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
For the period ended September 30, 1994
Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from to
Commission file number 1-7092
ILLINOIS CENTRAL RAILROAD COMPANY
(Exact name of registrant as specified in its charter)
Delaware 36-2728842
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
455 North Cityfront Plaza Drive, Chicago, Illinois 60611-5504
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(312) 755-7500
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
As of September 30, 1994, 100 common shares were outstanding.
THE REGISTRANT IS A WHOLLY-OWNED SUBSIDIARY OF ILLINOIS CENTRAL
CORPORATION AND MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS
H(1) (a) AND (b) OF THE FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH
THE REDUCED DISCLOSURE FORMAT.
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
FORM 10-Q
Three Months and Nine Months Periods Ended September 30, 1994
CONTENTS
Part I - Financial Information:
Item 1. Financial Statements:
Consolidated Statements of Income 3
Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
Part II - Other Information:
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
($ in millions)
(Unaudited)
Revenues $146.7 $147.4 $439.4 $422.2
Operating expenses:
Labor and fringe
benefits 49.7 49.3 146.6 142.6
Leases and car hire 16.2 17.9 48.0 54.2
Diesel fuel 7.6 7.3 23.1 22.3
Materials and supplies 10.1 9.3 30.2 27.4
Depreciation and
amortization 6.2 5.7 18.1 16.7
Other 13.1 12.0 36.9 29.3
Operating expenses 102.9 101.5 302.9 292.5
Operating income 43.8 45.9 136.5 129.7
Other income, net 2.2 0.6 4.3 2.8
Interest expense, net (6.2) (6.8) (19.1) (25.1)
Income before income taxes,
extraordinary item and
cumulative effect of changes
in accounting principles 39.8 39.7 121.7 107.4
Provision for income taxes 14.7 18.1 45.0 41.8
Income before extraordinary
item and cumulative effect
of changes in accounting
principles 25.1 21.6 76.7 65.6
Extraordinary item, net - - - (23.4)
Cumulative effect of changes
in accounting principles - - - ( 0.1)
Net Income $25.1 $21.6 $ 76.7 $42.1
The following notes are an integral part of othe consolidated financial
statements.
-3-
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in millions)
(Unaudited)
ASSETS September 30, December 31,
1994 1993
Current assets:
Cash and temporary cash investments $15.8 $ 8.1
Receivables, net of allowance for doubtful
accounts of $2.5 in 1994 and $3.1 in 1993 39.4 84.6
Materials and supplies, at average cost 17.9 20.1
Assets held for disposition 9.1 9.1
Deferred income taxes - current 21.4 22.8
Other current assets 3.9 3.6
Total current assets 107.5 148.3
Investments 14.6 14.5
Properties:
Transportation:
Road and structures, including land 981.1 947.9
Equipment 87.7 71.7
Other, principally land 40.2 40.4
Total properties 1,109.0 1,060.0
Accumulated depreciation (24.3) (19.3)
Net properties 1,084.7 1,040.7
Other assets 10.9 10.2
Total assets $1,217.7 $1,213.7
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term debt $ 1.3 $ 1.1
Accounts payable 56.6 51.7
Dividends payable - 15.0
Income taxes payable 7.5 3.5
Casualty and freight claims 24.9 24.7
Employee compensation and vacations 14.9 15.8
Taxes other than income taxes 12.4 13.9
Accrued redundancy reserves 6.7 6.8
Other accrued expenses 27.0 28.4
Total current liabilities 151.3 160.9
Long-term debt
Deferred income taxes 307.9 347.3
Other liabilities and reserves 202.7 200.6
Contingencies and commitments 130.3 138.1
Stockholder's equity:
Common stock authorized, issued
and outstanding 100 shares,
$1 par value - -
Additional paid-in capital 128.9 128.6
Retained income 296.6 238.2
Total stockholder's equity 425.5 366.8
Total liabilities and stockholder's
equity $1,217.7 $1,213.7
The following notes are an integral part of the consolidated financial
statements.
-4-
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
($ in millions)
(Unaudited)
Nine Months Ended September 30,
1994 1993
Cash flows from operating activities :
Net income $76.7 $42.1
Reconciliation of net income to net
cash provided by (used for) operating
activities :
Extraordinary item, net - 23.4
Cumulative effect of changes in
accounting principles - 0.1
Depreciation and amortization 18.1 16.6
Deferred income taxes 3.4 36.2
Equity in undistributed earnings of
affiliates, net of dividends
received (0.4) (0.2)
Net gains on sales of real estate (2.0) -
Cash changes in working capital 51.5 (10.4)
Changes in other assets (0.8) (2.9)
Changes in other liabilities and reserves (4.6) (7.0)
Net cash provided by (used for) operating
activities 141.9 97.9
Cash flows from investing activities :
Additions to properties (61.9) (42.9)
Proceeds from sales of line segment
and real estate 3.6 0.4
Proceeds from single track sales - 0.0
Proceeds from equipment sales 3.9 3.6
Proceeds from sales of investments 0.3 0.2
Other (1.5) (3.5)
Net cash provided by (used for) investing
activities (55.6) (42.2)
Cash flows from financing activities :
Proceeds from issuance of debt 210.6 219.6
Payments on debt (253.5) (264.6)
Dividends paid (33.2) (20.2)
Purchase of subsidiary's common stock (2.5) (0.3)
Net cash provided by (used for) financing
activities (78.6) (65.5)
Changes in cash and temporary cash
investments 7.7 (9.8)
Cash and temporary cash investments at
beginning of period 8.1 25.6
Cash and temporary cash investments at
end of period $15.8 $15.8
Supplemental disclosure of cash flow information :
Cash paid during the year for:
Interest (net of amount capitalized) $22.7 $33.0
Income taxes $37.5 $ 5.9
The following notes are an integral part of the consolidated financial
statements.
-5-
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
1. Basis of Presentation
Except as described below, the accompanying unaudited consolidated
financial statements have been prepared in accordance with accounting
policies described in the 1993 Annual Report on Form 10-K and should be
read in conjunction with the disclosures therein.
In the opinion of management, these interim financial statements reflect
all adjustments, consisting of normal recurring accruals, necessary to
present fairly the financial position, results of operations and cash
flows for the periods presented. Interim results are not necessarily
indicative of results for the full year. Certain 1993 amounts have been
reclassified to conform with the presentation used in the 1994 financial
statements.
Income Per Share
Income per share has been omitted as the Railroad is a wholly-owned
subsidiary of Illinois Central Corporation ("IC").
2. Sales of Accounts Receivable
In the first quarter of 1994, the Railroad entered into a revolving
agreement to sell undivided percentage interests in certain of its
accounts receivable, with recourse, to a financial institution. The
agreement, which expires March 1997, allows for sales of accounts
receivable up to a maximum of $50 million at any one time. The Railroad
services the accounts receivable sold under the agreement. At September
30, 1994, $48 million in accounts receivable had been sold pursuant to
the Agreement. The Railroad retains the same exposure to credit
loss as existed prior to the sale. Costs related to the agreement
will vary generally in correlation with changes in prevailing
interest rates. These costs, which are included in Other
Income, Net, were $.6 million and $1.5 million for the three month and
nine month periods ended September 30, 1994, respectively.
3. Dividends
On October 6, 1994, the Railroad declared and paid a $9.3 million dividend
to IC. Certain provisions of the Railroad's debt agreements restrict the
level of dividends it may pay to IC. At September 30, 1994, approximately
$96 million was free of such restrictions.
4. Certain Investments in Debt and Equity Securities
Effective January 1, 1994, the Railroad adopted the Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt
and Equity Securities" ("SFAS No. 115"). SFAS No. 115 expands the use of
fair value accounting for certain investments in debt and equity
securities but retains the use of the amortized cost method for
investments in debt securities that the reporting enterprise has the
positive intent and ability to hold to maturity. All of the investments
held by the Railroad are temporary and held for less than 90 days. They
are included in the Consolidated Balance Sheet as part of Cash and
Temporary Cash Investments. For the periods presented, all investments
were in U.S. Corporate demand notes. It is the intent of the Railroad to
hold all debt securities to maturity, therefore, the following is provided
in accordance with SFAS No. 115 ($ in millions):
9-30-94 1-1-94
Aggregate fair value $12.9 $ 4.6
Gross unrealized holding gain $ - $ -
Gross unrealized holding losses $ - $ -
Amortized cost $12.9 $ 4.6
5. Recent Events
On July 19, 1994, IC and Kansas City Southern Industries, Inc. (KCSI)
announced the signing of a letter of intent providing for the acquisition
of the KCSI and certain related assets by IC.
A derailment in Kegley, Illinois in August 1994, resulted in the spilling
of more than 20,000 gallons of Tetrachloroethylene. The Railroad is in
the process of implementing immediate response actions at the site.
To date an estimate of remediation costs has not been made. However,
based on prior experience and actions taken so far management does not
believe that this site will have a material adverse effect on the
Company's financial condition.
On October 24, 1994, both companies announced that they had mutually
agreed to terminate the letter of intent and the negotiations for the
acquisition. The two companies said that they had not been able to reach
definitive agreement on a number of issues.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The discussion below takes into account the financial condition and
results of operations of the Railroad for the periods presented in the
consolidated financial statements.
Results of Operations
Three Months Ended September 30, 1994 Compared to Three Months Ended
September 30, 1993
Revenues for 1994 decreased from the prior year quarter by $.7 million or
.5% to $146.7 million. The decrease was a result of a 7.4% decrease in
gross freight revenue per carload which was partially offset by a 4.4%
increase in the number of carloads coupled with increases in revenue other
than gross freight revenue. For the quarter, the Railroad experienced
carloading increases in coal (27.9%) and intermodal (61.5%), offset by
decreased grain loads (23.7%). Prior year carloadings in coal were
adversely impacted by United Mine Workers (UMW) strike against several
coal producers served by the Railroad. However, other commodities, most
notably grain and grain mill, were positively impacted by the extensive
flooding in the Midwest in 1993.
In June 1994, the Railroad signed a marketing agreement with Southern
Pacific Railroad Corporation (SP) for the north/south transport of
intermodal units in the Chicago-Texas-Mexico market, beginning July 1,
1994. The agreement calls for at least 30,000 intermodal units which the
SP moves in this market annually to be routed over the Railroad's system
resulting in a more direct route to and from Chicago through Memphis.
Operating expenses for 1994 increased $1.4 million, or 1.4% as compared
to 1993. Increases in labor, materials and supplies and depreciation were
partially offset by decreased lease and car hire expense. The shift in
expenses from leases and car hire to depreciation reflects the Railroad's
shift from leasing to ownership of its fleet. For 1993, operating
expenses, other benefited from detoured traffic as a result of the
flooding of the Mississippi River.
Operating income for 1994 decreased 4.6% ($2.1 million) to $43.8 million
from $45.9 million in 1993, as a result of decreased revenues cited above,
coupled with increased operating expenses.
Net interest expense decreased by 8.8% to $6.2 million as compared to
$6.8 million in 1993, primarily as a result of utilization of commercial
paper financing and the selling of accounts receivable.
Nine Months Ended September 30, 1994 Compared to Nine Months Ended
September 30, 1993. Revenues for 1994 increased from the prior year by
$17.2 million or 4.1% to $439.4 million. The increase was a result of a
5.7% increase in the number of carloads coupled with increases in revenue
other than gross freight revenue, which were partially offset by a
decrease of 4.1% in gross freight revenue per carload. For the first nine
months of 1994 the Railroad experienced carloading increases in coal
(24.0%), intermodal (46.3%) and chemicals (2.3%) offset by decreased grain
loads (18.1%). The UMW strike negatively impacted full year 1993 coal
carloadings.
Operating expenses for 1994 increased $10.4 million, or 3.6% as compared
to 1993, reflecting the variances cited above for the nine months ended
September 30, 1994.
Operating income for 1994 increased 5.2% ($6.8 million) to $136.5 million
from $129.7 million in 1993, as a result of increased revenues partially
offset by the increased operating expenses.
Net interest expense decreased 23.9% to $19.1 million as compared to $25.1
million in 1993, primarily as a result of the 1993 refinancing of the
Railroad's debt, utilization of commercial paper financing and the selling
of accounts receivable.
Effective January 1, 1993, the Railroad adopted both the Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" ("SFAS No. 106") and the
Statement of Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits" ("SFAS No. 112"). SFAS No. 106
requires that future costs associated with providing postretirement
benefits be recognized as expense over the employees' requisite service
period. The pay-as-you-go method used prior to 1993 recognized the
expense on a cash basis. SFAS No. 112 establishes accounting standards
for employers who provide postemployment benefits and clarifies when the
expense is to be recognized. As a result of adopting these two standards
the Railroad recorded a decrease to net income of $84,000 (net of taxes of
$46,000) as a cumulative effect of changes in accounting principles.
Liquidity and Capital Resources
Operating Data: Nine Months Ended September 30,
1994 1993
($ in millions)
Cash flows provided by (used for):
Operating activities $141.9 $ 97.9
Investing activities (55.6) (42.2)
Financing activities (78.6) (65.5)
Net change in cash and
temporary cash investments $ 7.7 $ (9.8)
Operating activities in 1994 provided $141.9 million in cash, primarily
from net income before depreciation and deferred taxes, and the $48.0
million of net proceeds from the sales of accounts receivables.
During 1994, additions to property of $61.9 million include approximately
$28.2 million for track and bridge rehabilitation, approximately $2.9
million for intermodal facilities, approximately $10.7 million for signals
and communications and approximately $16.7 million for equipment upgrades,
including lease conversions. The Railroad anticipates that base capital
expenditures for 1994 will be approximately $65 million and will
concentrate on track maintenance, renewal of track structures such as
bridges, and upgrading the locomotive fleet. If additional opportunities
such as equipment lease conversions or market-driven expansion occur in
1994, the total capital spending including capitalized leases could be
approximately $90 million. To date, capital leases and equipment
lease-conversions have totaled approximately $12.4 million. Expenditures
for capital additions and lease conversions are expected to be met from
current operations and other available sources.
Over the last three years, management has concentrated on reducing
leverage, expanding funding sources, lowering funding costs and upgrading
the debt ratings issued by the rating services. The latest steps in this
process are a first quarter of 1994 agreement with a financial institution
whereby the Railroad sells certain of its accounts receivables and the
initiation in November 1993 of a public commercial paper program.
In the first quarter of 1994, the Railroad entered into a receivables
purchase agreement to sell undivided percentage interests in certain of
its accounts receivable, with recourse, to a financial institution. The
agreement, which expires March 1997, allows for sales of accounts
receivable up to a maximum of $50 million at any one time. The Railroad
services the accounts receivable sold under the agreement. At September
30, 1994, $48 million in accounts receivable had been sold pursuant
to the Agreement. The Railroad retains the same exposure to credit
loss as existed prior to the sale. Costs related to the agreement
will vary generally in correlation with changes in prevailing
interest rates. These costs, which are included in
Other Income, Net, were $1.5 million for the nine months ended September
30, 1994.
The commercial paper, issued by the Railroad, is rated A2 by S&P, F2 by
Fitch Investors Service, Inc. ("Fitch") and P3 by Moody's and is supported
by a $100 million Revolver with the Railroad's bank lending group. At
September 30, 1994, $37.0 million of commercial paper was outstanding with
an average interest rate of 5.25%. During the first nine months, the
amount outstanding ranged from $13.0 million to $60.0 million. The
Railroad views this program as a significant long-term funding source and
intends to issue replacement notes as each existing issue matures and
accordingly issuances are classified as long-term.
In connection with the termination of negotiations between IC and KCSI,
Standard and Poor's and Fitch affirmed their BBB rating on IC securities
and removed the IC's debt from a credit watch.
At September 30, 1994, no amounts had been drawn under either the
Railroad's Revolver or Bank Line. The $100 million available under the
Revolver was limited to $60.6 million because $37.0 million in commercial
paper was outstanding and $2.4 million in letters of credit had been
issued. The Bank Line was structured as a 364-day renewal instrument and
expired October 26, 1994. At September 30, 1994, no amounts were
outstanding. The Railroad has negotiated an amended and restated Revolver
which replaces the Bank Line and increases the Revolver to $150
million. The new agreement, which expires in 1999, provides for more
favorable pricing to the Railroad recognizing the Railroad's improved
credit ratings. The basic covenants in the former agreement
continue in the new agreement.
The Railroad also has uncommitted floating rate Credit Facility totalling
$95million. At September 30, 1994, no amounts were outstanding on any of
the facilities.
The Railroad believes that its available cash, cash generated by its
operationsand cash available via commercial paper, the Revolver, and the
Credit Facility will be sufficient to meet foreseeable liquidity
requirements.
Various borrowings of the Railroad are governed by agreements which
contain financial and operating covenants. All entities were in compliance
with these covenant requirements at September 30, 1994, and management
does not anticipate any difficulty in maintaining such compliance.
Certain covenants of the Railroad's debt agreements restrict the level of
dividends it may pay to IC. At September 30, 1994, approximately $96
million of Railroad equity was free of such restrictions. The Railroad
declared and paid a dividend of approximately $9.3 million to IC in
October 1994.
The Railroad has paid approximately $4.1 million in the first nine months
of 1994 for costs associated with the various labor agreements signed in
1992 and 1991. The Railroad anticipates that an additional $1.7 million
will be required in 1994 related to all such agreements. These
requirements are expected to be met from current operating activities or
other available sources.
The Railroad has expressed its intent to negotiate labor agreements
locally, i.e, with each union separately, and not be subject to national
handling whereby all railroads negotiate as one with each union. To date,
unions representing 10% of the Railroad's union represented workforce have
ratified new agreements. The agreements cover wage and work rule issues
through 1999 and provide annual increases of approximately 3-4%. The
Railroad has not reached any agreements with operating crafts. Under the
Railway Labor Act changes to the existing contracts with the other unions
can be requested by either side after October 31, 1994.
The Railroad has entered into various hedge agreements designed to
mitigate significant changes in fuel prices. As a result, approximately
95% of the Railroad's short-term diesel fuel requirements through March
1995 and 47% through June 1995 are protected against significant price
changes.
The Railroad is and will continue to be subject to extensive regulation
under environmental laws concerning, among other things, discharges into
the environment and the handling, storage, transportation and disposal of
waste and hazardous materials. Inherent in the operations and real estate
activities of the Railroad and other railroads is the risk of
environmental liabilities. As discussed in Item 3. "Legal Proceedings,"
in the Railroad's definitive Annual Report on Form 10-K for the year ended
December 31, 1993, dated March 16, 1994, Commission File No. 1-10720,
several properties on which the Railroad currently or formerly conducted
operations are subject to governmental action in connection with
environmental damage. See also Item 1 in Part II of the Railroad's Form
10-Q for the three months ended June 30, 1994 and Item 1 in Part II
herein. In the opinion of management, the Railroad has adequate reserves
to cover the costs for investigation and remediation. However, there can
be no assurance that environmental conditions will not be discovered which
might individually or in the aggregate have a material adverse effect on
the Railroad's financial condition.
A derailment in Kegley, Illinois in August 1994, resulted in the spilling
of more than 20,000 gallons of Tetrachloroethylene. The Railroad is in
the process of implementing immediate response actions at the site. To date
an estimate of remediation costs has not been made. However, based on
prior experience and actions taken so far management does not believe
that this site will have a material adverse effect on the Company's
financial condition.
Recent Event
On July 19, 1994, the Company and Kansas City Southern Industries, Inc.
(KCSI) announced the signing of a letter of intent providing for the
acquisition of the Kansas City Southern Railway and certain related assets
by IC.
On October 24, 1994, both companies announced that they had mutually
agreed to terminate the letter of intent and the negotiations for the
acquisition. The two companies said that they had not been able to reach
definitive agreement on a number of issues.
Recent Accounting Pronouncements
In May 1993, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 114, "Accounting by
Creditors for Impairment of a Loan" ("SFAS No. 114"). In October 1994,
the FASB issued Statement of Financial Accounting Standards No. 118,
"Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosures" (SFAS No. 118), SFAS No. 118 amends SFAS No. 114.
SFAS No. 114, as amended by SFAS No. 118, requires that impaired loans be
measured based on the present value of expected future cash flows
discounted at the loan's effective interest rate. This statement applies
to financial statements for fiscal years beginning after December 15,
1994, with earlier adoption encouraged. The Railroad is currently
evaluating the impact of this statement, if any, on its reported results.
Early adoption is not anticipated.
Also in October 1994, the FASB issued Statement of Financial Accounting
Standard No. 119, "Disclosure about Derivative Financial Instruments and
Fair Value of Financial Instruments" (SFAS No. 119). This statement
requires disclosures about derivative financial instruments and amends two
previously standards, SFAS No. 105 and SFAS No. 107. The new standard
SFAS No. 119 is effective for years ending after December 15, 1994.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Incorporated herein by reference is Item 3. - "Legal Proceedings" in the
Railroad's definitive Annual Report Form 10-K for the year ended December
31, 1993, dated March 16, 1994, and Part II Item 1. "Legal Proceedings"
in the Quarterly Report on Form 10-Q for the three months ended June 30,
1994, dated August 8, 1994, both Commission File No. 1-7092.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
See Exhibit Index on page 15
(b) Reports on Form 8-K:
None
ILLINOIS CENTRAL RAILROAD COMPANY
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
ILLINOIS CENTRAL RAILROAD COMPANY
/s/ Dale W. Phillips
Dale W. Phillips
Vice President & Chief Financial
Officer
/s/ John V. Mulvaney
John V. Mulvaney
Controller
Date: November 10, 1994
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Sequential
No. Descriptions Page No.
4.1 Promissory Note between Illinois Central Railroad
Company and NBD Bank, NA dated August 1, 1994.
4.2 Note between Illinois Central Company and The
Long-Term Credit Bank of Japan, Limited, dated
August 29, 1994.
4.3 Grid Promissory Note between Illinois Central
Railroad Company and Bank of America National
Trust and Savings Association dated July 26, 1994.
27 Financial Data Schedule
NBD Bank, N.A. Exhibit 4.1
611 Woodward Avenue
Detroit, Michigan 48226
Phone 313-225-1000
August 1, 1994
Illinois Central Railroad Co.
455 North City Front Plaza Drive
Chicago, Illinois 60611-5504
Attention: Mr. Douglas A. Koman
Dear Doug:
This will confirm the terms of our agreement under which NBD Bank, N.A.
("the Bank") may make loans to you from time to time. Any loans shall be
made or renewed only upon the sole discretionary approval of NBD and
otherwise subject to the following terms:
1. The Bank shall have sole and absolute discretion to determine whether
to make, extend or renew loans under this agreement.
2. Loans shall not in any event exceed an aggregate principal amount of
Twenty Million Dollars ($20,000,000) at any one time outstanding. Upon
request, given by telephone, fax, or letter, by a person designated to the
Bank by you in writing as your duly authorized representative, the Bank
will advance and credit to your account at the Bank, or transfer to
another bank designated by you, such sums of money as may mutually be
agreed upon at the time of the request. The Bank may act upon the oral
instructions of any person reasonably believed by the Bank to be a person
designated by you as your authorized representative.
3. You and the Bank each shall, upon the request of the other, forward to
the other a written confirmation of any advance of funds under this
agreement, [substantially in the form of the attached Exhibit B],
including confirmation of the date, maturity and amount of, and the
interest rate applicable to, the advance of funds. Any loans with a
maturity of 7 days or longer will in all cases require your written
confirmation.
4. Each advance of funds shall be repayable at a stated maturity (not to
exceed 180 days) established by the Bank at the time of advance or, if no
such stated maturity is established, upon demand. Each advance of funds
which is repayable on demand shall bear interest at a per annum rate
established by the Bank from time to time, which rate is subject to change
daily. Each advance of funds having a stated maturity shall bear interest
at the rate per annum established by the Bank on the date of the advance
and may not be prepaid prior to its maturity without the Bank's consent.
5. Interest on each advance of funds repayable at a stated maturity shall
be due and payable at the stated maturity. Interest on each advance of
funds repayable on demand shall be due and payable on the first day of
each fiscal quarter. Interest shall be paid by the Bank's debiting your
account at the Bank, and shall be calculated on the basis of the actual
number of days elapsed in a year of 360 days.
6. Each advance or repayment of funds shall be in the minimum amount of
$1,000,000 and shall be made in immediately available funds at the
principal office of the Bank in Detroit, Michigan.
7. Before the first advance under this agreement, you shall execute and
deliver to the Bank your promissory note in the form attached as Exhibit
A in the full principal amount stated in paragraph 2 of this agreement
(the "Master Note"). The Bank shall, in the ordinary course of its
business, make notations in its records of the date, amount of interest
rate and maturity of each borrowing, the amount of each payment and other
information. Such records shall, in the absence of manifest error, be
conclusive as to the outstanding principal balance of and interest rate
or rates applicable to the Master Note.
8. It is understood and agreed that any interest rate offered under this
agreement may be below or above the Bank's announced prime rate of
interest and will not necessarily be the lowest rate charged by the Bank
to any of its customers.
9. This agreement may be terminated by either party by written notice to
the other. The Bank's right to terminate this agreement is separate and
distinct from its right to deny any request for a loan or to demand
payment. Such denial or demand may be made at any time as permitted by
this agreement without terminating this agreement. In any event, no
termination shall affect the rights and obligations of the parties with
respect to advances of funds outstanding under this agreement at the time
of such termination.
10. You have agreed that the aggregate principal amount of all of your
obligations and those of your Affiliates to the Bank under this and any
other credit facilities shall not exceed Twenty Million Dollars
($20,000,000) at any one time outstanding. If at any time such obligations
exceed that limit, you will promptly apply the proceeds of your other
credit facilities with the Bank to reduce your outstanding obligations
under this agreement by the amount required to avoid exceeding the limit.
As used above, the term "Affiliate" means any person or entity that
controls, is controlled by, or is under common control with, you.
11. Representations. You represent that you are a corporation duly
organized, existing and in good standing under the laws of the State of
Delaware, and that the execution and delivery of this agreement and the
Master Note and the performance of the obligations they impose are within
your corporate powers, have been duly authorized by all necessary action
of your board of directors, and do not contravene the terms of your
articles of incorporation or bylaws. You further represent that the
execution and delivery of this agreement and the Master Note and the
performance of the obligations they impose do not violate any law and do
not conflict with any agreement by which you are bound, do not require the
consent or approval of any governmental authority or any third party and
that this agreement and the Master Note are valid and binding agreements,
enforceable according to their terms. You further represent that all
balance sheets, profit and loss statements, and other financial statements
furnished to the Bank are accurate and fairly reflect the financial
condition of the organizations and persons to which they apply on their
effective dates, including contingent liabilities of every type, which
financial condition has not changed materially and adversely since those
dates.
12. Default. If any of the following events occurs:
(l) You fail to pay when due any amount payable under the Master Note,
this agreement, or any other instrument or agreement evidencing debt to
any creditor, (2) you otherwise default under the terms of the Master
Note, this agreement, or any other agreement between you and the Bank, (3)
you otherwise default under the terms of any agreement or instrument
relating to any debt due for borrowed money such that the creditor
declares the debt before its scheduled maturity, (4) any representation
which you have made or will make to the Bank is untrue in any material
respect, (5) you make an assignment for the benefit of creditors or are
adjudicated bankrupt, or (6) proceedings are instituted against you under
the United States Bankruptcy Code or under any bankruptcy, reorganization
or insolvency law or other law for the relief of debtors and such
proceedings are not stayed or dismissed within 60 days of commencement,
then, all of your obligations to the Bank under this agreement and the
Master Note shall be due immediately, without notice, at the Bank's
option.
13. Remedies. lf your obligations to the Bank under this agreement and the
Master Note are not paid at maturity, whether by demand, acceleration or
otherwise, the Bank shall have all of the rights and remedies provided by
any law or agreement. You are liable to the Bank for all reasonable costs
and expenses of every kind incurred in the making and collection of the
loans under this agreement and the Master Note, including without
limitation, reasonable attorneys' fees and court costs. These costs and
expenses shall include, without limitation, any costs and expenses
incurred by the Bank in any bankruptcy, reorganization, insolvency or
other similar proceeding.
14. Waivers. No delay on the part of the Bank in the exercise of any right
or remedy shall operate as a waiver. No single or partial exercise by the
Bank of any right or remedy shall preclude any other future exercise of
that right or remedy or the exercise of any other right or remedy. No
waiver or indulgence by the Bank of any default shall be effective unless
it is in writing and signed by the Bank, nor shall a waiver on one
occasion be construed as a bar to or waiver of that right on any future
occasion.
15. Entire Agreement/Severability. This agreement and the Master Note
embody the entire agreement and understanding between you and the Bank and
supersede all prior agreements and understandings relating to their
subject matter. If any one or more of your obligations under this
agreement or the Master Note shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of your
remaining obligations shall not in any way be affected or impaired, and
such validity, illegality or unenforceability in one jurisdiction shall
not affect the validity, legality or enforceability of your obligations
under this agreement or the Master Note in any other jurisdiction.
16. Miscellaneous. This agreement and the Master Note are governed by
Michigan law. This agreement and the Master Note are binding on you and
your successors, and shall inure to the benefit of the Bank, its
successors and assigns. Section headings are for convenience of reference
only and shall not affect the interpretation of this agreement or the
Master Note.
17. Waiver of Jury Trial: The parties, after consulting or having had the
opportunity to consult with counsel, knowingly, voluntarily and
intentionally waive any right either of them may have to a trial by jury
in any litigation based upon or arising out of this agreement, the Master
Note or any related instrument or agreement or any of the transactions
contemplated by this agreement, or any course of conduct, dealing,
statements (whether oral or written), or actions of either of them.
Neither party shall seek to consolidate, by counterclaim or otherwise, any
such action in which a jury trial has been waived with any other action
in which a jury trial cannot be or has not been waived.
17. Waiver of Jury Trial: (Cont'd.) These provisions shall not be deemed
to have been modified in any respect or relinquished by either party
except by a written instrument executed by both of them.
If the foregoing accurately reflects your understanding of the terms,
please execute the copy enclosed and return it to the Bank.
Very truly yours,
NBD BANK
By
Steven K. Wagner
Its:
Second Vice President
And:
Its:
SKW:ljs
Enclosures
Accepted and Agreed to this 8th day of August, 1994
ILLINOIS CENTRAL RAILROAD
DOUGLAS A. Koman
Its:
Treasurer
Exhibit 4.2
MASTER NOTE
$25,000,000 August 29, 1994
FOR VALUED RECEIVED, Illinois Central Railroad
Company (the "Company") promises to pay to the order of
The Long-Term Credit Bank of Japan, Limited (the "Bank"),
in lawful money of the United States of America at the
offices of Chemical Bank, New York, New York, ABA No.
021000128, A/C #544-7-77109, or as the Bank may otherwise
direct, the lesser of Twenty-Five Million Dollars or the
aggregate outstanding unpaid principal amount of loans
advanced hereunder, together with interest as provided
below.
The Company and the Bank may agree to a fixed interest
rate and a specific maturity for a loan (a "fixed rate
loan") at the time of borrowing. Interest on each fixed
rate loan shall be payable upon the maturity of such
fixed rate loan and, in the case of a fixed rate loan
with an original maturity in excess of three months,
interest shall also be payable on the last day of each
three month period during which such fixed rate loan is
outstanding. The principal balance of each fixed rate
loan shall be due and payable on the maturity date agreed
to with respect to such fixed rate loan.
Any person authorized to borrow on behalf of the Company
(an "authorized person") may request a loan hereunder by
telephone or telefax. The Company agrees that, in
implementing this arrangement, the Bank is authorized to
honor requests which it believes, in good faith, to
emanate from an authorized person acting pursuant to this
Note, whether in fact that be the case or not. The
Company will confirm the terms of each loan so requested
by mailing a confirmation letter to the Bank signed by
any authorized person. The Bank shall make the proceeds
of any requested borrowing available to the Company by
wire, transferring such amounts in immediately available
funds into the Company's Account #7418736 at Continental
Bank, ABA No. 0710-0003-9.
The Company hereby authorizes the Bank to record loans,
maturities, repayments, interest rates and payment dates
on the schedule attached hereto or otherwise in
accordance with the Bank's usual practice. The obligation
of the Company to repay each loan made hereunder shall be
absolute and unconditional notwithstanding any failure to
the Bank to record such amounts on the schedule attached
hereto or to receive confirmation of the transaction from
the Company and, in the event of disagreement as to the
terms of a transaction, the Bank's records shall govern,
absent manifest error.
Each payment of principal or interest hereunder
shall be made by 12:00 PM Central Standard time on the
day when due. If any payment shall become due and payable
on a Saturday, Sunday or legal holiday under the laws of
Illinois and/or New York, such payment shall be made on
the next succeeding business day and any such extended
time of the payment of principal or interest shall be
included in computing interest at the rate this Note
bears in connection with such payment. Interest on fixed
rate loans shall be computed for the actual number of
days elapsed on a 360-day year basis.
Payments of both principal and interest are to be made in
lawful money of the United States of America.
If any change in any law, rule, regulation or directive
(including, without limitation, Regulation D of the Board
of Governors of the Federal Reserve System) imposes any
condition the result of which is to increase the cost to
the Bank of making, funding or maintaining any fixed rate
loan hereunder or reduces any amount receivable by the
Bank hereunder in connection with a fixed rate loan, the
Company shall pay the Bank the amount of such increased
expense incurred or the reduction in an amount received
which the Bank determines is attributable to making,
funding and maintaining the fixed rate loans hereunder.
Subject to the indemnification provisions specified in
the following sentence, a fixed rate loan may be paid
prior to the agreed maturity on one business day's notice
to the Bank. If, for any reason, any payment of a fixed
rate loan occurs prior to maturity of that loan, the
Company will indemnify the Bank for any loss of cost
resulting therefrom. Such loss or cost shall be the
difference as reasonably determined by the Bank, between
the amount that would have been realized by the Bank for
the period from the prepayment of such fixed rate loan to
the scheduled maturity date of such fixed rate loan
(based on the interest rate applicable thereto) and any
lesser amount that would be realized by the Bank in re-
employing the funds received in prepayment by making a
loan in the principal amount prepaid for the same period.
The Company warrants and represents to the Bank that (a)
the execution and delivery of this Note and the
performance by the Company of its obligations hereunder
are within the corporate powers of the Company and have
been duly authorized by all necessary corporate action on
the part of the Company, (b) this Note is the legal,
valid and binding obligation of the Company, enforceable
in accordance with its terms subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting
creditors' rights and to general equity principles, and
(c) the making and performance of this Note do not and
will not contravene or conflict with the charter or by-
laws of the Company or to the best knowledge of the
Company violate or constitute a default under any law,
any presently existing requirement or restriction imposed
by judicial, arbitral or other government instrumentality
or any agreement, instrument or indenture by which the
company is bound.
Nothing in this Note shall constitute a commitment
to make loans to the Company. The Bank may declare all
unpaid principal and interest of fixed rate loans
immediately due and payable if (i) any amount payable
hereunder is not paid when due, (ii) there is any
material adverse change in the Company's financial
condition, operations, prospects, properties or business,
(iii) the Company shall fail to pay, discharge or secure
an extension of the maturity of any indebtedness for
borrowed money in excess of $5,000,000 when due, or
otherwise defaults under any agreement governing such
indebtedness, the effect of which is to cause such
indebtedness to become due or to permit the holder
thereof to cause such indebtedness to become due prior to
its stated maturity, in each case after continuation of
such default beyond all applicable grace periods, (iv)
any petition is filed by or against the Company under any
federal bankruptcy, reorganization, debt arrangement or
other case or proceeding under any federal bankruptcy or
insolvency law or any similar state law, (v) the Company
becomes insolvent or generally fails to pay, or admits in
writing its inability to pay, debts as they become due,
(vi) the Company shall apply for, consent to, or
acquiesce in the appointment of a trustee, receiver,
sequestrator or other custodian for the Company or make
a general assignment for the benefit of creditors, or
(vii) the Company breaches any representation or warranty
made by it in this Note.
The Company expressly waives any presentment, demand,
protest or notice in connection with this Note now, or
hereafter, required by applicable law and agrees to pay
all reasonable out of pocket costs and expenses of
collection, including without limitation, reasonable
attorneys' fees.
If the amounts outstanding hereunder are declared
immediately due and payable, or are not otherwise paid
when due, thereafter the outstanding principal balance
hereof and all accrued but unpaid interest due hereon (to
the extent permitted by applicable law) shall bear
interest at the rate or rates provided for such principal
amounts plus two percent (2%) per annum until such
principal and interest have been paid in full.
This Note shall be governed by the internal laws of the
State of Illinois, including those laws which are
applicable to national banks located in Illinois.
THE BANK MAY ENFORCE ANY CLAIM ARISING OUT OF THIS NOTE
IN ANY STATE OR FEDERAL COURT HAVING SUBJECT MATTER
JURISDICTION AND LOCATED IN Chicago, ILLINOIS. FOR THE
PURPOSE OF ANY ACTION OR PROCEEDING INSTITUTED WITH
RESPECT TO ANY SUCH CLAIM, THE COMPANY HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF SUCH COURTS. THE COMPANY
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF SAID COURTS BY MAILING A COPY THEREOF, BY
REGISTERED MAIL, POSTAGE PREPAID, TO THE COMPANY AND
AGREES THAT SUCH SERVICE , TO THE FULLEST EXTENT
PERMITTED BY LAW, (i) SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON IT IN ANY SUCH SUIT,
ACTION OR PROCEEDING AND (ii) SHALL BE TAKEN AND HELD TO
BE VALID PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO
IT. NOTHING HEREIN CONTAINED SHALL AFFECT THE RIGHT OF
THE BANK OR ANY HOLDER OF THIS NOTE TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR PRECLUDE THE BANK OR
ANY HOLDER OF THIS NOTE FROM BRINGING AN ACTION OR
PROCEEDING IN RESPECT HEREOF IN ANY OTHER COUNTRY, STATE
OR PLACE HAVING JURISDICTION OVER SUCH ACTION. IN
CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING INSTITUTED
IN ANY STATE OR FEDERAL COURT LOCATED IN CHICAGO,
ILLINOIS, THE COMPANY HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT
MAY HAVE OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
THE COMPANY HEREBY EXPRESSLY WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS UNDER THIS NOTE, OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN
CONNECTION WITH THIS NOTE, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
ILLINOIS CENTRAL
RAILROAD COMPANY
ADDRESS:
455 North Cityfront Plaza Drive
Chicago Illinois 60611
By:
Name: D A. Koman
Title: Treasurer
July 26, 1994 Exhibit 4.3
Mr. Douglas Koman
Treasurer
Illinois Central Railroad
455 N. Cityfront Plaza Drive
Chicago, IL 60611-5504
Dear Mr. Koman:
This Facility Agreement Letter (the "Agreement") sets forth certain
underlying arrangements for loans which Bank of America National Trust and
Savings Association (the "Bank") may from time to time make to Illinois
Central Railroad Company (the "Borrower") under a Short-Term Loan Facility
(the "Facility"). These arrangements detail the operation of the Facility
and serve to augment the properly signed and delivered Grid Promissory
Note (the "Note") evidencing the debt for all borrowings under this
Facility. The Bank and the Borrower hereby agree as follows:
1. Borrowing Resolutions. Prior to the making of any loans the Borrower
will have delivered to the Bank resolutions of the Borrower's Board of
Directors, in a form satisfactory to the Bank, authorizing certain persons
(Authorized Persons") to take on behalf of the Borrower all actions
contemplated by this Agreement and the Note.
2. Agreements to Make Loans. From time to time, by telephone, the Borrower
may ask to borrow money from the Bank, or the Bank may offer to make loans
("Loans") to the Borrower, hereunder. The Borrower and the Bank may from
time to time make oral agreements ("Oral Agreements") that the Bank will
make Loans to the Borrower hereunder. Each Oral Agreement will specify the
following terms (the "Terms") of the Loan relating thereto: (i) the date
on which such Loan is to be made, (ii) the principal amount of such Loan,
(iii) the date on which such Loan shall mature (the "Maturity Date"), (iv)
the annual rate of interest on such Loan (which shall be a fixed rate),
and (v) the date or dates on which any interest payable prior to maturity
is to be paid. The Borrower acknowledges and confirms that all claims of
the Bank in respect of outstanding Loans under this Agreement will at all
times rank pari passu with all other senior unsecured indebtedness of the
Borrower.
3. Confirmations: Crediting of Funds; Reliance by the
Bank.
Each time the Bank and the Borrower shall enter into an Oral Agreement
with respect to a Loan,
(a) the Bank shall endeavor to send the Borrower written, telecopied or
telexed confirmation of the Terms of such Loan; and
(b) the Bank shall make such Loan by wire transfer of the Loan amount in
immediately available funds, to the Borrower's account at a bank specified
in written, telecopied or telexed form by the Borrower.
(c) The Bank shall make such entries on the note as reflects the Loan and
the Oral Agreement. The Bank shall be entitled to rely upon and act
hereunder pursuant to any Oral Agreement which it reasonably believes to
have been made with the Borrower through an Authorized Person. If the Bank
shall credit or transfer any amount to an account of the Borrower pursuant
to this Agreement, then the Bank shall be deemed to have made a Loan
pursuant hereto, and the Borrower shall be indebted to the Bank for such
amount. If the Borrower believes that the confirmation relating to any
Loan contains any error or discrepancy from the applicable Oral Agreement,
the Borrower will promptly notify the Bank thereof. The Bank shall be held
harmless for any action or omission in reliance on such Oral Agreement as
understood by the Bank. If any disagreement arises between the Borrower
and the Bank as to the terms of any oral Agreement, both shall attempt to
resolve such disagreement in good faith, otherwise, the applicable Loan
shall be payable on demand by the Bank, together with interest to the date
of payment at the effective Federal Funds Rate. The "Effective Federal
Funds Rate" shall mean a per annum floating rate of interest equal, for
any day, to the average per annum rate of interest at which member banks
of the Federal Reserve System make overnight loads to each other on such
day (or, if such day is not a Business Day, then on the next preceding
Business Day), as reported by the Federal Reserve Bank of New York.
"Business Day" shall mean any day other than a day on which banks are
authorized to be closed in New York City or San Francisco. Principal and
interest on each Loan shall be repaid in accordance with the terms of the
Oral Agreements and the Note by wire transfer of immediately available
funds to the Bank, as it shall direct from time to time.
4. Uncommitted Facility. The Borrower acknowledges that the Facility is
not a committed facility and that the Bank shall have no obligation to
make any Loads under this Agreement.
5. Benefit of Agreement. This Agreement and the Note shall be binding
upon, for the benefit of, and enforceable by the respective successors and
assigns of the parties hereto; provided that neither party to this
Agreement or the Note may assign any of its rights hereunder or thereunder
without the prior written consent of the other party. The Bank may sell
participations and subparticipations in all or any part of the Loans made
hereunder; provided that in such event the participant shall not have any
direct rights against the Borrower under this Agreement or the Note. The
Bank may furnish any information concerning the Borrower received with
respect to this Agreement from time to time to assignees and participants
(including prospective assignees and participants).
6. Notices. All notices hereunder and all written or telexed confirmations
of Oral Agreements made hereunder shall be sent, to the Borrower, as
indicated from time to time on Exhibit B and if to the Bank, as indicated
on Exhibit C.
7. Information to be Furnished by the Borrower. The Borrower agrees that
so long as any Loan is outstanding, the Borrower will deliver to the Bank:
(a) as soon as available and in any event within 90 days after the end of
each fiscal year of the Borrower, a copy of the Borrower's annual report
to shareholders or such other applicable audited financial report showing
the Borrower's (and subsidiaries) Consolidated Balance Sheet, Statements
of Income and Statements of Cash Flow;
(b) as soon as available and in any event within 45 days after the end of
each fiscal quarter of the Borrower, a Consolidated Balance Sheet of the
Borrower (and subsidiaries) as at the end of such quarter and the related
Consolidated Statements of Income, and Statements of Cash Flow for such
fiscal quarter and for the portion of the Borrower's fiscal year ended at
the end of such quarter; and
(c) prompt notice of the occurrence of any event or condition which
constitutes, or is likely to result in, a material adverse change in the
Borrower which would materially adversely affect the ability of the
Borrower to promptly repay principal and interest on all outstanding
Loans.
8. Expenses. The Borrower agrees to pay on demand all reasonable out-of-
pocket costs and expenses (including reasonable attorneys' fees and
expenses and the reasonable allocated cost of staff counsel) incurred by
the Bank in connection with the enforcement of, or any waiver or amendment
of any term of this Agreement, any Loan, or the Note.
9. Remedies. No failure or delay on the part of the Bank in exercising any
right or remedy hereunder or under the Note, nor any partial exercise of
any right or remedy shall preclude any further exercise thereof or the
exercise of any other right or remedy hereunder or under the Note. Such
rights and remedies expressly provided are cumulative and not exclusive
of any rights or remedies which the Bank would otherwise have.
10. Modifications. No provision of this Agreement or the Note may be
waived, modified or discharged except in writing by the Bank.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
If this letter correctly reflects your agreement with us, please
execute both copies hereof and return one to us, whereupon this
Agreement shall be binding upon you and the Bank.
Yours sincerely,
Bank of America National Trust
and Savings Association
Title:
Agreed and accepted this 26th day of July 1994.
Illinois Central Railroad Company
By:
Title
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