, the ability of a Certificate Owner to pledge
Pass Through Certificates to persons or entities that do not participate in the
DTC system, or to otherwise act with respect to such Pass Through Certificates,
may be limited due to the lack of a physical certificate for such Pass Through
Certificates.
GATC understands that DTC will take any action permitted to be taken by
Certificateholders only at the direction of one or more DTC Participants to
whose accounts with DTC the Pass Through Certificates are credited.
Additionally, GATC understands that DTC will take such actions with respect to
any specified percentage of the beneficial interest of Certificateholders held
in each Trust only at the direction of and on behalf of DTC Participants whose
holders include undivided interests that satisfy any such percentage. DTC may
take conflicting actions with respect to other undivided interests to the extent
that such actions are taken on behalf of DTC Participants whose holders include
such undivided interests.
Neither GATC nor the Pass Through Trustee will have any liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Pass Through
6
<PAGE> 9
Certificates held by Cede, as nominee for DTC, or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interests.
The information contained in this section concerning DTC and DTC's
book-entry system has been obtained from sources that the Company believes to be
reliable, but the Company takes no responsibility for the accuracy thereof.
DEFINITIVE CERTIFICATES. With respect to each Trust, the related Pass
Through Certificates will be issued in fully registered, certificated form
("Definitive Certificates") to Certificate Owners or their nominees, rather than
to DTC or its nominee, only if (i) GATC advises the Pass Through Trustee in
writing that DTC is no longer willing or able to properly discharge its
responsibilities as depository with respect to such Pass Through Certificates
and the Pass Through Trustee or GATC is unable to locate a qualified successor,
(ii) GATC, at its option, elects to terminate the book-entry system through DTC
or (iii) after the occurrence of an Event of Default, Certificate Owners
representing an aggregate percentage interest in such Trust of not less than a
majority advise the Pass Through Trustee through DTC in writing that the
continuation of a book-entry system through DTC (or a successor thereto) is no
longer in the Certificate Owners' best interest. (Section 3.09)
Upon the occurrence of any event described in the immediately preceding
paragraph, the Pass Through Trustee will be required to notify all affected
Certificate Owners through DTC Participants of the availability of Definitive
Certificates. Upon surrender by DTC of the certificates representing the Pass
Through Certificates and receipt of instructions for re-registration, the Pass
Through Trustee will reissue the Pass Through Certificates as Definitive
Certificates to Certificate Owners. (Section 3.09)
Distributions of principal of, premium, if any, and interest on the Pass
Through Certificates will thereafter be made by the Pass Through Trustee in
accordance with the procedures set forth in the Basic Agreement and the
applicable Trust Supplements, directly to holders of Definitive Certificates in
whose names such Definitive Certificates were registered at the close of
business on the applicable record date. Such distributions will be made by check
mailed to the address of each such holder as it appears on the register
maintained with respect to the applicable Trust. The final payment on any Pass
Through Certificate, however, will be made only upon presentation and surrender
of such Pass Through Certificate at the office or agency specified in the notice
of final distribution to Certificateholders. (Section 4.02)
Definitive Certificates will be freely transferable and exchangeable at the
office of the Pass Through Trustee upon compliance with the requirements set
forth in the Basic Agreement and the applicable Trust Supplements. No service
charge will be imposed for any registration of transfer or exchange, but payment
of a sum sufficient to cover any tax or other governmental charge shall be
required. (Section 3.04)
SAME-DAY SETTLEMENT AND PAYMENT. Settlement for the Pass Through
Certificates will be required to be made in immediately available funds. So long
as the Pass Through Certificates are registered in the name of Cede, all
payments made by GATC to the Indenture Trustees, as assignees of the Owner
Trustees' rights under the Leases, will be in immediately available funds and
will be passed through by the Pass Through Trustee to DTC in immediately
available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearinghouse or next-day funds. In contrast, the Pass
Through Certificates will trade in DTC's Same Day Funds Settlement System until
maturity, and secondary market trading activity in the Pass Through Certificates
will therefore be required by DTC to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in immediately
available funds on trading activity in the Pass Through Certificates.
PAYMENTS AND DISTRIBUTIONS
Payments received by the Pass Through Trustee of principal of, premium, if
any, and interest on the Equipment Notes held in each Trust will be distributed
by the Pass Through Trustee to the Certificateholders of such Trust on the date
such receipt is confirmed, except in certain cases when some or all of
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such Equipment Notes are in default. See "Description of the Pass Through
Certificates -- Events of Default and Certain Rights Upon an Event of Default."
Payments of principal of, and interest on the unpaid principal amount of,
the Equipment Notes held in each Trust will be scheduled to be received by the
Pass Through Trustee on the dates specified in the applicable Prospectus
Supplement (such scheduled payments of principal of, and interest on, the
Equipment Notes are herein referred to as "Scheduled Payments," and the dates
specified therefor in the applicable Prospectus Supplement are herein referred
to as "Regular Distribution Dates"). The Pass Through Trustee of each Trust will
distribute on each Regular Distribution Date to the Certificateholders of such
Trust all Scheduled Payments, the receipt of which is confirmed by the Pass
Through Trustee on such Regular Distribution Date. Each such distribution of
Scheduled Payments will be made by the Pass Through Trustee to the holders of
record of the Pass Through Certificates of such Trust on the fifteenth day
immediately preceding such Regular Distribution Date, subject to certain
exceptions. (Sections 4.01 and 4.02) If a Scheduled Payment is not received by
the Pass Through Trustee on a Regular Distribution Date but is received within
five days thereafter, it will be distributed on the date received to such
holders of record. If it is received after such five-day period, it will be
treated as a Special Payment and distributed as described below.
Each Certificateholder of each Trust will be entitled to receive a pro rata
share of any distribution in respect of Scheduled Payments of principal and
interest made on the Equipment Notes held in such Trust. Scheduled Payments of
principal on the Equipment Notes held in each Trust will be set forth in the
applicable Prospectus Supplement. After a partial or full prepayment or default
in respect of some or all of such Equipment Notes, a Certificateholder should
refer to the information with respect to the Pool Balance and the Pool Factor
for such Trust reported periodically by the Pass Through Trustee. See
"Description of the Pass Through Certificates -- Pool Factors" and "Description
of the Pass Through Certificates -- Statements to Certificateholders."
Payments of principal, premium, if any, and interest received by the Pass
Through Trustee on account of a partial or full prepayment, if any, of the
Equipment Notes held in a Trust, and payments received by the Pass Through
Trustee following a default in respect of the Equipment Notes held in a Trust
(including payments received by the Pass Through Trustee on account of the
purchase by the related Owner Trustee of such Equipment Notes or payments
received on account of the sale of such Equipment Notes by the Pass Through
Trustee) ("Special Payments") will be distributed on the dates specified
therefor in the applicable Prospectus Supplement (a "Special Distribution
Date"). In general, the Pass Through Trustee will mail notice to the
Certificateholders of record of any Trust not less than 20 days prior to the
Special Distribution Date on which any Special Payment is scheduled to be
distributed by the Pass Through Trustee stating such anticipated Special
Distribution Date. (Section 4.02) Each distribution of a Special Payment, other
than a final distribution, on a Special Distribution Date for any Trust will be
made by the Pass Through Trustee to the holders of record of the Pass Through
Certificates of such Trust on the fifteenth day preceding such Special
Distribution Date. See "Description of the Equipment Notes -- Prepayments" and
"Description of the Pass Through Certificates -- Events of Default and Certain
Rights Upon an Event of Default."
The Basic Agreement requires that the Pass Through Trustee establish and
maintain, for each Trust and for the benefit of the Certificateholders of such
Trust, one or more non-interest bearing accounts (the "Certificate Account") for
the deposit of payments representing Scheduled Payments on the Equipment Notes
held in such Trust. (Section 4.01) The Basic Agreement also requires that the
Pass Through Trustee establish and maintain, for each Trust and for the benefit
of the Certificateholders of such Trust, one or more accounts (the "Special
Payments Account") for the deposit of payments representing Special Payments.
Pursuant to the terms of the Basic Agreement, the Pass Through Trustee is
required to deposit any Scheduled Payments relating to the applicable Trust
received by it in the Certificate Account of such Trust and to deposit any
Special Payments so received by it in the Special Payments Account of such
Trust. (Section 4.01) All amounts so deposited will be distributed by the Pass
Through Trustee on a Regular Distribution Date or a Special Distribution Date as
appropriate. (Section 4.02)
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At such time, if any, as the Pass Through Certificates of any Trust are
issued in the form of Definitive Certificates and not to Cede, as nominee for
DTC, distributions by the Pass Through Trustee from the Certificate Account or
the Special Payments Account of such Trust on a Regular Distribution Date or a
Special Distribution Date, as appropriate, will be made by check mailed to each
Certificateholder of such Trust of record on the applicable record date at its
address appearing on the register maintained with respect to such Trust.
(Section 4.02) The final distribution for each Trust, however, will be made only
upon presentation and surrender of the Pass Through Certificates for such Trust
at the office or agency of the Pass Through Trustee specified in the notice
given by the Pass Through Trustee of such final distribution. The Pass Through
Trustee will mail such notice of the final distribution to the
Certificateholders of such Trust, specifying the date set for such final
distribution and the amount of such distribution. (Section 11.01) See
"Description of the Pass Through Certificates -- Termination of the Trusts."
If any Regular Distribution Date or Special Distribution Date is not a
Business Day, distributions scheduled to be made on such Regular Distribution
Date or Special Distribution Date may be made on the next succeeding Business
Day without additional interest. (Section 12.10)
POOL FACTORS
Unless there has been a prepayment, or a default in respect of one or more
issues of the Equipment Notes held in a Trust, as described in the applicable
Prospectus Supplement or below in "Description of the Pass Through Certificates
- -- Events of Default and Certain Rights Upon an Event of Default," the Pool
Factor for such Trusts will decline in proportion to the scheduled repayments of
principal on the Equipment Notes held in such Trust as described in the
applicable Prospectus Supplement. In the event of a partial or full prepayment
or default, the Pool Factor and the Pool Balance of each Trust so affected will
be recomputed after giving effect thereto and notice thereof will be mailed to
Certificateholders of such Trust. Each Trust will have a separate Pool Factor
and Pool Balance.
Unless otherwise described in the applicable Prospectus Supplement, the
"Pool Balance" for each Trust indicates, as of any date, the aggregate unpaid
principal amount of the Equipment Notes held in such Trust on such date plus any
amounts in respect of principal on such Equipment Notes held by the Pass Through
Trustee and not yet distributed plus the amount of any moneys held in the
related escrow account (other than earnings thereon). The Pool Balance for each
Trust as of any Regular Distribution Date or Special Distribution Date shall be
computed after giving effect to the payment of principal, if any, on the
Equipment Notes held in such Trust and distribution thereof to be made on that
date.
Unless otherwise described in the applicable Prospectus Supplement, the
"Pool Factor" for each Trust, as of any date, is the quotient (rounded to the
seventh decimal place) computed by dividing (i) the Pool Balance of such Trust,
by (ii) the aggregate original principal amount of the Equipment Notes held in
such Trust. The Pool Factor for each Trust as of any Regular Distribution Date
or Special Distribution Date shall be computed after giving effect to the
payment of principal, if any, on the Equipment Notes held in such Trust and
distribution thereof to be made on that date. The Pool Factor for each Trust
will initially be 1.0000000; thereafter, the Pool Factor for each Trust will
decline as described above to reflect reductions in the Pool Balance of such
Trust. The amount of a Certificateholder's pro rata share of the Pool Balance of
a Trust can be determined by multiplying the original denomination of the
Certificateholder's Pass Through Certificate of such Trust by the Pool Factor
for such Trust as of the applicable Regular Distribution Date or Special
Distribution Date. The Pool Factor and the Pool Balance for each Trust will be
mailed to Certificateholders of record of such Trust on each Regular
Distribution Date and Special Distribution Date.
STATEMENTS TO CERTIFICATEHOLDERS
On each Regular Distribution Date and Special Distribution Date, if any,
the Pass Through Trustee will include with each distribution of a Scheduled
Payment or Special Payment to Certificateholders of record of the related Trust
a statement, giving effect to such distribution to be made on such Regular
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Distribution Date or Special Distribution Date, if any, setting forth the
following information (per $1,000 in aggregate principal amount of Pass Through
Certificates for such Trust, as to (i) and (ii) below):
(i) the amount of such distribution allocable to principal and the amount
allocable to premium, if any;
(ii) the amount of such distribution allocable to interest; and
(iii) the Pool Balance and the Pool Factor for such Trust.
So long as the Pass Through Certificates of any Trust are registered in the
name of Cede, as nominee for DTC, on the applicable record date prior to each
Regular Distribution Date and Special Distribution Date, the Pass Through
Trustee will request from DTC a Securities Position Listing setting forth the
names of all DTC Participants reflected on DTC's books as holding interests in
the Pass Through Certificates of such Trust on such record date. On each Regular
Distribution Date and Special Distribution Date, the Pass Through Trustee will
mail to each such DTC Participant the statement described above, and will make
available additional copies as requested by such DTC Participant, to be
available for forwarding to Certificate Owners. (Section 3.09)
In addition, after the end of each calendar year, the Pass Through Trustee
will prepare for each Certificateholder of record of each Trust at any time
during the preceding calendar year a report containing the sum of the amounts
determined pursuant to clauses (i) and (ii) above with respect to the Trust for
such calendar year or, in the event such person was a Certificateholder of
record during a portion of such calendar year, for the applicable portion of
such calendar year, and such other items as are readily available to the Pass
Through Trustee and which a Certificateholder shall reasonably request as
necessary for the purpose of such Certificateholder's preparation of its federal
income tax returns. (Section 4.03) Such report and such other items shall be
prepared on the basis of information supplied to the Pass Through Trustee by the
DTC Participants, and shall be delivered by the Pass Through Trustee to such DTC
Participants to be available for forwarding by such DTC Participants to
Certificate Owners in the manner described above.
At such time, if any, as the Pass Through Certificates of a Trust are
issued in the form of Definitive Certificates, the Pass Through Trustee will
prepare and deliver the information described above to each Certificateholder of
record of such Trust as the name and period of record ownership of such
Certificateholder appears on the records of the Registrar of the Pass Through
Certificates.
VOTING OF EQUIPMENT NOTES
The Pass Through Trustee, as holder of the Equipment Notes held in each
Trust, has the right to vote and give consents and waivers in respect of such
Equipment Notes under the applicable Indenture. The Basic Agreement sets forth
the circumstances in which the Pass Through Trustee shall direct any action or
cast any vote as the holder of the Equipment Notes held in the applicable Trust
at its own discretion and the circumstances in which the Pass Through Trustee
shall seek instructions from the Certificateholders of such Trust. Prior to an
Event of Default (as defined below) with respect to any Trust, the principal
amount of the Equipment Notes held in such Trust directing any action or being
voted for or against any proposal shall be in proportion to the principal amount
of Pass Through Certificates held by the Certificateholders of such Trust taking
the corresponding position. (Sections 6.01 and 10.01)
EVENTS OF DEFAULT AND CERTAIN RIGHTS UPON AN EVENT OF DEFAULT
The Basic Agreement defines an event of default with respect to a Trust (an
"Event of Default") as the occurrence and continuance of an event of default
under one or more of the related Indentures (an "Indenture Event of Default").
The Indenture Events of Default will be described in the applicable Prospectus
Supplement and will include events of default under the related Lease. There
will be, however, no cross-default provisions in the Indentures and events
resulting in an Indenture Event of Default under any particular Indenture (or a
default under any other indebtedness of the Company) will not necessarily result
in an Indenture Event of Default occurring under any other Indenture. If an
Indenture
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Event of Default occurs in fewer than all of the Indentures related to a Trust,
the Equipment Notes issued pursuant to the related Indentures with respect to
which an Indenture Event of Default has not occurred will continue to be held in
such Trust and payments of principal and interest on such Equipment Notes will
continue to be distributed to the holders of the Pass Through Certificates of
such Trust as originally scheduled.
The Owner Trustee and the Owner Participant under each Indenture will have
the right under certain circumstances to cure an Indenture Event of Default that
results from the occurrence of a Lease Event of Default under the related Lease.
If the Owner Trustee or the Owner Participant chooses to exercise such cure
right, the Indenture Event of Default and consequently the Event of Default with
respect to the related Trust or Trusts will be deemed to be cured.
The Basic Agreement provides that, as long as an Indenture Event of Default
under any Indenture relating to Equipment Notes held in a Trust shall have
occurred and be continuing, the Pass Through Trustee of such Trust may vote all
of the Equipment Notes issued under such Indenture that are held in such Trust,
and upon the direction of the holders of Pass Through Certificates evidencing
fractional undivided interests aggregating not less than a majority in interest
of such Trust, shall vote not less than a corresponding majority of such
Equipment Notes in favor of directing the related Indenture Trustee to declare
the unpaid principal amount of all Equipment Notes issued under such Indenture
and any accrued and unpaid interest thereon to be due and payable. The Basic
Agreement also provides that, if an Indenture Event of Default under any
Indenture relating to Equipment Notes held in a Trust shall have occurred and be
continuing, the Pass Through Trustee of such Trust may, and upon the direction
of the holders of Pass Through Certificates evidencing fractional undivided
interests aggregating not less than a majority in interest of such Trust shall,
subject to certain conditions, vote all of the Equipment Notes issued under such
Indenture that are held in such Trust in favor of directing the related
Indenture Trustee as to the time, method and place of conducting any proceeding
for any remedy available to such Indenture Trustee or of exercising any trust or
power conferred on such Indenture Trustee under such Indenture. (Sections 6.01
and 6.04)
As an additional remedy, if an Indenture Event of Default shall have
occurred and be continuing, the Basic Agreement provides that the Pass Through
Trustee of a Trust holding Equipment Notes issued under such Indenture may, and
upon the direction of the holders of Pass Through Certificates evidencing
fractional undivided interests aggregating not less than a majority in interest
of such Trust shall, sell all or part of such Equipment Notes for cash to any
person. (Sections 6.01 and 6.02) Any proceeds received by the Pass Through
Trustee upon any such sale shall be deposited in the Special Payments Account
for such Trust and shall be distributed to the Certificateholders of such Trust
on a Special Distribution Date. (Sections 4.01 and 4.02) The market for
Equipment Notes in default may be very limited and there can be no assurance
that they could be sold for a reasonable price. Furthermore, so long as the same
institution acts as Trustee of each Trust, it may be faced with a conflict in
deciding from which Trust to sell Equipment Notes to available buyers. If the
Pass Through Trustee sells any such Equipment Notes with respect to which an
Indenture Event of Default exists for less than their outstanding principal
amount, the Certificateholders of such Trust will receive a smaller amount of
principal distributions than anticipated and will not have any claim for the
shortfall against GATC, the related Owner Trustee, the related Owner Participant
or the Pass Through Trustee. Furthermore, neither the Pass Through Trustee nor
the Certificateholders of such Trust could take any action with respect to any
remaining Equipment Notes held in such Trust so long as no Indenture Event of
Default existed with respect thereto.
Any amount distributed to the Pass Through Trustee of any Trust by the
Indenture Trustee under any Indenture on account of the Equipment Notes held in
such Trust following an Indenture Event of Default under such Indenture shall be
deposited in the Special Payments Account for such Trust and shall be
distributed to the Certificateholders of such Trust on a Special Distribution
Date. In addition, if, following an Indenture Event of Default under any
Indenture, the related Owner Trustee exercises its option, if any, to purchase
the outstanding Equipment Notes issued under such Indenture as described in the
related Prospectus Supplement, the price paid by such Owner Trustee to the Pass
Through Trustee of any Trust for the Equipment Notes issued under such Indenture
and held in such Trust shall be deposited in the
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Special Payments Account for such Trust and shall be distributed to the
Certificateholders of such Trust on a Special Distribution Date. (Sections 4.01
and 4.02)
Any funds held by the Pass Through Trustee in the Special Payments Account
for such Trust representing either payments received with respect to any
Equipment Notes held in a Trust following an Indenture Event of Default or
proceeds from the sale by the Pass Through Trustee of any such Equipment Notes,
shall, to the extent practicable, be invested and reinvested by the Pass Through
Trustee in Permitted Government Investments pending the distribution of such
funds on a Special Distribution Date. Permitted Government Investments are
defined as being obligations of the United States and agencies thereof maturing
in not more than 60 days or such lesser time as is required for the distribution
of any such funds on a Special Distribution Date. (Sections 4.01 and 4.04)
The Basic Agreement provides that the Pass Through Trustee of each Trust
shall, within 90 days after the occurrence of a default (as defined below) in
respect of such Trust, give to the Certificateholders of such Trust notice,
transmitted by mail, of all uncured or unwaived defaults with respect to such
Trust known to it; provided that, except in the case of default in the payment
of principal of, premium, if any, or interest on any of the Equipment Notes held
in such Trust, the Pass Through Trustee shall be protected in withholding such
notice if it in good faith determines that the withholding of such notice is in
the interest of such Certificateholders. The term "default," for the purpose of
the provision described in this paragraph only, shall mean the occurrence of any
Event of Default with respect to a Trust as specified above, except that in
determining whether any such Event of Default has occurred any grace period or
notice in connection therewith shall be disregarded. (Section 7.02)
The Basic Agreement contains a provision entitling the Pass Through Trustee
of each Trust, subject to the duty of the Pass Through Trustee during a default
to act with the required standard of care, to be indemnified by the holders of
the Pass Through Certificates of such Trust before proceeding to exercise any
right or power under the Basic Agreement at the request of such
Certificateholders. (Section 7.03)
In certain cases, the holders of Pass Through Certificates of a Trust
evidencing fractional undivided interests aggregating not less than a majority
in interest of such Trust may on behalf of the holders of all Pass Through
Certificates of such Trust waive any past default or Event of Default with
respect to such Trust and thereby annul any direction given by the Pass Through
Trustee on behalf of such holders to the related Indenture Trustee with respect
thereto, except (i) a default in the deposit of any Scheduled Payment or Special
Payment or in the distribution of any such payment, (ii) a default in payment of
the principal of, premium, if any, or interest on any of the Equipment Notes
held in such Trust, and (iii) a default in respect of any covenant or provision
of the Basic Agreement or the related Trust Supplement that cannot be modified
or amended without the consent of each Certificateholder of such Trust affected
thereby. (Section 6.05) Each Indenture will provide that, with certain
exceptions, the holders of a majority in aggregate unpaid principal amount of
the Equipment Notes issued thereunder may on behalf of all such holders waive
any past default or Indenture Event of Default thereunder. In the event of a
waiver with respect to a Trust as described above, the principal amount of the
Equipment Notes issued under the related Indenture held in such Trust shall be
counted as waived in the determination of the majority in aggregate unpaid
principal amount of Equipment Notes required to waive a default or an Indenture
Event of Default under such Indenture. Therefore, if the Certificateholders of a
Trust waive a past default or Event of Default such that the principal amount of
the Equipment Notes held in such Trust constitutes the required majority in
aggregate unpaid principal amount under the applicable Indenture, such past
default or Indenture Event of Default under such Indenture shall be waived. For
a discussion of waivers of Indenture Events of Default under the Indentures, see
"Description of the Equipment Notes -- Indenture Events of Default and
Remedies."
MODIFICATIONS OF THE BASIC AGREEMENT
The Basic Agreement contains provisions permitting GATC and the Pass
Through Trustee of each Trust to enter into supplemental trust agreements,
without the consent of the holders of any of the Pass Through Certificates of
such Trust, (i) to evidence the succession of another corporation to GATC and
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the assumption by such corporation of GATC's obligations under the Basic
Agreement and the applicable Trust Supplement, (ii) to add to the covenants of
GATC for the benefit of the holders of such Pass Through Certificates, (iii) to
cure any ambiguity, to correct any manifest error or to correct or supplement
any defective or inconsistent provision of such Basic Agreement, the applicable
Trust Supplement or any supplemental trust agreement, or to make any other
provisions with respect to matters or questions arising thereunder, provided
such action shall not adversely affect the interest of the holders of such Pass
Through Certificates, (iv) to evidence and provide for a successor Trustee for
some or all of the Trusts, or (v) to make any other amendments or modifications
which shall only apply to Pass Through Certificates of one or more series to be
issued thereafter. (Section 9.01)
The Basic Agreement also contains provisions permitting GATC and the Pass
Through Trustee of each Trust, with the consent of the Certificateholders of
such Trust evidencing fractional undivided interests aggregating not less than a
majority in interest of such Trust, to execute supplemental trust agreements
adding any provisions to or changing or eliminating any of the provisions of the
Basic Agreement, to the extent relating to such Trust, and the applicable Trust
Supplement, or modifying the rights of such Certificateholders, except that no
such supplemental trust agreement may, without the consent of the holder of each
such Pass Through Certificate so affected, (a) reduce in any manner the amount
of, or delay the timing of, any receipt by the Pass Through Trustee of payments
on the Equipment Notes held in such Trust, or distributions in respect of any
Pass Through Certificate of such Trust, or make distributions payable in coin or
currency other than that provided for in such Pass Through Certificates, or
impair the right of any Certificateholder of such Trust to institute suit for
the enforcement of any such payment when due, (b) permit the disposition of any
Equipment Note held in such Trust, except as provided in the Basic Agreement or
the applicable Trust Supplement, or (c) reduce the percentage of the aggregate
fractional undivided interests of the Trust provided for in the Basic Agreement
or the applicable Trust Supplement, the consent of the holders of which is
required for any such supplemental trust agreement or for any waiver provided
for in the Basic Agreement or such Trust Supplement. (Section 9.02)
MODIFICATION AND CONSENTS AND WAIVERS UNDER THE INDENTURES AND RELATED
AGREEMENTS
In the event that the Pass Through Trustee, as the holder of any Equipment
Notes held in a Trust, receives a request for its consent to any amendment,
modification or waiver under the Indenture, Lease or other document relating to
such Equipment Notes, which requires the consent of the Certificateholders of
such Trust, the Pass Through Trustee shall mail a notice of such proposed
amendment, modification or waiver to each Certificateholder of such Trust as of
the date of such notice. The Pass Through Trustee shall request instructions
from the Certificateholders of such Trust as to whether or not to consent to
such amendment, modification or waiver. The Pass Through Trustee shall vote or
consent with respect to such Equipment Notes in such Trust in the same
proportion as the Pass Through Certificates of such Trust were actually voted by
the holders thereof by a certain date. Notwithstanding the foregoing, if an
Event of Default in respect of such Trust shall have occurred and be continuing,
the Pass Through Trustee, subject to the voting instructions referred to under
"Description of the Pass Through Certificates -- Events of Default and Certain
Rights Upon an Event of Default," may in its own discretion consent to such
amendment, modification or waiver, and may so notify the Indenture Trustee to
which such consent relates. (Section 10.01)
TERMINATION OF THE TRUSTS
The obligations of GATC and the Pass Through Trustee with respect to a
Trust will terminate upon the distribution to Certificateholders of such Trust
of all amounts required to be distributed to them pursuant to the Basic
Agreement and the applicable Trust Supplement and the disposition of all
property held in such Trust. The Pass Through Trustee will mail to each
Certificateholder of record of such Trust notice of the termination of such
Trust, the amount of the proposed final payment and the proposed date for the
distribution of such final payment for such Trust. The final distribution to any
Certificateholder of
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such Trust will be made only upon surrender of such Certificateholder's Pass
Through Certificates at the office or agency of the Pass Through Trustee
specified in such notice of termination. (Section 11.01)
DELAYED PURCHASE
In the event that, on the date of issuance of any Pass Through
Certificates, all of the proceeds from the sale of such Pass Through
Certificates are not used to purchase the Equipment Notes contemplated to be
held in the related Trust, such Equipment Notes may be purchased by the Pass
Through Trustee at any time on or prior to the date specified in the applicable
Prospectus Supplement. In such event, the Pass Through Trustee will hold the
proceeds from the sale of such Pass Through Certificates not used to purchase
Equipment Notes in an escrow account pending the purchase of the Equipment Notes
not so purchased. Such proceeds will be invested in Specified Investments at the
direction and risk of, and for the account of, GATC. Earnings on Specified
Investments in the escrow account for each Trust will be paid to GATC
periodically, and GATC will be responsible for any losses realized on such
Specified Investments. (Section 2.02)
On the Regular Distribution Date occurring after the issuance of such Pass
Through Certificates, GATC will pay to the Pass Through Trustee an amount equal
to the interest that would have accrued on any Equipment Notes which are
purchased after the date of the issuance of such Pass Through Certificates from
the date of the issuance of such Pass Through Certificates to, but excluding,
the date of the purchase of such Equipment Notes by the Pass Through Trustee.
(Section 2.02)
To the extent that Equipment Notes are not purchased by the Pass Through
Trustee on or prior to the date specified in the applicable Prospectus
Supplement, the unexpended proceeds from the sale of such Pass Through
Certificates, together with interest thereon at the rate applicable to such Pass
Through Certificates, will be distributed to the holders of such Pass Through
Certificates as a Special Payment.
MERGER, CONSOLIDATION AND TRANSFER OF ASSETS
GATC will be prohibited from consolidating with or merging into any other
corporation or transferring substantially all of its assets as an entirety to
any other corporation unless any successor or transferee corporation shall be a
corporation organized and existing under the laws of the United States or any
state or the District of Columbia and shall expressly assume all the obligations
of GATC contained in the Basic Agreement, the Participation Agreements and the
Leases, and both immediately prior to and after giving effect to such
consolidation, merger or transfer, no Lease Event of Default shall have occurred
and be continuing. (Section 5.02)
THE PASS THROUGH TRUSTEE
Unless otherwise specified in the applicable Prospectus Supplement, The
First National Bank of Chicago will be the Pass Through Trustee for each of the
Trusts. The Pass Through Trustee and any of its affiliates may hold Pass Through
Certificates in their own names. (Section 7.05) With certain exceptions, the
Pass Through Trustee makes no representations as to the validity or sufficiency
of the Basic Agreement, the Trust Supplements, the Pass Through Certificates,
the Equipment Notes, the Indentures, the Leases or other related documents.
(Section 7.04) Unless otherwise specified in a Prospectus Supplement, The First
National Bank of Chicago will also be the Indenture Trustee of the Indentures
under which the Equipment Notes are issued.
The Pass Through Trustee may resign with respect to any or all of the
Trusts at any time, in which event GATC will be obligated to appoint a successor
trustee. If the Pass Through Trustee ceases to be eligible to continue as
Trustee with respect to a Trust or becomes incapable of acting as Trustee or
becomes insolvent, GATC may remove such Trustee. In addition, any holder of Pass
Through Certificates of such Trust for at least six months may in such
circumstances, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of such Trustee and the
appointment of a successor trustee. Any resignation or removal of the Pass
Through Trustee with respect
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to a Trust and appointment of the successor trustee for such Trust does not
become effective until acceptance of the appointment by the successor trustee.
(Section 7.09) Pursuant to such resignation and successor trustee provisions, it
is possible that a different trustee could be appointed to act as the successor
trustee with respect to each Trust. All references in this Prospectus to the
Pass Through Trustee are to the trustee acting in such capacity under each of
the Trusts and should be read to take into account the possibility that each of
the Trusts could have a different successor trustee in the event of such a
resignation or removal.
The Basic Agreement provides that GATC will pay the Pass Through Trustee's
fees and expenses and will indemnify the Pass Through Trustee in accordance with
the Participation Agreement with respect to certain taxes. To the extent not
indemnified by GATC with respect to such taxes, the Pass Through Trustee may be
entitled to be reimbursed by the applicable Trust. (Section 7.07)
DESCRIPTION OF THE EQUIPMENT NOTES
The statements under this caption are summaries and do not purport to be
complete. Except as otherwise indicated below or as described in the applicable
Prospectus Supplement, the following summaries will apply to the Equipment
Notes, the Indenture, the Lease and the Participation Agreement relating to each
Equipment Group. Additional provisions with respect to the Equipment Notes, the
Indentures, the Leases and the Participation Agreements relating to any
particular Equipment Group will be described in the applicable Prospectus
Supplement.
GENERAL
Each Equipment Note issued under the same Indenture will relate to a single
Equipment Group. The Equipment Notes with respect to each Equipment Group will
be issued under a separate Indenture between the related Owner Trustee of a
trust for the benefit of the Owner Participant which is the beneficial owner of
such Equipment Group and the related Indenture Trustee.
Each Owner Trustee will lease an Equipment Group to GATC pursuant to a
separate Lease between such Owner Trustee and GATC. GATC will be obligated to
make or cause to be made rental and other payments to the related Owner Trustee
under such Lease in respect of such Equipment Group in amounts that will be at
least sufficient to pay when due all payments required to be made on the
Equipment Notes issued with respect to such Equipment Group. The Equipment Notes
will not be, however, direct obligations of, or guaranteed by, GATC. GATC's
rental obligations under each Lease will be general obligations of GATC.
PRINCIPAL AND INTEREST PAYMENTS
Interest paid on the Equipment Notes held in each Trust will be passed
through to the Certificateholders of such Trust on the dates and at the rate per
annum set forth in the applicable Prospectus Supplement until the final
distribution date for such Trust. Principal paid on the Equipment Notes held in
each Trust will be passed through to the Certificateholders of such Trust in
scheduled amounts on the dates set forth in the applicable Prospectus Supplement
until the final distribution date for such Trust.
If any date scheduled for any payment of principal of, premium, if any, or
interest on the Equipment Notes is not a Business Day, such payment may be made
on the next succeeding Business Day without any additional interest.
PREPAYMENTS
The applicable Prospectus Supplement will describe the circumstances,
whether voluntary or involuntary, under which the related Equipment Notes may be
prepaid or purchased, the premium (if any) related to certain prepayments or
purchases and other terms applying to prepayments or purchases of such Equipment
Notes.
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SECURITY
The Equipment Notes issued with respect to each Equipment Group will be
secured by (i) an assignment by the related Owner Trustee to the related
Indenture Trustee of such Owner Trustee's rights (except for certain limited
rights described in the Prospectus Supplement) under the Lease with respect to
such Equipment Group, including the right to receive payments of rent thereunder
and (ii) a perfected security interest to such Indenture Trustee in such
Equipment Group, subject to the rights of GATC under such Lease. The Equipment
Notes will not be cross-collateralized and consequently the Equipment Notes
issued in respect of any one Equipment Group will not be secured by any other
Equipment Group or the Lease related thereto. Unless and until an Indenture
Event of Default with respect to an Equipment Group has occurred and is
continuing, the Indenture Trustee may not exercise the rights of the Owner
Trustee under the related Lease, except the right to receive payments of rent
due thereunder.
GATC will be required to file each Indenture, any indenture supplement,
each Lease and any lease supplement with respect to each Equipment Group under
the Interstate Commerce Act and will be further required to deposit such
documents with the Registrar General of Canada under the Railway Act of Canada
and to publish notice of such deposit in accordance with such Act. Such
Interstate Commerce Act filing gives the Indenture Trustee a perfected security
interest in each Equipment Unit in such Equipment Group whenever it is located
in the United States and in the Lease. Such deposit and publication in Canada
will be done in order to protect the lien of the Indenture Trustee in and to the
Lease and the Equipment Units created by the Indenture in Canada or any province
or territory thereof, to the extent provided for in the Railway Act of Canada.
Each Equipment Unit may be operated by GATC or, subject to certain
limitations, under sublease or interchange arrangements in the United States,
Canada or Mexico. The extent to which the Indenture Trustee's security interest
would be recognized in an Equipment Unit located in countries other than the
United States is uncertain.
Funds, if any, held from time to time by the Indenture Trustee with respect
to any Equipment Units, including funds held as the result of the loss or
destruction of such Equipment Units or termination of the Lease relating
thereto, will be invested and reinvested by such Indenture Trustee, at the
direction of GATC (except in the case of a Lease Event of Default under the
applicable Lease), in Specified Investments. GATC will pay the amount of any
loss resulting from any such investment directed by it.
LIMITATION OF LIABILITY
The Equipment Notes will not be direct obligations of, or guaranteed by,
GATC or the Owner Trustees. None of the Owner Trustees, the Owner Participants
or the Indenture Trustees, or any affiliates thereof, shall be personally liable
to any holder of an Equipment Note or, in the case of the Owner Trustees and the
Owner Participants, to the Indenture Trustees for any amounts payable under the
Equipment Notes or, except as provided in each Indenture, for any liability
under such Indenture. All payments of principal of, premium, if any, and
interest on the Equipment Notes issued with respect to any Equipment Group
(other than payments made in connection with an optional prepayment or purchase
by the related Owner Trustee) will be made only from the assets subject to the
lien of the Indenture with respect to such Equipment Group or the income and
proceeds received by the related Indenture Trustee therefrom (including rent
payable by GATC under the Lease with respect to such Equipment Group).
Except as otherwise provided in the Indentures, each Owner Trustee in its
individual capacity shall not be answerable or accountable under the Indentures
or under the Equipment Notes under any circumstances except for its own wilful
misconduct or gross negligence. None of the Owner Participants will have any
duty or responsibility under any of the Indentures or the Equipment Notes to the
Indenture Trustees or to any holder of any Equipment Note.
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INDENTURE EVENTS OF DEFAULT AND REMEDIES
The applicable Prospectus Supplement will describe the Indenture Events of
Default under the related Indentures, the remedies that the Indenture Trustee
may exercise with respect to the related Equipment Group, either at its own
initiative or upon instruction from holders of the related Equipment Notes, and
other provisions relating to the occurrence of an Indenture Event of Default and
the exercise of remedies. There will be no cross-default provisions in the
Indentures and events resulting in an Indenture Event of Default under any
particular Indenture (or a default under any other indebtedness of the Company)
will not necessarily result in an Indenture Event of Default under any other
Indenture.
In the event of the bankruptcy of an Owner Participant, it is possible
that, notwithstanding that the related Equipment Group is owned by an Owner
Trustee in trust, such Equipment Group and the Lease and the Equipment Notes
related thereto might become part of the bankruptcy proceeding. In such event,
payments on such Equipment Notes might be interrupted and the ability of the
Indenture Trustee to exercise its remedies under the applicable Indenture might
be restricted, although the Indenture Trustee would retain its status as a
secured creditor in respect of such Lease and the related Equipment Group. In
addition, in the event of an Owner Participant bankruptcy, the estate might seek
court approval to reject the related Lease as an executory contract. Such a
Lease rejection, if successful, would leave the Indenture Trustee as a secured
creditor in respect of the related Equipment Group with a claim for damages
against the estate.
THE LEASES
TERM AND RENTALS. Each Equipment Group will be leased separately by the
related Owner Trustee to GATC for a term commencing on the delivery date thereof
to such Owner Trustee and expiring on a date not earlier than the latest
maturity date of the Equipment Notes issued with respect to such Equipment Group
unless previously terminated as permitted by the related Lease. The basic rental
payments by GATC under each Lease will be payable on the dates specified in the
applicable Prospectus Supplement, and will be assigned by the Owner Trustee
under the related Indenture to provide the funds necessary to make payments of
principal and interest due from such Owner Trustee on the Equipment Notes issued
under such Indenture. Although in certain cases the basic rental payments under
the Leases may be adjusted, under no circumstances will rental payments be less
than the scheduled payments of principal and interest on the Equipment Notes
issued under the Indenture relating to such Lease. The balance of any basic
rental payments under each Lease, after payment of the scheduled principal and
interest on the Equipment Notes issued under the Indenture relating to such
Lease, will be paid over to the related Owner Trustee. GATC's obligation to pay
rent and to cause other payments to be made under each Lease will be a general
obligation of GATC.
NET LEASE. GATC's obligations in respect of each Equipment Group will be
those of a lessee under a "net lease." Accordingly, GATC will be obligated, at
its cost and expense, to maintain, repair and keep each Equipment Unit in an
Equipment Group in accordance with prudent industry maintenance practices and in
compliance in all material respects with all laws and regulations and consistent
with maintenance practices used by GATC in respect of equipment owned or leased
by GATC similar in type to such Equipment Unit. Subject to certain exceptions,
GATC will, at its expense, make all alterations, replacements or modifications
required to be made by the Association of American Railroads, the United States
Department of Transportation, or any other United States, state or local
governmental agency. GATC reserves the right to contest the validity or
applicability of any required alterations, replacements or modifications. GATC
shall have the right to make alterations, modifications and improvements with
respect to each Equipment Unit in an Equipment Group, provided that no such
alteration, modification or improvement shall diminish the fair market value,
utility or remaining economic useful life of such Unit.
INSURANCE. Unless waived or otherwise excused by the terms of any Lease,
GATC will be required to procure from reputable insurance companies, property
damage and public liability insurance, and, subject to certain limited
exceptions, maintain such insurance in such amounts and for such risks and with
such insurance companies and subject to such deductibles and self insurance no
less comprehensive in
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amounts and against risks customarily insured against by GATC in respect of
equipment owned or leased by it similar in type to the Equipment Units and
consistent with prudent industry standards for companies engaged in full service
leasing of railcars, if any.
LEASE EVENTS OF DEFAULT; REMEDIES. The applicable Prospectus Supplement
will describe the Lease Events of Default under the related Lease, the remedies
that the Owner Trustee, or Indenture Trustee as assignee of the Owner Trustee,
may exercise with respect to an Equipment Group, and other provisions relating
to the occurrence of a Lease Event of Default and the exercise of remedies.
Lease Events of Default under each Lease will include, among other things,
(a) failure by GATC to make rental payments under the Lease, (b) failure to
maintain insurance as required by the Lease, (c) use of the Equipment Group in
contravention of the Lease, (d) breach of any representation or warranty made by
GATC in the Lease or in the related Participation Agreement and (e) the
occurrence of certain events of bankruptcy, reorganization or insolvency of
GATC. Upon the occurrence of a Lease Event of Default under any Lease, the
related Indenture Trustee, as assignee of the related Owner Trustee's rights
under such Lease, will be entitled to repossess the Equipment Units and use or
sell such Equipment Units free and clear of GATC's rights therein.
If GATC were to become a debtor in a bankruptcy or reorganization case
under the Bankruptcy Code, GATC or its bankruptcy trustee could reject any or
all Leases to which it is a party. In such event, there could be no assurance
that the amount of any claim for damages under such Leases that would be allowed
in such bankruptcy case would be in an amount sufficient to provide for the
repayment of the related Equipment Notes. In any case, rejection of a Lease by
GATC or its bankruptcy trustee would not deprive the related Indenture Trustee
of its security interest in the related Equipment Group.
GATC is not a railroad, and the protections against the automatic stay in
bankruptcy under Section 1168 of the Bankruptcy Code which are granted to
lessors, conditional vendors and purchase money financiers of rolling stock to a
common carrier by railroad will not be available to an Indenture Trustee upon
the occurrence of a Lease Event of Default.
THE PARTICIPATION AGREEMENTS
GATC will be required to indemnify each Owner Participant, each Owner
Trustee, each Indenture Trustee and the Pass Through Trustee for certain losses
and claims and for certain other matters. Each Owner Participant will be
required to discharge certain liens or claims on or against the assets subject
to the lien of the related Indenture that arise out of any act of or failure to
act by or claim against such Owner Participant. Subject to certain restrictions,
each Owner Participant may transfer its interest in the related Equipment Group.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable Prospectus Supplement, Pass
Through Certificates may be purchased by an employee benefit plan (a "Plan")
subject to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). A fiduciary of a Plan must determine that the purchase of a Pass
Through Certificate is consistent with its fiduciary duties under ERISA and does
not result in a non-exempt prohibited transaction as defined in Section 406 of
ERISA or Section 4975 of the Code. Employee benefit plans which are governmental
plans (as defined in Section 3(32) of ERISA) and certain church plans (as
defined in Section 3(33) of ERISA) are not subject to the fiduciary
responsibility provisions of ERISA.
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FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion by GATC of the anticipated material
federal income tax consequences of the purchase, ownership and disposition of
Pass Through Certificates. The summary is based on laws, regulations, rulings
and decisions now in effect, all of which are subject to change, possibly with
retroactive effect, or different interpretation. The discussion below does not
purport to address federal income tax consequences applicable to particular
categories of investors, some of which (for example, insurance companies,
dealers in securities, financial institutions or foreign investors) may be
subject to special rules. In addition, this summary is generally limited to
investors who will hold the Pass Through Certificates as "capital assets"
(generally, property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended (the "Code"). Investors should
consult their own tax advisors in determining the federal, state, local, and any
other tax consequences to them of the purchase, ownership and disposition of
Pass Through Certificates, including the advisability of making any election
discussed below. Prospective investors should note that no rulings have been or
will be sought from the Internal Revenue Service (the "IRS") with respect to any
of the federal income tax consequences discussed below, and no assurance can be
given that the IRS will not take contrary positions. It is anticipated that the
Trusts will not be indemnified for any federal income taxes that may be imposed
upon them, and the imposition of any such taxes on any Trust could result in a
reduction in the amounts available for distribution to the Certificateholders of
such Trust.
Mayer, Brown & Platt, counsel to GATC, has advised GATC that, in its
opinion, based upon its interpretation of analogous authorities under currently
applicable law, the Trusts will not be classified as associations taxable as
corporations, but, rather will be classified as grantor trusts under subpart E,
Part I of Subchapter J of the Code, and that each Certificateholder of a Trust
will be treated as the owner of a pro rata undivided interest in each of the
Equipment Notes or any other property held in such Trust.
GENERAL
GATC believes that each Certificateholder in a Trust will be required to
report on its federal income tax return its pro rata share of the entire income
from the Equipment Notes or any other property held in such Trust, in accordance
with such Certificateholder's method of accounting. A Certificateholder using
the cash method of accounting should take into account its pro rata share of
income as and when received by the Pass Through Trustee of such Trust. A
Certificateholder using an accrual method of accounting should take into account
its pro rata share of income as it accrues or is received by such Trustee,
whichever is earlier.
A purchaser of a Pass Through Certificate will be treated as purchasing an
interest in each Equipment Note and any other property in a Trust at a price
determined by allocating the purchase price paid for the Pass Through
Certificate among such Equipment Notes and other property in proportion to their
fair market values at the time of purchase of such Pass Through Certificate.
GATC believes that at the time of formation of a particular Trust, the purchase
price paid for a Pass Through Certificate with respect to such Trust by an
original purchaser of a Pass Through Certificate will be allocated among the
Equipment Notes in such Trust in proportion to their respective principal
amounts. The portion of such Certificateholder's purchase price allocated to
each Equipment Note will constitute such Certificateholder's initial tax basis
in such Equipment Note.
SALES OF PASS THROUGH CERTIFICATES
A Certificateholder's tax basis in a Pass Through Certificate will equal
its cost of such Pass Through Certificate, reduced by any amortized premium (as
described below) and any payments other than interest made on such Pass Through
Certificate and increased by any market discount or original issue discount
included in the Certificateholder's income. A Certificateholder that sells a
Pass Through Certificate will recognize gain or loss (in the aggregate) in an
amount equal to the difference between its adjusted tax basis in the Pass
Through Certificate and the amount realized on the sale (except to the extent
attributable to accrued interest, which should be taxable as interest income)
and, if an Equipment
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Note or other asset of the related Trust is disposed of, or an Equipment Note of
the related Trust is prepaid, a Certificateholder will recognize gain or loss
(in the aggregate) in an amount equal to the difference between such
Certificateholder's adjusted tax basis in such Equipment Note or other asset and
the Certificateholder's pro rata portion of the amount realized on the
disposition by the Trust or upon such prepayment (except to the extent
attributable to accrued interest, which should be taxable as interest income).
Subject to the market discount provisions of the Code (described below), any
such gain or loss will be capital gain or loss if the Pass Through Certificate
was held as a capital asset and, if the Pass Through Certificate was held for
more than one year, will be long-term capital gain or loss to the extent the
Equipment Notes have been held by a Trust for more than one year. Any long-term
capital gains realized will be taxable under current law to corporate taxpayers
at the rates applicable to ordinary income, and to individual taxpayers at a
maximum marginal rate of 28%. Any capital losses realized will be deductible by
a corporate taxpayer only to the extent of capital gains and by an individual
taxpayer only to the extent of capital gains plus $3,000 of other income.
MARKET DISCOUNT
A purchaser of a Pass Through Certificate will be considered to have
acquired an interest in an Equipment Note held in a Trust at a "market discount"
to the extent the remaining principal amount of such Equipment Note allocable to
the Pass Through Certificate exceeds the Certificateholder's tax basis allocable
to such Equipment Note, unless the excess does not exceed a prescribed de
minimis amount. In the event such excess exceeds the de minimis amount, the
Certificateholder will be subject to the market discount rules of Sections 1276
and 1278 of the Code with regard to its interest in the Equipment Note.
In the case of a sale or other disposition of a Certificateholder's
interest in an Equipment Note subject to the market discount rules, Section 1276
of the Code requires that gain, if any, from such sale or disposition be treated
as ordinary income to the extent such gain represents market discount that has
accrued during the period in which the interest was held by such
Certificateholder. In addition, a disposition of a Certificateholder's interest
in an Equipment Note by gift (and in certain other circumstances), could result
in the recognition of market discount income, computed as if such Note had been
sold for its fair market value.
In the case of a partial principal payment on a Certificateholder's
interest in an Equipment Note subject to the market discount rules, Section 1276
of the Code requires that such payment be included in gross income as ordinary
income to the extent such payment does not exceed the market discount that has
accrued during the period such interest was held by such Certificateholder. The
amount of any accrued market discount later required to be included in income
upon a disposition or subsequent partial principal payment, will be reduced by
the amount of accrued market discount previously included in income.
Generally, market discount accrues under a straight line method, or, at the
election of the taxpayer, under a constant interest rate method. However, in the
case of bonds the principal of which may be paid in two or more installments
(such as the Equipment Notes), the manner in which market discount is to be
accrued will be described in Treasury regulations that have yet to be issued.
Until such Treasury regulations are issued, the explanatory Conference Committee
Report to the Tax Reform Act of 1986 (the "Conference Report") indicates that
holders of such obligations may elect to accrue market discount either on the
basis of a constant interest rate or as follows: (1) for those obligations that
have OID, market discount shall be deemed to accrue in proportion to the accrual
of OID for any accrual period, and (2) for those obligations which do not have
OID, the amount of market discount that is deemed to accrue is the amount of
market discount that bears the same ratio to the total amount of remaining
market discount that the amount of stated interest paid in the accrual period
bears to the total amount of stated interest remaining to be paid on the
obligation as of the beginning of such period.
Under Section 1277 of the Code, if in any taxable year interest paid or
accrued by a Certificateholder on indebtedness incurred or continued to purchase
or carry its interest in an Equipment Note subject to
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the market discount rules exceeds the interest (including OID) currently
includible in income with respect to such interest in an Equipment Note,
deduction of such interest must be deferred to the extent of the market discount
allocable to the taxable year. The deferred portion of any interest expense will
generally be deductible when such market discount is included in income upon the
sale or other disposition (including repayment) of the indebtedness.
Section 1278 of the Code allows a taxpayer to make an election to include
market discount in its gross income currently. If such election is made, the
rules of Sections 1276 and 1277 (described above) will not apply to the
taxpayer.
Due to the complexity of the market discount rules, prospective
Certificateholders are advised to consult their tax advisors as to the
applicability and operation of the market discount rules as they may apply to a
Certificateholder's interest in the Equipment Notes held by a Trust.
PREMIUM
A Certificateholder will generally be considered to have acquired an
interest in an Equipment Note at a premium to the extent the Certificateholder's
tax basis allocable to such interest exceeds the remaining principal amount of
the Equipment Note allocable to such interest. In that event, a
Certificateholder who holds a Pass Through Certificate as a capital asset may
amortize that premium as an offset to interest income under Section 171 of the
Code, with corresponding reductions in the Certificateholder's tax basis in its
interest in the Equipment Note if an election under Section 171 of the Code is
or has been made with respect to all debt instruments held by the taxpayer
(including the Pass Through Certificates). Generally, such amortization is on a
constant yield basis. However, in the case of bonds the principal of which may
be paid in two or more installments (such as the Equipment Notes), the
Conference Report indicates a Congressional intent that amortization will be in
accordance with the same rules that will apply to the accrual of market discount
on such obligations (see the discussion of market discount above).
In the case of obligations which may be called at a premium prior to
maturity, amortizable bond premium may be determined by reference to an early
call date. Due to the complexities of the amortizable premium rules,
particularly where there is more than one possible call date and the amount of
any premium is uncertain, Certificateholders are urged to consult their own tax
advisors as to the amount of any amortizable premium and the advisability of
making the election.
BACKUP WITHHOLDING
Payments made on the Pass Through Certificates and proceeds from the sale
of the Pass Through Certificates to or through certain brokers may be subject to
a "backup" withholding tax of 31% unless the Certificateholder complies with
certain reporting procedures or is an exempt recipient under Section 6049(b)(4)
of the Code. Any such withheld amounts will be allowed as a credit against the
Certificateholder's federal income tax.
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CERTAIN ILLINOIS TAXES
Mayer, Brown & Platt has advised GATC that, in its opinion, under existing
Illinois law as of the date hereof (i) the Trusts will not be classified as
associations taxable as corporations for purposes of franchise and income
taxation by the State of Illinois or any political subdivision thereof; (ii)
Certificateholders will be treated as the owners of undivided interests in the
assets of the Trusts for purposes of franchise and income taxation by the State
of Illinois and any political subdivision thereof; (iii) the Trusts will not be
subject to taxation or any other governmental fee or charge by the State of
Illinois or any political subdivision thereof; (iv) neither the Equipment Notes
nor the Pass Through Certificates will be subject to ad valorem taxation or any
other tax on intangible property by the State of Illinois or any political
subdivision thereof; (v) neither the delivery of the Equipment Notes to the
Trusts nor the acquisition, ownership or disposition of the interest of any
Certificateholder in any Pass Through Certificate will be subject to any sales,
use or transfer taxes imposed by the State of Illinois or any political
subdivision thereof; and (vi) a Certificateholder will not be subject to
taxation or any governmental fee or charge by the State of Illinois or any
political subdivision thereof, if a Certificateholder (a) is not a resident of
the State of Illinois, or otherwise subject to any tax, governmental charge or
fee imposed by the State of Illinois or any political subdivision thereof, (b)
does not otherwise have part of its receipt or income includible (either
directly or indirectly) in a tax return filed by a Certificateholder (or an
affiliate of the Certificateholder) in the State of Illinois, and (c) would not
be subject to taxation or any governmental fee or charge by the State of
Illinois if, instead of owning said Pass Through Certificates, the
Certificateholder owned its share of the assets of a Trust directly.
Neither the Trusts nor the Certificateholders will be indemnified for any
state or local taxes imposed on them, and the imposition of any such taxes on a
Trust could result in a reduction in the amounts available for the distribution
to the Certificateholders of such Trust. In general, should a Certificateholder
or a Trust be subject to any state or local tax which would not be imposed if
the Pass Through Trustee were located in a different jurisdiction in the United
States, the Pass Through Trustee will resign and a new Trustee in such other
jurisdiction will be appointed.
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PLAN OF DISTRIBUTION
The Company may sell the Pass Through Certificates being offered hereby:
(i) through agents, (ii) to or through underwriters, (iii) through dealers, (iv)
directly to purchasers or (v) through a combination of any such methods of sale.
The distribution of the Pass Through Certificates may be effected from time
to time in one or more transactions either (i) at a fixed price or prices, which
may be changed, or (ii) at market prices prevailing at the time of sale, or
(iii) at prices related to such prevailing market prices, or (iv) at negotiated
prices.
Offers to purchase the Pass Through Certificates may be solicited directly
by the Company or by agents designated by the Company from time to time. Any
such agent, which may be deemed to be an underwriter as that term is defined in
the Securities Act, involved in the offer or sale of the Pass Through
Certificates in respect of which this Prospectus is delivered will be named, and
any commissions payable by the Company to such agent will be set forth, in the
applicable Prospectus Supplement. Unless otherwise indicated in the Prospectus
Supplement, any such agent will be acting on a best efforts basis for the period
of its appointment.
If an underwriter or underwriters are utilized in the sale, the Company
will execute an underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters and the terms of the transaction,
including commissions, discounts and other compensation of the underwriters and
dealers, if any, will be set forth in the Prospectus Supplement, which will be
used by the underwriters to make resales of the Pass Through Certificates in
respect of which this Prospectus is delivered to the public.
If a dealer is utilized in the sale of the Pass Through Certificates in
respect of which this Prospectus is delivered, the Company or the Pass Through
Trustee, as the case may be, will sell such Pass Through Certificates to the
dealer, as principal. The dealer may then resell such Pass Through Certificates
to the public at varying prices to be determined by such dealer at the time of
resale.
Underwriters, dealers, agents and other persons may be entitled, under
agreements which may be entered into with the Company, to indemnification
against certain civil liabilities, including liabilities under the Securities
Act.
Underwriters, dealers and agents may be customers of, engage in
transactions with or perform services for the Company in the ordinary course of
business.
LEGAL OPINIONS
The validity of the Pass Through Certificates will be passed upon for GATC
by Mayer, Brown & Platt, Chicago, Illinois, and for any underwriters or agents,
by Winston & Strawn, Chicago, Illinois. Both Mayer, Brown & Platt and Winston &
Strawn will rely on the opinion of the Law Department of The First National Bank
of Chicago, as to basic matters relating to the authorization, execution and
delivery of the Pass Through Certificates under the Basic Agreement.
EXPERTS
The consolidated financial statements and related schedules of GATC
appearing in GATC's Annual Report (Form 10K) for the year ended December 31,
1992, have been audited by Ernst & Young, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
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APPENDIX I
GLOSSARY OF CERTAIN TERMS
The following is a glossary of certain terms used in this Prospectus
relating to the Pass Through Certificates. The definitions of terms used in this
glossary that are also used in the Basic Agreement, Trust Supplements,
Indentures, Leases or Participation Agreements are qualified in their entirety
by reference to the definitions of such terms contained therein. Additional
terms or changes in the terms defined below may appear in the applicable
Prospectus Supplement.
"Basic Agreement" means the Pass Through Trust Agreement, dated as of
August 1, 1992, between GATC and the Pass Through Trustee.
"Business Day," when used with respect to the Pass Through Certificates of
any series, means any day other than a Saturday, a Sunday, or a day on which
commercial banking institutions in New York, New York, Chicago, Illinois or a
city and state in which the Pass Through Trustee or any related Indenture
Trustee maintains its Corporate Trust Office are authorized or obligated by law,
regulation or executive order to be closed.
"Certificate Account" means the one or more non-interest-bearing accounts
established and maintained by the Pass Through Trustee pursuant to the Basic
Agreement on behalf of the Certificateholders of each Trust for the deposit of
payments representing Scheduled Payments on the Equipment Notes held in such
Trust.
"Certificate Owner" means a person acquiring an interest in a Pass Through
Certificate registered in the name of Cede & Co. as the nominee of The
Depositary Trust Company.
"Certificateholder" means the Person in whose name a Pass Through
Certificate is registered.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Equipment Group" means all the railcars (which may include various types
or categories of standard gauge rolling stock) leased by an Owner Trustee to
GATC pursuant to a Lease.
"Equipment Notes" means the equipment notes issued on a nonrecourse basis
by the Owner Trustees to the Indenture Trustees under the Indentures.
"Equipment Units" or "Units" means an individual railcar.
"Event of Default" means, with respect to the Equipment Notes held in any
Trust, the occurrence and continuance of an Indenture Event of Default under one
or more of the related Indentures.
"Indenture" means each of the separate trust indenture and security
agreements entered into from time to time between an Owner Trustee and a
Indenture Trustee with respect to the issuance of Equipment Notes, as such
agreement may be amended or supplemented in accordance with its respective
terms.
"Indenture Event of Default" means each of the events designated as an
event of default in an Indenture, as described in the applicable Prospectus
Supplement.
"Indenture Trustee," when used with respect to any Equipment Note or the
Indenture applicable thereto, means the bank or trust company designated as
indenture trustee under such Indenture, and any successor to such Indenture
Trustee as such trustee.
"Lease" means each of the lease agreements entered into with respect to an
Equipment Group between an Owner Trustee and GATC, as each such lease agreement
may from time to time be amended or supplemented.
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"Lease Event of Default" means each of the events designated as an event of
default in a Lease, as described in the applicable Prospectus Supplement.
"Owner Participant" means each of the owner participants for whose benefit
an Owner Trustee owns an Equipment Group leased to GATC pursuant to a Lease and
its permitted successors and assigns.
"Owner Trustee," when used with respect to any Equipment Note or the
Indenture applicable thereto or the Lease related thereto, means the "Owner
Trustee" referred to in the applicable Indenture, not in its individual capacity
but solely as trustee; and each other Person which may from time to time be
acting as Owner Trustee in accordance with the provisions of the applicable
Indenture, Lease or Participation Agreement.
"Participation Agreement" when used with respect to any Equipment Note,
means the agreement to which GATC and the Pass Through Trustee are parties,
providing for, among other things, the purchase of Equipment Notes by the Pass
Through Trustee.
"Pass Through Certificate" means each of the Pass Through Certificates to
be issued by each of the Trusts pursuant to the Basic Agreement and the related
Trust Supplement.
"Pass Through Trustee" means, unless otherwise specified in a Prospectus
Supplement, The First National Bank of Chicago, in its capacity as Pass Through
Trustee under each Trust, and each other person which may from time to time act
as successor Pass Through Trustee under such Trust.
"Pool Balance" means, for each Trust, as of any date, the aggregate unpaid
principal amount of the Equipment Notes held in such Trust on such date plus any
amounts in respect of principal on such Equipment Notes held by the Pass Through
Trustee and not yet distributed plus the amount of any moneys held in the
related escrow account (other than earnings thereon). The Pool Balance for each
Trust as of any Regular Distribution Date or Special Distribution Date shall be
computed after giving effect to the payment of principal, if any, on the
Equipment Notes held in such Trust and distribution thereof to be made on that
date.
"Pool Factor" means, for each Trust, as of any date, the quotient (rounded
to the seventh decimal place) computed by dividing (i) the Pool Balance of such
Trust by (ii) the aggregate original principal amount of such Equipment Notes
held in such Trust. The Pool Factor for each Trust as of any Regular
Distribution Date or Special Distribution Date shall be computed after giving
effect to the payment of principal, if any, on the Equipment Notes held in such
Trust and distribution thereof to be made on that date.
"Regular Distribution Date" means the dates specified in the applicable
Prospectus Supplement.
"Scheduled Payment" means each payment of interest or principal on an
Equipment Note scheduled to be received by the Pass Through Trustee on the
Regular Distribution Dates specified in the applicable Prospectus Supplement.
"Special Distribution Date" means each date on which a Special Payment will
be distributed, as specified in the applicable Prospectus Supplement.
"Special Payment" means (i) any payment of principal, premium, if any, and
interest resulting from the prepayment or purchase of an Equipment Note held in
a Trust, (ii) any payment of principal and interest (including any interest
accruing upon default) on or any other amount in respect of an Equipment Note
held in a Trust upon an Indenture Event of Default in respect of, or upon
acceleration relating to, such Equipment Note, (iii) any payment of principal,
premium, if any, and interest on an Equipment Note which is not in fact paid
within five days of a Regular Distribution Date, (iv) any proceeds from the sale
of any Equipment Note upon an Event of Default, or (v) the amounts available for
distribution from a Trust as a result of the failure to apply such amounts to
the purchase of Equipment Notes on or prior to the date specified in the
applicable Prospectus Supplement.
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"Special Payments Account" means the one or more accounts established and
maintained by the Pass Through Trustee pursuant to the Basic Agreement on behalf
of the Certificateholders of each Trust for the deposit of payments representing
Special Payments on the Equipment Notes held in such Trust.
"Specified Investments" when used with respect to any Trust, means, unless
otherwise specified in the related Prospectus Supplement, (i) direct obligations
of the United States of America and agencies thereof for which the full faith
and credit of the United States of America is pledged, (ii) obligations fully
guaranteed by the United States of America, (iii) certificates of deposit issued
by, or bankers' acceptances of, or time deposits with, any bank, trust company
or national banking association incorporated or doing business under the laws of
the United States of America or one of the states thereof having combined
capital and surplus and retained earnings of at least $500,000,000 (including
any Indenture Trustee or Owner Trustee if such conditions are met) and (iv)
repurchase agreements with any financial institution having a combined capital
and surplus of at least $750,000,000 fully collateralized by obligations of the
type described in clauses (i) through (iii) above; provided that if all of the
above investments are unavailable, the entire amounts to be invested may be used
to purchase Federal funds from an entity described in clause (iii) above; and
provided further that no investment shall be eligible as a "Specified
Investment" unless the final maturity or date of return of such investment is 91
days or less from the date of purchase thereof.
"Trust" means each of the General American Transportation Corporation Pass
Through Trusts to be formed pursuant to the Basic Agreement and a Trust
Supplement.
"Trust Supplement" means each of the Pass Through Trust Supplements between
GATC and the Pass Through Trustee, pursuant to each of which a Trust is formed
and a series of Pass Through Certificates is issued to evidence fractional
undivided ownership interests in the Trust Property held in such Trust.
"Trust Property" means the Equipment Notes held as the property of a Trust
and all funds from time to time deposited in the related Certificate Account,
the related Special Payments Account and any other account maintained as a part
of such Trust, including any proceeds from the sale by the Pass Through Trustee
of any such Equipment Note in connection with an Event of Default.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
SUBJECT TO COMPLETION, DATED FEBRUARY 16, 1994
PROSPECTUS
$650,000,000 [LOGO]
GENERAL AMERICAN TRANSPORTATION
CORPORATION
DEBT SECURITIES
General American Transportation Corporation, a New York corporation ("GATC" or
the "Company") may offer from time to time, in one or more series, up to
$650,000,000 aggregate principal amount (or the equivalent in foreign currencies
or currency units) of its debt securities ("Debt Securities"), on terms to be
determined at the time the Debt Securities are offered for sale. Unless
otherwise provided in a Prospectus Supplement, the Debt Securities of any series
may be represented by a single global certificate registered in the name of a
depository's nominee and, if so represented, beneficial interests in the global
certificate will be shown on, and transfers thereof will be effected only
through, records maintained by the depository and its participants. Debt
Securities may be offered for sale directly to purchasers and may also be
offered through underwriters, dealers or agents. The names of any underwriters
or agents and any compensation to such underwriters or agents will be set forth
in the Prospectus Supplement.
The terms of the Debt Securities, including, where applicable, the specific
designation, aggregate principal amount, authorized denominations, currencies in
which such Debt Securities are issued or payable, maturity, rate (or manner of
calculation thereof) and time of payment of interest, if any, whether the Debt
Securities are issuable in registered form or bearer form or both, whether any
series of the Debt Securities will be represented by a single global
certificate, any terms for redemption or for sinking fund payments, whether the
Debt Securities are convertible into Debt Securities of a different series, the
initial public offering price, the net proceeds to the Company from the sale of
the Debt Securities and any other specific terms in connection with the offering
and sale of the Debt Securities in respect of which this Prospectus is being
delivered will be set forth in a Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is February , 1994
<PAGE> 30
AVAILABLE INFORMATION
General American Transportation Corporation, a New York corporation ("GATC"
or the "Company") is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports and other information filed by GATC
with the Commission can be inspected and copied at the Public Reference Section
of the Commission, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the public reference facilities of the
Commission's Regional Offices at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661, and Seven World Trade Center, New York, New York 10048. Copies
of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. GATC has filed with the Commission a registration statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement.
DOCUMENTS INCORPORATED BY REFERENCE
GATC's Annual Report on Form 10-K for the year ended December 31, 1992, its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1993, June 30,
1993, and September 30, 1993, respectively, and its Current Report on Form 8-K
dated July 28, 1993 heretofore filed with the Commission pursuant to the
Exchange Act, are hereby incorporated by reference.
All documents filed by GATC pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the securities offered hereby shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified and superseded, to constitute a part of
this Prospectus.
GATC will provide without charge to each person, including any beneficial
owner, to whom this Prospectus is delivered, upon the written or oral request of
such person, a copy of any or all of the foregoing documents incorporated herein
by reference (other than exhibits unless specifically incorporated therein).
Requests for such documents should be directed to General American
Transportation Corporation, 500 West Monroe Street, Chicago, Illinois
60661-3676, Attention: Secretary (telephone 312-621-6200).
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of Debt
Securities will be added to the general funds of the Company and may be used to
repay the Company's outstanding short-term borrowings and long-term debt. The
proceeds may also be used to finance capital expenditures, to finance
acquisitions, or to make advances to GATX Corporation ("GATX"), of which the
Company is a wholly owned subsidiary. In addition, the proceeds may be used for
other corporate purposes or as may be described in the Prospectus Supplement.
The Company has not allocated a specific portion of the proceeds for any
particular use at this time. Pending such use, the net proceeds may be
temporarily invested in short-term securities.
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<PAGE> 31
THE COMPANY
GATC is a wholly owned subsidiary of GATX Corporation and is principally
engaged in railcar leasing and management. GATX Terminals Corporation
("Terminals"), a wholly owned subsidiary of the Company, is engaged in the
operation of public bulk liquid terminals and domestic pipeline systems. The
Company is the largest lessor of railroad tank cars in the United States, and
Terminals is one of the largest independent operators of public bulk liquid
terminals in the world. The principal offices of the Company are located at 500
West Monroe Street, Chicago, Illinois 60661-3676 (telephone: (312) 621-6200).
The Company leases specialized railcars, primarily tank cars and to a
lesser extent Airslide(R) covered hoppers and plastic pellet cars, under full
service leases. The Company's railcars have a useful life of approximately 30 to
33 years. The average age of the railcars in the Company's fleet is
approximately 15 years. The Company's customers typically lease new equipment
for a term of five years or longer, whereas renewals or leases of used cars are
typically for periods ranging from less than a year to seven years with an
average lease term of about three years. Under its full service leases, the
Company maintains and services its railcars, pays ad valorem taxes and provides
many ancillary services.
Terminals is engaged in the storage, handling and intermodal transfer of
petroleum and chemical commodities at key points in the bulk liquid distribution
chain. Terminals owns and operates terminals in the United States and the United
Kingdom; Terminals also has joint venture interests in facilities in Europe and
the Pacific Rim. All of its terminals are located near major distribution and
transportation points and most are capable of receiving and shipping bulk
liquids by ship, rail, barge and truck. Many of the terminals are also linked
with major interstate pipelines. In addition to storing, handling and
transferring bulk liquids, Terminals also provides blending and testing services
at most of its facilities.
RELATIONSHIP WITH GATX
All of the Company's outstanding common stock is owned by GATX. GATX is
also the parent of American Steamship Company, a shipping company which operates
self-unloading vessels on the Great Lakes, GATX Logistics, Inc., which provides
distribution and logistics support services throughout North America and
develops and operates warehouses, and GATX Financial Services, which through its
principal subsidiary, GATX Capital Corporation as well as its subsidiaries and
joint ventures, arranges and services the financing of equipment and other
capital assets on a worldwide basis.
GATX will not guarantee the Debt Securities and does not guarantee any
other indebtedness of the Company. The Company, in the normal course of
business, pays dividends to GATX to provide for GATX's normal operating
expenses. Additional amounts have been advanced to GATX from time to time for
general corporate purposes, the redemption of GATX preferred stock and the
retirement of debt. In addition, GATX may make advances to subsidiaries of the
Company in the normal course of business. These advances have no fixed maturity
date.
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<PAGE> 32
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms and provisions of the series of Debt Securities offered by a
Prospectus Supplement, including any additional covenants or changes to existing
covenants relating to such series, and the extent to which such general terms
and provisions described below may apply thereto, will be described in the
Prospectus Supplement relating to such series of Debt Securities.
The Debt Securities are to be issued under an Indenture, dated as of
October 1, 1987, as supplemented (the "Debt Indenture"), between the Company and
The Chase Manhattan Bank (National Association), as Trustee (the "Debt
Trustee"). The following summaries of certain provisions of the Debt Securities
and the Debt Indenture do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all provisions of the Debt
Securities and the Debt Indenture, including the definitions therein of certain
terms. Particular sections of the Debt Indenture which are relevant to the
discussion are cited parenthetically. Wherever particular sections or defined
terms of the Debt Indenture are referred to, it is intended that such sections
or defined terms shall be incorporated herein by reference. Capitalized terms
not otherwise defined herein shall have the meaning ascribed to such terms in
the Debt Indenture.
GENERAL
The Debt Indenture does not limit the amount of Debt Securities which can
be issued thereunder or the amount of debt which may otherwise be incurred by
the Company, and additional debt securities may be issued under the Debt
Indenture up to the aggregate principal amount which may be authorized from time
to time by, or pursuant to a resolution of, the Company's Board of Directors or
by a supplemental indenture. Reference is made to the Prospectus Supplement for
the following terms, if applicable, of the particular series of Debt Securities
being offered thereby: (i) the title of the Debt Securities of the series; (ii)
any limit upon the aggregate principal amount of the Debt Securities of the
series; (iii) the date or dates on which the principal of the Debt Securities of
the series will be payable; (iv) the rate or rates (or manner of calculation
thereof), if any, at which the Debt Securities of the series will bear interest,
the date or dates from which any such interest will accrue and on which such
interest will be payable, and, with respect to Debt Securities of the series in
registered form, the record date for the interest payable on any interest
payment date; (v) the place or places where the principal of and interest, if
any, on the Debt Securities of the series will be payable; (vi) any redemption
or sinking fund provisions; (vii) the denominations in which Debt Securities of
the series shall be issuable; (viii) if other than the principal amount thereof,
the portion of the principal amount of Debt Securities of the series which will
be payable upon declaration of acceleration of the maturity thereof; (ix)
whether the Debt Securities of the series will be issuable in registered or
bearer form or both, any restrictions applicable to the offer, sale or delivery
of Debt Securities in bearer form ("bearer Debt Securities") and whether and the
terms upon which bearer Debt Securities will be exchangeable for Debt Securities
in registered form ("registered Debt Securities") and vice versa; (x) any
provisions relating to the conversion of Debt Securities of the series into Debt
Securities of a different series; (xi) whether and under what circumstances the
Company will pay additional amounts on the Debt Securities of the series held by
a person who is not a U.S. person (as defined below) in respect of taxes or
similar charges withheld or deducted and, if so, whether the Company will have
the option to redeem such Debt Securities rather than pay such additional
amounts; (xii) the currencies in which payments of interest, premium or
principal are payable with respect to such Debt Securities; (xiii) whether the
Debt Securities of any series will be issued as one or more Global Securities;
(xiv) whether Debt Securities of the series will be issuable in Tranches; and
(xv) any additional provisions or other terms not inconsistent with the
provisions of the Debt Indenture, including any terms which may be required by
or advisable under United States laws or regulations or advisable in connection
with the marketing of Debt Securities of such series. (Section 2.01 and 2.02) To
the extent not described herein, principal and interest, if any, will be
payable, and the Debt Securities of a particular
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<PAGE> 33
series will be transferable, in the manner described in the Prospectus
Supplement relating to such series. "Principal" when used herein includes, when
appropriate, the premium, if any, on the Debt Securities.
Each series of Debt Securities will constitute unsecured and unsubordinated
indebtedness of the Company and will rank on a parity with the Company's other
unsecured and unsubordinated indebtedness. There are no covenants or "event
risk" provisions contained in the Debt Indenture that may afford holders of Debt
Securities protection in the event of a highly leveraged transaction involving
the Company.
Debt Securities of any series may be issued as registered Debt Securities
or bearer Debt Securities or both as specified in the terms of the series.
Additionally, Debt Securities of any series may be represented by a single
global note registered in the name of a depository's nominee and, if so
represented, beneficial interests in such global note will be shown on, and
transfers thereof will be effected only through, records maintained by a
designated depository and its participants. Unless otherwise indicated in the
Prospectus Supplement, Debt Securities will be issued in the denomination of
$1,000 and integral multiples thereof and bearer Debt Securities will not be
offered, sold, resold or delivered to U.S. persons in connection with their
original issuance. Debt Securities of any series may be denominated in and
payments of principal and interest may be made in United States dollars or any
other currency, including composite currencies such as the European Currency
Unit. For purposes of this Prospectus, "U.S. person" means a citizen or resident
of the United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof, or any estate or trust the income of which is subject to United States
federal income taxation regardless of its source.
To the extent set forth in the Prospectus Supplement, except in special
circumstances set forth in the Debt Indenture, interest on bearer Debt
Securities will be payable only against presentation and surrender of the
coupons for the interest installments evidenced thereby as they mature at a
paying agency of the Company located outside of the United States and its
possessions. (Section 2.05(c)) The Company will maintain such an agency for a
period of two years after the principal of such bearer Debt Securities has
become due and payable. During any period thereafter for which it is necessary
in order to conform to United States tax laws or regulations, the Company will
maintain a paying agent outside of the United States and its possessions to
which the bearer Debt Securities and coupons related thereto may be presented
for payment and will provide the necessary funds therefor to such paying agent
upon reasonable notice. (Section 2.04)
Bearer Debt Securities and the coupons related thereto will be transferable
by delivery. (Section 2.08(f))
If appropriate, United States federal income tax consequences applicable to
a series of Debt Securities will be described in the Prospectus Supplement
relating thereto.
BOOK-ENTRY REGISTRATION
If the Prospectus Supplement so indicates, the Debt Securities will be
represented by one or more certificates (the "Global Securities"). The Global
Securities representing Debt Securities will be deposited with, or on behalf of,
The Depository Trust Company ("DTC") or other successor depository appointed by
the Company (DTC or such other depository is herein referred to as the
"Depository") and registered in the name of the Depository or its nominee. Debt
Securities represented by a Global Security will not be issuable in definitive
form.
DTC currently limits the maximum denomination of any single Global Security
to $150,000,000. Therefore, for purposes hereof, "Global Security" refers to the
Global Security or Global Securities representing the entire issue of Debt
Securities of a particular series.
DTC has advised the Company and any underwriters, dealers or agents named
in the Prospectus Supplement as follows: DTC is a limited-purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the
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<PAGE> 34
New York Uniform Commercial Code and a "clearing agency" registered pursuant to
the provisions of Section 17A of the Securities Exchange Act of 1934. DTC was
created to hold securities of its participants and to facilitate the clearance
and settlement of securities transactions among its participants in such
securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations, some of
which (and/or their representatives) own DTC. Access to DTC's book-entry system
is also available to others, such as banks, brokers, dealers and trust
companies, that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
Upon the issuance by the Company of Debt Securities represented by a Global
Security, DTC will credit, on its book-entry registration and transfer system,
the respective principal amounts of the Debt Securities represented by such
Global Security to the accounts of participants. The accounts to be credited
shall be designated by the underwriters, dealers or agents. Ownership of
beneficial interests in the Global Security will be limited to participants or
persons that hold interests through participants. Ownership of beneficial
interests in Debt Securities represented by the Global Security will be shown
on, and the transfer of that ownership will be effected only through, records
maintained by DTC (with respect to interests of participants in DTC), or by
participants in DTC or persons that may hold interests through such participants
(with respect to persons other than participants in DTC). The laws of some
states require that certain purchasers of securities take physical delivery of
such securities in definitive form. Such limits and such laws may impair the
ability to transfer beneficial interests in the Global Security.
So long as the Depository for the Global Security, or its nominee, is the
registered owner of the Global Security, the Depository or its nominee, as the
case may be, will be considered the sole owner or holder of the Debt Securities
represented by such Global Security for all purposes under the Debt Indenture.
Except as provided below, owners of beneficial interests in Debt Securities
represented by the Global Security will not be entitled to have Debt Securities
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of Debt Securities in definitive
form and will not be considered the owners or holders thereof under the Debt
Indenture.
Payments of principal of and interest, if any, on the Debt Securities
represented by the Global Security registered in the name of DTC or its nominee
will be made by the Company through the Debt Trustee under the Debt Indenture or
a paying agent (the "Paying Agent"), which may also be the Debt Trustee under
the Debt Indenture, to DTC or its nominee, as the case may be, as the registered
owner of the Global Security. Neither the Company, the Debt Trustee, nor the
Paying Agent will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company has been advised that DTC, upon receipt of any payment of
principal or interest in respect of a Global Security, will credit immediately
the accounts of the related participants with payment in amounts proportionate
to their respective holdings in principal amount of beneficial interest in such
Global Security as shown on the records of DTC. The Company expects that
payments by participants to owners of beneficial interests in a Global Security
will be governed by standing customer instructions and customary practices, as
is now the case with securities held for the accounts of customers in bearer
form or registered in "street name" and will be the responsibility of such
participants.
If the Depository with respect to a Global Security is at any time
unwilling or unable to continue as Depository and a successor Depository is not
appointed by the Company within 90 days, the Company will issue certificated
notes in exchange for the Debt Securities represented by such Global Security.
The information contained in this section concerning DTC and DTC's
book-entry system has been obtained from sources that the Company believes to be
reliable, but the Company takes no responsibility for the accuracy thereof.
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<PAGE> 35
SAME-DAY SETTLEMENT
If the Prospectus Supplement so indicates, settlement for the Debt
Securities will be made by the underwriters, dealers or agents in immediately
available funds and all payments of principal and interest on the Debt
Securities will be made by the Company in immediately available funds. Secondary
trading in long-term notes and debentures of corporate issuers is generally
settled in clearinghouse or next-day funds. In contrast, the Debt Securities
subject to settlement in immediately available funds will trade in the
Depository's Same-Day Funds Settlement System until maturity, and secondary
market trading activity in such Debt Securities will therefore be required by
the Depository to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the Debt Securities.
EXCHANGE OF DEBT SECURITIES
Registered Debt Securities may be exchanged, subject to certain specified
restrictions, for an equal aggregate principal amount of registered Debt
Securities of the same series and date of maturity in such authorized
denominations as may be requested upon surrender of the registered Debt
Securities at an agency of the Company maintained for such purpose and upon
fulfillment of all other requirements of such agent. (Section 2.08(a))
To the extent permitted by the terms of a series of Debt Securities
authorized to be issued in registered form and bearer form, bearer Debt
Securities may be exchanged for an equal aggregate principal amount of
registered or bearer Debt Securities of the same series and date of maturity in
such authorized denominations as may be requested upon surrender of the bearer
Debt Securities with all unpaid coupons relating thereto at an agency of the
Company maintained for such purpose and upon fulfillment of all other
requirements of such agent. (Section 2.08(b)) As of the date of this Prospectus,
temporary United States Treasury regulations essentially prohibit exchanges of
registered Debt Securities for bearer Debt Securities and, unless such
regulations are modified, the terms of a series of Debt Securities will not
permit registered Debt Securities to be exchanged for bearer Debt Securities.
CERTAIN COVENANTS OF THE COMPANY
The Company may not declare or pay any dividend or make any distribution in
cash or property on its Capital Stock or to any stockholder (other than
dividends or distributions payable in Capital Stock of the Company), or
purchase, redeem or otherwise acquire or retire for value any Capital Stock or
warrants or rights to acquire Capital Stock of the Company or permit any
Subsidiary to purchase, redeem or otherwise acquire or retire for value any such
Capital Stock or warrants or rights to acquire Capital Stock, if, upon giving
effect to such dividend, distribution, purchase, redemption or other acquisition
or retirement, the aggregate amount expended for all such purposes subsequent to
December 31, 1989 shall exceed the sum of (a) the aggregate Consolidated Net
Income accrued during the period (taken as a cumulative whole) subsequent to
December 31, 1989, (b) the aggregate of the net proceeds received by the Company
from the issue or sale of, or conversion of indebtedness into, its Capital Stock
or warrants or rights to acquire Capital Stock subsequent to December 31, 1989,
other than to a Subsidiary, said net proceeds being deemed for this purpose to
equal the aggregate of (x) the cash, if any, received by the Company for such
issue or sale, plus (y) the fair value of consideration other than cash (as
determined by the Board of Directors, whose determination shall be conclusive
and evidenced by a Board Resolution filed with the Debt Trustee) received by the
Company from such issue, sale or conversion, and (c) $75 million. (Section 4.07)
The Company may not (or permit any Subsidiary to) make any loan or advance
to or any other investment in, extend any credit so as to result in any amount
being deemed receivable from, or make any payments with respect to any guaranty
of any indebtedness of, any Related Parties (including GATX and its other
Subsidiaries) if, after giving effect thereto, the sum of all such loans,
advances, investments, receivables and payments, less the sum of any loans and
advances from, and accounts
7
<PAGE> 36
payable to, any Related Parties, would exceed 75% of the Consolidated Tangible
Net Worth of the Company.
"Consolidated Net Income" means, for any period, the consolidated net
income of the Company and its subsidiaries for such period determined in
accordance with generally accepted accounting principles in the United States on
the date of such computation.
"Consolidated Tangible Net Worth" means the consolidated shareholder's
equity of the Company and its subsidiaries, as reflected on the consolidated
balance sheet of the Company prepared in accordance with generally accepted
accounting principles in the United States at the conclusion of the immediately
preceding fiscal quarter for which such determination is made, less the amount
of intangible assets (including, without limitation, franchises, patents and
patent applications, trademarks and brand names, goodwill, research and
development expenses, unamortized debt discount and expense, and all write-ups
in the book value of any asset (excluding write-ups of assets resulting from the
application of principles of purchase accounting with respect to acquisitions
made by the Company)).
"Investment" means all loans, advances, purchases of Capital Stock, capital
contributions and transfers of assets, and all sales and other dispositions of
assets for consideration consisting of evidences of indebtedness, Capital Stock
or other securities of the purchaser.
AMENDMENT AND WAIVER
Subject to certain exceptions, the Debt Indenture and the Debt Securities
may be amended or supplemented by the Company and the Debt Trustee with the
written consent of the holders of a majority in principal amount of the
outstanding Debt Securities of each series affected by the amendment or
supplement (with each series voting as a class), or compliance with any
provision may be waived with the consent of the holders of a majority in
principal amount of the outstanding Debt Securities of each series affected by
such waiver (with each series voting as a class). However, without the consent
of each Securityholder affected, an amendment or waiver may not (i) reduce the
amount of Debt Securities whose holders must consent to an amendment or waiver;
(ii) change the rate of or change the time for payment of interest on any Debt
Security; (iii) change the principal of or change the Stated Maturity of any
Debt Security; (iv) reduce any premium payable upon redemption of any Debt
Security; (v) waive a default in the payment of the principal of or interest on
any Debt Security; (vi) make any Debt Security payable in money other than that
stated in the Debt Security; or (vii) impair the right to institute suit for the
enforcement of any payment on or with respect to any Debt Security. (Section
9.02) The Debt Indenture may be amended or supplemented without the consent of
any Securityholder (i) to cure any ambiguity, defect or inconsistency in the
Debt Indenture or in the Debt Securities of any series; (ii) to provide for the
assumption of all the obligations of the Company under the Debt Securities and
any coupons appertaining thereto and under the Debt Indenture by any corporation
in connection with a merger, consolidation, or transfer or lease of the
Company's property and assets substantially as an entirety, as provided for in
the Debt Indenture; (iii) to secure the Debt Securities; (iv) to provide for
uncertificated Debt Securities in addition to or in place of certificated Debt
Securities; (v) to make any change that does not adversely affect the rights of
any Securityholder; (vi) to provide for the issuance of and establish the form
and terms and conditions of a series of Debt Securities or to establish the form
of any certifications required to be furnished pursuant to the terms of the Debt
Indenture or any series of Debt Securities; or (vii) to add to rights of
Securityholders. (Section 9.01)
SUCCESSOR ENTITY
The Company may consolidate with, or merge into, or be merged into, or
transfer or lease its property and assets substantially as an entirety to,
another U.S. corporation which assumes all the obligations of the Company under
the Debt Securities and any coupons appertaining thereto and under the Debt
Indenture if, after giving effect thereto, no default under the Debt Indenture
shall have occurred and be continuing. Thereafter, except in the case of a
lease, all such obligations of the Company shall terminate. (Section 5.01 and
Section 5.02)
8
<PAGE> 37
DEFEASANCE, SATISFACTION AND DISCHARGE OF THE DEBT SECURITIES PRIOR TO MATURITY
Defeasance. Unless provided for otherwise in the Prospectus Supplement, if
the Company shall deposit with the Debt Trustee, in trust, at or before
maturity, lawful money or direct obligations of the United States of America or
obligations the principal of and interest on which are guaranteed by the United
States of America in such amounts and maturing at such times that the proceeds
of such obligations to be received upon the respective maturities and interest
payment dates of such obligations will provide funds sufficient, in the opinion
of a nationally recognized firm of independent public accountants chosen by the
Company, to pay when due the principal of and interest on the Debt Securities to
maturity (such money or direct obligations of, or obligations guaranteed by, the
United States of America, initially deposited or equivalent cash or securities
subsequently exchanged therefor, to be held as security for the payment of such
principal and interest), then the Company may omit to comply with certain of the
terms of the Debt Indenture as they relate to the Debt Securities, including
certain of the restrictive covenants described herein under the caption
"Description of Debt Securities -- Certain Covenants of the Company" and the
Event of Default described in clause (iv) under the caption "Description of Debt
Securities -- Events of Default," and such other restrictive covenants or Events
of Default as may be set forth in the Prospectus Supplement. Defeasance of the
Debt Securities would be subject to the satisfaction of certain conditions,
including, among others, (i) the absence of an Event of Default at the date of
the deposit, (ii) the perfection of the holders' interest in such deposit and
(iii) that such deposit would not result in a breach of a material instrument by
which the Company is bound. (Section 8.02)
Satisfaction and Discharge. Upon the deposit of money or securities
contemplated above and the satisfaction of certain conditions, the Company may
omit to comply with its obligations duly and punctually to pay the principal of
and interest on the Debt Securities, or with any Events of Default with respect
thereto, and thereafter the holders of Debt Securities shall be entitled only to
payment out of the money or securities deposited with the Debt Trustee. Such
conditions may include, among others, (i) except in certain limited
circumstances involving a deposit made within one year of maturity, (A) the
absence of an Event of Default at the date of deposit or on the 91st day
thereafter, and (B) the delivery to the Debt Trustee by the Company of an
opinion of nationally recognized tax counsel to the effect that holders of Debt
Securities will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit and discharge and will be subject to
Federal income tax on the same amounts and in the same manner and at the same
times as would have been the case if such deposit and discharge had not
occurred, and (ii) the receipt by the Company of an opinion of counsel to the
effect that such satisfaction and discharge will not result in a violation of
the rules of any nationally recognized exchange on which the Debt Securities are
listed. (Section 8.01)
EVENTS OF DEFAULT
The following events are defined in the Debt Indenture as "Events of
Default" with respect to a series of Debt Securities: (i) default in the payment
of interest on any Debt Security of such series for 30 days; (ii) default in the
payment of the principal of any Debt Security of such series; (iii) default in
the payment of any sinking fund installment required to be made by the Company
with respect to any series of Debt Securities; (iv) failure by the Company for
90 days after notice to it to comply with any of its other agreements in the
Debt Securities of such series, in the Debt Indenture or in any supplemental
indenture under which the Debt Securities of that series may have been issued;
and (v) certain events of bankruptcy or insolvency. (Section 6.01) If an Event
of Default occurs with respect to the Debt Securities of any series and is
continuing, the Debt Trustee or the holders of at least 25% in principal amount
of all of the outstanding Debt Securities of that series may declare the
principal (or, if the Debt Securities of that series are original issue discount
Debt Securities, such portion of the principal amount as may be specified in the
terms of that series) of, and any accrued interest on, all the Debt Securities
of that series to be due and payable. Upon such declaration, such principal (or,
in the case of original issue discount Debt Securities, such specified amount)
and all accrued interest thereon shall be due and payable immediately. (Section
6.02)
9
<PAGE> 38
Securityholders may not enforce the Debt Indenture or the Debt Securities,
except as provided in the Debt Indenture. (Section 6.06) The Debt Trustee may
require indemnity satisfactory to it before it enforces the Debt Indenture or
the Debt Securities. (Section 7.01(f)) Subject to certain limitations, holders
of a majority in principal amount of the Debt Securities of each series affected
(with each series voting as a class) may direct the Debt Trustee in its exercise
of any trust power. (Section 6.05) The Debt Trustee may withhold from
Securityholders notice of any continuing default (except a default in payment of
principal or interest) if it determines in good faith that withholding notice is
in their interests. (Section 7.05) The Company is not required under the Debt
Indenture to furnish any periodic evidence as to the absence of default or as to
compliance with the terms of the Debt Indenture.
CONCERNING THE DEBT TRUSTEE
The Company may maintain banking relationships in the ordinary course of
business with the Debt Trustee. The Debt Trustee also acts as trustee with
respect to the Company's Medium-Term Notes Series A, B, C and D.
10
<PAGE> 39
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities being offered hereby: (i) directly
to purchasers, (ii) through agents, (iii) to or through underwriters, (iv)
through dealers or (v) through a combination of any such methods of sale.
The distribution of the Debt Securities may be effected from time to time
in one or more transactions either (i) at a fixed price or prices, which may be
changed, or (ii) at market prices prevailing at the time of sale, or (iii) at
prices related to such prevailing market prices, or (iv) at negotiated prices.
Offers to purchase Debt Securities may be solicited directly by the Company
or by agents designated by the Company from time to time. Any such agent, which
may be deemed to be an underwriter as that term is defined in the Securities
Act, involved in the offer or sale of the Debt Securities in respect of which
this Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be acting
on a best efforts basis for the period of its appointment.
If an underwriter or underwriters are utilized in the sale, the Company
will execute an underwriting agreement with such underwriters at the time of
sale to them and the names of the underwriters and the terms of the transaction,
including commissions, discounts and other compensation of the underwriters and
dealers, if any, will be set forth in the Prospectus Supplement, which will be
used by the underwriters to make resales of the Debt Securities in respect of
which this Prospectus is delivered to the public.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to the dealer, as principal. The dealer may then resell such Debt Securities to
the public at varying prices to be determined by such dealer at the time of
resale.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Debt Securities from the Company at the public offering
price set forth in the Prospectus Supplement pursuant to contracts providing for
payment and delivery on a specified date in the future. Such contracts will be
subject only to those conditions set forth in the Prospectus Supplement, and the
Prospectus Supplement will set forth the commission payable for solicitation of
such contracts.
Underwriters, dealers, agents and other persons may be entitled, under
agreements which may be entered into with the Company, to indemnification
against certain civil liabilities, including liabilities under the Securities
Act.
Underwriters, dealers and agents may be customers of, engage in
transactions with or perform services for the Company in the ordinary course of
business.
LEGAL OPINIONS
Unless otherwise indicated in the Prospectus Supplement to this Prospectus,
certain legal matters in connection with the Debt Securities offered hereby will
be passed upon for the Company by Mayer, Brown & Platt, Chicago, Illinois, and
for any underwriters or agents, by Winston & Strawn, Chicago, Illinois.
EXPERTS
The consolidated financial statements and related schedules of GATC
appearing in GATC's Annual Report (Form 10K) for the year ended December 31,
1992, have been audited by Ernst & Young, independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
11
<PAGE> 40
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time that the registration
statement becomes effective. This prospectus shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be any sale
of these securities in any State in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such State.
SUBJECT TO COMPLETION, DATED FEBRUARY 16, 1994
PROSPECTUS SUPPLEMENT
(To Prospectus Dated February , 1994)
U.S. $650,000,000
GENERAL AMERICAN TRANSPORTATION CORPORATION [LOGO]
MEDIUM-TERM NOTES, SERIES E
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
General American Transportation Corporation ("GATC" or the "Company") may offer
from time to time its Medium-Term Notes, Series E (the "Notes"). Each Note will
mature on any business day nine months or more from the date of issue as
selected by the purchaser and agreed to by the Company and may be subject to
redemption at the option of the Company or repayment at the option of the holder
prior to maturity. The aggregate principal amount of the Notes to be offered
will not exceed U.S. $650,000,000 or its equivalent in foreign currencies or
currency units. Principal of and interest on the Notes may be payable in U.S.
dollars or in such foreign currencies or currency units (the "Specified
Currency") as may be designated by the Company. See "Important Currency Exchange
Information." Each Note will bear interest at a fixed rate (a "Fixed Rate
Note"), which may be zero in the case of certain Notes issued at a price
representing a substantial discount from the principal amount payable upon
maturity, or at a floating rate (a "Floating Rate Note"). See "Description of
Notes -- Fixed Rate Notes" and "Description of Notes -- Floating Rate Notes."
The currencies or currency units and redemption and repayment provisions, if
any, will be set forth in a pricing supplement to this Prospectus Supplement
(the "Pricing Supplement"). Notes may pay a level amount in respect of both
principal and interest amortized over the life of the Note (an "Amortizing
Note"). Holders of Notes may be provided the option of extending the maturity of
such Notes to one or more dates (an "Extendible Maturity Note"). The Notes will
not be subject to redemption or repayment prior to their stated maturity unless
otherwise specified in the applicable Pricing Supplement. The Notes may be
issued as Indexed Notes the principal amount of which, payable at maturity, is
determined by the relationship between the denominated currency and another
currency. See "Description of Notes -- Indexed Notes."
Each Note will be issued in fully registered form and will be represented by
either a global certificate (a "Global Security") registered in the name of a
nominee of The Depository Trust Company ("DTC") or other depository (DTC or such
other depository as is specified in the applicable Pricing Supplement is herein
referred to as the "Depository", and each Note represented by a Global Security
is herein referred to as a "Book-Entry Note"), or a certificate issued in
definitive form (a "Certificated Note"), as set forth in the applicable Pricing
Supplement. Interests in Book-Entry Notes will be shown on, and transfers
thereof will be effected only through, records maintained by the Depository and
its participants. See "Description of Notes -- Book-Entry System."
Unless otherwise set forth in the applicable Pricing Supplement, the Interest
Payment Dates, if any, for each Fixed Rate Note will be June 15 and December 15
of each year and at maturity. The Interest Payment Dates for each Floating Rate
Note will be established on the date of issue and will be set forth therein and
in the applicable Pricing Supplement. Interest rates and interest rate formulas
are subject to change by the Company, but no change will affect any Notes
already issued or as to which an offer to purchase has been accepted by the
Company.
Unless otherwise specified in the applicable Pricing Supplement, the Notes will
be issued in denominations of U.S. $1,000 or any amount in excess thereof which
is an integral multiple of U.S. $1,000. The authorized denominations of Notes
denominated in a Specified Currency other than U.S. dollars will be set forth in
the applicable Pricing Supplement. See "Description of Notes -- General."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
PRICE TO AGENTS' PROCEEDS TO
PUBLIC(1)(2) COMMISSIONS(3) COMPANY(2)(3)(4)
Per Note...................................... 100.000% .125%-.750% 99.875%-99.250%
Total......................................... U.S. $650,000,000 U.S.$812,500- U.S. $649,187,500-
$4,875,000 $645,125,000
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Unless otherwise specified in the Pricing Supplement, the Price to Public
will be 100% of the principal amount.
(2) Or the equivalent thereof in the Specified Currency.
(3) The Company will pay to Salomon Brothers Inc and to Morgan Stanley & Co.
Incorporated (each an "Agent") a commission depending upon the maturity of
the Notes of from .125% to .750% of the principal amount of each Note;
provided, that commissions with respect to Notes maturing 30 years or more
from the date of issue will be subject to negotiation.
(4) Before deducting expenses payable by the Company estimated at U.S. $250,000,
including reimbursement of the Agents' expenses. The Company has agreed to
indemnify each Agent against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended.
The Notes are being offered on a continuing basis by the Company through the
Agents, which have agreed to use their reasonable best efforts to solicit
purchases of the Notes. The Company may also sell the Notes at a discount to the
Agents for resale to one or more investors or other purchasers at varying prices
related to prevailing market prices at the time of resale, or, if set forth in
the applicable Pricing Supplement, at a fixed public offering price, as
determined by the Agents. In addition, each Agent may offer Notes purchased by
it as principal for its own account or at negotiated discounts for resale to
investors, other dealers or other purchasers. Unless otherwise specified in the
applicable Pricing Supplement, any Note purchased by an Agent as principal will
be purchased at 100% of the principal amount thereof less a percentage equal to
the commission applicable to an agency sale of a Note of identical maturity. The
Company reserves the right to sell the Notes directly on its own behalf. The
Notes will not be listed on any securities exchange, and there can be no
assurance that the maximum principal amount of Notes offered by this Prospectus
Supplement will be sold or that there will be a secondary market for the Notes.
The Company reserves the right to withdraw, cancel or modify the offer made
hereby without notice. The Company or the Agents may reject any offer to
purchase as a whole or in part. See "Plan of Distribution."
SALOMON BROTHERS INC MORGAN STANLEY & CO.
INCORPORATED
The date of this Prospectus Supplement is February , 1994.
<PAGE> 41
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the Notes
will be added to the general funds of the Company and may be used to repay the
Company's outstanding short-term or long-term debt. In addition, the proceeds
may be used to finance capital expenditures, to finance acquisitions, to make
advances to GATX Corporation, or for other corporate purposes, as may be set
forth in one or more Pricing Supplements. The Company has not allocated a
specific portion of the proceeds for any particular use at this time. Pending
such use, the net proceeds may be temporarily invested in short-term securities.
IMPORTANT CURRENCY EXCHANGE INFORMATION
Purchasers are required to pay for Notes in the Specified Currency and
payment of principal of, premiums, if any, and interest on such Notes will be
made in the Specified Currency unless otherwise indicated in the applicable
Pricing Supplement. Currently, there are limited facilities in the United States
for conversion of U.S. dollars into foreign currencies and vice versa, and
generally banks do not offer non-U.S. dollar checking or savings account
facilities in the United States. However, if requested by a prospective
purchaser of Notes denominated in a Specified Currency other than U.S. dollars,
the Agent soliciting the offer to purchase will arrange for the conversion of
U.S. dollars into such Specified Currency to enable the purchaser to pay for
such Notes. Such requests must be made on or before the fifth Business Day (as
defined below) preceding the date of delivery of the Notes, or by such other
date as determined by such Agent. Each such conversion will be made by the
relevant Agent on such terms and subject to such conditions, limitations and
charges as such Agent may from time to time establish in accordance with its
regular foreign exchange practice. All costs of exchange will be borne by
purchasers of the Notes.
References herein to "U.S. dollars" or "U.S. $" or "$" are to the currency
of the United States of America.
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<PAGE> 42
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered
hereby supplements, and to the extent inconsistent therewith, replaces, the
description of the general terms and provisions of the Debt Securities set forth
in the accompanying Prospectus, to which description reference is hereby made.
The following description will apply to each Note unless otherwise specified in
the applicable Pricing Supplement.
GENERAL
The Notes are to be issued as a series of Debt Securities limited in
principal amount to $650,000,000, or its equivalent in foreign currencies or
currency units, in aggregate principal amount under an Indenture dated as of
October 1, 1987, as supplemented by supplemental indentures dated as of May 15,
1988, March 15, 1990 and June 15, 1990 (collectively, the "Debt Indenture"),
between the Company and The Chase Manhattan Bank (National Association), as
Trustee (the "Debt Trustee"), which is described more fully under "Description
of Debt Securities" in the accompanying Prospectus. The aggregate principal
amount of Notes that may be issued and sold may be reduced as a result of the
sale by the Company of other Debt Securities or pass through certificates of the
Company. The statements herein concerning the Notes and the Debt Indenture do
not purport to be complete. They are qualified in their entirety by reference to
the provisions of the Debt Indenture, including the definitions of certain
capitalized terms used herein without definition.
The Notes will be offered on a continuing basis and will mature on any
Business Day nine months or more from the date of issue, as selected by the
purchaser and agreed to by the Company, and may be subject to redemption at the
option of the Company or repayment at the option of the holder prior to
maturity, as set forth under "Redemption and Repayment" below. Floating Rate
Notes will mature on an Interest Payment Date (each as defined below). Each Note
will bear interest at either (a) a fixed rate, which may be zero in the case of
certain Notes issued at an Issue Price (as defined below) representing a
substantial discount from the principal amount payable upon maturity (a
"Zero-Coupon Note"), or (b) a floating rate, determined by reference to a Base
Rate which may be adjusted by a Spread or Spread Multiplier (each as defined
below).
The Notes may be issued as Indexed Notes, the principal amount of which
payable at maturity will be determined by the difference between the currency in
which such Notes are denominated and another currency or composite currency set
forth in the applicable Pricing Supplement. See "Indexed Notes."
Each Note will be issued initially as either a Book-Entry Note or a
Certificated Note in fully registered form without coupons. Except as set forth
in the Prospectus under "Description of Debt Securities-Book-Entry
Registration," Book-Entry Notes will not be issuable in certificated form. See
"Book-Entry System."
Unless otherwise specified in the applicable Pricing Supplement, the
authorized denominations of Notes denominated in U.S. dollars will be $1,000 and
any larger amount that is an integral multiple of $1,000. The authorized
denominations of Notes denominated in a Specified Currency other than U.S.
dollars will be set forth in the applicable Pricing Supplement.
The Notes will constitute unsecured and unsubordinated indebtedness of the
Company and will rank on a parity with the Company's other unsecured and
unsubordinated indebtedness.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions are authorized
or required by law or regulation to close in The City of New York or the City of
Chicago, or (i) with respect to Notes the principal of or the interest on which
is payable in a Specified Currency other than U.S. dollars, the capital city of
the country of the Specified Currency, (ii) with respect to Notes denominated in
European Currency Units, Brussels, Belgium and (iii) with respect to LIBOR Notes
(as defined below), the City of London. "London Banking Day" means any day on
which dealings in deposits in U.S. dollars are transacted in the London
interbank market.
The Notes may be issued as Original Issue Discount Notes. An "Original
Issue Discount Note" is a Note, including any Zero-Coupon Note, which is issued
at a price lower than the amount payable at the
S-3
<PAGE> 43
Stated Maturity thereof and which provides that upon redemption or acceleration
of the Maturity thereof an amount, less than the principal amount payable at the
Stated Maturity thereof and determined in accordance with the terms thereof,
shall become due and payable. Original Issue Discount Notes, as well as certain
other Notes offered hereunder, may be subject to special United States federal
income tax rules governing original issue discount. See "United States Federal
Taxation -- Original Issue Discount" below. A "Zero Coupon Note" is a Note that
does not bear interest prior to Maturity.
The interest rate on a Note will in no event be higher than the maximum
rate permitted by New York State law, as the same may be modified by United
States law of general application. Under present New York State law, the maximum
rate of interest, with certain exceptions, is 25% per annum on a simple interest
basis. This limit may not apply to Notes in which $2,500,000 or more has been
invested.
All percentages resulting from any calculation of the rate of interest on a
Floating Rate Note will be rounded, if necessary, to the nearest 1/100,000 of 1%
(.0000001), with five one-millionths of a percentage point rounded upward, and
all dollar amounts used in or resulting from such calculation on Floating Rate
Notes will be rounded to the nearest cent (with one-half cent being rounded
upward).
The Pricing Supplement relating to each Note will describe the following
terms: (1) the currencies or currency units in which the principal of and
interest on such Note is payable; (2) whether such Note is a Fixed Rate Note or
a Floating Rate Note; (3) the price (expressed as a percentage of the aggregate
principal amount thereof) at which such Note will be issued (the "Issue Price");
(4) the date on which such Note will be issued (the "Issue Date"); (5) the date
on which such Note will mature (the "Maturity Date"); (6) if such Note is a
Fixed Rate Note, the rate per annum at which such Note will bear interest, if
any (the "Interest Rate"); (7) if such Note is a Floating Rate Note, the Base
Rate, the Initial Interest Rate, the Interest Reset Dates, the Interest Payment
Dates, the Index Maturity, the Maximum Interest Rate and the Minimum Interest
Rate, if any, and the Spread or Spread Multiplier, if any (all as defined
below), and any other terms relating to the particular method of calculating the
Interest Rate, for such Note; (8) whether such Note may be redeemed at the
option of the Company or repaid at the option of the holder or is otherwise
required to be redeemed prior to maturity, and if so, the provisions relating to
such redemption or repayment; (9) whether such Note is an Indexed Note; (10) if
such Note is an Indexed Note, the Denominated Currency, the Indexed Currency,
the Face Amount, the Base Exchange Rate, the Determination Agent and the
Reference Dealers (each as defined in the applicable Pricing Supplement)
relating to such Indexed Note and certain other information relating to Indexed
Notes; (11) whether such Note is an Amortizing Note, and if so, the provisions
relating to such amortization; (12) whether such Note is an Extendible Maturity
Note (as defined below), and if so, the provisions relating to such Extendible
Maturity Note; and (13) any other terms of such Note not inconsistent with the
provisions of the Debt Indenture.
PAYMENT OF PRINCIPAL AND INTEREST
The principal of and interest on each Note are payable by the Company in
the Specified Currency for such Note. If the Specified Currency for a Note is
other than U.S. dollars, the Company will, unless otherwise specified in the
applicable Pricing Supplement, appoint an agent (initially The Chase Manhattan
Bank (National Association)) (the "Exchange Rate Agent") to determine the
exchange rate for converting all payments in respect of such Note into U.S.
dollars in the manner described in the following paragraph and to perform such
conversion on behalf of the Company. Notwithstanding the foregoing, the holder
of a Note denominated in a Specified Currency other than U.S. dollars may (if
such Note and the applicable Pricing Supplement so indicate) elect to receive
all such payments in the Specified Currency by delivery of a written request to
the Debt Trustee, One New York Plaza, 14th Floor, New York, New York 10081,
which must be received by the Debt Trustee on or prior to the applicable Record
Date or at least 15 calendar days prior to maturity, as the case may be. Such
election shall remain in effect unless and until changed by written notice to
the Debt Trustee, but the Debt Trustee must receive written notice of any such
change on or prior to the applicable record date or at least 15 calendar days
prior to maturity, as the case may be. In the absence of manifest error, all
determinations by the Exchange Rate Agent shall be final and binding on the
Company and the holders of Notes. Until the Notes
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are paid or payment thereof is duly provided for, the Company will, at all
times, maintain a paying agent (the "Paying Agent") in The City of New York
capable of performing the duties described herein to be performed by the Paying
Agent. The Company has initially appointed the Debt Trustee as the Paying Agent.
The Company will notify the holders of such Notes, in accordance with the Debt
Indenture, of any change in the Paying Agent or its address.
Unless otherwise specified, in the case of a Note denominated in a
Specified Currency other than U.S. dollars, unless the holder has elected
otherwise, payment in respect of such Note shall be made in U.S. dollars based
upon the exchange rate as determined by the Exchange Rate Agent based on the
highest firm bid quotation expressed in U.S. dollars received by such Exchange
Rate Agent at approximately 11:00 a.m., New York City time, on the second
Business Day preceding the applicable payment date, from three recognized
foreign exchange dealers in The City of New York selected by the Exchange Rate
Agent and approved by the Company (one of which may be the Exchange Rate Agent)
for the purchase by the quoting dealer, for settlement on such payment date, of
the aggregate amount of the Specified Currency payable on such payment date in
respect of all such Notes denominated in such Specified Currency electing to
receive payments in U.S. dollars. If no such bid quotations are available,
payments will be made in the Specified Currency, unless such Specified Currency
is unavailable due to the imposition of exchange controls or to other
circumstances beyond the Company's control, in which case payment will be made
as described below under "Currency Risks -- Payment Currency." All currency
exchange costs will be borne by the holders of such Notes by deductions from
such payments.
Unless otherwise specified in the applicable Pricing Supplement, payments
in U.S. dollars of interest on Certificated Notes (other than interest payable
at maturity or upon earlier redemption or repayment) will be made by mailing a
check to the holder at the address of such holder appearing on the security
register on the applicable Record Date (as defined below). Simultaneously with
the election by any holder to receive payments in a Specified Currency other
than U.S. dollars (by written request to the Debt Trustee, as provided above),
such holder shall provide appropriate payment instructions to the Paying Agent,
and all such payments will be made in immediately available funds to an account
maintained by the payee in the Specified Currency. Beneficial owners of
Book-Entry Notes will be paid in accordance with the Depository's and the
participant's procedures in effect from time to time as described under
"Book-Entry System" below. Unless otherwise specified in the applicable Pricing
Supplement, principal and interest payable at maturity or upon earlier
redemption or repayment in respect of a Note will be paid in immediately
available funds upon surrender of such Note accompanied by wire transfer
instructions at the office of the Paying Agent.
Unless otherwise specified in the applicable Pricing Supplement, if the
principal of any Original Issue Discount Note is declared to be due and payable
immediately as described in the Prospectus under "Description of Debt Securities
- -- Events of Default," the amount of principal due and payable with respect to
such Note shall be the Amortized Face Amount of such Note as of the date of such
declaration. The "Amortized Face Amount" of an Original Issue Discount Note for
this purpose shall be the amount equal to (i) the Issue Price set forth in the
applicable Pricing Supplement plus (ii) the portion of the difference between
the Issue Price and the principal amount of such Note that has accrued at the
yield to maturity set forth in the Pricing Supplement (computed in accordance
with generally accepted United States bond yield computation principles) to such
date of declaration, but in no event shall the Amortized Face Amount of an
Original Issue Discount Note exceed its principal amount.
The "Record Date" with respect to any Interest Payment Date shall be the
date 15 calendar days prior to such Interest Payment Date, whether or not such
date shall be a Business Day. Interest payable and punctually paid or duly
provided for on any Interest Payment Date will be paid to the person in whose
name a Note is registered at the close of business on the Record Date
immediately preceding such Interest Payment Date; provided, however, that the
first payment of interest on any Note with an Issue Date between a Record Date
and an Interest Payment Date or on an Interest Payment Date will be made on the
Interest Payment Date following the next succeeding Record Date to the
registered holder on such next succeeding Record Date; provided, further, that
interest payable at maturity or upon earlier redemption or repayment will be
payable to the person to whom principal shall be payable.
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FIXED RATE NOTES
Each Fixed Rate Note will bear interest from its Issue Date at the rate per
annum stated on the face thereof and in the applicable Pricing Supplement until
the principal amount thereof is paid or made available for payment. Unless
otherwise specified in the applicable Pricing Supplement, interest on each Fixed
Rate Note will be payable semi-annually each June 15 and December 15 (each an
"Interest Payment Date") and at maturity or upon earlier redemption or
repayment. Each payment of interest shall include interest accrued to but
excluding the Interest Payment Date. Interest on the Fixed Rate Notes will be
computed on the basis of a 360-day year of twelve 30-day months.
If any Interest Payment Date for any Fixed Rate Note falls on a day that is
not a Business Day, the interest payment shall be made on the next day that is a
Business Day, and no interest on such payment shall accrue for the period from
and after the Interest Payment Date. If the maturity (or date of redemption or
repayment) of any Fixed Rate Note falls on a day that is not a Business Day, the
payment of interest and principal (and premium, if any) will be made on the next
succeeding Business Day, and no interest on such payment shall accrue for the
period from and after the maturity date (or date of redemption or repayment).
Interest payments for Fixed Rate Notes will include accrued interest from
and including the Issue Date or from and including the last date in respect of
which interest has been paid, as the case may be, to, but excluding, the
Interest Payment Date or the date of maturity or earlier redemption or
repayment, as the case may be.
FLOATING RATE NOTES
Each Floating Rate Note will bear interest from its Issue Date at rates
determined by reference to an interest rate basis (the "Base Rate"), which may
be adjusted by a Spread or Spread Multiplier (each as defined below), until the
principal amount thereof is paid or made available for payment. The applicable
Pricing Supplement will designate one of the following Base Rates as applicable
to each Floating Rate Note: (a) the Commercial Paper Rate (a "Commercial Paper
Rate Note"), (b) LIBOR (a "LIBOR Note"), (c) the Treasury Rate (a "Treasury Rate
Note"), (d) the Certificate of Deposit Rate (a "CD Rate Note"), (e) the Federal
Funds Rate (a "Federal Funds Rate Note"), (f) the Prime Rate (a "Prime Rate
Note"), or (g) such other Base Rate as is set forth in such Pricing Supplement
and in such Floating Rate Note. The "Index Maturity" for any Floating Rate Note
is the period of maturity of the instrument or obligation from which the Base
Rate is calculated.
Unless otherwise specified in the applicable Pricing Supplement, the
interest rate on each Floating Rate Note will be calculated by reference to the
specified Base Rate (i) plus or minus the Spread, if any, or (ii) multiplied by
the Spread Multiplier, if any. The "Spread" is the number of basis points
(one-one-hundredth of a percentage point) specified in the applicable Pricing
Supplement as being applicable to the interest rate for such Floating Rate Note,
and the "Spread Multiplier" is the percentage specified in the applicable
Pricing Supplement as being applicable to the interest rate for such Floating
Rate Note.
As specified in the applicable Pricing Supplement, a Floating Rate Note may
also have either or both of the following: (i) a maximum numerical interest rate
limitation, or ceiling, on the rate of interest which may accrue during any
interest period ("Maximum Interest Rate"); and (ii) a minimum numerical interest
rate limitation, or floor, on the rate of interest which may accrue during any
interest period ("Minimum Interest Rate").
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semiannually or annually (an "Interest Reset Date"),
as specified in the applicable Pricing Supplement. Unless otherwise specified in
the applicable Pricing Supplement, the Interest Reset Date will be, in the case
of Floating Rate Notes that reset daily, each Business Day; in the case of
Floating Rate Notes (other than Treasury Rate Notes) that reset weekly,
Wednesday of each week; in the case of Treasury Rate Notes that reset weekly,
Tuesday of each week (except as provided below); in the case of Floating Rate
Notes that reset monthly, the third Wednesday of each month; in the case of
Floating Rate Notes that
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reset quarterly, the third Wednesday of March, June, September and December; in
the case of Floating Rate Notes that reset semiannually, the third Wednesday of
each of two months specified in the applicable Pricing Supplement; and in the
case of Floating Rate Notes that reset annually, the third Wednesday of the
month specified in the applicable Pricing Supplement. If any Interest Reset Date
for any Floating Rate Note would otherwise be a day that is not a Business Day,
such Interest Reset Date shall be postponed to the next succeeding Business Day,
except that in the case of a LIBOR Note, if such Business Day is in the next
succeeding calendar month, such Interest Reset Date shall be the next preceding
Business Day. If an auction of Treasury bills (as defined below) falls on a day
that is an Interest Reset Date for Treasury Rate Notes, the Interest Reset Date
shall be the following day that is a Business Day.
Interest on each Floating Rate Note will be payable monthly, quarterly,
semiannually or annually (the "Interest Payment Period") as specified in the
applicable Pricing Supplement. Except as provided below or in the applicable
Pricing Supplement, the date or dates on which interest will be payable (each an
"Interest Payment Date") will be, in the case of Floating Rate Notes with a
monthly Interest Payment Period, the third Wednesday of each month; in the case
of Floating Rate Notes with a quarterly Interest Payment Period, the third
Wednesday of March, June, September and December; in the case of Floating Rate
Notes with a semiannual Interest Payment Period, the third Wednesday of each of
the two months specified in the applicable Pricing Supplement; and in the case
of Floating Rate Notes with an annual Interest Payment Period, the third
Wednesday of the month specified in the applicable Pricing Supplement. Unless
otherwise specified in the applicable Pricing Supplement, if any Interest
Payment Date for any Floating Rate Note would otherwise be a day that is not a
Business Day, such Interest Payment Date shall be postponed to the next day that
is a Business Day except, in the case of a LIBOR Note, if such Business Day is
in the next succeeding calendar month, such Interest Payment Date shall be the
immediately preceding Business Day.
Interest payments on each Interest Payment Date for Floating Rate Notes
(except in the case of Floating Rate Notes that reset daily or weekly) will
include accrued interest from and including the Issue Date or from and including
the last date in respect of which interest has been paid, as the case may be,
to, but excluding, such Interest Payment Date. In the case of Floating Rate
Notes that reset daily or weekly, interest payments will include accrued
interest from and including the Issue Date or from and including the last date
in respect of which interest has been paid, as the case may be, to and including
the Record Date immediately preceding the applicable Interest Payment Date,
except that at maturity the interest payments will include accrued interest from
and including the Issue Date, or from and including the last date in respect of
which interest has been paid, as the case may be, to, but excluding the Maturity
Date.
Accrued interest shall be calculated by multiplying the principal amount of
such Floating Rate Note by an accrued interest factor. Such accrued interest
factor will be computed by adding the interest factors calculated for each day
in the period for which accrued interest is being calculated. The interest
factor (rounded upward, if necessary, to the next higher one hundred-thousandth
of a percent) for each such day is computed by dividing the interest rate
applicable to such day by 360, in the case of Commercial Paper Rate Notes, LIBOR
Notes, CD Rate Notes, Federal Funds Rate Notes and Prime Rate Notes, or by the
actual number of days in the year, in the case of Treasury Rate Notes. The
interest rate applicable to any day that is an Interest Reset Date is the
interest rate for such Interest Reset Date. The interest rate applicable to any
other day is the interest rate for the immediately preceding Interest Reset Date
(or, if none, the Initial Interest Rate, as described below).
Unless otherwise specified in the applicable Pricing Supplement, The Chase
Manhattan Bank (National Association) shall be the calculation agent (the
"Calculation Agent") with respect to the Floating Rate Notes. Upon the request
of the holder of any Floating Rate Note, the Calculation Agent will provide the
interest rate then in effect and, if determined, the interest rate which will
become effective on the next Interest Reset Date with respect to such Floating
Rate Note.
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The interest rate in effect with respect to a Floating Rate Note from the
Issue Date to the first Interest Reset Date (the "Initial Interest Rate") will
be specified in the applicable Pricing Supplement. The interest rate for each
subsequent Interest Reset Date will be determined by the Calculation Agent as
follows.
Commercial Paper Rate Notes
Commercial Paper Rate Notes will bear interest at the interest rates
(calculated with reference to the Commercial Paper Rate and the Spread or Spread
Multiplier, if any) specified in the Commercial Paper Rate Notes and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Commercial Paper Rate" for each Interest Reset Date will be determined by the
Calculation Agent on the second Business Day prior to such Interest Reset Date
(a "Commercial Paper Rate Determination Date") and shall be the Money Market
Yield (as defined below) on such date of the rate for commercial paper having
the Index Maturity specified in the applicable Pricing Supplement, as such rate
shall be published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates" or any successor
publication ("H.15(519)"), under the heading "Commercial Paper." In the event
that such rate is not published prior to 9:00 A.M., New York City time, on the
Calculation Date (as defined below), then the Commercial Paper Rate shall be the
Money Market Yield on such Commercial Paper Rate Determination Date of the rate
for commercial paper of the specified Index Maturity as published by the Federal
Reserve Bank of New York in its daily statistical release "Composite 3:30 P.M.
Quotations for U.S. Government Securities" ("Composite Quotations") under the
heading "Commercial Paper." If by 3:00 P.M., New York City time, on such
Calculation Date such rate is not yet published in either H.15(519) or Composite
Quotations, then the Commercial Paper Rate shall be the Money Market Yield of
the arithmetic mean of the offered rates as of 11:00 A.M., New York City time,
on such Commercial Paper Rate Determination Date of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent for
commercial paper of the specified Index Maturity, placed for an industrial
issuer whose bond rating is "AA," or the equivalent, from a nationally
recognized rating agency; provided, however, that if the dealers selected as
aforesaid by the Calculation Agent are not quoting offered rates as mentioned in
this sentence, the Commercial Paper Rate in effect for the applicable period
will be the Commercial Paper Rate in effect on such Commercial Paper Rate
Determination Date.
"Money Market Yield" shall be a yield calculated with the following
formula:
Money Market Yield = D x 360
----------- X 100
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the Index Maturity.
The interest rate for each such Interest Reset Date shall be the Commercial
Paper Rate applicable to such Interest Reset Date plus or minus the Spread or
multiplied by the Spread Multiplier, as specified in the applicable Pricing
Supplement; however, the interest rate in effect for the period from the Issue
Date to the first Interest Reset Date will be the Initial Interest Rate and the
interest rate in effect for the ten days immediately prior to maturity or
earlier redemption or repayment will be that in effect on the tenth day
preceding such maturity or earlier redemption or repayment. The "Calculation
Date" pertaining to a Commercial Paper Rate Determination Date will be the tenth
Business Day after such Commercial Paper Rate Determination Date.
LIBOR Notes
LIBOR Notes will bear interest at the interest rates (calculated with
reference to LIBOR as described below, and then applying the Spread or Spread
Multiplier, if any) specified in the LIBOR Notes and the applicable Pricing
Supplement.
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Unless otherwise indicated in the applicable Pricing Supplement, "LIBOR"
for each Interest Reset Date means the determination by the Calculation Agent in
accordance with the following provisions:
(i) On the second London Banking Day prior to the Interest Reset Date
(a "LIBOR Determination Date") relating to a LIBOR Note, either, as
specified in the applicable Pricing Supplement: (a) the arithmetic mean of
the offered rates for deposits in U.S. dollars for the period of the Index
Maturity specified in the applicable Pricing Supplement, commencing on the
Interest Reset Date, which appear on the Reuters Screen LIBO Page as of
11:00 A.M., London time, on the LIBOR Determination Date, if at least two
such offered rates appear on the Reuters Screen LIBO Page ("LIBOR
Reuters"), or (b) the rate for deposits in U.S. dollars having the Index
Maturity designated in the applicable Pricing Supplement, commencing on the
Interest Reset Date, that appears on the Telerate Page 3750 as of 11:00
A.M., London time, on that LIBOR Determination Date ("LIBOR Telerate").
Unless otherwise indicated in the applicable Pricing Supplement, "Reuters
Screen LIBO Page" means the display designated as Page "LIBO" on the
Reuters Monitor Money Rate Service (or such other page as may replace the
LIBO page on that service for the purpose of displaying London interbank
offered rates of major banks). "Telerate Page 3750" means the display
designated as page "3750" on the Telerate Service (or such other page as
may replace the 3750 page on that service or such other service or services
as may be nominated by the British Bankers' Association (the "Association")
for the purpose of displaying London interbank offered rates for U.S.
dollar deposits). If neither LIBOR Reuters nor LIBOR Telerate is specified
in the applicable Pricing Supplement, LIBOR will be determined as if LIBOR
Telerate had been specified. In the case where (a) above applies, if fewer
than two offered rates appear on the Reuters Screen LIBO Page, or, in the
case where (b) above applies if no rate appears on the Telerate Page 3750,
as applicable, LIBOR in respect of that Interest Reset Date will be
determined as if the parties had specified the rate described in (ii)
below.
(ii) With respect to an Interest Reset Date as to which this provision
applies, LIBOR will be determined on the basis of the rates at which
deposits in U.S. dollars having the Index Maturity designated in the
applicable Pricing Supplement are offered at approximately 11:00 A.M.,
London time, on such LIBOR Determination Date by four major banks
("Reference Banks") in the London interbank market selected by the
Calculation Agent (after consultation with the Association) to prime banks
in the London interbank market commencing on the Interest Reset Date and in
a principal amount of not less than U.S. $1,000,000 that is representative
for a single transaction in such market at such time. The Calculation Agent
will request the principal London office of each of the Reference Banks to
provide a quotation of its rate. If at least two such quotations are
provided, LIBOR for such Interest Reset Date will be the arithmetic mean of
such quotations. If fewer than two quotations are provided, LIBOR for such
Interest Reset Date will be the arithmetic mean of the rates quoted at
approximately 11:00 A.M., New York City time, on such LIBOR Determination
Date by three major banks (which may include the Agents) in The City of New
York selected by the Calculation Agent (after consultation with the
Association) for loans in U.S. dollars to leading European banks having the
specified Index Maturity designated in the applicable Pricing Supplement
commencing on the Interest Reset Date and in a principal amount equal to an
amount of not less than U.S. $1,000,000 that is representative for a single
transaction in such market at such time; provided, however, that if the
banks selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR will be LIBOR then in effect on such
Interest Reset Date.
Treasury Rate Notes
Treasury Rate Notes will bear interest at the interest rate (calculated
with reference to the Treasury Rate and the Spread or Spread Multiplier, if any)
specified in the Treasury Rate Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Treasury Rate" means, with respect to any Treasury Rate Determination Date, the
rate for the auction held on such Treasury Rate Determination Date of direct
obligations of the United States ("Treasury bills") having the Index Maturity
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designated in the applicable Pricing Supplement as published in H.15(519) under
the heading "Treasury bills -- auction average (investment)" or, if not so
published by 9:00 A.M., New York City time, on the Calculation Date pertaining
to such Treasury Rate Determination Date, the auction average rate (expressed as
a bond equivalent, rounded to the nearest one-hundredth of a percent, with five
one-thousandths of a percent rounded upwards, on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis) as otherwise announced by
the United States Department of the Treasury. In the event that the results of
the auction of Treasury bills having the Index Maturity designated in the
applicable Pricing Supplement are not published or reported as provided above by
3:00 P.M., New York City time, on such Calculation Date or if no such auction is
held on such Treasury Rate Determination Date, then the Treasury Rate shall be
calculated by the Calculation Agent and shall be a yield to maturity (expressed
as a bond equivalent, rounded to the nearest one-hundredth of a percent, with
five one-thousandths of a percent rounded upwards, on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean
of the secondary market bid rates, as of approximately 3:30 P.M., New York City
time, on such Treasury Rate Determination Date, of three leading primary United
States government securities dealers selected by the Calculation Agent for the
issue of Treasury bills with a remaining maturity closest to the Index Maturity
designated in the applicable Pricing Supplement; provided, however, that if the
dealers selected as aforesaid by the Calculation Agent are not quoting bid rates
as mentioned in this sentence, the Treasury Rate for such Interest Reset Date
will be the Treasury Rate in effect on such Interest Reset Date.
The "Treasury Rate Determination Date" will be the day of the week in which
the related Interest Reset Date falls on which Treasury bills would normally be
auctioned. Treasury bills are normally sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is normally held
on the following Tuesday, except that such auction may be held on the preceding
Friday. If, as the result of a legal holiday, an auction is so held on the
preceding Friday, such Friday will be the Treasury Rate Determination Date
pertaining to the Interest Reset Date occurring in the next succeeding week.
The interest rate for each such Interest Reset Date shall be the Treasury
Rate applicable to such Interest Reset Date plus or minus the Spread or
multiplied by the Spread Multiplier, as specified in the applicable Pricing
Supplement; provided, however, the interest rate in effect for the period from
the Issue Date to the first Interest Reset Date will be the Initial Interest
Rate and the interest rate in effect for the ten days immediately prior to
maturity or earlier redemption or repayment will be that in effect on the tenth
day preceding such maturity or earlier redemption or repayment. The "Calculation
Date" pertaining to a Treasury Rate Determination Date will be the tenth
Business Day after such Treasury Rate Determination Date.
CD Rate Notes
CD Rate Notes will bear interest at the interest rate (calculated with
reference to the CD Rate and the Spread or Spread Multiplier, if any) specified
in the CD Rate Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CD Rate"
means, with respect to any Interest Reset Date, the rate on such date for
negotiable certificates of deposit having the Index Maturity designated in the
applicable Pricing Supplement as published in H.15(519) under the heading "CDs
(Secondary Market)," or, if not so published by 9:00 A.M., New York City time,
on the second Business Day prior to such Interest Reset Date (a "CD Rate
Determination Date") pertaining to such Interest Reset Date, the CD Rate will be
the rate on such Interest Reset Date for negotiable certificates of deposit of
the Index Maturity designated in the applicable Pricing Supplement as published
in the Composite Quotations under the heading "Certificates of Deposit." If such
rate is not yet published in either H.15(519) or the Composite Quotations by
3:00 P.M., New York City time, on the CD Rate Determination Date pertaining to
such Interest Reset Date, the CD Rate on such Interest Reset Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the
secondary market offered rates as of 10:00 A.M., New York City time, on such
Interest Reset Date, for certificates of deposit in the denomination of
$5,000,000 with a remaining maturity closest to the Index Maturity designated in
the
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Pricing Supplement of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the Calculation
Agent for negotiable certificates of deposit of major United States money center
banks in the market for negotiable certificates of deposit; provided, however,
that if the dealers selected as aforesaid by the Calculation Agent are not
quoting as set forth above, the CD Rate in effect for the applicable period will
be the same as the CD Rate for the immediately preceding Interest Payment Period
(or, if there was no such Interest Payment Period, the rate of interest payable
on the CD Rate Notes for which such CD Rate is being determined shall be the
Initial Interest Rate).
Federal Funds Rate Notes
Federal Funds Rate Notes will bear interest at the interest rate
(calculated with reference to the Federal Funds Rate and the Spread or Spread
Multiplier, if any) specified in the Federal Funds Rate Notes and in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
"Federal Funds Rate" means, with respect to any Interest Reset Date, the rate on
such date for Federal funds as published in H.15(519) under the heading "Federal
Funds (Effective)," or, if not so published by 9:00 A.M., New York City time, on
the second Business Day prior to such Interest Reset Date (a "Federal Funds
Determination Date") pertaining to such Interest Reset Date, the Federal Funds
Rate will be the rate on such Interest Reset Date as published in the Composite
Quotations under the heading "Federal Funds/Effective Rate." If such rate is not
yet published in either H.15(519) or the Composite Quotations by 3:00 P.M., New
York City time, on the Federal Funds Determination Date pertaining to such
Interest Reset Date, the Federal Funds Rate for such Interest Reset Date will be
calculated by the Calculation Agent and will be the arithmetic mean of the rates
for the last transaction in overnight Federal funds, as of 9:00 A.M., New York
City time, on such Interest Reset Date, arranged by three leading brokers of
Federal funds transactions in The City of New York selected by the Calculation
Agent; provided, however, that if the brokers selected as aforesaid by the
Calculation Agent are not quoting as set forth above, the Federal Funds Rate in
effect for the applicable period will be the same as the Federal Funds Rate for
the immediately preceding Interest Payment Period (or, if there was no such
Interest Payment Period, the rate of interest payable on the Federal Funds Rate
Notes for which such Federal Funds Rate is being determined shall be the Initial
Interest Rate).
Prime Rate Notes
Prime Rate Notes will bear interest at the interest rate (calculated with
reference to the Prime Rate and the Spread or Spread Multiplier, if any)
specified in the Prime Rate Notes and in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Interest Reset Date, the rate set forth in
H.15(519) for such date opposite the caption "Bank Prime Loan." If such rate is
not yet published by 9:00 A.M., New York City time, on the second Business Day
prior to such Interest Reset Date (a "Prime Rate Determination Date") pertaining
to such Interest Reset Date, the Prime Rate for such Interest Reset Date will be
the arithmetic mean of the rates of interest publicly announced by each bank
named on the Reuters Screen NYMF Page (as defined below) as such bank's prime
rate or base lending rate as in effect for such Interest Reset Date as quoted on
the Reuters Screen NYMF Page on such Interest Reset Date, or, if fewer than four
such rates appear on the Reuters Screen NYMF Page for such Interest Reset Date,
the rate shall be the arithmetic mean of the prime rates quoted on the basis of
the actual number of days in the year divided by 360 as of the close of business
on such Interest Reset Date by at least two of the three major money center
banks in The City of New York selected by the Calculation Agent from which
quotations are requested. If fewer than two quotations are provided, the Prime
Rate shall be calculated by the Calculation Agent and shall be determined as the
arithmetic mean on the basis of the prime rates in The City of New York by the
appropriate number of substitute banks or trust companies organized and doing
business under the laws of the United States, or any State thereof, in each case
having total equity capital of at least U.S. $500 million and being subject to
supervision or examination by federal or state authority, selected by the
Calculation Agent to
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quote such rate or rates. "Reuters Screen NYMF Page" means the display
designated as Page "NYMF" on the Reuters Monitor Money Rates Service (or such
other page as may replace the NYMF Page on that service for the purpose of
displaying prime rates or base lending rates of major United States banks).
If in any month or two consecutive months the Prime Rate is not published
in H.15(519) and the banks or trust companies selected as aforesaid are not
quoting as mentioned in the preceding paragraph, the "Prime Rate" for such
Interest Payment Period will be the same as the Prime Rate for the immediately
preceding Interest Payment Period (or, if there was no such Interest Payment
Period, the rate of interest payable on the Prime Rate Notes for which the Prime
Rate is being determined shall be the Initial Interest Rate). If this failure
continues over three or more consecutive months, the Prime Rate for each
succeeding Interest Reset Date until the maturity, redemption or repayment of
such Prime Rate Notes or, if earlier, until this failure ceases, shall be LIBOR
determined as if such Prime Rate Notes were LIBOR Notes, and the spread, if any,
shall be the number of basis points specified in the applicable Pricing
Supplement as the "Alternate Rate Event Spread."
INDEXED NOTES
The Notes may be issued, from time to time, as Notes of which the principal
amount payable on a date from 9 months or more from the Issue Date and/or on
which the amount of interest payable on an Interest Payment Date will be
determined by reference to currencies, currency units, commodity prices,
financial or non-financial indices or other factors (the "Indexed Notes"), as
indicated in the applicable Pricing Supplement. Holders of Indexed Notes may
receive a principal amount at maturity that is greater than or less than the
face amount of such Notes depending upon the fluctuation of the relative value,
rate or price of the specified index. Specific information pertaining to the
method for determining the principal amount payable at maturity, a historical
comparison of the relative value, rate or price of the specified index and the
face amount of the Indexed Note and certain additional United States federal
income tax considerations will be described in the applicable Pricing
Supplement. See "Currency Risks."
PAYMENTS ON AMORTIZING NOTES
Amortizing Notes are securities for which payments of principal and
interest are made in equal installments over the life of the security. Unless
otherwise provided in the applicable Pricing Supplement, interest on each
Amortizing Note will be computed on the basis of a 360-day year of twelve 30-day
months. Payments with respect to Amortizing Notes will be applied first to
interest due and payable thereon and then to the reduction of the unpaid
principal amount thereof. A table setting forth repayment information in respect
of each Amortizing Note will be provided to the original purchaser and will be
available, upon request, to subsequent holders.
EXTENSION OF MATURITY
The Pricing Supplement relating to each Note will indicate whether the
holder of such Note has the option to extend the maturity of such Note to one or
more dates (each an "Extended Maturity Date") indicated in the applicable
Pricing Supplement. If the holder has such option with respect to any such Note
(an "Extendible Maturity Note"), the following procedures will apply, unless
otherwise specified in the applicable Pricing Supplement.
Each Note will mature on the Maturity Date as indicated in the applicable
Pricing Supplement; provided, that the Maturity Date may be extended, at the
option of the holder, to the Extended Maturity Date or Dates, if any, shown in
the applicable Pricing Supplement if the holder of such Note so elects, in the
manner specified below, prior to the applicable Notice of Extension Date shown
in the applicable Pricing Supplement. Such election will be irrevocable and will
be binding upon each subsequent holder of such Note. If no Extended Maturity
Date or Dates are indicated with respect to a Note, the Maturity Date of such
Note will not be extended.
Any such election to extend the Maturity Date of an Extendible Maturity
Note will be effective only if notice thereof is provided to the Debt Trustee in
the manner described below. The Maturity Date of such
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Note may be extended, at the option of the holder thereof, to each successive
Extended Maturity Date indicated in the applicable Pricing Supplement if the
holder of such Note presents a duly completed extension notice, which may be
obtained from the Company or the Debt Trustee, to the Debt Trustee in New York,
New York prior to but not more than 10 Business Days prior to the applicable
Notice of Extension Date shown in the applicable Pricing Supplement; provided,
however, that if a holder of such Note does not make an election with respect to
a specified Extended Maturity Date, such Note may not be extended with respect
to a subsequent Extended Maturity Date. Any option by the holder to extend the
Maturity Date of an Extendible Maturity Note must be exercised with respect to
the entire principal amount thereof unless otherwise provided in the Pricing
Supplement. All questions as to the validity, eligibility (including time of
receipt) and acceptance of any option to extend the Maturity Date of such Note
will be determined by the Company, whose determination will be final and
binding.
REDEMPTION AND REPAYMENT
The Pricing Supplement relating to each Note will indicate if such Note can
be redeemed prior to maturity or if such Note will be redeemable at the option
of the Company on a date or dates specified prior to maturity at a price or
prices set forth in the applicable Pricing Supplement, together with accrued
interest to the date of redemption. Unless otherwise specified in the applicable
Pricing Supplement, the Notes will not be subject to redemption or repayment
prior to their stated maturity. Unless otherwise specified in the applicable
Pricing Supplement, the Notes will not be subject to any sinking fund or
amortization. The Company may redeem any of the Notes that are redeemable and
remain outstanding either in whole or from time to time in part, upon not less
than 30 nor more than 60 days' notice. If less than all of the Notes with like
tenor and terms are to be redeemed, the Notes to be redeemed shall be selected
by the Debt Trustee by such method as the Debt Trustee shall deem fair and
appropriate.
The Pricing Supplement relating to each Note will indicate either that such
Note is not repayable at the option of the holder prior to maturity or that such
Note will be repayable at the option of the holder on a date or dates specified
prior to maturity at a price or prices set forth in the applicable Pricing
Supplement, together with accrued interest to the date of repayment.
In order for a Note to be repaid, the Paying Agent must receive at least 30
days but not more than 45 days prior to the repayment date (i) the Note with the
form entitled "Option to Elect Repayment" on the reverse of the Note duly
completed or (ii) a telegram, telex, facsimile transmission or letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States setting forth the name of the holder of the Note, the principal amount of
the Note, the principal amount of the Note to be repaid, the certificate number
or a description of the tenor and terms of the Note, a statement that the option
to elect repayment is being exercised thereby and a guarantee that the Note to
be repaid with the form entitled "Option to Elect Repayment" on the reverse of
the Note duly completed will be received by the Paying Agent not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter and such Note and form duly completed are received by the Paying Agent by
such fifth Business Day. Exercise of the repayment option by the holder of a
Note shall be irrevocable. The repayment option may be exercised by the holder
of a Note for less than the entire principal amount of the Note provided that
the principal amount of the Note remaining outstanding after the repayment is an
authorized denomination of at least $1,000,000.
If a Note is represented by a Global Security, the Depository's nominee
will be the holder of such Note and therefore will be the only entity that can
exercise a right to repayment. In order to ensure that the Depository's nominee
will timely exercise a right to repayment with respect to a particular Note, the
beneficial owner of such Note must instruct the broker or other direct or
indirect participant through which it holds an interest in such Note to notify
the Depository of its desire to exercise a right to repayment. Different firms
have different cut-off times for accepting instructions from their customers
and, accordingly, each beneficial owner should consult the broker or other
direct or indirect participant through which it holds an interest in a Note in
order to ascertain the cut-off time by which such an instruction must be given
in order for timely notice to be delivered to the Depository.
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Notwithstanding anything in this Prospectus Supplement to the contrary,
unless otherwise specified in the applicable Pricing Supplement, if a Note is an
Original Issue Discount Note, the amount payable on such Note in the event of
redemption or repayment prior to its Maturity Date shall be the Amortized Face
Amount of such Note as of the date of redemption or the date of repayment, as
the case may be. The "Amortized Face Amount" of an Original Issue Discount Note
for this purpose shall be the amount equal to (i) the Issue Price set forth in
the applicable Pricing Supplement plus (ii) the portion of the difference
between the Issue Price and the principal amount of such Note that has accrued
at the yield to maturity set forth in the Pricing Supplement (computed in
accordance with generally accepted United States bond yield computation
principles) to such date of redemption or repayment, but in no event shall the
Amortized Face Amount of an Original Issue Discount Note exceed its principal
amount.
REPURCHASE
The Company may at any time purchase Notes at any price or prices in the
open market or otherwise. Notes so purchased by the Company may be held or
resold or, at the discretion of the Company, may be surrendered to the Debt
Trustee for cancellation.
BOOK-ENTRY SYSTEM
Upon issuance, all Book-Entry Notes having the same Specified Currency,
Issue Date, Maturity Date, reset, extension, redemption and repayment
provisions, Issue Price (in the case of Original Issue Discount Notes), and
interest rate (in the case of Fixed Rate Notes), Base Rate, Initial Interest
Rate, Interest Reset Dates, Interest Payment Dates, Index Maturity, Minimum
Interest Rate, if any, Maximum Interest Rate, if any, and Spread or Spread
Multiplier, if any (in the case of Floating Rate Notes), and Denominated
Currency, Indexed Currency, Face Amount and Base Exchange Rate (in the case of
Indexed Notes, each as defined in the applicable Pricing Supplement), will be
represented by a single Global Security. Each Global Security representing
Book-Entry Notes will be deposited with, or on behalf of, DTC or such other
Depository as is specified in the Pricing Supplement, and registered in the name
of a nominee of DTC or such other Depository. The owner of a Book-Entry Note
may, on terms acceptable to the Company and DTC or such other Depository,
exchange such Book-Entry Note for a Certificated Note. DTC has advised the
Company that its procedures do not currently permit such exchanges. DTC
currently only accepts Notes which have a Specified Currency of U.S. dollars. A
further description of the Depository's procedures with respect to Global
Securities representing Book-Entry Notes is set forth in the Prospectus under
"Description of Debt Securities -- Book-Entry Registration" and "-- Same-Day
Settlement".
The information in this section concerning the Depository and the
Depository's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
CURRENCY RISKS
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in a Note denominated in a Specified Currency other than the
currency of the country in which a purchaser is resident or the currency
(including any composite currency) in which a purchaser conducts its primary
business (the "home currency") entails significant risks that are not associated
with a similar investment in a security denominated in the home currency.
Similarly, an investment in an Indexed Note with respect to which payments of
principal or interest are determined with respect to an Indexed Currency (as
defined in the applicable Pricing Supplement) (each a "Currency Indexed Note")
entails significant risks that are not associated with a similar investment in
non-indexed Notes. Such risks include, without limitation, the possibility of
significant changes in rates of exchange between the home currency and the
Specified Currency (and, in the case of Currency Indexed Notes, the rate of
exchange between the Specified Currency and the Indexed Currency for such
Currency Indexed Notes) and the
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possibility of the imposition or modification of foreign exchange controls with
respect to the Specified Currency. Such risks generally depend on factors over
which the Company has no control, such as economic and political events and the
supply of and demand for the relevant currencies. In recent years, rates of
exchange for certain currencies have been highly volatile, and such volatility
may be expected in the future. Fluctuations in any particular exchange rate that
have occurred in the past are not necessarily indicative, however, of
fluctuations in the rate that may occur during the term of any Note.
Depreciation of the Specified Currency in which a Note is denominated against
the relevant home currency would result in a decrease in the effective yield of
such Note below its coupon rate and in certain circumstances could result in a
loss to the investor on a home currency basis. Similarly, depreciation of the
Denominated Currency (as defined in the applicable Pricing Supplement) with
respect to a Currency Indexed Note against the applicable Indexed Currency would
result in the principal amount payable with respect to such Currency Indexed
Note at the Maturity Date thereof being less than the Face Amount of such
Currency Indexed Note which, in turn, would decrease the effective yield of such
Currency Indexed Note below its stated interest rate and could also result in a
loss to the investor. See "Description of Notes -- Indexed Notes."
Governments have from time to time imposed, and may in the future impose,
exchange controls that could affect exchange rates as well as the availability
of a Specified Currency for making payments with respect to a Note. At present,
the Company has identified the following currencies and composite currency in
which payments on Notes may be made: Australian dollars, Canadian dollars,
Danish kroner, English pounds sterling, French franc, Italian lire, New Zealand
dollars, Spanish peseta, United States dollars and ECU. There can be no
assurances that exchange controls will not restrict or prohibit payments in any
such currency or currency unit. Even if there are no actual exchange controls,
it is possible that on a payment date with respect to any particular Note, the
Specified Currency for such Note would not be available to the Company to make
payments then due. In that event, the Company will make such payments in the
manner set forth under "Payment Currency" below.
The information set forth in this Prospectus Supplement is not directed to
prospective purchasers who are residents of countries other than the United
States with respect to any matters that may affect the purchase, holding or
receipt of payments of principal of, premium, if any, and interest on the Notes.
Such persons should consult their own counsel with regard to such matters.
THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT HERETO AND THE
PROSPECTUS DO NOT DESCRIBE ALL THE RISKS OF AN INVESTMENT IN NOTES DENOMINATED
IN A CURRENCY (INCLUDING ANY COMPOSITE CURRENCY) OTHER THAN A PROSPECTIVE
PURCHASER'S HOME CURRENCY OR OF AN INVESTMENT IN CURRENCY INDEXED NOTES, AND THE
COMPANY DISCLAIMS ANY RESPONSIBILITY TO ADVISE PROSPECTIVE PURCHASERS OF SUCH
RISKS AS THEY EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS SUCH RISKS
MAY CHANGE FROM TIME TO TIME. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR OWN
FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN NOTES
DENOMINATED IN A CURRENCY (INCLUDING ANY COMPOSITE CURRENCY) OTHER THAN THE
PARTICULAR HOME CURRENCY OR BY AN INVESTMENT IN CURRENCY INDEXED NOTES. SUCH
NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR PERSONS WHO ARE UNSOPHISTICATED WITH
RESPECT TO FOREIGN CURRENCY TRANSACTIONS.
Unless otherwise provided, Notes denominated in foreign currencies other
than ECU will not be sold in, or to residents of, the country of the Specified
Currency in which particular Notes are denominated.
The Pricing Supplement relating to each Note denominated in a Specified
Currency other than U.S. dollars or any Currency Indexed Note will contain
information concerning relevant historical exchange rates for the applicable
Specified Currency, Denominated Currency and/or Indexed Currency, as the case
may be, a description of such currency or currencies and any exchange controls
affecting such currency or currencies. The information contained therein is
furnished as a matter of information only and
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should not be regarded as indicative of the range of or trends in fluctuations
in currency exchange rates that may occur in the future.
PAYMENT CURRENCY
Except as set forth below, if payment on a Note is required to be made in a
Specified Currency other than U.S. dollars and on a payment date with respect to
such Note such currency is unavailable due to the imposition of exchange
controls or other circumstances beyond the Company's control, or is no longer
used by the government of the country issuing such currency or for the
settlement of transactions by public institutions of or within the international
banking community, then all payments due on such payment date shall be made in
U.S. dollars. The amount so payable on any payment date in such foreign currency
shall be converted into U.S. dollars at a rate determined by the Exchange Rate
Agent on the basis of the most recently available Market Exchange Rate for such
currency, or as otherwise specified in the applicable Pricing Supplement. Any
payment made under such circumstances in U.S. dollars where the required payment
is in a Specified Currency other than U.S. dollars will not constitute an Event
of Default under the Debt Indenture.
If payment on a Note is required to be made in ECU and on a payment date
with respect to such Note ECU are unavailable due to the imposition of exchange
controls or other circumstances beyond the Company's control, or are no longer
used in the European Monetary System, then all payments due on such payment date
shall be made in U.S. dollars. The amount so payable on any payment date in ECU
shall be converted into U.S. dollars at a rate determined by the Exchange Rate
Agent as of the second Business Day prior to the date on which such payment is
due on the following basis: The component currencies of the ECU for this purpose
(the "Components") shall be the currency amounts that were components of the ECU
as of the last date on which ECU were used in the European Monetary System. The
equivalent of ECU in U.S. dollars shall be calculated by aggregating the U.S.
dollar equivalents of the Components. The U.S. dollar equivalent of each of the
Components shall be determined by the Exchange Rate Agent on the basis of the
most recently available Market Exchange Rate for the Components, or as otherwise
indicated in the applicable Pricing Supplement.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
shall be divided or multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the amounts of those
currencies as Components shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated component currencies
expressed in such single currency. If any component currency is divided into two
or more currencies, the amount of that currency as a Component shall be replaced
by amounts of such two or more currencies, each of which shall have a value on
the date of division equal to the amount of the former component currency
divided by the number of currencies into which that currency was divided.
All determinations referred to above made by the Exchange Rate Agent shall
be at its sole discretion (except to the extent expressly provided herein or in
the applicable Pricing Supplement that any determination is subject to approval
by the Company) and, in the absence of manifest error, shall be conclusive for
all purposes and binding on holders of the Notes and the Company, and the
Exchange Rate Agent shall have no liability therefor.
FOREIGN CURRENCY JUDGMENTS
The Notes will be governed by and construed in accordance with the laws of
the State of New York. A judgment for money damages by courts in the United
States, including a money judgment based on an obligation expressed in a foreign
currency, will ordinarily be rendered only in U.S. dollars. New York statutory
law provides that in an action based on an obligation expressed in a currency
other than U.S. dollars a court shall render a judgment or decree in the foreign
currency of the underlying obligation and that the judgment or decree shall be
converted into U.S. dollars at the exchange rate prevailing on the date of entry
of the judgment or decree.
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UNITED STATES FEDERAL TAXATION
The following summary accurately describes certain United States federal
income tax consequences of the ownership and disposition of Notes as of the date
hereof, based on the opinion of Mayer, Brown & Platt, counsel to the Company.
Except where noted, it deals only with Notes held as capital assets and does not
deal with special situations, such as those of dealers in securities or foreign
currencies, financial institutions, life insurance companies, persons holding
Notes as a hedge against, or which are hedged against, currency risks or United
States Holders whose "functional currency" is not the U.S. dollar. In addition,
this summary does not address the federal income tax consequences of owning
Indexed Notes or any other Notes the payments of principal or interest on which
are contingent. Such consequences will be addressed in the relevant Pricing
Supplement. Furthermore, the discussion below is based upon the provisions of
the Internal Revenue Code of 1986 (the "Code") and regulations, rulings and
judicial decisions thereunder as of the date hereof, and such authorities may be
repealed, revoked or modified so as to result in federal income tax consequences
different from those discussed below. Persons considering the purchase,
ownership or disposition of Notes should consult their own tax advisors
concerning the federal income tax consequences in light of their particular
situations as well as any consequences arising under the laws of any other
taxing jurisdiction.
As used herein, "United States Holder" means an owner of a Note that is a
citizen or resident of the United States, a corporation, partnership or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof, an estate or trust the income of which is subject
to United States federal income taxation regardless of its source or certain
former citizens of the United States whose income and gain on the Notes will be
taxable in the United States. A "Non-United States Holder" is a holder that is
not a United States Holder.
PAYMENTS OF INTEREST
Except as set forth below, interest on a Note will generally be taxable to
a United States Holder as ordinary income from domestic sources at the time it
is paid or accrued in accordance with the United States Holder's method of
accounting for tax purposes.
ORIGINAL ISSUE DISCOUNT
The following is a summary of the principal United States federal income
tax consequences of the ownership of Discounted Notes (as defined below) by
United States Holders. Additional rules applicable to Discounted Notes which are
denominated in or determined by reference to a Specified Currency other than the
U.S. dollar are described under "Foreign Currency Notes" below. If the Company
issues Discounted Notes that qualify as "applicable high-yield obligations"
under the Code, the rules applicable to such Notes will be set forth in the
relevant Pricing Supplement. This summary is based on final Treasury regulations
(the "OID Regulations") that were recently issued. Although the OID Regulations
by their terms only apply to debt instruments issued on or after April 4, 1994,
taxpayers may rely on the OID Regulations for debt instruments issued after
December 21, 1992. Proposed Treasury regulations that the OID Regulations
replaced could alternatively apply to debt instruments issued prior to April 4,
1994. If the Company issues Discounted Notes prior to April 4, 1994 and the
rules of the proposed Treasury regulations produce a result different than that
produced by the OID Regulations, the alternative rules applicable to such Notes
will be set forth in the applicable Pricing Supplement.
A Note may be issued for an amount that is less than its "stated redemption
price at maturity" (the sum of all payments to be made on the Note other than
"qualified stated interest"). The difference between the stated redemption price
at maturity of the Note and its "issue price", if such difference is at least
0.25 percent of the stated redemption price at maturity multiplied by the number
of complete years to maturity, will be OID. (Notes issued with OID shall be
referred to as "Discounted Notes".) The "issue price" of each Note will be the
first price to the public (not including bond houses, brokers or similar persons
or organizations acting in the capacity of underwriters or wholesalers) at which
a substantial amount of the particular offering is sold.
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"Qualified stated interest" is stated interest that is unconditionally
payable in cash or in property (other than debt instruments of the issuer) at
least annually and with respect to a Fixed Rate Note, at a single fixed rate.
Interest is payable at a single fixed rate only if the rate appropriately takes
into account the length of the interval between payments. In the case of a
qualified variable rate debt instrument, qualified stated interest also includes
stated interest that is unconditionally payable in cash or property (other than
debt instruments of the issuer) at least annually at (i) one or more qualified
floating rates, (ii) a single fixed rate and one or more qualified floating
rates, (iii) a single objective rate, or (iv) a single fixed rate and a single
objective rate that is a qualified inverse floating rate. Whether the rate of
interest with respect to a Fixed Rate Note or Floating Rate Note is qualified
stated interest will be described in the applicable Pricing Supplement.
Certain of the Notes may be redeemed prior to maturity, as indicated in the
applicable Pricing Supplement. The OID Regulations provide than any Note that
may be redeemed prior to its Stated Maturity Date at the option of the issuer
shall be treated from the time of issuance as having a maturity date for federal
income tax purposes on such redemption date if such redemption would result in a
lower yield to maturity. Notice will be given in the applicable Pricing
Supplement when the Company determines that a particular Note will be deemed to
have a maturity date for federal income tax purposes prior to its Stated
Maturity Date.
In certain cases, Notes that bear stated interest and are issued at par may
be deemed to bear OID for federal income tax purposes, with the result that the
inclusion of interest into income for federal income tax purposes may vary from
the actual cash payments of interest made on such Notes, generally accelerating
income for cash method taxpayers. Under the OID Regulations, generally a Note
may be a Discounted Note where a Floating Rate Note provides for a maximum
interest rate or a minimum interest rate that is very likely to cause the
interest rate in one or more accrual periods, known as of the issue date, to be
significantly less, in the case of a maximum rate, or more, in the case of a
minimum rate, than the overall expected return on the Note or if there are
restrictions on changes in interest rates that cause the yield on the Note to be
significantly more or less than the yield without such restrictions. Notice will
be given in the applicable Pricing Supplement when the Company determines that a
particular Note will be a Discounted Note. Unless an applicable Pricing
Supplement so indicates, Floating Rate Notes will not be Discounted Notes.
United States Holders of Discounted Notes with a maturity upon issuance of
more than one year must, in general, include OID in income in advance of the
receipt of some or all of the related cash payments. The amount of OID
includible in income by the initial United States Holder of a Discounted Note is
the sum of the "daily portions" of OID with respect to the Note for each day
during the taxable year or portion of the taxable year in which such United
States Holder held such Note ("accrued OID"). The daily portion is determined by
allocating to each day in any "accrual period" a pro rata portion of the OID
allocable to that accrual period. The "accrual period" for a Discounted Note may
be of any length and may vary in length over the term of a Note, provided that
each accrual period is no longer than one year and each scheduled payment of
principal or interest occurs at the end of an accrual period. In general, the
computation of OID is simplest if accrual periods correspond to the intervals
between payment dates provided by the terms of a Note. The Company will specify
the accrual period it intends to use in the applicable Pricing Supplement
although the Holder is not bound by the Company's choice of accrual period. The
amount of OID allocable to any accrual period is an amount equal to the excess,
if any, of (a) the product of the Note's adjusted issue price at the beginning
of such accrual period and its yield to maturity (determined on the basis of
compounding at the close of each accrual period and properly adjusted for the
length of the accrual period) over (b) the sum of any qualified stated interest
allocable to the accrual period. In determining OID allocable to an accrual
period, if an interval between payments of qualified stated interest contains
more than one accrual period the amount of qualified stated interest payable at
the end of the interval is allocated on a pro rata basis to each accrual period
in the interval and the adjusted issue price must be increased by the amount of
any qualified stated interest that has accrued prior to the beginning of the
accrual period but is not payable until a later date. OID allocable to a final
accrual period is the difference between the amount payable at maturity (other
than a
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payment of qualified stated interest) and the adjusted issue price at the
beginning of the final accrual period. If all accrual periods are of equal
length, except for an initial short accrual period, the amount of OID allocable
to the initial short accrual period may be computed under any reasonable method.
The "adjusted issue price" of a Note at the beginning of any accrual period is
equal to its issue price increased by the accrued OID for each prior accrual
period determined without regard to the amortization of any acquisition premium
or amortizable bond premium (as described below) and reduced by any prior
payments with respect to such Note that were not qualified stated interest.
Under these rules, a United States Holder will have to include in income
increasingly greater amounts of OID in successive accrual periods. The Company
is required to report the amount of OID accrued on Notes held of record by
persons other than corporations and other exempt holders.
SHORT-TERM NOTES
In the case of Notes having a term of one year or less ("Short-Term
Notes"), under the OID Regulations, payments of stated interest are not treated
as qualified stated interest. Accordingly, all payments on Short-Term Notes
(including all stated interest) will be included in the stated redemption price
at maturity and, thus, United States Holders will generally be taxed on the
"discount" in lieu of stated interest. The discount will be equal to the excess
of the stated redemption price at maturity over the issue price of the
Short-Term Note, unless the United States Holder elects to compute this discount
using tax basis instead of issue price. In general, an individual and certain
other cash method United States Holders of Short-Term Notes are not required to
include accrued discount in their income currently unless they elect to do so.
United States Holders who report income for federal income tax purposes on the
accrual method and certain other United States Holders are required to accrue
discount on such Short-Term Notes (as ordinary income) on a straight-line basis,
unless an election is made to accrue the discount according to a constant yield
method based on daily compounding. In the case of a United States Holder who is
not required, and does not elect, to include discount in income currently, any
gain realized on the sale, exchange or retirement of the Short-Term Note will be
ordinary income to the extent of the discount accrued through the date of sale,
exchange or retirement. In addition, United States Holders who do not elect to
currently include accrued discount in income may be required to defer deductions
for a portion of the United States Holder's interest expense with respect to any
indebtedness incurred or continued to purchase or carry such Notes.
MARKET DISCOUNT
If a United States Holder purchases a Note other than a Short-Term Note for
an amount that is less than its "revised issue price" (defined as the sum of the
issue price of the Note and the aggregate amount of the OID includible, if any,
without regard to the rules for acquisition premium discussed below, in the
gross income of all previous holders of the Note), the amount of the difference
will be treated as "market discount" for federal income tax purposes, unless
such difference is less than a specified de minimis amount. Under the market
discount rules, a United States Holder will be required to treat any principal
payment on, or any gain on the sale, exchange, retirement or other disposition
of, a Note as ordinary income to the extent of the market discount which has not
previously been included in income and is treated as having accrued on such Note
at the time of such payment or disposition. In addition, the United States
Holder may be required to defer, until the maturity of the Note or its earlier
disposition in a taxable transaction, the deduction of all or a portion of the
interest expense on any indebtedness incurred or continued to purchase or carry
such Note.
Any market discount will be considered to accrue ratably during the period
from the date of acquisition to the maturity date of the Note, unless the United
States Holder elects to accrue on a constant yield method. A United States
Holder of a Note may elect to include market discount in income currently as it
accrues (on either a ratable or constant yield basis), in which case the rule
described above regarding deferral of interest deductions will not apply. This
election to include market discount in income currently, once made, applies to
all market discount obligations acquired on or after the first
S-19
<PAGE> 59
taxable year to which the election applies, and may not be revoked without the
consent of the Internal Revenue Service (the "IRS").
ACQUISITION PREMIUM; AMORTIZABLE BOND PREMIUM
A United States Holder who purchases a Note for an amount that is greater
than its adjusted issue price but equal to or less than the sum of all amounts
payable on the Note after the purchase date other than payments of qualified
stated interest will be considered to have purchased such Note at an
"acquisition premium." Under the acquisition premium rules the amount of OID
which such United States Holder must include in its gross income with respect to
such Note for any taxable year will be reduced by the portion of such
acquisition premium properly allocable to such year.
A United States Holder who purchases a Note for an amount in excess of the
sum of all amounts payable on the Note after the purchase date other than
qualified stated interest will be considered to have purchased the Note at a
"premium" and will not be required to include any OID in income. A United States
Holder generally may elect to amortize the premium over the remaining term of
the Note on a constant yield method. The amount amortized in any year will be
treated as a reduction of the United States Holder's interest income for the
Note. Bond premium on a Note held by a United States Holder that does not make
such an election will decrease the gain or increase the loss otherwise
recognized on disposition of the Note. The election to amortize premium on a
constant yield method, once made, applies to all debt obligations held or
subsequently acquired by the electing United States Holder on or after the first
day of the first taxable year to which the election applies and may not be
revoked without the consent of the IRS.
ELECTION TO TREAT ALL INTEREST AS OID
Under the OID Regulations, an accrual basis United States Holder may elect
to treat all interest on any Note as OID and calculate the amount includible in
gross income under the constant yield method described above. For the purposes
of this election, interest includes stated interest, acquisition discount, OID,
de minimis OID, market discount, de minimis market discount and unstated
interest, as adjusted by any amortizable bond premium or acquisition premium. If
a United States Holder makes this election for a Note with market discount or
amortizable bond premium, the election is treated as an election under the
market discount or amortizable bond premium provisions, described above, and the
electing United States Holder will be required to amortize bond premium or
include market discount in income currently for all of the United States
Holder's other debt instruments with market discount or amortizable bond
premium. The election is to be made for the taxable year in which the United
States Holder acquired the Note, and may not be revoked without the consent of
the IRS. United States Holders should consult with their own tax advisors about
this election.
SALE, EXCHANGE AND RETIREMENT OF NOTES
A United States Holder's tax basis in a Note will, in general, be the
United States Holder's cost therefor, increased by OID, market discount or any
discount with respect to a Short-Term Note previously included in income by the
United States Holder and reduced by any amortized premium and any cash payments
on the Note other than qualified stated interest. Upon the sale, exchange or
retirement of a Note, a United States Holder will recognize gain or loss equal
to the difference between the amount realized upon the sale, exchange or
retirement and the adjusted tax basis of the Note. Except as described above
with respect to certain Short-Term Notes, market discount that has accrued but
has not been previously included in income and gain or loss attributable to
changes in foreign currency exchange rates as described below with respect to
certain Foreign Currency Notes, such gain or loss will be capital gain or loss
and will be long-term capital gain or loss if at the time of sale, exchange or
retirement the Note has been held for more than one year. Under current law, net
capital gains of individuals are, under certain circumstances, taxed at lower
rates than items of ordinary income. The deductibility of capital losses is
subject to limitations.
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<PAGE> 60
FOREIGN CURRENCY NOTES
The following is a summary of the principal United States federal income
tax consequences to a United States Holder of the ownership of a Note (a
"Foreign Currency Note") denominated in a Specified Currency other than the U.S.
dollar (a "Foreign Currency"). Persons considering the purchase of Foreign
Currency Notes should consult their own tax advisors with regard to the
application of the United States federal income tax laws to their particular
situations, as well as any consequences arising under the laws of any other
taxing jurisdiction.
If interest payments are made in a Foreign Currency to a United States
Holder who is not required to accrue such interest prior to its receipt, i.e., a
United States Holder who uses the cash method of accounting, such United States
Holder will be required to include in income the U.S. dollar value of the amount
received (determined by translating the Foreign Currency received at the "spot
rate" for such Foreign Currency on the date such payment is received),
regardless of whether the payment is in fact converted into U.S. dollars. No
foreign currency gain or loss is recognized with respect to the receipt of such
payment.
A United States Holder who is required to accrue interest on a Foreign
Currency Note prior to receipt of such interest will be required to include in
income for each taxable year the U.S. dollar value of the interest that has
accrued during such year, determined by translating such interest at the average
rate of exchange for the period or periods during which such interest accrued.
The average rate of exchange for an interest accrual period is the simple
average of the exchange rates for each business day of such period (or such
other average that is reasonably derived and consistently applied by the
holder). An accrual basis United States Holder may elect to translate interest
income at the spot rate on the last day of the accrual period (or last day of
the taxable year in the case of an accrual period that straddles the holder's
taxable year) or on the date the interest payment is received if such date is
within five business days of the end of the accrual period. Upon receipt of an
interest payment on such Note, such United States Holder will recognize foreign
currency gain or loss in an amount equal to the difference between the U.S.
dollar value of such payment (determined by translating any Foreign Currency
received at the "spot rate" for such Foreign Currency on the date received) and
the U.S. dollar value of the interest income that such holder has previously
included in income with respect to such payment. Any such gain or loss generally
will not be treated as interest income or expense, except to the extent provided
in Treasury Regulations or administrative pronouncements of the IRS.
OID on a Note that is also a Foreign Currency Note will be determined for
any accrual period in the applicable Foreign Currency and then translated into
U.S. dollars in the same manner as interest income accrued by a United States
Holder on the accrual basis, as described above. Likewise, a United States
Holder will recognize foreign currency gain or loss when the OID is paid to the
extent of the difference between the U.S. dollar value of the accrued OID
(determined in the same manner as for accrued interest) and the U.S. dollar
value of such payment (determined by translating any Foreign Currency received
at the spot rate for such Foreign Currency on the date of payment). For this
purpose, all receipts on a Note will be viewed first as the receipt of any
stated interest payments called for under the terms of the Note, second as
receipts of previously accrued OID (to the extent thereof), with payments
considered made for the earliest accrual periods first, and thereafter as the
receipt of principal.
The amount of market discount on Foreign Currency Notes includible in
income will generally be determined by translating the market discount
determined in the Foreign Currency into U.S. dollars at the spot rate on the
date the Foreign Currency Note is retired or otherwise disposed of. If the
United States Holder has elected to accrue market discount currently, then the
amount which accrues is determined in the Foreign Currency and then translated
into U.S. dollars on the basis of the average exchange rate in effect during
such accrual period. A United States Holder will recognize foreign currency gain
or loss with respect to market discount which is accrued currently using the
approach applicable to the accrual of interest income as described above.
Amortizable bond premium on a Foreign Currency Note will be computed in the
applicable Foreign Currency. With respect to a United States Holder that elects
to amortize the premium, the amortizable
S-21
<PAGE> 61
bond premium will reduce interest income in the applicable Foreign Currency. At
the time bond premium is amortized, foreign currency gain or loss (which is
generally ordinary income or loss) will be realized based on the difference
between spot rates at such time and at the time of acquisition of the Foreign
Currency Note. A United States Holder that does not elect to amortize bond
premium will translate the bond premium, computed in the applicable Foreign
Currency, into U.S. dollars at the spot rate on the maturity date and such bond
premium will constitute a capital loss which may be offset or eliminated by
exchange gain. The principles of this paragraph also apply to acquisition
premium.
A United States Holder's tax basis in a Foreign Currency Note will be the
U.S. dollar value of the Foreign Currency amount paid for such Foreign Currency
Note determined at the time of such purchase. A United States Holder who
purchases a Note with previously owned Foreign Currency will recognize exchange
gain or loss at the time of purchase attributable to the difference at the time
of purchase, if any, between his tax basis in such Foreign Currency and the fair
market value of the Note in U.S. dollars on the date of purchase. Such gain or
loss will be ordinary income or loss.
For purposes of determining the amount of any gain or loss recognized by a
United States Holder on the sale, exchange or retirement of a Foreign Currency
Note, the amount realized upon such sale, exchange or retirement will be the
U.S. dollar value of the amount realized in Foreign Currency (other than amounts
attributable to accrued but unpaid interest not previously included in the
holder's income), determined at the time of the sale, exchange or retirement.
A United States Holder will recognize foreign currency gain or loss
attributable to the movement in exchange rates between the time of purchase and
the time of disposition (including the sale, exchange or retirement) of a
Foreign Currency Note. Such gain or loss will be treated as ordinary income or
loss. The amount of such gain or loss will equal the difference between (i) the
U.S. dollar value of the foreign currency principal amount of such Note on the
date such Note is disposed of, and (ii) the U.S. dollar value of the foreign
currency principal amount of such Note on the date such United States Holder
acquired such Note. Any portion of the proceeds of such disposition attributable
to accrued interest may result in foreign currency gain or loss under the rules
set forth above. The realization of such gain or loss with respect to principal
and interest will be limited to the amount of overall gain or loss realized on
the disposition of a Foreign Currency Note. Under proposed Treasury regulations
issued on March 17, 1992, if a Foreign Currency Note is denominated in one of
certain hyperinflationary currencies, generally (i) foreign currency gain or
loss would be realized with respect to movements in the exchange rate between
the beginning and end of each taxable year (or such shorter period) that such
Note was held and (ii) such foreign currency gain or loss would be treated as an
addition or offset, respectively, to the accrued interest income on (and an
adjustment to the holder's tax basis in) the Foreign Currency Note.
A United States Holder's tax basis in Foreign Currency received as interest
on (or OID with respect to), or received on the sale or retirement of, a Foreign
Currency Note will be the U.S. dollar value thereof at the spot rate at the time
the holder received such Foreign Currency. Any gain or loss recognized by a
United States Holder on a sale, exchange or other disposition of Foreign
Currency will be ordinary income or loss and will not be treated as interest
income or expense, except to the extent provided in Treasury regulations or
administrative pronouncements of the IRS.
NON-UNITED STATES HOLDERS
Under present United States federal income and estate tax law, and subject
to the discussion below concerning backup withholding:
(a) no withholding of United States federal income tax will be
required with respect to the payment by the Company or any Paying Agent of
principal or interest (which for purposes of this discussion includes OID)
on a Note owned by a Non-United States Holder, provided, in the case of
interest, (i) that the beneficial owner does not actually or constructively
own 10% or more of the total combined voting power of all classes of stock
of the Company entitled to vote within the meaning of section 871(h)(3) of
the Code and the regulations thereunder, (ii) the beneficial owner is not a
controlled foreign corporation that is related to the Company through stock
ownership,
S-22
<PAGE> 62
(iii) the beneficial owner is not a bank whose receipt of interest on a
Note is described in section 881(c)(3)(A) of the Code, (iv) in the case of
a Note, the beneficial owner satisfies the statement requirement (described
generally below) set forth in section 871(h) and section 881(c) of the Code
and the regulations thereunder, or (v) such interest is not interest
described in section 871(h)(4) of the Code (which generally is limited to
certain types of contingent interest);
(b) no withholding of United States federal income tax generally will
be required with respect to any gain or income realized by a Non-United
States Holder upon the sale, exchange or retirement of a Note; and
(c) a Note beneficially owned by an individual who at the time of
death is a Non-United States Holder will not be subject to United States
federal estate tax as a result of such individual's death, provided that
such individual does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the company entitled
to vote within the meaning of section 871(h)(3) of the Code and the
regulations thereunder and provided that the interest payments with respect
to such Note would not have been, if received at the time of such
individual's death, effectively connected with the conduct of a U.S. trade
or business by such individual.
To qualify for the exemption from withholding tax referred to in (a)(iv)
above, the beneficial owner of such Note, or a financial institution holding the
Note on behalf of such owner, must provide, in accordance with specified
procedures, a paying agent of the Company with a statement to the effect that
the beneficial owner is not a U.S. person, citizen or resident. Pursuant to
current temporary Treasury regulations, these requirements will be met if (1)
the beneficial owner provides his name and address, and certifies, under
penalties of perjury, that he is not a U.S. person, citizen or resident (which
certification may be made on an IRS Form W-8 (or successor form)) or (2) a
financial institution holding the Note on behalf of the beneficial owner
certifies, under penalties of perjury, that such statement has been received by
it and furnishes a paying agent with a copy thereof. The Company does not intend
to issue any Notes described in (a)(v) above.
Payments to Non-United States Holders not meeting the requirements of
paragraph (a) above and thus subject to withholding of United States federal
income tax may nevertheless be exempt from such withholding if the beneficial
owner of the Note provides the Company with a properly executed and timely (1)
IRS Form 1001 (or successor form) claiming an exemption or partial exemption
from withholding under the benefit of a tax treaty or (2) IRS Form 4224 (or
successor form) stating that interest paid on the Note is not subject to
withholding tax because it is effectively connected with the owner's conduct of
a trade or business in the United States.
A Non-United States Holder who is engaged in a U.S. trade or business and
has interest or gain from a Note that is effectively connected with such U.S.
trade or business will generally be subject to regular United States income tax
on such interest in the same manner as if it were a United States Holder. In
addition, if such Non-United States Holder is a corporation, it may be subject
to a branch profits tax equal to 30% of its effectively connected earnings and
profits for the taxable year, subject to certain adjustments. For purposes of
the branch profits tax, interest (including original issue discount) on and any
gain recognized on the disposition of a Note will be included in the earnings
and profits of such Non-United States Holder if such interest is effectively
connected with the conduct of a U.S. trade or business by the Non-United States
Holder.
BACKUP WITHHOLDING AND INFORMATION REPORTING
In general, information reporting requirements will apply to certain
payments of principal, interest, OID and premium paid on Notes and to the
proceeds of sale of a Note made to United States Holders other than certain
exempt recipients (such as corporations). A 31 percent backup withholding tax
will apply to such payments if the United States Holder fails to provide a
taxpayer identification number or certification of foreign or other exempt
status or fails to report in full dividend and interest income. Such
certification may be made on an Internal Revenue Service Form W-9 or a
substantially similar form.
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<PAGE> 63
No information reporting or backup withholding will be required with
respect to payments made by the Company or any paying agent to Non-United States
Holders if a statement described in (a)(iv) under "Non-United States Holders"
has been received and the payor does not have actual knowledge that the
beneficial owner is a United States person.
In addition, backup withholding and information reporting will not apply if
payments of the principal, interest, OID or premium on a Note is paid or
collected by a foreign office of a custodian, nominee or other foreign agent on
behalf of the beneficial owner of such Note, or if a foreign office of a broker
(as defined in applicable Treasury regulations) pays the proceeds of the sale of
a Note to the owner thereof. If, however, such nominee, custodian, agent or
broker is, for United States federal income tax purposes, a U.S. person, a
controlled foreign corporation or a foreign person that derives 50% or more of
its gross income for certain periods from the conduct of a trade or business in
the United States, such payments will not be subject to backup withholding but
will be subject to information reporting, unless (1) such custodian, nominee,
agent or broker has documentary evidence in its records that the beneficial
owner is not a U.S. person and certain other conditions are met or (2) the
beneficial owner otherwise establishes an exemption. Temporary Treasury
regulations provide that the Treasury is considering whether backup withholding
will apply with respect to such payments of principal, interest or the proceeds
of a sale that are not subject to backup withholding under the current
regulations. Under proposed Treasury regulations not currently in effect backup
withholding will not apply to such payments absent actual knowledge that the
payee is a United States person.
Payments of principal, interest, OID and premium on a Note paid to the
beneficial owner of a Note by a United States office of a custodian, nominee or
agent, or the payment by the United States office of a broker of the proceeds of
sale of a Note, will be subject to both backup withholding and information
reporting unless the beneficial owner provides a statement described in (a)(iv)
above and the payor does not have actual knowledge that the beneficial owner is
a United States person or otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against such holder's United States federal income tax
liability provided the required information is furnished to the IRS.
S-24
<PAGE> 64
PLAN OF DISTRIBUTION
The Notes are being offered on a continuing basis by the Company through
the Agents, each of which has agreed to use its reasonable best efforts to
solicit offers to purchase the Notes. The Company will pay each Agent a
commission, depending upon maturity, of from .125% to .750% of the principal
amount of the Notes sold through such Agent; provided, that commissions with
respect to Notes maturing 30 years or more from the date of issue will be
subject to negotiation. The Company has agreed to be responsible for the
reasonable fees and disbursements of counsel to the Agents and to reimburse the
Agents for their out-of-pocket expenses.
The Company may sell Notes to any of the Agents, as principal for its own
account, at negotiated discounts for resale to investors or other purchasers at
varying prices related to prevailing market prices at the time of resale or, if
set forth in the applicable Pricing Supplement, at a fixed public offering
price, as determined by such Agent. After any initial public offering of Notes
to be resold to purchasers at a fixed public offering price, the public offering
price and any concession or discount may be changed. In addition, each Agent may
offer Notes purchased as principal to other dealers. Notes sold by an Agent to a
dealer may be sold at a discount and unless otherwise specified in the
applicable Pricing Supplement, such discount allowed will not be in excess of
the discount received by the Agent from the Company. Unless otherwise specified
in the applicable Pricing Supplement, any Note sold to an Agent as principal
will be purchased by such Agent at a price equal to 100% of the principal amount
thereof less a percentage equal to the commission applicable to an agency sale
of a Note of identical maturity and may be resold by such Agent.
The Company reserves the right to sell Notes directly to the public on its
own behalf in those jurisdictions where it is authorized to do so. No commission
will be payable on any sales made directly to the public by the Company.
The Company will have the sole right to accept offers to purchase Notes and
may reject any proposed purchase of Notes in whole or in part. Each Agent will
have the right, in its discretion reasonably exercised, to reject any offer to
purchase Notes received by it, in whole or in part.
Each Agent may be deemed to be an "underwriter" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). The Company has
agreed to indemnify each Agent against certain liabilities, including
liabilities under the Securities Act, or to contribute to payments each Agent
may be required to make in respect thereof.
Each of the Agents may from time to time purchase and sell Notes in the
secondary market or make a market in the Notes, but is not obligated to do so,
and may discontinue market-making at any time without notice. There can be no
assurance that there will be a secondary market for the Notes or liquidity in
the secondary market if one develops.
S-25
<PAGE> 65
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT (INCLUDING THE ACCOMPANYING PRICING SUPPLEMENT) AND THE
ACCOMPANYING PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS
PROSPECTUS SUPPLEMENT (INCLUDING THE ACCOMPANYING PRICING SUPPLEMENT) AND THE
ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE AGENTS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT (INCLUDING THE
ACCOMPANYING PRICING SUPPLEMENT) AND THE ACCOMPANYING PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATES AS OF WHICH
INFORMATION IS GIVEN IN THIS PROSPECTUS SUPPLEMENT (INCLUDING THE ACCOMPANYING
PRICING SUPPLEMENT) AND THE ACCOMPANYING PROSPECTUS. THIS PROSPECTUS SUPPLEMENT
(INCLUDING THE ACCOMPANYING PRICING SUPPLEMENT) AND THE ACCOMPANYING PROSPECTUS
DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATES IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OF SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PROSPECTUS SUPPLEMENT
Use of Proceeds........................ S-2
Important Currency Exchange
Information.......................... S-2
Description of Notes................... S-3
Currency Risks......................... S-14
United States Federal Taxation......... S-17
Plan of Distribution................... S-25
PROSPECTUS
Available Information.................. 2
Documents Incorporated by Reference.... 2
Use of Proceeds........................ 2
The Company............................ 3
Description of Debt Securities......... 4
Plan of Distribution................... 11
Legal Opinions......................... 11
Experts................................ 12
</TABLE>
U.S. $650,000,000
[LOGO]
GENERAL AMERICAN
TRANSPORTATION
CORPORATION
MEDIUM-TERM NOTES,
SERIES E
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
SALOMON BROTHERS INC
MORGAN STANLEY & CO.
INCORPORATED
PROSPECTUS SUPPLEMENT
DATED FEBRUARY , 1994
<PAGE> 66
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
An itemized statement of the amount of all expenses, other than
underwriting discounts and commissions, incurred by the Company in connection
with the issuance and distribution of the Securities follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee....................... $ 134,436*
Trustees' Fees and Expenses............................................... 30,000
Printing Expenses......................................................... 75,000
Rating Agency Fees........................................................ 165,000
Accounting Fees and Expenses.............................................. 60,000
Legal Fees and Expenses................................................... 150,000
Blue Sky Fees and Expenses................................................ 30,000
Miscellaneous Expenses.................................................... 30,564
---------
Total.............................................................. $ 675,000
---------
---------
</TABLE>
- ---------------
* Actual. All other amounts are estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Certain provisions of the New York Business Corporation Law and Article II,
Section 11 of the Company's by-laws provide for the prompt indemnification of
directors and officers under certain conditions, including the possibility of
indemnification against liabilities under the Securities Act of 1933. The
by-laws also provide that the Company has the burden of proving that a director
is not entitled to indemnification in a particular instance.
In addition, the Company's directors and officers are insured under
directors and officers liability insurance policies maintained by GATX.
Reference is made to Section 8 of the form of Selling Agency Agreement for
Medium-Term Notes filed as Exhibit 1.1 hereto for provisions regarding
indemnification of the Company and its officers, directors and controlling
persons against certain liabilities. The Company expects that any underwriting
agreement entered into by the Company in connection with the sale of the Pass
Through Certificates or the Debt Securities will contain comparable provisions
regarding indemnification.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
-------- -------------------------------------------------------------------------
<S> <C>
1.1 -- Proposed form of Selling Agency Agreement relating to the Debt
Securities.
4.1 -- Indenture relating to the Debt Securities, dated as of October 1,
1987, between the Company and The Chase Manhattan Bank (National Associa-
tion) (the "Debt Trustee"), as supplemented by the Supplemental
Indentures dated May 15, 1988, March 15, 1990 and June 15, 1990,
respectively. Incorporated by reference to the Company's Registration
Statement on Form S-3 (SEC No. 33-17692) filed October 8, 1987, as
supplemented by First Supplemental Indenture, dated as of May 15,
1988, incorporated by reference to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1988, Second Supplemental
Indenture, dated as of March 15, 1990, incorporated by reference to
the Company's Current Report on Form 8-K dated March 15, 1990, and
Third Supplemental Indenture, dated as of June 15, 1990, incorporated
by reference to the Company's Current Report on Form 8-K dated June
29, 1990.
</TABLE>
II-1
<PAGE> 67
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
-------- -------------------------------------------------------------------------
<S> <C>
4.2 -- Proposed form of Fixed Rate Notes.
4.3 -- Proposed form of Floating Rate Notes.
4.4 -- Pass Through Trust Agreement, dated as of August 1, 1992, between the
Pass Through Trustee and the registrant relating to the Pass Through
Certificates.
4.5 -- Proposed form of Pass Through Certificates (included in Exhibit 4.4).
5.1 -- Opinion of Mayer, Brown & Platt as to the legality of the Securities.
5.2 -- Opinion of counsel for the Pass Through Trustee as to the legality of
the Securities.
8.1 -- Tax Opinion of Mayer, Brown & Platt.
12.1 -- Statement of Computation of Ratio of Earnings to Fixed Charges.
Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1992 and the Company's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1993.
23.1 -- Consent of Ernst & Young.
23.2 -- Consent of Mayer, Brown & Platt (included in Exhibits 5.1 and 8.1
above).
23.3 -- Consent of counsel to the Pass Through Trustee (included in Exhibit
5.2 above).
24.1 -- Power of Attorney (appears on the signature page of this Registration
Statement).
25.1 -- Form T-1, Statement of Eligibility of the Debt Trustee.
25.2 -- Form T-1, Statement of Eligibility of the Pass Through Trustee.
</TABLE>
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, unless the information required to be included
in such post-effective amendment is contained in a periodic report filed
by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 and incorporated herein by reference;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, indivi-dually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement, unless the information required to be
included in such post-effective amendment is contained in a periodic
report filed by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 and incorporated herein by
reference; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933 each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-2
<PAGE> 68
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-3
<PAGE> 69
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois on February , 1994.
GENERAL AMERICAN
TRANSPORTATION CORPORATION
By: /s/ D. WARD FULLER
D. Ward Fuller
President, Chief Executive
Officer and Director
Each of the undersigned hereby constitutes and appoints Paul A. Heinen and
Ronald J. Ciancio, and each of them (with full power to each of them to act
alone), his true and lawful attorney-in-fact and agent, for him and in his
behalf and his name, place and stead, in any and all capacities, to sign,
execute and file any amendment or amendments to this registration statement,
with all exhibits and any and all documents and supplementary information
required to be filed with respect thereto, granting unto said attorneys, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in order to effectuate the same as
fully to all intents and purposes as he himself might or could do if personally
present, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on February , 1994.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------------ ------------------------------------------------
<S> <C>
/s/ D. WARD FULLER President, Chief Executive Officer and Director
D. Ward Fuller
/s/ MELVIN D. KUSTA Controller, Principal Financial Officer and
Melvin D. Kusta Principal Accounting Officer
/s/ JAMES J. GLASSER Director
James J. Glasser
/s/ PAUL A. HEINEN Director
Paul A. Heinen
</TABLE>
II-4
<PAGE> 1
EXHIBIT 1.1
General American Transportation Corporation
$650,000,000 Medium-Term Notes
Due From Nine Months or More
From Date of Issue
Selling Agency Agreement
_____________ __, 1994
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, New York 10020
Dear Sirs:
General American Transportation Corporation (the "Company"), a New
York corporation and a wholly owned subsidiary of GATX Corporation (the
"Parent"), confirms its agreement with each of you with respect to the issue
and sale by the Company of up to $650,000,000 aggregate principal amount of its
Medium-Term Notes, Series E, Due Nine Months or more from Date of Issue (the
"Notes"). The Notes will be issued under an indenture dated as of October 1,
1987, as supplemented pursuant to the First Supplemental Indenture thereto
dated as of May 15, 1988, the Second Supplemental Indenture thereto dated as of
March 15, 1990 and the Third Supplemental Indenture thereto dated as of June
15, 1990, between the Company and The Chase Manhattan Bank (National
Association), as trustee (the "Trustee") (such indenture as so supplemented is
hereinafter called the "Indenture"). The Notes will be issued in minimum
denominations of U.S. $100,000 for Certificated Notes (as hereinafter defined)
and $1,000 for Book-Entry Notes (as hereinafter defined) and in denominations
exceeding such amount by integral multiples of U.S. $1,000, and if denominated
in a currency other than U.S. dollars, the equivalent in such other currency
(the "Specified Currency") as determined in the Indenture, of U.S. $100,000
(rounded down to an integral multiple of 1,000 units of such Specified
Currency) and any larger amount that is an integral multiple of 1,000 units of
such Specified Currency, will be issued only in fully registered form, and will
be issued in the currency or currency unit and will have the maturities, annual
interest
<PAGE> 2
rates (whether fixed or floating), redemption provisions and other terms set
forth in a pricing supplement (the "Pricing Supplement") to the Prospectus
referred to below. The Notes will be issued, and the terms thereof
established, in accordance with the Indenture and, in the case of Notes sold
pursuant to Section 2(a), the Medium-Term Notes Administrative Procedures
attached hereto as Exhibit A or such other procedures agreed upon in writing
from time to time by each Agent and the Company after notice to, and in the
case of procedures which affect the rights, duties or obligations of the
Trustee, with the approval of, the Trustee (the "Procedures"). For the
purposes of this Agreement, the term "Agent" shall refer to any of you acting
solely in the capacity as agent for the Company pursuant to Section 2(a) and
not as principal (collectively, the "Agents"), the term "Purchaser" shall refer
to any of you acting solely as principal pursuant to Section 2(b) and not as
agent, and the term "you" shall refer to you collectively whether at any time
any of you is acting in both such capacities or in either such capacity. In
acting under this Agreement, in whatever capacity, each of you is acting
individually and not jointly.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Agent as set forth below in this Section 1.
Certain terms used in this Section 1 and elsewhere in this Agreement are
defined in paragraph (l) hereof.
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933 (the "Act") and has filed with the
Securities and Exchange Commission (the "Commission") a registration
statement on such Form (File Number: 33-33073) and a registration
statement on such Form (File Number: 33-_____), including a basic
prospectus in accordance with Rule 429, which have each become
effective, for the registration under the Act of $650,000,000
aggregate principal amount of debt securities (the "Securities"),
including the Notes. Such registration statements, as amended at the
date of this Agreement, meet the requirements set forth in Rule
415(a)(1)(ix) or (x) under the Act and comply in all other material
respects with said Rule. The Company has included in such
registration statements, or has filed or will file with the Commission
pursuant to the applicable paragraph of Rule 424(b) and Rule 429 under
the Act, a supplement to the form of prospectus included in such
registration statements relating to the Notes and the plan of
distribution thereof (the "Prospectus Supplement"). In connection
with the sale of Notes the Company proposes to file with the
Commission pursuant to the applicable paragraph of Rule 424(b) and
Rule 429 under the Act further supplements to the Prospectus
Supplement specifying the interest rates, maturity dates and, if
appropriate, other terms of the Notes sold pursuant hereto or the
offering thereof.
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<PAGE> 3
(b) As of the Execution Time, on the Effective Date, when any
supplement to the Prospectus is filed with the Commission, as of the
date of any Terms Agreement (as defined by Section 2(b)) and at the
date of delivery by the Company of any Notes sold hereunder (a
"Closing Date"), (i) the Registration Statement, as amended as of any
such time, and the Prospectus, as supplemented as of any such time,
and the Indenture will comply in all material respects with the
applicable requirements of the Act, the Trust Indenture Act of 1939
(the "Trust Indenture Act") and the Securities Exchange Act of 1934
(the "Exchange Act") and the respective rules thereunder; (ii) the
Registration Statement, as amended as of any such time, did not or
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and (iii) the
Prospectus, as supplemented as of any such time, will not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to
(i) that part of the Registration Statement which constitutes the
Statement of Eligibility (Form T-1) under the Trust Indenture Act of
the Trustee or (ii) the information contained in or omitted from the
Registration Statement or the Prospectus (or any supplement thereto)
in reliance upon and in conformity with information furnished in
writing to the Company by any of you specifically for use in
connection with the preparation of the Registration Statement or the
Prospectus (or any supplement thereto).
(c) Neither the Company nor any of its subsidiaries is in
violation of its corporate charter or bylaws or in default under any
agreement, indenture or instrument, the effect of which violation or
default would be material to the Company and its subsidiaries taken as
a whole; the execution, delivery and performance of this Agreement and
compliance by the Company with the provisions of the Notes and the
Indenture will not conflict with, result in the creation or imposition
of any lien, charge or encumbrance upon any of the assets of the
Company or of any of its subsidiaries pursuant to the terms of, or
constitute a default under, any agreement, indenture or instrument, or
result in a violation of the corporate charter or bylaws of the
Company or of any of its subsidiaries or any order, rule or regulation
of any court or governmental agency having jurisdiction over the
Company or any of its subsidiaries, the effect of which violation or
default would be material to the Company and its subsidiaries taken as
a whole; and, except as required by the Act, the Trust Indenture Act,
the Exchange Act and applicable state securities laws, no consent,
authorization or order of, or
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<PAGE> 4
filing or registration with, any court or governmental agency is
required for the execution, delivery and performance of this Agreement
and the Indenture.
(d) Except as described in the Registration Statement and the
Prospectus, there has not been any material adverse change in, or any
adverse development which materially affects or will materially affect
the business, properties, condition (financial or other) or results of
operations of the Company and its subsidiaries taken as a
whole since the dates as of which information is given in the
Registration Statement and the Prospectus.
(e) Ernst & Young, whose reports have been incorporated by
reference or included in the Company's most recent Annual Report on
Form 10-K which is incorporated by reference in the Prospectus, are
independent public accountants as required by the Act and the rules
and regulations thereunder. (The term "Ernst & Young" when used in
this Agreement shall include any successor independent accounting firm
of recognized national standing that has served or shall serve as the
Company's independent public accountants.)
(f) As of the time any Notes are issued and sold hereunder
(i) the Indenture will have been duly authorized, executed and
delivered by the Company and will constitute a legal, valid and
binding instrument enforceable against the Company in accordance with
its terms, (ii) the Notes will have been duly authorized, executed,
authenticated and, upon payment therefor as provided in this
Agreement, will constitute legal, valid and binding obligations of the
Company entitled to the benefits of the Indenture, and (iii) the
Indenture conforms and the Notes will conform to the descriptions
thereof contained in the Prospectus.
(g) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing and in good standing under the laws
of the jurisdiction in which it is chartered or organized, is duly
qualified to do business and is in good standing as a foreign
corporation under the laws of each jurisdiction in which its ownership
of property or the conduct of its business requires such
qualification, except where the failure so to qualify would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole, and has power and authority necessary to own or hold its
property and to conduct the business in which it is engaged.
(h) Except as described in the Prospectus, there is no
material litigation or governmental proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries which might result in any material adverse change in the
business, properties, condition
-4-
<PAGE> 5
(financial or other), results of operations or prospects of the
Company and its subsidiaries taken as a whole or which is required to
be disclosed in the Registration Statement.
(i) The financial statements filed as part of the
Registration Statement or included in the Prospectus present, or (in
the case of any amendment or supplement to any such document, or any
material incorporated by reference in any such document, filed with
the Commission after the date as of which this representation is being
made) will present at all times during the effectiveness of this
Agreement, fairly, the financial condition and results of operations
of the Company and its subsidiaries taken as a whole, at the dates and
for the periods indicated, and have been, and (in the case of any
amendment or supplement to any such document, or any material
incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is being
made) will be at all times during the effectiveness of this Agreement,
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved.
(j) The documents incorporated by reference into the
Prospectus have been, and (in the case of any amendment or supplement
to any such document, or any material incorporated by reference in any
such document, filed with the Commission after the date as of which
this representation is being made) will be at all times during the
effectiveness of this Agreement, prepared by the Company in conformity
with the applicable requirements of the Act and the Exchange Act and
the respective rules and regulations of the Commission thereunder and
such documents have been, or (in the case of any amendment or
supplement to any such document, or any material incorporated by
reference in any such document, filed with the Commission after the
date as of which this representation is being made) will be at all
times during the effectiveness of this Agreement, timely filed as
required thereby.
(k) There are no contracts or other documents which are
required to be filed as exhibits to the Registration Statement by the
Act or by the rules and regulations of the Commission thereunder, or
which were required to be filed as exhibits to any document
incorporated by reference in the Prospectus by the Exchange Act or the
rules and regulations of the Commission thereunder, which have not
been filed as exhibits to the Registration Statement or to such
document or incorporated therein by reference as permitted by the
rules and regulations of the Commission under the Act and the Exchange
Act as required.
-5-
<PAGE> 6
(l) The terms which follow, when used in this Agreement,
shall have the meanings indicated. The term "the Effective Date"
shall mean each date that the Registration Statement and any
post-effective amendment or amendments thereto became or become
effective. "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto. "Basic
Prospectus" shall mean the form of basic prospectus relating to the
Securities contained in the Registration Statement at the Effective
Date. "Prospectus" shall mean the Basic Prospectus as supplemented by
the Prospectus Supplement. "Registration Statement" shall mean the
registration statements referred to in paragraph (a) above, including
incorporated documents, exhibits and financial statements, as amended
at the Execution Time. "Rule 415", "Rule 424" and "Rule 429" refer to
such rules under the Act. Any reference herein to the Registration
Statement, the Basic Prospectus, the Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective
Date of the Registration Statement or the issue date of the Basic
Prospectus, the Prospectus Supplement or the Prospectus, as the case
may be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the Basic
Prospectus, the Prospectus Supplement or the Prospectus shall be
deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement or
the issue date of the Basic Prospectus, the Prospectus Supplement or
the Prospectus, as the case may be, deemed to be incorporated therein
by reference.
(m) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida,
Chapter 92-198, An Act Relating to Disclosure of Doing Business with
Cuba, and the Company further agrees that if it commences engaging in
business with the government of Cuba or with any person or affiliate
located in Cuba after the date the Registration Statement becomes or
has become effective with the Securities and Exchange Commission or
with the Florida Department of Banking and Finance (the "Department"),
whichever date is later, or if the information reported in the
Prospectus, if any, concerning the Company's business with Cuba or
with any person or affiliate located in Cuba changes in any material
way, the Company will provide the Department notice of such business
or change, as appropriate, in a form acceptable to the Department.
2. Appointment of Agents; Solicitation by the Agents of Offers to
Purchase; Sales of Notes to a Purchaser. (a) Subject to the terms and
conditions set forth herein, and to the reservation by the Company of the right
to sell, solicit, and accept offers to
-6-
<PAGE> 7
purchase Notes directly on its own behalf, the Company hereby authorizes each
Agent to act as its agent to solicit offers for the purchase of all or part of
the Notes from the Company.
On the basis of the representations and warranties, and subject to the
terms and conditions set forth herein, each of the Agents agrees, as agent of
the Company, to use its reasonable efforts to solicit offers to purchase the
Notes from the Company upon the terms and conditions set forth in the
Prospectus (and any supplement thereto) and in the Procedures. Each Agent
shall make reasonable efforts to assist the Company in obtaining performance by
each purchaser whose offer to purchase Notes from the Company has been
solicited by such Agent and accepted by the Company, but such Agent shall not,
except as otherwise provided in this Agreement, be obligated to disclose the
identity of any purchaser or have any liability to the Company (other than by
reason of such Agent's failure to discharge its obligations hereunder) in the
event any such purchase is not consummated for any reason. Except as provided
in Section 2(b), under no circumstances will any Agent be obligated to purchase
any Notes for its own account. It is understood and agreed, however, that any
Agent may purchase Notes as principal pursuant to Section 2(b).
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase Notes. Upon receipt of instructions from
the Company, the Agents will forthwith suspend solicitation of offers to
purchase Notes from the Company until such time as the Company has advised them
that such solicitation may be resumed.
Unless otherwise agreed between the Company and such Agent, the
Company agrees to pay each Agent a commission in U.S. dollars, on the Closing
Date with respect to each sale of Notes by the Company as a result of a
solicitation made by such Agent, in an amount equal to that percentage
specified in Schedule I hereto of the aggregate principal amount of the Notes
sold by the Company. Such commission shall be payable as specified in the
Procedures.
Subject to the provisions of this Section and to the Procedures,
offers for the purchase of Notes may be solicited by each Agent as agent for
the Company at such time and in such amounts as such Agent deems advisable.
The Company may from time to time sell Notes otherwise than through an Agent;
provided, however, that so long as this Agreement shall be in effect the
Company shall not solicit offers to purchase Notes through any agents other
than the Agents. It is understood that if from time to time the Company is
approached by a prospective agent offering a specific purchase of Notes, the
Company may engage such agent with respect to such specific purchase, provided
that (i) such agent is engaged on terms substantially similar (including the
same commission schedule) to the applicable terms of this Agreement and
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<PAGE> 8
(ii) the Agents are given notice of such purchase before it is consummated.
Notwithstanding anything to the contrary contained herein, the Company
may authorize any other person, partnership or corporation (an "Additional
Agent") to act as its agent to solicit offers for the purchase of all or part
of the Notes of the Company upon five business days' prior notice to such
Agents as are at such time parties to this Agreement; provided, however, that
any Additional Agent shall execute this Agreement and become a party hereto and
thereafter the term Agent as used in this Agreement shall mean the Agents and
such Additional Agent. At such time, the Additional Agent shall specify its
requirements for the delivery of certificates, letters and opinions as are set
forth in Section 5 hereof.
If the Company shall default in its obligations to deliver Notes to a
purchaser whose offer it has accepted, the Company shall indemnify and hold
each of you harmless against any loss, claim or damage arising from or as a
result of such default by the Company.
(b) Subject to the terms and conditions stated herein, whenever the
Company and any Agent determines that the Company shall sell Notes directly to
such Agent as principal, each such sale of Notes shall be made in accordance
with the terms of this Agreement and a supplemental agreement relating to such
sale. Each such supplemental agreement (which may be either a written
agreement or an oral agreement between the Agent and the Company, confirmed in
writing by such Agent to the Company within one business day thereafter) is
herein referred to as a "Terms Agreement." Each Terms Agreement shall describe
the Notes to be purchased by the Purchaser pursuant thereto and shall specify
the aggregate principal amount of such Notes, the price to be paid to the
Company for such Notes, the currency or currency unit in which such Note shall
be denominated, the maturity date of such Notes, the rate at which interest
will be paid on such Notes, whether such rate of interest shall be fixed or
floating, the dates on which interest will be paid on such Notes and the record
date with the respect to each such payment of interest, the Closing Date for
the purchase of such Notes, the place of delivery of such Notes and payment
therefor, the method of payment and any requirements for the delivery of
opinions of counsel, the certificates from the Company or its officers or a
letter from the Company's independent public accountants as described in
Section 6(b). Any such Terms Agreement may also specify the period of time
referred to in Section 4(m) hereof. Any written Terms Agreement may be in the
form attached hereto as Exhibit B. The Purchaser's commitment to purchase
Notes shall be deemed to have been made on the basis of the representations and
warranties of the Company herein contained and shall be subject to the terms
and conditions herein set forth.
-8-
<PAGE> 9
Delivery of the certificates for Notes sold to the Purchaser pursuant
to a Terms Agreement shall be made not later than the Closing Date set forth in
such Terms Agreement, against payment of funds to the Company in the net amount
due to the Company for such Notes by the method and in the form set forth in
the Procedures unless otherwise agreed to between the Company and the Purchaser
in such Terms Agreement.
Unless otherwise agreed to between the Company and the Purchaser in a
Terms Agreement, any Note sold to a Purchaser (i) shall be purchased by such
Purchaser at a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of a Note of
identical maturity and (ii) may be resold by such Purchaser at varying prices
from time to time or, if set forth in the applicable Terms Agreement and
Pricing Supplement, at a fixed public offering price. In connection with any
resale of Notes purchased, a Purchaser may use a selling or dealer group and
may reallow to any broker or dealer any portion of the discount or commission
payable pursuant hereto.
3. Offering Procedure. (a) Unless otherwise agreed between the
Company and each Agent, each Agent shall communicate to the Company, orally or
in writing, each offer to purchase Notes received by such Agent (unless such
offer is rejected by such Agent in accordance herewith) on terms previously
communicated by the Company to such Agent, and unless otherwise agreed between
the Company and each Agent, the Company shall have the sole right to accept
such offers to purchase Notes and may refuse any proposed purchase of Notes in
whole or in part for any reason.
(b) Unless otherwise agreed between the Company and each Agent, each
Agent shall have the right, in its discretion reasonably exercised, to reject
any proposed purchase of Notes, as a whole or in part, and any such rejection
shall not be deemed a breach of its agreement contained herein. Each Agent and
the Company agree to perform the respective duties and obligations specifically
provided to be performed by them in the Procedures.
4. Agreements. The Company agrees with each of you that:
(a) Prior to the termination of the offering of the Notes
(including by way of resale by a Purchaser of Notes), the Company will
not file any amendment of the Registration Statement or supplement to
the Prospectus (except for (i) periodic or current reports filed under
the Exchange Act, (ii) a supplement relating to any offering of Notes
providing solely for the specification of or a change in the maturity
dates, interest rates, issuance prices or other similar terms of any
Notes or (iii) a supplement relating to an offering of securities
other than the Notes) unless the Company has furnished each of you a
copy for your review prior to filing
-9-
<PAGE> 10
and will not file any such proposed amendment or supplement to which
either of you may reasonably object. Subject to the foregoing
sentence, the Company will cause each supplement to the Prospectus to
be filed with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will provide
evidence satisfactory to you of such filing. The Company will
promptly advise each of you (i) when the Prospectus, and any
supplement thereto, shall have been filed with the Commission pursuant
to Rule 424(b), (ii) when, prior to the termination of the offering of
the Notes, any amendment of the Registration Statement shall have been
filed or become effective, (iii) of any request by the Commission for
any amendment of the Registration Statement or amendment of or
supplement to the Prospectus or for any additional information, (iv)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (v) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Notes for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Notes
is required to be delivered under the Act, any event occurs as a
result of which the Registration Statement, as then amended, or the
Prospectus, as then supplemented, would include any untrue statement
of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, any facts or events arise which,
individually or in the aggregate, would represent a material change in
the information set forth in the Registration Statement or the
Prospectus, or if it shall be necessary to amend the Registration
Statement or to supplement the Prospectus to comply with the Act or
the Exchange Act or the respective rules thereunder, the Company will
(i) immediately notify each of you to suspend solicitation of offers
to purchase Notes (and, if so notified by the Company, each of you
shall forthwith suspend such solicitation and cease using the
Prospectus as then amended or supplemented), (ii) promptly prepare and
file with the Commission, subject to the first sentence of paragraph
(a) of this Section 4, an amendment or supplement which will correct
such statement or omission or an amendment or supplement which will
effect such compliance and (iii) promptly supply any such amended or
supplemented Prospectus to each of you in such quantities as you may
reasonably request. If such amendment or supplement, and any
documents, certificates and opinions furnished to each of you pursuant
to paragraph (g) of this Section 4 in connection with
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<PAGE> 11
the preparation or filing of such amendment or supplement, are
reasonably satisfactory in all respects to you, you will, upon the
filing of such amendment or supplement with the Commission and upon
the effectiveness of an amendment to the Registration Statement, if
such an amendment is required, resume your obligation to solicit
offers to purchase Notes hereunder.
(c) The Company, during the period when a prospectus relating
to the Notes is required to be delivered under the Act, will file
promptly all documents required to be filed with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and
will furnish to each of you copies of such documents. In addition, on
or prior to the date on which the Company makes any announcement to
the general public concerning earnings or concerning any other event
which is required to be described, or which the Company proposes to
describe, in a document filed pursuant to the Exchange Act, the
Company will furnish to each of you the information contained or to be
contained in such announcement. The Company also will furnish to each
of you copies of all other press releases or announcements to the
general public. The Company will immediately notify each of you of
(i) any decrease in the rating of the Notes or any other debt
securities of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Act) or (ii) any notice given of any intended or potential decrease in
any such rating or of an intended or potential change in any such
rating that does not indicate the direction of the intended or
potential change, as soon as the Company learns of any such decrease
or notice.
(d) As soon as practicable, the Company will make generally
available to its security holders and to each of you an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(e) The Company will furnish to each of you and to your
counsel, without charge, copies of the Registration Statement
(including exhibits thereto), and each amendment to the Registration
Statement (including solely in the case of each of you, when filed
with the Commission, all documents incorporated by reference therein)
and, so long as delivery of a prospectus may be required by the Act,
as many copies of the Prospectus and any amendments thereof and
supplements thereto as you may reasonably request.
(f) The Company will arrange for the qualification of the
Notes for sale under the laws of such jurisdictions as any of you may
designate, will maintain such qualifications in effect so long as
required for the distribution of the Notes,
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<PAGE> 12
and will arrange for the determination of the legality of the
Notes for purchase by institutional investors.
(g) The Company shall furnish to each of you and your
counsel, such information, documents, certificates of officers of the
Company and opinions of counsel for the Company relating to the
business, operations and affairs of the Company, the Registration
Statement, the Prospectus, and any amendments thereof or supplements
thereto, the Indenture, the Notes, this Agreement, the Procedures and
the performance by the Company and you of its and your respective
obligations hereunder and thereunder as any of you may from time to
time and at any time prior to the termination of this Agreement
reasonably request.
(h) The Company shall, whether or not any sale of the Notes
is consummated, (i) pay all expenses incident to the performance of
its obligations under this Agreement and any Terms Agreement,
including the fees and disbursements of its accountants and counsel,
the cost of printing or other production and delivery of the
Registration Statement, the Prospectus, all amendments thereof and
supplements thereto, the Indenture, this Agreement, any Terms
Agreement and all other documents relating to the offering, the cost
of preparing, printing, packaging and delivering the Notes, the fees
and disbursements, including fees of counsel, incurred in compliance
with Section 4(f), the fees and disbursements of the Trustee and the
fees of any agency that rates the Notes, and (ii) reimburse each of
you on a monthly basis for all out-of-pocket expenses (including
without limitation advertising expenses) reasonably incurred by you in
connection with this Agreement, and (iii) be responsible for the
reasonable fees and disbursements of your counsel incurred heretofore
or hereafter in connection with this Agreement.
(i) Each acceptance by the Company of an offer to purchase
Notes will be deemed to be an affirmation that its representations and
warranties contained in this Agreement are true and correct at the
time of such acceptance, as though made at and as of such time, and a
covenant that such representations and warranties will be true and
correct at the time of delivery to the purchaser of the Notes relating
to such acceptance, as though made at and as of such time (it being
understood that for purposes of the foregoing affirmation and covenant
such representations and warranties shall relate to the Registration
Statement and Prospectus as amended or supplemented at each such
time). Each such acceptance by the Company of an offer for the
purchase of Notes shall be deemed to constitute an additional
representation, warranty and agreement by the Company that, as of the
settlement date for the sale of such Notes, after giving effect to the
issuance of such Notes, of any other
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<PAGE> 13
Notes to be issued on or prior to such settlement date and of any
other Securities to be issued and sold by the Company on or prior to
such settlement date, the aggregate amount of Securities (including
any Notes) which have been issued and sold by the Company will not
exceed the amount of Securities registered pursuant to the
Registration Statement. The Company will inform you promptly upon
your request of the aggregate amount of Securities registered under
the Registration Statement which remain unsold.
(j) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an amendment or
supplement (i) relating to an offering of Securities other than the
Notes or (ii) providing solely for the specification of or a change in
the maturity dates, the interest rates, the issuance prices or other
similar terms of Notes being sold under this Agreement), to the extent
any of you so requests, the Company will deliver or cause to be
delivered promptly to each of you a certificate of the Company signed
by the President or any Vice President (in the financial area) and the
principal financial or accounting officer or the Treasurer of the
Company, dated the date of the effectiveness of such amendment or the
date of filing of such supplement, in form reasonably satisfactory to
you, to the effect that the statements contained in the certificate
that was last furnished to you pursuant to either Section 5(e) or this
Section 4(j) are true and correct at the time of the effectiveness of
such amendment or the filing of such supplement as though made at and
as of such time (except that (i) the last day of the fiscal quarter
for which financial statements of the Company were last filed with the
Commission shall be substituted for the corresponding date in such
certificate and (ii) such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented
to the time of the effectiveness of such amendment or the filing of
such supplement) or, in lieu of such certificate, a certificate of the
same tenor as the certificate referred to in Section 5(e) but modified
to relate to the last day of the fiscal quarter for which financial
statements of the Company were last filed with the Commission and to
the Registration Statement and the Prospectus as amended and
supplemented to the time of the effectiveness of such amendment or the
filing of such supplement.
(k) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an amendment or
supplement (i) relating to an offering of Securities other than the
Notes, (ii) providing solely for the specification of or a change in
the maturity dates, the interest rates, the issuance prices or other
similar terms of Notes being sold under this Agreement or (iii)
setting forth or incorporating by reference financial statements or
other
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<PAGE> 14
information as of and for a fiscal quarter, unless, in the case of
this clause (iii), in the reasonable judgment of any of you, such
financial statements or other information are of such a nature that an
opinion of counsel should be furnished), to the extent that any of you
so requests, the Company shall furnish or cause to be furnished
promptly to each of you a written opinion or opinions of counsel of
the Company satisfactory to each of you, dated the date of the
effectiveness of such amendment or the date of filing of such
supplement, in form satisfactory to each of you, of the same tenor as
the opinions referred to in Sections 5(b) and (c) but modified to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of the effectiveness of such amendment or the
filing of such supplement or, in lieu of such opinions, counsel last
furnishing such an opinion to you may furnish each of you with a
letter to the effect that you may rely on such last opinion to the
same extent as though it were dated the date of such letter
authorizing reliance (except that statements in such last opinions
will be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of the
effectiveness of such amendment or the filing of such supplement).
(l) Each time that the Registration Statement or the
Prospectus is amended or supplemented to include or incorporate
amended or supplemental financial information or such amended or
supplemental information is incorporated by reference in the
Registration Statement or the Prospectus, to the extent any of you so
requests, the Company shall cause Ernst & Young promptly to furnish
each of you a letter, dated the date of the effectiveness of such
amendment or the date of filing of such supplement, in form
satisfactory to each of you, of the same tenor as the letter referred
to in Section 5(f) with such changes as may be necessary to reflect
the amended and supplemental financial information included or
incorporated by reference in the Registration Statement and the
Prospectus, as amended or supplemented to the date of such letter;
provided, however, that, if the Registration Statement or the
Prospectus is amended or supplemented solely to include or incorporate
by reference financial information as of and for a fiscal quarter, the
Company's independent public accountants may limit the scope of such
letter, which shall be satisfactory in form to each of you, to the
unaudited financial statements included in such amendment or
supplement, unless any other information included or incorporated by
reference therein of an accounting, financial or statistical nature is
of such a nature that, in the reasonable judgment of any of you, such
letter should cover such other information.
(m) During the period, if any, specified in any Terms
Agreement, the Company shall not, without the prior consent of
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<PAGE> 15
the Purchaser thereunder, issue or announce the proposed issuance in
the United States of securities denominated in the same currency or
currency unit as specified in the applicable Terms Agreement and which
(i) in the case of a Terms Agreement relating to Notes with a maturity
of seven years or less, have a maturity of from greater than nine
months to ten years, or (ii) in the case of a Terms Agreement relating
to Notes with a maturity of more than seven years, have a maturity of
from seven to twenty years.
5. Conditions to the Obligations of the Agents. The obligations of
any Agent to solicit offers to purchase the Notes shall be subject to the
accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time, on the Effective Date, when any
supplement to the Prospectus is filed with the Commission and as of each
Closing Date, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder, and to the following additional
conditions:
(a) If filing of the Prospectus, or any supplement thereto,
is required pursuant to Rule 424(b), the Prospectus and any such
supplement shall have been filed in the manner and within the time
period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have furnished to such Agent the
opinion or opinions of the general counsel of the Company or other
counsel of or to the Company acceptable to such Agent, dated the
Execution Time to the effect that:
(i) each of the Company and its subsidiaries
(excluding subsidiaries which, considered in the aggregate,
would not constitute a "significant subsidiary" under Commission
Regulation S-X) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
corporate power and authority to own its properties and conduct
its business as described in the Prospectus, and is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases properties or conducts
business, except where the failure so to qualify would not have
a material adverse effect on the Company and its subsidiaries
taken as a whole;
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<PAGE> 16
(ii) the Company's authorized equity capitalization is
as set forth in the Prospectus;
(iii) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated herein except such
as have been obtained under the Act and such as may be required
under the blue sky laws of any jurisdiction in connection with
the sale of the Notes as contemplated by this Agreement and such
other approvals (specified in such opinion) as have been
obtained;
(iv) neither the execution and delivery of the
Indenture, the issue and sale of the Notes, nor the consummation
of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in a
breach of or constitute a default under, the Articles of
Incorporation or bylaws of the Company or the terms of any
indenture or other agreement or instrument known to such counsel
and to which the Company or any of its subsidiaries is a party
or by which any of them are bound, or any order or regulation
known to such counsel to be applicable to the Company or any of
its subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over
the Company or any of its subsidiaries;
(v) to the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitration involving the Company or any of its subsidiaries, of
a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus,
and there is no contract or other document of a character
required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit, which is not described
or filed as required; and the statements included or
incorporated in the Prospectus describing any legal proceedings
or material contracts or agreements relating to the Company or
any of its subsidiaries fairly summarize such matters;
(vi) the Registration Statement and any amendments
thereto have become effective under the Act; any required filing
of the Prospectus, and any supplements thereto, pursuant to Rule
424(b) has been made in the manner and within the time period
prescribed by Rule 424(b); to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened, and the Registration
Statement
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<PAGE> 17
and the Prospectus (other than the financial statements and other
financial and statistical information contained therein as to which
such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act and the
Exchange Act and the respective rules thereunder; and no facts have
come to the attention of such counsel which cause them to believe that
at the Effective Date or at the Execution Time the Registration
Statement (other than the financial statements and other financial and
statistical information contained therein as to which such counsel
need express no opinion) contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or
that the Prospectus (other than the financial statements and other
financial and statistical information contained therein as to which
such counsel need express no opinion) includes any untrue statement of
a material fact or omits to state a material fact necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading; and
(vii) this Agreement has been duly authorized,
executed and delivered by the Company.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent deemed proper, on certificates of responsible
officers of the Company and public officials. References to the
Prospectus in this paragraph (b) include any supplements thereto at
the date such opinion is rendered.
(c) The Company shall have furnished to such Agent the
opinion of Mayer, Brown & Platt, counsel for the Company, dated the
Execution Time to the effect that:
(i) the Indenture has been duly authorized, executed
and delivered, has been duly qualified under the Trust Indenture
Act, and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms
(subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in
effect and to general principles of equity); and the Notes have
been duly authorized and, when the terms and forms thereof have
been established and the Notes have been executed and
authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the purchasers thereof, the
Notes will constitute legal, valid and binding obligations of
the Company entitled to the benefits of the Indenture (subject,
as to enforcement
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<PAGE> 18
of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles
of equity); and the Indenture conforms and the Notes will
conform to the descriptions thereof in the Prospectus;
(ii) the Registration Statement and any amendments
thereto have become effective under the Act; any required filing
of the Prospectus, and any supplements thereto, pursuant to Rule
424(b) has been made in the manner and within the time period
prescribed by Rule 424(b); to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened, and the Registration
Statement and the Prospectus (other than material incorporated
by reference therein and the financial statements and other
financial and statistical information contained therein as to
which such counsel need express no opinion) comply as to form in
all material respects with the applicable requirements of the
Act and the Exchange Act and the respective rules thereunder;
and no facts have come to the attention of such counsel which
cause them to believe that at the Effective Date or at the
Execution Time the Registration Statement (other than the
financial statements and other financial and statistical
information contained therein as to which such counsel need
express no opinion) contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Prospectus (other than the financial
statements and other financial and statistical information
contained therein as to which such counsel need express no
opinion) includes any untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading; and
(iii) the opinions of such counsel expressed or
referred to under "United States Taxation" in the Prospectus are
confirmed.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent deemed proper, on certificates of responsible
officers of the Company and public officials. References to the
Prospectus in this paragraph (c) include any supplements thereto at
the date such opinion is rendered.
(d) Such Agent shall have received from Winston & Strawn,
counsel for the Agents, such opinion or opinions,
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<PAGE> 19
dated the Execution Time with respect to the issuance and sale of the
Notes, the Indenture, the Registration Statement, the Prospectus and
other related matters as the Agents may reasonably require, and the
Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to such Agent a
certificate of the Company, signed by the President or any Vice
President (in the financial area) and the principal financial or
accounting officer or the Treasurer of the Company, dated the
Execution Time, to the effect that the signers of such certificate
have examined the Registration Statement, the Prospectus, any
supplement to the Prospectus and this Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all material
respects on and as of the date of such certificate with the same
effect as if made on the date of such certificate and the
Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied as a
condition to the obligation of the Agents to solicit offers to
purchase the Notes;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
in the business, properties, condition (financial or other),
results of operations or, to the best of their knowledge, the
prospects of the Company and its subsidiaries taken as a whole,
whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(f) At the Execution Time, Ernst & Young shall have furnished
to such Agent a letter or letters (which may refer to letters
previously delivered to such Agent), dated as of the Execution Time,
in form and substance satisfactory to such Agent, confirming that they
are independent accountants within the meaning of the Act and the
Exchange Act and the respective applicable published rules and
regulations thereunder and stating in effect that:
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<PAGE> 20
(i) in their opinion the audited financial
statements and financial statement schedules included or
incorporated in the Registration Statement and the Prospectus
and reported on by them comply in form in all material respects
with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company and
its subsidiaries; carrying out certain specified procedures (but
not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal matters
of significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders, directors of the Company and standing committees
thereof; and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of the
Company and its subsidiaries as to transactions and events
subsequent to the date of the most recent audited financial
statements included or incorporated in the Prospectus, nothing
came to their attention which caused them to believe that:
(1) any unaudited financial statements
included or incorporated in the Registration Statement
and the Prospectus do not comply in form in all material
respects with applicable accounting requirements and with
the published rules and regulations of the Commission
with respect to financial statements included or
incorporated in quarterly reports on Form 10-Q under the
Exchange Act; and said unaudited financial statements are
not in conformity with generally accepted accounting
principles applied on a basis substantially consistent
with that of the audited financial statements included or
incorporated in the Registration Statement and the
Prospectus;
(2) with respect to the period subsequent to
the date of the most recent financial statements (other
than any capsule information), audited or unaudited, in
or incorporated in the Registration Statement and the
Prospectus, there were any changes, at a specified date
not more than five business days prior to the date of the
letter, in the advances to, investments in or receivables
from related parties, or in the capital stock or long
term debt of the Company and its subsidiaries or any
decreases in the shareholders' equity of the Company or
consolidated net current assets or net
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<PAGE> 21
assets as compared with the amounts shown on the most
recent consolidated balance sheet included or
incorporated in the Registration Statement and the
Prospectus, or for the period from the date of the most
recent financial statements included or incorporated in
the Registration Statement and the Prospectus to such
specified date there were any decreases, as compared with
the corresponding period in the preceding year in net
operating revenues or in income before income taxes and
net income of the Company and its subsidiaries, except in
all instances for changes or decreases set forth in such
letter; or
(3) the amounts included in any unaudited
"capsule" information included or incorporated in the
Registration Statement and the Prospectus do not agree
with the amounts set forth in the unaudited financial
statements for the same periods or were not determined on
a basis substantially consistent with that of the
corresponding amounts in the audited financial statements
included or incorporated in the Registration Statement
and the Prospectus; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Prospectus and in Exhibit 12 to the
Registration Statement, agrees with the accounting records of
the Company and its subsidiaries, excluding any questions of
legal interpretation.
References to the Registration Statement and the Prospectus in
this paragraph (f) include any amendment thereof or supplement thereto
at the date of the letter.
(g) Prior to the Execution Time, the Company shall have
furnished to such Agent such further information, certificates and
documents as such Agent may reasonably request.
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to such Agent and its counsel, this Agreement and all obligations
of such Agent hereunder may be canceled at any time by such Agent.
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<PAGE> 22
Notice of such cancellation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be
delivered at the office of Mayer, Brown & Platt, counsel for the Company, at
190 South LaSalle Street, Chicago, Illinois, on the date hereof.
6. Conditions to Obligations of a Purchaser. The obligations of a
Purchaser to purchase any Notes will be subject to the accuracy of the
representations and warranties on the part of the Company herein as of the date
of the related Terms Agreement and as of the Closing Date for such Notes, to
the performance and observance by the Company of all covenants and agreements
herein contained on its part to be performed and observed and to the following
additional conditions precedent:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened.
(b) To the extent agreed to between the Company and the
Purchaser in a Terms Agreement, the Purchaser shall have received,
appropriately updated in a manner consistent with Section 5 hereof,
(i) a certificate of the Company, dated as of the Closing Date, to the
effect set forth in Section 5(e) (except that references to the
Prospectus shall be to the Prospectus as supplemented as of the date
of such Terms Agreement), (ii) the opinions of the general counsel of
the Company and other counsel of or to the Company, dated as of the
Closing Date, to the effect set forth in Sections 5(b) and (c), (iii)
the opinion of Winston & Strawn, counsel for the Purchaser, dated as
of the Closing Date, to the effect set forth in Section 5(d) and (iv)
the letter of Ernst & Young, dated as of the Closing Date, to the
effect set forth in Section 5(f).
(c) Prior to the Closing Date, the Company shall have
furnished to the Purchaser such further information, certificates and
documents as the Purchaser may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement
and the applicable Terms Agreement, or if any of the opinions and certificates
mentioned above or elsewhere in this Agreement or such Terms Agreement and
required to be delivered to the Purchaser pursuant to the terms hereof and
thereof shall not be in all material respects reasonably satisfactory in form
and substance to the Purchaser and its counsel, such Terms Agreement and all
obligations of the Purchaser thereunder and with respect to
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<PAGE> 23
the Notes subject thereto may be canceled at, or at any time prior to, the
respective Closing Date by the Purchaser. Notice of such cancellation shall be
given to the Company in writing or by telephone or telegraph confirmed in
writing.
7. Reimbursement of the Agent's Expenses. If any condition to the
obligations of any Agent set forth in Section 5 hereof is not satisfied, if any
condition to the obligations of a Purchaser set forth in Section 6 hereof is
not satisfied, if any termination pursuant to Section 9 hereof shall occur or
in the case of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by such Agent, the Company will reimburse such Agent upon
demand for all expenses that shall have been incurred by such Agent pursuant to
Section 4(h) hereof in connection with this Agreement.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each of
you, the directors, officers, employees and agents of each of you and each
person who controls either of you within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which you, they or any of you or them may become subject under
the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained
in the registration statement for the registration of the Securities as
originally filed or in any amendment thereof, or in the Prospectus or any
preliminary Prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that (i) the Company
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of you specifically for inclusion therein, and (ii)
such indemnity with respect to the Prospectus or any preliminary Prospectus
shall not inure to the benefit of any of you (or any person controlling any of
you) from whom the person asserting any such loss, claim, damage or liability
purchased the Notes which are the subject thereof if such person did not
receive a copy of the Prospectus (or the Prospectus as supplemented) excluding
documents
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<PAGE> 24
incorporated therein by reference at or prior to the confirmation of the sale
of such Notes to such person in any case where (A) such delivery is required by
the Act, (B) the untrue statement or omission of a material fact contained in
the Prospectus or any preliminary Prospectus was corrected in the Prospectus
(or the Prospectus as supplemented) and (C) if a copy of such Prospectus (or
the Prospectus as supplemented) had been so sent or given, such delivery would
have cured the defect giving rise to the claim asserted by such person. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each of you agrees, severally and not jointly, to indemnify and
hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company to you, but only with reference to
written information relating to such of you furnished to the Company by such of
you specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
you may otherwise have. The Company acknowledges that the statements set forth
under the heading "Plan of Distribution" in the Prospectus constitutes the only
information furnished in writing by any of you for inclusion in the documents
referred to in the foregoing indemnity, and you confirm that such statements
with respect to you are correct.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified parties shall
have the right to employ one separate counsel and one local counsel for all
such indemnified parties in such action, and the indemnifying party shall bear
the
-24-
<PAGE> 25
reasonable fees, costs and expenses of such separate counsel and local counsel
if (i) the use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest, (ii)
the actual or potential defendants in, or targets of, any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available to
it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ such counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and each of you agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
you may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company and by each of you from the offering of the
Notes from which such Losses arise; provided, however, that in no case shall
any of you be responsible for any amount in excess of the commissions received
by such of you in connection with the sale of Notes from which such Losses
arise (or, in the case of Notes sold pursuant to a Terms Agreement, the
aggregate commissions that would have been received by such of you if such
commissions had been payable). If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and each of you
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and of each of you
in connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses) of the Notes from which such Losses arise, and
benefits received by each of you shall be deemed to be equal to the total
commissions received by such of you
-25-
<PAGE> 26
in connection with the sale of Notes from which such Losses arise (or, in the
case of Notes sold pursuant to a Terms Agreement, the aggregate commissions
that would have been received by such of you if such commissions had been
payable). Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company or any of you. The Company and each of you agree that it would not be
just and equitable if contribution were determined by pro rata allocation or
any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each person who controls any of you within the meaning of
the Act or the Exchange Act and each director, officer, employee and agent of
any of you shall have the same rights to contribution as you and each person
who controls the Company within the meaning of either the Act or the Exchange
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable terms and
conditions of this paragraph (d).
9. Termination. (a) This Agreement will continue in effect until
terminated as provided in this Section 9. This Agreement may be terminated at
any time by either the Company as to any of you or any of you insofar as this
Agreement relates to such of you, giving written notice of such termination to
such of you or the Company, as the case may be. This Agreement shall so
terminate at the close of business on the first business day following the
receipt of such notice by the party to whom such notice is given. This
Agreement may be terminated as to one or more of the Agents, and to the extent
not terminated with respect to any Agent, this Agreement shall remain in full
force and effect as between the Company and any such Agent. In the event of
such termination, no party shall have any liability to the other party hereto,
except as provided in the fourth paragraph of Section 2(a), Section 4(h),
Section 7, Section 8 and Section 10. The provisions of this Agreement
(including without limitation Section 11 hereof) applicable to any purchase of
a Note for which an agreement to purchase exists prior to the termination
hereof shall survive any termination of this Agreement.
(b) Each Terms Agreement shall be subject to termination in the
absolute discretion of the Purchaser, by notice given to the Company prior to
delivery of and payment for any Note to be purchased thereunder, if prior to
such time (i) trading in the Company's or the Parent's securities shall have
been suspended by the Commission, trading in the Parent's securities shall have
been suspended by the New York Stock Exchange or the Midwest Stock
Exchange or trading in securities generally on the New York Stock
-26-
<PAGE> 27
Exchange shall have been suspended or limited or minimum prices shall
have been established on such Exchange, (ii) a banking moratorium shall have
been declared by either Federal or New York State authorities or, in the case
of Notes denominated in other than U.S. dollars, by the authorities of the
country of the currency in which such Notes are so denominated, (iii) there
shall have occurred any outbreak or material escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the reasonable judgment of the Purchaser, impracticable to market such
Notes, (iv) there shall have been any decrease in the rating of any of the
Company's debt securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act) or any
notice given of any intended or potential decrease in any such rating or of any
review of or possible change in any such rating that does not indicate the
direction of the possible change or (v) there shall have been any change, or
any development involving a prospective change, in or affecting the business,
properties, condition (financial or other) or results of operation of the
Company and its subsidiaries taken as a whole, the effect of which is, in the
reasonable judgment of the Purchaser, so material and adverse as to make it
impractical or inadvisable to market the Notes.
10. Survival of Certain Provisions. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of you set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of you or the Company or any of the officers, directors, employees,
agents or controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Notes. The provisions of Sections 4(h), 7 and
8 hereof shall survive the termination or cancellation of this Agreement. The
provisions of this Agreement (including without limitation Section 11 hereof)
applicable to any purchase of a Note for which an agreement to purchase exists
prior to the termination hereof shall survive any termination of this
Agreement. If at the time of termination of this Agreement any Purchaser shall
notify the Company that it continues to own Notes with the intention of selling
them, the provisions of Section 4 shall remain in effect until the earlier of
(a) the date on which such Notes are sold by the Purchaser and (b) the date
which is 90 days after the termination of the Agreement.
11. Right of Person Who Agreed to Purchase To Refuse To Purchase.
(a) The Company agrees that any person who has agreed to purchase and pay for
any Note pursuant to a solicitation by any of the Agents, shall have the right
to refuse to purchase such Note if at the Closing Date therefor, any condition
set forth in Section 5 or 6, as applicable, shall not be satisfied.
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<PAGE> 28
(b) The Company agrees that any person who has agreed to purchase
and pay for any Note pursuant to a solicitation by any of the Agents shall have
the right to refuse to purchase such Note if, subsequent to the agreement to
purchase such Note, any change, condition or development specified in any of
Sections 9(b)(i) through (v) shall have occurred (with the judgment of the
Agent which presented the offer to purchase such Note being substituted for any
judgment of a Purchaser required therein) the effect of which is, in the
reasonable judgment of the Agent which presented the offer to purchase such
Note, so material and adverse as to make it impractical or inadvisable to
proceed with the sale and delivery of such Note (it being understood that under
no circumstance shall any such Agent have any duty or obligation to the Company
or to any such person to exercise the judgment permitted to be exercised under
this Section 11(b) and Section 9(b)).
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to any of you, will be mailed,
delivered or telegraphed and confirmed to such of you, at the address specified
in Schedule I hereto; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 500 West Monroe Street, Chicago, Illinois
60661-3676, Attention: Treasurer.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, their respective successors, the officers,
directors, employees, agents and controlling persons referred to in Section 8
hereof and, to the extent provided in Section 11, any person who has agreed to
purchase Notes, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
* * * * *
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<PAGE> 29
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and the acceptance by each of you shall represent a
binding agreement among the Company and each of you.
Very truly yours,
General American Transportation
Corporation
By_________________________________
Its________________________________
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
Salomon Brothers Inc
By____________________________
Its___________________________
Morgan Stanley & Co. Incorporated
By____________________________
Its___________________________
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<PAGE> 30
SCHEDULE I
Commissions:
The Company agrees to pay each Agent a commission equal to the
following percentage of the principal amount of each Note sold on an agency
basis by such Agent:
<TABLE>
<CAPTION>
Term Commission Rate
---- ---------------
<S> <C> <C>
From 9 months to less than 1 year........... .125%
From 1 year to less than 18 months.......... .150%
From 18 months to less than 2 years......... .200%
From 2 years to less than 3 years........... .250%
From 3 years to less than 4 years........... .350%
From 4 years to less than 5 years........... .450%
From 5 years to less than 6 years........... .500%
From 6 years to less than 7 years........... .550%
From 7 years to less than 10 years.......... .600%
From 10 years to less than 15 years......... .625%
From 15 years to less than 20 years......... .700%
From 20 years to less than 30 years......... .750%
</TABLE>
Terms of 30 years and greater shall be negotiated at the time of sale.
Unless otherwise specified in the applicable Terms Agreement,
the discount or commission payable to a Purchaser shall be determined on the
basis of the commission schedule set forth above.
Address for Notice to you:
Notices to Salomon Brothers Inc shall be directed to it at Seven
World Trade Center, New York, New York 10048, Attention: Medium-Term Note
Department. Copies of pricing supplements should be provided to Salomon
Brothers Inc at 8800 Hidden River Parkway, Tampa, Florida 33637, Attention:
Enrico Castro. Certificated Note stubs should be provided to The Bank of New
York, One Wall Street, Third Floor, New York, New York, 10005, Attention:
Dealer Clearance.
Notices to Morgan Stanley & Co. Incorporated shall be directed
to it at 1221 Avenue of the Americas, New York, New York 10020, Attention:
Continuously Offered Products Group, with a copy to Manager, Credit Department,
at 1251 Avenue of the Americas, New York, New York 10020.
<PAGE> 31
EXHIBIT A
General American Transportation Corporation
MEDIUM-TERM NOTES, SERIES E, ADMINISTRATIVE PROCEDURES
___________
_______, ____
The administrative procedures and specific terms of the
offering of Medium-Term Notes, Series E (the "Notes"), on a continuous
basis by General American Transportation Corporation ("the Company")
pursuant to the Selling Agency Agreement, dated as of _______, ____
(the "Agency Agreement") among the Company, Salomon Brothers Inc and
Morgan Stanley & Co. Incorporated (each an "Agent" and collectively,
the "Agents") are explained below. In the Agency Agreement, the
Agents have agreed to use their reasonable best efforts to solicit
purchases of the Notes. Each Agent, as principal, may purchase Notes
for its own account pursuant to the terms and settlement details of a
terms agreement entered into between the Company and such Agent, as
contemplated by the Agency Agreement between them. The Notes will
rank equally with all other unsecured and unsubordinated debt of the
Company and have been registered with the Securities and Exchange
Commission (the "Commission").
Each Note will be issued under an indenture dated as of
October 1, 1987, as supplemented by the First Supplemental Indenture
thereto, dated as of May 15, 1988, the Second Supplemental Indenture
thereto, dated as of March 15, 1990 and the Third Supplemental
Indenture thereto, dated as of June 15, 1990, between the Company and
The Chase Manhattan Bank (National Association), as trustee (the
"Trustee") (such indenture as so supplemented is hereinafter called
the "Indenture"). Notes will bear interest at either fixed rates
("Fixed Rate Notes") or floating rates ("Floating Rate Notes"). The
Notes may be issued as indexed notes ("Indexed Notes") the principal
amount of which, payable at maturity, is determined by reference to
currencies, currency units, commodity prices, financial or
non-financial indices or other factors. Each Note will be represented
by either a Global Security (as defined hereinafter) delivered to the
Trustee, as agent for The Depository Trust Company ("DTC"), and
recorded in the book-entry system maintained by DTC (a "Book-Entry
Note") or a certificate delivered to the Holder thereof or a Person
designated by such Holder (a "Certificated Note"). Only Notes
denominated and payable in U.S. dollars may be issued as Book-Entry
Notes. An owner of a Book-Entry Note will not be entitled to receive
a certificate representing such a Note.
The Trustee will act as Paying Agent for the payment of
principal of and premium, if any, and interest on the Notes and
<PAGE> 32
will perform, as Paying Agent, unless otherwise specified, the other duties
specified herein. Book-Entry Notes will be issued in accordance with the
administrative procedures set forth in Parts I and III hereof, as adjusted in
accordance with changes in DTC's operating requirements, and Certificated Notes
will be issued in accordance with the administrative procedures set forth in
Parts II and III hereof. Unless otherwise defined herein, terms defined in the
Indenture and the Notes shall be used herein as therein defined. To the extent
the procedures set forth below conflict with the provisions of the Notes, the
Indenture, DTC's operating requirements or the Agency Agreement, the relevant
provisions of the Notes, the Indenture, DTC's operating requirements or the
Agency Agreement, as applicable, shall control.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES.
In connection with the qualification of the Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions described
below, in accordance with its respective obligations under a Letter of
Representations from the Company and the Trustee to DTC, dated as of the date
hereof, and a Medium-Term Note Certificate Agreement between the Trustee and
DTC, dated as of March 10, 1989, and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more
Book-Entry Notes, the Company will issue a
single global security in fully registered
form without coupons (a "Global Security")
representing up to $150,000,000 principal
amount of all such Book-Entry Notes that have
the same Stated Maturity, redemption,
repayment and extension provisions (if any),
Interest Payment Dates, Interest Payment
Period, Regular Record Dates, Original Issue
Date, Original Issue Discount Provisions,
redemption, repayment and extension
provisions (if any), and, in the case of
Fixed Rate Notes, interest rate, or, in the
case of Floating Rate Notes, initial interest
rate, Base Rate, Index Maturity, Interest
Reset Period, Interest Reset Dates, Spread or
Spread Multiplier (if any), minimum interest
rate (if any), and maximum interest rate (if
any), or, in the case of Indexed Notes,
Denominated Currency, Indexed Currency, Face
Amount and Base Exchange Rate, and in each
case any other relevant terms (collectively,
the "Terms") . Each Global Security will be
dated and issued as of the
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<PAGE> 33
date of its authentication by the
Trustee. Each Global Security will bear an
original issue date, which will be (i) with
respect to an original Global Security (or
any portion thereof), the original issue date
specified in such Global Security, and (ii)
following a consolidation of Global
Securities, with respect to the Global
Security resulting from such consolidation,
the most recent Interest Payment Date to
which interest has been paid or duly provided
for on the predecessor Global Securities,
regardless of the date of authentication of
such resulting Global Security. Book-Entry
Notes may be denominated and payable only in
U.S. dollars. No Global Security will
represent (i) both Fixed Rate and Floating
Rate Book-Entry Notes or (ii) any
Certificated Note.
Identification
Numbers: The Company has arranged with the CUSIP
Service Bureau of Standard & Poor's
Corporation (the "CUSIP Service Bureau") for
the reservation of a series of CUSIP numbers
(including tranche numbers), which series
consists of approximately 900 CUSIP numbers
and relates to Global Securities representing
Book-Entry Notes and book-entry medium-term
notes issued by the Company with other series
designations. The Company has obtained from
the CUSIP Service Bureau a written list of
such series of reserved CUSIP numbers and has
delivered to the Trustee and DTC such written
list of 150 CUSIP numbers of such series.
The Company will assign CUSIP numbers to
Global Securities as described below under
Settlement Procedure "B". DTC will notify
the CUSIP Service Bureau periodically of the
CUSIP numbers that the Company has assigned
to Global Securities. At any time when fewer
than 100 of the reserved CUSIP numbers of the
series remain unassigned to Global
Securities, if it deems necessary, the
Company will reserve additional CUSIP numbers
for assignment to Global Securities
representing Book-Entry Notes. Upon
obtaining such additional CUSIP numbers, the
Company shall deliver a list of such
additional CUSIP numbers to the Trustee and
DTC.
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<PAGE> 34
Registration: Global Securities will be issued only in
fully registered form without coupons.
Each Global Security will be registered in
the name of Cede & Co., as nominee for DTC,
on the Security Register maintained under the
Indenture. The beneficial owner of a
Book-Entry Note (or one or more indirect
participants in DTC designated by such owner)
will designate one or more participants in
DTC (with respect to such Book-Entry Note,
the "Participants") to act as agent or agents
for such owner in connection with the
book-entry system maintained by DTC, and DTC
will record in book-entry form, in accordance
with instructions provided by such
Participants, a credit balance with respect
to such beneficial owner in such Book-Entry
Note in the account of such Participants.
The ownership interest of such beneficial
owner (or such Participant) in such Book-
Entry Note will be recorded through the
records of such Participants or through the
separate records of such Participants and one
or more indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will be
accomplished by book entries made by
DTC and, in turn, by Participants (and in
certain cases, one or more indirect
participants in DTC) acting on behalf of
beneficial transferors and transferees of
such Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP
Service Bureau at any time a written
notice of consolidation (a copy of which
shall be attached to the resulting Global
Security described below) specifying (i) the
CUSIP numbers of two or more outstanding
Global Securities that represent (A) Fixed
Rate Book-Entry Notes having the same Terms
and for which interest has been paid to the
same date, (B) Floating Rate Book-Entry Notes
having the same Terms and for which interest
has been paid to the same date or (C) Indexed
Notes having the same Terms and for which
interest has been paid to the same date, (ii)
a date, occurring at least thirty days after
such written notice is delivered and at least
thirty days before the next Interest Payment
Date for such Book-Entry Notes, on which such
Global Securities shall be exchanged for a
single replacement Global Security and (iii)
a
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<PAGE> 35
new CUSIP number, obtained from the
Company, to be assigned to such replacement
Global Security. Upon receipt of such a
notice, DTC will send to its participants
(including the Trustee) a written
reorganization notice to the effect that such
exchange will occur on such date. Prior to
the specified exchange date, the Trustee will
deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and
the new CUSIP number and stating that, as of
such exchange date, the CUSIP numbers of the
Global Securities to be exchanged will no
longer be valid. On the specified exchange
date, the Trustee will exchange such Global
Securities for a single Global Security
bearing the new CUSIP number and the CUSIP
numbers of the exchanged Global Securities
will, in accordance with CUSIP Service Bureau
procedures, be cancelled and not immediately
reassigned. Notwithstanding the foregoing,
if the Global Securities to be exchanged
exceed $150,000,000 in aggregate principal
amount, one Global Security will be
authenticated and issued to represent each
$150,000,000 of principal amount of the
exchanged Global Securities and an additional
Global Security will be authenticated and
issued to represent any remaining principal
amount of such Global Securities (see
"Denominations" below).
Maturities: Each Book-Entry Note will mature on a date
not less than nine months after the
settlement date for such Note. A Floating
Rate Book-Entry Note will mature only on an
Interest Payment Date for such Note. Any
Book-Entry Note denominated in Pounds
Sterling will mature on a date not less than
one year, nor more than five years, after its
Original Issue Date.
Denominations: Book-Entry Notes will be issued in principal
amounts of $1,000 or any amount in
excess thereof that is an integral multiple
of $1,000. Global Securities will be
denominated in principal amounts not in
excess of $150,000,000. If one or more
Book-Entry Notes having an aggregate
principal amount in excess of $150,000,000
would, but for the preceding sentence, be
represented by a single Global Security, then
one Global Security will be authenticated and
issued to represent each
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<PAGE> 36
$150,000,000 principal amount of such
Book-Entry Note or Notes and an additional
Global Security will be authenticated and
issued to represent any remaining principal
amount of such Book-Entry Note or Notes. In
such a case, each of the Global Securities
representing such Book-Entry Note or Notes
shall be assigned the same CUSIP number.
Interest: General. Interest, if any, on each
Book-Entry Note will accrue from the
original issue date for the first interest
period or the last date to which interest has
been paid, if any, for each subsequent
interest period, on the Global Security
representing such Book-Entry Note, and will
be calculated and paid in the manner
described in such Book-Entry Note and in the
Prospectus (as defined in the Agency
Agreement), as supplemented by the applicable
Pricing Supplement relating to such Book
Entry Note. Unless otherwise specified
therein, each payment of interest on a
Book-Entry Note will include interest accrued
to but excluding the Interest Payment Date
(provided that, in the case of Floating Rate
Book-Entry Notes which reset daily or weekly,
interest payments will include accrued
interest to but excluding the Regular Record
Date immediately preceding the Interest
Payment Date) or to but excluding Maturity
(other than a Maturity of a Fixed Rate
Book-Entry Note occurring on the 31st day of
a month, in which case such payment of
interest will include interest accrued to but
excluding the 30th day of such month).
Interest payable at the Maturity of a
Book-Entry Note or upon earlier redemption or
repayment will be payable to the Person to
whom the principal of such Note is payable.
Standard & Poor's Corporation will use the
information received in the pending deposit
message described under Settlement Procedure
"C" below in order to include the amount of
any interest payable and certain other
information regarding the related Global
Security in the appropriate (daily or weekly)
bond report published by Standard & Poor's
Corporation.
Regular Record Dates. The Regular
Record Date with respect to any Interest
Payment Date shall be the date fifteen
calendar days immediately preceding such
Interest Payment
-6-
<PAGE> 37
Date, whether or not such date is a
Business Day.
Interest Payment Date on Fixed Rate
Book-Entry Notes. Unless otherwise specified
pursuant to Settlement Procedure "A" below,
interest payments on Fixed Rate Book-Entry
Notes will be made semiannually on June 15 and
December 15 of each year and at Maturity or
upon earlier redemption or repayment;
provided, however, that in the case of a Fixed
Rate Book-Entry Note issued between a Regular
Record Date and an Interest Payment Date or on
an Interest Payment Date, the first interest
payment will be made on the Interest Payment
Date following the next succeeding Regular
Record Date; provided, further, that if an
Interest Payment Date for a Fixed Rate
Book-Entry Note is not a Business Day, the
payment due on such day shall be made on the
next succeeding Business Day and no interest
shall accrue on such payment for the period
from and after such Interest Payment Date.
Interest Payment Date on Floating Rate
Book-Entry Notes. Interest payments will be
made on Floating Rate Book-Entry Notes
monthly, quarterly, semi-annually or
annually. Unless otherwise agreed upon,
interest will be payable, in the case of
Floating Rate Book-Entry Notes with a monthly
Interest Payment Period, on the third
Wednesday of each month; with a quarterly
Interest Payment Period, on the third
Wednesday of March, June, September and
December of each year; with a semi-annual
Interest Payment Period, on the third
Wednesday of the two months specified pursuant
to Settlement Procedure "A" below; and with an
annual Interest Payment Period, on the third
Wednesday of the month specified pursuant to
Settlement Procedure "A" below; provided,
however, that if an Interest Payment Date for
a Floating Rate Book-Entry Note would
otherwise be a day that is not a Business Day
with respect to such Floating Rate Book-Entry
Note, such Interest Payment Date will be the
next succeeding Business Day with respect to
such Floating Rate Book-Entry Note, except
that in the case of a Floating Rate Book-Entry
Note for which the Base Rate is LIBOR, if such
Business Day is in the next succeeding
calendar month, such Interest Payment Date
-7-
<PAGE> 38
will be the immediately preceding
Business Day; and provided further, that in
the case of a Floating Rate Book-Entry Note
issued between a Regular Record Date and an
Interest Payment Date or on an Interest
Payment Date, the first interest payment will
be made on the Interest Payment Date following
the next succeeding Regular Record Date.
Notice of Interest Payment and Regular
Record Dates. On the first Business Day of
January, April, July and October of each year,
the Trustee will deliver to the Company and
DTC a written list of Regular Record Dates and
Interest Payment Dates that will occur with
respect to Book-Entry Notes during the
six-month period beginning on such first
Business Day. Promptly after each Interest
Determination Date for Floating Rate
Book-Entry Notes, the Trustee, as Calculation
Agent, will notify Standard & Poor's
Corporation of the interest rates determined
on such Interest Determination Date.
Calculation of
Interest: Fixed Rate Book-Entry Notes. Interest on
Fixed Rate Book-Entry Notes (including
interest for partial periods) will be
calculated on the basis of a 360-day year of
twelve thirty-day months. (Examples of
interest calculations are as follows: The
period from August 15, 1990, to February 15,
1991, equals 6 months and 0 days, or 180 days;
the interest payable equals 180/360 times the
annual rate of interest times the principal
amount of the Note. The period from September
17, 1990, to February 15, 1991, equals 4
months and 28 days, or 148 days; the interest
payable equals 148/360 times the annual rate
of interest times the principal amount of the
Note.) Notwithstanding the foregoing, in the
case of any Fixed Rate Book-Entry Note issued
on the thirty-first day of a month, the
interest calculation shall include such
thirty-first day.
Floating Rate Book-Entry Notes.
Interest rates on Floating Rate Book-Entry
Notes will be determined as set forth in the
form of Notes. Interest on Floating Rate
Book-Entry Notes, except as otherwise set
forth therein, will be calculated on the basis
of actual days
-8-
<PAGE> 39
elapsed and a year of 360 days, except
that in the case of a Floating Rate Book-Entry
Note for which the Base Rate is the Treasury
Rate, interest will be calculated on the basis
of the actual number of days in the year.
Payments of
Principal and
Interest: Payment of Interest Only. Promptly after
each Regular Record Date, the Trustee
will deliver to the Company and DTC a written
notice specifying by CUSIP number the amount
of interest to be paid on each Global Security
on the following Interest Payment Date (other
than an Interest Payment Date coinciding with
Maturity) and the total of such amounts. DTC
will confirm the amount payable on each Global
Security on such Interest Payment Date by
reference to the appropriate (daily or weekly)
bond reports published by Standard & Poor's
Corporation. The Company will pay to the
Trustee, as paying agent, the total amount of
interest due on such Interest Payment Date
(other than at Maturity), and the Trustee will
pay such amount to DTC at the times and in the
manner set forth below under "Manner of
Payment".
Payments at Maturity. On or about the
first Business Day of each month, the Trustee
will deliver to the Company and DTC a written
list of principal and interest to be paid on
each Global Security maturing either at Stated
Maturity or on a Redemption or Repayment Date
or otherwise in the following month. The
Company, the Trustee and DTC will confirm the
amounts of such principal and interest
payments with respect to each such Global
Security on or about the fifth Business Day
preceding the Maturity or Redemption or
Repayment Date of such Global Security. On or
before Maturity or such Redemption or
Repayment Date, as the case may be, the
Company will pay to the Trustee, as the paying
agent, the principal amount of such Global
Security, together with interest due at such
Maturity or such Redemption or Repayment Date,
as the case may be. The Trustee will pay such
amounts to DTC at the times and in the manner
set forth below under "Manner of Payment". If
any Maturity of, or Redemption or Repayment
Date relating to, a Global Security
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<PAGE> 40
representing Book-Entry Notes is not a
Business Day, the payment due on such day
shall be made on the next succeeding Business
Day and no interest shall accrue on such
payment for the period from and after such
Maturity or Redemption or Repayment Date, as
the case may be. Promptly after payment to
DTC of the principal and interest due at
Maturity of such Global Security, the Trustee
will cancel such Global Security in accordance
with the terms of the Indenture and deliver it
to the Company with a certificate of
cancellation. On the first Business Day of
each month, the Trustee will deliver to the
Company a written statement indicating the
total principal amount of Outstanding Global
Securities for which it serves as trustee as
of the immediately preceding Business Day. If
the Maturity of a Book-Entry Note is not a
Business Day, the payment due on such day
shall be made on the next succeeding Business
Day and no interest shall accrue on such
payment for the period from and after such
Maturity.
Manner of Payment. The total amount of
any principal and interest due on Global
Securities on any Interest Payment Date or at
Maturity or upon earlier redemption or
repayment shall be paid by the Company to the
Trustee in immediately available funds not
later than 9:30 A.M. (New York City time) for
use by the Trustee on such date. The Company
will make such payment on such Global
Securities by wire transfer to the Trustee or
by instructing the Trustee to debit the
account of the Company maintained with the
Trustee. The Company will confirm such wire
transfer instructions in writing to the
Trustee. Prior to 10:00 A.M. (New York City
time) on each Maturity Date and Redemption and
Repayment Date the Trustee will pay by
separate wire transfer (using Fedwire message
entry instructions in a form previously
specified by DTC) to an account at the Federal
Reserve Bank of New York previously specified
by DTC, in funds available for immediate use
by DTC, each payment of principal (together
with interest thereon) due on Global
Securities on any Maturity Date or any
Redemption or Repayment Date, as the case may
be. On each Interest Payment Date (other than
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<PAGE> 41
at Maturity or any Redemption or
Repayment Date), interest payments shall be
made to DTC in funds available for immediate
use by DTC, in accordance with existing
arrangements between the Trustee and DTC. On
each such date, DTC will pay, in accordance
with its SDFS operating procedures then in
effect, such amounts in funds available for
immediate use to the respective Participants
in whose names the Book-Entry Notes
represented by such Global Securities are
recorded in the book-entry system maintained
by DTC. Neither the Company (either as issuer
or as Paying Agent) nor the Trustee shall have
any direct responsibility or liability for the
payment by DTC to such Participants of the
principal of and interest on the Book-Entry
Notes.
Withholding Taxes. The amount of any
taxes required under applicable law to be
withheld from any interest payment on a
Book-Entry Note will be determined and
withheld by the Participant, indirect
participant in DTC or other Person responsible
for forwarding payments and materials directly
to the beneficial owner of such Note.
Procedure for
Rate Setting and
Posting: The Company and the Agents will discuss from
time to time the aggregate principal
amount of, the issuance price of, and the
interest rates to be borne by, Book-Entry
Notes that may be sold as a result of the
solicitation of orders by the Agents. If the
Company decides to set prices of, and rates
borne by, any Book-Entry Notes in respect of
which the Agents are to solicit orders (the
setting of such prices and rates to be
referred to herein as "posting") or if the
Company decides to change prices or rates
previously posted by it, it will promptly
advise the Agents of the prices and rates to
be posted.
Acceptance and
Rejection of
Offers: Unless otherwise instructed by the Company,
each Agent will advise the Company
promptly by telephone of all offers to
purchase Book-Entry Notes received by such
Agent, other than those rejected by it in
whole or in part in the reasonable exercise of
its discretion. Unless
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<PAGE> 42
otherwise agreed by the Company and each
of the Agents, the Company has the sole right
to accept offers to purchase Book-Entry Notes
and may reject any such offer in whole or in
part.
Preparation
of Pricing
Supplement: If any offer to purchase a Book-Entry Note is
accepted by or on behalf of the Company,
the Company will prepare a pricing supplement
(a "Pricing Supplement") reflecting the terms
of such Note and will arrange to have such
Pricing Supplement filed with the Commission
via EDGAR in accordance with the applicable
paragraph of Rule 424(b) under the Act and
will supply at least ten copies thereof (and
additional copies if requested) to the Agent
which presented the offer (the "Presenting
Agent") to the address specified in Schedule I
to the Agreement. The Presenting Agent will
cause a Prospectus and Pricing Supplement to
be delivered to the purchaser of the Note.
In each instance that a Pricing
Supplement is prepared, the Presenting Agent
will affix the Pricing Supplement to
Prospectuses prior to their use. Outdated
Pricing Supplements, and the Prospectuses to
which they are attached (other than those
retained for files), will be destroyed.
Settlement: The receipt by the Company of immediately
available funds in payment for a
Book-Entry Note and the authentication and
issuance of the Global Security representing
such Book-Entry Note shall constitute
"settlement" with respect to such Book-Entry
Note. All orders accepted by the Company will
be settled on the fifth Business Day following
the date of sale of such Book-Entry Note
pursuant to the timetable for settlement set
forth below unless the Company, the Trustee
and the purchaser agree to settlement on
another day which shall be no earlier than the
next Business Day following the date of sale.
Settlement
Procedures: Settlement Procedures with regard to each
Book-Entry Note sold by the Company
through an Agent, as agent, shall be as
follows:
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<PAGE> 43
A. The Presenting Agent will
advise the Company by telephone
of the following settlement
information:
1. Principal amount.
2. Stated Maturity.
3. In the case of a Fixed Rate
Book-Entry Note, the
interest rate, or, in the
case of Floating Rate
Book-Entry Note, the initial
interest rate (if known at
such time), Base Rate, Index
Maturity, Interest Reset
Period, Interest Reset Dates,
Spread or Spread Multiplier
(if any), minimum interest
rate (if any), maximum
interest rate (if any),
Interest Payment Period,
Interest Payment Dates and
Regular Record Dates or, in
the case of Indexed
Book-Entry Notes, the
Denominated Currency, Indexed
Currency, Face Amount, Base
Exchange Rate, Determination
Agent and the Reference
Dealers.
4. Redemption and repayment
provisions, if any.
5. Settlement date.
6. Price.
7. Presenting Agent's
commission, determined
as provided in Schedule I to
the Agency Agreement.
8. Whether the Note is issued
at an original issue
discount and, if so, the
total amount of OID, the
yield to maturity and the
initial accrued period OID.
B. The Company will assign a CUSIP
number to the Global Security
representing such Book-Entry Note and
then advise the Trustee by telephone
(confirmed in writing at any time on
the same date) or electronic
transmission of the information set
forth in Settlement Procedure "A"
above, such CUSIP number
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<PAGE> 44
and the name of the Presenting
Agent. The Company will also notify
the Presenting Agent of such CUSIP
number by telephone as soon as
practicable. Each such communication
by the Company shall constitute a
representation and warranty by the
Company to the Trustee and each Agent
that (i) such Note is then, and at
the time of issuance and sale thereof
will be, duly authorized for issuance
and sale by the Company, (ii) such
Note, and the Global Security
representing such Note, will conform
with the terms of the Indenture
pursuant to which such Note and
Global Security are issued and (iii)
upon authentication and delivery of
such Global Security, the aggregate
initial offering price of all Notes
issued under the Indenture will not
exceed $650,000,000 or the equivalent
thereof in one or more currencies
(except for Securities represented
by, authenticated and delivered in
exchange for and in lieu of
Securities pursuant to Section 2.08,
2.09, 2.12, 3.06 or 9.05 of the
Indenture).
C. The Trustee will enter a
pending deposit message through
DTC's Participant Terminal System,
providing the following settlement
information to DTC (which shall route
such information to Standard & Poor's
Corporation) and the Presenting
Agent:
1. The information set forth in
Settlement Procedure "A".
2. Identification as a Fixed
Rate Book-Entry Note, a
Floating Rate Book-Entry Note
or an Indexed Book-Entry
Note.
3. Initial Interest Payment
Date for such Book-Entry
Note, number of days by which
such date succeeds the
related Regular Record Date
(which, in the case of
Floating Rate Notes which
reset daily or weekly, shall
be the date five calendar
days immediately preceding
the applicable Interest
Payment Date and in the
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<PAGE> 45
case of all other Notes
shall be the Regular Record
Date as defined in the Note)
and amount of interest
payable on such Interest
Payment Date.
4. The Interest Payment Period.
5. CUSIP number of the Global
Security representing
such Book-Entry Note.
6. Whether such Global Security
will represent any other
Book-Entry Note (to the
extent known at such time).
D. To the extent the Company has not
already done so, the Company
will deliver to the Trustee a Global
Security in a form that has been
approved by the Company, the Agents
and the Trustee.
E. The Trustee will complete such Book-
Entry Note, stamp the appropriate
legend, as instructed by DTC, if
not already set forth thereon, and
authenticate the Global Security
representing such Book-Entry Note.
F. DTC will credit such Book-Entry Note
to the Trustee's participant
account at DTC.
G. The Trustee will enter an SDFS
deliver order through DTC's
Participant Terminal System
instructing DTC to (i) debit such
Book-Entry Note to the Trustee's
participant account and credit such
Book-Entry Note to the Presenting
Agent's participant account and (ii)
debit the Presenting Agent's
settlement account and credit the
Trustee's settlement account for an
amount equal to the price of such
Book-Entry Note less the Presenting
Agent's commission. The entry of
such a deliver order shall constitute
a representation and warranty by the
Trustee to DTC that (i) the Global
Security representing such Book-Entry
Note has been issued and
authenticated and (ii) the Trustee is
holding such Global Security pursuant
to the Medium-Term Note Certificate
Agreement between the Trustee and
DTC.
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<PAGE> 46
H. The Presenting Agent will enter an
SDFS deliver order through DTC's
Participant Terminal System
instructing DTC (i) to debit such
Book-Entry Note to the Presenting
Agent's participant account and
credit such Book-Entry Note to the
participant accounts of the
Participants with respect to such
Book-Entry Note and (ii) to debit the
settlement accounts of such
Participants and credit the
settlement account of the Presenting
Agent for an amount equal to the
price of such Book-Entry Note.
I. Transfers of funds in accordance
with SDFS deliver orders
described in Settlement Procedures
"G" and "H" will be settled in
accordance with SDFS operating
procedures in effect on the
settlement date.
J. The Trustee will wire transfer to or
credit the account of the
Company maintained at The Chase
Manhattan Bank (National
Association), in funds available for
immediate use, in the amount
transferred to the Trustee in
accordance with Settlement Procedure
"G."
K. The Presenting Agent will confirm
the purchase of such Book-Entry
Note to the purchaser either by
transmitting to the Participants with
respect to such Book-Entry Note a
confirmation order or orders through
DTC's institutional delivery system
or by mailing a written confirmation
to such purchaser.
Settlement
Procedures
Timetable: For orders of Book-Entry Notes solicited by
an Agent, as agent, and accepted by the
Company for settlement on the first Business
Day after the sale date, Settlement Procedures
"A" through "K" set forth above shall be
completed as soon as possible but not later
than the respective times (New York City time)
set forth below:
<TABLE>
Settlement
Procedure Time
--------- ----
<S> <C>
</TABLE>
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<PAGE> 47
<TABLE>
<S> <C>
A 11:00 A.M. on the date on
which an offer to
purchase has been accepted
(the "sale date")
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 3:00 P.M. on the day before
settlement
E 9:00 A.M. on settlement date
F 10:00 A.M. on settlement date
G-H 2:00 P.M. on settlement date
I 4:45 P.M. on settlement date
J-K 5:00 P.M. on settlement date
</TABLE>
If a sale is to be settled more than one
Business Day after the sale date, Settlement
Procedures "A", "B" and "C" shall be completed
as soon as practicable but no later than 11:00
A.M. and 12:00 Noon on the first Business Day
after the sale date and no later than 2:00
P.M. on the Business Day before the settlement
date, respectively. If the initial interest
rate for a Floating Rate Book-Entry Note has
not been determined at the time that
Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be
completed as soon as such rate has been
determined but no later than 12:00 Noon and
2:00 P.M., respectively, on the Business Day
before the settlement date. Settlement
Procedure "I" is subject to extension in
accordance with any extension of Fedwire
closing deadlines and in the other events
specified in the SDFS operating procedures in
effect on the settlement date.
If settlement of a Book-Entry Note is
rescheduled or cancelled, the Trustee will
deliver to DTC, through DTC's Participant
Terminal System, a cancellation message to
such effect by no later than 2:00 P.M. on the
Business Day immediately preceding the
scheduled settlement date.
Failure to
Settle: If the Trustee fails to enter an SDFS
deliver order with respect to a
Book-Entry Note pursuant to Settlement
Procedure "G", the Trustee may deliver to DTC,
through DTC's Participant Terminal System, as
soon as practicable, a withdrawal message
instructing DTC to debit such Book-Entry Note
to the Trustee's participant account. DTC will
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<PAGE> 48
process the withdrawal message, provided
that the Trustee's participant account
contains a principal amount of the Global
Security representing such Book-Entry Note
that is at least equal to the principal amount
to be debited. If a withdrawal message is
processed with respect to all the Book-Entry
Notes represented by a Global Security, the
Trustee will cancel such Global Security in
accordance with the Indenture, make
appropriate entries in the Trustee's records
and send such cancelled Global Security to the
Company. The CUSIP number assigned to such
Global Security shall, in accordance with
CUSIP Service Bureau procedures, be cancelled
and not immediately reassigned. If a
withdrawal message is processed with respect
to one or more, but not all, of the Book-Entry
Notes represented by a Global Security, the
Trustee will exchange such Global Security for
two Global Securities, one of which shall
represent such Book-Entry Note or Notes and
shall be cancelled immediately after issuance
and the other of which shall represent the
remaining Book-Entry Notes previously
represented by the surrendered Global Security
and shall bear the CUSIP number of the
surrendered Global Security.
If the purchase price for any Book-Entry
Note is not timely paid to the Participants
with respect to such Note by the beneficial
purchaser thereof (or a Person, including an
indirect participant in DTC, acting on behalf
of such purchaser), such Participants and, in
turn, the Presenting Agent for such Note may
enter SDFS deliver orders through DTC's
Participant Terminal System reversing the
orders entered pursuant to Settlement
Procedures "H" and respectively. Thereafter,
the Trustee will deliver the withdrawal
message and take the related actions described
in the preceding paragraph. If such failure
shall have occurred for any reason other than
a default by the Presenting Agent in the
performance of its obligations hereunder and
under the Agency Agreement, then the Company
will reimburse the Presenting Agent or the
Trustee, as applicable, on an equitable basis
for the loss of the use of the funds during
the period when they were credited to the
account of the Company.
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<PAGE> 49
Notwithstanding the foregoing, upon any
failure to settle with respect to a Book-Entry
Note, DTC may take any actions in accordance
with its SDFS operating procedures then in
effect. If it is necessary for the Trustee to
return funds to DTC by reason of any failure
to settle with respect to any Book-Entry Note,
the Company shall pay to the Trustee funds
immediately available to the Trustee on the
date of failure, and the Trustee is hereby
instructed to withdraw said funds from an
account maintained by the Company at The Chase
Manhattan Bank (National Association). The
Trustee shall give the Company notice of said
withdrawal one hour prior thereto or such
lesser time prior thereto as is practicable
under the circumstances. In the event of a
failure to settle with respect to one or more,
but not all, of the Book-Entry Notes to have
been represented by a Global Security, the
Trustee will provide, in accordance with
Settlement Procedure "E" for the
authentication and issuance of a Global
Security representing the other Book-Entry
Notes to have been represented by such Global
Security and will make appropriate entries in
its records.
Procedures For
Rate Changes: When the Company has determined to change the
interest rates of Notes being offered,
it will promptly advise the Agents and the
Agents will forthwith suspend solicitation of
offers. The Agents will telephone the Company
with recommendations as to the changed
interest rates. At such time as the Company
has advised the Agents of the new interest
rates, the Agents may resume solicitation of
offers. Until such time only "indications of
interest" may be recorded. The Company will
file with the Commission, in accordance with
the applicable paragraph of Rule 424(b) under
the Act, a Pricing Supplement to the
Prospectus relating to such Notes that
reflects the applicable interest rates and
other terms and will deliver copies of such
Pricing Supplement to the Agents.
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<PAGE> 50
Suspension of
Solicitation;
Amendment or
Supplement: Subject to the Company's representations,
warranties and covenants contained in
the Agency Agreement, the Company may instruct
each Agent to suspend solicitation of
purchases of Book-Entry Notes at any time.
Upon receipt of such instructions, each Agent
will forthwith suspend such solicitations
until such time as it has been advised by the
Company that such solicitations may be
resumed. If the Company decides to amend or
supplement the Registration Statement (as
defined in the Agency Agreement) filed by the
Company with the Commission with respect to
the Notes or the Prospectus relating to the
Notes, it will promptly advise each Agent and
will furnish it with the proposed amendment or
supplement and with any such certificates and
opinions as are required, all consistent with
the Company's obligations under the Agency
Agreement. Subject to the provisions of the
Agency Agreement, the Company may file with
the Commission any such supplement to the
Prospectus relating to the Notes. The Company
will provide the Agents and the Trustee with
copies of any such supplement, and confirm to
the Agents that such supplement has been filed
with the Commission pursuant to the applicable
paragraph of Rule 424(b). The Company will,
consistent with such obligations, promptly
advise each Agent and the Trustee whether
orders outstanding at the time each Agent
suspends solicitation may be settled and
whether copies of such Prospectus as in effect
at the time of the suspension, together with
the appropriate Pricing Supplement, may be
delivered in connection with the settlement of
such orders. The Company will have the sole
responsibility for such decision and for any
arrangements that may be made in the event
that the Company determines that such orders
may not be settled or that copies of such
Prospectus and Pricing Supplement may not be
so delivered.
Delivery of
Prospectus: A copy of the Prospectus and Pricing
Supplement relating to a Book-Entry Note
must accompany or precede the earliest of any
written offer of such Book-Entry Note,
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<PAGE> 51
confirmation of the purchase of such
Book-Entry Note or payment for such Book-Entry
Note by its purchaser. If notice of a change
in the terms of the Book-Entry Notes is
received by an Agent between the time an order
for a Book-Entry Note is placed and the time
written confirmation thereof is sent by such
Agent to a customer or his agent, such
confirmation shall be accompanied by a
Prospectus and Pricing Supplement setting
forth the terms in effect when the order was
placed. Subject to the preceding paragraph,
each Agent will deliver a Prospectus and
Pricing Supplement as herein described with
respect to each Book-Entry Note sold by it.
The Company will make such delivery if such
Book-Entry Note is sold directly by the
Company to a purchaser (other than an agent).
Confirmation: For each offer to purchase a Book-Entry Note
solicited by any Agent and accepted by
or on behalf of the Company, the Presenting
Agent will issue a confirmation to the
purchaser, with a copy to the Company, setting
forth the details set forth above and delivery
and payment instructions.
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<PAGE> 52
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
The Trustee will serve as registrar in connection with the
Certificated Notes.
Issuance: Each Certificated Note will be dated and
issued as of the date of its
authentication by the Trustee. Each
Certificated Note will bear an Original Issue
Date, which will be (i) with respect to an
original Certificated Note (or any portion
thereof), its original issuance date (which
will be the settlement date) and (ii) with
respect to any Certificated Note (or portion
thereof) issued subsequently upon transfer or
exchange of a Certificated Note or in lieu of
a destroyed, lost or stolen Certificated Note,
the Original Issue Date of the predecessor
Certificated Note, regardless of the date of
authentication of such subsequently issued
Certificated Note.
Registration: Certificated Notes will be issued only in
fully registered form without coupons.
Transfers and
Exchanges: A Certificated Note may be presented for
transfer or exchange at the corporate
trust office of the Trustee. Certificated
Notes will be exchangeable for other
Certificated Notes having identical terms but
different authorized denominations without
service charge. Certificated Notes will not
be exchangeable for Book-Entry Notes.
Maturities: Each Certificated Note will mature on a date
not less than nine months from the
settlement date for such note. A Floating
Rate Book-Entry Note will mature only on an
Interest Payment Date for such Note. Any Note
denominated in Pounds Sterling will mature on
a date not less than one year, nor more than
five years, after its Original Issue Date.
Denominations: Certificated Notes denominated in U.S.
dollars will be issued in denominations
of $100,000 or any amount in excess thereof
that is an integral multiple of $1,000. The
authorized denominations of Notes denominated
-22-
<PAGE> 53
in any other currency will be specified
pursuant to "Settlement Procedures" below.
Interest: General. Interest, if any, on each
Certificated Note will accrue from the
original issue date of such Note for the first
interest period or the last date to which
interest has been paid, if any, for each
subsequent interest period, and will be
calculated and paid in the manner described in
such Note and in the Prospectus (as defined in
the Agency Agreement) and Pricing Supplement
relating to such Note.
Unless otherwise specified therein, each
payment of interest on a Certificated Note
will include interest accrued to but excluding
the Interest Payment Date (provided that, in
the case of Floating Rate Certificated Notes
which reset daily or weekly, interest payments
will include accrued interest to but excluding
the Regular Record Date immediately preceding
the Interest Payment Date) or to but excluding
Maturity (other than a Maturity of a Fixed
Rate Certificated Note occurring on the 31st
day of a month, in which case such payment of
interest will include interest accrued to but
excluding the 30th day of such month).
Regular Record Dates. The Regular
Record Dates with respect to any Interest
Payment Date shall be the date fifteen
calendar days immediately preceding such
Interest Payment Date, whether or not such
date is a Business Day.
Interest Payment Date on Fixed Rate
Certificated Notes. Unless otherwise
specified pursuant to Settlement Procedure "A"
below, interest payments on Fixed Rate
Certificated Notes will be made semiannually
on June 15 and December 15 of each year and at
Maturity or upon earlier redemption or
repayment; provided, however, that in the case
of a Fixed Rate Certificated Note issued
between a Regular Record Date and an Interest
Payment Date or on an Interest Payment Date,
the first interest payment will be made on the
Interest Payment Date following the next
succeeding Regular Record Date; provided,
further, that if any Interest Payment Date
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<PAGE> 54
for a Fixed Rate Certificated Note is
not a Business Day, the payment due on such
day shall be made on the next succeeding
Business Day and no interest shall accrue on
such payment for the period from and after
such Interest Payment Date.
Interest Payment Date on Floating Rate
Certificated Notes. Interest payments will be
made on Floating Rate Certificated Notes
monthly, quarterly, semi-annually or
annually. Interest will be payable, in the
case of Floating Rate Certificated Notes with
a monthly Interest Payment Period, on the
third Wednesday of each month; with a
quarterly Interest Payment Period, on the
third Wednesday of March, June, September and
December of each year; with a semi-annual
Interest Payment Period, on the third
Wednesday of the two months specified pursuant
to Settlement Procedure "A" below; and with an
annual Interest Payment Period, on the third
Wednesday of the month specified pursuant to
Settlement Procedure "A" below; provided,
however, that if an Interest Payment Date for
a Floating Rate Certificated Note would
otherwise be a day that is not a Business Day
with respect to such Floating Rate
Certificated Note, such Interest Payment Date
will be the next succeeding Business Day with
respect to such Floating Rate Certificated
Note, except that in the case of a Floating
Rate Certificated Note for which the Base Rate
is LIBOR, if such Business Day is in the next
succeeding calendar month, such Interest
Payment Date will be the immediately preceding
Business Day; and provided further, that in
the case of a Floating Rate Certificated Note
issued between a Regular Record Date and an
Interest Payment Date or on an Interest
Payment Date, the first interest payment will
be made on the Interest Payment Date following
the next succeeding Regular Record Date.
Calculation of
Interest: Fixed Rate Certificated Notes. Interest on
Fixed Rate Certificated Notes (including
interest for partial periods) will be
calculated on the basis of a 360-day year of
twelve thirty-day months. (Examples of
interest calculations are as follows: August
-24-
<PAGE> 55
15, 1990 to February 15, 1991, equals 6
months and 0 days or 180 days; the interest
payable equals 180/360 times the annual rate
of interest times the principal amount of the
Note. The period from September 17, 1990 to
February 15, 1991 equals 4 months and 28 days,
or 148 days; the interest payable equals
148/360 times the annual rate of interest
times principal amount of the Note.)
Notwithstanding the foregoing, in the case of
any Fixed Rate Certificated Note issued on the
thirty-first day of a month, the interest
calculation shall include such thirty-first
day.
Floating Rate Certificated Notes.
Interest rates on Floating Rate Certificated
Notes will be determined as set forth in the
form of Notes. The Company and the Trustee
will confirm the amount of the initial
interest payment due on any Floating Rate
Certificated Note for which the initial
Interest Period is shorter or longer than the
Index Maturity. Interest on Floating Rate
Certificated Notes, except as otherwise set
forth therein, will be calculated on the basis
of actual days elapsed and a year of 360 days,
except that in the case of a Floating Rate
Certificated Note for which the Base Rate is
the Treasury Rate, interest will be calculated
on the basis of the actual number of days in
the year.
Payments of
Principal and
Interest: The Trustee will pay the principal amount of
each Certificated Note at Maturity or
upon earlier redemption or repayment upon
presentation of such Note to the Trustee.
Such payment, together with payment of
interest due at Maturity or upon earlier
redemption or repayment of such Note, will be
made in funds available for immediate use by
the Trustee and in turn by the Holder of such
Note. Certificated Notes presented to the
Trustee at Maturity or upon earlier redemption
or repayment for payment will be cancelled by
the Trustee in accordance with the terms of
the Indenture and delivered to the Company.
All interest payments on a Certificated Note
(other than interest due at Maturity or upon
earlier redemption or
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<PAGE> 56
repayment) will be made by check drawn
on the Trustee (or another Person appointed by
the Trustee) and mailed by the Trustee to the
Person entitled thereto as provided in such
Note and the Indenture. Following each
Regular Record Date and Special Record Date,
the Trustee will furnish the Company with a
list of interest payments to be made on the
following Interest Payment Date for each
Certificated Note and in total for all
Certificated Notes. Interest at Maturity or
upon earlier redemption or repayment will be
payable to the Person to whom the payment of
principal is payable. The Trustee will be
responsible for withholding taxes on interest
paid on Certificated Notes as required by
applicable law. If any Interest Payment Date
for or the Maturity or redemption or repayment
date of a Certificated Note is not a Business
Day, the payment due on such day shall be made
on the next succeeding Business Day and no
interest shall accrue on such payment for the
period from and after such Interest Payment
Date or Maturity or redemption or repayment
date, as the case may be.
Procedure for
Rate Setting and
Posting: The Company and the Agents will discuss from
time to time the aggregate principal
amount of, the issuance price of, and the
interest rates to be borne by, Certificated
Notes that may be sold as a result of the
solicitation of orders by the Agents. If the
Company decides to set prices of, and rates
borne by, any Certificated Notes in respect of
which the Agents are to solicit orders (the
setting of such prices and rates to be
referred to herein as "posting") or if the
Company decides to change prices or rates
previously posted by it, it will promptly
advise the Agents of the prices and rates to
be posted.
Acceptance and
Rejection of
Offers: Unless otherwise instructed by the Company,
each Agent will advise the Company
promptly by telephone of all offers to
purchase Certificated Notes received by such
Agent, other than those rejected by it in
whole or in part in the reasonable exercise of
its
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<PAGE> 57
discretion. Unless otherwise agreed by
the Company and each of the Agents, the
Company has the sole right to accept offers to
purchase Notes and may reject any such offer
in whole or in part. Before accepting any
offer to purchase a Certificated Note to be
settled in less than three Business Days, the
Company shall verify that the Trustee will
have adequate time to prepare and authenticate
such Note.
Preparation of
Pricing
Supplement: If any offer to purchase a Certificated Note
is accepted by or on behalf of the
Company, the Company will prepare a pricing
supplement (a "Pricing Supplement") reflecting
the terms of such Note and will arrange to
have such Pricing Supplement filed with the
Commission via EDGAR in accordance with the
applicable paragraph of Rule 424(b) under the
Act and will supply at least ten copies
thereof (and additional copies if requested)
to the Agent which presented the order (the
"Presenting Agent") to the address specified
in Schedule I to the Agreement. The
Presenting Agent will cause a Prospectus and
Pricing Supplement to be delivered to the
purchaser of such Certificated Note.
In each instance that a Pricing Supplement is
prepared, the Presenting Agent will
affix the Pricing Supplement to Prospectuses
prior to their use. Outdated Pricing
Supplements, and the Prospectuses to which
they are attached (other than those retained
for files), will be destroyed.
Settlement: The receipt by the Company of immediately
available funds in exchange for an
authenticated Certificated Note delivered to
the Presenting Agent and such Presenting
Agent's delivery of such Note against receipt
of immediately available funds shall, with
respect to such Note, constitute
"settlement." All orders accepted by the
Company will be settled on the fifth Business
Day following the date of sale of such
Certificated Note pursuant to the timetable
for settlement set forth below, unless the
Company, the Trustee and the purchaser agree
to settlement on a later date which shall be
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<PAGE> 58
no earlier than the next Business Day
following the date of sale.
Settlement
Procedures: Settlement Procedures with regard to each
Certificated Note sold by the Company
through an Agent, as agent, shall be as
follows:
A. The Presenting Agent will advise the
Company by telephone of the
following settlement information, in
time for the Trustee to prepare and
authenticate the required Note:
1. Name in which such
Certificated Note is to
be registered ("Registered
Owner").
2. Address of the Registered
Owner and address for
payment of principal and
interest.
3. Taxpayer identification
number of the Registered
Owner (if available).
4. Principal amount.
5. Stated Maturity.
6. In the case of a Fixed Rate
Certificated Note, the
interest rate or, in the case
of a Floating Rate
Certificated Note, the
initial interest rate (if
known at such time), Base
Rate, Index Maturity,
Interest Reset Period,
Interest Reset Dates, Spread
or Spread Multiplier (if
any), minimum interest rate
(if any), maximum interest
rate (if any), Interest
Payment Period, Interest
Payment Dates and Regular
Record Dates or, in the case
of Indexed Certificated
Notes, the Denominated
Currency, Indexed Currency,
Face Amount, Base Exchange
Rate, Determination Agent and
Reference Dealers.
7. Specified Currency and
whether the option to
elect payment in a Specified
Currency applies and if
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<PAGE> 59
the Specified Currency
is not U.S. dollars, the
authorized denominations.
8. Redemption, repayment or
extension provisions, if any.
9. Settlement date.
10. Price (including currency).
11. Presenting Agent's
commission, determined
as provided in Schedule I to
the Agency Agreement.
12. Whether such Certificated
Note is issued at an
original issue discount, and,
if so, the total amount of
OID, the yield to maturity
and the initial accrual
period OID.
B. The Company will advise the Trustee
by telephone (confirmed in
writing at any time on the sale date)
or electronic transmission of the
information set forth in Settlement
Procedure "A" above and the name of
the Presenting Agent. Each such
communication by the Company shall
constitute a representation and
warranty by the Company to the
Trustee and each Agent that (i) such
Note is then, and at the time of
issuance and sale thereof will be,
duly authorized for issuance and sale
by the Company, (ii) such Note will
conform with the terms of the
Indenture and (iii) upon
authentication and delivery of such
Note, the aggregate initial offering
price of all Notes issued under the
Indenture will not exceed
$650,000,000 or the equivalent
thereof in other currencies (except
for securities represented by
securities authenticated and
delivered in exchange for or in lieu
of securities pursuant to Section
2.08, 2.09, 2.12, 3.06 or 9.05 of any
Indenture).
C. The Company will deliver to
the Trustee a pre-printed four-ply
packet for such Certificated Note,
which packet will
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<PAGE> 60
contain the following documents in
forms that have been approved by
the Company, the Agents and the
Trustee:
1. Certificated Note with
customer confirmation.
2. Stub One - For Trustee.
3. Stub Two - For Agent (to the
address specified in
Schedule I to the Agreement).
4. Stub Three - For the Company.
D. The Trustee will complete such
Certificated Note and
authenticate such Certificated Note
and deliver it (with the
confirmation) and Stubs One and Two
to the Presenting Agent, all in
accordance with the written
directions (or oral instructions
confirmed in writing on the next
Business Day) of the Company, and the
Presenting Agent will acknowledge
receipt of the Note by stamping or
otherwise marking Stub One and
returning it to the Trustee. Such
delivery will be made only against
such acknowledgment of receipt and
evidence that instructions have been
given by the Presenting Agent for
payment to the account of the Company
at The Chase Manhattan Bank (National
Association), in funds available for
immediate use, of an amount equal to
the price of such Note less the
Presenting Agent's commission. In
the event that the instructions given
by the Presenting Agent for payment
to the account of the Company are
revoked, the Company will as promptly
as possible wire transfer to the
account of the Presenting Agent an
amount of immediately available funds
equal to the amount of such payment
made.
E. The Presenting Agent will deliver
such Certificated Note (with the
confirmation) to the customer against
payment in immediately payable
funds. The Presenting Agent will
obtain the
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<PAGE> 61
acknowledgement of receipt of
such Certificated Note by retaining
Stub Two.
F. The Trustee will send Stub Three to
the Company by first-class mail.
Settlement
Procedures
Timetable: For offers of Certificated Notes solicited by
an Agent, as agent, and accepted by the
Company, Settlement Procedures "A" through "F"
set forth above shall be completed on or
before the respective times (New York City
time) set forth below:
<TABLE>
<CAPTION>
Settlement
Procedure Time:
--------- -----
<S> <C>
A 1:00 P.M. on day before settlement date
B 3:00 P.M. on day before settlement date
C-D 2:15 P.M. on settlement date
E 3:00 P.M. on settlement date
F 5:00 P.M. on settlement date
</TABLE>
Failure to Settle: If a purchaser fails to accept delivery of
and make payment for any Certificated
Note, the Presenting Agent will notify the
Company and the Trustee by telephone and
return such Certificated Note to the Trustee.
Upon receipt of such notice, the Company will
immediately wire transfer to the account of
the Presenting Agent an amount equal to the
amount previously credited to the account of
the Company in respect of such Certificated
Note. Such wire transfer will be made on the
settlement date, if possible, and in any event
not later than the Business Day following the
settlement date. If the failure shall have
occurred for any reason other than a default
by the Presenting Agent in the performance of
its obligations hereunder and under the Agency
Agreement, then the Company will reimburse the
Presenting Agent or the Trustee, as
appropriate, on an equitable basis for its
loss of the use of the funds during the period
when they were credited to the account of the
Company. Immediately upon receipt of the
Certificated Note in respect of which such
failure occurred, the Trustee will
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<PAGE> 62
cancel such Certificated Note in
accordance with the Indenture, make
appropriate entries in the Trustee's records
and send such Note to the Company.
Procedure for
Rate Changes: When the Company has determined to change the
interest rates of Certificated Notes
being offered, it will promptly advise the
Agents and the Agents will forthwith suspend
solicitation of offers. The Agents will
telephone the Company with recommendations as
to the changed interest rates. At such time
as the Company has advised the Agents of the
new interest rates, the Agents may resume
solicitation of offers. Until such time only
"indications of interest" may be recorded.
The Company will file with the Commission, in
accordance with the applicable paragraph of
Rule 424(b) under the Act, a Pricing
Supplement to the Prospectus relating to such
Notes that reflects the applicable interest
rates and other terms and will deliver copies
of such Pricing Supplement to the Agents.
Suspension of
Solicitation;
Amendments or
Supplement: Subject to the Company's representations,
warranties and covenants contained in
the Agency Agreement, the Company may instruct
each Agent to suspend solicitation of
purchases of Certificated Notes at any time.
Upon receipt of such instructions, each Agent
will forthwith suspend such solicitations
until such time as it has been advised by the
Company that such solicitations may be
resumed. If the Company decides to amend or
supplement the Registration Statement (as
defined in the Agency Agreement) filed by the
Company with the Commission with respect to
the Notes or the Prospectus relating to the
Notes, it will promptly advise each Agent and
will furnish it with the proposed amendment or
supplement, all consistent with the Company's
obligations under the Agency Agreement.
Subject to the provisions of the Agency
Agreement, the Company may file with the
Commission any such supplement to the
Prospectus relating to the Notes. The Company
will provide the Agents and the Trustee with
copies of any such supplement,
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<PAGE> 63
and confirm to the Agents that such
supplement has been filed with the Commission
pursuant to the applicable paragraph of Rule
424(b). The Company will, consistent with
such obligations, promptly advise each Agent
and the Trustee whether orders outstanding at
the time each Agent suspends solicitation may
be settled and whether copies of such
Prospectus as in effect at the time of the
suspension, together with the appropriate
Pricing Supplement, may be delivered in
connection with the settlement of such
orders. The Company will have the sole
responsibility for such decision and for any
arrangements that may be made in the event the
Company determines that such orders may not be
settled or that copies of such Prospectus and
Pricing Supplement may not be so delivered.
Delivery of
Prospectus: A copy of the Prospectus and Pricing
Supplement relating to a Certificated
Note must accompany or precede the earlier of
any written offer of such Note, delivery of
such Note, confirmation of the purchase of
such Note and payment for such Note by its
purchaser. If notice of a change in the terms
of the Certificated Notes is received by an
Agent between the time an order for a
Certificated Note is placed and the time
written confirmation thereof is sent by such
Agent to a customer or his agent, such
confirmation shall be accompanied by a
Prospectus and Pricing Supplement setting
forth the terms in effect when the order was
placed. Subject to the preceding paragraph,
each Agent will deliver a Prospectus and
Pricing Supplement as herein described with
respect to each Note sold by it. The Company
will make such delivery if such Certificated
Note is sold directly by the Company to a
purchaser (other than any Agent).
Confirmation: For each offer to purchase a Certificated
Note solicited by any Agent and accepted
by or on behalf of the Company, the Presenting
Agent will issue a confirmation to the
purchaser, with a copy to the Company, setting
forth the details set forth above and delivery
and payment instructions.
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<PAGE> 64
PART III: ADMINISTRATIVE PROCEDURES FOR BOTH
BOOK-ENTRY AND CERTIFICATED NOTES
Trustee Not to
Risk Funds: Nothing herein shall be deemed to require the
Trustee to risk or expend its own funds
in connection with any payment to the Company,
or any Agent or the purchaser, it being
understood by all parties that payments made
by the Trustee to either the Company or any
Agent shall be made only to the extent that
funds are provided to the Trustee for such
purpose.
Authenticity of
Signatures: The Company will cause the Trustee to furnish
each Agent from time to time with the
specimen signatures of each of the Trustee's
officers, employees or agents who has been
authorized by the Trustee to authenticate
Notes, but each Agent will have no obligation
or liability to the Company or the Trustee in
respect of the authenticity of the signature
of any officer, employee or agent of the
Company or the Trustee on any Note. The
Company will furnish the Trustee from time to
time with the specimen signatures of persons
who have been authorized by the Company to
sign Company Orders.
Payment of
Expenses: Each Agent shall forward to the Company, from
time to time (but not more often than
monthly), a statement of the out-of-pocket
expenses incurred by such Agent during that
time which are reimbursable to it pursuant to
the terms of the Agency Agreement. The
Company will remit payment promptly to such
Agent.
Advertising Costs: The Company will determine with each Agent
the amount of advertising that may be
appropriate in soliciting offers to purchase
the Notes. Advertising expenses will be paid
by the Company.
Periodic Statements
from the Trustee: Periodically, the Trustee will send to the
Company a statement setting forth the
principal amount of Book-Entry Notes
Outstanding as of that date and setting forth
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<PAGE> 65
a brief description of any sales of
Book-Entry Notes which the Company has
advised, but which have not yet been settled.
-35-
<PAGE> 66
EXHIBIT B
General American Transportation Corporation
Medium-Term Notes, Series E
Due from 9 Months or More from Date of Issue
TERMS AGREEMENT
____________ __, 19__
General American Transportation Corporation
500 West Monroe Street
Chicago, Illinois 60661-3676
Attention: Treasurer
Subject in all respects to the terms and conditions of the
Selling Agency Agreement (the "Agreement") dated February __, 1994, among
Salomon Brothers Inc, Morgan Stanley & Co. Incorporated and you (the
"Agreement"), the undersigned agrees to purchase the following Notes of General
American Transportation Corporation:
Aggregate Principal Amount:
Currency or Currency Unit:
Interest Rate or Method of Determining:
Date of Maturity:
Interest Payment Dates:
Regular Record Dates:
Purchase Price: ____% of Principal Amount [plus accrued
interest from ___________, 19__]
Purchase Date and Time:
Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
Modification, if any, in the
requirements to deliver the
documents specified in Section
6(b) of the Agreement:
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<PAGE> 67
Period during which additional
Notes may not be sold pursuant
to Section 4(m) of the Agreement: The period from the signing
of this Terms Agreement
through the closing hereunder.
[Specify if different period
is agreed upon.]
Other Terms:
[Additional Information Application
to Offers to Purchase Original
Issue Discount Notes:
Total amount of OID:
Yield to Maturity:
Initial Accrual Period OID:]
[Name]
By:___________________________
Its:_________________________]
[Name]
By:___________________________
Its:_________________________]
Accepted:
General American Transportation
Corporation
By:___________________________
Its:__________________________
-2-
<PAGE> 1
Exhibit 4.2
Under proposed United States Treasury Regulations, it is possible that Notes
which are not issued at a discount but which are issued between a record date
and the related Interest Payment Date would be treated as issued at an original
issue discount because interest is not paid at fixed periodic intervals at a
fixed rate during the entire term of such Notes, with the consequence that
holders (including cash basis holders) would be required to report interest in
respect of such a Note as a constant yield accrual basis for United States
Federal income tax purposes.
CUSIP NO.
REGISTERED NO. FIXR PRINCIPAL AMOUNT:
GENERAL AMERICAN TRANSPORTATION CORPORATION
MEDIUM-TERM NOTE, SERIES E
Due Nine Months or More from Date of Issue
(Fixed Rate)
If the registered owner of this Note (as indicated below) is The Depository
Trust Company (the "Depository") or a nominee of the Depository, this Note is a
global Note and the following legend is applicable: Unless this certificate is
presented by an authorized representative of The Depository Trust Company (55
Water Street, New York, New York) to the issuer or its agent for registration
of transfer, exchange or payment, and any certificate issued is registered in
the name of CEDE & CO., or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to CEDE
& CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL since the registered owner hereof, CEDE & CO., has an
interest herein.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "YIELD TO
MATURITY" AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED
UNDER THE APPROXIMATE METHOD BELOW) WILL BE
COMPUTED SOLELY FOR PURPOSES OF APPLYING THE
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES
The following summary of terms is subject to the information set forth on the
reverse hereof:
<TABLE>
<S> <C>
ISSUANCE PRICE: OPTIONAL REDEMPTION: [ ] YES [ ] NO
ORIGINAL ISSUE DATE: INITIAL REDEMPTION DATE:
MATURITY DATE: OPTION TO ELECT REPAYMENT: [ ] YES [ ] NO
SPECIFIED CURRENCY: OPTIONAL REPAYMENT DATES:
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
OPTION TO RECEIVE PAYMENTS OPTIONAL REPAYMENT PRICES:
IN SPECIFIED CURRENCY:
[ ] YES [ ] NO
AUTHORIZED DENOMINATIONS: INTEREST RATE:
INTEREST PAYMENT DATES: TOTAL AMOUNT OF OID:
YIELD TO MATURITY: INITIAL ACCRUAL PERIOD OID:
REDEMPTION PRICE: Initially DEPOSITORY:
___% of Principal Amount and
declining by ___% of the AMORTIZING NOTE:
Principal Amount on each
anniversary of the Initial EXTENDIBLE MATURITY NOTE:
Redemption Date until the
Redemption Price is 100% of OTHER PROVISIONS:
the Principal Amount.
</TABLE>
GENERAL AMERICAN TRANSPORTATION CORPORATION, a New York corporation (herein
called the "Company", which term includes any successor Person under the
Indenture referred to on the reverse hereof), for value received, hereby
promises to pay to _____________________________ or registered assigns, the
principal sum of ______________________________ on the Maturity Date shown
above, and to pay interest thereon from and including the Original Issue Date
shown above or from and including the last date in respect of which interest
has been paid, as the case may be. Interest will be paid on the Interest
Payment Dates shown above, commencing with the first such Interest Payment Date
next succeeding the Original Issue Date shown above (except as provided below),
at the rate per annum specified above, until the principal hereof is paid or
made available for payment, and interest shall accrue on any overdue principal
and on any overdue installment of interest (to the extent that the payment of
such interest shall be legally enforceable) at the rate per annum in effect at
the time such principal or installment of interest, as the case may be, was due
and payable. The interest so payable and punctually paid or duly provided for
on any Interest Payment Date will, as provided in such Indenture, be paid to
the Person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the regular record date for such
interest, which shall be the fifteenth day (whether or not a Business Day) next
preceding such Interest Payment Date; provided, however, that interest payable
at the Maturity Date or upon earlier redemption or repayment will be payable to
the Person to whom principal shall be payable. If this Note was originally
issued between a regular record date and an Interest Payment Date, the first
payment of interest on this Note will be made on the Interest Payment Date
following the next succeeding regular record date to the registered owner of
this Note on such next succeeding regular record date. Any interest not
punctually paid or duly provided for shall be payable as provided in the
Indenture.
2
<PAGE> 3
If this Note is denominated in a Specified Currency other than U.S. dollars,
then the Holder may, by delivery of a written request to the Trustee, One New
York Plaza, 14th Floor, New York, New York 10081 (Attention: Corporate Trust
Department) or at such other address as it may designate as its principal
corporate trust office in The City of New York, received by the Trustee on or
prior to the applicable record date or at least 15 days prior to the Maturity
Date, as the case may be, elect to receive all such payments in the Specified
Currency. Such election will remain in effect until revoked by written notice
to the Trustee received not later than the applicable record date or at least
15 days prior to the Maturity Date, as the case may be. In addition, if bid
quotations for U.S. dollars of the type specified on the reverse side hereof
are not available, the Exchange Rate Agent (as defined), will be unable to
exchange the Specified Currency for U.S. dollars and payments of principal and
interest will be made in the Specified Currency. If the Specified Currency is
unavailable due to the imposition of exchange controls or to other
circumstances beyond the Company's control, payments will be made in U.S.
dollars as described on the reverse side hereof.
Payments in U.S. dollars of interest on this Note (other than interest
payable at the Maturity Date or upon earlier redemption or repayment) will be
made by mailing a check to the Holder at the address of the Holder appearing in
the security register on the applicable record date. Simultaneously with the
election by the Holder to receive payments in a Specified Currency other than
U.S. dollars (by written request to the Trustee, as provided above), the Holder
shall provide appropriate payment instructions to the Paying Agent (as
defined), and all such payments will be made in immediately available funds to
an account maintained by the payee in the Specified Currency. Principal and
interest payable at the Maturity Date or upon earlier redemption or repayment
in respect of this Note will be paid in immediately available funds upon
surrender of this Note accompanied by wire transfer instructions at the office
of the Trustee.
If the registered owner of this Note (as indicated above) is the Depository
or a nominee of the Depository, this Note is a global Note and the following
legend is applicable except as specified on the reverse hereof: THIS GLOBAL
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY OR BY A NOMINEE
OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY
THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR OF THE DEPOSITORY OR A
NOMINEE OF SUCH SUCCESSOR.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
Reference is hereby made to the further provisions of this Note set forth on
the reverse hereof and such further provisions shall for all purposes have the
same effect as though fully set forth at this place.
This Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been manually signed by or on
behalf of the Trustee under the Indenture referred to on the reverse hereof.
3
<PAGE> 4
IN WITNESS WHEREOF, General American Transportation Corporation has caused
this instrument to be signed in its name by the facsimile signatures of its
duly authorized officers, and has caused a facsimile of its corporate seal to
be affixed hereunto or imprinted hereon.
Dated:
GENERAL AMERICAN TRANSPORTATION CORPORATION
By:________________________________________
(Corporate Seal)
Attest:
By:_____________________________
Trustee's Certificate of Authentication
This is one of the Securities of the
series described herein and referred
to in the within-mentioned Indenture.
The Chase Manhattan Bank
(National Association), As Trustee
By:______________________________
Authorized Officer
4
<PAGE> 5
GENERAL AMERICAN TRANSPORTATION CORPORATION
MEDIUM-TERM NOTE, SERIES E
Section 1. General. This Note is one of a duly authorized issue of
debentures, notes, bonds or other evidences of indebtedness of the Company
(herein called the "Securities"), of the series hereinafter specified, all
issued or to be issued under and pursuant to an indenture, dated as of October
1, 1987, between General American Transportation Corporation (the "Company")
and The Chase Manhattan Bank (National Association), as Trustee, as
supplemented by the First Supplemental Indenture, dated as of May 15, 1988, the
Second Supplemental Indenture, dated as of March 15, 1990, and the Third
Supplemental Indenture, dated as of June 15, 1990, each between the Company and
the Trustee (the indenture, as so supplemented, is referred to as the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the Holders of the Notes. The Securities may be issued in one or
more series, which different series may be issued in various aggregate
principal amounts, may mature at different times, may bear interest, if any, at
different rates, may be subject to different redemption provisions, if any, may
be subject to different sinking, purchase or analogous funds, if any, and may
otherwise vary as in the Indenture provided. This Note is one of a series
designated as "Medium-Term Notes, Series E" of the Company, limited in
aggregate principal amount to U.S. $650,000,000, or its equivalent in foreign
currencies or currency units, or in such lesser amount as may be reduced by the
sale of Securities of another series. References herein to "Notes" shall mean
the Notes of said Series E.
Section 2. Payments. (a) Interest on this Note will be payable
semi-annually each June 15 and December 15 (the "Interest Payment Dates") and
at the Maturity Date or upon earlier redemption or repayment.
Interest payments on each Interest Payment Date for this Note will include
accrued interest from and including the Original Issue Date or from and
including the last date in respect of which interest has been paid, as the case
may be, to, but excluding, such Interest Payment Date, except that at the
Maturity Date the interest payments will include accrued interest from and
including the Original Issue Date, or from and including the last date in
respect of which interest has been paid, as the case may be, to, but excluding,
the Maturity Date.
(b) If the Specified Currency shown on the face hereof is other than U.S.
dollars and if the Holder has not made the election described in paragraph (c)
below, payment in respect of this Note shall be made in U.S. dollars based upon
the exchange rate as determined by the Exchange Rate Agent (initially The Chase
Manhattan Bank (National Association)) based on the highest firm bid quotation
expressed in U.S. dollars received by the Exchange Rate Agent at approximately
11:00 a.m., New York City time, on the second Business Day preceding the
applicable payment date from three recognized foreign exchange dealers in The
City of New York selected by the Exchange Rate Agent and approved by the
Company (one of which may be the Exchange Rate Agent) for the purchase by the
quoting dealer, for settlement on such payment date, of the aggregate amount of
the
5
<PAGE> 6
Specified Currency payable to all Holders of Notes denominated in such
Specified Currency who have elected to receive payment in U.S. dollars on such
payment date. If no such bid quotations are available, payments will be made
in the Specified Currency, unless such Specified Currency is unavailable due to
the imposition of exchange controls or to other circumstances beyond the
Company's control, in which case payment will be made as described in paragraph
(d) below. All currency exchange costs associated with any payment in U.S.
dollars on this Note shall be borne by the Holder hereof by deductions from
such payments.
(c) If the Specified Currency for this Note is other than U.S. dollars, the
Exchange Rate Agent will, unless otherwise specified on the face hereof,
determine the exchange rate for converting all payments in respect of this Note
into U.S. dollars in the manner described in paragraph (b) above and perform
such conversion on behalf of the Company. Notwithstanding the foregoing, if
this Note is denominated in a Specified Currency other than U.S. dollars, the
Holder of this Note may elect to receive all such payments in the Specified
Currency by delivery of a written request to the Trustee, One New York Plaza,
14th Floor, New York, New York 10081, which must be received by the Trustee on
or prior to the applicable record date or at least 15 calendar days prior to
the Maturity Date, as the case may be. Such election shall remain in effect
unless and until changed by written notice to the Trustee, but the Trustee must
receive written notice of any such change on or prior to the applicable record
date or at least 15 calendar days prior to the Maturity Date, as the case may
be. Such election shall remain in effect unless and until changed by written
notice to the Trustee received on or prior to the applicable record date or at
least 15 calendar days prior to the Maturity Date. In the absence of manifest
error, all determinations by the Exchange Rate Agent shall be final and binding
on the Company and the Holder of this Note.
(d) Except as set forth below, if payment of this Note is required to be
made in a Specified Currency other than U.S. dollars and on a payment date with
respect to this Note such currency is unavailable due to the imposition of
exchange controls or other circumstances beyond the Company's control, or is no
longer used by the government of the country issuing such currency or for the
settlement of transactions by public institutions of or within the
international banking community, then all payments due on such payment date
shall be made in U.S. dollars. The amount so payable on any payment date in
such Specified Currency shall be converted into U.S. dollars at a rate
determined by the Exchange Rate Agent on the basis of the most recently
available noon buying rate for cable transfers in The City of New York as
determined by the Federal Reserve Bank of New York (the "Market Exchange
Rate"), or as otherwise specified on the face hereof. Any payment made under
such circumstances in U.S. dollars where the required payment is in Specified
Currency other than U.S. dollars will not constitute an Event of Default under
the Indenture.
If payment on this Note is required to be made in European Currency Units
("ECU") and on a payment date with respect to this Note ECU are unavailable due
to the imposition of exchange controls or other circumstances beyond the
Company's control, or are no longer used in the European Monetary System, then
all payments due on such payment date shall be made in U.S. dollars. The
amount so payable on any payment date in ECU shall be converted into U.S.
dollars at a rate determined by the Exchange Rate Agent as of the second
Business Day prior to the date on which such payment is due on the following
basis: The component currencies of the ECU for this
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<PAGE> 7
purpose (the "Components") shall be the currency amounts that were Components
of the ECU as of the last date on which ECU were used in the European Monetary
System. The equivalent of ECU in U.S. dollars shall be calculated by
aggregating the U.S. dollar equivalents of the Components. The U.S. dollar
equivalent of each of the Components shall be determined by the Exchange Rate
Agent on the basis of the most recently available Market Exchange Rate for the
Components, or as otherwise indicated on the face hereof.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
shall be divided or multiplied in the same proportion. If two or more
component currencies are consolidated into a single currency, the amount of
those currencies as Components shall be replaced by an amount in such single
currency equal to the sum of the amounts of the consolidated component
currencies expressed in such single currency. If any component currency is
divided into two or more currencies, the amount of that currency as a Component
shall be replaced by amounts of such two or more currencies, each of which
shall have a value on the date of division equal to the amount of the former
component currency divided by the number of currencies into which that currency
was divided.
All determinations referred to above made by the Exchange Rate Agent shall be
at its sole discretion (except to the extent expressly provided herein or on
the face hereof that any determination is subject to approval by the Company)
and, in the absence of manifest error, shall be conclusive for all purposes and
binding on the Holder of this Note and the Company, and the Exchange Rate Agent
shall have no liability therefor.
(e) All percentages resulting from any calculations under this Note will be
rounded, if necessary, to the nearest one hundred thousandth of a percentage
point (with five one-millionths of a percentage point being rounded upward) and
all currency or currency unit amounts used in or resulting from any such
calculation in respect of the Notes will be rounded to the nearest
one-hundredth of a unit (with five one-thousandths being rounded upward).
(f) Until the Notes are paid or payment thereof is duly provided for, the
Company will, at all times, maintain a paying agent (the "Paying Agent") in The
City of New York capable of performing the duties described herein to be
performed by the Paying Agent. The Company has initially appointed the Trustee
as the Paying Agent. The Company will notify the Holders of such Notes, in
accordance with the Indenture, of any change in the Paying Agent or its
address.
Section 3. Redemption. If so specified on the face hereof, the Company may
at its option redeem this Note in whole or from time to time in part on or
after the date designated as the Initial Redemption Date on the face hereof at
prices declining from a specified premium, if any, to par together with accrued
interest to the date of redemption. The Company may exercise such option by
causing the Trustee to mail a notice of such redemption at least 30 but not
more than 60 days prior to the date of redemption. In the event of redemption
of this Note in part only, a new Note or Notes for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the cancellation
hereof. If less than all of the Notes with like tenor and terms to this Note
are to be
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<PAGE> 8
redeemed, the Notes to be redeemed shall be selected by the Trustee by such
method as the Trustee shall deem fair and appropriate.
Section 4. Repayment. If so specified on the face hereof, this Note will be
repayable prior to the Maturity Date at the option of the Holder on the
Optional Repayment Dates shown on the face hereof at the Optional Repayment
Prices shown on the face hereof together with accrued interest to the date of
repayment. In order for this Note to be repaid, the Trustee must receive at
least 30 but not more than 45 days prior to an Optional Repayment Date (i) this
Note with the form below entitled "Option to Elect Repayment" duly completed or
(ii) a telegram, telex, facsimile transmission or letter from a member of a
national securities exchange or the National Association of Securities Dealers,
Inc. or a commercial bank or trust company in the United States of America
setting forth the name of the Holder of this Note, the principal amount of this
Note, the principal amount of this Note to be repaid, the certificate number or
a description of the tenor and terms of this Note, a statement that the option
to elect repayment is being exercised thereby and a guarantee that this Note
with the form below entitled "Option to Elect Repayment" duly completed will be
received by the Paying Agent not later than five Business Days after the date
of such telegram, telex, facsimile transmission or letter. If the procedure
described in clause (ii) of the preceding sentence is followed, this Note with
such form duly completed must be received by the Paying Agent by such fifth
Business Day. Any tender of this Note for repayment shall be irrevocable. The
repayment option may be exercised by the Holder of this Note for less than the
entire principal amount of the Note provided that the principal amount of the
Note remaining outstanding after repayment is an authorized denomination. Upon
such partial repayment this Note shall be cancelled and a new Note or Notes for
the remaining principal amount hereof shall be issued in the name of the Holder
of this Note.
Section 5. Sinking Fund. The Notes will not be subject to any sinking fund.
Section 6. Original Issue Discount Notes. Notwithstanding anything herein
to the contrary, if this Note is an Original Issue Discount Note, the amount
payable in the event of redemption or repayment, or declaration of acceleration
following an Event of Default, prior to the Maturity Date hereof in lieu of the
principal amount due at the Maturity Date hereof shall be the Amortized Face
Amount of this Note as of the redemption date, the date of repayment or the
date of declaration of acceleration, as the case may be. The "Amortized Face
Amount" of this Note shall be the amount equal to (a) the Issue Price (as set
forth on the face hereof) plus (b) that portion of the difference between the
Issue Price and the principal amount hereof that has accrued at the Yield to
Maturity (as set forth on the face hereof) (computed in accordance with
generally accepted United States bond yield computation principles) at the date
as of which the Amortized Face Amount is calculated but in no event shall the
Amortized Face Amount of this Note exceed its principal amount.
Section 7. Events of Default. In case an Event of Default, as defined in
the Indenture, with respect to the notes shall have occurred and be continuing,
the principal hereof and any accrued interest hereon may be declared, and upon
such declaration shall become, due and payable, in the manner, with the effect
and subject to the conditions provided in the Indenture.
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<PAGE> 9
Section 8. Modifications and Waivers. The Indenture contains provisions
permitting the Company and the Trustee, with the written consent of the Holders
of a majority in principal amount of the outstanding Securities of all series
to be affected (with each series voting as a class), evidenced as in the
Indenture provided, to execute supplemental indentures adding any provisions to
change or eliminate any provisions of the Indenture or any supplemental
indenture or to modify the rights of the Holders of the Securities of each such
series; provided, however, that no such supplemental indenture shall (i) change
the Maturity Date of any Security, or reduce the principal amount thereof, the
rate of or the time of payment of any interest on any Security, reduce any
premium payable upon the redemption thereof, waive a Default in the payment of
the principal of or interest on any Security, make any Security payable in
money other than that stated therein, make any change in respect of the
percentage of Securities of any series, the consent of the holders of which is
required to waive an existing Default, or impair or affect the right of any
Holder to bring suit for the payment thereof, or (ii) reduce the aforesaid
percentage of Securities of any series, the consent of the Holders of which is
required for any such supplemental indenture, without the consent of the Holder
of each Security affected. It is also provided in the Indenture that, with
respect to certain Defaults or Events of Default regarding the Securities of
any series, the Holders of a majority in principal amount of the Securities of
such series at the time outstanding may on behalf of the Holders of all of the
Securities of such series waive any existing Default or Event of Default and
its consequences, except a Default in the payment of the principal of or
interest on any of the Securities. Any such consent or waiver by the Holder of
this Note (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders and owners of this Note
and of any Note which may be issued upon the registration for transfer hereof
or in exchange or substitution herefor, irrespective of whether or not any
notation of such consent or waiver is made upon this Note or such other Notes.
No reference herein to the Indenture and no reference to any provision of
this Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest, if any, on this Note at the place, at the
respective times, at the rate and in the currency herein prescribed.
Section 9. Authorized Denominations. The Notes are issuable in registered
form without coupons in the minimum denomination of $1,000, or the equivalent
thereof in the Specified Currency, and in any larger amount that is an integral
multiple of $1,000 or 1,000 units of the Specified Currency. Notes may be
exchanged by the Holder hereof without charge except for any tax or other
governmental charge imposed in connection therewith, for a like aggregate
principal amount of Notes of other authorized denominations in the manner and
subject to the limitations provided in the Indenture at the office or agency to
be maintained by the Company in The City of New York, New York, or at such
other location or locations as may be provided for in the Indenture.
Section 10. Registration of Transfer. Upon due presentment for registration
of transfer of this Note at the office or agency of the Company in The City of
New York, New York, one or more new Notes of authorized denominations, for an
equal aggregate principal amount, will be
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<PAGE> 10
issued to the transferee in exchange therefor subject to the limitations
provided in the Indenture, without charge except for any tax or other
governmental charge imposed in connection therewith.
If this Note is a global Note (as specified on the face hereof), this Note is
exchangeable only if (x) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for this global Note or if at any
time the Depository ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, (y) the Company in its sole
discretion determines that this Note shall be exchangeable for certificated
Notes in registered form or (z) an Event of Default, or an event which with the
passage of time or the giving of notice would become an Event of Default, with
respect to the Notes represented hereby has occurred and is continuing,
provided that the definitive Notes so issued in exchange for this permanent
global Note shall be in denominations of $1,000 and any integral multiple of
$1,000 in excess thereof and be of like aggregate principal amount and tenor as
the portion of this permanent global Note to be exchanged, and provided further
that, unless the Company agrees otherwise, Notes of this series in certificated
registered form will be issued in exchange for this permanent global Note, or
any portion hereof, only if such Notes in certificated registered form were
requested by written notice to the Trustee or the Securities Registrar by or on
behalf of a person who is beneficial owner of an interest hereof given through
the Holder hereof. Except as provided above, owners of beneficial interests in
this permanent global Note will not be entitled to receive physical delivery of
Notes in certificated registered form and will not be considered the Holders
thereof for any purpose under the Indenture.
Section 11. Owners. Prior to due presentment for registration of transfer
of this Note, the Company, the Trustee, any Paying Agent and the Security
Registrar may deem and treat the registered Holder hereof as the absolute owner
of this Note (whether or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon), for the purpose of receiving
payment of, or on account of, the principal hereof, and, subject to the
provisions on the face hereof, interest hereon, and for all other purposes, and
neither the Company nor the Trustee nor any Paying Agent nor any Security
Registrar shall be affected by any notice to the contrary.
Section 12. No Recourse Against Certain Persons. No recourse shall be had
for the payment of the principal (or premium, if any) or the interest on this
Note, or for any claim based hereon, or otherwise in respect hereof, or based
on or in respect of the Indenture or any indenture supplemental thereto,
against any incorporator, stockholder, officer, director or employee, as such,
past, present or future, of the Company or any successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
Section 13. Defined Terms. All terms used in this Note which are defined in
the Indenture shall have the meanings assigned to them therein.
Section 14. Governing Law. This Note shall be governed and construed in
accordance with the law of the State of New York.
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<PAGE> 11
OPTION TO ELECT REPAYMENT
The undersigned owner of this Note hereby irrevocably elects to have the
Company repay the principal amount of this Note or portion hereof below
designated at the Optional Repayment Price indicated on the face hereof.
Dated:_____________________ ______________________________
Signature
Sign exactly as name appears on
the front of this Security
[SIGNATURE GUARANTEE - required
only if Securities are to be issued
and delivered to other than the
registered holder]
Principal amount to be Fill in for registration of
repaid, if amount to be Securities if to be issued
is less principal amount otherwise than to the then
of this Security (principal registered holder:
amount remaining must be an
authorized denomination) Name:_________________________
Address:______________________
______________________________
$_________________________ (Please print name and
address including zip code)
SOCIAL SECURITY OR OTHER TAXPAYER
ID NUMBER
______________________________
11
<PAGE> 12
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT MIN ACT - ...........Custodian...........
(Cust) (Minor)
Under Uniform Gifts to Minors Act
.................................
(State)
Additional abbreviations may also be used though not in the above list.
____________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
___________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE
OF ASSIGNEE
_______________________________________________ the within Note and all rights
thereunder, hereby irrevocably constituting and appointing __________________
attorney to transfer said Note on the books of the Company, with full power of
substitution in the premises.
Dated: _________________________________
Signature
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<PAGE> 13
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
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<PAGE> 1
EXHIBIT 4.3
Under proposed United States Treasury Regulations, it is possible that Notes
which are not issued at a discount but which are issued between a record date
and the related Interest Payment Date would be treated as issued at an original
issue discount because interest is not paid at fixed periodic intervals at a
fixed rate during the entire term of such Notes, with the consequence that
holders (including cash basis holders) would be required to report interest in
respect of such a Note on a constant yield accrual basis for United States
Federal income tax purposes.
CUSIP NO.
REGISTERED NO. FLR PRINCIPAL AMOUNT:
_________________
GENERAL AMERICAN TRANSPORTATION CORPORATION
MEDIUM-TERM NOTE, SERIES E
Due Nine Months or More from Date of Issue
(Floating Rate)
If the registered owner of this Note (as indicated below) is The Depository
Trust Company (the "Depository") or a nominee of the Depository, this Note is a
global Note and the following legend is applicable: Unless this certificate is
presented by an authorized representative of The Depository Trust Company (55
Water Street, New York, New York) to the issuer or its agent for registration
of transfer, exchange or payment, and any certificate issued is registered in
the name of CEDE & CO., or such other name as requested by an authorized
representative of The Depository Trust Company and any payment is made to CEDE
& CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL since the registered owner hereof, CEDE & CO., has an
interest herein.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID", "YIELD TO
MATURITY" AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED
UNDER THE APPROXIMATE METHOD BELOW) WILL BE
COMPUTED SOLELY FOR PURPOSES OF APPLYING THE
FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES
The following summary of terms is subject to the information set forth on the
reverse hereof:
ISSUE PRICE: REDEMPTION PRICE:
Initially ____% of Principal Amount and
declining by ___% of the Principal
ORIGINAL ISSUE DATE: Amount on each anniversary of the
Initial Redemption Date until the
Redemption Price is 100% of the
MATURITY DATE: Principal amount
BASE RATE:
<PAGE> 2
<TABLE>
<S> <C>
INITIAL INTEREST RATE: TOTAL AMOUNT OF OID:
INDEX MATURITY: YIELD TO MATURITY:
SPREAD (PLUS OR MINUS): INITIAL ACCRUAL PERIOD OID:
SPREAD MULTIPLIER: OPTION TO ELECT REPAYMENT: [ ] YES [ ] NO
AUTHORIZED DENOMINATIONS: OPTIONAL REPAYMENT DATES:
CALCULATION AGENT: OPTIONAL REPAYMENT PRICES:
MAXIMUM INTEREST RATE: MINIMUM INTEREST RATE:
INTEREST RESET PERIOD: INTEREST RESET DATES:
INTEREST PAYMENT PERIOD: INTEREST PAYMENT DATES:
SPECIFIED CURRENCY: DEPOSITORY:
OPTION TO RECEIVE PAYMENTS IN SPECIFIED CURRENCY: AMORTIZING NOTE:
[ ] YES [ ] NO
OPTIONAL REDEMPTION: [ ] YES [ ] NO EXTENDIBLE MATURITY NOTE:
INITIAL REDEMPTION DATE: OTHER PROVISIONS:
</TABLE>
GENERAL AMERICAN TRANSPORTATION CORPORATION, a New York corporation (herein
called the "Company", which term includes any successor Person under the
Indenture referred to on the reverse hereof), for value received, hereby
promises to pay to ___________________________________________, or registered
assigns, the principal sum of ______________________________________ on the
Maturity Date shown above, and to pay interest thereon from and including the
Original Issue Date shown above or from and including the last date in respect
of which interest has been paid, as the case may be; provided, however, that if
this Note has a daily or weekly Interest Reset Period, as shown above, such
interest will be paid from and including the Original Issue Date shown above or
from and including the day following the most recent regular record date to
which interest has been paid, as the case may be. Interest will be paid on the
Interest Payment Dates shown above, commencing with the first such Interest
Payment Date next succeeding the Original Issue Date shown above (except as
provided below), at the rate per annum determined in accordance with the
provisions on the reverse hereof, depending on the Base Rate specified above
and the Spread, if any, or Spread Multiplier, if any, until the principal
hereof is paid or made available for payment, and interest shall accrue on any
overdue principal and on any overdue installment of interest (to the extent
that the payment of such interest shall be legally enforceable) at the rate per
annum in effect at the time such principal or installment of interest, as
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<PAGE> 3
the case may be, was due and payable. The interest so payable and punctually
paid or duly provided for on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the regular record
date for such interest, which shall be the fifteenth day (whether or not a
Business Day) next preceding such Interest Payment Date; provided, however,
that interest payable at the Maturity Date or upon earlier redemption or
repayment will be payable to the Person to whom principal shall be payable. If
this Note was originally issued between a regular record date and an Interest
Payment Date, the first payment of interest on this Note will be made on the
Interest Payment Date following the next succeeding regular record date to the
registered owner of this Note on such next succeeding regular record date. Any
interest not punctually paid or duly provided for shall be payable as provided
in the Indenture.
If this Note is denominated in a Specified Currency other than U.S. dollars,
then the Holder may, by delivery of a written request to the Trustee, One New
York Plaza, 14th Floor, New York, New York 10081 (Attention: Corporate Trust
Department) or at such other address as it may designate as its principal
corporate trust office in The City of New York, received by the Trustee on or
prior to the applicable record date or at least 15 days prior to the Maturity
Date, as the case may be, elect to receive all such payments in the Specified
Currency. Such election will remain in effect until revoked by written notice
to the Trustee received not later than on or prior to the applicable record
date or at least 15 days prior to the Maturity Date, as the case may be. In
addition, if bid quotations for U.S. dollars of the type specified on the
reverse side hereof are not available, the Exchange Rate Agent (as defined),
will be unable to exchange the Specified Currency for U.S. dollars and payments
of principal and interest will be made in the Specified Currency. If the
Specified Currency is unavailable due to the imposition of exchange controls or
to other circumstances beyond the Company's control, payments will be made in
U.S. dollars as described on the reverse side hereof.
Payments in U.S. dollars of interest on this Note (other than interest
payable at the Maturity Date or upon earlier redemption or repayment) will be
made by mailing a check to the Holder at the address of the Holder appearing in
the security register on the applicable record date. Simultaneously with the
election by the Holder to receive payments in a Specified Currency other than
U.S. dollars (by written request to the Trustee, as provided above), the Holder
shall provide appropriate payment instructions to the Paying Agent (as
defined), and all such payments will be made in immediately available funds to
an account maintained by the payee in the Specified Currency. Principal and
interest payable at the Maturity Date or upon earlier redemption or repayment
in respect of this Note will be paid in immediately available funds upon
surrender of this Note accompanied by wire transfer instructions at the office
of the Trustee.
If the registered owner of this Note (as indicated above) is the Depository
or a nominee of the Depository, this Note is a global Note and the following
legend is applicable except as specified on the reverse hereof: THIS GLOBAL
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY OR BY A NOMINEE
OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY
THE DEPOSITORY
3
<PAGE> 4
OR ANY SUCH NOMINEE TO A SUCCESSOR OF THE DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR.
Reference is hereby made to the further provisions of this Note set forth on
the reverse hereof and such further provisions shall for all purposes have the
same effect as though fully set forth at this place.
This Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been manually signed by or on
behalf of the Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, General American Transportation Corporation has caused
this instrument to be signed in its name by the facsimile signatures of its
duly authorized officers, and has caused a facsimile of its corporate seal to
be affixed hereunto or imprinted hereon.
Dated: GENERAL AMERICAN TRANSPORTATION
CORPORATION
By:_____________________________________
(Corporate Seal)
Attest:
By:______________________________
Trustee's Certificate of Authentication
This is one of the Securities of the
series described herein and referred
to in the within-mentioned Indenture.
The Chase Manhattan Bank
(National Association), As Trustee
By:______________________________
Authorized Officer
4
<PAGE> 5
GENERAL AMERICAN TRANSPORTATION CORPORATION
MEDIUM-TERM NOTE, SERIES E
Section 1. General. This Note is one of a duly authorized
issue of debentures, notes, bonds or other evidences of indebtedness of the
Company (herein called the "Securities"), of the series hereinafter specified,
all issued or to be issued under and pursuant to an indenture, dated as of
October 1, 1987, between General American Transportation Corporation (the
"Company") and The Chase Manhattan Bank (National Association), as Trustee, as
supplemented by the First Supplemental Indenture, dated as of May 15, 1988, the
Second Supplemental Indenture, dated as of March 15, 1990 and the Third
Supplemental Indenture, dated as of June 15, 1990, each between the Company and
the Trustee (the indenture, as so supplemented, is referred to as the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the Holders of the Notes. The Securities may be issued in one or
more series, which different series may be issued in various aggregate
principal amounts, may mature at different times, may bear interest, if any, at
different rates, may be subject to different redemption provisions, if any, may
be subject to different sinking, purchase or analogous funds, if any, and may
otherwise vary as in the Indenture provided. This Note is one of a series
designated as "Medium- Term Notes, Series E" of the Company, limited in
aggregate principal amount to U.S. $650,000,000, or its equivalent in foreign
currencies or currency units, or in such lesser amount as may be reduced by the
sale of Securities of another series. References herein to "Notes" shall mean
the Notes of said Series E.
Section 2. Payments. (a) Interest on this Note will be
payable monthly, quarterly, semiannually or annually (the "Interest Payment
Period") as shown on the face hereof. Except as provided below or on the face
hereof, the date or dates on which interest will be payable (each an "Interest
Payment Date") will be, if this Note has a monthly Interest Payment Period, the
third Wednesday of each month; if this Note has a quarterly Interest Payment
Period, the third Wednesday of March, June, September and December; if this
Note has a semiannual Interest Payment Period, the third Wednesday of each of
the two months specified on the face hereof; and if this Note has an annual
Interest Payment Period, the third Wednesday of the month specified on the face
hereof. Unless otherwise specified on the face hereof, if any Interest Payment
Date for this Note would otherwise be a day that is not a Business Day, such
Interest Payment Date shall be postponed to the next day that is a Business Day
except that, if the Base Rate indicated on the face of this Note is LIBOR and
if such Business Day is in the next succeeding calendar month, such Interest
Payment Date shall be the immediately preceding Business Day.
The rate of interest on this Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually (an "Interest Reset Date"), as
specified on the face hereof. Unless otherwise specified on the face hereof,
the Interest Reset Date will be, if the rate of interest on this Note resets
daily, each Business Day; if the rate of interest on this Note (other than if
the Base Rate indicated on the face of this Note is the Treasury Rate) resets
weekly, Wednesday of each week; if the Base Rate indicated on the face of this
Note is the Treasury Rate and the rate of interest on this Note resets weekly,
Tuesday of each week (except as provided below); if the rate of interest
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<PAGE> 6
on his Note resets monthly, the third Wednesday of each month; if the rate of
interest on this Note resets quarterly, the third Wednesday of March, June,
September and December; if the rate of interest on this Note resets
semiannually, the third Wednesday of each of two months specified on the face
hereof; and if the rate of interest on this Note resets annually, the third
Wednesday of the month specified on the face hereof. If any Interest Reset
Date for this Note would otherwise be a day that is not a Business Day, such
Interest Reset Date shall be postponed to the next succeeding Business Day,
except that if the Base Rate indicated on the face of this Note is LIBOR and
such Business Day is in the next succeeding calendar month, such Interest Reset
Date shall be the next preceding Business Day. If the Base Rate indicated on
the face of this Note is the Treasury Rate and if an auction of Treasury bills
falls on a day that is an Interest Reset Date for this Note, the Interest Reset
Date shall be the following day that is a Business Day.
(b) If the Specified Currency shown on the face hereof is other
than U.S. dollars and if the Holder has not made the election described in
paragraph (c) below, payment in respect of this Note shall be made in U.S.
dollars based upon the exchange rate as determined by the Exchange Rate Agent
(initially The Chase Manhattan Bank (National Association)) based on the
highest firm bid quotation expressed in U.S. dollars received by the Exchange
Rate Agent at approximately 11:00 a.m., New York City time, on the second
Business Day preceding the applicable payment date from three recognized
foreign exchange dealers in The City of New York selected by the Exchange Rate
Agent and approved by the Company (one of which may be the Exchange Rate Agent)
for the purchase by the quoting dealer, for settlement on such payment date, of
the aggregate amount of the Specified Currency payable to all Holders of Notes
denominated in such Specified Currency who have elected to receive payment in
U.S. dollars on such payment date. If no such bid quotations are available,
payments will be made in the Specified Currency, unless such Specified Currency
is unavailable due to the imposition of exchange controls or to other
circumstances beyond the Company's control, in which case payment will be made
as described in paragraph (d) below. All currency exchange costs associated
with any payment in U.S. dollars on this Note shall be borne by the Holder
hereof by deductions from such payments.
(c) If the Specified Currency for this Note is other than U.S.
dollars, the Exchange Rate Agent will, unless otherwise specified on the face
hereof, determine the exchange rate for converting all payments in respect of
this Note into U.S. dollars in the manner described in paragraph (b) above and
perform such conversion on behalf of the Company. Notwithstanding the
foregoing, if this Note is denominated in a Specified Currency other than U.S.
dollars, the Holder of this Note may elect to receive all such payments in the
Specified Currency by delivery of a written request to the Trustee, One New
York Plaza, 14th Floor, New York, New York 10081, which must be received by
the Trustee on or prior to the applicable record date or at least 15 calendar
days prior to the Maturity Date, as the case may be. Such election shall
remain in effect unless and until changed by written notice to the Trustee, but
the Trustee must receive written notice of any such change on or prior to the
applicable record date or at least 15 calendar days prior to the Maturity Date,
as the case may be. Such election shall remain in effect unless and until
changed by written notice to the Trustee received on or prior to the applicable
record date or at least 15 calendar days prior to the Maturity Date. In the
absence of manifest error, all determinations by the Exchange Rate Agent shall
be final and binding on the Company and the Holder of this Note.
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<PAGE> 7
(d) Except as set forth below, if payment of this Note is required
to be made in a Specified Currency other than U.S. dollars and on a payment
date with respect to this Note such currency is unavailable due to the
imposition of exchange controls or other circumstances beyond the Company's
control, or is no longer used by the government of the country issuing such
currency or for the settlement of transactions by public institutions of or
within the international banking community, then all payments due on such
payment date shall be made in U.S. dollars. The amount so payable on any
payment date in such foreign currency shall be converted into U.S. dollars at a
rate determined by the Exchange Rate Agent on the basis of the most recently
available noon buying rate for cable transfers in The City of New York as
determined by the Federal Reserve Bank of New York (the "Market Exchange
Rate"), or as otherwise specified on the face hereof. Any payment made under
such circumstances in U.S. dollars where the required payment is in Specified
Currency other than U.S. dollars will not constitute an Event of Default under
the Indenture.
If payment on this Note is required to be made in European Currency
Units ("ECU") and on a payment date with respect to this Note ECU are
unavailable due to the imposition of exchange controls or other circumstances
beyond the Company's control, or are no longer used in the European Monetary
System, then all payments due on such payment date shall be made in U.S.
dollars. The amount so payable on any payment date in ECU shall be converted
into U.S. dollars at a rate determined by the Exchange Rate Agent as of the
second Business Day prior to the date on which such payment is due on the
following basis: The component currencies of the ECU for this purpose (the
"Components") shall be the currency amounts that were Components of the ECU as
of the last date on which ECU were used in the European Monetary System. The
equivalent of ECU in U.S. dollars shall be calculated by aggregating the U.S.
dollar equivalents of the Components. The U.S. dollar equivalent of each of
the Components shall be determined by the Exchange Rate Agent on the basis of
the most recently available Market Exchange Rate for the Components, or as
otherwise indicated on the face hereof.
If the official unit of any component currency is altered by way of
combination or subdivision, the number of units of that currency as a Component
shall be divided or multiplied in the same proportion. If two or more
component currencies are consolidated into a single currency, the amount of
those currencies as Components shall be replaced by an amount in such single
currency equal to the sum of the amounts of the consolidated component
currencies expressed in such single currency. If any component currency is
divided into two or more currencies, the amount of that currency as a Component
shall be replaced by amounts of such two or more currencies, each of which
shall have a value on the date of division equal to the amount of the former
component currency divided by the number of currencies into which that currency
was divided.
All determinations referred to above made by the Exchange Rate Agent
shall be at its sole discretion (except to the extent expressly provided herein
or on the face hereof that any determination is subject to approval by the
Company) and, in the absence of manifest error, shall be conclusive for all
purposes and binding on the Holder of this Note and the Company, and the
Exchange Rate Agent shall have no liability therefor.
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<PAGE> 8
(e) Interest payments on each Interest Payment Date for this Note
(except if the rate of interest on this Note resets daily or weekly) will
include accrued interest from and including the Original Issue Date or from and
including the last date in respect of which interest has been paid, as the case
may be, to, but excluding, such Interest Payment Date. If the rate of interest
on this Note resets daily or weekly, interest payments will include accrued
interest from and including the Original Issue Date or from and including the
last date in respect of which interest has been paid, as the case may be, to
and including the Record Date immediately preceding the applicable Interest
Payment Date, except that at the Maturity Date the interest payments will
include accrued interest from and including the Issue Date, or from and
including the last date in respect of which interest has been paid, as the case
may be, to, but excluding, the Maturity Date.
Accrued interest shall be calculated by multiplying the principal
amount of this Note by an accrued interest factor. Such accrued interest
factor will be computed by adding the interest factors calculated for each day
in the period for which accrued interest is being calculated. The interest
factor (rounded upward, if necessary, to the next higher one hundred-thousandth
of a percent) for each such day is computed by dividing the interest rate
applicable to such day by 360, if the Base Rate indicated on the face hereof is
the Commercial Paper Rate or LIBOR, or by the actual number of days in the
year, if the Base Rate indicated on the face hereof is the Treasury Rate. The
interest rate applicable to any date that is an Interest Reset Date is the
interest rate for such Interest Reset Date. The interest rate applicable to
any other day is the interest rate for the immediately preceding Interest Reset
Date (or, if none, the Initial Interest Rate, as described below).
Notwithstanding the foregoing, the interest rate hereon shall not be greater
than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate,
if any, shown on the face hereof. In addition, the interest rate hereon shall
in no event be higher than the maximum interest rate permitted by New York law
as the same may be modified by United States law of general application.
(f) The interest rate in effect with respect to this Note from the
Issue Date to the first Interest Reset Date (the "Initial Interest Rate") will
be specified on the face hereof. The interest rate for each subsequent
Interest Reset Date will be determined by the Calculation Agent (as defined) as
follows:
DETERMINATION OF COMMERCIAL PAPER RATE. If the Base Rate is
the Commercial Paper Rate as indicated on the face hereof, the
"Commercial Paper Rate" for each Interest Reset Date will be
determined by the Calculation Agent as of the second Business Day
prior to such Interest Reset Date (a "Commercial Paper Interest
Determination Date") and shall be the Money Market Yield (as defined
below) on such Date of the rate for commercial paper having the Index
Maturity as indicated on the face hereof, as such rate shall be
published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates"
("H.15(519)"), or any successor publication, under the heading
"Commercial Paper." In the event that such rate is not published
prior to 9:00 A.M., New York City time, on the Calculation Date (as
defined below), then the Commercial Paper Rate shall be the Money
Market Yield on such Commercial Paper Interest Determination Date of
the rate for commercial paper of the specified Index Maturity as
published by the Federal Reserve Bank of New York in its daily
statistical release
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<PAGE> 9
"Composite 3:30 P.M. Quotations for U.S. Government Securities"
("Composite Quotations") under the heading "Commercial Paper." If by
3:00 P.M., New York City time, on such Calculation Date such rate is
not yet published in either H.15(519) or Composite Quotations, then
the Commercial Paper Rate shall be the Money Market Yield of the
arithmetic mean of the offered rates as of 11:00 A.M., New York City
time, on such Commercial Paper Interest Determination Date of three
leading dealers of commercial paper in The City of New York selected
by the Calculation Agent for commercial paper of the specified Index
Maturity, placed for an industrial issuer whose bond rating is "AA",
or the equivalent, from a nationally recognized rating agency;
provided, however, that if the dealers selected as aforesaid by the
Calculation Agent are not quoting offered rates as mentioned in this
sentence, the rate of interest in effect for the applicable period
will be the rate of interest in effect on such Commercial Paper
Interest Determination Date.
"Money Market Yield" shall be a yield calculated in accordance with
the following formula:
Money Market Yield = D X 360 X 100
360 - (D X M)
where "D" refers to the applicable per annum rate for commercial paper
quoted on a bank discount basis and expressed as a decimal, and "M"
refers to the actual number of days in the Index Maturity.
The interest rate for each such Interest Reset Date shall be
the Commercial Paper Rate applicable to such Interest Reset Date plus
or minus the Spread or multiplied by the Spread Multiplier, as
indicated on the face hereof; however, in the interest rate in effect
for the period from the Original Issue Date to the first Interest
Reset Date will be the Initial Interest Rate and the interest rate in
effect for the 10 days immediately prior to the Maturity Date or
earlier redemption or repayment will be that in effect on the 10th day
preceding such Maturity Date or earlier redemption or repayment. The
"Calculation Date" pertaining to a Commercial Paper Interest
Determination Date shall be the 10th Business Day after such
Commercial Paper Interest Determination Date.
DETERMINATION OF LIBOR. If the Base Rate is LIBOR as
indicated on the face hereof, "LIBOR" for each such Interest Reset
Date will be determined as follows:
(i) On the second London Banking Day prior to the
Interest Reset Date (a "LIBOR Determination
Date") relating to a LIBOR Note, either, as
specified in the applicable Pricing Supplement:
(a) the arithmetic mean of the offered rates for
deposits in U.S. dollars for the period of the
Index Maturity specified in the applicable
Pricing Supplement, commencing on the Interest
Reset Date, which appear on the Reuters Screen
LIBO Page as of 11:00 A.M., London time, on the
LIBOR Determination Date, if at least two such
offered rates appear on the Reuters Screen LIBO
Page ("LIBOR Reuters"), or (b) the rate for
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<PAGE> 10
deposits in U.S. dollars having the Index
Maturity designated in the applicable Pricing
Supplement, commencing on the Interest Reset
Date, that appears on the Telerate Page 3750 as
of 11:00 A.M., London time, on that LIBOR
Determination Date ("LIBOR Telerate"). Unless
otherwise indicated in the applicable Pricing
Supplement, "Reuters Screen LIBO Page" means the
display designated as Page "LIBO" on the Reuters
Monitor Money Rate Service (or such other page
as may replace the LIBO page on that service for
the purpose of displaying London interbank
offered rates of major banks). "Telerate Page
3750" means the display designated as page
"3750" on the Telerate Service (or such other
page as may replace the 3750 page on that
service or such other service or services as may
be nominated by the British Bankers' Association
(the "Association") for the purpose of
displaying London interbank offered rates for
U.S. dollar deposits). If neither LIBOR Reuters
nor LIBOR Telerate is specified in the
applicable Pricing Supplement, LIBOR will be
determined as if LIBOR Telerate had been
specified. In the case where (a) above applies,
if fewer than two offered rates appear on the
Reuters Screen LIBO Page, or, in the case where
(b) above applies if no rate appears on the
Telerate Page 3750, as applicable, LIBOR in
respect of that Interest Reset Date will be
determined as if the parties had specified the
rate described in (ii) below.
(ii) With respect to an Interest Reset Date on which
this provision applies, LIBOR will be determined
on the basis of the rates at which deposits in
U.S. dollars having the Index Maturity
designated in the applicable Pricing Supplement
are offered at approximately 11:00 A.M., London
time, on such LIBOR Determination Date by four
major banks ("Reference Banks") in the London
interbank market selected by the Calculation
Agent (after consultation with the Association)
to prime banks in the London interbank market
commencing on the Interest Reset Date and in a
principal amount of not less than U.S.
$1,000,000 that is representative for a single
transaction in such market at such time. The
Calculation Agent will request the principal
London office of each of the Reference Banks to
provide a quotation of its rate. If at least
two such quotations are provided, LIBOR for such
Interest Reset Date will be the arithmetic mean
of such quotations. If fewer than two
quotations are provided, LIBOR for such Interest
Reset Date will be the arithmetic mean of the
rates quoted at approximately 11:00 A.M., New
York City Time, on such LIBOR Determination Date
by three major banks (which may include the
Agents) in The City of New York selected by the
Calculation Agent (after consultation with the
Association) for loans in U.S. dollars to
leading European banks having the specified
Index Maturity designated in the applicable
Pricing Supplement commencing on the Interest
Reset Date and in a principal amount equal to an
amount
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of not less than U.S. $1,000,000 that is
representative for a single transaction in such
market at such time; provided, however, that if
the banks selected as aforesaid by the
Calculation Agent are not quoting as mentioned in
this sentence, LIBOR will be LIBOR then in
effect on such Interest Reset Date.
The interest rate for each such Interest Reset Date shall be
LIBOR plus or minus the Spread or multiplied by the Spread Multiplier
as indicated on the face hereof; provided, however, the interest rate
in effect for the period from the Issue Date to the first Interest
Reset Date will be the Initial Interest Rate and the interest rate in
effect for the 10 days immediately prior to the Maturity Date or
earlier redemption or repayment will be that in effect on the 10th day
preceding such Maturity Date or earlier redemption or repayment. The
"Calculation Date" pertaining to a LIBOR Determination Date shall be
such LIBOR Determination Date.
DETERMINATION OF TREASURY RATE. If the Base Rate is the
Treasury Rate as indicated on the face hereof, the "Treasury Rate"
with respect to any Treasury Rate Determination Date shall be the rate
for the auction held on such Treasury Rate Determination Date of
direct obligations of the United States ("Treasury bills") having the
Index Maturity as indicated on the face hereof as published in
H.15(519) under the heading "Treasury bills--auction average
(investment)" or, if not so published by 9:00 A.M., New York City
time, on the Calculation Date pertaining to such Treasury Rate
Determination Date, the auction average rate (expressed as a bond
equivalent, rounded to the nearest one-hundredth of a percent, with
five one-thousandths of a percent rounded upwards, on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis)
as otherwise announced by the United States Department of the
Treasury. In the event that the results of the auction of Treasury
bills having the Index Maturity as indicated on the face hereof are
not published or reported as provided above by 3:00 P.M., New York
City time, on such Calculation Date or if no such auction is held on
such Treasury Rate Determination Date, then the Treasury Rate shall be
calculated by the Calculation Agent and shall be a yield to maturity
(expressed as a bond equivalent, rounded to the nearest one-hundredth
of a percent, with five one-thousandths of a percent rounded upwards,
on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on such
Treasury Rate Determination Date, of three leading primary United
States government securities dealers selected by the Calculation Agent
for the issue of Treasury bills with a remaining maturity closest to
the Index Maturity as indicated on the face hereof; provided, however,
that if the dealers selected as aforesaid by the Calculation Agent are
not quoting bid rates as mentioned in this sentence, the Treasury Rate
for such Interest Reset Date will be the Treasury Rate in effect
immediately prior to such Interest Reset Date.
The "Treasury Rate Determination Date" shall be the day of the
week in which such Interest Reset Date falls on which Treasury bills
would normally be auctioned. Treasury bills are normally sold at
auction on Monday of each week, unless that day is a legal
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<PAGE> 12
holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday.
If, as a result of a legal holiday, an auction is so held on the
preceding Friday, such Friday will be the Treasury Rate Determination
Date pertaining to the Interest Reset Date occurring in the next
succeeding week.
The interest rate for each such Interest Reset Date shall be the
Treasury Rate plus or minus the Spread or multiplied by the Spread
Multiplier as indicated on the face hereof; provided, however, the
interest rate in effect for the period from the Issue Date to the
first Interest Reset Date will be the Initial Interest Rate and the
interest rate in effect for the 10 days immediately prior to the
Maturity Date or earlier redemption or repayment will be that in
effect on the 10th day preceding such Maturity Date or earlier
redemption or repayment. The "Calculation Date" pertaining to a
Treasury Rate Determination Date will be the 10th Business Day after
such Treasury Rate Determination Date.
DETERMINATION OF CD RATE. If the Base Rate is the CD Rate as
indicated on the face hereof, the "CD Rate" means, with respect to any
Interest Reset Date, the rate on such date for negotiable certificates
of deposit having the Index Maturity designated in the applicable
Pricing Supplement as published in H.15(519) under the heading "CDs
(Secondary Market)," or, if not so published by 9:00 A.M., New York
City time, on the second Business Day prior to such Interest Reset
Date (a "CD Rate Determination Date") pertaining to such Interest
Reset Date, the CD Rate will be the rate on such Interest Reset Date
for negotiable certificates of deposit of the Index Maturity
designated in the applicable Pricing Supplement as published by the
Federal Reserve Bank of New York in its daily statistical release
"Composite 3:30 P.M. Quotations for U.S. Government Securities" (the
"Composite Quotations") under the heading "Certificates of Deposit."
If such rate is not yet published in either H.15(519) or the Composite
Quotations by 3:00 P.M., New York City time, on the CD Rate
Determination Date pertaining to such Interest Reset Date, the CD Rate
on such Interest Reset Date will be calculated by the Calculation
Agent and will be the arithmetic mean of the secondary market offered
rates as of 10:00 A.M., New York City time, on such Interest Reset
Date, for certificates of deposit in the denomination of $5,000,000
with a remaining maturity closest to the Index Maturity designated in
the Pricing Supplement of three leading nonbank dealers in negotiable
U.S. dollar certificates of deposit in The City of New York selected
by the Calculation Agent for negotiable certificates of deposit of
major United States money center banks in the market for negotiable
certificates of deposit; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as set
forth above, the CD Rate in effect for the applicable period will be
the same as the CD Rate for the immediately preceding Interest Payment
Period (or, if there was no such Interest Payment Period, the rate of
interest payable on the CD Rate Notes for which such CD Rate is being
determined shall be the Initial Interest Rate).
The interest rate for each such Interest Reset Date shall be
the CD Rate plus or minus the Spread or multiplied by the Spread
Multiplier as indicated on the face hereof; provided, however, the
interest rate in effect for the period from the Issue Date to the
first Interest
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<PAGE> 13
Reset Date will be the Initial Interest Rate and the interest rate in
effect for the 10 days immediately prior to the Maturity Date or
earlier redemption or repayment will be that in effect on the 10th day
preceding such Maturity Date or earlier redemption or repayment. The
"Calculation Date" pertaining to a CD Rate Determination Date shall be
such CD Rate Determination Date.
DETERMINATION OF FEDERAL FUNDS RATE. If the Base Rate is the
Federal Funds Rate as indicated on the face hereof, the "Federal Funds
Rate" means, with respect to any Interest Reset Date, the rate on such
date for Federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)," or, if not so published by 9:00 A.M., New
York City time, on the second Business Day prior to such Interest
Reset Date (a "Federal Funds Determination Date") pertaining to such
Interest Reset Date, the Federal Funds Rate will be the rate on such
Interest Reset Date as published in the Composite Quotations under the
heading "Federal Funds/Effective Rate." If such rate is not yet
published in either H.15(519) or the Composite Quotations by 3:00
P.M., New York City time, on the Federal Funds Determination Date
pertaining to such Interest Reset Date, the Federal Funds Rate for
such Interest Reset Date will be calculated by the Calculation Agent
and will be the arithmetic mean of the rates for the last transaction
in overnight Federal funds, as of 9:00 A.M., New York City time, on
such Interest Reset Date, arranged by three leading brokers of Federal
funds transactions in The City of New York selected by the Calculation
Agent; provided, however, that if the brokers selected as aforesaid by
the Calculation Agent are not quoting as set forth above, the Federal
Funds Rate in effect for the applicable period will be the same as the
Federal Funds Rate for the immediately preceding Interest Payment
Period (or, if there was no such Interest Payment Period, the rate of
interest payable on the Federal Funds Rate Notes for which such
Federal Funds Rate is being determined shall be the Initial Interest
Rate).
The interest rate for each such Interest Reset Date shall be
the Federal Funds Rate plus or minus the Spread or multiplied by the
Spread Multiplier as indicated on the face hereof; provided, however,
the interest rate in effect for the period from the Issue Date to the
first Interest Reset Date will be the Initial Interest Rate and the
interest rate in effect for the 10 days immediately prior to the
Maturity Date or earlier redemption or repayment will be that in
effect on the 10th day preceding such Maturity Date or earlier
redemption or repayment. The "Calculation Date" pertaining to a
Federal Funds Rate Determination Date shall be such Federal Funds Rate
Determination Date.
DETERMINATION OF PRIME RATE. If the Base Rate is the Prime
Rate as indicated on the face hereof, the "Prime Rate" means, with
respect to any Interest Reset Date, the rate set forth in H.15(519)
for such date opposite the caption "Bank Prime Loan." If such rate is
not yet published by 9:00 A.M., New York City time, on the second
Business Day prior to such Interest Reset Date (a "Prime Rate
Determination Date") pertaining to such Interest Reset Date, the Prime
Rate for such Interest Reset Date will be the arithmetic mean of the
rates of interest publicly announced by each bank named on the Reuters
Screen NYMF Page (as defined below) as such bank's prime rate or base
lending rate as in effect for such
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<PAGE> 14
Interest Reset Date as quoted on the Reuters Screen NYMF Page on such
Interest Reset Date, or, if fewer than four such rates appear on the
Reuters Screen NYMF Page for such Interest Reset Date, the rate shall
be the arithmetic mean of the prime rates quoted on the basis of the
actual number of days in the year divided by 360 as of the close of
business on such Interest Reset Date by at least two of the three
major money center banks in The City of New York selected by the
Calculation Agent from which quotations are requested. If fewer than
two quotations are provided, the Prime Rate shall be calculated by the
Calculation Agent and shall be determined as the arithmetic mean on
the basis of the prime rates in The City of New York by the
appropriate number of substitute banks or trust companies organized
and doing business under the laws of the United States, or any State
thereof, in each case having total equity capital of at least U.S.
$500 million and being subject to supervision or examination by
federal or state authority, selected by the Calculation Agent to quote
such rate or rates. "Reuters Screen NYMF Page" means the display
designated as Page "NYMF" on the Reuters Monitor Money Rates Service
(or such other page as may replace the NYMF Page on that service for
the purpose of displaying prime rates or base lending rates of major
United States banks).
If in any month or two consecutive months the Prime Rate is not
published in H.15(519) and the banks or trust companies selected as
aforesaid are not quoting as mentioned in the preceding paragraph, the
"Prime Rate" for such Interest Payment Period will be the same as the
Prime Rate for the immediately preceding Interest Payment Period (or,
if there was no such Interest Payment Period, the rate of interest
payable on the Prime Rate Notes for which the Prime Rate is being
determined shall be the Initial Interest Rate). If this failure
continues over three or more consecutive months, the Prime Rate for
each succeeding Interest Reset Date until the maturity, redemption or
repayment of such Prime Rate Notes or, if earlier, until this failure
ceases, shall be LIBOR determined as if such Prime Rate Notes were
LIBOR Notes, and the spread, if any, shall be the number of basis
points specified in the applicable Pricing Supplement as the
"Alternate Rate Event Spread."
The interest rate for each such Interest Reset Date shall be
the Prime Rate plus or minus the Spread or multiplied by the Spread
Multiplier as indicated on the face hereof; provided, however, the
interest rate in effect for the period from the Issue Date to the
first Interest Reset Date will be the Initial Interest Rate and the
interest rate in effect for the 10 days immediately prior to the
Maturity Date or earlier redemption or repayment will be that in
effect on the 10th day preceding such Maturity Date or earlier
redemption or repayment. The "Calculation Date" pertaining to a Prime
Rate Determination Date shall be such Prime Rate Determination Date.
The Trustee shall be the Calculation Agent. At the request of the
Holder hereof, the Calculation Agent will provide the interest rate then in
effect and, if determined, the interest rate which will become effective on the
next Interest Reset Date with respect to this Note.
All percentages resulting from any calculations under this Note will
be rounded, if necessary, to the nearest one hundred thousandth of a percentage
point (with five one-millionths of a percentage
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<PAGE> 15
point being rounded upward) and all currency or currency unit amounts used in
or resulting from any such calculation in respect of the Notes will be rounded
to the nearest one-hundredth of a unit (with five one-thousandths being rounded
upward).
(g) Until the Notes are paid or payment thereof is duly provided
for, the Company will, at all times, maintain a paying agent (the "Paying
Agent") in The City of New York capable of performing the duties described
herein to be performed by the Paying Agent. The Company has initially
appointed the Trustee as the Paying Agent. The Company will notify the Holders
of such Notes, in accordance with the Indenture, of any change in the Paying
Agent or its address.
Section 3. Redemption. If so specified on the face hereof,
the Company may at its option redeem this Note in whole or from time to time in
part on or after the date designated as the Initial Redemption Date on the face
hereof at prices declining from a specified premium, if any, to par together
with accrued interest to the date of redemption. The Company may exercise such
option by causing the Trustee to mail a notice of such redemption at least 30
but not more than 60 days prior to the date of redemption. In the event of
redemption of this Note in part only, a new Note or Notes for the unredeemed
portion hereof shall be issued in the name of the Holder hereof upon the
cancellation hereof. If less than all of the Notes with like tenor and terms
to this Note are to be redeemed, the Notes to be redeemed shall be selected by
the Trustee by such method as the Trustee shall deem fair and appropriate.
Section 4. Repayment. If so specified on the face hereof,
this Note will be repayable prior to the Maturity Date at the option of the
Holder on the Optional Repayment Dates shown on the face hereof at the Optional
Repayment Prices shown on the face hereof together with accrued interest to the
date of repayment. In order for this Note to be repaid, the Trustee must
receive at least 30 but not more than 45 days prior to an Optional Repayment
Date (i) this Note with the form below entitled "Option to Elect Repayment"
duly completed or (ii) a telegram, telex, facsimile transmission or letter from
a member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States of America setting forth the name of the Holder of this Note, the
principal amount of this Note, the principal amount of this Note to be repaid,
the certificate number or a description of the tenor and terms of this Note, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that this Note with the form below entitled "Option to Elect
Repayment" duly completed will be received by the Paying Agent not later than
five Business Days after the date of such telegram, telex, facsimile
transmission or letter. If the procedure described in clause (ii) of the
preceding sentence is followed, this Note with such form duly completed must be
received by the Paying Agent by such fifth Business Day. Any tender of this
Note for repayment shall be irrevocable. The repayment option may be exercised
by the Holder of this Note for less than the entire principal amount of the
Note provided that the principal amount of the Note remaining outstanding after
repayment is an authorized denomination. Upon such partial repayment this Note
shall be cancelled and a new Note or Notes for the remaining principal amount
hereof shall be issued in the name of the Holder of this Note.
Section 5. Sinking Fund. The Notes will not be subject to
any Sinking Fund.
15
<PAGE> 16
Section 6. Original Issue Discount Notes. Notwithstanding
anything herein to the contrary, if this Note is an Original Issue Discount
Note, the amount payable in the event of redemption or repayment, or
declaration of acceleration following an Event of Default, prior to the
Maturity Date hereof in lieu of the principal amount due at the Maturity Date
hereof shall be the Amortized Face Amount of this Note as of the redemption
date, the date of repayment, or the date of declaration of acceleration, as the
case may be. The "Amortized Face Amount" of this Note shall be the amount
equal to (a) the Issue Price (as set forth on the face hereof) plus (b) that
portion of the difference between the Issue Price and the principal amount
hereof that has accrued at the Yield to Maturity (as set forth on the face
hereof) (computed in accordance with generally accepted United States bond
yield computation principles) at the date as of which the Amortized Face Amount
is calculated but in no event shall the Amortized Face Amount of this Note
exceed its principal amount.
Section 7. Events of Default. In case an Event of Default,
as defined in the Indenture, with respect to the Notes shall have occurred and
be continuing, the principal hereof and any accrued interest hereon may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
Section 8. Modifications and Waivers. The Indenture
contains provisions permitting the Company and the Trustee, with the written
consent of the Holders of a majority in principal amount of the outstanding
Securities of all series to be affected (with each series voting as a class),
evidenced as in the Indenture provided, to execute supplemental indentures
adding any provisions to change or eliminate any provisions of the Indenture or
any supplemental indenture or to modify the rights of the Holders of the
Securities of each such series; provided, however, that no such supplemental
indenture shall (i) change the Maturity Date of any Security, or reduce the
principal amount thereof, the rate of or the time of payment of any interest on
any Security, reduce any premium payable upon the redemption thereof, waive a
Default in the payment of the principal of or interest on any Security, make
any Security payable in money other than that stated therein, make any change
in respect of the percentage of Securities of any series, the consent of the
holders of which is required to waive an existing Default, or impair or affect
the right of any Holder to bring suit for the payment thereof, or (ii) reduce
the aforesaid percentage of Securities of any series, the consent of the
Holders of which is required for any such supplemental indenture, without the
consent of the Holder of each Security affected. It is also provided in the
Indenture that, with respect to certain Defaults or Events of Default regarding
the Securities of any series, the Holders of a majority in principal amount of
the Securities of such series may on behalf of the Holders of all of the
Securities of such series waive any existing Default or Event of Default and
its consequences, except a Default in the payment of the principal of or
interest on any of the Securities. Any such consent or waiver by the Holder
of this Note (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders and owners of this
Note and of any Note which may be issued upon the registration for transfer
hereof or in exchange or substitution herefore, irrespective of whether or not
any notation of such consent or waiver is made upon this Note or such other
Notes.
16
<PAGE> 17
No reference herein to the Indenture and no reference to any provision
of this Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest, if any, on this Note at the place, at the
respective times, at the rate and in the currency herein prescribed.
Section 9. Authorized Denominations. Notes are issuable in
registered form without coupons in the minimum denomination of $1,000, or the
equivalent thereof in the Specified Currency, and in any larger amount that is
an integral multiple of $1,000 or 1,000 units of the Specified Currency. Notes
may be exchanged by the Holder hereof without charge except for any tax or
other governmental charge imposed in connection therewith, for a like aggregate
principal amount of Notes of other authorized denominations in the manner and
subject to the limitations provided in the Indenture at the office or agency to
be maintained by the Company in The City of New York, New York, or at such
other location or locations as may be provided for in the Indenture.
Section 10. Registration of Transfer. Upon due presentment
for registration of transfer of this Note at the office or agency of the
Company in The City of New York, New York, one or more new Notes of authorized
denominations, for an equal aggregate principal amount, will be issued to the
transferee in exchange therefor subject to the limitations provided in the
Indenture, without charge except for any tax or other governmental charge
imposed in connection therewith.
If this Note is a global Note (as specified on the face hereof), this
Note is exchangeable only if (x) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for this global Note or if at any
time the Depository ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, (y) the Company in its sole
discretion determines that this Note shall be exchangeable for certificated
Notes in registered form or (z) an Event of Default, or an event which with the
passage of time or the giving of notice would become an Event of Default, with
respect to the Notes represented hereby has occurred and is continuing,
provided that the definitive Notes so issued in exchange for this permanent
global Note shall be in denominations of $1,000 and any integral multiple of
$1,000 in excess thereof and be of like aggregate principal amount and tenor as
the portion of this permanent global Note to be exchanged, and provided further
that, unless the Company agrees otherwise, Notes of this series in certificated
registered form will be issued in exchange for this permanent global Note, or
any portion hereof, only if such Notes in certificated registered form were
requested by written notice to the Trustee or the Securities Registrar by or on
behalf of a person who is beneficial owner of an interest hereof given through
the Holder hereof. Except as provided above, owners of beneficial interests in
this permanent global Note will not be entitled to receive physical delivery of
Notes in certificated registered form and will not be considered the Holders
thereof for any purpose under the Indenture.
Section 11. Owners. Prior to due presentment for
registration of transfer of this Note, the Company, the Trustee, any Paying
Agent and the Security Registrar may deem and treat the registered Holder
hereof as the absolute owner of this Note (whether or not this Note shall be
overdue and notwithstanding any notation of ownership or other writing hereon),
for the purpose of receiving payment of, or on account of, the principal
hereof, and, subject to the provisions on
17
<PAGE> 18
the face hereof, interest hereon, and for all other purposes, and neither the
Company nor the Trustee nor any Paying Agent nor any Security Registrar shall
be affected by any notice to the contrary.
Section 12. No Recourse Against Certain Persons. No
recourse shall be had for the payment of the principal (or premium, if any) or
the interest on this Note, or for any claim based hereon, or otherwise in
respect thereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any incorporator, stockholder, officer, director
or employee, as such, past, present or future, of the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
Section 13. Definitions. All terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them therein.
Section 14. Governing Law. This Note shall be governed and
construed in accordance with the law of the State of New York.
18
<PAGE> 19
OPTION TO ELECT REPAYMENT
The undersigned owner of this Note hereby irrevocably elects to have
the Company repay the principal amount of this Note or portion hereof below
designated at the Optional Repayment Price indicated on the face hereof.
<TABLE>
<S> <C>
Dated: ___________________________ ________________________________
Signature
Sign exactly as name appears on the front of this
Security [SIGNATURE GUARANTEE - required only if
Securities are to be issued and delivered to the
other than the registered holder]
Principal amount to be repaid, Fill in for registration of Securities
if amount to be repaid is less if to be issued otherwise than to the then
the principal amount of this registered holder:
Security (principal amount
remaining must be an authorized Name: ____________________________________
denomination) Address:
(Please print name and address
$_________________________ including zip code)
SOCIAL SECURITY OR OTHER TAXPAYER ID NUMBER
___________________________________________
</TABLE>
19
<PAGE> 20
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - ..................Custodian......................
(Cust) (Minor)
Under Uniform Gifts to Minors Act
-------------------------------------
(State)
Additional abbreviations may also be used though not in the above list.
__________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) into
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
____________________________________
|____________________________________|____________________
____________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
____________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ________________________ attorney to transfer said Note on the books
of the Company, with full power of substitution in the premises.
Dated: ________________________________
Signature
20
<PAGE> 21
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
21
<PAGE> 1
EXHIBIT 4.4
GENERAL AMERICAN TRANSPORTATION CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS TRUSTEE
PASS THROUGH TRUST AGREEMENT
DATED AS OF AUGUST 1, 1992
<PAGE> 2
Reconciliation and tie between Pass Through Trust Agreement dated as of August
1, 1992 and the Trust Indenture Act of 1939. This reconciliation does not
constitute part of the Pass Through Trust Agreement.
<TABLE>
<CAPTION>
TRUST INDENTURE PASS THROUGH TRUST
ACT OF 1939 SECTION AGREEMENT SECTION
------------------- -----------------
<S> <C>
310(a)(1) 7.07
310(a)(2) 7.07
312(a) 3.09; 8.01; 8.02
313(a) 7.06
314(a) 8.04(a) - (c)
314(b) 8.04(d)
314(c)(1) 1.02
314(c)(2) 1.02
314(d)(1) 7.12; 11.01
314(d)(2) 7.12; 11.01
314(d)(3) 2.01
314(e) 1.02
315(b) 8.03
316(a)(last sentence) 1.01
316(a)(1)(A) 6.04
316(a)(1)(B) 6.05
316(b) 6.06
316(c) 1.04(d)
317(a)(1) 6.03
317(b) 7.12
318(a) 12.06
</TABLE>
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION HEADING PAGE
<S> <C> <C>
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.02. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1.03. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 1.04. Acts of Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE II ORIGINAL ISSUANCE OF CERTIFICATES; ACQUISITION
OF EQUIPMENT NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.01. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.02. Acquisition of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.03. Acceptance by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.04. Limitation of Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE III THE CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.01. Form, Denomination and Execution of
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.02. Authentication of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.03. Temporary Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.04. Registration of Transfer and Exchange of
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.05. Mutilated, Destroyed, Lost or Stolen
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.06. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.07. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.08. Limitation of Liability for Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.09. Book-Entry and Definitive Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE IV DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.01. Certificate Account and Special Payments
Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 4.02. Distributions from Certificate Account
and Special Payments Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 4.03. Statements to Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.04. Investment of Special Payment Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE V THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.01. Maintenance of Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.02. Consolidation, Merger or Sale of Assets
Permitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE VI DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.02. Incidents of Sale of Equipment Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.03. Judicial Proceedings Instituted by
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.04. Control by Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.05. Waiver of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 6.06. Undertaking to Pay Court Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 6.07. Right of Certificateholders to Receive
Payments Not to Be Impaired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 6.08. Certificateholders May Not Bring Suit
Except Under Certain Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 6.09. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VII THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 7.01. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 7.02. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.03. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.04. Not Responsible for Recitals or Issuance
of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 7.05. May Hold Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 7.06. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 7.07. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.08. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.09. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.10. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 7.11. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 7.12. Maintenance of Agencies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 7.13. Money for Certificate Payments to Be
Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 7.14. Registration of Equipment Notes in
Trustee's Name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 7.15. Representations and Warranties of
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 7.16. Withholding Taxes; Information Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.17. Trustee's Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C> <C>
ARTICLE VIII CERTIFICATEHOLDER'S LISTS AND REPORTS BY TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 8.01. The Company to Furnish Trustee with
Names and Addresses of
Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 8.02. Preservation of Information;
Communication to Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 8.03. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 8.04. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE IX SUPPLEMENTAL TRUST AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 9.01. Supplemental Trust Agreements Without
Consent of Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 9.02. Supplemental Trust Agreements with
Consent of Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 9.03. Documents Affecting Immunity or
Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 9.04. Execution of Supplemental Trust
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 9.05. Effect of Supplemental Trust Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 9.06. Conformity to Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 9.07. Reference in Certificates to
Supplemental Trust Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE X AMENDMENTS TO INDENTURES AND NOTE DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 10.01. Amendments and Supplements to Indenture
and Other Note Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE XI TERMINATION OF TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 11.01. Termination of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE XII MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 12.01. Limitation on Rights of
Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 12.02. Certificates Nonassessable and Fully
Paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 12.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 12.04. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 12.05. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 12.06. Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 12.07. Effect of Headings and Table of
Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 12.08. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
</TABLE>
iii
<PAGE> 6
<TABLE>
<S> <C> <C>
Section 12.09. Benefits of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 12.10. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 12.11. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
EXHIBIT A -- FORM OF CERTIFICATE
iv
<PAGE> 7
THIS PASS THROUGH TRUST AGREEMENT, dated as of August 1, 1992, between
General American Transportation Corporation, a New York corporation, and the
First National Bank of Chicago, a national banking association, as Trustee, is
made with respect to the formation from time to time of separate General
American Transportation Corporation Pass Through Trusts, and the issuance from
time to time of separate series of Pass Through Certificates representing
fractional undivided interests in the respective Trusts.
WITNESSETH:
WHEREAS, from time to time the company and the Trustee shall enter
into a Trust Supplement pursuant to which the Trustee shall declare the
creation of a separate Trust for the benefit of the Holders of the series of
Certificates to be issued in respect of such Trust, and the initial Holders of
the Certificates of such series, as the grantors of such Trust, by their
respective acceptances of the Certificates of such series, shall join in the
creation of such Trust with the Trustee;
WHEREAS, all Certificates to be issued in respect of each separate
Trust will be issued as a separate series pursuant to the Basic Agreement and
the related Trust Supplement, will evidence fractional undivided interests in
such Trust, and will have no rights, benefits or interest in respect of any
other separate Trust or the property held therein;
WHEREAS, one Owner Trustee or each of two or more Owner Trustees, each
acting on behalf of one or more Owner Participants, may issue Equipment Notes
to finance a portion of the purchase price of Equipment to be purchased by such
Owner Trustee and leased to the Company pursuant to the related Lease;
WHEREAS, each such Owner Trustee will issue Equipment Notes on a
non-recourse basis under a separate Indenture in order to finance a portion of
the purchase price paid, or to be paid, for such Equipment;
WHEREAS, from time to time, pursuant to the terms and conditions of
this Basic Agreement as supplemented by a separate Trust Supplement with
respect to a separate Trust to be formed hereunder, the Trustee shall purchase
one or more series of Equipment Notes of the same tenor as the series of
Certificates to be issued in respect of such Trust and shall hold such
Equipment Notes in trust for the benefit of the Certificateholders of such
Trust;
WHEREAS, to facilitate the sale of Equipment Notes to the Trustee on
behalf of each Trust created from time to time pursuant to this Basic Agreement
and the related Trust
<PAGE> 8
Supplement, the Company has duly authorized the execution and delivery of this
Basic Agreement and each Trust Supplement as the "issuer," as such term is
defined in and solely for purposes of the Securities Act of 1933, as amended,
of the Certificates to be issued in respect of each Trust and as the "obligor,"
as such term is defined in and solely for purposes of the Trust Indenture Act
of 1939, as amended, with respect to all such Certificates and is undertaking
to perform certain administrative and ministerial duties hereunder and is also
undertaking to pay the fees and expenses of the Trustee;
WHEREAS, this Basic Agreement, as supplemented from time to time, is
subject to the provisions of the Trust Indenture Act of 1939, as amended, and
shall, to the extent applicable, be governed by such provisions;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of the other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. For all purposes of this Basic
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms used herein that are defined in this
Article have the meanings assigned to them in this Article, and
include the plural as well as the singular;
(2) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all references in this Basic Agreement to designated
"Articles", "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of this Basic Agreement; and
(4) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Basic Agreement as a whole
and not to any particular Article, Section or other subdivision.
"ACT" when used with respect to any Holder, has the meaning specified
in Section 1.04.
"AFFILIATE" of any specified Person, means any other Person which
directly or indirectly controls or is controlled by, or is
2
<PAGE> 9
under common control with, such specified Person. For the purposes of this
definition, "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"AUTHORIZED AGENT" when used with respect to the Certificates of any
series, means any Paying Agent or Registrar for the Certificates of such
series.
"AVOIDABLE TAX" has the meaning specified in Section 7.09(e).
"BASIC AGREEMENT" means this Pass Though Trust Agreement, as the same
may from time to time be supplemented, amended or modified, but does not
include any Trust Supplement.
"BOOK-ENTRY CERTIFICATES" when used with respect to the Certificates
of any series, means a beneficial interest in the Certificates of such series,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 3.09.
"BUSINESS DAY" means any day other than a Saturday, a Sunday, or a day
on which commercial banking institutions are authorized or obligated by law,
executive order, or governmental decree to be closed in New York, New York,
Chicago, Illinois, the city and state in which the Corporate Trust Office of
the Indenture Trustee is located or the city and state in which the Corporate
Trust Office of the Trustee is located.
"CERTIFICATE" means any one of the certificates executed and
authenticated by the Trustee, substantially in the form of Exhibit A hereto.
"CERTIFICATE ACCOUNT" when used with respect to the Certificates of
any series, means the account or accounts created and maintained for such
series pursuant to Section 4.01(a) and the related Trust Supplement.
"CERTIFICATEHOLDER OR HOLDER" when used with respect to the
Certificates of any series, means the Person in whose name a Certificate of
such series is registered in the Register for Certificates of such series.
"CERTIFICATE OWNER" when used with respect to the Certificates of any
series, means, for purposes of Section 3.09, the Person who owns a Book-Entry
Certificate of such series.
3
<PAGE> 10
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects, directly or indirectly, book-entry transfers and pledges of
securities deposited with the Clearing Agency.
"COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
or, if at any time after the execution of this instrument such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"COMPANY" means General American Transportation Corporation, a New
York corporation, or its successor in interest pursuant to Section 5.02, or any
other obligor with respect to the Certificates (within the meaning of the Trust
Indenture Act).
"CORPORATE TRUST OFFICE" with respect to the Trustee, the Owner
Trustee and the Indenture Trustee, means the office of such trustee in the city
at which at any particular time its corporate trust business shall be
principally administered.
"CUT-OFF-DATE" when used with respect to the Certificates of any
series, means the date designated as such in the Trust Supplement of such
series.
"DEFAULT" means any event which is, or after notice or lapse of time
or both would become, an Event of Default.
"DEFINITIVE CERTIFICATES" when used with respect to the Certificates
of any series, has the meaning specified in Section 3.09.
"DIRECTION" has the meaning specified in Section 1.04(c).
"DTC" means The Depository Trust Company and any successor clearing
agency.
"EQUIPMENT" means items of railroad rolling stock which are the
subject of any Lease.
"EQUIPMENT NOTE" when used with respect to any Trust, means any one of
the Equipment Notes (as defined in the applicable Indenture) described in, or
on a schedule attached to, the Trust Supplement in respect of such Trust and to
be held by the Trustee as a part of such Trust, including any Equipment Note
(as so
4
<PAGE> 11
defined) issued under the applicable Indenture in replacement or substitution
therefor.
"ESCROW ACCOUNT" when used with respect to the Certificates of
any series, has the meaning specified in Section 2.02(b).
"ESCROWED FUNDS" when used with respect to any Trust, has the meaning
specified in Section 2.02(b).
"EVENT OF DEFAULT" when used with respect to any Trust, means an event
described in Section 6.01.
"FRACTIONAL UNDIVIDED INTEREST" means the fractional undivided
interest in a Trust that is evidenced by a Certificate relating to such Trust.
"INDENTURE" when used with respect to any Trust, means each of the one
or more separate trust indenture and security agreements described in, or on a
schedule attached to, the Trust Supplement relating to such Trust and which
relates to a series of Equipment Notes to be held in such Trust, as such
agreement may be amended or supplemented in accordance with its terms; and
Indentures means all of such agreements.
"INDENTURE EVENT OF DEFAULT" when used with respect to any Indenture,
means any Indenture Event of Default (as such term is defined in such
Indenture).
"INDENTURE TRUSTEE" when used with respect to any Equipment Note or
the Indenture applicable thereto, means the bank or trust company designated as
indenture trustee under such Indenture; and any successor to such Indenture
Trustee as such trustee; and Indenture Trustees means all of the Indenture
Trustees under the Indentures.
"INITIAL REGULAR DISTRIBUTION DATE" when used with respect to the
Certificates of any series means the first Regular Distribution Date on which a
Scheduled Payment is to be made.
"ISSUANCE DATE" when used with respect to any Trust, means the date of
the issuance of the series of Certificates of such Trust.
"LEASE" means any lease between an Owner Trustee, as the lessor, and
the Company, as the lessee, described in an Indenture, as each such lease may
be amended or supplemented in accordance with its respective terms; and Leases
means all of such Leases.
"LETTER OF REPRESENTATIONS" when used with respect to the Certificates
of any series, means the initial agreement among the
5
<PAGE> 12
Company, the Trustee and the initial Clearing Agency substantially in the form
attached as an exhibit to the related Trust Supplement.
"NOTE DOCUMENTS" when used with respect to any Equipment Note, means
the applicable Indenture, Participation Agreement and Lease.
"OFFICER'S CERTIFICATE" means a certificate signed (i) in the case of
a corporation by the President, any Vice President, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of such corporation, (ii) in
the case of a partnership by the Chairman of the Board, the President or any
Vice President the Treasurer or an Assistant Treasurer of a corporate general
partner, and (iii) in the case of the Owner Trustee or the Indenture Trustee, a
certificate signed by a Responsible Officer of the Owner Trustee or Indenture
Trustee.
"OPINION OF COUNSEL" means an opinion in writing, signed by legal
counsel, who may be (a) the General Counsel or Assistant General Counsel of the
Company or (b) such other counsel designated by the Company, the Owner Trustee
or the Indenture Trustee, whether or not such counsel is an employee of any of
them and who shall be acceptable to the Trustee.
"OUTSTANDING" when used with respect to Certificates of any series,
means, as of the date of determination, all Certificates of such series
theretofore authenticated and delivered under this Basic Agreement and the
related Trust Supplement, except:
(i) Certificates of such series theretofore canceled by
the Registrar or delivered to the applicable Trustee or the Registrar
for cancellation;
(ii) Certificates of such series for which money in the
full amount has been theretofore deposited with the applicable Trustee
or any Paying Agent in trust for the Certificateholders of such series
as provided in Section 4.01 pending distribution of such money to the
Certificateholders of such series pursuant to the final distribution
payment to be made pursuant to Section 11.01 hereof; and
(iii) Certificates of such series in exchange for or in
lieu of which other Certificates of such series have been
authenticated and delivered pursuant to this Basic Agreement and the
related Trust Supplement.
"OWNER PARTICIPANT" means the "Owner Participant" referred to in the
applicable Indenture and any permitted successor or assign of any such Owner
Participant; and Owner Participants at
6
<PAGE> 13
any time of determination means all of the Owner Participants then referred to
in the Indentures.
"OWNER TRUSTEE" when used with respect to any Indenture or the
Equipment Notes, the Lease or the Equipment related thereto, means the "Owner
Trustee" referred to in such Indenture, not in its individual capacity but
solely as trustee, and each other Person which may from time to time be acting
as Owner Trustee in accordance with the provisions of the related Note
Documents; and Owner Trustees means all of the Owner Trustees party to any of
the respective Indentures.
"PARTICIPATION AGREEMENT" means any participation or similar agreement
described in an Indenture providing for, among other things, the issuance of
Equipment Notes pursuant to such Indenture to finance a portion of the purchase
price of Equipment to be purchased by an Owner Trustee and leased to the
Company pursuant to a Lease; and Participation Agreements means all such
agreements.
"PAYING AGENT" when used with respect to the Certificates of any
series, means the paying agent maintained and appointed for the Certificates of
such series pursuant to Section 7.12.
"PERMITTED GOVERNMENT INVESTMENT" means obligations of the United
States of America and agencies thereof for the payment of which the full faith
and credit of the United States of America is pledged, maturing in not more
than 60 days or such lesser time as is necessary for payment of any Special
Payments on a Special Distribution Date.
"PERSON" means any individual, corporation, partnership, association,
trust, unincorporated organization, or government or any agency or political
subdivision thereof.
"POOL BALANCE" when used with respect to any Trust, means, as of any
date, the aggregate unpaid principal amount of the Equipment Notes held in such
Trust on such date plus the amount of the principal payments on such Equipment
Notes held by the Trustee and not yet distributed plus the amount of any moneys
held in the related Escrow Account (other than earnings thereon). The Pool
Balance as of any Regular Distribution Date or Special Distribution Date, if
any, with respect to such Trust shall be computed after giving effect to the
payment of principal, if any, on the Equipment Notes and distribution thereof
to be made on that date.
"POOL FACTOR" when used with respect to any Trust, means, as of any
date, the quotient (rounded to the seventh decimal place) computed by dividing
(i) the Pool Balance of such Trust by (ii) the aggregate original principal
amount of the Equipment Notes
7
<PAGE> 14
held in such Trust. The Pool Factor, as of any Regular Distribution Date or
Special Distribution Date, if any, with respect to such Trust shall be computed
after giving effect to the payment of principal, if any, on the Equipment Notes
and distribution thereof to be made on that date.
"POSTPONED NOTES" when used with respect to any Trust or the related
series of Certificates, means the Equipment Notes to be held in such Trust as
to which a Postponement Notice shall have been delivered pursuant to Section
2.02(b).
"POSTPONEMENT NOTICE" when used with respect to any Trust or the
related series of Certificates, means a certificate of the Company signed by an
officer of the Company (1) requesting that the Trustee temporarily postpone
purchase of the related Equipment Notes to a date later than the Issuance Date
of such series of Certificates, (2) identifying the amount of the purchase
price of each such Equipment Note and the aggregate purchase price of all such
Equipment Notes and (3) with respect to such Equipment Notes referred to in
Clause (1), either (a) setting or resetting a new Transfer Date (which shall be
on or prior to the applicable Cut-off Date) for payment by the Trustee of such
purchase price and issuance by the Owner Trustee of the related Equipment Note,
or (b) indicating that such new Transfer Date (which shall be on or prior to
the applicable Cut-off Date) will be set by subsequent written notice not less
than one Business Day prior to such new Transfer Date.
"RECORD DATE" when used with respect to any Trust or the related
series of Certificates, means (i) for Scheduled Payments to be distributed on
any Regular Distribution Date, other than the final distribution, the day
(whether or not a Business Day) which is 15 days preceding such Regular
Distribution Date, and (ii) for Special Payments to be distributed on any
Special Distribution Date, if any, other than the final distribution, the day
(whether or not a Business Day)which is 15 days preceding such Special
Distribution Date.
"REGISTER AND REGISTRAR" when used with respect to the Certificates of
any series, means the register maintained and the registrar appointed pursuant
to Sections 3.04 and 7.12.
"REGULAR DISTRIBUTION DATE" when used with respect to distributions
from any Trust of Scheduled Payments, means each date designated as such in the
related Trust Supplement, until payment of all the Scheduled Payments to be
made under the Equipment Notes held in such Trust has been made.
"REQUEST" means a request by the Company setting forth the subject
matter of the request accompanied by an Officer's
8
<PAGE> 15
Certificate and an Opinion of counsel as provided in Section 1.02 hereof.
"RESPONSIBLE OFFICER" when used with respect to the initial Trustee,
the initial Indenture Trustee or the Owner Trustee means any officer in the
Corporate Trust Office; when used with respect to any successor Trustee, or
successor Indenture Trustee, means the chairman or vice-chairman of the board
of directors or trustees, the chairman or vice-chairman of the executive or
standing committee of the board of directors or trustees, the president, the
chairman of the committee on trust matters, any vice-president, any second
vice-president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust officer or
assistant trust officer, the comptroller and any assistant comptroller; and,
when used with respect to the Trustee and the Indenture Trustee, also means any
other officer of the Trustee or the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, when used with respect to the Trustee, Indenture Trustee or
Owner Trustee with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"SCHEDULED PAYMENT" when used with respect to a Regular Distribution
Date, means any payment (other than a Special Payment) of interest on or
principal and interest on an Equipment Note, due from the Owner Trustee which
issued the Equipment Note, which payment represents the payment of a regularly
scheduled installment of principal at the stated maturity of such installment
of principal on such Equipment Note or, the payment of regularly scheduled
interest accrued on such Equipment Note, or both.
"SPECIAL DISTRIBUTION DATE" means each date on which a Special Payment
is to be distributed, as specified in the applicable Trust Supplement.
"SPECIAL PAYMENT" when used with respect to a Special Distribution
Date, means (i) any payment of principal, premium, if any, and interest on an
Equipment Note resulting from the prepayment or purchase of such Equipment Note
held in a Trust, (ii) any payment of principal and interest (including any
interest accruing upon default) on, or any other amount in respect of, an
Equipment Note upon an Indenture Event of Default in respect thereof or upon an
acceleration under the Indenture relating thereto, (iii) any Scheduled Payment
or any Special Payment referred to in clause (i) of this definition which is
not in fact paid within five days of the Regular Distribution Date or Special
Distribution Date applicable thereto, (iv) the amounts required to be
distributed by the penultimate paragraph of
9
<PAGE> 16
Section 2.02(b) or (v) any proceeds from the sale of any Equipment Note by the
Trustee pursuant to Article VI hereof; and Special Payments means all of such
Special Payments.
"SPECIAL PAYMENTS ACCOUNT" when used with respect to the Certificates
of any series, means the account or accounts created and maintained for such
series pursuant to Section 4.01(b) and the related Trust Supplement.
"SPECIFIED INVESTMENTS" when used with respect to any Trust, means,
unless otherwise specified in the related Trust Supplement (i) direct
obligations of the United States of America and agencies thereof for which the
full faith and credit of the United States is pledged, (ii) obligations fully
guaranteed by the United States of America, (iii) certificates of deposit
issued by, or bankers' acceptances of, or time deposits with, any bank, trust
company or national banking association incorporated or doing business under
the laws of the United States of America or one of the states thereof having
combined capital and surplus and retained earnings of at least $500,000,000
(including the Indenture Trustee or Owner Trustee if such conditions are met),
and (iv) repurchase agreement with any financial institution having a combined
capital and surplus of at least $750,000,000 fully collateralized by
obligations of the type described in clauses (i) through (iii) above; provided
that if all of the above investments are unavailable, the entire amount to be
invested may be used to purchase Federal funds from an entity described in
(iii) above; and provided further that no investment shall be eligible as a
"Specified Investment" unless the final maturity or date of return of such
investment is 91 days or less from the date of purchase thereof.
"TRANSFER DATE" has the meaning assigned to that term or any of the
terms "Delivery Date," "Funding Date" or "Closing Date" in a Participation
Agreement.
"TRUST" means the trust created by a Trust Supplement, the estate of
which consists of the related Trust Property.
"TRUSTEE" means the institution executing this Basic Agreement as
Trustee, or its successor in interest, and any successor trustee appointed as
provided herein.
"TRUST INDENTURE ACT" except as otherwise provided in Section 9.06,
means the Trust Indenture Act of 1939 as in force at the date as of which this
Basic Agreement was executed.
"TRUST PROPERTY" when used with respect to any Trust, means the
Equipment Notes held as the property of such Trust and all monies at any time
paid thereon and all monies due and to become due thereunder, funds from time
to time deposited in the related
10
<PAGE> 17
Escrow Account, the related Certificate Account and the related Special
Payments Account and any proceeds from the sale by the Trustee pursuant to
Article VI hereof of any such Equipment Note.
"TRUST SUPPLEMENT" means an agreement supplement hereto pursuant to
which (i) a separate Trust is created for the benefit of the Holders of the
Certificates of a series, (ii) the issuance of the Certificates of such series
representing Fractional Undivided Interests in such Trust is authorized, and
(iii) the terms of the Certificates of such series are established, as such
agreement may from time to time be supplemented, amended or modified.
SECTION 1.02. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any
application or request by the Company, any Owner Trustee or any Indenture
Trustee to the Trustee to take any action under any provision of this Basic
Agreement or any Trust Supplement, the Company, such Owner Trustee or such
Indenture Trustee, as the case may be, shall furnish to the Trustee an
Officer's Certificate stating that, in the opinion of the signer, all
conditions precedent, if any, provided for in this Basic Agreement or the
applicable Trust Supplement relating to the proposed action have been complied
with an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Basic Agreement or any Trust
Supplement relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Basic Agreement or any Trust
Supplement shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein and in the applicable Trust Supplement relating
thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
11
<PAGE> 18
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 1.03. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any Opinion of Counsel stated to be based on the opinion of other
counsel shall be accompanied by a copy of such other opinion.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Basic Agreement or any Trust Supplement, they may, but
need not, be consolidated and form one instrument.
SECTION 1.04. ACTS OF CERTIFICATEHOLDERS. (a) Any
direction, consent, waiver or other action provided by this Basic Agreement or
any Trust Supplement to be given or taken by Certificateholders may be embodied
in and evidenced by one or more instruments of substantially similar tenor
signed by such Certificateholders in person or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company or any
Indenture Trustee. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Certificateholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Basic Agreement or any Trust
Supplement and (subject to Section 7.01) conclusive in favor of the Trustee,
the Company and the Indenture Trustee, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the certificate of any notary public or
other officer of any jurisdiction authorized to take acknowledgements of deeds
or administer oaths that the Person executing such instrument acknowledged to
him the execution thereof, or by an affidavit of a witness to such
12
<PAGE> 19
execution sworn to before any such notary or such other officer and where such
execution is by an officer of a corporation or association or a member of a
partnership, on behalf of such corporation, association or partnership such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.
(c) In determining whether the Certificateholders of the requisite
Fractional Undivided Interests of Certificates of any series Outstanding have
given any direction, consent or waiver (a "Direction"), under this Basic
Agreement or any Trust Supplement, Certificates owned by the Company, any
related Owner Trustee, any related Owner Participant or any Affiliate of any
such Person shall be disregarded and deemed not to be Outstanding for purposes
of any such determination. In determining whether the Trustee shall be
protected in relying upon any such Direction, only Certificates of such series
which the Trustee knows to be so owned shall be so disregarded.
Notwithstanding the foregoing, (i) if any such Person owns 100% of the
Certificates of any series Outstanding, such Certificates shall not be so
disregarded as aforesaid, and (ii) if any amount of Certificates of such series
so owned by any such Person have been pledged in good faith, such Certificates
shall not be disregarded as aforesaid if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Certificates and that the pledgee is not the Company, any related Owner
Trustee, any related Owner Participant or any Affiliate of any such Persons.
(d) The Company may at its option by delivery of an Officer's
Certificate to the Trustee set a record date to determine the
Certificateholders entitled to give any consent, request, demand,
authorization, Direction, notice, waiver or other Act. Notwithstanding Section
316(c) of the Trust Indenture Act, such record date shall be the record date
specified in such Officer's Certificate which shall be a date not more than 30
days prior to the first solicitation of Certificateholders in connection
therewith. If such a record date is fixed, such consent, request, demand,
authorization, Direction, notice, waiver or other Act may be given before or
after such record date, but only the Certificateholders of record of the
applicable series at the close of business on such record date shall be deemed
to be Certificateholders for the purposes of determining whether
Certificateholders of the requisite proportion of Outstanding Certificates of
such series have authorized or agreed or consented to such consent, request,
demand, authorization, Direction, notice, waiver or other Act, and for that
purpose the Outstanding Certificates of such series shall be computed as of
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such record date; provided that no such consent, request, demand,
authorization, Direction, notice, waiver or other Act by the Certificateholders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Basic Agreement not later than one year
after such record date.
(e) Any Direction, consent, waiver or other action by the
Certificateholder of any Certificate shall bind the Certificateholder of every
Certificate issued upon the transfer thereof or in exchange therefor or in lieu
thereof, whether or not notation of such action is made upon such Certificate.
(f) Except as otherwise provided in Section 1.04(c), Certificates
of any series owned by or pledged to any Person shall have an equal and
proportionate benefit under the provisions of this Basic Agreement and the
related Trust Supplement, without preference, priority, or distinction as among
all of the Certificates of such series.
ARTICLE II
ORIGINAL ISSUANCE OF CERTIFICATES
ACQUISITION OF EQUIPMENT NOTES
SECTION 2.01. AMOUNT UNLIMITED; ISSUABLE IN SERIES. (a) The
aggregate principal amount of Certificates which may be authenticated and
delivered under this Basic Agreement is unlimited. The Certificates may be
issued from time to time in one or more series and shall be designated
generally as the "Pass Through Certificates," with such further designations
added or incorporated in such title for the Certificates of each series as
specified in the related Trust Supplement. Each Certificate shall bear upon
its face the designation so selected for the series to which it belongs. All
Certificates of the same series shall be substantially identical except that
the Certificates of a series may differ as to denomination and as may otherwise
be provided in the Trust Supplement establishing the Certificates of such
series. Each separate series of Certificates issued pursuant to this Basic
Agreement and related Trust Supplement will evidence Fractional Undivided
Interests in the separate Trust formed by such Trust Supplement, and will have
no rights, benefits or interests in respect of any other separate Trust or the
Trust Property held therein. All Certificates of the same series issued under
this Basic Agreement and the related Trust Supplement shall be in all respects
equally and ratably entitled to the benefits of this Basic Agreement and the
related Trust Supplement without preference, priority, or distinction on
account of the actual time or times of authentication and delivery, all in
accordance with the terms and provisions of this Basic Agreement and the
related Trust Supplement.
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(b) The following matters shall be established with respect to the
Certificates of each series issued hereunder by a Trust Supplement executed and
delivered by and between the Company and the Trustee:
(1) the formation of the Trust as to which the
Certificates represent Fractional Undivided Interests and its
designation (which designation shall distinguish such Trust from each
other Trust created under this Basic Agreement and a Trust
Supplement);
(2) the specific title of the Certificates (which title
shall distinguish the Certificates of the series from each other
series of Certificates issued under this Basic Agreement);
(3) any limit upon the aggregate principal amount of the
Certificates which may be authenticated and delivered under this Basic
Agreement (which limit shall not pertain to Certificates authenticated
and delivered upon registration of transfer of, or in exchange for, or
in lieu of, other Certificates of the series pursuant to Sections
3.03, 3.04 and 3.05);
(4) the Cut-Off Date with respect to the Certificates and
the related Trust;
(5) the Regular Distribution Dates applicable to the
Certificates and the related Trust;
(6) the Special Distribution Dates applicable to the
Certificates and the related Trust;
(7) if other than as provided in Section 7.12, the
Registrar or the Paying Agent for the Certificates of such series,
including any Co-Registrar or additional Paying Agent;
(8) if other than as provided in Section 3.01, the
denominations in which the Certificates of such series shall be
issuable;
(9) the specific form of the Certificates of such series
and whether or not such Certificates are to be issued as Book-Entry
Certificates;
(10) a description of the Equipment Notes to be acquired
and held in the Trust formed by such Trust Supplement and of the
related Equipment and Note Documents;
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(11) provisions with respect to the terms for which the
definitions set forth in Article I hereof permit or require further
specification in the related Trust Supplement; and
(12) any other terms of the Certificates of such series
(which terms shall not be inconsistent with the provisions of the
Trust Indenture Act or adversely affect the interest of the
Certificateholders of any series Outstanding at the time), including
any terms which may be required or advisable under United States laws
or regulations or advisable in connection with the marketing of
Certificates of the series.
(c) At any time and from time to time after the execution and
delivery of this Basic Agreement and a Trust Supplement forming a Trust and
establishing the terms of Certificates of a series, Certificates of such series
shall be executed, authenticated and delivered by the Trustee to the Person or
Persons specified by the Company upon request of the Company and upon
satisfaction of any conditions precedent set forth in the related Trust
Supplement.
SECTION 2.02. ACQUISITION OF EQUIPMENT NOTES. (a)
Certificates of a series executed, authenticated and delivered by the Trustee
upon request of the Company in accordance with Section 2.01(c) shall equal in
the aggregate the aggregate principal amount of the Equipment Notes to be
purchased by the Trustee pursuant to the related Participation Agreements and
shall evidence the entire ownership of the related Trust. The Trustee shall
issue and sell such Certificates, in authorized denominations and in such
Fractional Undivided Interests, so as to result in the receipt of consideration
in an amount equal to the aggregate principal amount of such Equipment Notes
and, concurrently therewith, the Trustee shall purchase, pursuant to the terms
and conditions of the Participation Agreements, the Equipment Notes (except
Postponed Notes, if any) at a purchase price equal to the amount of such
consideration so received. Except as provided in Sections 3.03, 3.04 and
3.05 hereof, the Trustee shall not execute, authenticate or deliver
Certificates of such series in excess of the aggregate amount specified in this
paragraph. The provisions of this Subsection (a) are subject to the provisions
of Subsection (b) below.
(b) If on or prior to the Issuance Date with respect to a series
of Certificates and the related Trust the Company shall deliver to the Trustee
a Postponement Notice relating to one or more Postponed Notes, the Trustee
shall postpone the purchase of the related Postponed Notes and shall deposit
into an escrow account (the "Escrow Account") to be maintained as a part of
such Trust an amount equal to the purchase price of such Postponed Notes (the
"Escrowed Funds"). The Escrowed Funds so deposited
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shall be invested by the Trustee at the direction and risk of, and for the
benefit of, the Company in Specified Investments (i) maturing no later than any
scheduled Transfer Date relating to such series of Certificates, or (ii) if no
such Transfer Date has been scheduled, maturing on the next Business Day, or
(iii) if the Company has given notice to the Trustee that any Postponed Notes
will not be issued, with respect to the portion of the Escrowed Funds relating
to such Postponed Notes, maturing on the next applicable Special Distribution
Date, if such investments are reasonably available for purchase. The Trustee
shall make withdrawals from the Escrow Account only as provided in this Basic
Agreement and the related Trust Supplement.
Upon request of the Company on one or more occasions, and the
satisfaction of the closing conditions specified in the applicable
Participation Agreements on or prior to the related Cut-Off Date, the Trustee
shall purchase the applicable Postponed Notes with the Escrowed Funds. The
purchase price shall equal the principal amount of such Postponed Notes. On
the Initial Regular Distribution Date, the Company will pay (in immediately
available funds) to the Trustee an amount equal to the interest that would have
accrued on any Postponed Notes purchased after the Issuance Date if such
Postponed Notes had been purchased on the Issuance Date, from the Issuance Date
to, but not including, the date of the purchase of such Postponed Notes by the
Trustee.
The Trustee shall hold all such Specified Investments until the
maturity thereof and will not sell or otherwise transfer such Specified
Investments. If Specified Investments held in the Escrow Account mature prior
to any applicable Transfer Date, any proceeds received on the maturity of such
Specified Investments (other than any earnings thereon) shall be reinvested by
the Trustee at the direction and risk of, and for the benefit of, the Company
in Specified Investments maturing as provided in the second preceding
paragraph.
Any earnings on Specified Investments received from time to time by
the Trustee shall be promptly distributed to the Company. The Company shall
pay to the Trustee for deposit to the Escrow Account an amount equal to any
losses realized on such Specified Investments.
If the Company notifies the Trustee prior to the applicable Cut-Off
Date that any of the Postponed Notes will not be issued on or prior to the
Cut-Off Date for any reason, on the next Special Distribution Date for the
series of Certificates related to such Postponed Notes occurring more than 10
days following the date of such notice (i) the Company shall pay to the Trustee
for deposit in the related Special Payments Account, in immediately available
funds, an amount equal to the interest that would have accrued on the Postponed
Notes designated in such notice at a
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rate equal to the interest rate applicable to such series of Certificates from
the Issuance Date to, but not including, such Special Distribution Date and
(ii) the Trustee shall transfer an amount equal to that amount of Escrowed
Funds that would have been used to purchase the Postponed Notes designated in
such notice and the amount paid by the Company pursuant to the immediately
preceding clause (i) to the related Special Payments Account for distribution
as a Special Payment in accordance with the provisions hereof.
If, on the applicable Cut-Off Date, an amount equal to less than all
of the Escrowed Funds (other than Escrowed Funds referred to in the immediately
preceding paragraph) has been used to purchase Postponed Notes, on the Special
Distribution Date for the series of Certificates related to such Postponed
Notes next following such Cut-Off Date by more than 10 days (i) the Company
shall pay to the Trustee for deposit in the related Special Payments Account,
in immediately available funds, an amount equal to the interest that would have
accrued on such Postponed Notes contemplated to be purchased with such unused
Escrowed Funds (other than Escrowed Funds referred to in the immediately
preceding paragraph) but not so purchased at a rate equal to the interest rate
applicable to such series of Certificates from the Issuance Date to, but no
including, such Special Distribution Date and (ii) the Trustee shall transfer
such unused Escrowed Funds and the amount paid by the Company pursuant to the
immediately preceding clause (i) to such Special Payments Account for
distribution as a Special Payment in accordance with the provisions hereof.
SECTION 2.03. ACCEPTANCE BY TRUSTEE. The Trustee, upon the
execution and delivery of a Trust Supplement creating a Trust and a series of
Certificates, shall acknowledge its acceptance of all right, title and interest
in and to the Equipment Notes to be acquired pursuant to Section 2.02 hereof
and the Participation Agreements and shall declare that the Trustee holds and
will hold such right, title, and interest, together with all other property
constituting the Trust Property, for the benefit of all present and future
Certificateholders of such series, upon the trusts herein and in such Trust
Supplement set forth. By its payment for and acceptance of each Certificate of
such series issued to it under this Basic Agreement and such Trust Supplement,
each initial Certificateholder of such series as grantor of the Trust thereby
joins in the creation and declaration of such Trust.
SECTION 2.04. LIMITATION OF POWERS. Each Trust shall be
constituted solely for the purpose of making the investment in the Equipment
Notes provided for in the related Trust Supplement, and, except as set forth
herein or in such Trust Supplement, the Trustee shall not be authorized or
empowered to acquire any other investments or engage in any other activities
and, in particular,
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the Trustee shall not be authorized or empowered to do anything that would
cause the Trust to fail to qualify as a "grantor trust" for federal income tax
purposes (including, as subject to this restriction, acquiring any Equipment
(as defined in the related Indenture) by bidding the Equipment Notes or
otherwise, or taking any action with respect to any such Equipment once
acquired).
ARTICLE III
THE CERTIFICATES
SECTION 3.01. FORM, DENOMINATION AND EXECUTION OF
CERTIFICATES. The Certificates of each series shall be issued in registered
form without coupons and shall be substantially in the form attached hereto as
Exhibit A, with such omissions, variations and insertions as are permitted by
this Basic Agreement or the related Trust Supplement, and may have such
letters, numbers or other marks of identification and such legends or
endorsements printed, lithographed or engraved thereon, as may be required to
comply with the rules of any securities exchange on which such Certificates may
be listed or to conform to any usage in respect thereof, or as may,
consistently herewith, be prescribed by the Trustee or by the officer executing
such Certificates, such determination by said officer to be evidenced by his
signing such Certificates.
Except as provided in Section 3.09, the definitive Certificates of
such series shall be printed, lithographed or engraved or produced by any
combination of these methods or may be produced in any other manner permitted
by the rules of any securities exchange on which such Certificates may be
listed, all as determined by the officer executing such Certificates, as
evidenced by his execution of such Certificates.
Except as otherwise provided in the related Trust Supplement, the
Certificates of each series shall be issued in denominations of $1,000 or
integral multiples thereof except that one Certificate of such series may be
issued in a denomination of less than $1,000.
The Certificates of each series shall be executed on behalf of the
Trustee by manual or facsimile signature of a Responsible Officer of the
Trustee. Certificates bearing the manual or facsimile signature of an
individual who was, at the time when such signature was affixed, authorized to
sign on behalf of the Trustee shall be valid and binding obligations of the
Trustee, notwithstanding that such individual has ceased to be so authorized
prior to the authentication and delivery of such Certificates or did not hold
such office at the date of such Certificates. No Certificate of any series
shall be entitled to any benefit under this Basic Agreement or any Trust
Supplement,
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or be valid for any purposes, unless there appears on such Certificate a
certificate of authentication substantially in the form set forth in Exhibit A
hereto executed by the Trustee by manual signature, and such certificate upon
any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates of any series shall be dated the date of their authentication.
SECTION 3.02. AUTHENTICATION OF CERTIFICATES. The Trustee
shall duly authenticate and deliver Certificates of each series in authorized
denominations equalling in the aggregate the aggregate principal amount of the
Equipment Notes to be purchased by the Trustee pursuant to the related
Participation Agreement, and evidencing the entire ownership of the related
Trust.
SECTION 3.03. TEMPORARY CERTIFICATES. Pending the
preparation of definitive Certificates of any series, the Trustee may execute,
authenticate and deliver temporary Certificates of such series which are
printed lithographed, typewritten, or otherwise produced, in any denomination,
containing substantially the same terms and provisions as set forth in Exhibit
A, except for such appropriate insertions, omissions, substitutions and other
variations relating to their temporary nature as the officer executing such
temporary Certificates may determine, as evidenced by his execution of such
temporary Certificates.
If temporary Certificates of any series are issued, the Trustee will
cause definitive Certificates of such series to be prepared without
unreasonable delay. After the preparation of definitive Certificates, the
temporary Certificates shall be exchangeable for definitive Certificates of
such series upon surrender of the temporary Certificates at the Corporate Trust
Office of the Trustee, or at the office or agency of the Trustee maintained in
accordance with Section 7.12, without charge to the holder. Upon surrender for
cancellation of any one or more temporary Certificates, the Trustee shall
execute, authenticate and deliver in exchange therefor definitive Certificates
of like series, in authorized denominations of a like aggregate Fractional
Undivided Interest. Until so exchanged, such temporary Certificates shall in
all respects be entitled to the same benefits under this Basic Agreement and
the related Trust Supplement as definitive Certificates of such series.
SECTION 3.04. REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES. (a) The Trustee shall cause to be kept at the office or agency
to be maintained by it in accordance with the provisions of Section 7.12 a
register (the "Register") for each series of Certificates in which, subject to
the provisions of this Section 3.04 and the Certificates, the Trustee shall
provide for the registration of Certificates and of transfers and
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exchanges of Certificates as herein provided. The Trustee shall initially be
the registrar (the "Registrar") for the purpose of registering Certificates of
each series and transfers and exchanges of Certificates as herein provided.
(b) Upon surrender for registration of transfer of any Certificate
at the Corporate Trust Office or such other office or agency, the Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of like series, in authorized
denominations of a like aggregate Fractional Undivided Interest. At the option
of a Certificateholder, Certificates may be exchanged for other Certificates of
like series, in authorized denominations of a like aggregate Fractional
Undivided Interest, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for
exchange, the Trustee shall execute, authenticate and deliver the Certificates
that the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for registration of transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Trustee and the Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing.
(c) No service charge shall be made to a Certificateholder for any
registration of transfer or exchange of Certificates, but the Trustee shall
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of
Certificates.
(d) All Certificates surrendered for registration of transfer and
exchange shall be cancelled and subsequently destroyed by the Trustee.
SECTION 3.05. MUTILATED, DESTROYED, LOST OR STOLEN
CERTIFICATES. If (a) any mutilated Certificate is surrendered to the
Registrar, or the Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Registrar and the Trustee such security, indemnity or bond, as may be required
by them to save each of them harmless, then, in the absence of notice to the
Registrar or the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like series and of like Fractional Undivided Interest with the
same final Regular Distribution Date. In connection with the issuance of any
new Certificate under this Section 3.05, the Trustee shall require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the
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Trustee and the Registrar) connected therewith. Any duplicate Certificate
issued pursuant to this Section 3.05 shall constitute conclusive evidence of
the appropriate Fractional Undivided Interest in the related Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 3.06. PERSONS DEEMED OWNERS. Prior to due
presentation of a Certificate for registration of transfer, the Trustee, the
Registrar, and any Paying Agent of the Trustee may treat the person in whose
name any Certificate is registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to Section 4.02 and for all other
purposes whatsoever, and neither the Trustee, the Registrar, nor any Paying
Agent of the Trustee shall be affected by any notice to the contrary.
SECTION 3.07. CANCELLATION. All Certificates surrendered for
payment or transfer or exchange shall, if surrendered to any Person a party
hereto other than the Registrar, be delivered by such Person to the Registrar
for cancellation. No Certificates shall be authenticated in lieu of or in
exchange for any Certificates cancelled as provided in this Section, except as
expressly permitted by this Basic Agreement. All cancelled Certificates held
by the Registrar shall be destroyed and a certification of their destruction
delivered to the Trustee.
SECTION 3.08. LIMITATION OF LIABILITY FOR PAYMENTS. All
payments or distributions made to Certificateholders of any series under this
Basic Agreement or the related Trust Supplement shall be made only from such
Trust Property of the related Trust and only to the extent that the Trustee
shall have sufficient income or proceeds from the Trust Property to make such
payments in accordance with the terms of Article IV of this Basic Agreement and
the related Trust Supplement. Each Certificateholder, by its acceptance of
such Certificate, agrees that it will look solely to the income and proceeds
from the Trust Property of the related Trust to the extent available for
distribution to the Holder thereof as provided in this Basic Agreement and the
related Trust Supplement. Nothing in this Basic Agreement shall be construed
as an agreement, or otherwise creating an obligation, of the Company to pay any
of the principal, premium, if any, and interest due from time to time under the
Equipment Notes or in respect of the Certificates.
SECTION 3.09. BOOK-ENTRY AND DEFINITIVE CERTIFICATES. (a)
Except for one Certificate of each series that may be issued in a denomination
of less than $1,000, the Certificates of each series may be issued in the form
of one or more typewritten Certificates representing the Book-Entry
Certificates of such series, to be delivered to DTC, the initial Clearing
Agency, by, or on behalf
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of, the Company. In such case, the Certificates of such series delivered to
DTC shall initially be registered on the Register in the name of CEDE & Co.,
the nominee of the initial Clearing Agency, and no Certificate Owner will
receive a definitive certificate representing such Certificate Owner's interest
in the Certificates of such series, except as provided above and in Subsection
(d) below. Except with respect to the one Certificate of each series that may
be issued in a denomination of less than $1,000, unless and until definitive,
fully registered Certificates of such series (the "Definitive Certificates")
have been issued pursuant to Subsection (d) below:
(i) the provisions of this Section 3.09 shall be in full
force and effect;
(ii) the Company, the Paying Agent, the Registrar and the
Trustee may deal with the Clearing Agency for all purposes (including
the making of distributions on the Certificates) as the authorized
representative of the Certificate Owners;
(iii) to the extent that the provisions of this Section
3.09 conflict with any other provisions of this Basic Agreement or any
Trust Supplement (other than the provisions of any Trust Supplement
amending this Section 3.09 as permitted by this Basic Agreement), the
provisions of this Section 3.09 shall control;
(iv) the rights of Certificate Owners shall be exercised
only through the Clearing Agency and shall be limited to those
established by law and agreements between such Certificate Owners and
the Clearing Agency Participants; and until Definitive Certificates
are issued pursuant to Subsection (d) below, the Clearing Agency will
make book-entry transfers among the Clearing Agency Participants and
receive and transmit distributions of principal and interest and
premium, if any, on the Certificates to such Clearing Agency
Participants; and
(v) whenever this Basic Agreement or any Trust Supplement
requires or permits actions to be taken based upon instructions or
directions of Certificateholders of such series holding Certificates
of such series evidencing a specified percentage of the Fractional
Undivided Interests in the related Trust, the Clearing Agency shall be
deemed to represent such percentage only to the extent that it has
received instructions to such effect from Certificate Owners and/or
Clearing Agency Participants owning or representing, respectively,
such required percentage of the beneficial interest in Certificates of
such series and has delivered such instructions to the Trustee. The
Trustee shall have no
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obligation to determine whether the Clearing Agency has in fact
received any such instructions.
(b) Except with respect to the one Certificate of each series that
may be issued in a denomination of less than $1,000, whenever notice or other
communication to the Certificateholders of such series is required under this
Basic Agreement or the related Trust Supplement, unless and until Definitive
Certificates shall have been issued pursuant to Subsection (d) below, the
Trustee shall give all such notices and communications specified herein to be
given to Certificateholders of such series to the Clearing Agency and/or the
Clearing Agency Participants, and shall make available additional copies as
requested by such Clearing Agency Participants.
(c) Unless and until Definitive Certificates of a series are
issued pursuant to Subsection (d) below, on the Record Date prior to each
applicable Regular Distribution Date and Special Distribution Date, the Trustee
will request from DTC a Securities Position Listing (as defined in the Letter
of Representations) setting forth the names of all Clearing Agency Participants
reflected on DTC's books as holding interests in the Certificates of such
series on such Record Date. The Trustee shall mail to each such Clearing
Agency Participant, the statements described in Section 4.03 hereof and will
make available additional copies as requested by such Clearing Agency
Participant to be available for forwarding to Certificate Owners.
(d) If with respect to the Certificates of any series, (i) the
Company advises the Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities and the Trustee or
the Company is unable to locate a qualified successor, (ii) the Company at its
option, advises the Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence of
an Event of Default, Certificate Owners of Book-Entry Certificates of such
series evidencing Fractional Undivided Interests aggregating not less than a
majority in interest in the related Trust, by Act of said Certificate Owners
delivered to the Company and the Trustee, advise the Trustee and the Clearing
Agency through the Clearing Agency Participants in writing that the
continuation of a book- entry system through the Clearing Agency is no longer
in the best interests of the Certificate Owners of such series, then the
Trustee shall notify all Certificate Owners of such series, through the
Clearing Agency, of the occurrence of any such event and of the availability of
Definitive Certificates. Upon surrender to the Trustee of all the Certificates
of such series held by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency for registration of Definitive
Certificates in the names of Certificate Owners of such series, the Trustee
shall issue and
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deliver the Definitive Certificates of such series in accordance with the
instructions of the Clearing Agency. Neither the Company, the Registrar, the
Paying Agent nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such registration instructions. Upon the issuance of Definitive
Certificates of such series, the Trustee shall recognize the Person in whose
name such Definitive Certificates are registered in the Register as
Certificateholders of such series hereunder. Neither the Company nor the
Trustee shall be liable if the Trustee or the Company is unable to locate a
qualified successor Clearing Agency.
(e) Except as otherwise provided in the related Trust Supplement,
the Trustee shall enter into the applicable Letter of Representations with
respect to each series of Certificates and fulfill its responsibilities
thereunder.
(f) The provisions of this Section 3.09 may be made inapplicable
to any series or may be amended with respect to any series in the related Trust
Supplement.
ARTICLE IV
DISTRIBUTIONS; STATEMENTS TO
CERTIFICATEHOLDERS
SECTION 4.01. CERTIFICATE ACCOUNT AND SPECIAL PAYMENTS
ACCOUNT. (a) The Trustee shall establish and maintain on behalf of the
Certificateholders of each series a Certificate Account as one or more
non-interest-bearing accounts. The Trustee shall hold the Certificate Account
in trust for the benefit of the Certificateholders of such series, and shall
make or permit withdrawals therefrom only as provided in this Basic Agreement
or the related Trust Supplement. On each day when a Scheduled Payment is made
under any Indenture to the Trustee, as holder of the Equipment Notes issued
under such Indenture, the Trustee upon receipt shall immediately deposit the
aggregate amount of such Scheduled Payment in the applicable Certificate
Account.
(b) The Trustee shall establish and maintain on behalf of the
Certificateholders of each series a Special Payments Account as one or more
accounts, which shall be non-interest-bearing except as provided in Section
4.04. The Trustee shall hold such Special Payments Account in trust for the
benefit of the Certificateholders of such series, and shall make or permit
withdrawals therefrom only as provided in this Basic Agreement or the related
Trust Supplement. On each day when one or more Special Payments (other than a
Special Payment that represents either payment received with respect to an
Equipment Note upon an Event of Default in respect thereof or the proceeds of
any sale pursuant to Article VI hereof by the Trustee of an Equipment
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Note) is made under any Indenture to the Trustee, as holder of the Equipment
Notes issued under such Indenture, the Trustee upon receipt shall immediately
deposit the aggregate amounts of such Special Payments in the applicable
Special Payments Account. Upon the sale of any Equipment Note by the Trustee
pursuant to Article VI hereof and the realization of any proceeds thereof, the
Trustee shall deposit the aggregate amount of such proceeds as a Special
Payment in the applicable Special Payments Account.
(c) The Trustee shall present to the Indenture Trustee to which an
Equipment Note relates such Equipment Note on the date of its stated final
maturity, or in the case of any Equipment Note which is to be prepaid or
purchased in whole pursuant to the relevant Indenture, on the applicable
prepayment or purchase date under such Indenture.
SECTION 4.02. DISTRIBUTIONS FROM CERTIFICATE ACCOUNT AND
SPECIAL PAYMENTS ACCOUNT. (a) On each Regular Distribution Date with respect
to a series of Certificates or as soon thereafter as the Trustee has confirmed
receipt of the payment of the Scheduled Payments due on the Equipment Notes
held in the related Trust on such date, the Trustee shall distribute out of the
applicable Certificate Account the entire amount deposited therein on account
of Scheduled Payments pursuant to Section 4.01(a). There shall be so
distributed to each Certificateholder of record on the Record Date with respect
to such Regular Distribution Date (other than as provided in Section 11.01
concerning the final distribution) (i) by check mailed to such
Certificateholder at the address appearing in the Register or (ii) prior to the
time Definitive Certificates are issued, by wire transfer of same-day funds to
the account designated by the Certificateholder to the Trustee on or prior to
the Record Date relating to such Regular Distribution Date, such
Certificateholder's pro rata share (based on the aggregate Fractional Undivided
Interest in the related Trust held by such Certificateholder) of the aggregate
amount in the applicable Certificate Account.
(b) On each Special Distribution Date with respect to any Special
Payment with respect to a series of Certificates or as soon thereafter as the
Trustee has confirmed receipt of the Special Payments due on the Equipment
Notes held in the related Trust or realized upon the sale of any such Equipment
Note, the Trustee shall distribute out of the applicable Special Payments
Account the entire amount deposited therein on account of Special Payments
pursuant to Section 4.01(b). There shall be so distributed to each
Certificateholder of record of such series on the Record Date with respect to
such Special Distribution Date (other than as provided in Section 11.01
concerning the final distribution) (i) by check mailed to such
Certificateholder at the address appearing in the Register or (ii) prior to the
time Definitive Certificates are issued, by wire transfer of same-day
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funds to the account designated by the Certificateholder to the Trustee on or
prior to the Record Date relating to such Special Distribution Date, such
Certificateholder's pro rata share (based on the aggregate Fractional Undivided
Interest in the related Trust held by such Certificateholder) of the aggregate
amount in the applicable Special Payments Account on account of such Special
Payment.
(c) The Trustee shall at the expense of the Company cause notice
of each Special Payment with respect to a series of Certificates to be mailed
to each Certificateholder of such series at his address as it appears in the
Register. In the event of a prepayment or purchase of Equipment Notes held in
the related Trust, such notice shall be mailed not less than 20 days prior to
the date any such Special Payment is scheduled to be distributed. In the case
of a Special Payment pursuant to either of the last two paragraphs of Section
2.02(b), such notice shall be mailed not less than 10 days prior to the date
any such Special Payment is scheduled to be distributed. In the case of any
other Special Payments, such notice shall be mailed as soon as practicable
after the Trustee has confirmed that it has received funds for such Special
Payment. Notices mailed by the Trustee shall set forth:
(i) the Special Distribution Date and the Record Date
therefor (except as otherwise provided in Section 11.01);
(ii) the amount of the Special Payment for each $1,000
face amount Certificate (taking into account any payment to be made by
the Company pursuant to Section 2.02(b)) and the amount thereof
constituting principal, premium, if any, and interest;
(iii) the reason for the Special Payment; and
(iv) if the Special Distribution Date is the same date as
a Regular Distribution Date for the Certificates of such series, the
total amount to be received on such date for each $1,000 face amount
Certificate.
If the amount of premium payable upon the prepayment or purchase of an
Equipment Note has not been calculated at the time that the Trustee mails
notice of a Special Payment, it shall be sufficient if the notice sets forth
the other amounts to be distributed and states that any premium received will
also be distributed.
SECTION 4.03. STATEMENTS TO CERTIFICATEHOLDERS. (a) On each
Regular Distribution Date and Special Distribution Date, if any, with respect
to a series of Certificates the Trustee will include with each distribution to
Certificateholders of the related series a statement, giving effect to such
distribution to
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be made on such Regular Distribution Date or Special Distribution Date, as the
case may be, setting forth the following information (per a $1,000 face amount
Certificate as to (i) and (ii) below):
(i) the amount of such distribution allocable to principal
and the amount allocable to premium, if any;
(ii) the amount of such distribution allocable to interest;
and
(iii) the Pool Balance and the Pool Factor of the related
Trust.
(b) Within a reasonable period of time after the end of each
calendar year but not later than the latest date permitted by law, the Trustee
shall furnish to each Person who at any time during such calendar year was a
Certificateholder of record a statement containing the sum of the amounts
determined pursuant to clauses (a)(i) and (a)(ii) with respect to the related
Trust for such calendar year or, in the event such Person was a
Certificateholder of record during a portion of such calendar year, for the
applicable portion of such year, and such other items as are readily available
to the Trustee and which a Certificateholder shall reasonably request as
necessary for the purpose of such Certificateholder's preparation of its
Federal Income tax returns.
SECTION 4.04. INVESTMENT OF SPECIAL PAYMENT MONEYS. Any
money received by the Trustee pursuant to Section 4.01(b) representing a
Special Payment which is not to be promptly distributed shall, to the extent
practicable, be invested in Permitted Government Investments by the Trustee
pending distribution of such Special Payment pursuant to Section 4.02. Any
investment made pursuant to this Section 4.04 shall be in such Permitted
Government Investments having maturities not later than the date that such
moneys are required to be used to make the payment required under Section 4.02
on the applicable Special Distribution Date and the Trustee shall hold any such
Permitted Government Investments until maturity. The Trustee shall have no
liability with respect to any investment made pursuant to this Section 4.04,
other than by reason of the willful misconduct or negligence of the Trustee.
All income and earnings from such investments shall be distributed on such
Special Distribution Date as part of such Special Payment.
ARTICLE V
THE COMPANY
SECTION 5.01. MAINTENANCE OF CORPORATE EXISTENCE. The
Company, at its own costs and expense, will do or cause to be done all things
necessary to preserve and keep in full force and
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effect its corporate existence, rights and franchises, except as otherwise
specifically permitted in Section 5.02; provided, however, that the Company
shall not be required to preserve any right or franchise if the Company shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of the Company and that the loss thereof is not prejudicial in
any material respect to the Certificateholders.
SECTION 5.02. CONSOLIDATION, MERGER OR SALE OF ASSETS
PERMITTED. (a) The Company covenants that it will not consolidate with or
merge into any other corporation or sell, convey or otherwise dispose of all or
substantially all of its assets as an entirety to any Person unless the
successor or transferee corporation (if other than the Company) shall be a
corporation organized and existing under the laws of the United States of
America or a state thereof or the District of Columbia, and such corporation
shall expressly assume the due and punctual performance and observance of all
of the covenants and conditions of this Basic Agreement and the related Trust
Supplement to be performed by the Company by supplemental agreement given by
such successor corporation to the Trustee.
(b) The Company agrees with the Certificateholders of each series
that, immediately prior to and after giving effect to any transaction described
in Section 5.02(a), no Event of Default with respect to Equipment Notes held in
the related Trust arising solely as a result of an event of default under a
related Lease and no Indenture Event of Default with respect to such Equipment
Notes arising solely as a result of an event of default under a related lease,
and no event that, after notice or lapse of time, or both, would become such an
Event of Default or such an Indenture Event of Default, shall have occurred and
be continuing. The Trustee, subject to the provisions of Sections 7.01 and
7.02, may receive an Officer's Certificate and an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, sale or conveyance,
and any such assumption complies with the provisions of this Section 5.02.
(c) In case of any such merger, consolidation, sale, conveyance or
other disposition and upon any such assumption by the successor corporation,
such successor corporation shall succeed to and be substituted for the Company
hereunder, with the same effect as if it had been named herein as the party of
the first part.
ARTICLE VI
DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If in respect of any Trust,
any Indenture Event of Default under any applicable Indenture (an "Event of
Default") shall occur and be continuing,
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then, and in each and every case, so long as such Indenture Event of Default
shall be continuing, the Trustee may vote all of the Equipment Notes issued
under the applicable Indenture and held in the Trust, and upon the direction of
the Certificateholders evidencing Fractional Undivided Interests aggregating
not less than a majority in interest in such Trust, the Trustee shall vote a
corresponding majority of such Equipment Notes, in favor of directing the
Indenture Trustee under such Indenture, to declare the unpaid principal amount
of the Equipment Notes then outstanding to which such Event of Default relates
and accrued interest thereon to be due and payable under, and in accordance
with the provisions of, the applicable Indenture. In addition, if an Indenture
Event of Default shall have occurred and be continuing under any Indenture, the
Trustee may in accordance with the applicable Indenture vote the Equipment
Notes held in the Trust to which such Event of Default relates to direct the
Indenture Trustee regarding the exercise of remedies provided in such
Indenture.
In addition, after an Event of Default shall have occurred and be
continuing with respect to any Equipment Notes, the Trustee may in its
discretion, and upon the direction of the Certificateholders evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
in the related Trust shall, by such officer or agent as it may appoint, sell,
convey, transfer and deliver such Equipment Note or Equipment Notes, without
recourse to or warranty by the Trustee or any Certificateholder, to any Person.
In any such case, the Trustee shall sell, assign, contract to sell or otherwise
dispose of and deliver such Equipment Note or Equipment Notes in one or more
parcels at public or private sale or sales, at any location or locations at the
option of the Trustee, all upon such terms and conditions as it may reasonably
deem advisable and at such prices as it may reasonably deem advisable, for
cash. If the Trustee so decides or is required to sell or otherwise dispose of
any Equipment Note pursuant to this Section, the Trustee shall take such of the
actions described above as it may reasonably deem most effectual to complete
the sale or other disposition of such Equipment Note, so as to provide for the
payment in full of all amounts due on the related series of Certificates. The
Trustee shall give notice to the Company promptly after any such sale.
Notwithstanding the foregoing, any action taken by the Trustee under this
Section shall not, in the reasonable judgment of the Trustee, be adverse to the
best interests of the Certificateholders of such series.
SECTION 6.02. INCIDENTS OF SALE OF EQUIPMENT NOTES. Upon any
sale of all or any part of the Equipment Notes made either under the power of
sale given under this Basic Agreement or the related Trust Supplement or
otherwise for the enforcement of this
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Basic Agreement or the related Trust Supplement, the following shall be
applicable:
(1) Certificateholders and Trustee May Purchase Equipment
Notes. Any Certificateholder, the Trustee in its individual or any
other capacity or any other Person may bid for and purchase any of the
Equipment Notes, and upon compliance with the terms of sale, may hold,
retain, possess and dispose of such Equipment Notes in their or its or
his own absolute right without further accountability.
(2) Receipt of Trustee Shall Discharge Purchaser. The
receipt of the Trustee or of the officer making such sale shall be a
sufficient discharge to any purchaser for his purchase money, and,
after paying such purchase money and receiving such receipt, such
purchaser or his personal representative or assigns shall not be
obliged to see to the application of such purchase money, or be in any
way answerable for any loss, misapplication or non-application
thereof.
(3) Application of Moneys Received upon Sale. Any moneys
collected by the Trustee upon any sale made either under the power of
sale given by this Basic Agreement and the related Trust Supplement or
otherwise for the enforcement of this Basic Agreement and the related
Trust Supplement, shall be applied as provided in Section 4.02.
SECTION 6.03. JUDICIAL PROCEEDINGS INSTITUTED BY TRUSTEE.
(a) Trustee May Bring Suit. If there shall be a failure to make
payment of the principal of, premium, if any, or interest on any Equipment
Note, or if there shall be any failure to pay Rent (as defined in the
applicable Lease) under any Lease when due and payable, then the Trustee, in
its own name, and as trustee of an express trust, as holder of such Equipment
Notes, shall be, to the extent permitted by and in accordance with the terms of
the Note Documents, entitled and empowered to institute any suits, actions or
proceedings at law, in equity or otherwise, for the collection of the sums so
due and unpaid or proceedings at law, in equity or otherwise, for the
collection of the sums so due and unpaid on such Equipment Notes or under such
Lease and may prosecute any such claim or proceeding to judgment or final
decree with respect to the whole amount of any such sums so due and unpaid.
(b) Trustee May File Proofs of Claim; Appointment of Trustee as
Attorney-in-Fact in Judicial Proceedings. The Trustee in its own name, or as
trustee of an express trust, or as attorney-in-fact for the Certificateholders
of any series, or in any one or more of such capacities (irrespective of
whether
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distributions on the Certificates of any series shall then be due and payable,
or the payment of the principal on any Equipment Notes shall then be due and
payable, as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand to the relevant Indenture
Trustee for the payment of overdue principal, premium (if any) or interest on
the Equipment Notes), shall be entitled and empowered to file such proofs of
claim and other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee and of the Certificateholders of any series
allowed in any receivership, insolvency, bankruptcy, liquidation, readjustment,
reorganization or any other judicial proceedings relative to the Company or any
Owner Trustee or Owner Participant, their respective creditors or property.
Any receiver, assignee, trustee, liquidator, sequestrator (or similar official)
in any such judicial proceeding is hereby authorized by each Certificateholder
to make payments in respect of such claim to the Trustee, and in the event that
the Trustee shall consent to the making of such payments directly to the
Certificateholders of any series, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel. Nothing contained in this Basic Agreement or
any related Trust Supplement shall be deemed to give to the Trustee any right
to accept or consent to any plan of reorganization or otherwise by action of
any character in any such proceeding or to waive or change in any way any right
of any Certificateholder of any series.
SECTION 6.04. CONTROL BY CERTIFICATEHOLDERS. Subject to Section
2.04, the Certificateholders holding Certificates of a series evidencing
Fractional Undivided Interests aggregating not less than a majority in interest
in the related Trust shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee under this Basic
Agreement or the related Trust Supplement, including any right of the Trustee
as holder of the Equipment Notes, provided that:
(1) such direction shall not be in conflict with any rule
of law or with this Basic Agreement or the related Trust Supplement
and would not involve the Trustee in personal liability or expense,
(2) the Trustee shall not determine that the action so
directed would be unjustly prejudicial to the Certificateholders of
such series not taking part in such direction,
(3) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction, and
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(4) if any Indenture Event of Default under a related
Indenture shall have occurred and be continuing, such direction shall
not obligate the Trustee to vote more than a corresponding majority of
the related Equipment Notes held by the Trust in favor of directing
any action by the Indenture Trustee with respect to such Indenture
Event of Default.
SECTION 6.05. WAIVER OF DEFAULTS. The Certificateholders
holding Certificates of a series evidencing Fractional Undivided Interests
aggregating not less than a majority in interest in the Trust may on behalf of
all of the Certificateholders of such series waive any Default or Event of
Default and its consequences hereunder or under the related Trust Supplement
with respect to such series or may instruct the Trustee to waive any default
under the related Indenture, this Basic Agreement or the related Trust
Supplement with respect to such series and its consequences, except a Default:
(1) in the deposit of any Scheduled Payment or Special
Payment under Section 4.01 or in the distribution of any payment under
Section 4.02 on the Certificates of such series, or
(2) in the payment of the principal of, premium, if any,
or interest on any Equipment Notes, or
(3) in respect of a covenant or provision hereof which
under Article IX hereof cannot be modified or amended without the
consent of the Certificateholder of each Outstanding Certificate of
such series affected.
Upon any such waiver, such Default shall cease to exist with respect
to the Certificates of such series, and any Event of Default arising therefrom
shall be deemed to have been cured for every purpose in respect of such series
and any direction given by the Trustee on behalf of the Certificateholders of
such series to the Indenture Trustee shall be annulled with respect thereto;
but so such waiver shall extend to any subsequent or other Default or Event of
Default or impair any right consequent thereon. Upon any such waiver, the
Trustee shall vote the Equipment Notes issued under the Indenture to waive the
corresponding Indenture Default or Indenture Event of Default.
SECTION 6.06. UNDERTAKING TO PAY COURT COSTS. All parties to
this Basic Agreement and the related Trust Supplement, and each
Certificateholder by his acceptance of a Certificate, shall be deemed to have
agreed that any court may in its discretion require, in any suit, action or
proceeding for the enforcement of any right or remedy under this Basic
Agreement or the related Trust Supplement, or in any suit, action or proceeding
against
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the Trustee for any action taken or omitted by it as Trustee hereunder or under
the related Trust Supplement, the filing by any party litigant in such suit,
action or proceeding of an undertaking to pay the costs of such suit, action or
proceeding, and that such court may, in its discretion, assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in such
suit, action or proceeding, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; provided, however, that the
provisions of this Section shall not apply to (a) any suit, action or
proceeding instituted by any Certificateholder or group of Certificateholders
of any series evidencing Fractional Undivided Interests aggregating more than
10% of the relevant Trust, (b) any suit, action or proceeding instituted by any
Certificateholder of any series for the enforcement of the distribution of
payments pursuant to Section 4.02 hereof on or after the respective due dates
expressed herein or (c) any suit, action or proceeding instituted by the
Trustee.
SECTION 6.07. RIGHT OF CERTIFICATEHOLDERS TO RECEIVE PAYMENTS
NOT TO BE IMPAIRED. Anything in this Basic Agreement or any Trust Supplement
to the contrary notwithstanding, including without limitation Section 6.08
hereof, the right of any Certificateholder to receive distributions of payments
required pursuant to Section 4.02 hereof on the Certificates when due, or to
institute suit for the enforcement of any such payment on or after the
applicable Regular Distribution Date or Special Distribution Date, shall not be
impaired or affected without the consent of such Certificateholder.
SECTION 6.08. CERTIFICATEHOLDERS MAY NOT BRING SUIT EXCEPT
UNDER CERTAIN CONDITIONS. A Certificateholder of any series shall not have the
right to institute any suit, action or proceeding at law or in equity or
otherwise with respect to this Basic Agreement or the related Trust Supplement,
for the appointment of a receiver or for the enforcement of any other remedy
under this Basic Agreement or the related Trust Supplement, unless:
(1) such Certificateholder previously shall have given
written notice to the Trustee of a continuing Event of Default;
(2) the Certificateholders holding Certificates of such
series evidencing Fractional Undivided Interests aggregating not less
than a majority in interest of the Trust shall have requested the
Trustee in writing to institute such action, suit or proceeding and
shall have offered to the Trustee indemnity as provided in Section
7.03(e);
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(3) the Trustee shall have refused or neglected to
institute any such action, suit or proceeding for 60 days after
receipt of such notice, request and offer of indemnity; and
(4) no direction inconsistent with such written request
has been given to the Trustee during such 60 day period by the
Certificateholders holding Certificates of such series evidencing
Fractional Undivided Interests aggregating not less than a majority in
interest in the related Trust.
It is understood and intended that no one or more of the
Certificateholders of any series shall have any right in any manner whatever
hereunder or under the related Trust Supplement or under the Certificates of
such series to (i) surrender, impair, waive, affect, disturb or prejudice any
property in the Trust Property of the related Trust or the lien of any
applicable Indenture on any property subject thereto, or the rights of the
Certificateholders of such series or the holders of the applicable Equipment
Notes, (ii) obtain or seek to obtain priority over or preference to any other
Certificateholder of such series or (iii) enforce any right under this Basic
Agreement or the related Trust Supplement, except in the manner herein or
therein provided and for the equal, ratable and common benefit of all the
Certificateholders of such series subject to the provisions of this Basic
Agreement and the related Trust Supplement.
SECTION 6.09. REMEDIES CUMULATIVE. Every remedy given
hereunder to the Trustee or to any of the Certificateholders of any series
shall not be exclusive of any other remedy or remedies, and every such remedy
shall be cumulative and in addition to every other remedy given hereunder or
now or hereafter given by statute, law, equity or otherwise.
ARTICLE VII
THE TRUSTEE
SECTION 7.01. CERTAIN DUTIES AND RESPONSIBILITIES. (a)
Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties as are
specifically set forth in this Basic Agreement and related Trust
Supplement, and no implied covenants or obligations shall be read into
this Basic Agreement or related Trust Supplement against the Trustee;
and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed
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therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Basic Agreement and the related
Trust Supplement; but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Basic Agreement and related Trust Supplement.
(b) In case an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Basic Agreement and related Trust Supplement, and use the same degree of care
and skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(c) No provision of this Basic Agreement and related Trust
Supplement shall be construed to relieve the Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Certificateholders of any series evidencing
Fractional Undivided Interests aggregating not less than a majority in
interest in the relevant Trust relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under
this Basic Agreement or any related Trust Supplement; and
(4) no provision of this Basic Agreement or any related
Trust Supplement shall require the Trustee to expend or risk its own
funds in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk is not reasonably assured to it.
(d) Whether or not herein expressly so provided, every
provision of this Basic Agreement or any related Trust Supplement
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relating to the conduct or affecting the liability of or affording protection
to the Trustee shall be subject to the provisions of this Section.
SECTION 7.02. NOTICE OF DEFAULTS. As promptly as practicable
after, and in any event within 90 days after, the occurrence of any Default
hereunder, the Trustee shall transmit by mail to the Company, the related Owner
Trustee, the related Indenture Trustee and to all Certificateholders holding
Certificates of the related series in accordance with Section 313(c) of the
Trust Indenture Act, as their names and addresses appear in the Register,
notice of such Default hereunder known to the Trustee, unless such Default
shall have been cured or waived; provided, however, that, except in the case of
a Default in the payment of the principal of, premium, if any, or interest on
any Equipment Note, the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the
Certificateholders of the related series.
SECTION 7.03. CERTAIN RIGHTS OF TRUSTEE. Subject to the
provisions of Section 315 of the Trust Indenture Act: (a) the Trustee may rely
and shall be protected in acting or refraining from acting in reliance upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Request;
(c) whenever in the administration of this Basic Agreement or any
Trust Supplement the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officer's Certificate of the
Company, any Owner Trustee or any Indenture Trustee;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee be under no obligation to exercise any of the
rights or powers vested in it by this Basic Agreement or any Trust Supplement
at the request or direction of any of the
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Certificateholders of any series pursuant to this Basic Agreement or any Trust
Supplement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the cost, expenses and liabilities
which might be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties under this Basic Agreement or any Trust Supplement either
directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
SECTION 7.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
CERTIFICATES. The recitals contained herein and in the Certificates of each
series, except the certificates of authentication, shall not be taken as the
statements of the Trustee, and the Trustee assumes no responsibility for their
correctness. Subject to Section 7.15, the Trustee makes no representations as
to the validity or sufficiency of this Basic Agreement, any Trust Supplement,
the Note Documents, the Indentures, the Equipment Notes or the Certificates,
except that the Trustee hereby represents and warrants that this Basic
Agreement has been, and each Trust Supplement and each Certificate of each
series will be, executed and delivered by one of its officers who is duly
authorized to execute and deliver such document on its behalf.
SECTION 7.05. MAY HOLD CERTIFICATES. The Trustee, any Paying
Agent, Registrar or any other agent, in their respective individual or any
other capacity, may become the owner or pledgee of Certificates and may
otherwise deal with the Company, any Owner Trustee or any Indenture Trustee
with the same rights it would have if it were not Trustee, Paying Agent,
Registrar or such other agent.
SECTION 7.06. MONEY HELD IN TRUST. Money held by the Trustee
or the Paying Agent in trust under this Basic Agreement or under any Trust
Supplement need not be segregated from other funds except to the extent
required herein, in any Trust Supplement or by law and neither the Trustee nor
the Paying Agent shall have any liability for interest upon any such moneys
except as provided for herein or in any Trust Supplement.
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SECTION 7.07. COMPENSATION AND REIMBURSEMENT. The Company agrees
(1) to pay, or cause to be paid, to the Trustee from time
to time the compensation set forth in the schedule agreed to by the
Trustee and the Company for all services rendered by it hereunder
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein or in
any Trust Supplement, to reimburse, or cause to be reimbursed, the
Trustee upon its request for all reasonable out-of-pocket expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Basic Agreement or any Trust
Supplement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence,
willful misconduct or bad faith or as may be incurred due to the
Trustee's breach of its representations and warranties set forth in
Section 7.15;
(3) to indemnify, or cause to be indemnified, the Trustee
in accordance with the applicable Participation Agreement. The
Trustee shall notify the Company promptly of any claim for which it
may seek indemnity. The Company shall defend the claim and the
Trustee shall cooperate in the defense. The Trustee may have separate
counsel with the consent of the Company and the Company will pay the
reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent; and
(4) to indemnify, or cause to be indemnified, the
Trustee, solely in its individual capacity, for, and to hold it
harmless against, any tax (other than for or with respect to any tax
referred to in the next paragraph, provided that no indemnification
shall be available with respect to any tax attributable to the
Trustee's compensation for serving as such) incurred without
negligence, willful misconduct or bad faith, on its part, arising out
of or in connection with the acceptance or administration of this
Trust, including any costs and expenses incurred in contesting the
imposition of any such tax. The Trustee, in its individual capacity,
shall notify the Company promptly of any tax for which it may seek
indemnity. The Company shall defend against the imposition of such
tax and the Trustee, in its individual capacity, shall cooperate in
the defense. The Trustee, in its individual capacity, may have
separate counsel with the consent of the Company and the Company will
pay the
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reasonable fees and expenses of such counsel. The Company need not
pay for any taxes paid, in settlement or otherwise, without its
consent.
In addition, the Trustee shall be entitled to reimbursement from, and
shall have a lien prior to the Certificates upon, all property and funds held
or collected by the Trustee in its capacity as Trustee for any tax incurred
without negligence, bad faith or willful misconduct, on its part, arising out
of or in connection with the acceptance or administration of the Trust created
pursuant to any Trust Supplement (other than any tax attributable to the
Trustee's compensation for serving as such), including any costs and expenses
incurred in contesting the imposition of any such tax. If the Trustee
reimburses itself for any such tax it will within 30 days mail a brief report
setting forth the circumstances thereof to all Certificateholders as their
names and addresses appear in the Register.
SECTION 7.08. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. Each
Trust shall at all times have a Trustee which shall be eligible to act as a
Trustee under Section 310(a) of the Trust Indenture Act and which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of a least $100,000,000, and
subject to supervision or examination by Federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section to act as Trustee of any Trust, the Trustee shall resign immediately in
the manner and with the effect hereinafter specified in Section 7.09.
SECTION 7.09. RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR. (a) No resignation or removal of the Trustee of any Trust and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 7.10.
(b) The Trustee may resign at any time as Trustee of any or all
Trusts by giving written notice thereof to the Company, the Authorized Agents,
the related Owner Trustee and the related Indenture Trustee. If an instrument
of acceptance by a successor Trustee shall not have been delivered to the
Company, the related Owner Trustee and the related Indenture Trustee within 30
days after the giving by the Trustee of such notice of resignation,
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the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time as Trustee of any Trust
by Act of Certificateholders of the related series holding Certificates of such
series evidencing Fractional Undivided Interests aggregating not less than a
majority in interest in such Trust delivered to the Trustee and to the Company,
the related Owner Trustee and the related Indenture Trustee.
(d) If at any time in respect of any Trust:
(1) the Trustee shall fail to comply with Section 310 of
the Trust Indenture Act after written request therefor by the Company
or by any Certificateholder of the related series who has been a bona
fide Certificateholder for at least six months; or
(2) the Trustee shall cease to be eligible under Section
7.08 and shall fail to resign after written request therefor by the
Company or by any such Certificateholder; or
(3) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any case, (i) the Company may remove the Trustee or (ii) subject to
Section 6.06, any Certificateholder of the related series who has been a bona
fide Certificateholder for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee of such
Trust.
(e) If a Responsible Officer of the Trustee shall obtain actual
knowledge of an Avoidable Tax (as hereinafter defined) in respect of any Trust
which has been or is likely to be asserted, the Trustee shall promptly notify
the Company and the related Owner Trustees thereof and shall, within 30 days of
such notification, resign hereunder unless within such 30 day period the
Trustee of such Trust shall have received notice that the Company or the
related Owner Trustee has agreed to pay such tax. The Company shall promptly
appoint a successor Trustee of such Trust in a jurisdiction where there are no
Avoidable Taxes. As used herein an Avoidable Tax means a state or local tax:
(i) upon (w) the Trust, (x) the Trust Property of such Trust, (y)
Certificateholders of such Trust or (z) the Trustee for which the
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Trustee is entitled to seek reimbursement from the Trust Property of such
Trust, and (ii) which would be avoided if the Trustee were located in another
state, or jurisdiction within a state, within the United States. A tax shall
not be an Avoidable Tax if the Company or the related Owner Trustee shall agree
to pay, and shall pay, such tax.
(f) If the Trustee shall resign, be removed or become incapable of
acting as Trustee of any Trust, or if a vacancy shall occur in the office of
the Trustee of any Trust for any cause, the Company shall promptly appoint a
successor Trustee of such Trust. If, within 90 days after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
of such Trust shall be appointed by Act of the Certificateholders holding
Certificates evidencing Fractional Undivided Interests aggregating not less
than a majority in interest in such Trust delivered to the Company, the related
Owner Trustee, the related Indenture Trustee and the retiring Trustee, the
successor Trustee so appointed of such Trust shall, forthwith upon its
acceptance of such appointment, become the successor Trustee of such Trust and
supersede the successor Trustee appointed as provided above. If no successor
Trustee of such Trust shall have been so appointed as provided above and
accepted appointment in the manner hereinafter provided, any Certificateholder
who has been a bona fide Certificateholder of the related series for at least
six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee for such Trust.
(g) The successor Trustee of a Trust shall give notice of the
resignation and removal of the Trustee and appointment of the successor Trustee
by mailing written notice of such event by first-class mail, postage prepaid,
to the Certificateholders of the related series as their names and addresses
appear in the Register. Each notice shall include the name of such successor
Trustee and the address of its Corporate Trust Office.
SECTION 7.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a)
Every successor Trustee appointment hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
with respect to the related Trusts shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to related Trusts; but, on request of the Company or the successor Trustee,
such retiring Trustee shall execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee and such successor Trustee shall duly assign,
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transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee with respect to the related Trusts, subject nevertheless
to its lien, if any, provided for in Section 7.07. Upon request of any such
successor Trustee, the Company, the retiring Trustee and such provisions as
shall execute and deliver any and all instruments containing such provisions as
shall be necessary or desirable to transfer and confirm to, and for more fully
and certainly vesting in, such successor Trustee all such rights, powers and
trusts.
(b) If a successor Trustee is appointed with respect to one or
more (but not all) Trusts, the Company, the predecessor Trustee and each
successor Trustee with respect to any Trust shall execute and deliver an
agreement supplemental hereto which shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the predecessor Trustee with respect to the Trusts as to which
the predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and shall add to or change any of the provisions of this
Basic Agreement as shall be necessary to provide for or facilitate the
administration of the Trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental agreement shall
constitute such Trustee co-Trustees of the same Trust and that each such
Trustee shall be Trustee of separate Trusts.
SECTION 7.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
TO BUSINESS. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Certificates shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Certificates so authenticated with the same
effect as if such successor Trustee had itself authenticated such Certificates.
SECTION 7.12. MAINTENANCE OF AGENCIES. (a) With respect to
each series of Certificates, there shall at all times be maintained in the
Borough of Manhattan, The City of New York, an office or agency where
Certificates of such series may be presented or surrendered for registration of
transfer or for exchange, and for payment thereof and where notices and demands
to or upon the Trustee in respect of the Certificates or of this
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Basic Agreement or any Trust Supplement may be served. Such office or agency
shall be initially at First Chicago Trust Company of New York, 14 Wall Street,
8th Floor, New York, New York 10005, Attention: Corporate Trust
Administration. Written notice of the location of each such other office or
agency and of any change of location thereof shall be given by the Trustee to
the Company, the Owner Trustees, the Indenture Trustees and the
Certificateholders of such series. In the event that no such office or agency
shall be maintained or no such notice of location or of change of location
shall be given, presentations and demands may be made and notices may be served
at the Corporate Trust Office of the Trustee.
(b) There shall at all times be a Registrar and a Paying Agent
with respect to the Certificates of each series. Each such Authorized Agent
shall be a bank or trust company, shall be a corporation organized and doing
business under the laws of the United States or any state, with a combined
capital and surplus of at least $100,000,000, and shall be authorized under
such laws to exercise corporate trust powers, subject to supervision by Federal
or state authorities. The Trustee shall initially be the Paying Agent and, as
provided in Section 3.04, Registrar hereunder with respect to the Certificates
of each series. Each Registrar shall furnish to the Trustee, at stated
intervals of nor more than six months, and at such other times as the Trustee
may request in writing, a copy of the Register.
(c) Any corporation into which any Authorized Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authorized Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authorized Agent, shall be the successor of such Authorized Agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any paper or any further act on the
part of the parties hereto or such Authorized Agent or such successor
corporation.
(d) Any Authorized Agent may at any time resign by giving written
notice of resignation to the Trustee, the Company, the related Owner Trustees
and the related Indenture Trustees. The Company may, and at the request of the
Trustee shall, at any time terminate the agency of any Authorized Agent by
giving written notice of termination to such Authorized Agent and to the
Trustee. Upon the resignation or termination of an Authorized Agent or in case
at any time any such Authorized Agent shall cease to be eligible under this
Section (when, in either case, no other Authorized Agent performing the
functions of such Authorized Agent shall have been appointed), the Company
shall promptly appoint one or more qualified successor Authorized Agents,
reasonably satisfactory to the Trustee, to perform the
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functions of the Authorized Agent which has resigned or whose agency has been
terminated or who shall have ceased to be eligible under this Section. The
Company shall give written notice of any such appointment made by it to the
Trustee, the related Owner Trustees and the related Indenture Trustees; and in
each case the Trustee shall mail notice of such appointment to all
Certificateholders of the related series as their names and addresses appear on
the Register for such series.
(e) The Company agrees to pay, or cause to be paid, from time to
time to each Authorized Agent the compensation as set forth in the schedule
agreed to by each Authorized Agent and the Company for its services and to
reimburse it for its reasonable expenses.
SECTION 7.13. MONEY FOR CERTIFICATE PAYMENTS TO BE HELD IN
TRUST. All moneys deposited with any Paying Agent for the purpose of any
payment on Certificates of any series shall be deposited and held in trust for
the benefit of the Certificateholders entitled to such payment, subject to the
provisions of this Section. Moneys so deposited and held in trust shall
constitute a separate trust fund for the benefit of the Certificateholders with
respect to which such money was deposited.
The Trustee will cause each Paying Agent other than the Trustee to
execute and deliver to it an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will
(1) hold all sums held by it for payments on Certificates
of any series in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of
as herein provided;
(2) give the Trustee notice of any default by any obligor
upon the Certificates of any series in the making of any such payment;
and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
The Trustee may at any time, for the purpose of obtaining the
satisfaction and discharge of this Basic Agreement or for any other purpose,
direct any Paying Agent to pay to the Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Trustee upon the same trusts as those
upon which such sums were held by such Paying Agent; and, upon such payment by
any
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Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
SECTION 7.14. REGISTRATION OF EQUIPMENT NOTES IN TRUSTEE'S
NAME. The Trustee agrees that all Equipment Notes, Permitted Government
Investments, if any, and Specified Investments, if any, shall be issued in the
mane of the Trustee for the applicable Trust or its nominee and held by the
Trustee, or, if not so held, the Trustee or its nominee shall be reflected as
the owner of such Equipment Notes, Permitted Government Investments or
Specified Investments, as the case may be, in the register of the issuer of
such Equipment Notes, Permitted Government Investments or Specified Investments
under the applicable provisions of the Uniform Commercial Code in effect where
the Trustee holds such Equipment Notes, Permitted Government Investments,
Specified Investments, or other applicable law then in effect.
SECTION 7.15. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The
Trustee hereby represents and warrants that:
(i) the Trustee is a national banking association duly
organized, validly existing, and in good standing under the laws of
the United States of America;
(ii) the Trustee has full power, authority and legal right
to execute, deliver, and perform this Basic Agreement and the
Participation Agreement and has taken all necessary action to
authorize the execution, delivery, and performance by it of this Basic
Agreement;
(iii) the execution, delivery and performance by the
Trustee of this Basic Agreement (a) will not violate any provision of
any United States or Illinois law or regulation governing the banking
and trust powers of the Trustee or any order, writ, judgment, or
decree of any court, arbitrator, or governmental authority applicable
to the Trustee or any of its assets, (b) will not violate any
provision of the articles of association or by-laws of the Trustee, or
(c) will not violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the creation or
imposition of any lien on any properties included in the Trust
Property or any Trust pursuant to the provisions of any mortgage,
indenture, contract, agreement or other undertaking to which it is a
party, which violation, default or lien could reasonably be expected
to have an adverse effect on the Trustee's performance or ability to
perform its duties hereunder or thereunder or on the transactions
contemplated herein or therein;
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(iv) the execution, delivery and performance by the
Trustee of this Basic Agreement will not require the authorization,
consent, or approval of, the giving of notice to, the filing or
registration with, or the taking of any other action in respect of,
any United States or other governmental authority or agency regulating
the banking and corporate trust activities of the Trustee; and
(v) this Basic Agreement has been duly executed and
delivered by the Trustee and constitutes the legal, valid, and binding
agreement of the Trustee, enforceable in accordance with its terms,
provided that enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally and general principles of equity.
SECTION 7.16. WITHHOLDING TAXES; INFORMATION REPORTING. The
Trustee, as trustee of each grantor trust created by this Basic Agreement and
the related Trust Supplement, shall exclude and withhold from each distribution
of principal, premium, if any, and interest and other amounts due hereunder or
under any Trust Supplement or under the Certificates of any series any and all
withholding taxes applicable thereto as required by law. The Trustee agrees to
act as such withholding agent and, in connection therewith, whenever any
present or future taxes or similar charges are required to be withheld with
respect to any amounts payable in respect of the Certificates of any series, to
withhold such amounts and timely pay the same to the appropriate authority in
the name of and on behalf of the holders of the Certificates of any series,
that it will file any necessary withholding tax returns or statements when due,
and that, as promptly as possible after the payment thereof, it will deliver to
each holder of a Certificate of any series appropriate documentation showing
the payment thereof, together with such additional documentary evidence as such
holders may reasonably request from time to time. The Trustee agrees to file
any other information reports as it may be required to file under United States
law.
SECTION 7.17. TRUSTEE'S LIENS. The Trustee, in its 2
individual capacity, agrees that it will at its own cost and expense promptly
take any action as may be necessary to duly discharge and satisfy in full any
mortgage, pledge, lien, charge, encumbrance, security interest or claim
("Trustee's Liens") on or with respect to the Trust Property of any Trust which
is either (i) attributable to the Trustee in its individual capacity and which
is unrelated to the transactions contemplated by this Basic Agreement, any
Trust Supplement, the related Participation Agreement or the related Note
Documents, or (ii) attributable to the Trustee as trustee hereunder or in its
individual capacity
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and which arise out of acts or omissions which are prohibited by this Basis
Agreement or any Trust Supplement.
ARTICLE VIII
CERTIFICATEHOLDER'S LISTS AND REPORTS BY TRUSTEE
SECTION 8.01. THE COMPANY TO FURNISH TRUSTEE WITH NAMES AND
ADDRESSES OF CERTIFICATEHOLDERS. With respect to the Certificates of any
series, the Company will furnish to the Trustee within 15 days after each
Record Date with respect to a Scheduled Payment, and at such other times as the
Trustee may request in writing, within 30 days after receipt by the Company of
any such request, a list, in such form as the Trustee may reasonably require,
of all information, if any, in the possession or control of the Company as to
the names and addresses of the Holders of Certificates of such series, in each
case as of a date not more than 15 days prior to the time such list is
furnished; provided, however, that so long as the Trustee is the sole
Registrar, no such list need be furnished; and provided further, however, that
no such list need be furnished for so long as a copy of the Register is being
furnished to the Trustee pursuant to Section 7.12(b).
SECTION 8.02. PRESERVATION OF INFORMATION; COMMUNICATION TO
CERTIFICATEHOLDERS. (a) The Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of Certificateholders of
each series contained in the most recent list furnished to the Trustee as
provided in Section 7.12(b) or Section 8.01, as the case may be, and the names
and addresses of Certificateholders of each series, received by the Trustee in
its capacity as Registrar, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 7.12(b) or Section 8.01, as the case may
be, upon receipt of a new list so furnished.
SECTION 8.03. REPORTS BY TRUSTEE. Within 60 days after May
15 of each year commencing with the year 1993, the Trustee shall transmit to
the Certificateholders of each series, as provided in Section 313(c) of the
Trust Indenture Act, a brief report dated as of such May 15, if required by
Section 313(a) of the Trust Indenture Act.
SECTION 8.04. REPORTS BY COMPANY. The Company shall: (a)
file with the Trustee, within 30 days after the Company is required to file the
same with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may from time to time by rules and regulations prescribe)
which the Company is required to file with the Commission pursuant to section
13 or section 15(d) of the Securities Exchange Act of 1934, as amended; or, if
the Company
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is not required to file information, documents or reports pursuant to either of
such sections, then to file with the Trustee and the Commission, in accordance
with rules and regulations prescribed by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to section 13 of the Securities Exchange Act of 1934, as
amended, in respect of a security listed and registered on a national
securities exchange as may be prescribed in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with
the rules and regulations prescribed by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants provided for in this Basic Agreement or any
Trust Supplement, as may be required by such rules and regulations, including,
in the case of annual reports, if required by such rules and regulations,
certificates or opinions of independent public accountants, conforming to the
requirements of Section 1.02;
(c) transmit to all Certificateholders, in the manner and to the
extent provided in Section 313(c) of the Trust Indenture Act such summaries of
any information, documents and reports required to be filed by the Company
pursuant to subsections (a) and (b) of this Section 8.04 as may be required by
rules and regulations prescribed by the Commission; and
(d) furnish to the Trustee, not less often than annually, a brief
certificate from the principal executive officer, principal financial officer
or principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Basic Agreement and any
Trust Supplement. For purposes of this paragraph (d), such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Basic Agreement or any Trust Supplement.
ARTICLE IX
SUPPLEMENTAL TRUST AGREEMENTS
SECTION 9.01. SUPPLEMENTAL TRUST AGREEMENTS WITHOUT CONSENT
OF CERTIFICATEHOLDERS. Without the consent of the Certificateholders of any
series, the Company may, and the Trustee (subject to Section 9.03) shall, at
any time and from time to time enter into one or more agreements supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to
the Company and the assumption by any such successor of the
obligations of the Company herein contained and under the applicable
Trust Supplement; or
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(2) to add to the covenants of the Company for the benefit
of the Certificateholders of any series; or
(3) to cure any ambiguity, to correct any manifest error
or to correct or supplement any provision herein, in any Trust
Supplement or any supplemental trust agreement which may be defective
or inconsistent with any other provision herein, in any Trust
Supplement or any supplemental trust agreement or to make any other
provisions with respect to matters or questions arising under this
Basic Agreement or any Trust Supplement, provided that any such action
shall not adversely affect the interest of the Certificateholders of
any series; or
(4) to evidence and provide for the acceptance of
appointment hereunder and under the applicable Trust Supplements by a
successor Trustee with respect to one or more Trusts; or
(5) to make any other amendments or modifications hereto,
provided such amendments or modifications shall only apply to
Certificates of one or more series to be thereafter issued.
SECTION 9.02. SUPPLEMENTAL TRUST AGREEMENTS WITH CONSENT OF
CERTIFICATEHOLDERS. With respect to each separate Trust and the series of
Certificates relating thereto, with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in such Trust, by Act of said
Certificateholders delivered to the Company and the Trustee, the Company may
and the Trustee (subject to Section 9.03) shall, enter into an agreement or
agreements supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Basic
Agreement or the related Trust Supplement to the extent applicable to such
Certificateholders or of modifying in any manner the rights and obligations of
the Certificateholders of such series under this Basic Agreement or the related
Trust Supplement; provided, however, that no such supplemental agreement shall,
without the consent of the Holder of each Outstanding Certificate affected
thereby:
(1) reduce in any manner the amount of, or delay the
timing of, any receipt by the Trustee of payments on the Equipment
Notes held in such Trust or distributions that are required to be made
herein on any Certificate of any series, or change the coin or
currency in which, any Certificate of any series is payable, or impair
the right to institute suit for the enforcement of any such payment or
distribution on or after the Regular Distribution Date or Special
Distribution Date applicable thereto; or
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(2) permit the disposition of any Equipment Note in the
Trust Property of such Trust except as permitted by this Basic
Agreement or related Trust Supplement; or
(3) reduce the percentage of the aggregate Fractional
Undivided Interests of such Trust which is required for any such
supplemental agreement, or reduce such percentage required for any
waiver (of compliance with certain provisions of this Basic Agreement
or related Trust Supplement or certain defaults hereunder and their
consequences) provided for in this Basic Agreement or such Trust
Supplement.
It shall not be necessary for any Act of Certificateholders under this
Section to approve the particular form of any proposed supplemental agreement,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. DOCUMENTS AFFECTING IMMUNITY OR INDEMNITY. If
in the opinion of the Trustee any document required to be executed by it
pursuant to the terms of Section 9.01 or 9.02 affects any interest, right,
duty, immunity or indemnity in favor of the Trustee under this Basic Agreement
or any Trust Supplement, the Trustee may in its discretion decline to execute
such document.
SECTION 9.04. EXECUTION OF SUPPLEMENTAL TRUST AGREEMENTS. In
executing, or accepting the additional trusts created by, any supplemental
agreement permitted by this Article or the modifications thereby of the trusts
created by this Basic Agreement and the related Trust Supplement, the Trustee
shall be entitled to receive, and (subject to Section 7.01) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental agreement is authorized or permitted by this Basic Agreement
and the related Trust Supplement.
SECTION 9.05. EFFECT OF SUPPLEMENTAL TRUST AGREEMENTS. Upon
the execution of any supplemental agreement under this Article, this Basic
Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Basic Agreement for all purposes; and every
Certificateholder of each series theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby to the extent applicable to such
series.
SECTION 9.06. CONFORMITY TO TRUST INDENTURE ACT. Every
supplemental agreement executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
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SECTION 9.07. REFERENCE IN CERTIFICATES TO SUPPLEMENTAL TRUST
AGREEMENTS. Certificates of each series authenticated and delivered after the
execution of any supplemental agreement applicable to such series pursuant to
this Article may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental agreement; and, in such case, suitable
notation may be made upon Outstanding Certificates of such series after proper
presentation and demand.
ARTICLE X
AMENDMENTS TO INDENTURES AND NOTE DOCUMENTS
SECTION 10.01. AMENDMENTS AND SUPPLEMENTS TO INDENTURE AND OTHER
NOTE DOCUMENTS. In the event that the Trustee, as holder of any Equipment Note
in trust for the benefit of the Certificateholders of any series, receives a
request for a consent to any amendment, modification, waiver or supplement
under any related Indenture or other related Note Document, which requires the
consent of the Certificateholders of such series, the Trustee shall forthwith
send a notice of such proposed amendment, modification, waiver or supplement,
to each Certificateholder of such series registered on the Register as of such
date. The Trustee shall request from the Certificateholders of such series
Directions as to (i) whether or not to direct the applicable Indenture Trustee
to take or refrain from taking any action which a holder of such Equipment Note
has the option to direct, (ii) whether or not to give or execute any waivers,
consents, amendments, modifications or supplements as a holder of such
Equipment Note and (iii) how to vote any Equipment Note if a vote has been
called for with respect thereto. Provided such a request for Certificateholder
Direction shall have been made, in directing any action or casting any vote or
giving any consent as the holder of any Equipment Note, the Trustee shall vote
or consent with respect to such Equipment Note in the same proportion as the
Certificates of such series were actually voted by Acts of Holders delivered to
the Trustee prior to two Business Days before the Trustee directs such action
or casts such vote or gives such consent. Notwithstanding the foregoing, but
subject to Section 6.04, in the case that an Event of Default hereunder with
respect to such series shall have occurred and be continuing, the Trustee may,
in its own discretion and at its own direction, consent and notify the
applicable Indenture Trustee of such consent to any amendment, modification,
waiver or supplement under the applicable Indenture or other related Note
Document.
ARTICLE XI
TERMINATION OF TRUST
SECTION 11.01. TERMINATION OF THE TRUST. With respect to each Trust
created hereby and by its related Trust Supplement, the respective obligations
and responsibilities of the Company
52
<PAGE> 59
and the Trustee created hereby and thereby and such Trust created hereby and
thereby shall terminate upon the distribution to all Certificateholders of the
related series of all amounts required to be distributed to them pursuant to
this Basic Agreement and the related Trust Supplement and the disposition of
all property held as part of the Trust Property of such Trust; provided,
however, that in no event shall such Trust continue beyond the final expiration
date determined as provided in such Trust Supplement.
Notice of any termination of a Trust, specifying the applicable
Regular Distribution Date (or Special Distribution Date, as the case may be)
upon which the Certificateholders of any series may surrender their
Certificates to the Trustee for payment of the final distribution and
cancellation, shall be mailed promptly by the Trustee to Certificateholders of
such series not earlier than the 60th day and not later than the 20th day next
preceding such final distribution specifying (A) the Regular Distribution Date
(or Special Distribution Date, as the case may be) upon which final payment of
the Certificates of such series will be made upon presentation and surrender of
Certificates of such series at the office or agency of the Trustee therein
specified, (B) the amount of any such final payment, and (C) that the Record
Date otherwise applicable to such Regular Distribution Date (or Special
Distribution Date, as the case may be) is not applicable, payments being made
only upon presentation and surrender of the Certificates of such series at the
office or agency of the Trustee therein specified. The Trustee shall give such
notice to the Registrar at the time such notice is given to Certificateholders
of such series. Upon presentation and surrender of the Certificates of such
series, the Trustee shall cause to be distributed to Certificateholders of such
series amounts distributable on such Regular Distribution Date or Special
Distribution Date, as the case may be, pursuant to Section 4.02.
In the event that all of the Certificateholders of such series shall
not surrender their Certificates for cancellation within six months after the
date specified in the above-mentioned written notice, the Trustee shall give a
second written notice to the remaining Certificateholders of such series to
surrender their Certificates for cancellation and receive the final
distribution with respect thereto. In the event that any money held by the
Trustee for the payment of distributions on the Certificates of such series
shall remain unclaimed for two years (or such lesser time as the Trustee shall
be satisfied, after sixty days' notice from the Company, is one month prior to
the escheat period provided under applicable law) after the final distribution
date with respect thereto, the Trustee shall pay to the applicable Indenture
Trustee the appropriate amount of money
53
<PAGE> 60
relating to such Indenture Trustee and shall give written notice thereof to the
applicable Owner Trustee and the Company.
ARTICLE XII
MISCELLANEOUS PROVISIONS
SECTION 12.01. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The
death or incapacity of any Certificateholder of any series shall not operate to
terminate this Basic Agreement, the related Trust Supplement or the related
Trust, nor entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or commence any proceeding in any
court for a partition or winding up of the related Trust, nor otherwise affect
the rights, obligations, and liabilities of the parties hereto or any of them.
SECTION 12.02. CERTIFICATES NONASSESSABLE AND FULLY PAID.
Certificateholders of each series shall not be personally liable for
obligations of the related Trust, the Fractional Undivided Interests
represented by the Certificates of any series shall be nonassessable for any
losses or expenses of the related Trust or for any reason whatsoever, and
Certificates of such series upon authentication thereof by the Trustee pursuant
to Section 3.02 are and shall be deemed fully paid. No Certificateholder of
such series shall have any right (except as expressly provided herein) to vote
or in any manner otherwise control the operation and management of the related
Trust Property, the related Trust, or the obligations of the parties hereto,
nor shall anything set forth herein, or contained in the terms of the
Certificates of such series, be construed so as to constitute the
Certificateholders of such series from time to time as partners or members of
an association.
SECTION 12.03. NOTICES. With respect to Certificates of each
series, all demands, notices, and communications under the Basic Agreement or
such Trust Supplement with respect to such Trust shall be in writing,
personally delivered or mailed by certified mail-return receipt requested, and
shall be deemed to have been duly given upon receipt, in the case of the
Company, at the following address: General American Transportation
Corporation, 120 South Riverside Plaza, Chicago, Illinois 60606, Attention:
Secretary, and, in the case of the Trustee, at the following address: The
First National Bank of Chicago, Suite 0126, Chicago, Illinois 60670-0126,
Attention: Corporate Trust Services Division, or, in each case, at such other
address as shall be designated by such party in a written notice to the other
parties. Any notice required or permitted to be given to a Certificateholder
of any series hereunder shall be mailed by first class mail, postage prepaid,
at the address of such Holder as shown in the Register. Any notice so mailed
within the time prescribed in this Basic Agreement or the related Trust
54
<PAGE> 61
Supplement shall be conclusively presumed to have been duly given, whether or
not the Certificateholder of such series received such notice. The Trustee
shall promptly furnish the Company with a copy of each demand, notice or
written communication received by the Trustee hereunder from any
Certificateholder of any series, any Owner Trustee or any Indenture Trustee.
SECTION 12.04. GOVERNING LAW. THIS BASIC AGREEMENT AND THE
CERTIFICATES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 12.05. SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions, or terms of this Basic Agreement shall
be for any reason whatsoever held invalid, then such covenants, agreements,
provisions, or terms shall be deemed severable from the remaining covenants,
agreements, provisions, or terms of this Basic Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Basic
Agreement or any Trust, or of the rights of the Certificateholders thereof.
SECTION 12.06. TRUST INDENTURE ACT CONTROLS. This Basic Agreement
and any Trust Supplement are subject to the provisions of the Trust Indenture
Act and shall, to the extent applicable, be governed by such provisions.
SECTION 12.07. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 12.08. SUCCESSORS AND ASSIGNS. All covenants, agreements,
representations and warranties in this Basic Agreement by the Trustee and the
Company shall bind and, to the extent permitted hereby, shall inure to the
benefit of and be enforceable by their respective successors and assigns,
whether so expressed or not.
SECTION 12.09. BENEFITS OF AGREEMENT. Nothing in this Basic
Agreement or in the Certificates of any series express or implied, shall give
to any person, other than the parties hereto and their successors hereunder,
and the Certificateholders, any benefit or any legal or equitable right, remedy
or claim under this Basic Agreement.
SECTION 12.10. LEGAL HOLIDAYS. In any case where any Regular
Distribution Date or Special Distribution Date relating to any Certificate of
any series shall not be a Business Day,
55
<PAGE> 62
then (notwithstanding any other provision of this Basic Agreement) payment need
not be made on such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on such Regular Distribution Date or
Special Distribution Date, and no interest shall accrue during the intervening
period.
SECTION 12.11. COUNTERPARTS. For the purpose of facilitating the
execution of this Basic Agreement and for other purposes, this Basic Agreement
may be executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument.
56
<PAGE> 63
IN WITNESS WHEREOF, the Company and the Trustee have caused this Basic
Agreement to be duly executed by their respective officers and their respective
seals, duly attested, to be hereunto affixed, all as of the day and year first
above written.
GENERAL AMERICAN TRANSPORTATION
CORPORATION
By /s/ Donald J. Schaffer
Name: Donald J. Schaffer
Title: Vice President
[SEAL]
ATTEST:
/s/ John Levin
Assistant Corporate Secretary
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By /s/ R. D. Manella
Name: Richard D. Manella
Title: Vice President
[SEAL]
ATTEST:
/s/ J. T. Cahill
Trust Officer
57
<PAGE> 64
EXHIBIT A
FORM OF CERTIFICATE 1/
Unless this certificate is presented by an authorized representative
of DTC, a New York Corporation ("DTC") to Issuer or its agent for registration
of transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE or OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
General American Transportation Corporation
_____ PASS THROUGH TRUST
_____% Pass Through
Certificate, Series _____
CUSIP _____
Final Regular Distribution Date: ________
evidencing a fractional undivided interest in a trust, the property of
which includes certain Equipment Notes secured by certain railroad rolling
stock leased to General American Transportation Corporation.
Certificate
No. _______ $__________ Fractional Undivided Interest
representing .__________ of the Trust per
$1,000 face amount
THIS CERTIFIES THAT _____________________________, for value received,
is the registered owner of a $__________ (__________ dollars) Fractional
Undivided Interest in General American Transportation Corporation _____ Pass
Trough Trust (the "Trust") created by [ ] as trustee (the "Trustee"),
pursuant to a Pass Through Trust Agreement dated as of August __, 1992 and a
________________________
1/ This legend to appear on Book-Entry Certificates to be
deposited with The DTC. One Certificate may be issued in a
denomination less than $1,000 which shall not have this legend.
<PAGE> 65
related Trust Supplement dated as of _______________, 1992
(collectively, the "Agreement") between the Trustee and General American
Transportation Corporation, a corporation incorporated under New York law (the
"Company"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Agreement. This
Certificate is one of the duly authorized Certificates designated as "_____%
Pass Through Certificates, Series _____" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms, provisions, and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
The property of the Trust includes certain Equipment Notes (the "Trust
Property"). The Equipment Notes are secured by a security interest in railroad
rolling stock leased to the Company.
The Certificates represent fractional undivided interests in the Trust
and the Trust Property, and have no rights, benefits or interest in respect of
any other separate trust established pursuant to the terms of the Agreement for
any other series of certificates issued pursuant thereto.
Subject to and in accordance with the terms of the Agreement, from
funds then available to the Trustee, there will be distributed on each
_______________ and _______________ (a "Regular Distribution Date"), commencing
on _______________, to the person in whose name this Certificate is registered
at the close of business on the date of the month which is 15 days preceding
the Regular Distribution Date, an amount in respect of the Scheduled Payments
on the Equipment Notes due on such Regular Distribution Date, the receipt of
which has been confirmed by the Trustee, equal to the product of the percentage
interest in the Trust evidenced by this Certificate and an amount equal to the
sum of such Scheduled Payments. Subject to and in accordance with the terms of
the Agreement, in the event that Special Payments on the Equipment Notes are
received by the Trustee, from funds then available to the Trustee, there shall
be distributed on the applicable Special Distribution Date, to the Person in
whose name this Certificate is registered at the close of business on the day
of the month which is 15 days preceding the Special Distribution Date, an
amount in respect of such Special Payments on the Equipment Notes, the receipt
of which has been confirmed by the Trustee, equal to the product of the
percentage interest in the Trust evidenced by this Certificate and an amount
equal to the sum of such Special Payments so received. If a Regular
Distribution Date or Special Distribution Date is not a Business Day,
distribution shall be made on the immediately following Business Day. The
Special Distribution Date shall be the ____th day of the month determined as
provided in the
<PAGE> 66
Agreement. The Trustee shall mail notice of each Special Payment and the
Special Distribution Date therefor to the Holders of the Certificates.
Distributions on this Certificate will be made by the Trustee (i) by
check mailed to the person entitled thereto or (ii) prior to the time
Definitive Certificates are issued, by wire transfer of same-day funds to the
account designated by the Certificateholder to the Trustee on or prior to the
applicable Record Date, without the presentation or surrender of this
Certificate or the making of any notation hereon. Except as otherwise provided
in the Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after notice mailed by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency of the Trustee specified in such notice.
Unless this certificate is presented by an authorized representative
of DTC, a New York corporation ("DTC"), to the Company or its agent for
registration of transfer, exchange, or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or
to such other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has
an interest herein.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
<PAGE> 67
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
General American Transportation
Corporation Pass Through Trust
By [ ] as Trustee
By_________________________________
Title
<PAGE> 68
EXHIBIT A
[FORM OF THE TRUSTEE'S CERTIFICATE
OF AUTHENTICATION]
Dated:
This is one of the Certificates referred
to in the within-mentioned Agreement.
[ ] as Trustee
By ___________________________
Authorized Officer
[REVERSE OF CERTIFICATE]
The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right of payment, all as
more specifically set forth on the face hereof and in the Agreement. All
payments or distributions made to Certificateholders under the Agreement shall
be made only from the Trust Property and only to the extent that the Trustee
shall have sufficient income or proceeds from the Trust Property to make such
payments in accordance with the terms of the Agreement. Each Holder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such holder as provided in the Agreement. This Certificate
does not purport to summarize the Agreement and reference is made to the
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds, and duties evidenced hereby. A copy of the Agreement
may be examined during normal business hours at the principal office of the
Trustee, and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any
time by the Company and the Trustee with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less
<PAGE> 69
than a majority in interest in the Trust. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee in its capacity as Registrar, or
by any successor Registrar, in the Borough of Manhattan, the City of New York,
duly endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Registrar duly executed by the Holder
hereof or such Holder's attorney duly authorized in writing, and thereupon one
or more new Certificates of authorized denominations evidencing the same
aggregate Fractional Undivided Interest in the Trust will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations of $1,000 Fractional Undivided Interest and any
integral multiples of $1,000 in excess thereof except that one Certificate may
be in a denomination of less than $1,000. As provided in the Agreement and
subject to certain limitations therein set forth, Certificates are exchangeable
for new Certificates of authorized denominations and like series evidencing the
same aggregate Fractional Undivided Interest in the Trust, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant
to the Agreement and the disposition of all property held as part of the Trust
Property.
<PAGE> 70
EXHIBIT A
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
___________________________________________________________
___________________________________________________________
Please print or typewrite name and address including postal zip code
of assignee
___________________________________________________________
the within Certificate and all rights thereunder, hereby irrevocably
constituting and appointing
___________________________________________________________
attorney to transfer said Certificate on the books of the Trust with
full power of substitution in the premises.
Date: ______________________
__________________________________________
NOTICE: The signature to this assignment must correspond with the name
as written upon the face of the within-mentioned instrument in
every particular, without alteration or any change whatever.
<PAGE> 1
Exhibit 5.1
February 15, 1994
General American Transportation
Corporation
500 West Monroe Street
Chicago, Illinois 60661
Re: Shelf Registration of $650,000,000 of
Debt Securities and Pass Through Certificates
Ladies and Gentlemen:
We have acted as counsel to General American Transportation Corporation, a
New York corporation (the "Company"), in connection with the corporate
proceedings (the "Corporate Proceedings") taken and to be taken relating to the
public offering of up to $650,000,000 aggregate principal amount of debt
securities (the "Debt Securities") and pass through certificates (the "Pass
Through Certificates") that may be issued in one or more series from time to
time. Each series of Debt Securities will be issued under an Indenture dated
as of October 1, 1987, (as supplemented from time to time, the "Indenture")
between the Company and The Chase Manhattan Bank (National Association) as
Trustee. Each series of Pass Through Certificates will be issued under a Pass
Through Trust Agreement dated as of August 1, 1992 (as supplemented from time
to time, the "Basic Agreement") between the Company and the First National Bank
of Chicago, as Trustee (the "Pass Through Trustee"), as supplemented by a trust
supplement relating to such series of Pass Through Certificates (each, a "Trust
Supplement").
In so acting, we have examined and relied upon the originals, or copies
certified or otherwise identified to our satisfaction, of such records,
documents, certificates and other instruments as in our judgment are necessary
or appropriate to enable us to render the opinion expressed below.
Based upon the foregoing, we are of the opinion that:
1. Upon the completion of the Corporate Proceedings, the Debt Securities
will have been duly authorized for issuance and, when the Debt Securities are
duly executed, authenticated, issued and delivered and upon receipt of
payment therefor, the Debt Securities will constitute valid
<PAGE> 2
General American Transportation
Corporation
February 15, 1994
Page 2
and legally binding obligations of the Company entitled to the benefits of
the Indenture, except as may be limited by (a) applicable bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting
enforcement of creditors' rights generally and (b) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity).
2. Assuming the due authorization, execution and delivery by the Trustee of
the Basic Agreement and the Trust Supplement relating to each series of Pass
Through Certificates and the due authorization, execution, issuance,
authentication and delivery of each series of Pass Through Certificates by
the Trustee in accordance with the terms of the Basic Agreement and the Trust
Supplement relating to each such series, each series of Pass Through
Certificates will constitute valid and binding obligations of the Trustee
entitling the holders thereof to the benefits of the Basic Agreement and the
Trust Supplement relating to such series except as may be limited by (a)
applicable bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting enforcement of creditors' rights generally and (b)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
In rendering the foregoing opinion in paragraph 2 above, we have relied on
the opinion of the Law Department of The First National Bank of Chicago,
counsel to the Trustee, with respect to all matters opined to therein, and our
opinion is subject to all the assumptions contained in such opinion.
We hereby consent to the filing of this opinion as an exhibit to the
registration statement relating to the Debt Securities and the Pass Through
Certificates and the use of our name under the caption "Legal Opinions"
contained therein.
Very truly yours,
MAYER, BROWN & PLATT
<PAGE> 1
EXHIBIT 5.2
[LETTERHEAD]
February 8, 1994
General American Transportation Corporation
500 West Monroe Street
Chicago, Illinois 60661
Re: General American Transportation Corporation
Pass Through Certificates
Ladies and Gentlemen:
We are counsel to the Corporate Trust Services Division of The First
National Bank of Chicago (the "First Chicago"), and have represented it in
connection with (i) the Pass Through Trust Agreement dated as of August 1, 1992
(the "Basic Agreement") between General American Transportation Corporation (the
"Company") and First Chicago, as Trustee, and (ii) the Pass Through Certificates
issued under the Basic Agreement from time to time.
We are attorneys licensed to practice law in the State of Illinois and do
not purport to be experts on the laws of any state or other than the State of
Illinois. Consequently, with regard to the following opinion, no opinion is
expressed as to matters relating to the laws of any jurisdiction other than the
laws of the State of Illinois and federal laws applicable to national banks, and
no opinion is expressed herein as to the Securities Act of 1933, as amended, the
Trust Indenture Act of 1939, as amended, or any state securities or so-called
"blue-sky" laws.
As such counsel we are familiar with the Articles of Association and the
By-Laws of First Chicago, with certificates of authority to exercise corporate
trust powers issued to First Chicago by the Federal Reserve Board of the United
States (as predecessor in jurisdiction to the Comptroller of the Currency of the
United States), and with certain Resolutions of the Board of Directors of First
Chicago pertaining to the operation of the Corporate Trust Services Division of
First Chicago with respect to the authorization, execution and delivery of the
above-described document.
Basing our conclusions on such examination and familiarity, we are of the
opinion that:
1) First Chicago has been duly organized and is validly existing as a
national banking association in good standing under the laws of the
United States of America with full corporate trust power and authority
to enter into and perform its obligations under the Basic Agreement.
2) The execution and delivery of the Basic Agreement and the Pass Through
Certificates have been duly authorized by First Chicago, and assuming
the due authorization, execution and delivery of the Basic Agreement by
the Company, and assuming that the Basic Agreement, upon execution and
delivery thereof by First Chicago, will constitute the legal, valid,
binding and enforceable obligation of the Company, the Basic Agreement
constitutes the legal, valid and binding obligation of First Chicago,
enforceable against First Chicago in accordance with its
<PAGE> 2
terms, except as the enforceability thereof may be (a) limited by
bankruptcy, insolvency, reorganization, moratorium, liquidation or other
similar laws now or hereafter in effect relating to creditor's rights,
and (b) subject to general principles or equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
3) Upon the due execution, authentication and delivery thereof in
accordance with the Basic Agreement, the Pass Through Certificates will
have been duly and validly issued and will be entitled to the benefits
of the Basic Agreement.
4) Neither the execution nor the delivery by First Chicago of the Basic
Agreement nor the consummation of any of the transactions by First
Chicago contemplated thereunder requires the consent or approval of, the
giving of notice to, or the registration with, or the taking of any
other action with respect to, any governmental authority or agency under
any existing Federal law governing the banking or trust powers of First
Chicago.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement of the Company pursuant to which the Pass Through
Certificates are being registered under the Securities Act of 1933 and to the
reference to the Law Department of The First National Bank of Chicago under the
caption "Legal Opinions" in the Registration Statement.
This opinion is furnished to you solely for your benefit in connection with
the transactions contemplated by the Basic Agreement, and may not be used,
circulated, quoted or otherwise referred to without our prior written consent.
Respectfully submitted,
[Sig.]
The Law Department
The First National Bank of Chicago
<PAGE> 1
Exhibit 8.1
February 14, 1994
General American Transportation Corporation
500 West Monroe Street
Chicago, Illinois 60661
Re: Shelf Registration of $650,000,000 of Debt Securities and Pass
Through Certificates
Ladies and Gentlemen:
We have acted as counsel to General American Transportation Corporation, a
New York corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended, of a shelf Registration Statement on Form
S-3 (the "Registration Statement"). The Registration Statement relates to up
to $650,000,000 aggregate principal amount of debt securities and pass through
certificates (the "Pass Through Certificates") that may be issued in one or
more series from time to time on a delayed basis, including up to $650,000,000
of such debt securities as Medium-Term Notes, Series E (the "Medium-Term
Notes").
In rendering this opinion, we have relied upon the Internal Revenue Code of
1986, as amended, legislative history, Treasury regulations, judicial
authorities, published positions of the Internal Revenue Service and such other
authorities as we have considered relevant, all as in effect on the date hereof
and all of which are subject to change, which change may be retroactive, or
different interpretations, which interpretations may have retroactive
application. This opinion is subject to the explanations and qualifications
set forth under the caption "United States Federal Taxation" in the Prospectus
Supplement relating to the Medium-Term Notes which constitutes a part of the
Registration Statement and under the captions "Federal Income Tax Consequences"
and "Certain Illinois Taxes" in the Prospectus relating to the Pass Through
Certificates which constitutes a part of the Registration Statement.
On the basis of and subject to the foregoing, we confirm that (1) the
discussion set forth under the caption "United States Federal Taxation" in the
Prospectus Supplement relating to
<PAGE> 2
General American Transportation
Corporation
February 14, 1994
Page 2
the Medium-Term Notes accurately summarizes the material federal income tax
consequences to holders of the ownership and disposition of the Medium-Term
Notes and (2) the discussions set forth in the Prospectus relating to the Pass
Through Certificates under the captions "Federal Income Tax Consequences" and
"Certain Illinois Taxes" accurately summarize the material federal and Illinois
income tax consequences to U.S. holders of the ownership and disposition of
the Pass Through Certificates except to the extent that the characteristics of
any series of Pass Through Certificates differs from the characteristics
described in the Prospectus.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the use of our name under the caption "United States
Federal Taxation" in the Prospectus Supplement relating to the Medium-Term
Notes which constitutes a part of the Registration Statement and under the
captions "Federal Income Tax Consequences" and "Certain Illinois Taxes" in the
Prospectus relating to the Pass Through Certificates which constitutes a part
of the Registration Statement.
Very truly yours,
MAYER, BROWN & PLATT
<PAGE> 1
[ERNST & YOUNG LETTERHEAD]
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of General American
Transportation Corporation and to the incorporation by reference therein of our
report dated January 26, 1993, with respect to the consolidated financial
statements and schedules of General American Transportation Corporation included
in its Annual Report (Form 10-K) for the year ended December 31, 1992, filed
with the Securities and Exchange Commission.
/s/ ERNST & YOUNG
February 14, 1994
<PAGE> 1
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
GENERAL AMERICAN TRANSPORTATION CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
NEW YORK 36-2827991
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
500 WEST MONROE STREET
CHICAGO, ILLINOIS 60661
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
PASS THROUGH CERTIFICATES
(TITLE OF INDENTURE SECURITIES)
<PAGE> 2
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
--------------------
INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
------------------------------
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
-----------------
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE> 3
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the
United States of America, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Chicago and State of Illinois, on
the 8th day of February, 1994.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE,
By /S/ R. D. MANELLA
R. D. MANELLA
VICE PRESIDENT
*Exhibits 1, 2, 3, and 4 are herein incorporated by reference to
Exhibits bearing identical numbers in Item 12 of the Form T-1 of The
First National Bank of Chicago, filed as Exhibit 26(b) to the
Registration Statement on Form S-3 of Dow Capital B.V. and The Dow
Chemical Company, filed with the Securities and Exchange Commission on
June 3, 1991 (Registration No. 33-36314).
3
<PAGE> 4
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
February 8, 1994
Securities and Exchange Commission,
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between General American
Transportation Corporation and The First National Bank of Chicago, the
undersigned, in accordance with Section 321(b) of the Trust Indenture Act of
1939, as amended, hereby consents that the reports of examinations of the
undersigned, made by Federal or State authorities authorized to make such
examinations, may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By /s/ R. D. MANELLA
R. D. Manella
Vice President
4
<PAGE> 5
EXHIBIT 7
A copy of the latest report of conditions of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
5
<PAGE> 6
<TABLE>
<S> <C> <C>
Legal Title of Bank: First National Bank of Chicago Call Date: 9/30/93 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1993
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400 <-
DOLLAR AMOUNTS IN ------------ ----
THOUSANDS RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RCA-A):
a. Noninterest-bearing balances and currency and coin(1) . . . . 0081 6,140,040 1.a.
b. Interest-bearing balances(2) . . . . . . . . . . . . . . . . . 0071 6,078,671 1.b.
2. Securities (from Schedule RC-B) . . . . . . . . . . . . . . . . . 0390 580,723 2
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold . . . . . . . . . . . . . . . . . . . . . . 0276 3,134,457 3.a.
b. Securities purchased under agreements to resell . . . . . . . 0277 252,650 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFD 2122 13,404,247 4.a.
b. LESS: Allowance for loan and lease losses . . . . . . . . . . RCFD 3123 343,005 4.b.
c. LESS: Allocated transfer risk reserve . . . . . . . . . . . . RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c) . . . . . . . . . . . . . 2125 13,061,242 4.d.
5. Assets held in trading accounts . . . . . . . . . . . . . . . . . 2146 2,202,246 5.
6. Premises and fixed assets (including capitalized leases) . . . . 2145 500,925 6.
7. Other real estate owned (from Schedule RC-M) . . . . . . . . . . 2150 111,329 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M) . . . . . . . . . . . . . . . . . 2130 14,491 8.
9. Customers' liability to this bank on acceptances outstanding . . 2155 552,637 9.
10. Intangible assets (from Schedule RC-M) . . . . . . . . . . . . . 2143 155,975 10.
11. Other assets (from Schedule RC-F) . . . . . . . . . . . . . . . . 2160 2,847,290 11.
12. Total assets (sum of items 1 through 11) . . . . . . . . . . . . 2170 35,632,676 12.
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
6
<PAGE> 7
<TABLE>
<S> <C> <C>
Legal Title of Bank: First National Bank of Chicago Call Date: 9/30/93 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
Thousands BIL MIL THOU
---------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1) . . . . . . . . . . . RCON 2200 14,261,174 13.a.
(1) Noninterest-bearing(1) . . . . . . . . RCON 6631 6,124,322 13.a.(1)
(2) Interest-bearing . . . . . . . . . . . . . . . RCON 6636 8,136,852 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II) . . . . RCFN 2200 10,168,389 13.b.
(1) Noninterest bearing . . . . . . . . . . . . . RCFN 6631 2,339,236 13.b.(1)
(2) Interest-bearing RCFN 6636 7,829,153 13.b.(2)
14. Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of
its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased . . . . . . . . . . . . . RCFD 0278 2,411,666 14.a.
b. Securities sold under agreements to repurchase . . RCFD 0279 7,738 14.b.
15. Demand notes issued to the U.S. Treasury . . . . RCON 2840 102,420 15.
16. Other borrowed money . . . . . . . . . . . . . . RCFD 2850 1,871,318 16.
17. Mortgage indebtedness and obligations under capitalized
leases . . . . . . . . . . . . . . . . . . . RCFD 2910 267,000 17.
18. Bank's liability on acceptance executed and outstanding RCFD 2920 552,637 18.
19. Subordinated notes and debentures . . . . . . . . . . . RCFD 3200 1,175,000 19.
20. Other liabilities (from Schedule RC-G) . . . . . RCFD 2930 2,196,402 20.
21. Total liabilities (sum of items 13 through 20) . . . . . RCFD 2948 33,013,744 21.
22. Limited-Life preferred stock and related surplus . . . . RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus . . . . . RCFD 3838 0 23.
24. Common stock . . . . . . . . . . . . . . . . . . RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,249,790 25.
26. a. Undivided profits and capital reserves . . . . . . RCFD 3632 169,255 26.
b. LESS: Net unrealized loss on marketable equity
securities . . . . . . . . . . . . . . . . . . . . RCFD 0297 0 26.b.
27. Cumulative foreign currency translation adjustments . . RCFD 3284 (971) 27.
28. Total equity capital (sum of items 23 through 27). . . . RCFD 3210 2,618,932 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28) . . . . . . . . RCFD 3300 35,632,676 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the most
comprehensive level of auditing work performed for the bank by independent external
auditors as of any date during 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RCFA 6724 N/A M.1.
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company external auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
7
<PAGE> 1
EXHIBIT 25.2
Securities Act of 1933 File No. _________
(If application to determine eligibility of trustee
for delayed offering pursuant to Section 305 (b) (2))
___________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) _________________
_______________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
(Exact name of trustee as specified in its charter)
13-2633612
(I.R.S. Employer Identification Number)
1 CHASE MANHATTAN PLAZA, NEW YORK, NEW YORK
(Address of principal executive offices)
10081
(Zip Code)
_______________
GENERAL AMERICAN TRANSPORTATION CORPORATION
(Exact name of obligor as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation or organization)
36-2827991
(I.R.S. Employer Identification No.)
500 WEST MONROE
CHICAGO, ILLINOIS
(Address of principal executive offices)
60661
(Zip Code)
_______________
DEBT SECURITIES
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Comptroller of the Currency, Washington, D.C.
Board of Governors of The Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
The Trustee is not the obligor, nor is the Trustee directly
or indirectly controlling, controlled by, or under common
control with the obligor.
(See Note on Page 2.)
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as a part of this statement of
eligibility.
*1. -- A copy of the articles of association of the
trustee as now in effect . (See Exhibit T-1
(Item 12) , Registration No. 33-55626.)
*2. -- Copies of the respective authorizations of The Chase Manhattan
Bank (National Association) and The Chase Bank of
New York (National Association) to commence business
and a copy of approval of merger of said corporations, all
of which documents are still in effect.
(See Exhibit T-1 (Item 12), Registration No. 2-67437.)
*3. -- Copies of authorizations of The Chase Manhattan Bank
(National Association) to exercise corporate trust powers,
both of which documents are still in effect. (See Exhibit T-1
(Item 12), Registration No. 2-67437).
*4. -- A copy of the existing by-laws of the trustee. (See Exhibit
T-1 (Item 12(a)), Registration No. 33-28806.)
*5. -- A copy of each indenture referred to in Item 4, if the obligor
is in default. (Not applicable).
*6. -- The consents of United States institutional trustees required
by Section 321(b) of the Act.
(See Exhibit T-1, (Item 12), Registration No. 22-19019.)
7.-- A copy of the latest report of condition of the trustee
published pursuant to law or the
requirements of its supervising or examining authority.
___________________
*The Exhibits thus designated are incorporated herein by reference.
Following the description of such Exhibits is a reference to the copy of the
Exhibit heretofore filed with the Securities and Exchange Commission, to which
there have been no amendments or changes.
___________________
1.
<PAGE> 3
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base a responsive answer to Item 2 the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, The Chase Manhattan Bank (National Association), a corporation
organized and existing under the laws of the United States of America, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of New York, and the
State of New York, on the 8th day February, 1994.
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By Janice Tolve
---------------------
Second Vice President
_________________
2
<PAGE> 4
EXHIBIT 7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of
THE CHASE MANHATTAN BANK, N.A.
of New York in the State of New York, at the close of business on September 30,
1993, published in response to call made by Comptroller of the Currency, under
title 12. United States Code, Section 161.
Charter Number 02370 Comptroller of the Currency Northeastern District
Statement of Resources and Liabilities
<TABLE>
<CAPTION>
ASSETS Thousands
of Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.............. $4,674,736
Interest-bearing balances.........................................5,374,597
Securities.............................................................6,261,309
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries
and in IBFs:
Federal funds sold.................................................2,781,000
Securities purchased under agreements to resell......................599,805
Loans and lease financing receivables:
Loans and leases net of unearned income................$51,963,405
LESS: Allowance for loan and lease losses...............1,441,698
LESS: Allocated transfer risk reserve......................107,265
Loans and leases net of unearned income, allowance, and reserve.......50,419,442
Assets held in trading accounts........................................4,243,296
Premises and fixed assets (including capitalized leases)...............1,806,510
Other real estate owned................................................1,133,788
Investments in unconsolidated subsidiaries and associate companies........59,706
Customers' liability to this bank on acceptances outstanding.............853,332
Intangible assets........................................................351,380
Other assets...........................................................4,683,740
---------
TOTAL ASSETS.........................................................$83,247,641
-----------
-----------
LIABILITIES
Deposits:
In domestic offices.............................................$32,309,451
Noninterest-bearing.................................$11,192,841
Interest-bearing.....................................21,116,610
In foreign offices, Edge and Agreement subsidiaries, and IBFs....31,259,700
Noninterest-bearing..................................$2,784,987
Interest-bearing.....................................28,474,713
----------
Federal funds purchased and securities sold under agreements to repurchase
in domestic offices of the bank and of its Edge and Agreement
subsidiaries and in IBFs:
Federal funds purchased...........................................2,974,601
Securities sold under agreements to repurchase.......................77,553
Demand notes issued to the U.S. Treasury..................................25,000
Other borrowed money...................................................2,951,813
Mortgage indebtedness and obligations under capitalized leases............41,457
Bank's liability on acceptances executed and outstanding.................865,687
Subordinated notes and debentures......................................2,360,000
Other liabilities......................................................4,327,703
---------
TOTAL LIABILITIES....................................................$77,193,055
Limited-life preferred stock and relate surplus................................0
EQUITY CAPITAL
Perpetual preferred stock and related surplus..................................0
Common stock............................................................$908,825
Surplus................................................................4,351,645
Undivided profits and capital reserves...................................778,153
LESS: Net unrealized loss on marketable equity securities.....................0
Cumulative foreign currency translation adjustments.......................10,963
TOTAL EQUITY CAPITAL...................................................6,049,586
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, AND
EQUITY CAPITAL....................................................$83,242,641
----------
----------
</TABLE>
L. Lester J. Stephens, Jr., Senior Vice President and Controller of the
above-named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.
(Signed) Lester J. Stephens, Jr.
We the undersigned directors, attest to the correctness of this statement of
resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
(Signed) Thomas G. Labrecque
(Signed) Arthur F. Ryan Directors
(Signed) Richard J. Boyle
3
