- --------------------------------------------------------------------------------
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended Commission File Number
June 30, 1996 2-54754
General American Transportation Corporation
Incorporated in the IRS Employer Identification No.
State of New York 36-2827991
500 West Monroe Street
Chicago, Illinois 60661-3676
(312) 621-6200
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Registrant had 1,000 shares of common stock outstanding (all owned by GATX
Corporation) as of July 31, 1996.
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<PAGE>
<TABLE>
<CAPTION>
PART I--FINANCIAL INFORMATION
GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
In Millions
Three Months Ended Six Months Ended
June 30 June 30
--------------------- --------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Gross income...................................... $182.3 $177.9 $361.6 $353.1
Costs and expenses
Operating expenses........................... 78.8 75.9 160.6 152.7
Interest..................................... 28.8 26.9 54.9 50.3
Provision for depreciation
and amortization......................... 33.0 30.5 64.3 60.5
Selling, general and administrative.......... 14.6 13.4 28.9 26.6
-------- -------- -------- --------
155.2 146.7 308.7 290.1
-------- -------- -------- --------
Income before income taxes and equity
in net earnings of affiliated companies...... 27.1 31.2 52.9 63.0
Income taxes...................................... 10.0 11.8 19.7 25.4
-------- -------- -------- --------
Income before equity in net earnings
of affiliated companies and cumulative
effect of accounting changes................. 17.1 19.4 33.2 37.6
Equity in net earnings
of affiliated companies...................... 4.6 5.0 8.9 10.0
-------- -------- --------- --------
Net income........................................ $ 21.7 $ 24.4 $ 42.1 $ 47.6
======== ======== ======== ========
<FN>
Note - The consolidated balance sheet at December 31, 1995 has been derived from
the audited financial statements at that date. All other consolidated financial
statements are unaudited but include all adjustments, consisting only of normal
recurring items, which management considers necessary for a fair statement of
the consolidated results of operations and financial position for the respective
periods. Operating results for the six months ended June 30, 1996 are not
necessarily indicative of the results that may be achieved for the entire year
ending December 31, 1996.
</FN>
</TABLE>
-1-
<PAGE>
<TABLE>
<CAPTION>
GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
In Millions
ASSETS
June 30 December 31
1996 1995
---------------- -------------
(Unaudited)
<S> <C> <C>
Cash and cash equivalents....................... $ 12.8 $ 13.4
Trade receivables - net......................... 61.0 64.8
Property, plant and equipment
Railcars and support facilities............ 2,103.2 1,945.1
Tank storage terminals and pipelines....... 1,341.3 1,242.3
--------- ---------
3,444.5 3,187.4
Less - Allowances for depreciation......... (1,385.2) (1,332.3)
--------- ---------
2,059.3 1,855.1
Due from GATX Corporation....................... 390.4 373.9
Investments in affiliated companies............. 229.5 221.2
Other assets.................................... 99.5 102.6
---------- ---------
TOTAL ASSETS $2,852.5 $2,631.0
========= =========
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
LIABILITIES, DEFERRED ITEMS AND SHAREHOLDER'S EQUITY
June 30 December 31
1996 1995
--------------- -------------
(Unaudited)
<S> <C> <C>
Accounts payable................................ $ 83.3 $ 89.9
Accrued expenses................................ 35.3 36.4
Debt
Short-term debt.............................. 305.2 144.8
Long-term debt............................... 1,010.8 972.9
Capital lease obligations.................... 111.4 115.1
---------- ---------
1,427.4 1,232.8
Deferred income taxes........................... 290.9 281.1
Other deferred items............................ 257.4 250.0
---------- ---------
Total liabilities and deferred items 2,094.3 1,890.2
Shareholder's equity
Common Stock - par value $1 per share;
1,000 shares authorized, issued and
outstanding (owned by GATX Corporation) - -
Additional capital........................... 335.0 335.0
Reinvested earnings.......................... 411.9 392.7
Cumulative unrealized equity adjustments..... 11.3 13.1
---------- ----------
Total shareholder's equity 758.2 740.8
---------- ----------
TOTAL LIABILITIES, DEFERRED ITEMS
AND SHAREHOLDER'S EQUITY $2,852.5 $2,631.0
========== ==========
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
In Millions
Three Months Ended Six Months Ended
June 30 June 30
-------------------- -----------------
1996 1995 1996 1995
------- -------- ------- ------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 21.7 $ 24.4 $ 42.1 $ 47.6
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for depreciation and amortization 33.0 30.5 64.3 60.5
Deferred income taxes 4.7 5.7 9.5 13.0
Other (includes working capital) (7.0) (4.2) (16.8) (27.0)
--------- --------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 52.4 56.4 99.1 94.1
INVESTING ACTIVITIES
Additions to property, plant and equipment:
Railcars and support facilities (87.6) (68.4) (168.9) (165.2)
Tank storage terminals and pipelines (49.2) (28.8) (85.9) (49.1)
Investments in affiliated companies (1.3) (.4) (2.2) (.6)
---------- --------- -------- ---------
Capital additions (138.1) (97.6) (257.0) (214.9)
Proceeds from other asset dispositions 6.2 3.3 7.1 17.7
---------- --------- -------- ---------
NET CASH USED IN INVESTING ACTIVITIES (131.9) (94.3) (249.9) (197.2)
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt - 65.9 100.0 115.9
Repayment of long-term debt (62.2) (5.6) (67.3) (10.9)
Net increase (decrease) in short-term debt 161.5 (.8) 160.5 37.7
Payment of capital lease obligations - - (3.7) (3.9)
Cash dividends paid to GATX Corporation (11.0) (12.4) (22.8) (24.8)
Net increase in amount due from
GATX Corporation (6.6) - (16.5) (11.3)
---------- --------- --------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 81.7 47.1 150.2 102.7
---------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ 2.2 $ 9.2 $ (.6) $ (.4)
========= ========= ========= =========
</TABLE>
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<PAGE>
MANAGEMENT'S DISCUSSION OF OPERATIONS
COMPARISON OF FIRST SIX MONTHS OF 1996 TO FIRST SIX MONTHS OF 1995
GENERAL
General American Transportation Corporation's (GATC's) net income for the first
six months of 1996 was $42 million compared to net income of $48 million for the
first half of 1995. Year- to-date gross income increased 2% as the result of the
additional number of railcars on lease at Transportation, partially offset by
lower revenues at Terminals. Net income decreased 12% because of utilization and
pricing pressures at certain of the terminal locations.
Cash provided by operating activities increased $5 million, from $94 million in
the first six months of 1996 to $99 million in the first six months of 1995. The
increase is principally due to changes in working capital.
Capital additions of $257 million for the first six months of 1996 increased $42
million from the comparable 1995 period. Transportation invested $166 million in
its domestic railcar fleet and facilities versus $154 million last year; in
addition, $5 million was invested in operations in Mexico and Europe this year
versus $12 million a year ago. Terminals' capital spending of $86 million, which
included expansion of the Central Florida Pipeline and the purchase of a 65%
interest in a terminal in Mexico, exceeded the first six months of 1995 by $37
million. Full year 1996 capital spending for GATC is forecasted to exceed $500
million, including $86 million expended in July 1996 for the remaining 55%
interest in CGTX, Transportation's Canadian railcar affiliate. This purchase
brings Transportation's total fleet to 77,000 railcars. A portion of the 1996
expenditures may not be effected depending on market conditions. It is
anticipated that capital expenditures will be funded by both internally
generated funds and GATC's available external financing sources.
GATC had available unused committed lines of credit in the amount of $188
million at June 30, 1996. GATC has a $650 million shelf registration for pass
through trust certificates and debt securities, under which $100 million of
notes have previously been issued. No notes were issued during the quarter.
-5-
<PAGE>
RESULTS OF OPERATIONS
Following is a discussion of the operating results of GATC's business segments:
RAILCAR LEASING AND MANAGEMENT (TRANSPORTATION)
- --------------------------------------------------------------------------------
Six Months Ended
(In Millions) June 30
1996 1995 Change
------ ------ ---------------
Gross Income $196.4 $175.6 $20.8 12%
Net Income $ 32.8 $ 30.9 $ 1.9 6%
- --------------------------------------------------------------------------------
Transportation's gross income for the first half of 1996 increased 12% from the
comparable prior year period due to approximately 4,500 additional railcars on
lease compared to a year ago and slightly higher lease rates. Approximately
63,200 railcars were on lease at quarter end, including 800 in Mexico, compared
to 58,700 a year ago. Domestic fleet utilization at June 30, 1996 was 94% on a
fleet size of 66,600 compared to 95% on a fleet size of 61,700 a year ago.
Net income increased 6% from the first half of 1995. Higher revenues were
partially offset by increased ownership costs and higher SG&A expense due in
part to litigation costs; also, 1995 included a gain on the sale of land in
Mexico. Operating margins increased slightly as the revenue growth rate was
slightly more than the rate of increase of operating expenses. Fleet repair
costs were 5% greater than in 1995 due to the increased fleet size; however,
fleet repair costs as a percent of revenue were lower than last year. Average
throughput at June 30, 1996, for railcars in GATX repair facilities decreased to
30 days, down from 44 days a year ago, reflecting the improved productivity at
Transportation's upgraded service centers. Ownership costs, consisting of rental
expense, depreciation, and interest, increased 18% due to the increased fleet
size.
-6-
<PAGE>
TERMINALS AND PIPELINES
- --------------------------------------------------------------------------------
Six Months Ended
(In Millions) June 30
1996 1995 Change
------- ------- ---------------
Gross Income $145.8 $159.4 $(13.6) (9)%
Net Income $ 9.3 $ 16.7 $ (7.4) (44)%
- --------------------------------------------------------------------------------
Terminals' 1996 gross income decreased 9% reflecting general softness in the
petroleum markets as pricing and/or utilization issues continue to impact the
domestic and international markets. Lower petroleum inventories and
backwardation in the futures market continue to negatively impact revenue. On
the positive side, pipeline volumes remain strong due to continued high demand,
and the chemical markets remain stable. Throughput of 344 million barrels was 9%
greater than last year, primarily as a result of the colder winter in the
Northeast and increased inventory turns of customers' products. Capacity
utilization at Terminals' wholly-owned facilities was 86% at the end of the
second quarter of 1996 compared to 88% a year ago as reduced spot business and
tanks out of service for repair contributed to the reduction.
Terminals' net income decreased $7 million from 1995 reflecting weakness in the
domestic and international petroleum markets. Operating margins decreased
slightly as a result of a greater decrease in revenues relative to cost
reductions achieved. Terminals' operating expenses were $5 million lower than
last year primarily due to lower maintenance costs, insurance recoveries, and
savings in various other operating costs. Interest expense increased $3 million
over 1995 as total debt grew to finance the capital additions. Equity in net
earnings of affiliated companies of $6 million decreased $1 million principally
due to lower results at the Singapore and Belgium terminals as a result of
reduced petroleum activity, partially offset by increased earnings at the Kobe,
Japan, terminal which has been completely restored after last year's earthquake,
and incremental earnings from the newly-acquired Olympic pipeline.
-7-
<PAGE>
COMPARISON OF SECOND QUARTER 1996 TO
SECOND QUARTER 1995
GROSS INCOME
- -------------------------------------------------------------------------------
(In Millions) Three Months Ended
June 30
Business Segment 1996 1995 Change
- ------------------------------- ------ ------ ---------------
Railcar Leasing and Management $99.2 $90.1 $ 9.1 10 %
Terminals and Pipelines 73.0 78.1 (5.1) (7)
- --------------------------------------------------------------------------------
NET INCOME
- --------------------------------------------------------------------------------
(In Millions) Three Months Ended
June 30
Business Segment 1996 1995 Change
- -------------------------------- ------ ------ -------------
Railcar Leasing and Management $17.1 $16.1 $ 1.0 6 %
Terminals and Pipelines 4.6 8.3 (3.7) (45)
- --------------------------------------------------------------------------------
Increases and decreases in gross income and net income between these quarters
for both segments were principally due to the same reasons discussed previously
in relation to the six-month periods.
-8-
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Other than as previously reported, neither the registrant nor any of its
subsidiaries is currently a party to any material pending legal proceeding,
other than ordinary routine litigation incidental to the business, and to the
belief of the registrant, no such proceeding is contemplated.
Item 6. Exhibits and Reports on Form 8-K Page
(a) 10 Revolving Credit Facility Agreement for General American
Transportation Corporation as borrower dated as of
May 9, 1996, file number 2-54754. Submitted to the SEC along
with the electronic submission of this Quarterly Report on
Form 10-Q.
12 Statement regarding computation of ratios of earnings to
fixed charges. 11
27 Financial Data Schedule for General American Transportation
Corporation for the quarter ended June 30, 1996. Submitted to the
SEC along with the electronic submission of this Quarterly Report
on Form 10-Q.
Any instrument defining the rights of security holders with
respect to nonregistered long-term debt not being filed on the
basis that the amount of securities authorized does not exceed 10
percent of the total assets of the company and subsidiaries on a
consolidated basis will be furnished to the Commission upon
request.
(b) No reports on Form 8-K were filed during the reporting period.
-9-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GENERAL AMERICAN TRANSPORTATION CORPORATION
(Registrant)
/s/D. Ward Fuller
-----------------------------------------------
D. Ward Fuller
President, Chief Executive Officer and Director
(Duly Authorized Officer)
/s/Donald J. Schaffer
-----------------------------------------------
Donald J. Schaffer
Vice President, Finance and Chief
Financial Officer
Date: August 6, 1996
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<PAGE>
<TABLE>
<CAPTION>
Exhibit 12
GENERAL AMERICAN TRANSPORTATION CORPORATION
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(Unaudited)
(In Millions, Except for Ratios)
Three Months Ended Six Months Ended
June 30 June 30
----------------------- --------------------
1996 1995 1996 1995
-------- --------- -------- --------
<S> <C> <C> <C> <C>
Earnings available for fixed charges:
Net income.................................................... $ 21.7 $ 24.4 $ 42.1 $ 47.6
Add (deduct):
Income taxes.............................................. 10.0 11.8 19.7 25.4
Equity in net earnings of affiliated
companies, net of distributions received............... (4.3) (.7) (7.3) (4.9)
Interest on indebtedness and amortization
of debt discount and expense........................... 28.8 26.9 54.9 50.3
Amortization of capitalized interest...................... .3 .3 .6 .6
Portion of rents representative of interest
factor (deemed to be one-third)........................ 5.8 4.4 11.6 8.8
-------- -------- -------- ---------
Total earnings available for fixed charges.................... $ 62.3 $ 67.1 $121.6 $127.8
======== ======== ======== =========
Fixed Charges:
Interest on indebtedness and amortization
of debt discount and expense.............................. $ 28.8 $ 26.9 $ 54.9 $ 50.3
Capitalized interest.......................................... 1.2 1.1 2.5 2.6
Portion of rents representative of interest
factor (deemed to be one-third)........................... 5.8 4.4 11.6 8.8
-------- -------- -------- ---------
Total fixed charges........................................... $ 35.8 $ 32.4 $ 69.0 $ 61.7
======== ========= ======== =========
Ratio of earnings to fixed charges(A)............................... 1.74x 2.07x 1.76x 2.07x
<FN>
(A) The ratios of earnings to fixed charges represents the number of times
"fixed charges" are covered by "earnings." "Fixed charges" consist of
interest on outstanding debt and capitalized interest, one-third (the
proportion deemed representative of the interest factor) of rentals, and
amortization of debt discount and expense. "Earnings" consist of
consolidated net income before income taxes and fixed charges, less
equity in net earnings of affiliated companies, net of distributions
received.
</FN>
</TABLE>
-11-
<PAGE>
EXHIBITS FILED WITH DOCUMENT
(a) 10 Revolving Credit Facility Agreement for General American
Transportation Corporation as borrower dated as of May 9, 1996,
file number 2-54754. Submitted to the SEC along with the
electronic submission of this Quarterly Report on Form 10-Q.
12 Statement regarding computation of ratios of earnings to
fixed charges.
27 Financial Data Schedule for GATC for the quarter ended June 30, 1996
submitted to the SEC along with the electronic submission of this
Quarterly Report on Form 10-Q.
[EXECUTION COPY]
$300,000,000
CREDIT AGREEMENT
dated as of
May 9, 1996
among
General American Transportation Corporation,
The Banks Listed Herein,
The First National Bank of Chicago,
as Administrative Agent,
and
Morgan Guaranty Trust Company of New York,
as Documentation Agent
27009/201/CA/gatc.morgan
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
1.1. Definitions..................................................... 1
1.2. Accounting Terms and Determinations............................. 12
1.3. Types of Borrowings............................................. 12
ARTICLE 2
THE CREDITS
2.1. Commitments to Lend............................................. 12
2.2. Notice of Committed Borrowing................................... 13
2.3. Money Market Borrowings......................................... 14
2.4. Notice to Banks; Funding of Loans............................... 17
2.5. Registry........................................................ 18
2.6. Maturity of Loans............................................... 19
2.7. Interest Rates.................................................. 19
2.8. Fees............................................................ 20
2.9. Optional Termination or Reduction of Commitments................ 21
2.10. Mandatory Termination of Commitments............................ 21
2.11. Optional Prepayments............................................ 21
2.12. General Provisions as to Payments............................... 21
2.13. Funding Losses.................................................. 22
2.14. Computation of Interest and Fees................................ 22
2.15. Regulation D Compensation....................................... 22
2.16. Optional Increase in Commitments................................ 23
2.17. Mandatory Prepayment in the Event of a Change in Control........ 24
ARTICLE 3
CONDITIONS
3.1. Effectiveness................................................... 24
3.2. Borrowings...................................................... 25
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Page
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1. Corporate Existence............................................. 26
4.2. Authorization of Agreement; No Violation........................ 26
4.3. Governmental Approvals.......................................... 26
4.4. Binding Effect.................................................. 26
4.5. Financial Information........................................... 27
4.6. Litigation...................................................... 27
4.7. Employee Benefit Plans.......................................... 27
4.8. Taxes........................................................... 27
4.9. Subsidiaries.................................................... 28
4.10. Full Disclosure................................................. 28
4.11. Compliance With Laws............................................ 28
4.12. Environmental Matters........................................... 28
ARTICLE 5
COVENANTS
5.1. Maintenance of Existence........................................ 29
5.2. Compliance with Laws, Etc....................................... 29
5.3. Payment of Taxes and Claims, Etc................................ 29
5.4. Keeping of Books................................................ 29
5.5. Visitation, Inspection, Etc..................................... 30
5.6. Insurance....................................................... 30
5.7. Reporting Covenants............................................. 30
5.8. Financial Test Covenants........................................ 32
5.9. Mergers, Etc.................................................... 33
5.10. Negative Pledge................................................. 33
5.11. Use of Proceeds................................................. 34
5.12. Certain Transfers to Subsidiaries of the Borrower............... 34
5.13. Transactions with Affiliates.................................... 35
ARTICLE 6
DEFAULTS
6.1. Payments......................................................... 35
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<PAGE>
Page
6.2. Covenants Without Notice......................................... 35
6.3. Other Covenants.................................................. 35
6.4. Representations.................................................. 36
6.5. Non-Payments of Other Indebtedness............................... 36
6.6. Defaults Under Other Agreements.................................. 36
6.7. Failure to Pay, Etc.............................................. 36
6.8. Bankruptcy....................................................... 36
6.9. ERISA............................................................ 37
6.10. Judgments........................................................ 37
6.11. Change of Control of the Borrower................................ 37
ARTICLE 7
THE AGENTS
7.1. Appointment and Authorization.................................... 38
7.2. Agents and Affiliates............................................ 38
7.3. Action by Agents................................................. 38
7.4. Employment of Agents and Experts................................. 39
7.5. Liability of Agents.............................................. 39
7.6. Indemnification.................................................. 40
7.7. Credit Decision.................................................. 40
7.8. Successor Administrative Agent................................... 40
7.9. Agents' Fees..................................................... 40
ARTICLE 8
CHANGE IN CIRCUMSTANCES
8.1. Basis for Determining Interest Rate Inadequate or Unfair......... 41
8.2. Illegality....................................................... 41
8.3. Increased Cost and Reduced Return................................ 42
8.4. Taxes............................................................ 43
8.5. Base Rate Loans Substituted for Affected Euro-Dollar Loans....... 45
8.6. Replacement of Bank.............................................. 45
ARTICLE 9
MISCELLANEOUS
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<PAGE>
Page
9.1. Notices.......................................................... 46
9.2. No Waivers....................................................... 46
9.3. Expenses; Indemnification........................................ 46
9.4. Sharing of Set-Offs.............................................. 47
9.5. Amendments and Waivers .......................................... 47
9.6. Successors and Assigns........................................... 48
9.7. Collateral....................................................... 49
9.8. Governing Law; Submission to Jurisdiction........................ 49
9.9. Counterparts; Integration........................................ 50
9.10. WAIVER OF JURY TRIAL............................................. 50
9.11. Confidentiality.................................................. 50
PRICING SCHEDULE....................................................... 1
SCHEDULE 5.10.......................................................... 1
EXHIBIT A - Note....................................................... 1
EXHIBIT B - Money Market Quote Request................................. 1
EXHIBIT C - Invitation for Money Market Quotes......................... 1
EXHIBIT D - Money Market Quote......................................... 1
EXHIBIT E - Opinion of Counsel for the Borrower........................ 1
EXHIBIT F - Opinion of Special Counsel for the Agents.................. 1
EXHIBIT G - Assignment and Assumption Agreement........................ 1
27009/201/CA/gatc.morgan
<PAGE>
AGREEMENT dated as of May 9, 1996 among GENERAL AMERICAN
TRANSPORTATION CORPORATION, the BANKS listed on the signature pages hereof, THE
FIRST NATIONAL BANK OF CHICAGO, as Administrative Agent, and MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, as Documentation Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. The following terms, as used herein, have the
following meanings: "Absolute Rate Auction" means a solicitation of Money Market
Quotes setting forth Money Market Absolute Rates pursuant to Section 2.3.
"Administrative Agent" means The First National Bank of Chicago in
its capacity as administrative agent for the Banks hereunder, and its successors
in such capacity.
"Administrative Questionnaire" means, with respect to each Bank,
an administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
"Affiliate" means (i) any Person that directly, or indirectly
through one or more intermediaries, controls the Borrower (a "Controlling
Person") or (ii) any Person (other than the Borrower or a Subsidiary) which is
controlled by or is under common control with a Controlling Person. As used
herein, the term "control" means possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agents" means the Administrative Agent and the Documentation
Agent.
"Applicable Lending Office" means, with respect to any Bank, (i)
in the case of its Base Rate Loans, its Domestic Lending Office, (ii) in the
case of its
27009/201/CA/gatc.morgan
<PAGE>
Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of its
Money Market Loans, its Money Market Lending Office.
"Assignee" has the meaning set forth in Section 9.6(c).
"Authorized Officer" means any of the Chairman of the Board of
Directors, President, Chief Financial Officer, Treasurer or Assistant Treasurer
of the Borrower, acting singly.
"Bank" means each bank listed on the signature pages hereof, each
bank which becomes a Bank pursuant to Section 2.16 or 8.6 and each Assignee
which becomes a Bank pursuant to Section 9.6(c), and their respective
successors.
"Bankruptcy Code" is defined in Section 6.8.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Corporate Base Rate for such day and (ii) the sum of 1/2 of 1%
plus the Federal Funds Effective Rate for such day.
"Base Rate Loan" means a Committed Loan to be made by a Bank as a
Base Rate Loan in accordance with the applicable Notice of Committed Borrowing
or pursuant to Article 8.
"Borrower" means General American Transportation Corporation, a
New York corporation, and its successors.
"Borrowing" has the meaning set forth in Section 1.3.
"Change in Control" means (i) the acquisition by any Person, or
two or more Persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 50% or more of the outstanding shares of
voting stock of GATX, or (ii) Continuing Directors shall cease to constitute a
majority of the board of directors of GATX.
"Change in Control Notice" is defined in Section 2.17.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment" means (i) with respect to each Bank listed on the
signature pages hereof, the amount set forth opposite its name on the signature
pages
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<PAGE>
hereof and (ii) with respect to each Assignee or other Person which becomes a
Bank pursuant to Section 9.6(c), 2.16 or 8.6, the amount of the Commitment
thereby assumed by it, in each case as such amount may be reduced from time to
time pursuant to Sections 2.9 and 9.6(c) or increased from time to time pursuant
to Sections 2.16, 8.6 and 9.6(c).
"Committed Loan" means a loan made by a Bank pursuant to Section
2.1.
"Consolidated Adjusted EBIT" means, for any period, the sum of
Consolidated Net Income for such period plus, to the extent deducted in
determining such Consolidated Net Income, Consolidated Interest Expense,
provisions for income tax and fifty percent (50%) of Consolidated Railcar Lease
Expense for such period minus, to the extent included in such Consolidated Net
Income, all income of the Borrower and its Subsidiaries derived from Investments
in GATX or any Subsidiary of GATX (other than the Borrower or a Subsidiary of
the Borrower).
"Consolidated Interest Expense" means, for any period, the
interest expense of the Borrower and its Subsidiaries, determined on a
consolidated basis for such period.
"Consolidated Net Income" means, for any period, the net after-tax
income of the Borrower and its Subsidiaries for such period, determined on a
consolidated basis.
"Consolidated Net Worth" means, at any date, the consolidated
stockholders' equity of Borrower and its Subsidiaries as at such date.
"Consolidated Railcar Lease Expense" means, for any fiscal period
of the Borrower, the consolidated railcar operating lease expense of the
Borrower and its Subsidiaries for such fiscal period.
"Consolidated Tangible Net Worth" means, at any date, Consolidated
Net Worth at such date minus, to the extent reflected therein, 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).
"Continuing Director" means (i) any director of GATX on the date
of this Agreement and (ii) any director of GATX elected to the board to replace
a Continuing Director who shall have died, or who shall have retired or resigned
from
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the board in the ordinary course, and whose election or nomination was approved
by a majority of the Continuing Directors then in office.
"Corporate Base Rate" means a rate per annum equal to the
corporate base rate of interest announced by First Chicago from time to time,
changing when and as said corporate base rate changes.
"Default" means any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Documentation Agent" means Morgan Guaranty Trust Company of New
York in its capacity as documentation agent for the Banks hereunder.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City or Chicago are authorized
by law to close.
"Domestic Lending Office" means, as to each Bank, its office
located at its address set forth in its Administrative Questionnaire (or
identified in its Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as its Domestic
Lending Office by notice to the Borrower and the Administrative Agent.
"Effective Date" means the date this Agreement becomes effective
in accordance with Section 3.1.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions applicable
to the Borrower or a Subsidiary and relating to (i) the protection of the
environment, (ii) the effect of the environment on human health, (iii)
emissions, discharges or releases of pollutants, contaminants, hazardous
substances or wastes into surface water, ground water or land, or (iv) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of l974,
as amended from time to time, and any rule or regulation issued thereunder.
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"ERISA Affiliate" means each trade or business (whether or not
incorporated) which together with the Borrower or a Subsidiary of the Borrower
would be under "common control" within the meaning of Section 4001 of ERISA.
"ERISA Termination Event" means (i) a "reportable event" described
in Section 4043 of ERISA and the regulations issued thereunder, other than a
"reportable event" with respect to which the provision for thirty (30) day
notice to the PBGC has been waived or contingently waived under such
regulations, or (ii) the withdrawal of the Borrower or any Subsidiary of the
Borrower or any ERISA Affiliate from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or (iii) the
filing of a notice of intent to terminate a Plan with respect to which there are
insufficient assets to pay benefits as they become due or the treatment of an
amendment of such a Plan as a termination under Section 4041 of ERISA, or (iv)
the institution of proceedings to terminate a Plan by the PBGC or (v) any other
event or condition which might constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan;
provided, that no event or occurrence of the type described in clauses (i)
through (v) above shall constitute an ERISA Termination Event unless there shall
result from such event or occurrence either a liability or a material risk of
incurring a liability to the PBGC or a Plan, which will have a Material Adverse
Effect.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including dealings
in dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office,
branch or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Administrative Agent.
"Euro-Dollar Loan" means a Committed Loan to be made by a Bank as
a Euro-Dollar Loan in accordance with the applicable Notice of Committed
Borrowing.
"Euro-Dollar Margin" means a rate per annum determined daily in
accordance with the Pricing Schedule.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor), for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency
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<PAGE>
liabilities" (or in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on Euro-Dollar Loans is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any Bank to United States
residents).
"Event of Default" has the meaning set forth in Article 6.
"Existing Credit Agreement" means the Third Amended and Restated
Revolving Credit Agreement dated as of March 31, 1994, as subsequently amended
by Amendment No. 1 dated as of April 21, 1995, among the Borrower, the banks
parties thereto and Bankers Trust Company, as agent.
"Facility Fee Rate" means a rate per annum determined daily in
accordance with the Pricing Schedule.
"Federal Funds Effective Rate" means, for any day, an interest
rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published for such day (or, if such day is
not a Domestic Business Day, for the immediately preceding Domestic Business
Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Domestic Business Day, the average of the
quotations at approximately 10:00 A.M. (Chicago time) on such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by the Administrative Agent in its sole
discretion.
"First Chicago" means The First National Bank of Chicago in its
individual capacity, and its successors.
"Fixed Rate Loans" means Euro-Dollar Loans or Money Market Loans
(excluding Money Market LIBOR Loans bearing interest at the Base Rate pursuant
to Section 8.1) or both.
"GATX" means GATX Corporation, a New York corporation, and its
successors.
"Indebtedness" of any Person means (without duplication):
(a) all obligations of such Person for borrowed money or for
the deferred purchase price of property or services, and all
obligations evidenced by bonds, debentures, notes or other similar
instruments (but excluding in each
27009/201/CA/gatc.morgan
<PAGE>
case those accounts payable and accruals that were incurred or created
in the normal course of business and have original maturities of one
year or less);
(b) all rental obligations under leases required to be
capitalized under, and as valued in accordance with, generally accepted
accounting principles;
(c) all guaranties (direct or indirect), all contingent
reimbursement obligations under undrawn letters of credit and other
contingent obligations of such Person in respect of, or obligations to
purchase or otherwise acquire or to assure payment of, Indebtedness of
others; and
(d) all obligations of such Person under, in connection with
or related to (A) any preferred stock or any instrument of a similar
character issued by such Person which has or may potentially have
characteristics of Indebtedness under generally accepted accounting
principles (including, without limitation, support provided by a letter
or letters of credit), or (B) any financing instrument or arrangement
issued or undertaken by such Person (w) that has a stated maturity
date, (x) under which any default does or may result in any payment
obligation or acceleration of any payment obligation, (y) that is
subject to a redemption obligation that either is mandatory or may be
imposed at the option of the holder or obligee thereof or (z) that is
convertible or exchangeable into any other instrument of Indebtedness.
"Indemnitee" has the meaning set forth in Section 9.3(b).
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending one,
two, three or six months (or, if corresponding funding is available to each
Bank, nine or twelve months) thereafter, as the Borrower may elect in the
applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall, subject to clause (c)
below, be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month,
in which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
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<PAGE>
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(2) with respect to each Base Rate Borrowing, the period
commencing on the date of such Borrowing and ending on the next succeeding
Payment Date; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended to the
next succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(3) with respect to each Money Market LIBOR Borrowing, the
period commencing on the date of such Borrowing and ending such whole number of
months thereafter as the Borrower may elect in accordance with Section 2.3;
provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall, subject to clause (c)
below, be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month,
in which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
(4) with respect to each Money Market Absolute Rate Borrowing,
the period commencing on the date of such Borrowing and ending such number of
days thereafter (but not less than 7 days) as the Borrower may elect in
accordance with Section 2.3; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Domestic Business Day shall, subject to clause (b)
below, be extended to the next succeeding Domestic Business Day; and
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<PAGE>
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Investment" of a Person means any loan, advance, extension of
credit or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificates of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"LIBOR Auction" means a solicitation of Money Market Quotes
setting forth Money Market Margins based on the London Interbank Offered Rate
pursuant to Section 2.3.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien, charge or deposit arrangement or other arrangement having the
practical effect of any of the foregoing and shall include the interest of a
vendor or lessor under any conditional sale agreement, capitalized lease or
other title retention agreement.
"Loan" means a Base Rate Loan, a Euro-Dollar Loan or a Money
Market Loan and "Loans" means Base Rate Loans, Euro-Dollar Loans or Money
Market Loans or any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.7(b).
"Material Adverse Effect" means a material adverse effect,
actual or prospective, on (i) the business, property, condition (financial or
otherwise) or results of operations of the Borrower and its Subsidiaries taken
as a whole, (ii) the ability of the Borrower to perform its obligations under
this Agreement and any Notes, or (iii) the validity or enforceability of this
Agreement or the rights or remedies of the Agents or the Banks hereunder and
thereunder.
"Material Indebtedness" means Indebtedness (other than the
Indebtedness incurred hereunder) of the Borrower and/or one or more of its
Subsidiaries, arising in one or more related or unrelated transactions, in an
aggregate principal or face amount exceeding $25,000,000.
"Money Market Absolute Rate" has the meaning set forth in
Section 2.3(d)(ii)(D).
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<PAGE>
"Money Market Absolute Rate Loan" means a loan to be made by a
Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each Bank, its
Domestic Lending Office or such other office, branch or affiliate of such Bank
as it may hereafter designate as its Money Market Lending Office by notice to
the Borrower and the Administrative Agent; provided that any Bank may from time
to time by notice to the Borrower and the Administrative Agent designate
separate Money Market Lending Offices for its Money Market LIBOR Loans, on the
one hand, and its Money Market Absolute Rate Loans, on the other hand, in which
case all references herein to the Money Market Lending Office of such Bank shall
be deemed to refer to either or both of such offices, as the context may
require.
"Money Market LIBOR Loan" means a loan to be made by a Bank
pursuant to a LIBOR Auction (including such a loan bearing interest at the Base
Rate pursuant to Section 8.1).
"Money Market Loan" means a Money Market LIBOR Loan or a Money
Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in Section
2.3(d)(ii)(C).
"Money Market Quote" means an offer by a Bank to make a Money
Market Loan in accordance with Section 2.3.
"Morgan" means Morgan Guaranty Trust Company of New York, in
its individual capacity, and its successors.
"Note" means any promissory note of the Borrower issued
pursuant to Section 2.5(b).
"Notice of Borrowing" means a Notice of Committed Borrowing
(as defined in Section 2.2) or a Notice of Money Market Borrowing (as defined in
Section 2.3(f)).
"Parent" means, with respect to any Bank, any Person
controlling such Bank.
"Participant" has the meaning set forth in Section 9.6(b).
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<PAGE>
"Payment Date" means the last day of each January, April, July
and October unless such day is not a Domestic Business Day, in which case
"Payment Date" shall mean the next succeeding Domestic Business Day.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan" means any Plan which is a multiemployer plan or
single employer plan, as defined in Section 4001 and subject to Title IV of
ERISA.
"Person" means an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means any employee benefit plan, as defined in Section
3(3) of ERISA, which is or, at any time during the five (5) calendar years
preceding the date of this Agreement, was maintained for employees of the
Borrower or a Subsidiary of the Borrower or an ERISA Affiliate.
"Pricing Schedule" means the Schedule attached hereto
identified as such.
"Reference Banks" means First Chicago, Morgan and
Citibank, N.A., and "Reference Bank" means any one of such Reference Banks.
"Refunding Borrowing" means a Committed Borrowing which, after
application of the proceeds thereof, results in no net increase in the
outstanding principal amount of Committed Loans made by any Bank.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Required Banks" means at any time Banks having at least 51%
of the aggregate amount of the Commitments or, if the Commitments shall have
been terminated, holding at least 51% of the aggregate unpaid principal amount
of the Loans.
"Restricted Payment" means (i) any dividend or other
distribution on any shares of the Borrower's capital stock (except dividends
payable solely in shares of its capital stock) or (ii) any payment on account of
the purchase, redemption, retirement or acquisition of (a) any shares of the
Borrower's capital stock or (b) any option, warrant or other right to acquire
shares of the Borrower's capital stock (but not including
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<PAGE>
payments of principal, premium (if any) or interest made pursuant to the terms
of convertible debt securities prior to conversion).
"Revolving Credit Period" means the period from and including
the Effective Date to but not including the Termination Date.
"Subsidiary" of any Person means a corporation of which a
majority of the outstanding shares of stock of each class having ordinary voting
power is owned by such Person, by one or more Subsidiaries of such Person, or by
such Person and one or more of its Subsidiaries.
"Termination Date" means May 9, 2001, or, if such day is not a
Euro- Dollar Business Day, the next preceding Euro-Dollar Business Day.
"United States" means the United States of America, including
the States and the District of Columbia, but excluding its territories and
possessions.
SECTION 1.2. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Subsidiaries delivered
to the Banks; provided that, if the Borrower notifies the Administrative Agent
that the Borrower wishes to amend any covenant in Article 5 to eliminate the
effect of any change in generally accepted accounting principles on the
operation of such covenant (or if the Administrative Agent notifies the Borrower
that the Required Banks wish to amend Article 5 for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
generally accepted accounting principles in effect immediately before the
relevant change in generally accepted accounting principles became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Banks.
SECTION 1.3. Types of Borrowings. The term "Borrowing" denotes
the aggregation of Loans of one or more Banks to be made to the Borrower
pursuant to Article 2 on a single date and for a single Interest Period.
Borrowings are classified for purposes of this Agreement either by reference to
(i) the pricing of Loans comprising such Borrowing (e.g., a "Fixed Rate
Borrowing" is a Euro-Dollar Borrowing or a Money Market Borrowing (excluding any
such Borrowing consisting of Money Market LIBOR Loans bearing interest at the
Base Rate pursuant to Section 8.1), and a "Euro- Dollar Borrowing" is a
Borrowing comprised of Euro-Dollar Loans) or (ii) the provisions of Article 2
under which participation therein is determined (i.e., a "Committed Borrowing"
is a Borrowing under Section 2.1 in which all Banks participate in proportion to
their Commitments, while a "Money Market Borrowing" is a Borrowing under Section
2.3 in which the Bank participants are determined on the basis of their bids in
accordance therewith).
ARTICLE 2
THE CREDITS
SECTION 2.1. Commitments to Lend. (a) During the Revolving
Credit Period, each Bank severally agrees, on the terms and conditions set forth
in this Agreement, to make loans to the Borrower pursuant to this Section from
time to time in amounts such that the aggregate principal amount of Committed
Loans by such Bank at any one time outstanding shall not exceed the amount of
its Commitment. Each Euro- Dollar Borrowing under this Section shall be in an
aggregate principal amount of $10,000,000 or any larger multiple of $1,000,000
and each Base Rate Borrowing under this Section shall be in an aggregate
principal amount of $5,000,000 or any larger multiple of $1,000,000 (except that
any such Borrowing may be in the aggregate amount available in accordance with
Section 3.2(b)) and shall be made from the several Banks ratably in proportion
to their respective Commitments. Within the foregoing limits, the Borrower may
borrow under this Section, repay, or to the extent permitted by Section 2.11,
prepay Loans and reborrow at any time during the Revolving Credit Period under
this Section.
SECTION 2.2. Notice of Committed Borrowing. (a) The Borrower
shall give the Administrative Agent notice (a "Notice of Committed Borrowing")
not later than 10:30 A.M. (Chicago time) on (x) the date of each Base Rate
Borrowing and (y) the third (or fifth, in case a nine- or twelve-month Interest
Period is elected) Euro- Dollar Business Day before each Euro-Dollar Borrowing,
specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) whether the Loans comprising such Borrowing are to be
Base Rate Loans or Euro-Dollar Loans; and
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<PAGE>
(iv) in the case of a Euro-Dollar Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
(b) If the Borrower specifies a nine- or twelve-month Interest
Period with respect to any Euro-Dollar Borrowing (an "Extended Interest Period")
in any Notice of Borrowing and the Administrative Agent shall not have received
from any Bank notice that deposits are not available to it in the relevant
market with a maturity corresponding to such Extended Interest Period within two
Euro-Dollar Business Days after receipt by the Administrative Agent of such
Notice of Borrowing, then such Bank shall be deemed to have available to it such
corresponding deposits for such Extended Interest Period. If any Bank timely
notifies the Administrative Agent of the unavailability of such corresponding
deposits for an Extended Interest Period, then the Administrative Agent shall
promptly notify the Borrower and the Borrower shall deliver a new Notice of
Borrowing (which may be included as an alternative election in the original
Notice of Borrowing) specifying a different election within the applicable time
periods specified in the definition of Interest Period. If the Borrower fails to
so timely deliver such a new Notice of Borrowing, then the Borrowing shall be a
Base Rate Borrowing.
SECTION 2.3. Money Market Borrowings. (a) The Money Market
Option. In addition to Committed Borrowings pursuant to Section 2.1, the
Borrower may, as set forth in this Section, request the Banks during the
Revolving Credit Period to make offers to make Money Market Loans to the
Borrower. The Banks may, but shall have no obligation to, make such offers and
the Borrower may, but shall have no obligation to, accept any such offers in the
manner set forth in this Section.
(b) Money Market Quote Request. When the Borrower wishes to
request offers to make Money Market Loans under this Section, it shall transmit
to the Administrative Agent by telex or facsimile transmission a Money Market
Quote Request substantially in the form of Exhibit B hereto so as to be received
not later than 10:30 A.M. (Chicago time) on (x) the fifth Euro-Dollar Business
Day prior to the date of Borrowing proposed therein, in the case of a LIBOR
Auction or (y) the Domestic Business Day next preceding the date of Borrowing
proposed therein, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Administrative Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective) specifying:
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<PAGE>
(i) the proposed date of Borrowing, which shall be a
Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic
Business Day in the case of an Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which shall be
$5,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period, and
(iv) whether the Money Market Quotes requested are to set forth
a Money Market Margin or a Money Market Absolute Rate.
The Borrower may request offers to make Money Market Loans for more than one
Interest Period in a single Money Market Quote Request. No Money Market Quote
Request shall be given within five Euro-Dollar Business Days (or such other
number of days as the Borrower and the Administrative Agent may agree) of any
other Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly upon receipt
of a Money Market Quote Request, the Administrative Agent shall send to the
Banks by telex or facsimile transmission an Invitation for Money Market Quotes
substantially in the form of Exhibit C hereto, which shall constitute an
invitation by the Borrower to each Bank to submit Money Market Quotes offering
to make the Money Market Loans to which such Money Market Quote Request relates
in accordance with this Section.
(d) Submission and Contents of Money Market Quotes. (i) Each
Bank may submit a Money Market Quote containing an offer or offers to make Money
Market Loans in response to any Invitation for Money Market Quotes. Each Money
Market Quote must comply with the requirements of this subsection (d) and must
be submitted to the Administrative Agent by telex or facsimile transmission at
its offices specified in or pursuant to Section 9.1 not later than (x) 2:00 P.M.
(Chicago time) on the fourth Euro-Dollar Business Day prior to the proposed date
of Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M. (Chicago time) on
the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in
either case, such other time or date as the Borrower and the Administrative
Agent shall have mutually agreed and shall have notified to the Banks not later
than the date of the Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be effective); provided that
Money Market Quotes submitted by the Administrative Agent (or any affiliate of
the Administrative Agent) in the capacity of a Bank may be submitted, and may
only be submitted, if the Administrative Agent or such affiliate notifies the
Borrower of the terms of the offer or offers contained therein not later than
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<PAGE>
(x) one hour prior to the deadline for the other Banks, in the case of a LIBOR
Auction or (y) 15 minutes prior to the deadline for the other Banks, in the case
of an Absolute Rate Auction. Subject to Articles 3 and 6, any Money Market Quote
so made shall be irrevocable except with the written consent of the
Administrative Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall be in substantially the
form of Exhibit D hereto and shall in any case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan for which
each such offer is being made, which principal amount (w) may be
greater than or less than the Commitment of the quoting Bank, (x) must
be $5,000,000 or a larger multiple of $1,000,000, (y) may not exceed
the principal amount of Money Market Loans for which offers were
requested and (z) may be subject to an aggregate limitation as to the
principal amount of Money Market Loans for which offers being made by
such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin above or below
the applicable London Interbank Offered Rate (the "Money Market
Margin") offered for each such Money Market Loan, expressed as a
percentage (specified to the nearest 1/10,000th of 1%) to be added to
or subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the rate of
interest per annum (specified to the nearest 1/10,000th of 1%) (the
"Money Market Absolute Rate") offered for each such Money Market Loan,
and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate offers by the quoting
Bank with respect to each Interest Period specified in the related Invitation
for Money Market Quotes.
(iii) Any Money Market Quote shall be disregarded if it:
(A) is not substantially in conformity with Exhibit D hereto
or does not specify all of the information required by subsection
(d)(ii) above;
(B) contains qualifying, conditional or similar language;
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(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Money Market Quotes; or
(D) arrives after the time set forth in subsection (d)(i).
(e) Notice to Borrower. The Administrative Agent shall
promptly notify the Borrower of the terms (x) of any Money Market Quote
submitted by a Bank that is in accordance with subsection (d) and (y) of any
Money Market Quote that amends, modifies or is otherwise inconsistent with a
previous Money Market Quote submitted by such Bank with respect to the same
Money Market Quote Request. Any such subsequent Money Market Quote shall be
disregarded by the Administrative Agent unless such subsequent Money Market
Quote is submitted solely to correct a manifest error in such former Money
Market Quote. The Administrative Agent's notice to the Borrower shall specify
(A) the aggregate principal amount of Money Market Loans for which offers have
been received for each Interest Period specified in the related Money Market
Quote Request, (B) the respective principal amounts and Money Market Margins or
Money Market Absolute Rates, as the case may be, so offered and (C) if
applicable, limitations on the aggregate principal amount of Money Market Loans
for which offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than 10:30
A.M. (Chicago time) on (x) the third Euro-Dollar Business Day prior to the
proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed
date of Borrowing, in the case of an Absolute Rate Auction (or, in either case,
such other time or date as the Borrower and the Administrative Agent shall have
mutually agreed and shall have notified to the Banks not later than the date of
the Money Market Quote Request for the first LIBOR Auction or Absolute Rate
Auction for which such change is to be effective), the Borrower shall notify the
Administrative Agent of its acceptance or non-acceptance of the offers so
notified to it pursuant to subsection (e). In the case of acceptance, such
notice (a "Notice of Money Market Borrowing") shall specify the aggregate
principal amount of offers for each Interest Period that are accepted. The
Borrower may accept any Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the related
Money Market Quote Request;
(ii) the principal amount of each Money Market Borrowing must
be $5,000,000 or a larger multiple of $1,000,000;
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(iii) acceptance of offers may only be made on the basis of
ascending Money Market Margins or Money Market Absolute Rates, as the
case may be; and
(iv) the Borrower may not accept any offer that is described
in subsection (d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(g) Allocation by Administrative Agent. If offers are made by
two or more Banks with the same Money Market Margins or Money Market Absolute
Rates, as the case may be, for a greater aggregate principal amount than the
amount in respect of which such offers are accepted for the related Interest
Period, the principal amount of Money Market Loans in respect of which such
offers are accepted shall be allocated by the Administrative Agent among such
Banks as nearly as possible (in multiples of $1,000,000, as the Administrative
Agent may deem appropriate) in proportion to the aggregate principal amounts of
such offers. Determinations by the Administrative Agent of the amounts of Money
Market Loans shall be conclusive in the absence of manifest error.
SECTION 2.4. Notice to Banks; Funding of Loans. (a) Upon
receipt of a Notice of Borrowing, the Administrative Agent shall promptly notify
each Bank of the contents thereof and of such Bank's share (if any) of such
Borrowing and such Notice of Borrowing shall not thereafter be revocable by the
Borrower.
(b) Not later than 12:00 Noon (Chicago time) on the date of
each Borrowing, each Bank participating therein shall (except as provided in
subsection (c) of this Section) make available its share of such Borrowing, in
Federal or other funds immediately available in Chicago, to the Administrative
Agent at its address referred to in Section 9.1. Unless the Administrative Agent
determines that any applicable condition specified in Article 3 has not been
satisfied, the Administrative Agent will promptly make the funds so received
from the Banks available to the Borrower at the Administrative Agent's aforesaid
address.
(c) If any Bank makes a new Loan hereunder on a day on which
the Borrower is to repay all or any part of an outstanding Loan from such Bank,
such Bank shall apply the proceeds of its new Loan to make such repayment and
only an amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such Bank to the
Administrative Agent as provided in subsection (b) of this Section, or remitted
by the Borrower to the Administrative Agent as provided in Section 2.12, as the
case may be.
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<PAGE>
(d) Unless the Administrative Agent shall have received notice
from a Bank prior to the date of any Borrowing (or, in the case of any Base Rate
Borrowing, prior to 12:00 Noon (Chicago time) on the date of such Borrowing)
that such Bank will not make available to the Administrative Agent such Bank's
share of such Borrowing, the Administrative Agent may assume that such Bank has
made such share available to the Administrative Agent on the date of such
Borrowing in accordance with subsections (b) and (c) of this Section and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Bank shall not have so made such share available to the Administrative Agent,
such Bank and the Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Administrative Agent, at (i) in the case
of the Borrower, a rate per annum equal to the interest rate applicable thereto
pursuant to Section 2.7 and (ii) in the case of such Bank, the Federal Funds
Effective Rate. If such Bank shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Bank's Loan
included in such Borrowing for purposes of this Agreement.
SECTION 2.5. Registry. (a) The Administrative Agent shall
maintain a register (the "Register") on which it will record the Commitment of
each Bank, each Loan made by such Bank and each repayment of any Loan made by
such Bank. Any such recordation by the Administrative Agent on the Register
shall be conclusive, absent manifest error. Each Bank shall record on its
internal records (including computerized systems) the foregoing information as
to its own Commitment and Loans. Failure to make any such recordation, or any
error in such recordation, shall not affect the Borrower's obligations hereunder
in respect of the Loans.
(b) The Borrower hereby agrees that, upon the request of the
Administrative Agent by any Bank at any time, such Bank's Loans shall be
evidenced by a promissory note of the Borrower (a "Note"), substantially in the
form of Exhibit A hereto, payable to the order of such Bank and representing the
obligation of the Borrower to pay the unpaid principal amount of the Loans made
by such Bank, with interest as provided herein on the unpaid principal amount
from time to time outstanding.
SECTION 2.6. Maturity of Loans. Each Loan included in any
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such Borrowing.
SECTION 2.7. Interest Rates. (a) Each Base Rate Loan shall
bear interest on the outstanding principal amount thereof, for each day from the
date such
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<PAGE>
Loan is made until it becomes due, at a rate per annum equal to the Base Rate
for such day. Such interest shall be payable for each Interest Period on the
last day thereof. Any overdue principal of or interest on any Base Rate Loan
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the sum of 2% plus the rate otherwise applicable to Base Rate
Loans for such day.
(b) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each day during the Interest Period
applicable thereto, at a rate per annum equal to the sum of the Euro-Dollar
Margin for such day plus the London Interbank Offered Rate applicable to such
Interest Period. Such interest shall be payable for each Interest Period on the
last day thereof and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof.
The "London Interbank Offered Rate" applicable to any Interest
Period means the average (rounded upward, if necessary, to the next higher 1/16
of 1%) of the respective rates per annum at which deposits in dollars are
offered to each of the Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of such Reference Bank to which such
Interest Period is to apply and for a period of time comparable to such Interest
Period.
(c) Any overdue principal of or interest on any Euro-Dollar
Loan shall bear interest, payable on demand, for each day until paid at a rate
per annum equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin
for such day plus the London Interbank Offered Rate applicable to the Interest
Period for such Loan and (ii) the sum of 2% plus the Euro-Dollar Margin for such
day plus the average (rounded upward, if necessary, to the next higher 1/16 of
1%) of the respective rates per annum at which one day (or, if such amount due
remains unpaid more than three Euro-Dollar Business Days, then for such other
period of time not longer than three months as the Administrative Agent may
select) deposits in dollars in an amount approximately equal to such overdue
payment due to each of the Reference Banks are offered to such Reference Bank in
the London interbank market for the applicable period determined as provided
above (or, if the circumstances described in clause (a) or (b) of Section 8.1
shall exist, at a rate per annum equal to the sum of 2% plus the rate applicable
to Base Rate Loans for such day).
(d) Subject to Section 8.1, each Money Market LIBOR Loan shall
bear interest on the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the sum of the London
Interbank Offered Rate for such Interest Period (determined in accordance with
Section 2.7(b) as if the related Money Market LIBOR Borrowing were a Committed
Euro-Dollar Borrowing) plus (or
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<PAGE>
minus) the Money Market Margin quoted by the Bank making such Loan in accordance
with Section 2.3. Each Money Market Absolute Rate Loan shall bear interest on
the outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the Money Market Absolute Rate quoted by
the Bank making such Loan in accordance with Section 2.3. Such interest shall be
payable for each Interest Period on the last day thereof and, if such Interest
Period is longer than three months, at intervals of three months after the first
day thereof. Any overdue principal of or interest on any Money Market Loan shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the sum of 2% plus the Base Rate for such day.
(e) The Administrative Agent shall determine each interest
rate applicable to the Loans hereunder. The Administrative Agent shall give
prompt notice to the Borrower and the participating Banks of each rate of
interest so determined, and its determination thereof shall be conclusive in the
absence of manifest error.
(f) Each Reference Bank agrees to use its best efforts to
furnish quotations to the Administrative Agent as contemplated by this Section.
If any Reference Bank does not furnish a timely quotation, the Administrative
Agent shall determine the relevant interest rate on the basis of the quotation
or quotations furnished by the remaining Reference Bank or Banks or, if none of
such quotations is available on a timely basis, the provisions of Section 8.1
shall apply.
SECTION 2.8. Fees. (a) The Borrower shall pay to the
Administrative Agent for the account of the Banks ratably a facility fee at the
Facility Fee Rate. Such facility fee shall accrue (i) from and including the
Effective Date to but excluding the date of termination of the Commitments in
their entirety, on the daily aggregate amount of the Commitments (whether used
or unused) and (ii) from and including such date of termination to but excluding
the date the Loans shall be repaid in their entirety, on the daily aggregate
outstanding principal amount of the Loans.
(b) Accrued fees under this Section shall be payable quarterly
in arrears on each Payment Date and on the date of termination of the
Commitments in their entirety (and, if later, the date the Loans shall be repaid
in their entirety).
SECTION 2.9. Optional Termination or Reduction of Commitments.
During the Revolving Credit Period, the Borrower may, upon at least two Domestic
Business Days' notice to the Administrative Agent, (i) terminate the Commitments
at any time, if no Loans are outstanding at such time or (ii) ratably reduce
from time to time by an aggregate amount of $10,000,000 or a larger multiple of
$1,000,000, the aggregate amount of the Commitments in excess of the aggregate
outstanding principal amount of the Loans.
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<PAGE>
SECTION 2.10. Mandatory Termination of Commitments. The
Commitments shall terminate on the Termination Date and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable on
such date.
SECTION 2.11. Optional Prepayments. (a) The Borrower may, upon
notification to the Administrative Agent not later than 10:00 A.M. (Chicago
time) on the date of such payment, prepay any Base Rate Borrowing (or any Money
Market Borrowing bearing interest at the Base Rate pursuant to Section 8.1) or
upon at least three Euro-Dollar Business Days' notice to the Administrative
Agent, prepay any Euro- Dollar Borrowing, in each case in whole at any time, or
from time to time in part in amounts aggregating $5,000,000 or any larger
multiple of $1,000,000, by paying the principal amount to be prepaid together
with accrued interest thereon to the date of prepayment and any amounts owed
pursuant to Section 2.13. Each such optional prepayment shall be applied to
prepay ratably the Loans of the several Banks included in such Borrowing.
(b) Except as provided in subsection (a) above the Borrower
may not prepay all or any portion of the principal amount of any Money Market
Loan prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this
Section, the Administrative Agent shall promptly notify each Bank of the
contents thereof and of such Bank's ratable share (if any) of such prepayment
and such notice shall not thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments. (a) The
Borrower shall make each payment of principal of, and interest on, the Loans and
of fees hereunder, not later than 12:00 Noon (Chicago time) on the date when
due, in Federal or other funds immediately available in Chicago, to the
Administrative Agent at its address referred to in Section 9.1. The
Administrative Agent will promptly distribute to each Bank its ratable share of
each such payment received by the Administrative Agent for the account of the
Banks. Whenever any payment of principal of, or interest on, the Base Rate Loans
or Money Market Absolute Rate Loans or of fees shall be due on a day which is
not a Domestic Business Day, the date for payment thereof shall be extended to
the next succeeding Domestic Business Day. Whenever any payment of principal of,
or interest on, any Euro-Dollar Loan or Money Market LIBOR Loan shall be due on
a day which is not a Euro-Dollar Business Day, the date for payment thereof
shall be extended to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in which case the date
for payment thereof shall be the next preceding Euro-Dollar Business Day. If the
date for any payment of principal is extended by operation of law or otherwise,
interest thereon shall be payable for such extended time.
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<PAGE>
(b) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the Banks
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such due
date an amount equal to the amount then due such Bank. If and to the extent that
the Borrower shall not have so made such payment, each Bank shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent, at the Federal Funds Effective Rate.
SECTION 2.13. Funding Losses. If the Borrower makes any
payment of principal with respect to any Fixed Rate Loan (pursuant to Article 2,
6 or 8 or otherwise) on any day other than the last day of the Interest Period
applicable thereto, or the last day of an applicable period fixed pursuant to
Section 2.7(c), or if the Borrower fails to borrow or prepay any Fixed Rate
Loans after notice has been given to any Bank in accordance with Section 2.4(a)
or 2.11, the Borrower shall reimburse each Bank within 15 days after demand for
any resulting loss or expense incurred by it (or by an existing or prospective
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of margin for the period after any such payment or failure to
borrow or prepay, provided that such Bank shall have delivered to the Borrower a
certificate as to the amount of such loss or expense, which certificate shall be
conclusive in the absence of manifest error.
SECTION 2.14. Computation of Interest and Fees. Interest based
on the Corporate Base Rate hereunder shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day). All other interest
and fees shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.15. Regulation D Compensation. Each Bank may require
the Borrower to pay, contemporaneously with each payment of interest on the
Euro-Dollar Loans, additional interest on the related Euro-Dollar Loan of such
Bank at a rate per annum determined by such Bank up to but not exceeding the
excess of (i) (A) the applicable London Interbank Offered Rate (or other rate
determined pursuant to Section 2.7(c)) divided by (B) one minus the Euro-Dollar
Reserve Percentage over (ii) the applicable London Interbank Offered Rate (or
other rate determined pursuant to Section 2.7(c)). Any Bank wishing to require
payment of such additional interest (x) shall so notify the Borrower and the
Administrative Agent, in which case such additional interest on the Euro-Dollar
Loans of such Bank shall be payable to such
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<PAGE>
Bank at the place indicated in such notice with respect to each Interest Period
and each period determined pursuant to Section 2.7(c) commencing at least three
Euro-Dollar Business Days after the giving of such notice and (y) shall notify
the Borrower at least five Euro-Dollar Business Days prior to each date on which
interest is payable on the Euro-Dollar Loans of the amount then due it under
this Section.
SECTION 2.16. Optional Increase in Commitments. At any time,
if no Default shall have occurred and be continuing, the Borrower may, if it so
elects, increase the aggregate amount of the Commitments, either by designating
a bank not theretofore a Bank to become a Bank (such designation to be effective
only with the prior written consent of the Administrative Agent, which consent
will not be unreasonably withheld) or by agreeing with an existing Bank that
such Bank's Commitment shall be increased. Upon execution and delivery by the
Borrower and such Bank or other bank of an instrument in form reasonably
satisfactory to the Administrative Agent, such existing Bank shall have a
Commitment as therein set forth or such other bank shall become a Bank with a
Commitment as therein set forth and all the rights and obligations of a Bank
with such a Commitment hereunder; provided:
(a) that the Borrower shall provide prompt notice of such
increase to the Administrative Agent, who shall promptly notify the
Banks;
(b) that no Commitment of any Bank exceeds, as a result of
such increase, the lesser of (x) 10% of the aggregate amount of the
Commitments or(y) $37,500,000; and
(c) that the amount of such increase, together with all other
increases in the aggregate amount of the Commitments pursuant to this
Section 2.16 since the date of this Agreement, does not exceed
$75,000,000.
Upon any increase in the aggregate amount of the Commitments pursuant to this
Section 2.16, within five Domestic Business Days, in the case of each Base Rate
Borrowing then outstanding, and at the end of the then current Interest Period
with respect thereto, in the case of each Euro-Dollar Borrowing then
outstanding, the Borrower shall prepay or repay such Borrowing in its entirety
and, to the extent the Borrower elects to do so and subject to the conditions
specified in Article 3, the Borrower shall reborrow Committed Loans from the
Banks in proportion to their respective Commitments after giving effect to such
increase, until such time as all outstanding Committed Loans are held by the
Banks in such proportion.
SECTION 2.17. Mandatory Prepayment in the Event of a Change in
Control. Not less than five Domestic Business Days prior to the consummation of
any transaction which would cause a Change in Control (but not before public
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<PAGE>
announcement of such transaction), the Borrower shall notify (a "Change in
Control Notice") the Administrative Agent and each Bank of such expected
transaction, including within such Change in Control Notice the expected closing
date of such transaction. Within 15 days of receipt of such Change in Control
Notice by any Bank (or, if the Borrower shall have failed to give a timely
Change in Control Notice to such Bank, within 15 days of the later of (x) such
Change in Control or (y) such Bank's learning thereof), such Bank may, at its
option, give notice to the Administrative Agent and the Borrower that such Bank
elects to terminate its Commitment hereunder. On a date agreed upon between the
Borrower, the Administrative Agent and the terminating Bank (which date shall in
no event occur later than 15 days after receipt by the Administrative Agent and
the Borrower of the notice delivered pursuant to the preceding sentence), such
Bank's Commitment shall terminate and the Borrower shall repay at such time all
of such Bank's outstanding Loans, together with accrued interest thereon, any
accrued fees with respect to such Bank's Commitment, any costs, losses or
expenses incurred by such Bank in connection with such prepayment payable by the
Borrower pursuant to Section 2.13 and any other obligations of the Borrower to
such Bank hereunder.
ARTICLE 3
CONDITIONS
SECTION 3.1. Effectiveness. This Agreement shall become
effective on the date that each of the following conditions shall have been
satisfied (or waived in accordance with Section 9.5):
(a) receipt by the Documentation Agent of counterparts hereof
signed by each of the parties hereto (or, in the case of any party as
to which an executed counterpart shall not have been received, receipt
by the Documentation Agent in form satisfactory to it of telegraphic,
telex, telecopy or other written confirmation from such party of
execution of a counterpart hereof by such party);
(b) receipt by the Documentation Agent of an opinion of
counsel for the Borrower, substantially in the form of Exhibit E hereto
and covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;
(c) receipt by the Documentation Agent of an opinion of Davis
Polk & Wardwell, special counsel for the Agents, substantially in the
form of Exhibit F
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<PAGE>
hereto and covering such additional matters relating to the
transactions contemplated hereby as the Required Banks may
reasonably request;
(d) receipt by the Documentation Agent of all documents the
Documentation Agent may reasonably request relating to the existence of
the Borrower, the corporate authority for and the validity of this
Agreement and the Debt incurred hereunder, and any other matters
relevant hereto, all in form and substance satisfactory to the
Documentation Agent; and
(e) receipt by the Documentation Agent of evidence
satisfactory to it of the payment of all principal of and interest on
any loans outstanding under, and of all other amounts payable under,
the Existing Credit Agreement;
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later than
May 14, 1996. The Documentation Agent shall promptly notify the Borrower and the
Banks of the Effective Date, and such notice shall be conclusive and binding on
all parties hereto. The Banks that are parties to the Existing Credit Agreement,
comprising the "Required Banks" as defined therein, and the Borrower agree that
the commitments under the Existing Credit Agreement shall terminate in their
entirety simultaneously with and subject to the effectiveness of this Agreement
and that the Borrower shall be obligated to pay the accrued commitment and
facility fees thereunder to but excluding the date of such effectiveness.
SECTION 3.2. Borrowings. The obligation of any Bank to make
a Loan on the occasion of any Borrowing is subject to the satisfaction
of the following conditions:
(a) receipt by the Administrative Agent of a Notice of
Borrowing as required by Section 2.2 or 2.3, as the case may be;
(b) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans will not exceed the
aggregate amount of the Commitments;
(c) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of the
Borrower contained in this Agreement (except (i) in the case of a
Borrowing taking place after the Effective Date, the representation and
warranty set forth in Section 4.5 and (ii) in the case of a Refunding
Borrowing, the representations and
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<PAGE>
warranties set forth in Sections 4.6 and 4.12) shall be true on and as
of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c) and (d) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Banks that:
SECTION 4.1. Corporate Existence. The Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York and has duly qualified and is in good standing as a
foreign corporation under the laws of each jurisdiction where the failure to so
qualify or be in good standing, as the case may be, would have a Material
Adverse Effect.
SECTION 4.2. Authorization of Agreement; No Violation. The
execution, delivery and performance by the Borrower of this Agreement (a) are
within the corporate powers of the Borrower, (b) have been duly authorized by
all necessary corporate action, and (c) do not violate or create a default under
law, or the Certificate of Incorporation or By-laws of the Borrower, or any
contractual provision binding on or affecting the Borrower or its property, and
each such representation will be true upon the execution, delivery and
performance by the Borrower of any Note made by it.
SECTION 4.3. Governmental Approvals. No authorization or
approval or other action by, and no notice to or filing or registration with,
any governmental authority or regulatory body is required in connection with the
execution, delivery and performance by the Borrower of this Agreement or will be
required in connection with the execution, delivery and performance by the
Borrower of any Note made by it.
SECTION 4.4. Binding Effect. This Agreement constitutes, and
any Notes to be made by the Borrower will constitute, the legal, valid and
binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms, except as enforcement thereof may be
subject to (a) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting
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<PAGE>
creditors' rights generally, and (b) general principles of equity (regardless of
whether such enforcement is sought in a proceeding in equity or at law).
SECTION 4.5. Financial Information. (a) The consolidated
balance sheet of the Borrower and its Subsidiaries as at December 31, 1995 and
the related consolidated statements of income, retained earnings and changes in
cash flow for the twelve (12) month period then ended, including in each case
the related schedules and footnotes, reported on by Ernst & Young, true copies
of which have been previously delivered to each of the Banks, fairly present the
consolidated financial condition of the Borrower and its Subsidiaries as at the
date thereof and the consolidated results of operations and changes in financial
position for such period, in accordance with generally accepted accounting
principles applied on a consistent basis.
(b) Since December 31, 1995, there has been no material
adverse change in the business, financial condition, results of operations or
prospects of the Borrower and its Subsidiaries taken as a whole.
SECTION 4.6. Litigation. There is no action, suit or
proceeding, or any governmental investigation or any arbitration, in each case
pending or, to the knowledge of the Borrower, threatened against the Borrower or
any of its Subsidiaries or any material property of any thereof before any court
or arbitrator or any governmental or administrative body, agency or official (a)
which challenges the validity of this Agreement or any Note upon its issuance or
(b) which if adversely determined would have a Material Adverse Effect.
SECTION 4.7. Employee Benefit Plans. Each Plan is in
substantial compliance with the applicable provisions of ERISA and the Code. No
Pension Plan has an accumulated funding deficiency or (solely with respect to
conditions on the date hereof) a waived funding deficiency, in either case
within the meaning of Section 412 or Section 418B of the Code, and no
proceedings have been instituted by the PBGC to terminate any Pension Plan, in
any such case involving an amount which will have a Material Adverse Effect.
Neither the Borrower nor any Subsidiary thereof nor any ERISA Affiliate has
incurred any material liability to or on account of a Plan, and no condition
exists which presents a material risk to the Borrower, when taken as a whole
together with its Subsidiaries, of such a liability. No Plan which is a welfare
plan (as defined in Section 3(1) of ERISA) covering any participant or
beneficiary of any participant after the participant's termination of employment
(other than continuation coverage under Section 4980B of the Code) provides for
benefits in an amount which would reasonably be expected to have a Material
Adverse Effect.
SECTION 4.8. Taxes. The Borrower and its Subsidiaries have
filed all United States Federal tax returns and all other tax returns which are
required to be filed
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and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with generally accepted accounting
principles and as to which no Lien exists. The United States income tax returns
of the Borrower and its Subsidiaries have been audited by the Internal Revenue
Service through the fiscal year ended December 31, 1991. No tax liens have been
filed and no claims are being asserted with respect to any such taxes. The
charges, accruals and reserves on the books of the Borrower and its Subsidiaries
in respect of any taxes or other governmental charges are adequate.
SECTION 4.9. Subsidiaries. Each of the Borrower's Subsidiaries
is an organization duly formed, validly existing and in good standing under the
laws of its jurisdiction of organization, and has all corporate, partnership or
other entity powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted,
except for such licenses, authorizations, consents and approvals whose lack
could not reasonably be expected to have a Material Adverse Effect.
SECTION 4.10. Full Disclosure. All factual information
heretofore or contemporaneously furnished by or on behalf of the Borrower or any
of its Subsidiaries to any Agent or Bank for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all other such
factual information hereafter furnished by or on behalf of the Borrower or any
of its Subsidiaries to any Agent or Bank will be, true and accurate (taken as a
whole) on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time. The Borrower has
disclosed to the Banks in writing any and all facts which could have a Material
Adverse Effect.
SECTION 4.11. Compliance With Laws. The Borrower and its
Subsidiaries have complied in all material respects with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof, having jurisdiction over
the conduct of their respective businesses or the ownership of their respective
property where failure to comply with such statutes, rules, regulations, orders
and restrictions could have a Material Adverse Effect.
SECTION 4.12. Environmental Matters. In the ordinary course of
its business, the officers of the Borrower consider the effect of Environmental
Laws on the business of the Borrower and its Subsidiaries, in the course of
which they identify and evaluate potential risks and liabilities accruing to the
Borrower due to Environmental Laws. On the basis of this consideration, the
Borrower has reasonably concluded that
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its compliance with Environmental Laws is not reasonably anticipated to have a
Material Adverse Effect. Neither the Borrower nor any Subsidiary has received
any notice from any governmental agency or authority to the effect that its
operations are not in material compliance with any of the requirements of
applicable Environmental Laws or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could have a Material Adverse Effect.
ARTICLE 5
COVENANTS
The Borrower agrees that so long as any Bank has any
Commitment hereunder or any amount payable hereunder shall remain unpaid:
SECTION 5.1. Maintenance of Existence. The Borrower will
preserve and maintain, and cause each of its Subsidiaries to preserve and
maintain, its corporate existence, and all rights and franchises necessary for
the conduct of any material business in the normal course; provided, however,
that the corporate existence of any Subsidiary may be terminated if such
termination is not disadvantageous to the holders of any Indebtedness hereunder
or the holders of any Notes.
SECTION 5.2. Compliance with Laws, Etc. The Borrower will
comply, and cause each of its Subsidiaries to comply, in all material respects,
with all applicable laws, rules, regulations and orders.
SECTION 5.3. Payment of Taxes and Claims, Etc. The Borrower
will pay, and cause each of its Subsidiaries to pay, (i) all taxes, assessments
and governmental charges imposed upon it or upon its property, and (ii) all
claims (including, without limitation, claims for labor, materials, supplies or
services) which might, if unpaid, become a Lien upon its property, unless, in
each case, the validity or amount thereof is being contested in good faith by
appropriate proceedings and the Borrower has maintained adequate reserves in
accordance with generally accepted accounting principles with respect thereto.
SECTION 5.4. Keeping of Books. The Borrower will keep,
and cause each of its Subsidiaries to keep, necessary and proper books of
record and account, containing complete and accurate entries in all material
respects of all financial and
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business transactions of the Borrower and each Subsidiary thereof in accordance
with sound accounting practices.
SECTION 5.5. Visitation, Inspection, Etc. The Borrower will
permit any representative of any Bank, upon reasonable prior notice and at such
Bank's expense, to visit the principal offices of its business where financial
and legal records are maintained, to examine its books and financial records,
and to discuss its affairs, finances and accounts with its officers, all at such
reasonable times and as often as such Bank may reasonably request.
SECTION 5.6. Insurance. The Borrower will maintain or cause to
be maintained with financially sound and reputable insurers, insurance with
respect to its properties and business, and the properties and business of its
Subsidiaries, against loss or damage of the kinds insured against by reputable
companies in the same or similar businesses, such insurance to be of types and
in amounts (with deductible amounts) consistent with then prudent industry
standards of companies engaged in the same or similar kinds of businesses as the
Borrower and, as applicable, its Subsidiaries.
SECTION 5.7. Reporting Covenants. The Borrower will
deliver to each of the Banks:
(a) as soon as available and in any event within one hundred
five (105) days after the end of each fiscal year of the Borrower
copies of the Annual Report on Form 10-K filed by the Borrower for such
fiscal year with the Securities and Exchange Commission pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended,
or, with respect to any fiscal year of the Borrower for which the
Borrower does not make such a filing during such period, all
information for such fiscal year that would be required to be supplied
for an Annual Report on Form 10-K for such fiscal year were the
Borrower to have filed such an Annual Report for such fiscal year;
(b) as soon as available and in any event within one hundred
five (105) days after the end of each fiscal year of the Borrower
consolidating balance sheets of the Borrower and its Subsidiaries and
the related statements of income of the Borrower and its Subsidiaries
for such fiscal year, setting forth in each case in comparative form
the figures for the previous fiscal year, all in reasonable detail and
certified by an Authorized Officer of the Borrower that (A) they were
the consolidating reports that were used in connection with the
preparation of the consolidated audited financial statements as of the
end of such year as reported by the Borrower in its Annual Report on
Form 10-K, or as otherwise delivered pursuant to Section 5.7(a), and
(B) such consolidating balance sheets and statements of income reflect
the financial condition and
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<PAGE>
results of operations of the Borrower or Subsidiaries for which each
was prepared, in each case at the end of and for such fiscal year in
accordance with generally accepted accounting principles;
(c) as soon as available and in any event within fifty-five
(55) days after the end of each of the first three fiscal quarters of
each fiscal year of the Borrower the Quarterly Report of the Borrower
on Form 10-Q filed by the Borrower for such fiscal quarter with the
Securities and Exchange Commission pursuant to Section 13 or 15(d) of
the Securities and Exchange Act of 1934, as amended, or, with respect
to any fiscal quarter of the Borrower for which the Borrower does not
make such a filing during such period, all information for such fiscal
quarter that would be required to be supplied for a Quarterly Report of
the Borrower on Form 10-Q for such fiscal quarter were the Borrower to
have filed such a Quarterly Report for such fiscal quarter;
(d) as soon as available and in any event within fifty-five
(55) days after the end of each fiscal quarter of the Borrower
consolidating balance sheets of the Borrower and its Subsidiaries as at
the end of the corresponding quarter and the related consolidating
statements of income of the Borrower and its Subsidiaries for such
fiscal quarter and for the portion of the Borrower's fiscal year ended
at the end of such quarter, in each case in comparative form for the
figures for the corresponding quarter, and (with respect to such
statements of income), the corresponding portion of the Borrower's
previous fiscal year, all in reasonable detail and certified by an
Authorized Officer of the Borrower that (A) such consolidating
financial statements represent the underlying detail of the
consolidated unaudited financial statements as of the end of such
fiscal quarter as reported, or as would have been reported, by the
Borrower in its Quarterly Report on Form 10-Q as filed, or as would
have been filed, with the Securities and Exchange Commission, and (B)
such consolidating balance sheets and statements of income reflect the
financial condition and results of operations of the Borrower or the
Subsidiaries for which each was prepared, in each case at the end of or
for such quarter and (where applicable) for such portion of such fiscal
year, on a basis and prepared in a manner consistent with those
employed for the annual statements referred to in Section 5.7(b)
(subject to normal, year-end adjustments);
(e) concurrently with the delivery of the financial statements
referred to in Sections 5.7(a), (b), (c) and (d), a certificate of an
Authorized Officer of the Borrower: (a) setting forth calculations
establishing that the Borrower is in compliance with the financial
covenants set forth in Section 5.8, 5.10(i) or 5.12 of this Agreement,
as the case may be, and (b) stating that, to the best of his knowledge
after due inquiry, no Default has occurred and is continuing during
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<PAGE>
such period (or, if the same has occurred and is continuing, a
description thereof);
(f) together with the financial statements required pursuant
to Section 5.7(a), a certificate (addressed to the Banks) of the
accountants who reported on the financial statements included in the
Annual Report referred to therein, to the effect that, based upon their
audit and any additional review, nothing came to their attention that
would indicate that there exists a Default under this Agreement or if
any such Default exists, specifying the nature thereof;
(g) promptly after receiving knowledge of a Default, a
certificate of an Authorized Officer of the Borrower specifying the
nature thereof and the Borrower's proposed response thereto;
(h) promptly upon the mailing or filing thereof, copies of all
financial statements, reports and proxy statements mailed to the
Borrower's security- holders, and copies of all material registration
statements, periodic reports and other documents filed with the
Securities and Exchange Commission (or any successor thereto) or any
national securities exchange which are normally distributed to the
Borrower's security-holders;
(i) promptly after (i) the occurrence thereof, notice of the
institution of, or any adverse development in, any action, suit or
proceeding or any governmental investigation or any arbitration, before
any court or arbitrator or any governmental or administrative body,
agency or official, against the Borrower, any Subsidiary thereof or any
material property of any thereof, which action or adverse development
could be material with respect to the Borrower and its Subsidiaries
taken as a whole, or (ii) actual knowledge thereof, notice of the
threat of any such action, suit, proceeding, investigation or
arbitration;
(j) promptly after actual knowledge thereof, (i) notice that
an ERISA Termination Event or a "prohibited transaction", as such term
is defined in Section 4975 of the Code, with respect to any Pension
Plan has occurred, which notice shall specify the nature thereof and
the Borrower's proposed response thereto, and (ii) copies of any notice
of the PBGC's intention to terminate or to have a trustee appointed to
administer any Pension Plan; and
(k) with reasonable promptness, such other information
regarding the business, financial condition, results of operations or
prospects of the Borrower or its Subsidiaries as any Bank may
reasonably request from time to time
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<PAGE>
including, without limitation, any public filings and/or public
disclosure documentation not required to be delivered pursuant to
Section 5.7(h).
SECTION 5.8. Financial Test Covenants. The Borrower will:
(a) maintain a ratio of: (a) Consolidated Adjusted EBIT to (b)
the sum of Consolidated Interest Expense and fifty per cent (50%) of
Consolidated Railcar Lease Expense, in each case as of the end of each
fiscal quarter of the Borrower with respect to the four fiscal quarters
then ended taken as a single accounting period, in excess of 1.45 to
1.0;
(b) maintain at all times Consolidated Tangible Net Worth
greater than the sum of: (a) $570,000,000; plus (b) effective as of the
end of each fiscal quarter subsequent to December 31, 1995 for which
Consolidated Net Income is a positive amount, twenty-five per cent
(25%) of Consolidated Net Income for such fiscal quarter, such
increases pursuant to this clause (b) to be fully cumulative for all
such fiscal quarters and not to be reduced on account of a negative
amount of Consolidated Net Income in any other fiscal quarter or
quarters; and
(c) not allow as at any date the aggregate amount of
investments by the Borrower in, net advances by the Borrower to, or
receivables due to the Borrower from, GATX and its Subsidiaries (other
than the Borrower and Subsidiaries of the Borrower) to exceed
sixty-five per cent (65.0%) of Consolidated Tangible Net Worth.
For the purposes of this Section 5.8, Consolidated Tangible Net Worth at any
date during a fiscal quarter will be deemed to be the Consolidated Tangible Net
Worth calculated as at the end of the most recently ended fiscal quarter, except
that such calculation will be adjusted to reflect (x) write-offs and similar
special charges publicly announced by the Borrower during such fiscal quarter
and (y) any Restricted Payments made during such fiscal quarter.
SECTION 5.9. Mergers, Etc. The Borrower will not (i) consolidate
or merge with or into any other Person or (ii) sell, lease or otherwise
transfer, directly or indirectly, all or substantially all of the assets of the
Borrower and its Subsidiaries, taken as a whole, to any other Person, provided
that the Borrower may merge with another Person if (x) the Borrower is the
corporation surviving such merger and (y) immediately after giving effect to
such merger, no Default shall have occurred and be continuing.
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<PAGE>
SECTION 5.10. Negative Pledge. The Borrower will not, nor will
it permit any Subsidiary to, create, assume or suffer to exist any Lien in, of
or on the property of the Borrower or any of its Subsidiaries, except:
(a) Liens existing on the date of this Agreement and set forth on
Schedule 5.10 securing Indebtedness outstanding on the date of this
Agreement;
(b) any Lien existing on any asset of any Person at the time such
Person becomes a Subsidiary and not created in contemplation of such event;
(c) any Lien on any asset securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring such asset; provided that such Lien attaches to such asset
concurrently with or within 18 months after the acquisition thereof;
(d) any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Borrower or a Subsidiary
and not created in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Subsidiary and not created in contemplation of
such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding or any Indebtedness secured by any Lien permitted by any of the
foregoing clauses of this Section; provided that such Indebtedness is not
increased and is not secured by any additional assets;
(g) Liens securing judgments in an aggregate amount at any date
not to exceed $150,000,000;
(h) Liens arising in the ordinary course of its business
(including, without limitation, Liens for taxes, assessments or government
charges; statutory and contractual landlords' liens under leases; Liens in
favor of customs and revenue authorities arising as a matter of law to
secure the payment of customs duties; and Liens arising out of claims under
any Environmental Law provided such Liens are being contested in good faith
and that enforcement of such Liens has been stayed or not commenced) which
(i) do not secure Indebtedness and (ii) do not in the aggregate materially
detract from the value or materially impair the use of the assets of the
Borrower and its Subsidiaries, taken as a whole; and
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<PAGE>
(i) Liens not otherwise permitted by the foregoing clauses of this
Section securing Indebtedness in an aggregate principal or face amount at
any date not to exceed 50% of Consolidated Net Worth.
SECTION 5.11. Use of Proceeds. The proceeds of the Loans
constituting any Borrowing may be used as a back-up for the Borrower's
commercial paper program and for working capital and general corporate purposes.
None of such proceeds will be used in violation of Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System.
SECTION 5.12. Certain Transfers to Subsidiaries of the Borrower.
Notwithstanding any other provision hereof, the Borrower will not sell, convey
or otherwise transfer any interest in any assets of the type identified on any
balance sheet of the Borrower as property, plant or equipment, which assets were
owned by the Borrower on March 31, 1996, to any of its Subsidiaries, whether by
contribution to capital or any other means, direct or indirect, if the book
value of such assets on the date of such sale, conveyance or transfer, combined
with the book value of all such assets subject to any previous or concurrent
such sales, conveyances or transfers is in excess of ten per cent (10%) of the
aggregate book value of all such assets owned by the Borrower on March 31, 1996.
SECTION 5.13. Transactions with Affiliates. The Borrower will not,
and will not permit any Subsidiary to directly or indirectly, pay any funds to
or for the account of, make any Investment in, lease, sell, transfer or
otherwise dispose of any assets, tangible or intangible, to, or participate in,
or effect, any transaction with, any Affiliate except on an arm's-length basis
on terms no less favorable to the Borrower or such Subsidiary than could have
been obtained from a third party who was not an Affiliate; provided that the
foregoing provisions of this Section shall not prohibit (i) any such Person from
declaring or paying any lawful dividend so long as, after giving effect thereto,
no Default shall have occurred and be continuing or (ii) any such transactions
which in the aggregate could not have a Material Adverse Effect.
ARTICLE 6
DEFAULTS
Upon the occurrence and during the continuance of any of the following
specified events (each an "Event of Default"):
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SECTION 6.1. Payments. The Borrower shall fail to pay when due
(including, without limitation, by mandatory prepayment) any principal of the
Loans made to the Borrower; the Borrower shall fail to pay any interest on the
Loans made to the Borrower within five (5) Domestic Business Days of the date
when due (including interest due with respect to any mandatory prepayment of
principal); or the Borrower shall fail to pay within five (5) Domestic Business
Days after the due date thereof any fee or any other amount payable hereunder,
unless (solely in the case of any such other amount payable) contested in good
faith in appropriate proceedings; or
SECTION 6.2. Covenants Without Notice. The Borrower shall fail
to observe or perform any covenant or agreement contained in Section 5.8, 5.9,
5.10, 5.11 or 5.12; or
SECTION 6.3. Other Covenants. The Borrower shall fail to observe
or perform any covenant or agreement, other than those referred to in Sections
6.1 and 6.2; provided, that if such failure is capable of being remedied, such
failure shall not constitute a Default until thirty (30) days after the earlier
of (i) the Borrower's obtaining actual knowledge thereof, or (ii) written notice
thereof having been given to the Borrower by any Bank or the Administrative
Agent; or
SECTION 6.4. Representations. Any representation, warranty or
statement made herein or otherwise in writing or deemed (pursuant to Section
3.2) to be made by the Borrower or any of its officers under or in connection
with this Agreement shall have been or shall be incorrect in any material
respect when made or deemed to be made; or
SECTION 6.5. Non-Payments of Other Indebtedness. The Borrower or
any of its Subsidiaries shall fail to make any payment of principal of or
interest on any Material Indebtedness of the Borrower (other than any
Indebtedness under this Agreement) or such Subsidiary within three (3) Domestic
Business Days of the date when due (whether at stated maturity, on demand or
otherwise) after giving effect to any applicable grace period; or
SECTION 6.6. Defaults Under Other Agreements. The Borrower or any
of its Subsidiaries shall fail to observe or perform any financial covenant
contained in any agreement or instrument relating to any of its Material
Indebtedness within any applicable grace period, if the effect of such failure
is to accelerate, or to permit the holder of such Indebtedness or any other
Person to accelerate, the maturity of such Indebtedness; or any such
Indebtedness shall be required to be prepaid (other than by a regularly
scheduled required prepayment and other than in connection with events of the
type described in Article 8) in whole or in part, by acceleration or otherwise,
prior to its stated maturity; or
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<PAGE>
SECTION 6.7. Failure to Pay, Etc. The Borrower or any of its
Subsidiaries shall fail to pay, or shall state in writing or by authorized
public announcement that it shall not or is unable to pay, its debts generally
as they become due; or
SECTION 6.8. Bankruptcy. The Borrower or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy" as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against the Borrower or any of its Subsidiaries and the petition is not
controverted within twenty (20) days, or is not dismissed within sixty (60)
days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or any substantial
part of the property of the Borrower or any of its Subsidiaries; or the Borrower
or any of its Subsidiaries commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to the Borrower or such Subsidiary or there is
commenced against the Borrower or any of its Subsidiaries any such proceeding
which remains undismissed for a period of sixty (60) days; or the Borrower or
any of its Subsidiaries is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or the
Borrower or any of its Subsidiaries suffers any appointment of any custodian or
the like for it or any substantial part of its property to continue undischarged
or unstayed for a period of sixty (60) days; or the Borrower or any of its
Subsidiaries makes a general assignment for the benefit of creditors; or the
Borrower or any of its Subsidiaries shall by any act or conduct indicate its
consent to, approval of or acquiescence in any of the foregoing; or any
corporate action is taken by the Borrower or any of its Subsidiaries for the
purpose of effecting any of the foregoing; or
SECTION 6.9. ERISA. A Pension Plan shall fail to maintain the
minimum funding standard required by Section 412 of the Code for any plan year
or a waiver of such standard is sought or granted under Section 412(d), or a
Pension Plan is, shall have been or is likely to be, terminated or the subject
of termination proceedings under ERISA, or the Borrower, any Subsidiary of the
Borrower or an ERISA Affiliate has incurred or is likely to incur a liability to
or on account of a Plan, and there shall result from any such event or events
either a liability or a material risk of incurring a liability which will have a
Material Adverse Effect; or
SECTION 6.10. Judgments. A judgment or order for the payment of
money in excess of $25,000,000 or that otherwise could reasonably be expected to
have a Material Adverse Effect shall be rendered against the Borrower or any of
its Subsidiaries and such judgment or order shall continue unsatisfied (in the
case of a
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<PAGE>
money judgment), uncovered by insurance adequate in amount in the judgment of
the Required Banks to cover the portion of such judgment in excess of
$25,000,000, and in effect for a period of thirty (30) days during which
execution shall not be effectively stayed or deferred (whether by action of a
court, by agreement or otherwise); or
SECTION 6.11. Change of Control of the Borrower. GATX shall
sell, lease or otherwise dispose of or encumber any of the shares of any class
of the capital stock of the Borrower;
then, and in any such event, and at any time thereafter, if such event shall
then be continuing, the Administrative Agent, upon the written or telex request
of the Required Banks, shall, by written notice to the Borrower, take any or all
of the following actions, without prejudice to the rights of the Administrative
Agent, any Bank or the holder of any Note to enforce its claims against the
Borrower: (i) declare the Commitments terminated, whereupon the Commitment of
each Bank shall terminate immediately and any facility fee shall forthwith
become due and payable without any other notice of any kind; or (ii) declare the
principal of and any accrued interest on the Loans, and all other amounts owing
hereunder, to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; provided, that, if an Event of Default
specified in Section 6.8 shall occur with respect to the Borrower, the result
which would occur upon the giving of written notice by the Administrative Agent
to the Borrower, as specified in clauses (i) and (ii) above, shall occur
automatically without the giving of any such notice.
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ARTICLE 7
THE AGENTS
SECTION 7.1. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to appoint and authorize, each Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to such Agent by the terms hereof or thereof,
together with all such powers as are reasonably incidental thereto.
Notwithstanding the use of the defined terms "Administrative Agent" or
"Documentation Agent", it is expressly understood and agreed that none of the
Agents shall have any fiduciary responsibilities to any Bank by reason of this
Agreement, and that the Agents are merely acting as representatives of the Banks
with only those duties as are expressly set forth in this Agreement. In their
capacity as the Banks' contractual representatives, the Agents (i) do not hereby
assume any fiduciary duties to any of the Banks and (ii) are acting as
independent contractors, the rights and duties of which are limited to those
expressly set forth in this Agreement.
SECTION 7.2. Agents and Affiliates. Each of First Chicago and
Morgan shall have the same rights and powers under this Agreement as any other
Bank and may exercise or refrain from exercising the same as though it were not
an Agent, and each of First Chicago and Morgan and their affiliates may accept
deposits from, lend money to, and generally engage in any kind of business with
the Borrower or any Subsidiary or affiliate of the Borrower as if it were not an
Agent.
SECTION 7.3. Action by Agents. The obligations of each Agent
hereunder are only those expressly set forth herein. Each Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with written instructions signed by the Required Banks (or, when
expressly required hereby, all the Banks), and such instructions and any action
taken or failure to act pursuant thereto shall be binding on all of the Banks
and on any holder of a Note. The Banks hereby acknowledge that none of the
Agents shall be under any duty to take any discretionary action permitted to be
taken by it pursuant to the provisions of this Agreement unless such Agent shall
be requested in writing to do so by the Required Banks. Each of the Agents shall
be fully justified in failing or refusing to take any action hereunder unless
such Agent shall first be indemnified to its satisfaction by the Banks pro rata
in proportion to their Commitments (or, after termination of the Commitments, in
proportion to their outstanding Loans) against any and all liability, cost and
expense that such Agent may incur by reason of taking or continuing to take any
such action. The Administrative Agent shall not be deemed to have knowledge or
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notice of the occurrence of a Default unless the Administrative Agent has
received written notice from a Bank or the Borrower referring to this Agreement,
describing such Default and stating that such notice is a "notice of default".
In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give prompt notice thereof to the Banks. Without
limiting the generality of the foregoing, the Administrative Agent shall not be
required to take any action with respect to any Default, except as expressly
provided in the preceding sentence or Article 6.
SECTION 7.4. Employment of Agents and Experts. Each of the Agents
may execute any of its duties hereunder by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Banks, except as to money
or securities received by it or its authorized agents, for the default or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. Each Agent may consult with legal counsel (who may be counsel
for the Borrower), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts. Each of the Agents shall be entitled to rely upon any Note, notice,
consent, certificate, affidavit, letter, telegram, statement, paper or document
(which may be a telex, facsimile transmission or similar writing) believed by it
to be genuine and correct and to have been signed or sent by the proper Person
or Persons.
SECTION 7.5. Liability of Agents. Neither of the Agents nor any of
their affiliates nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required Banks (or, when
expressly required hereby, all the Banks) or (ii) in the absence of its own
gross negligence or willful misconduct. Neither of the Agents nor any of their
affiliates nor any of their respective directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into or verify
(i) any statement, warranty or representation made in connection with this
Agreement or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of the Borrower; (iii) the satisfaction of any
condition specified in Article 3, except receipt of items required to be
delivered to such Agent; or (iv) the validity, effectiveness or genuineness of
this Agreement or any Notes or other instrument or writing furnished in
connection herewith.
SECTION 7.6. Indemnification. Each Bank shall, ratably in
accordance with its Commitment (or, after termination of the Commitments, in
accordance with its outstanding Loans), indemnify each of the Agents, their
affiliates and their respective directors, officers, agents and employees (to
the extent not reimbursed by the Borrower) against any cost, reasonable expense
(including reasonable counsel fees and disbursements), claim, demand, action,
loss or liability that such indemnitees may suffer or incur in connection with
this Agreement or any action taken or omitted by
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such indemnitees hereunder; provided that no Bank shall be liable to any
indemnitee for any of the foregoing to the extent it arises from the gross
negligence or willful misconduct of such indemnitee.
SECTION 7.7. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon any Agent or other Bank, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also acknowledges
that it will, independently and without reliance upon any Agent or other Bank,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking any
action under this Agreement.
SECTION 7.8. Successor Administrative Agent. The Administrative
Agent may resign at any time by giving notice thereof to the Banks and the
Borrower. Upon any such resignation, the Required Banks shall have the right to
appoint a successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed by the Required Banks, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent gives notice
of resignation, then the retiring Administrative Agent may, on behalf of the
Banks, appoint a successor Administrative Agent, which shall be a commercial
bank organized or licensed under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$50,000,000. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation hereunder as Administrative Agent,
the provisions of this Article shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent.
SECTION 7.9. Agents' Fees. The Borrower shall pay to each Agent
for its own account auction, administrative and other fees in the amounts and at
the times previously agreed upon between the Borrower and such Agent.
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ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.1. Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any
Euro-Dollar Loan or Money Market LIBOR Loan:
(a) the Administrative Agent is advised by the Reference Banks
that deposits in dollars (in the applicable amounts) are not being offered
to the Reference Banks in the London interbank market for such Interest
Period, or
(b) in the case of a Euro-Dollar Borrowing, Banks having 50% or
more of the aggregate amount of the Commitments advise the Administrative
Agent that the London Interbank Offered Rate as determined by the
Administrative Agent will not adequately and fairly reflect the cost to
such Banks of funding their Euro-Dollar Loans for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist, the
obligations of the Banks to make Euro-Dollar Loans shall be suspended. Unless
the Borrower notifies the Administrative Agent at least two Domestic Business
Days before the date of any Fixed Rate Borrowing for which a Notice of Borrowing
has previously been given that it elects not to borrow on such date, (i) if such
Fixed Rate Borrowing is a Euro-Dollar Borrowing, such Borrowing shall instead be
made as a Base Rate Borrowing and (ii) if such Fixed Rate Borrowing is a Money
Market LIBOR Borrowing, the Money Market LIBOR Loans comprising such Borrowing
shall bear interest for each day from and including the first day to but
excluding the last day of the Interest Period applicable thereto at the Base
Rate for such day.
SECTION 8.2. Illegality. If, on or after the date of this
Agreement, the adoption of any applicable law, rule or regulation, or any change
in any applicable law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Euro-Dollar Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Bank (or its Euro-Dollar Lending Office) to make, maintain or fund its
Euro-Dollar Loans and such Bank shall so notify the Administrative Agent, the
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Administrative Agent shall forthwith give notice thereof to the other Banks and
the Borrower, whereupon until such Bank notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Bank to make Euro-Dollar Loans shall be
suspended. Before giving any notice to the Administrative Agent pursuant to this
Section, such Bank shall designate a different Euro-Dollar Lending Office if
such designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank
shall determine that it may not lawfully continue to maintain and fund any of
its outstanding Euro-Dollar Loans to maturity and shall so specify in such
notice, the Borrower shall immediately prepay in full the then outstanding
principal amount of each such Euro-Dollar Loan, together with accrued interest
thereon. Concurrently with prepaying each such Euro-Dollar Loan, the Borrower
shall borrow a Base Rate Loan in an equal principal amount from such Bank (on
which interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base Rate
Loan.
SECTION 8.3. Increased Cost and Reduced Return. (a) If on or after
(x) the date hereof, in the case of any Committed Loan or any obligation to make
Committed Loans or (y) the date of the related Money Market Quote, in the case
of any Money Market Loan, the adoption of any applicable law, rule or
regulation, or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall impose, modify or
deem applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
any such requirement with respect to which such Bank is entitled to compensation
during the relevant Interest Period under Section 2.15), special deposit,
insurance assessment or similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Bank (or its Applicable Lending
Office) or shall impose on any Bank (or its Applicable Lending Office) or the
London interbank market any other condition affecting its Fixed Rate Loans, its
Note (where applicable) or its obligation to make Fixed Rate Loans and the
result of any of the foregoing is to increase the cost to such Bank (or its
Applicable Lending Office) of making or maintaining any Fixed Rate Loan, or to
reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Note (where
applicable) with respect thereto, by an amount deemed by such Bank to be
material, then, within 15 days after demand by such Bank (with a copy to the
Administrative Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank for such increased cost or
reduction.
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(b) If any Bank shall have determined that, after the date hereof,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days after
demand by such Bank (with a copy to the Administrative Agent), the Borrower
shall pay to such Bank such additional amount or amounts as will compensate such
Bank (or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Bank to compensation pursuant to this
Section and will designate a different Lending Office if such designation will
avoid the need for, or reduce the amount of, such compensation and will not, in
the judgment of such Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank (together with such further information as the Borrower
may reasonably request) claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution methods.
SECTION 8.4. Taxes. (a) For the purposes of this Section 8.4,
the following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by the
Borrower pursuant to this Agreement or under any Note, and all liabilities with
respect thereto, excluding (i) in the case of each Bank and Agent, taxes imposed
on its income, and franchise or similar taxes imposed on it, by a jurisdiction
under the laws of which such Bank or Agent (as the case may be) is organized or
in which its principal executive office is located or, in the case of each Bank,
in which its Applicable Lending Office is located and (ii) in the case of each
Bank, any United States withholding tax imposed on such payments but only to the
extent that such Bank is subject to United States withholding tax at the time
such Bank first becomes a party to this Agreement.
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"Other Taxes" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or levies,
which arise from any payment made pursuant to this Agreement or under any Note
or from the execution or delivery of, or otherwise with respect to, this
Agreement or any Note.
(b) Any and all payments by the Borrower to or for the account of
any Bank or Agent hereunder or under any Note shall be made without deduction
for any Taxes or Other Taxes; provided that, if the Borrower shall be required
by law to deduct any Taxes or Other Taxes from any such payments, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) such Bank or Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions, (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) the Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 9.1, the original or
a certified copy of a receipt evidencing payment thereof.
(c) The Borrower agrees to indemnify each Bank and Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by such Bank or Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be paid within 15 days after such Bank or
Agent (as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Bank listed on the signature pages hereof and on
or prior to the date on which it becomes a Bank in the case of each other Bank,
and from time to time thereafter if requested in writing by the Borrower (but
only so long as such Bank remains lawfully able to do so), shall provide the
Borrower and the Administrative Agent with Internal Revenue Service form 1001 or
4224, as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Bank is entitled to benefits under an income tax
treaty to which the United States is a party which exempts the Bank from United
States withholding tax or reduces the rate of withholding tax on payments of
interest for the account of such Bank or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States.
(e) For any period with respect to which a Bank has failed to
provide the Borrower or the Administrative Agent with the appropriate form
pursuant to Section
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<PAGE>
8.4(d) (unless such failure is due to a change in treaty, law or regulation
occurring subsequent to the date on which such form originally was required to
be provided), such Bank shall not be entitled to indemnification under Section
8.4(b) or (c) with respect to Taxes imposed by the United States; provided that
if a Bank, which is otherwise exempt from or subject to a reduced rate of
withholding tax, becomes subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or
for the account of any Bank pursuant to this Section, then such Bank will change
the jurisdiction of its Applicable Lending Office if, in the reasonable judgment
of such Bank, such change (i) will eliminate or reduce any such additional
payment which may thereafter accrue and (ii) is not otherwise disadvantageous to
such Bank.
SECTION 8.5. Base Rate Loans Substituted for Affected Euro-Dollar
Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans has been
suspended pursuant to Section 8.2 or (ii) any Bank has demanded compensation
under Section 8.3(a) with respect to its Euro-Dollar Loans and the Borrower
shall, by at least five Euro-Dollar Business Days' prior notice to such Bank
through the Administrative Agent, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such Bank notifies the
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as
Euro-Dollar Loans shall be made instead as Base Rate Loans (on which
interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks); and
(b) after each of its Euro-Dollar Loans has been repaid, all
payments of principal which would otherwise be applied to repay such
Euro-Dollar Loans shall be applied to repay its Base Rate Loans instead.
SECTION 8.6. Replacement of Bank. (a) If (i) the obligation of any
Bank to make Euro-Dollar Loans has been suspended pursuant to Section 8.2 or
(ii) any Bank has demanded compensation under Section 8.3 or 8.4, the Borrower
may with the prior written consent of the Administrative Agent (such consent not
to be unreasonably withheld) obtain the agreement of a bank or banks (which may
be one or more of the Banks) to assume the Commitment of and purchase any Loans
made by such Bank.
(b) If any Bank (an "Acquiror Bank") acquires more than fifty per
cent (50.0%) of the shares of any class of the capital stock of, or otherwise
acquires control
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of, another Bank (an "Acquiree Bank"), whether by merger, consolidation or
otherwise, then the Borrower may with the prior written consent of the
Administrative Agent (such consent not to be unreasonably withheld) obtain the
agreement of a bank or banks (which may be one or more of the Banks) to assume
the Commitment of and purchase any Loans made by the Acquiror Bank or Acquiree
Bank.
(c) Each purchase made pursuant to this Section 8.6 shall be at a
purchase price equal to the principal amount of all of the non-continuing Bank's
outstanding Loans plus any accrued but unpaid interest thereon and the accrued
but unpaid facility fees in respect of such Bank's Commitment hereunder plus
such amount, if any, as would be payable pursuant to Section 2.13 if the
outstanding Loans of such Bank were prepaid in their entirety on the date of
consummation of the purchase plus any other amount then payable to or for the
account of such Bank hereunder.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (a) in the case of the Borrower or any Agent, at its address, facsimile
number or telex number set forth on the signature pages hereof, (b) in the case
of any Bank, at its address, facsimile number or telex number set forth in its
Administrative Questionnaire or (c) in the case of any party, such other
address, facsimile number or telex number as such party may hereafter specify
for the purpose by notice to the Administrative Agent and the Borrower. Each
such notice, request or other communication shall be effective (i) if given by
telex, when such telex is transmitted to the telex number specified in this
Section and the appropriate answerback is received, (ii) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received, (iii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iv) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the
Administrative Agent under Article 2 or Article 8 shall not be effective until
received.
SECTION 9.2. No Waivers. No failure or delay by any Agent or
Bank in exercising any right, power or privilege hereunder or under any Note
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The
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rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 9.3. Expenses; Indemnification. (a) The Borrower shall pay
(i) all out-of-pocket expenses of the Agents (including the fees and expenses of
Davis Polk & Wardwell, special counsel for the Agents) in connection with the
preparation and administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by
each Agent and Bank, including (without duplication) the fees and disbursements
of outside counsel and the allocated cost of inside counsel, in connection with
such Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify each Agent and Bank, their
respective affiliates and the respective directors, officers, agents and
employees of the foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in connection
with any investigative, administrative or judicial proceeding (whether or not
such Indemnitee shall be designated a party thereto) brought or threatened
relating to or arising out of this Agreement or any actual or proposed use of
proceeds of Loans hereunder; provided that no Indemnitee shall have the right to
be indemnified hereunder for such Indemnitee's own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
SECTION 9.4. Sharing of Set-Offs. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest then
due and payable with respect to any Loan which is greater than the proportion
received by any other Bank in respect of the aggregate amount of principal and
interest then due and payable to such other Bank with respect to such Loan, the
Bank receiving such proportionately greater payment shall purchase such
participations in the Loans held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Loans held by the Banks shall be shared by the
Banks pro rata; provided that nothing in this Section shall impair the right of
any Bank to exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of indebtedness of the
Borrower other than its indebtedness hereunder. The Borrower agrees, to the
fullest extent it may effectively do so under applicable law, that any holder of
a participation in a Loan, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and other rights
with respect to such participation as fully as if such
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holder of a participation were a direct creditor of the Borrower in the amount
of such participation.
SECTION 9.5. Amendments and Waivers . Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower and the Required Banks (and, if the
rights or duties of any Agent are affected thereby, by such Agent); provided
that no such amendment or waiver shall, unless signed by all the Banks, (i)
except as contemplated by Section 2.16 or 8.6, increase or decrease the
Commitment of any Bank (except for a ratable decrease in the Commitments of all
Banks) or subject any Bank to any additional obligation, (ii) reduce the
principal of or rate of interest on any Loan or any fees hereunder, (iii)
postpone the date fixed for any payment of principal of or interest on any Loan
or any fees hereunder or for the scheduled termination of any Commitment or (iv)
change any provision of this Section 9.5 or the percentage of the Commitments or
of the aggregate unpaid principal amount of the Loans, or the number of Banks,
which shall be required for the Banks or any of them to take any action under
this Section or any other provision of this Agreement.
SECTION 9.6. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Administrative Agent, such Bank shall remain responsible for
the performance of its obligations hereunder, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement. Any
agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement; provided that such participation agreement may provide that such
Bank will not agree to any modification, amendment or waiver of this Agreement
described in clause (i), (ii), or (iii) of Section 9.5 without the consent of
the Participant. The Borrower agrees that each Participant shall, to the extent
provided in its participation agreement, be entitled to the benefits of Article
8 with respect to its participating interest. An assignment or other transfer
which is not permitted by
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<PAGE>
subsection (c) or (d) below shall be given effect for purposes of this Agreement
only to the extent of a participating interest granted in accordance with this
subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (equivalent to an
initial Commitment of not less than $10,000,000) of all, of its rights and
obligations under this Agreement, and such Assignee shall assume such rights and
obligations, pursuant to an Assignment and Assumption Agreement in substantially
the form of Exhibit G hereto executed by such Assignee and such transferor Bank,
with (and subject to) the subscribed consent of the Borrower and the
Administrative Agent, which consents shall not be unreasonably withheld;
provided that if an Assignee is an affiliate of such transferor Bank or was a
Bank immediately prior to such assignment, no such consent shall be required;
and provided further that such assignment may, but need not, include rights of
the transferor Bank in respect of outstanding Money Market Loans. Upon execution
and delivery of such instrument and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between such transferor
Bank and such Assignee, such Assignee shall be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank with a Commitment as set
forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the consummation
of any assignment pursuant to this subsection (c), the transferor Bank, the
Administrative Agent and the Borrower shall make appropriate arrangements so
that, if requested by the Assignee, a Note is issued to the Assignee. In
connection with any such assignment, the transferor Bank shall pay to the
Administrative Agent an administrative fee for processing such assignment in the
amount of $2,500. If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall deliver to the Borrower
and the Administrative Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with Section
8.4.
(d) Any Bank may at any time assign all or any portion of its
rights under this Agreement or in any Note to a Federal Reserve Bank. No such
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's
rights shall be entitled to receive any greater payment under Section 8.3 or 8.4
than such Bank would have been entitled to receive with respect to the rights
transferred, unless such transfer is made with the Borrower's prior written
consent or by reason of the provisions of Section 8.2, 8.3 or 8.4 requiring such
Bank to designate a different Applicable Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
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SECTION 9.7. Collateral. Each of the Banks represents to the
Administrative Agent and each of the other Banks that it in good faith is not
relying upon any "margin stock" (as defined in Regulation U) as collateral in
the extension or maintenance of the credit provided for in this Agreement.
SECTION 9.8. Governing Law; Submission to Jurisdiction. This
Agreement and any Note issued hereunder shall be governed by and construed in
accordance with the laws of the State of New York. The Borrower hereby submits
to the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York State court sitting in New
York City for purposes of all legal proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby. The Borrower irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
SECTION 9.9. Counterparts; Integration. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter thereof.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE
BORROWER, THE AGENTS AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.11. Confidentiality. Each Bank agrees to hold any
confidential information which it may receive from the Borrower pursuant to this
Agreement in confidence, except for disclosure (i) to its affiliates and to
other Banks and their respective affiliates, (ii) to its subsidiaries, (iii) to
legal counsel, accountants and other professional advisors to such Bank, (iv) to
regulatory officials, (v) to any Person as requested pursuant to or as required
by law, regulation or legal process, (vi) to any Person in connection with any
legal proceeding to which such Bank is a party and (vii) to any actual or
proposed Assignee or Participant of all or part of its rights hereunder which
has agreed in writing to be bound by the provisions of this Section 9.11.
27009/201/CA/gatc.morgan
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
GENERAL AMERICAN TRANSPORTATION
CORPORATION
By /s/ Brian A. Kenney
------------------------
Name: Brian A. Kenney
Title: Treasurer
Address: 500 West Monroe Street
Chicago, IL 60661
Telex:
Facsimile: (312) 621-6645
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as
Documentation Agent
By /s/ Charles H. King
-------------------------
Name: Charles H. King
Title: Vice President
Address: 60 Wall Street
New York, NY 10260
Telex: 177615 MGT UT
Facsimile: (212) 648-5336
THE FIRST NATIONAL BANK OF
CHICAGO, as Administrative Agent
By /s/ Raymond M. Neihengen, Jr.
-----------------------------
Name: Raymond M. Neihengen, Jr.
Title: Authorized Agent
Address: One First National Plaza
Chicago, IL 60670
Telex: 190201
Facsimile: (312) 732-3246
27009/201/CA/gatc.morgan
<PAGE>
Commitment
- -----------
$31,500,000 THE FIRST NATIONAL BANK
OF CHICAGO
By /s/ Raymond M. Neihengen, Jr.
------------------------------
Name: Raymond M. Neihengen, Jr.
Title: Authorized Agent
$31,500,000 MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By /s/ Charles H. King
----------------------------
Name: Charles H. King
Title: Vice President
$24,000,000 ABN AMRO BANK N.V.,
CHICAGO BRANCH
By /s/ Frederick P. Engler
---------------------------
Name: Frederick P. Engler
Title: Group Vice President
By /s/ David C. Shapiro
---------------------------
Name: David C. Shapiro
Title: Vice President
27009/201/CA/gatc.morgan
<PAGE>
$24,000,000 BANK OF MONTREAL
By /s/ Randall B. Becker
--------------------------
Name: Randall B. Becker
Title: Managing Director
$24,000,000 THE BANK OF NEW YORK
By /s/ John M. Lokay, Jr.
-------------------------
Name: John M. Lokay, Jr.
Title: Vice President
$24,000,000 BANKERS TRUST COMPANY
By /s/ Mary Zadroga
------------------------
Name: Mary Zadroga
Title: Vice President
$24,000,000 CHEMICAL BANK
By /s/ Julie S. Long
------------------------
Name: Julie S. Long
Title: Vice President
27009/201/CA/gatc.morgan
<PAGE>
$24,000,000 CITIBANK, N.A.
By /s/ David L. Harris
------------------------
Name: David L. Harris
Title: Vice President
$24,000,000 THE INDUSTRIAL BANK OF JAPAN,
LTD., CHICAGO BRANCH
By /s/ Hiroaki Nakamura
------------------------
Name: Hiroaki Nakamura
Title: Joint General
Manager
$24,000,000 MELLON BANK, N.A.
By /s/ Reginald T. Overton
------------------------
Name: Reginald T. Overton
Title: Vice President
$15,000,000 NATIONSBANK, N.A.
By /s/ Wallace Harris, Jr.
------------------------
Name: Wallace Harris, Jr.
Title: Vice President
27009/201/CA/gatc.morgan
<PAGE>
$15,000,000 ROYAL BANK OF CANADA
By /s/ D. G. Calancie
------------------------
Name: D. G. Calancie
Title: Senior Manager
$15,000,000 SWISS BANK CORPORATION,
CHICAGO BRANCH
By /s/ Alan L. Griffin
------------------------
Name: Alan L. Griffin
Title: Executive Director
By /s/ Thomas Eggenschwiler
------------------------
Name: Thomas Eggenschwiler
Title: Executive Director
Total Commitments
=================
$300,000,000
27009/201/CA/gatc.morgan
<PAGE>
PRICING SCHEDULE
The "Euro-Dollar Margin" or "Facility Fee Rate" for any date is the
rate set forth below in the row opposite such term and in the column
corresponding to the "Status" that applies at such date:
Level I Level II Level III Level IV Level V Level VI
Euro-Dollar 0.1450% 0.160% 0.200% 0.250% 0.3750% 0.500%
Margin
- ------------- -------- --------- ---------- ---------- --------- -----------
Facility Fee 0.080% 0.090% 0.100% 0.1250% 0.1750% 0.250%
Rate
- ------------- -------- --------- ---------- ---------- ---------- ----------
For purposes of this Schedule and the Agreement, the following terms
have the following meanings, subject to the concluding paragraph of this
Schedule:
"Level I Status" applies on any date if on such date the Borrower's
long-term debt is rated A or higher by S&P or A2 or higher by Moody's.
"Level II Status" applies on any date if on such date (i) Level I
Status does not apply and (ii) the Borrower's long-term debt is rated A- or
higher by S&P or A3 or higher by Moody's.
"Level III Status" applies on any date if on such date (i) neither
Level I Status nor Level II Status applies and (ii) the Borrower's long-term
debt is rated BBB+ or higher by S&P or Baa1 or higher by Moody's.
"Level IV Status" applies on any date if on such date (i) none of Level
I Status, Level II Status or Level III Status applies and (ii) the Borrower's
long-term debt is rated BBB or higher by S&P or Baa2 or higher by Moody's.
"Level V Status" applies on any date if on such date (i) none of Level
I Status through Level IV Status applies and (ii) the Borrower's long-term debt
is rated BBB- or higher by S&P and Baa3 or higher by Moody's.
Level VI Status" applies on any date if on such date none of Level I
Status through Level V Status applies.
"Moody's" means Moody's Investors Service Inc.
"Status" refers to the determination of which of Level I Status, Level
II Status, Level III Status, Level IV Status, Level V Status or Level VI Status
exists at any date.
27009/201/CA/gatc.morgan
<PAGE>
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
The credit ratings to be utilized for purposes of this Schedule are
those assigned to the long-term senior unsecured debt of the Borrower without
third-party credit enhancement, and any rating assigned to any other debt of the
Borrower shall be disregarded. The rating in effect at any date is that in
effect at the close of business on such date.
If the Borrower is split-rated and the ratings differential is one
level, the higher of the two ratings will apply (e.g., A/A3 results in Level I
Status and BBB+/Baa2 results in Level III Status). If the Borrower is
split-rated and the ratings differential is more than one level, the average of
the two ratings (or the higher of two intermediate ratings) shall be used (e.g.,
A/Baa2 results in Level II Status and A-/Baa2 results in Level III Status). If,
however, at any date, the Borrower's long-term debt is not rated by both S&P and
Moody's, or is rated below BBB- by S&P or below Baa3 by Moody's, then Level VI
shall apply.
<PAGE>
Schedule 5.10
Liens
27009/201/CA/gatc.morgan
<PAGE>
EXHIBIT A - Note
NOTE
New York, New York
----------- --, ----
For value received, GENERAL AMERICAN TRANSPORTATION
CORPORATION, a New York corporation (the "Borrower"), promises to pay to the
order of ______________________ (the "Bank"), for the account of its Applicable
Lending Office, the unpaid principal amount of each Loan made by the Bank to the
Borrower pursuant to the Credit Agreement referred to below on the last day of
the Interest Period relating to such Loan. The Borrower promises to pay interest
on the unpaid principal amount of each such Loan on the dates and at the rate or
rates provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the principal office of The First National Bank
of Chicago in Chicago, Illinois.
All Loans made by the Bank, the respective types and
maturities thereof and all repayments of the principal thereof shall be recorded
by the Bank and, if the Bank so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the foregoing information
with respect to each such Loan then outstanding may be endorsed by the Bank on
the schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided that the failure of the Bank to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Credit
Agreement dated as of May 9, 1996 among General American Transportation
Corporation, the Banks parties thereto, The First National Bank of Chicago, as
Administrative Agent, and Morgan Guaranty Trust Company of New York, as
Documentation Agent (as the same may be amended from time to time, the "Credit
Agreement"). Terms defined in the Credit
27009/201/CA/gatc.morgan
<PAGE>
Agreement are used herein with the same meanings. Reference is made to the
Credit Agreement for provisions for the prepayment hereof and the acceleration
of the maturity hereof.
GENERAL AMERICAN TRANSPORTATION
CORPORATION
By________________________________
Name:
Title:
27009/201/CA/gatc.morgan
<PAGE>
LOANS AND PAYMENTS OF PRINCIPAL
===============================================================================
Amount of
Amount of Principal Notation Made
Date Loan Type of Loan Repaid Maturity Date By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
27009/201/CA/gatc.morgan
<PAGE>
EXHIBIT B - Money Market Quote Request
Form of Money Market Quote Request
----------------------------------
[Date]
To: The First National Bank of Chicago, as Administrative Agent
(the "Administrative Agent")
From: General American Transportation Corporation
Re: Credit Agreement (as the same may be amended from time to
time, the "Credit Agreement") dated as of May 9, 1996 among
General American Transportation Corporation, the Banks parties
thereto, the Administrative Agent and Morgan Guaranty Trust
Company of New York, as Documentation Agent
We hereby give notice pursuant to Section 2.3 of the Credit
Agreement that we request Money Market Quotes for the following proposed Money
Market Borrowing(s):
Date of Borrowing:_____________________
Principal Amount1 Interest Period2
- ----------------- ----------------
$___________
1 Amount must be $5,000,000 or a larger multiple of $1,000,000.
2 Not less than one month (LIBOR Auction) or not less than 7 days (Absolute
Rate Auction), subject to the provisions of the definition of Interest Period.
27009/201/CA/gatc.morgan
<PAGE>
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Terms used herein have the meanings assigned to them in the
Credit Agreement.
GENERAL AMERICAN
TRANSPORTATION CORPORATION
By
------------------------
Name:
Title:
27009/201/CA/gatc.morgan
<PAGE>
EXHIBIT C - Invitation for Money Market Quotes
Form of Invitation for Money Market Quotes
------------------------------------------
To: [Name of Bank]
Re: Invitation for Money Market Quotes to General American Transportation
Corporation (the "Borrower")
Pursuant to Section 2.3 of the Credit Agreement dated as of
May 9, 1996 among General American Transportation Corporation, the Banks parties
thereto, Morgan Guaranty Trust Company of New York, as Documentation Agent, and
the undersigned, as Administrative Agent, we are pleased on behalf of the
Borrower to invite you to submit Money Market Quotes to the Borrower for the
following proposed Money Market Borrowing(s):
Date of Borrowing:_________________
Principal Amount Interest Period
- ---------------- ---------------
$
Such Money Market Quotes should offer a Money Market [Margin]
[Absolute Rate]. [The applicable base rate is the London Interbank Offered
Rate.]
Please respond to this invitation by no later than [2:00 P.M.]
[9:30 A.M.] (Chicago time) on [date].
THE FIRST NATIONAL BANK OF
CHICAGO, as Administrative Agent
By
----------------------
Authorized Officer
27009/201/CA/gatc.morgan
<PAGE>
EXHIBIT D - Money Market Quote
Form of Money Market Quote
--------------------------
To: The First National Bank of Chicago, as Administrative Agent
Re: Money Market Quote to General American Transportation Corporation (the
"Borrower")
In response to your invitation on behalf of the Borrower dated
____________,______, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank:____________________
2. Person to contact at Quoting Bank:
___________________________
3. Date of Borrowing:_____________*
4. We hereby offer to make Money Market Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
- --------- --------- ---------------------------------
$
$
[Provided, that the aggregate principal amount of Money Market Loans
for which the above offers may be accepted shall not exceed
$______________.]**
- ----------
* As specified in the related Invitation.
27009/201/CA/gatc.morgan
<PAGE>
We understand and agree that the offer(s) set forth
above, subject to the satisfaction of the applicable conditions set
forth in the Credit Agreement dated as of May 9, 1996 among General
American Transportation Corporation, the Banks parties thereto, Morgan
Guaranty Trust Company of New York, as Documentation Agent, and
yourselves, as Administrative Agent, irrevocably obligates us to make
the Money Market Loan(s) for which any offer(s) are accepted, in whole
or in part.
Very truly yours,
[NAME OF BANK]
Dated: ____________ By:____________________
Authorized Officer
- ----------
** Principal amount bid for each Interest Period may not exceed principal amount
requested. Specify aggregate limitation if the sum of the individual offers
exceeds the amount the Bank is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
*** Not less than one month or not less than 7 days, as specified in the related
Invitation. No more than five bids are permitted for each Interest Period.
**** Margin over or under the London Interbank Offered Rate determined
for the applicable Interest Period. Specify percentage (to the nearest
1/10,000 of 1%)and specify whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest 1/10,000th of 1%).
27009/201/CA/gatc.morgan
<PAGE>
EXHIBIT E - Opinion of Counsel for the Borrower
OPINION OF
COUNSEL FOR THE BORROWER
------------------------
May 9, 1996
To the Banks and the Agents
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Documentation Agent
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
This opinion is delivered to you pursuant to Section 3.1(b) of
the Credit Agreement dated as of May 9, 1996 (the "Credit Agreement") among
General American Transportation Corporation, a New York corporation (the
"Borrower"), the banks listed on the signature pages thereof (the "Banks"), The
First National Bank of Chicago, as administrative agent (the "Administrative
Agent"), and Morgan Guaranty Trust Company of New York, as documentation agent
(the "Documentation Agent"). I am Assistant Secretary of the Borrower and I have
acted as internal counsel to the Borrower in connection with the preparation,
execution and delivery by the Borrower of the Credit Agreement. Capitalized
terms used herein shall have the meaning given to such terms in the Credit
Agreement.
In my capacity as such internal counsel, I or members of my
staff have examined originals or copies of the Credit Agreement and such
records, documents, agreements and other instruments as in my or their judgment
are necessary or appropriate to enable me to render the opinions expressed
below. In such examination, the genuineness of all signatures other than
signatures on behalf of the Borrower, the authenticity of all documents
submitted as originals and the conformity to originals of all documents
submitted as copies have been assumed.
On the basis of the foregoing and in reliance thereon, I am of
the opinion that as of the date hereof:
27009/201/CA/gatc.morgan
<PAGE>
a) The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York, has the
corporate power and authority to conduct the business in which it is engaged,
and is duly qualified and is in good standing as a foreign corporation under the
laws of each jurisdiction where its failure to so qualify or be in good standing
would have a Material Adverse Effect.
b) The execution, delivery and performance by the Borrower of
the Credit Agreement (i) are within the corporate power of the Borrower, (ii)
have been duly authorized by all necessary corporate action, (iii) do not
violate or create a default under any law, rule or regulation, or the
Certificate of Incorporation or By-laws of the Borrower and (iv) do not violate
or create a default under any contractual provision known to me, after due
inquiry, binding on or affecting the Borrower or its property.
c) No authorization, consent, license, or approval or other
action by, and no notice or declaration to or filing or registration with, any
court, governmental authority, commission, board, regulatory body, bureau or
agency is required in connection with the execution, delivery and performance by
the Borrower of the Credit Agreement.
d)The Credit Agreement has been duly executed and delivered
by the Borrower.
e) The Credit Agreement constitutes a valid and binding
agreement of the Borrower enforceable in accordance with its terms except as the
same may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity.
f) There is no action, suit or proceeding, or any governmental
investigation or any arbitration, in each case pending or, to the best of my
knowledge, threatened against the Borrower, any of its Subsidiaries, or any
material property of any thereof before any court or arbitrator or any
governmental or administrative body, agency or official which, if adversely
determined, could have a Material Adverse Effect.
I am qualified to practice law in the State of Illinois and do
not purport to be an expert on, or express any opinions concerning the laws of
any jurisdiction other than the laws of the State of Illinois, the federal laws
of the United States and the corporation law of the State of New York. Insofar
as the opinion in paragraph (e)
27009/201/CA/gatc.morgan
<PAGE>
above involves other laws of the State of New York, I have assumed, with your
consent, that such laws are the same as the laws of the State of Illinois.
I am furnishing this opinion to you solely for your benefit
and this opinion is not to be used, circulated, quoted or otherwise referred to
for any other purpose without my prior written consent; provided, that this
opinion may be relied upon by any Bank that becomes a Bank after the date hereof
in accordance with the terms and conditions of the Credit Agreement.
Very truly yours,
27009/201/CA/gatc.morgan
<PAGE>
EXHIBIT F - Opinion of Special Counsel for the Agents
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENTS
--------------------------------------
May 9, 1996
To the Banks and the Agents
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Documentation Agent
60 Wall Street
New York, New York 10260
Ladies and Gentleman:
We have participated in the preparation of the Credit
Agreement (the "Credit Agreement") dated as of May 9, 1996 among General
American Transportation Corporation, a New York corporation (the "Borrower"),
the banks listed on the signature pages thereof (the "Banks"), Morgan Guaranty
Trust Company of New York, as Documentation Agent (the "Documentation Agent"),
and The First National Bank of Chicago, as Administrative Agent (the
"Administrative Agent") and have acted as special counsel for the Agents for the
purpose of rendering this opinion pursuant to Section 3.1(c) of the Credit
Agreement. Terms defined in the Credit Agreement are used herein as therein
defined.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
27009/201/CA/gatc.morgan
<PAGE>
1. The execution, delivery and performance by the Borrower of
the Credit Agreement are within the Borrower's corporate powers and have been
duly authorized by all necessary corporate action.
2. The Credit Agreement constitutes a valid and binding
agreement of the Borrower enforceable in accordance with its terms except as the
same may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity.
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York and the
federal laws of the United States of America. In giving the foregoing opinion,
we express no opinion as to the effect (if any) of any law of any jurisdiction
(except the State of New York) in which any Bank is located which limits the
rate of interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection with the
above matter. This opinion may not be relied upon by you for any other purpose
or relied upon by any other Person without our prior written consent.
Very truly yours,
27009/201/CA/gatc.morgan
<PAGE>
EXHIBIT G - Assignment and Assumption Agreement
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of ___________,____among (NAME OF ASSIGNOR)
(the "Assignor"), (NAME OF ASSIGNEE) (the "Assignee"), [GENERAL AMERICAN
TRANSPORTATION CORPORATION (the "Borrower") and THE FIRST NATIONAL BANK OF
CHICAGO, as Administrative Agent (the "Agent")].
WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the Credit Agreement dated as of May 9, 1996 among the
Borrower, the Assignor and the other Banks party thereto, as Banks, Morgan
Guaranty Trust Company of New York, as Documentation Agent, and the Agent (as
heretofore amended or otherwise modified, the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor
has a Commitment to make Committed Loans to the Borrower in an aggregate
principal amount at any time outstanding not to exceed $___________;
WHEREAS, Committed Loans made to the Borrower by the Assignor
under the Credit Agreement in the aggregate principal amount of $__________ [and
Money Market Loans in the aggregate principal amount of $_______] are
outstanding at the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all
of the rights of the Assignor under the Credit Agreement in respect of a portion
of its Commitment thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its outstanding Committed
Loans [and Money Market Loans], and the Assignee proposes to accept assignment
of such rights and assume the corresponding obligations from the Assignor on
such terms;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as follows:
27009/201/CA/gatc.morgan
<PAGE>
SECTION 1. Definitions. All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Credit
Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells
to the Assignee all of the rights of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the obligations of the Assignor
under the Credit Agreement to the extent of the Assigned Amount, including the
purchase from the Assignor of the corresponding portion of the principal amount
of the Committed Loans [and Money Market Loans] made by the Assignor outstanding
at the date hereof. Upon the execution and delivery hereof by the Assignor, the
Assignee, [the Borrower and the Agent] and the payment of the amounts specified
in Section 3 required to be paid on the date hereof (i) the Assignee shall, as
of the date hereof, succeed to the rights and be obligated to perform the
obligations of a Bank under the Credit Agreement with a Commitment in an amount
equal to the Assigned Amount, [and] outstanding Committed Loans in the aggregate
principal amount of $______ [and outstanding Money Market Loans in the aggregate
principal amount of $______] and (ii) the Commitment of the Assignor shall, as
of the date hereof, be reduced by a like amount and the Assignor released from
its obligations under the Credit Agreement to the extent such obligations have
been assumed by the Assignee. The assignment provided for herein shall be
without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and
sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in Federal funds the amount heretofore agreed between them.1 It
is understood that facility fees accrued to the date hereof are for the account
of the Assignor and such fees accruing from and including the date hereof with
respect to the Assigned Amount are for the account of the Assignee. Each of the
Assignor and the Assignee hereby agrees that if it receives any amount under the
Credit Agreement which is for the account of the other party hereto, it shall
receive the same for the account of such other party to the extent of such other
party's interest therein and shall promptly pay the same to such other party.
The Assignee hereby advises the Administrative Agent that
- --------
1 Amount should combine principal together with accrued interest and
breakage compensation, if any, to be paid by the Assignee, net of any portion of
any upfront fee to be paid by the Assignor to the Assignee. It may be preferable
in an appropriate case to specify these amounts generically or by formula rather
than as a fixed sum.
27009/201/CA/gatc.morgan
<PAGE>
notice and payment instructions are set forth in the attached Administrative
Questionnaire.
[SECTION 4. Consent of the Borrower and the Agent. This
Agreement is conditioned upon the consent of the Borrower and the Agent pursuant
to Section 9.6(c) of the Credit Agreement. The execution of this Agreement by
the Borrower and the Agent is evidence of this consent.]
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the obligations of the Borrower
in respect of the Credit Agreement or any Note. The Assignee acknowledges that
it has, independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower.
SECTION 6. Representations and Warranties. The Assignee hereby
represents and warrants that none of the funds, monies, assets or other
consideration being used to make the purchase pursuant to this Agreement are
"plan assets" as defined under ERISA and that its rights, benefits and interests
in and under the Credit Agreement will not be "plan assets" under ERISA.
SECTION 7. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
SECTION 8. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
27009/201/CA/gatc.morgan
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
(NAME OF ASSIGNOR)
By_________________________
Name:
Title:
(NAME OF ASSIGNEE)
By_________________________
Name:
Title:
GENERAL AMERICAN TRANSPORTATION
CORPORATION
By_________________________
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO, as Administrative Agent
By__________________________
Name:
Title:
27009/201/CA/gatc.morgan
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 5.10
SALE/LEASEBACK CAPITAL LEASES
DECEMBER 31, 1995
NET EXPIR-
DEAL NUMBER BOOK ATION
NUMBER OF CARS COST RESERVE VALUE OBLIGATION DATE
------ ------- -------- ------- ------- ---------- -----
<C> <C> <C> <C> <C> <C> <C>
1 53 1,926,372 1,271,406 654,967 871,530 6-2004
2 0 0 0 0 0
3 167 7,480,202 4,641,400 2,838,802 4,300,059 12-2004
4 123 5,521,068 3,767,676 1,753,392 2,624,310 12-2002
5 171 7,777,827 5,300,987 2,467,840 3,830,110 12-2002
6 171 8,196,955 4,754,238 3,442,718 5,352,858 6-2006
7 178 10,137,934 6,105,800 4,032,134 6,775,856 9-2004
83-1 132 9,958,091 6,138,899 3,819,193 7,313,387 12-2003
83-2 107 5,536,060 3,413,904 2,122,156 4,034,723 12-2003
83-3 94 5,069,206 3,126,014 1,943,192 3,670,625 12-2003
84-1 501 22,715,639 10,889,480 11,826,159 19,282,390 12-2008
85-1 248 11,314,167 4,946,487 6,367,681 7,148,895 12-2008
85-2 210 10,549,482 4,585,254 5,964,228 7,315,353 6-2009
86-COMB 621 26,197,640 10,366,425 15,831,214 20,638,041 12-2010
87-1 436 20,437,691 7,184,682 13,253,009 18,463,306 1-2011
----- ----------- ---------- ------------- -----------
3,212 152,818,335 76,492,651 76,325,684.21 111,621,443
</TABLE>
<TABLE>
<CAPTION>
SALE/LEASEBACK OPERATING LEASES
AS OF 4/30/96
NUMBER REMAINING EXPIRATION
DEAL OF CARS COST DEBT DATE
---- ------- -------------- ---------------- -----
<C> <C> <C> <C> <C>
90-1 688 35,052,163 56,369,402 9-2010
90-2 1,299 65,112,862 107,568,406 12-2010
91-1 1,339 75,029,641 131,861,265 3-2014
92-1 1,279 74,845,019 125,859,302 8-2014
93-1 2,322 137,895,220 218,960,064 7-2015
94-1 2,312 130,000,125 228,931,372 1-2017
95-1 2,606 150,016,903 238,082,774 5-2017
95-2 1,668 100,019,539 167,596,632 7-2019
------ ----------- -------------
TOTAL 13,513 767,971,472 1,275,229,223
<FN>
NOTE: These cars are considered off balance sheet debt and are part of GATC's operating fleet, but are not part of our owned fleet.
</FN>
</TABLE>
27009/201/CA/gatc.morgan
<PAGE>
<TABLE>
<CAPTION>
GENERAL AMERICAN TRANSPORTATION CORPORATION Exhibit 12
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(Unaudited)
(In Millions, Except for Ratios)
Three Months Ended Six Months Ended
June 30 June 30
----------------------- --------------------
1996 1995 1996 1995
-------- --------- -------- --------
<S> <C> <C> <C> <C>
Earnings available for fixed charges:
Net income.................................................... $ 21.7 $ 24.4 $ 42.1 $ 47.6
Add (deduct):
Income taxes.............................................. 10.0 11.8 19.7 25.4
Equity in net earnings of affiliated
companies, net of distributions received............... (4.3) (.7) (7.3) (4.9)
Interest on indebtedness and amortization
of debt discount and expense........................... 28.8 26.9 54.9 50.3
Amortization of capitalized interest...................... .3 .3 .6 .6
Portion of rents representative of interest
factor (deemed to be one-third)........................ 5.8 4.4 11.6 8.8
-------- -------- -------- ---------
Total earnings available for fixed charges.................... $ 62.3 $ 67.1 $121.6 $127.8
======== ======== ======== =========
Fixed Charges:
Interest on indebtedness and amortization
of debt discount and expense.............................. $ 28.8 $ 26.9 $ 54.9 $ 50.3
Capitalized interest.......................................... 1.2 1.1 2.5 2.6
Portion of rents representative of interest
factor (deemed to be one-third)........................... 5.8 4.4 11.6 8.8
-------- -------- -------- ---------
Total fixed charges........................................... $ 35.8 $ 32.4 $ 69.0 $ 61.7
======== ========= ======== =========
Ratio of earnings to fixed charges(A)............................... 1.74x 2.07x 1.76x 2.07x
<FN>
(A) The ratios of earnings to fixed charges represents the number of times
"fixed charges" are covered by "earnings." "Fixed charges" consist of
interest on outstanding debt and capitalized interest, one-third (the
proportion deemed representative of the interest factor) of rentals, and
amortization of debt discount and expense. "Earnings" consist of
consolidated net income before income taxes and fixed charges, less
equity in net earnings of affiliated companies, net of distributions
received.
</FN>
</TABLE>
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet and Consolidated Income Statement of GATC and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 13
<SECURITIES> 0
<RECEIVABLES> 66
<ALLOWANCES> 5
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F1>
<PP&E> 3445
<DEPRECIATION> 1385
<TOTAL-ASSETS> 2853
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 1122 <F2>
0
0
<COMMON> 0
<OTHER-SE> 758
<TOTAL-LIABILITY-AND-EQUITY> 2853
<SALES> 0
<TOTAL-REVENUES> 362
<CGS> 0
<TOTAL-COSTS> 161 <F3>
<OTHER-EXPENSES> 64 <F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 55
<INCOME-PRETAX> 53 <F5>
<INCOME-TAX> 20
<INCOME-CONTINUING> 42
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 42
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1> Not applicable because GATC has an unclassified balance sheet.
<F2> This value consists of two components: Long-term debt of 1,011 million
and Capital Lease Obligations of 111 million. Short-term debt is not
included in this calculation.
<F3> This value represents Operating Expenses on the Consolidated Income
Statement.
<F4> This value consists of the Provision for Depreciation and Amortization on
the Consolidated Income Statement.
<F5> This value represents Income Before Income Taxes and Equity in Net
Earnings of Affiliates.
</FN>
</TABLE>
