UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
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 (I.R.S. EMPLOYER
OF INCORPORATION OR IDENTIFICATION NO.)
ORGANIZATION)
455 NORTH CITYFRONT PLAZA DRIVE
CHICAGO, ILLINOIS 60611-5504
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(312) 755-7500
SECURITIES REGISTERED PURSUANT TO SECTION 12(B)
OF THE ACT:
Name of each exchange on
Title of each class so which each class is
registered: registered:
Illinois Central Railroad
Company New York Stock Exchange
6-3/4% Notes,
due May 15, 2003
Gulf, Mobile and Ohio
Railroad Company New York Stock Exchange
5% Income Debentures,
Series A, due December 1, 2056
Securities registered pursuant to Section 12(g) of
the Act:
None
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 .... <PAGE>
As of December 31, 1993, the number of shares
outstanding of the registrant's common stock was
100.
DOCUMENTS INCORPORATED BY REFERENCE
NONE
THE REGISTRANT IS A WHOLLY-OWNED SUBSIDIARY OF
ILLINOIS CENTRAL CORPORATION (SEC FILE NO. 1-10720)
AND MEETS THE CONDITIONS SET FORTH IN GENERAL
INSTRUCTION J (1) (a) AND (b) OF FORM 10-K AND IS
THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT.
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
FORM 10-K
Year Ended December 31, 1993
INDEX
PART I 10-K Page
Item 1. Business . . . . . . . . . . . 3
Item 2. Properties . . . . . . . . . .
Item 3. Legal Proceedings. . . . . . . 14
Item 4. Submission of Matters to a Vote
of Security Holders(A) . . . 17
PART II
Item 5. Market for the Registrant's Common
Equity and Related Stockholder
Matters. . . . . . . . . . . 19
Item 6. Selected Financial Data (A). . 19
Item 7. Management's Discussion and
Analysis of Financial Condition
and Results of Operations. . 23
Item 8. Financial Statements and
Supplementary Data . . . . . 27
Item 9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure . . . . 27
PART III
Item 10. Directors and Executive Officers
of the Registrant (A). . . . 28
Item 11. Executive Compensation (A) . . 28
Item 12. Security Ownership of Certain
Beneficial Owners and
Management (A) . . . . . . . 28
Item 13. Certain Relationships and Related
Transactions (A) . . . . . . 28
PART IV
Item 14. Exhibits, Financial Statement
Schedules and Reports on
Form 8-K . . . . . . . . . 28
SIGNATURES. . . . . . . . . . . . . . . 29
(A) Omitted or amended as the registrant is a
wholly-owned subsidiary of Illinois Central
Corporation and meets the conditions set forth
in General Instructions J(1) (a) and (b) of
Form 10-K and is, therefore, filing this Form
with the reduced disclosure format.
<PAGE>
PART I
ITEM 1. BUSINESS
- -----------------
BACKGROUND
Illinois Central Railroad Company (the
"Railroad"), traces its origin to 1851, when the
Railroad was incorporated as the nation's first
land grant railroad. Today, the Railroad operates
2,700 miles of main line track between Chicago and
the Gulf of Mexico, primarily carrying chemicals,
coal and paper north, with coal, grain and milled
grain products moving south along its lines. The
Railroad has been significantly downsized and
restructured from its peak of nearly 10,000 miles
of track operated in 13 states, rebuilding its main
line and converting to a single-track main line
with a centralized traffic control system and
divesting major east-west segments. The Railroad
is a wholly-owned subsidiary and a principal asset
of Illinois Central Corporation ("IC").
In 1989, the Railroad was acquired by The
Prospect Group, Inc. ("Prospect") by means of a
public tender offer that resulted in the Railroad
becoming highly leveraged. Prospect distributed
the stock of the Railroad to Prospect's
stockholders in 1990, and the Railroad again became
publicly owned. Improved operating performance,
combined with sales of non-operating assets and
proceeds from equity and lower-cost debt financings
since 1990 have resulted in a substantial reduction
in the Railroad's leverage. Between December 31,
1989 and December 31, 1993, the Railroad reduced
its debt to capitalization ratio from 89% to
approximately 49%.
The principal executive office of the Railroad
is located at 455 North Cityfront Plaza Drive,
Chicago, Illinois 60611-5504 and its telephone
number is (312) 755-7500.
GENERAL
The Railroad is in the midst of a four year
plan designed to increase its revenues and lower
its operating ratio and interest costs. The plan
is in sharp contrast to the Railroad's primary
focus for the four years ended December 31, 1992 of
significantly reducing costs and improving service
offerings.
With 1992 as its base, the plan will focus on
capitalizing on the Railroad's leading operating
ratio among Class I railroads (operating expenses
divided by operating revenues) which was 68.6% at
December 31, 1993. The components of the plan are:
- increase annual revenues by $100 million by
the end of 1996
- reduce the operating ratio by one percentage
point per year for a total of four (4) points
below the 1992 base
- reduce annual interest expense by $10 million
To accomplish this plan, revenues must grow at
a compounded rate of 4.3% per year while operating
expenses must not exceed a compounded annual growth
rate of 2.5% per year.
Management has identified the sources of
planned revenue growth as economic expansion, new
and expanded plants on line and market share
growth. Economic expansion is the combination of
industrial production improvement and freight rate
increases. Market share growth is volume gained
from competition, (i.e., other railroads,
trucklines and barges) facilitated by being a low
cost producer. See "Item 7. Management's
Discussion and Analysis of Financial Condition and
Results of Operations" for a discussion of the
progress made in 1993.
To foster achievement of these goals, the
Railroad reorganized its marketing and sales effort
(see below), restructured its safety and claims
group into a Risk Management Group and streamlined
the operating organization. The latter effectively
created teams of engineering, maintenance and
transportation experts who share the common goal of
moving trains safely and efficiently. As a result
of these changes, decision-making authority and
accountability are now at lower and more localized
levels, in line with the Railroad's systematic
efforts to examine and refine all aspects of its
service offering to customers.
COMMODITIES AND CUSTOMERS
The Railroad's customers are engaged in a wide
variety of businesses and ship a number of
different products that can be classified into
commodity groups: chemicals, coal, grain, paper,
grain mill and food products and other commodities.
In 1993, two customers accounted for approximately
7% and 6%, respectively, of revenues (no other
customer exceeded 5%) and the ten largest customers
accounted for approximately 37% of revenues.
In order to address more effectively the
diversity of the Railroad's customer base and move
toward attainment of the four year growth plan, the
Railroad's marketing department was re-organized in
1993 along major commodity groups. The new
business units are chemicals and bulk, grain and
grain mill, forest products, coal and coke and
metals, and intermodal. The formation of separate
units enables a fully integrated sales and
marketing effort. Specialization allows employees
to anticipate and respond to customer needs more
quickly, to attract customers who previously used
trucks or barges for their service needs, and to
establish business relationships with new shippers.
These new units work with current and prospective
customers to develop customized shipping solutions.
Management believes that this commitment to
improved customer service has enhanced relations
with shippers.
The formation of the Intermodal Business Unit
underscores the Railroad's commitment to intermodal
through long-term relationships with major
participants in this strategic market. By forming
a separate business unit, the Railroad has fully
integrated its intermodal hub operation with sales
and marketing for unmatched control of this highly
specialized, customer-oriented service.
In 1993, the Railroad invested in 800 new
trailers and upgraded facilities to position itself
for intermodal growth, dedicated its newest, state-
of-the-art terminal, just south of Chicago at the
intersections of major expressways, and initiated a
major expansion at the Memphis facility with
completion anticipated for the first quarter of
1994.
To enhance service within its corridor, the
Railroad entered into several joint operating
agreements in 1992 and 1993 with trucklines and
other intermodal carriers. Management anticipates
that these relationships will provide better
service to customers and seamless transportation of
goods for shippers and customers.
In 1993, approximately 75% of the Railroad's
freight traffic originated on its own lines, of
which approximately 29% was forwarded to other
carriers. Approximately 20% of the Railroad's
freight traffic was received from other carriers
for final delivery by the Railroad, and the balance
of approximately 5% represented bridge or through
traffic.
The respective percentage contributions by
principal commodity group to the Railroad's freight
revenues and revenue ton miles during the past five
years are set forth below:
<TABLE>
CONTRIBUTIONS TO TOTAL FREIGHT REVENUES BY COMMODITY GROUP
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMMODITY
GROUP 1993 1992 1991 1990 1989
---- ---- ---- ---- ----
Chemicals.......................... 25.0% 24.3% 24.5% 25.3% 24.3%
Coal............................... 12.8 15.3 15.0 15.3 16.0
Grain.............................. 14.0 12.2 11.7 10.7 12.6
Paper.............................. 12.4 12.1 11.2 10.7 9.9
Grain mill & food products ........ 9.8 8.8 8.7 9.5 8.7
Intermodal......................... 5.4 5.4 5.2 5.0 4.6
All other ......................... 20.6 21.9 23.7 23.5 23.9
------ ------ ------ ------ ------
Total ............................. 100.0% 100.0% 100.0% 100.0% 100.0%
CONTRIBUTION TO REVENUE TON MILES BY COMMODITY GROUP(1)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMODITY
GROUP 1993 1992 1991
Chemicals................... 15.9% 15.1% 16.0%
Coal........................ 15.1 18.2 17.0
Grain....................... 27.9 27.3 27.7
Paper....................... 9.6 9.0 8.4
Grain mill & food products.. 9.9 9.0 8.3
Intermodal.................. 3.7 3.1 2.9
All other .................. 17.9 18.3 19.7
------ ------ ------
Total....................... 100.0% 100.0% 100.0%
</TABLE>
- -----------------
(1) A new car tracking system installed in late 1990
affects the comparability of 1993's, 1992's and 1991's ton
mile data with that of the prior years, thus prior years
are not presented.
<PAGE>
Some of the elements contained in these commodity
groupings are as follows:
CHEMICALS ................... A wide variety of chemicals
and related products such
as chlorine, caustic soda,
potash, soda ash, vinyl
chloride monomer, carbon
dioxide, synthetic resins,
alcohols, glycols, styrene
monomer, plastics, sulfuric
acid, muriatic acid,
anhydrous ammonia,
phosphates, mixed
fertilizer compounds and
carbon blacks.
COAL......................... Bituminous and
metallurgical coal.
GRAIN ....................... Corn, wheat, soybeans,
sorghum, barley and oats.
PAPER........................ Pulpboard, fiberboard,
woodpulp, printing paper,
newsprint and scrap or
waste paper.
GRAIN MILL & FOOD PRODUCTS .. Products obtained by
processing grain and other
farm products such as feed,
soybean meal, corn syrup,
flour and middlings, animal
packinghouse by-products
(tallow), canned food, corn
oil, soybean oil, vegetable
oils, malt liquors, sugar
and molasses.
INTERMODAL................... A wide variety of products
shipped either in
containers or trailers on
specially designed cars.
OTHER........................ Pulpwood and chips, lumber
and other wood products;
sand, gravel and stone,
coke and petroleum
products, metallic ores and
other bulk commodities;
primary and scrap metals,
machinery and metal
products, appliances,
automobiles and parts,
transportation equipment
and farm machinery; glass
and clay products, ordnance
and explosives, rubber and
plastic products, and
general commodities.<PAGE>
<TABLE>
<CAPTION>
OPERATING STATISTICS
Set forth below is certain information relating to the
Railroad's freight traffic during the past five years:
<S> <C> <C> <C> <C> <C>
1993 1992 1991 1990 1989
Carloads (in thousands)......... 848 852 866 853 893
Freight train miles
(in thousands)(2)............. 5,659 5,149 5,445 5,496 5,974
Revenue ton miles of freight
traffic (in millions)(1) (3).. 20,334 18,734 19,357 NM NM
Revenue tons per carload........ 79.1 76.6 79.0 77.7 79.8
Average length of haul
(in miles).................... 293 284 286 270 246
Gross freight revenue per
ton mile(1) (4)............... $ .027 $ .029 $ .028 NM NM
Net freight ton miles per average
route mile (in millions)(1)... 7.5 6.8 7.0 NM NM
Gallons per ton mile(5)......... .00251 .00269 .00276 .00292 .00329
Active locomotives.............. 322 331 361 375 439
Track resurfacing (miles)....... 1,293 1,465 940 618 200
Percent resurfaced.............. 29.8% 32.0% 19.6% 12.7% 3.9%
Ties laid in replacement
(including switch ties)....... 323,764 296,536 255,283 240,968 55,346
Slow order miles................ 152.32 135.42 194.62 149.74 308.19
</TABLE>
- ---------------
(1) Ton mile data for years subsequent to December
31, 1990, are not comparable with prior years
because of the installation of a new car
tracking system in late 1990. As a result,
this information is not meaningful (NM) for
1990 and 1989.
(2) Freight train miles equals the total number of
miles traveled by the Railroad's trains in the
movement of freight.
(3) Revenue ton miles of freight traffic equals
the product of the weight in tons of freight
carried for hire and the distance in miles
between origin and destination.
(4) Revenue per ton mile equals net freight
revenue divided by revenue ton miles of
freight traffic.
(5) Gallons per ton mile equals the amount of fuel
required to move one ton of freight one mile.
<PAGE>
The following tables summarize operating
expense-to-revenue ratios of the Railroad for each of the
past four years, excluding the effect of the $8.9 million
pretax special charge in 1992. The ratios for 1989 are
not comparable to subsequent years because of the
March 17, 1989, change in control and are not presented.
The first table analyzes the various components of
operating expenses based on the line items appearing on
the income statements, whereas the second table is based
on functional groupings.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1993 1992 1991 1990
Operating ratio(1)............... 68.6% 70.9% 73.6% 75.4%
Labor and fringe benefits ratio.. 33.7 34.9 35.8 37.3
Leases and car hire ratio........ 13.0 13.3 14.2 14.8
Diesel fuel ratio................ 5.4 5.5 6.0 5.9
Materials and supplies ratio..... 6.5 6.0 5.7 4.8
Depreciation and amortization
ratio........................... 4.0 3.9 3.8 4.0
Other ratio...................... 6.0 7.3 8.1 8.6
1993 1992 1991 1990
Operating ratio(1)............... 68.6% 70.9% 73.6% 75.4%
Transportation ratio(2).......... 29.6 31.6 34.8 35.3
Maintenance of way ratio(3)...... 7.2 7.1 6.4 7.1
Maintenance of equipment ratio(4) 21.3 22.9 23.9 23.7
</TABLE>
- ---------------------
(1) Operating ratio means the ratio of operating
expenses before special charge over operating
revenues.
(2) Transportation ratio means the ratio of
transportation expenses (such as expenses of
operating, servicing, inspecting, weighing,
assembling and switching trains) over
operating revenues.
(3) Maintenance of way ratio means the ratio of
maintenance of way expenses (such as the
expense of repairing, maintaining, leasing,
depreciating and retiring right-of-way and
trackage structures, buildings and facilities)
over operating revenues.
(4) Maintenance of equipment ratio means the ratio
of maintenance of equipment expenses (such as
the expense of repairing, maintaining,
leasing, depreciating and retiring
transportation and other operating equipment)
over operating revenues.
<PAGE>
EMPLOYEES; LABOR RELATIONS
Railroad industry personnel are covered by the
Railroad Retirement System instead of Social Security.
Employer contribution rates under the Railroad Retirement
System are currently more than double those in other
industries, and may rise further because of the
increasing proportion of retired employees receiving
benefits relative to the shrinking number of working
employees.
Labor relations in the railroad industry are subject
to extensive governmental regulation under the Railway
Labor Act. Railroad industry personnel are also covered
by the Federal Employer's Liability Act ("FELA") rather
than by state no-fault workmen's compensation systems.
FELA is a fault-based system, with compensation for
injuries determined by individual negotiation or
litigation.
The Railroad is a party to several national
collective bargaining agreements which establish the
wages and benefits of its union workers -- 90% of all
Railroad employees. These agreements are subject to
renegotiation beginning November 1, 1994, however, cost
of living allowance provisions and other terms in each
agreement continue until new agreements are reached.
Despite being part of a national bargaining group, the
Railroad has expressed a desire to negotiate separate
distinct agreements with each of its unions on a local
basis. Management has been exploring that position and
has held several discussions with representatives from
most of its unions. It is too early to determine if
separate agreements will be reached. Thus, the Railroad
has not taken steps to withdraw formally from the
national bargaining group. The following table shows the
average annual employment levels of the Railroad:
1993 1992 1991 1990 1989
Total employees.. 3,306 3,421 3,611 3,688 3,942
A significant portion of the decline from the 1992
level is the result of a separate agreement between the
Railroad and the United Transportation Union, reached in
November 1991. This agreement permits the Railroad to
reduce the size of all crews on all trains operated. In
accordance with this agreement, 158 crew members were
severed at a cost of $9.6 million to date. No further
dramatic reductions in the current crew size of
approximately 2.75 at December 31, 1993 is anticipated.
Management believes that additional jobs in all
areas may be eliminated over the next several years
primarily through attrition and retirements though
additional severances are possible.
<PAGE>
REGULATORY MATTERS; FREIGHT RATES; ENVIRONMENTAL
CONSIDERATIONS
The Railroad is subject to significant governmental
regulation by the ICC and other federal, state and local
regulatory authorities with respect to rates, service,
safety and operations.
The jurisdiction of the ICC encompasses, among other
things, rates charged for certain transportation
services, issuance of securities, assumption of certain
liabilities by railroads, mergers or the acquisition of
control of one carrier by another carrier and extension
or abandonment of rail lines or services.
The Federal Railroad Administration, the
Occupational Safety and Health Administration and certain
state transportation agencies have jurisdiction over
railroad safety matters. These agencies prescribe and
enforce regulations concerning car and locomotive safety
equipment, track safety standards, employee work
conditions and other operating practices.
The amount of coal transported by the Railroad is
expected to decline somewhat as the Clean Air Act is
fully implemented. Much of the coal from mines currently
served by the Railroad will not meet the environmental
standards of the Clean Air Act without blending or
installation of air scrubbers. On the other hand, the
Railroad expects to participate in additional movements
of Western coal. Overall, management believes that
implementation of the Clean Air Act is unlikely to have
a material adverse effect on the results of the Railroad.
The Railroad is and will continue to be subject to
extensive regulation under environmental laws and
regulations 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," several properties on which the
Railroad currently or formerly conducted operations are
subject to governmental action in connection with
environmental degradation. Additional expenditures by
the Railroad may be required in order to comply with
existing and future environmental and health and safety
laws and regulations or to address other sites which may
be discovered.
Environmental regulations and remediation processes
are subject to future change and cannot be determined at
this time. Based on present information, in the opinion
of management, the Railroad has adequate reserves for the
costs of environmental 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.
COMPETITION
The Railroad faces intense competition for freight
traffic from motor, water, and pipeline carriers and, to
a lesser degree, from other railroads. Competition with
other railroads and other modes of transportation is
generally based on the quality and reliability of the
service provided and the rates charged. Declining fuel
prices disproportionately benefit trucking operations
over railroad operations. The trucking industry
frequently is more cost and transit-time competitive
than railroads, particularly for distances of less
than 500 miles. While deregulation of freight rates
under the Staggers Act has greatly increased the ability
of railroads to compete with each other and alternate
forms of transportation, changes in governmental
regulations (particularly changes to the Staggers Act)
could significantly affect the Railroad's competitive
position.
To a greater degree than other rail carriers the
Railroad is vulnerable to barge competition because its
main routes are parallel to the Mississippi River system.
The use of barges for some commodities, particularly coal
and grain, sometimes represents a lower cost mode of
transportation. As a result, the Railroad's revenue per
ton-mile has generally been lower than industry averages
for these commodities. Barge competition and barge rates
are affected by navigational interruptions from ice,
floods and droughts. These interruptions cause widely
fluctuating rates. The Railroad's ability to maintain
its market share of the available freight has
traditionally been affected by its response to the
navigational conditions on the river.
Most of the Railroad's operations are conducted
between points served by one or more competing carriers.
The consolidation in recent years of major midwestern and
eastern rail systems has resulted in strong competition
in the service territory of the Railroad.
LIENS ON PROPERTIES
See Note 8 of Notes to Consolidated Financial
Statements.
LIABILITY INSURANCE
The Railroad is self-insured for the first $5
million of each loss. The Railroad carries $295 million
of liability insurance per occurrence, subject to an
annual cap of $370 million in the aggregate for all
losses. This coverage is considered by the Railroad's
management to be adequate in light of the Railroad's
safety record and claims experience.
<PAGE>
ITEM 2. PROPERTIES
- -------------------
PHYSICAL PLANT AND EQUIPMENT
System. As of December 31, 1993, the Railroad's
total system consisted of approximately 4,700 miles of
track comprised of 2,700 miles of main line, 300 miles of
secondary main line and 1,700 miles of passing, yard and
switching track. The Railroad owns all of the track
except for 190 miles operated by agreements over track
owned by other railroads.
Track Structures. During the five years ended
December 31, 1993, the Railroad has spent $305.3 million
on track structure to maintain its rail lines, as follows
($ in millions):
CAPITAL
Expenditures Maintenance Total
------------ ----------- -----
1993 ................ $ 50.3 $ 25.1 $ 75.4
1992 ................ 46.4 23.0 69.4
1991 ................ 36.3 20.7 57.0
1990 ................ 34.6 20.0 54.6
1989 ................ 19.1 29.8 48.9
------ ------ ------
Total.............. $186.7 $118.6 $305.3
These expenditures concentrated primarily on track
roadway and bridge rehabilitation in 1993 and 1992.
Approximately 1,300 miles and 1,400 miles of road were
resurfaced in 1993 and 1992, respectively. Over the last
two years, a total of $8.4 million was spent to construct
new or expanded intermodal facilities in Chicago and
Memphis. Expenditures in 1991 and 1990 benefited from
the use of reclaimed rail, cross ties, ballast and other
track materials from the second main line when the
Railroad's double-track mainline was converted to a
single-track mainline with centralized traffic control.
Most reclaimed material has now been used and future
expenditures will reflect the purchase of new materials.
The reduced number of miles of track and the general good
condition of the track structure should result in future
expenditures approximately equal to the average of 1993
and 1992.
Fleet. The Railroad's fleet has undergone
significant rationalization and upgrading from its peak
in 1985 of 862 locomotives and 28,616 freight cars. Over
the last two years older, less efficient locomotives were
replaced with newer larger horsepower and more efficient
equipment.
The Railroad is leasing 61 locomotives and
approximately 650 cars from other subsidiaries of IC.
When those leases expire, the Railroad has first right of
refusal to lease the equipment. As these cars are leased
to the Railroad other leased equipment will be returned
to the independent, third-party lessors or short-term car
hire agreements will be terminated. In 1993, the
Railroad acquired 4 SD-40-2 locomotives and also upgraded
its highway trailer fleet with 800 newly built trailers
which replaced 880 older leased trailers.
The following is the overall fleet at December 31:
Total Units: 1993 1992 1991 1990 1989
Locomotives(1).... 468 449 470 471 516
Freight cars ..... 15,112 15,877 16,381 16,526 17,141
Work equipment.... 745 902 881 934 1,000
Highway trailers(2) 898 203 124 67 70
- ------------------
(1) Approximately 100 locomotives need repair before
they can be returned to service. This equipment is
repaired if needed on an ongoing basis or sold. In 1993
and 1992, the Railroad sold 23 and 66 surplus
locomotives, respectively. The active fleet is 322 as of
December 31, 1993.
(2) Excludes trailers being accumulated for return to
lessors.
The components of the Railroad's fleet and in total for
1993 and in total for 1992 are shown below:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Long-Term 1993 1992
Description(1) Owned(2) Lease Total Total
- ------------ ------ --------- ----- -----
Locomotives:
Multipurpose 223 145 368 352
Switching 18 82 100 97
Total 241 227 468 449
Freight Cars:
Box (general service) 199 357 556 703
Box (special purpose) 1,928 725 2,653 2,345
Gondola 945 149 1,094 1,046
Hopper (open top) 1,611 3,344 4,955 5,397
Hopper (covered) 2,418 1,359 3,777 3,574
Flat 304 547 851 883
Other 998 228 1,226 1,929
Total 8,403 6,709 15,112 15,877
Work equipment 704 41 745 902
Highway trailers(3) - 898 898 203
</TABLE>
(1) In addition, approximately 2,735 freight cars and
696 highway trailers were being used by the Railroad
under short-term car hire agreements.
(2) May be subject to Conditional Sales Agreements.
(3) Excludes trailers being accumulated for return to
lessor.<PAGE>
ITEM 3. LEGAL PROCEEDINGS
- --------------------------
State of Alabama, et al. v. Alabama Wood Treating
Corporation, Inc., et al., S.D. Ala. No. 85-0642-C
The State of Alabama and Alabama State Docks
("ASD") filed suit in 1985 seeking damages for
alleged pollution of land in Mobile, Alabama,
stemming from creosoting operations over several
decades. Defendants include the Railroad, which
owned the land until 1976, Alabama Wood Treating
Corporation, Inc., and Reilly Industries, Inc.
("RII"), which leased the land from the Railroad
and conducted creosote operations on the site. In
December 1976, the Railroad sold the premises to
ASD. The complaint sought payment for the clean-up
cost together with punitive and other damages.
In 1986, ASD, RII and the Railroad agreed to form a
joint technical committee to clean the site sharing
equally the cost of clean-up, and in October 1986,
the court stayed further proceedings in the suit.
Under the agreement the joint technical committee
has spent approximately $6.6 million and has been
authorized to expend up to a total of $6.9 million.
The Railroad has contributed $2.2 million and has
agreed to increase its contribution to a total of
$2.3 million. Further clean-up activities are
anticipated.
Under the agreement, if any party disagrees with
the amount determined by the joint technical
committee to be expended or otherwise disagrees
with any aspect of the clean-up, such party may
decline further participation and recommence legal
proceedings. However, amounts already contributed
by any party will be credited against that party's
eventual liability and may not be recovered from
any other party.
Iselin Yard, Jackson, Tennessee
In 1991, the Iselin Rail Yard in Jackson, Tennessee
was placed on the Tennessee Superfund list. In May
1993, the United States Environmental Protection
Agency ("EPA") proposed to add a number of sites,
including Iselin Rail Yard to the National
Priorities List. The Railroad operated a rail yard
and locomotive repair facility at the site. The
shop facility was sold in 1986 and the rail yard
was sold in 1988. Trichloroethylene ("TCE") has
been found in several municipal water wells near
the site. TCE is a common component of solvents
similar to those believed to have been used at the
Iselin shop. In addition, concentrations of metals
and organic chemicals have been identified on the
surface of the site. No order has been issued by
any regulatory agency but the State of Tennessee is
monitoring work at the site. The Railroad expects
to cooperate with the agencies and other
Potentially Responsible Parties to conduct any
necessary studies and clean-up activities. The
Railroad has commenced a remedial investigation and
feasibility study of the site.
McComb, Mississippi
Elevated levels of lead and other soil
contamination has been discovered at the Railroad's
facility in McComb, Mississippi. The site was used
for many years for sandblasting lead-based paint
off freight cars. The Railroad has commenced a
formal site investigation under the supervision of
the Mississippi Department of Environmental
Quality. The Remedial Investigation has disclosed
the presence of lead in the soil and further
testing of the surface and subsurface soil and
groundwater is underway to assess the scope of the
contamination. No order has been issued by any
regulatory agency. The Railroad expects to
cooperate with the State of Mississippi to conduct
any necessary studies and clean-up activities.
Waste Oil Generation
The Railroad was notified in September 1992 that it
had been identified as a Potentially Responsible
Party at a federal superfund site in West Memphis,
Arkansas. The Railroad is alleged to have
generated waste oil which was collected by a waste
oil refiner who in turn disposed of sludge at the
West Memphis landfill. In December 1992, the
successor to the refiner initiated legal
proceedings to preserve testimony in anticipation
of a future contribution action against multiple
Potentially Responsible Parties including the
Railroad. Similar actions have been taken by the
EPA or third parties with respect to waste oil
allegedly generated by the Railroad and disposed of
in landfills at Livingston, LA, Griffith, IN and
Nashville, TN.
Based on information currently available, the
Railroad believes it has substantial defenses to
liability for any contamination at these sites, and
that any contribution to the contamination by the
Railroad was de minimis.
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
Intentionally omitted. See Index page of this
Report for explanation.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
All of the outstanding common stock of the Railroad
(100 shares) is owned by IC and therefore is not traded
on any market. Various credit agreements limit the
Railroad's ability to pay cash dividends to IC. However,
the Railroad was able to declare $36.0 million in
dividends in 1993 and $12.8 million in dividends in 1992.
At December 31, 1993, approximately $76 million of the
Railroad's equity was in excess of the limitation and
available for dividend to IC.
ITEM 6. SELECTED FINANCIAL DATA
- --------------------------------
Intentionally omitted. See Index page of this
Report for explanation.<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GROWTH PLAN
For the four years ended December 31, 1992, the
Railroad's primary drivers were reducing costs and
improving service offerings. The result was the best
operating ratio among Class I railroads, 68.6% at
December 31, 1993. While costs continue to be
scrutinized, a new direction was initiated in 1993. With
1992 as its base, a new plan was outlined as follows:
- increase annual revenues by $100 million by
the end of 1996.
- reduce the operating ratio by one percentage
point per year for a total of four (4) points
below the 1992 base.
- reduce annual interest expense by $10 million.
To accomplish this plan, revenues must grow at a
compounded annual rate of 4.3% while operating expenses
must not exceed a compounded annual growth rate of 2.5%
per year.
Management has identified the sources of planned
revenue growth as economic expansion, new and expanded
plants on our line and market share growth. Economic
expansion is the combination of industrial production
improvement and freight rate increases. Market share
growth is volume gained from competition i.e., other
railroads, trucklines and barges, facilitated by being a
low cost producer.
In 1993, the first year of the growth plan,
significant strides were made in accomplishing the plan
as total revenues increased 3.1%. Two major unplanned
events had an impact on revenues. In May 1993, the
United Mine Workers began a strike against several
companies affecting six mines served by the Railroad. As
a result, approximately 35,000 carloads of coal were
lost. The strike was settled in December 1993, and full
production resumed in January 1994. Partially offsetting
the lost coal loads was a gain of approximately 15,000
carloads of grain and grain mill products. This traffic
was diverted to the Railroad as a result of the flooding
of the upper Mississippi River in July and August 1993.
Additionally, over 500 trains from several other Class I
railroads were detoured over the Railroad's system. The
result was a significant increase in traffic density over
the Railroad's routes.
Carloadings of paper recorded their fourth
consecutive annual increase (3% for 1993). The increase
was a result of the improved economy and growth in
recycling. In 1993, chemical traffic increased 6%,
reversing a two-year recessionary trend. While not
benefiting for the full year from various truckline
partnerships, intermodal traffic grew at 15% in the
second half of 1993 versus the second half of 1992.
While 1993 revenue lagged behind the plan compound
rate of 4.3%, management believes the Railroad is
positioned well for 1994. The targeted revenue growth in
1994 is 5%.
For 1993, the Railroad exceeded its operating ratio
goal. Actual improvement was 2.3 percentage points and
the full year operating ratio was 68.6%. More efficient
train crew and train scheduling coupled with reduced
costs contributed to this achievement.
The tender offer for and retirement of the
Railroad's $145 million 14-1/8% Debentures, in the second
quarter of 1993, effectively resulted in the achievement
of the third goal of the growth plan as interest expense,
net declined $10.5 million in 1993 to $33.1 million.
Interest expense, net is expected to be below $30 million
in 1994.
RESULTS OF OPERATIONS
The discussion below takes into account the financial
condition and results of operations of the Railroad for
the years presented in the consolidated financial
statements.
1993 COMPARED TO 1992
Revenues for 1993 increased from the prior year by
$17.3 million or 3.1% to $564.7 million. The increase
was a result of a 2.9% increase in average gross freight
revenue per carload, resulting from an improved commodity
mix and modest rate increases. The 1993 revenue increase
was attributable in part to the gain in carloads when the
upper Mississippi River flooding affected barge traffic
and also disrupted rail operations of other carriers
which diverted traffic to the Railroad's system.
Additionally, chemical loads were up 6% and paper was up
3%. Intermodal was up 5%, reflecting the Railroad's
commitment to increase this aspect of operation, as
evidenced by the new Chicago-area intermodal facility and
expansions in Memphis. These gains were offset by lost
carloads of coal resulting from the United Mine Workers
strike of certain coal producers. For the year,
carloadings declined .5% (or 4,400 carloads) to 847,900
carloads.
Operating expenses for 1993 decreased $1.1 million,
or .3% as compared to 1992, excluding the special charge
recorded in 1992. Labor expense decreased $1.1 million
as a result of on-going cost control programs, including
the reduction in train crews, and an overall improvement
in efficiency. This decrease was accomplished despite
the additional expense incurred because of the flood-
related detours of other railroads' trains over the
Railroad's track and a 3% wage increase which was
effective July 1, 1993 for union employees. Fuel expense
reflects the increased traffic in 1993 and 1992 coupled
with a total of $1.5 million for increased fuel taxes
resulting from the Omnibus Budget Reconciliation Act of
1993 and for the costs associated with fuel hedges. The
more fuel efficient locomotives acquired over the last
two years partially offset the rise in fuel costs.
Materials and supplies increased $3.6 million primarily
as a result of track material purchases. The surplus
from the single track project was substantially depleted
necessitating purchase of new materials.
Operating income for 1993 increased 18.2% ($27.3
million) to $177.6 million compared to $150.3 million for
1992, as a result of increased revenues cited above and
decreased expenses (including the 1992 special charge).
Excluding the special charge, the increase in operating
income was 11.6% ($18.4 million).
Net interest expense decreased by 25.9% to $31.8
million compared to $42.9 million in 1992. The issuance
of new notes at 6.75% to replace the 14-1/8% Senior
Subordinated Debentures (the "Debentures") and lower
interest rates on floating debt account for the reduced
interest expense in 1993. The Debentures were retired
via a tender offer which resulted in an extraordinary
loss of $23.4 million, net of $12.6 million in tax
benefits. The extraordinary loss covers the costs
associated with the tender (i.e., premium on repurchase,
the write-off of unamortized financing fees and debt
discount and the costs associated with calling the
untendered Debentures).
See "Liquidity and Capital Resources" for discussion
of the impact of the
Omnibus Budget Reconciliation Act of 1993.
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. In
accordance with each standard, years prior to 1993 have
not been restated.
For 1993, the adoption of these two standards had no
significant effect on income before cumulative effect of
changes in accounting principles as compared to the
Railroad's prior pay-as-you-go method of accounting for
such benefits. The Railroad has no plans to fund these
liabilities and will continue to pay these costs on a
pay-as-you-go basis, as was done in prior years.
1992 COMPARED TO 1991
Revenues for 1992 decreased from the prior year by
$2.3 million or .4% to $547.4 million. The decrease
resulted from a 1.6% (or 13,900 carloads) decrease in the
number of freight carloads to 852,300, offset by a 1.1%
increase in the average gross revenue per carload. Net
freight revenue ton miles decreased 3.2% to 18.7 billion.
Gross freight revenue per thousand ton miles increased
2.7% to $28.89 from $28.12. The increase in average
revenue per carload was caused by an improved commodity
mix, in which a greater volume of higher revenue per
carload commodities was hauled, and modest rate
increases.
Operating expense for 1992 decreased by $7.5
million, or 1.9% as compared to 1991, even though the
Railroad recorded an $8.9 million pretax special charge
in 1992. Reductions in labor expense ($5.5 million),
lease and car hire expense ($5.2 million), diesel fuel
expense ($3.1 million) and a favorable litigation
settlement in the first quarter more than offset the
special charge. The special charge covered certain
organizational and other expenses associated with the
retirement of E. L. Moyers, the Railroad's Chairman,
President and Chief Executive Officer until February
1993, as well as various unrelated asset revaluations.
Operating income for 1992 increased by 3.6% to
$150.3 million compared to $145.1 million for 1991, as a
result of decreased expenses cited above offset by the
aforementioned pretax special charge and decreased
revenues. Excluding the special charge, the Railroad's
1992 operating income was $159.2 million, an increase of
$14.1 million (9.7%) as compared to 1991. This increase
is a result of on-going cost reduction programs,
including the reduction in train crew sizes and the
overall emphasis on efficiency.
Net interest expense decreased by 23.5% from $56.1
million to $42.9 million. The full year effect of the
August 1991 refinancing of the Series K Mortgage Bonds
and the repayment of approximately $34.0 million of the
Term Facility accounted for approximately $4.0 million
and $8.0 million, respectively, in reduced interest
expense for 1992.
Effective January 1, 1992, the Railroad adopted SFAS
No. 109, "Accounting for Income Taxes." As a result, the
Railroad recorded a $23.7 million reduction of its
accrued deferred income tax liabilities. The Railroad
elected to report this change as the cumulative effect of
change in accounting principle. Therefore, prior period
amounts have not been restated.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
OPERATING DATA:
1993 1992 1991
---- ---- ----
Cash flows provided by (used for):
Operating activities... $121.7 $ 124.1 $ 61.1
Investing activities... (54.1) (45.5) (25.2)
Financing activities... (85.1) (67.9) (34.5)
------ ------- ------
Net change in cash and
temporary cash
investments. $(17.5) $ 10.7 $ 1.4
Cash from operating activities was primarily net
income before depreciation, deferred taxes, extraordinary
item and the cumulative effect of changes in accounting
principles. A significant source of cash in 1992 ($26.4
million) was the realization of settlement proceeds with
numerous insurance carriers in connection with asbestos
and hearing loss casualty claims. Most of the
settlements were for prior claims but some cover future
claims related to prior periods. As part of the
settlements, the Railroad agreed to release the carriers
from liability for future hearing loss claims. An
additional $6.3 million was received in 1993.
During 1993, additions to property of $57.1 million
included approximately $36.6 million for track and bridge
rehabilitation and approximately $.6 million for the
purchase of 4 locomotives. During 1992, additions to
property of $50.8 million included approximately $46.4
million for track and bridge rehabilitation including
approximately $5 million for the construction of a new
intermodal facility in the Chicago area. The funds for
this new facility were provided by advance rentals on a
three-year lease agreement for the Railroad's old
intermodal yard in Chicago by another railroad. The
other railroad also paid for an option to acquire the old
yard for cash at any time during the three-year lease
period. Proceeds from the sales of excess materials
generated by the single-track project ($4.1 million in
1992) partially offset the cost of property additions.
Property retirements and removals unrelated to the
single-track project generated proceeds of $5.3 million
and $3.5 million in 1993 and 1992, respectively.
The Railroad anticipates that base capital
expenditures for 1994 will be approximately $50 million
and will concentrate on track maintenance, renewal of
track structures such as bridges, and upgrading the
locomotive fleet. If additional opportunities such as
lease conversions or market-driven expansions occur in
1994, the total capital spending could be approximately
$70 million. These expenditures are expected to be met
from current operations or other available sources.
<PAGE>
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. During that time
frame, the Railroad's public debt has moved from being
designated a "Highly Leveraged Transaction" to being
rated Baa3 by Moody's Investors Service ("Moody's") and
BBB by Standard & Poor's Corporation ("S&P"). Likewise,
the Railroad's debt has also gone from fully
collateralized to unsecured. A further step in this
process was the initiation of a public commercial paper
program in November 1993.
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 December 31, 1993, $38.1 million of commercial paper
was outstanding with various maturities. The interest
rates ranged from 3.45% to 3.75%. The Railroad views
this program as a significant long-term funding source
and intends to issue replacement notes as each existing
issue matures. Therefore, the $38.1 million is
classified as long-term.
Twice during 1993, the Railroad renegotiated its
lending arrangements with its bank lending group and the
private placement noteholders. In April 1993, in
connection with the Tender Offer for the $145 million 14-
1/8% Senior Subordinated Debentures (the "Debentures")
(see below), the banks converted the previous Permanent
Facility to a $180 million Revolving Credit Facility due
1996 at LIBOR plus 100 basis points. The banks and the
holders of the $160 million senior secured notes ("Senior
Notes") issued in 1991 agreed to release all collateral
and continue to lend on an unsecured basis. In November
1993, the banks again modified this arrangement in
connection with the commercial paper program. The new
bank agreements consist of a new $100 million Revolver,
due 1996 and a $50 million 364-day facility due in
October 1994 (the "Bank Line"). The new Revolver will be
used primarily for backup for the commercial paper but
can be used for general corporate purposes. The
available amount is reduced by the outstanding amount of
commercial paper borrowings and any letters of credit
issued on behalf of the Railroad under the facility. No
amounts have been drawn under the Revolver. The $100
million was limited to $57.9 million because $38.1
million in commercial paper was outstanding and $4.0
million in letters of credit had been issued. The Bank
Line was structured as a 364-day renewal instrument and
the Railroad intends to renew it on an on-going basis.
The $40 million borrowed at December 31, 1993, has
therefore been classified as long-term.
The Company believes that its available cash, cash
generated by its operations and cash available via
commercial paper, the Revolver and the Bank Line will be
sufficient to meet foreseeable liquidity requirements.<PAGE>
Various borrowings of the Railroad are governed by
agreements which contain financial and operating
covenants. The Railroad was in compliance with these
covenant requirements at December 31, 1993, and
management does not anticipate any difficulty in
maintaining such compliance.
In 1993, conditions in the financial markets
provided an opportunity for the Railroad to replace its
outstanding Debentures. As a result, the Railroad
initiated a tender offer for the Debentures. The tender
offer, costs associated with calling the $10.3 million
untendered portion and the refinancing of the Permanent
Facility Term Loan resulted in a $23.4 million
extraordinary loss, net of $12.6 million in tax benefits.
In connection with the tender offer for the
Debentures, the Railroad issued $100 million of 6.75%
non-callable, 10-year notes due 2003 (the "Notes") and
irrevocably placed funds with a trustee to cover
principal, a 6% premium and interest through the first
call date of October 1, 1994, for the untendered
Debentures. Additionally, the Railroad's bank lending
group agreed to the termination and replacement of the
previous Permanent Facility with a new $180 million
unsecured Revolving Credit Facility expiring December 31,
1996 (see above). Likewise, the Senior Note holders
agreed to release all the collateral specified in their
original agreement and continue on an unsecured basis.
Certain covenants of the Railroad's debt agreements
restrict the level of dividends it may pay to IC. In
1993 and 1992, the Railroad paid dividends to IC of $27.4
million and $6.4 million, respectively. In November
1993, the Railroad declared a $15.0 million dividend
which was paid in January 1994. At December 31, 1993,
approximately $76 million of Railroad equity was free of
such restrictions.
The Railroad has paid approximately $8 million, $10
million and $18 million in 1993, 1992 and 1991,
respectively, for severance and lump sum signing awards
associated with the various agreements signed in 1992 and
1991. The Railroad anticipates that an additional $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 entered into various hedge
agreements designed to mitigate significant changes in
fuel prices. As a result, approximately 93% of the
Railroad's short-term diesel fuel requirements through
March 1995 and 46% through June 1995 are protected
against significant price changes.
<PAGE>
Federal Deficit Reduction Package
On August 10, 1993, the Omnibus Budget
Reconciliation Act of 1993, which contains a deficit
reduction package, became law. Certain aspects of the
legislation increased taxes directly affecting the
Railroad. Most significantly, the new law increased the
maximum corporate federal income tax rate from 34% to 35%
retroactive to January 1, 1993. This change required the
Railroad to record additional deferred income tax expense
of approximately $3.1 million in the third quarter of
1993 to reflect the new tax rate's impact on net deferred
income tax liability as of January 1, 1993. The higher
corporate rate did not significantly affect the
Railroad's cash flow.
In addition, the legislation increased the federal
tax on diesel fuels by 4.3 cents per gallon effective
October 1, 1993. This tax increased the fuel expense of
the Railroad, which purchases approximately 4.3 million
gallons of diesel fuel each month, by $.5 million in
1993.
Other
The Railroad is and will continue to be subject to
extensive regulation under environmental laws and
regulations 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. Several properties on
which the Railroad currently or formerly conducted
operations are subject to governmental action in
connection with environmental damage. 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.
Recent Accounting Pronouncements
In May 1993, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards
No. 114, "Accounting by Creditors for Impairment of a
Loan" ("SFAS No. 114") and Statement of Financial
Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" ("SFAS No.
115").
SFAS No. 114 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 31, 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.
SFAS No. 115 addresses the accounting and reporting
for investments in equity securities that have readily
determinable fair values and for all investments in debt
securities. This statement is effective for fiscal years
beginning after December 15, 1993. Adoption is not
anticipated to have an adverse impact on reported
results.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
See Index to Consolidated Financial Statements on page 27
of this Report.
ITEM 9. CHANGES IN AND DISAGREEMENT WITH
ACCOUNTANTS IN ACCOUNTING FINANCIAL
DISCLOSURES
NONE<PAGE>
PART III
ITEM 10, 11, 12 and 13
- ----------------------
Intentionally omitted. See the Index page of this
Report for explanation.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
(a) 1. Financial Statements:
See Index to Consolidated Financial
Statements on page 27 of this Report.
2. Financial Statement Schedules:
See Index to Financial Statement Schedules on
page F-21 of this Report.
3. Exhibits:
See items marked with "*" on the Exhibit
Index beginning on page E-1 of this Report.
Items so marked identify management contracts or
compensatory plans or arrangements as required by
Item 14.
(b) 1. Reports on Form 8-K:
During the fourth quarter of 1993 the Registrant
filed with the Securities and Exchange Commission
the following reports on Form 8-K on the dates
indicated to report the events described:
NONE
(c) Exhibits:
The response to this portion of Item 14 is
submitted as a separate section of this Report.
See Exhibit Index beginning on page E-1.
(d) Financial Statement Schedules:
The response to this portion of Item 14 is
submitted as a separate section of this Report.
<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,
there unto duly authorized.
Illinois Central Railroad Company
By: /s/ DALE W. PHILLIPS
Dale W. Phillips
Vice President and Chief Financial Officer
Date: March 16, 1994
Pursuant to the requirements of the Securities
Exchange Act of 1934, this Report has been signed by the
following persons in the capacities and on the dates
indicated.
SIGNATURE Title(s) Date
/s/ GILBERT H. LAMPHERE Chairman of the
Gilbert H. Lamphere Board and
Director
March 16, 1994
/s/ E. HUNTER HARRISON President and Chief
E. Hunter Harrison Executive Officer
(principal executive
officer), Director
March 16, 1994
/s/ DALE W. PHILLIPS Vice President
Dale W. Phillips and Chief Financial
Officer (principal
financial officer)
March 16, 1994
/s/ JOHN V. MULVANEY Controller
John V. Mulvaney (principal accounting
officer)
March 16, 1994
/s/ RONALD A. LANE Director
Ronald A. Lane
March 16, 1994
/s/ GERALD F. MOHAN Director
Gerald F. Mohan
March 16, 1994
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
------------------
----------------------------
F O R M 10-K
FINANCIAL STATEMENTS
SUBMITTED IN RESPONSE TO ITEM 8
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Public Accountants.... F-1
Consolidated Statements of Income for the
three years ended December 31, 1993........ F-2
Consolidated Balance Sheets at
December 31, 1993 and 1992................. F-3
Consolidated Statements of Cash Flows for
the three years ended December 31, 1993.... F-4
Consolidated Statements of Stockholder's
Equity and Retained Income for the three
years ended December 31, 1993.............. F-5
Notes to Consolidated Financial Statements
for the three years ended December 31, 1993. F-6
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of Illinois Central Railroad
Company:
We have audited the accompanying consolidated
balance sheets of Illinois Central Railroad Company (a
Delaware corporation) and subsidiaries as of December 31,
1993 and 1992, and the related consolidated statements of
income, cash flows and stockholder's equity and retained
income for each of the three years in the period ended
December 31, 1993. These financial statements and the
schedules referred to below are the responsibility of the
Company's management. Our responsibility is to express
an opinion on these financial statements and schedules
based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free
of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also
includes assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the
financial position of Illinois Central Railroad Company
and subsidiaries as of December 31, 1993 and 1992, and
the results of their operations and their cash flows for
each of the three years in the period ended December 31,
1993, in conformity with generally accepted accounting
principles.
As discussed in Note 9 to the consolidated financial
statements, effective January 1, 1993, the Company
changed its method of accounting for postretirement
health care and postemployment benefits.
Our audits were made for the purpose of forming an
opinion on the basic financial statements taken as a
whole. The schedules listed in the index to financial
statement schedules herein are presented for purposes of
complying with the Securities and Exchange Commission's
rules and are not part of the basic financial statements.
These schedules have been subjected to the auditing
procedures applied in the audits of the basic financial
statements and, in our opinion, fairly state in all
material respects the financial data required to be set
forth therein in relation to the basic financial
statements taken as a whole.
ARTHUR ANDERSEN & CO.
Chicago, Illinois
January 19, 1994
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
($ in millions)
<TABLE>
<CAPTION>
Years Ended December 31,
1993 1992 1991
<S> <C> <C> <C>
Revenues $ 564.7 $ 547.4 $ 549.7
Operating expenses:
Labor and fringe benefits 190.2 191.3 196.8
Leases and car hire 73.1 72.6 77.8
Diesel fuel 30.4 30.0 33.1
Materials and supplies 36.7 33.1 31.4
Depreciation and amortization 22.8 21.4 20.5
Other 33.9 39.8 45.0
Special charge - 8.9 -
------ ------ -----
Operating expenses 387.1 397.1 404.6
Operating income 177.6 150.3 145.1
Other income, net 2.8 3.6 7.0
Interest expense, net (31.8) (42.9) (56.1)
------ ------ -----
Income before income taxes, extraordinary item
and cumulative effect of changes in
accounting principles 148.6 111.0 96.0
Provision for income taxes 56.6 37.7 30.7
------ ------ -----
Income before extraordinary item and cumulative
effect of changes in accounting principles 92.0 73.3 65.3
Extraordinary item, net (23.4) - -
Cumulative effect of changes in accounting
principles (0.1) 23.7 -
------ ------ -----
Net income $ 68.5 $ 97.0 $ 65.3
====== ====== =====
</TABLE>
The following notes are an integral part of the
consolidated financial statements.
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in millions)
<TABLE>
<CAPTION>
ASSETS December 31, 1993 December 31, 1992
<S> <C> <C>
Current assets:
Cash and temporary cash investment $ 8.1 $ 25.6
Receivables, net of allowance for doubtful
accounts of $3.1 in 1993 and $2.6 in 1992 84.6 79.1
Materials and supplies, at average cost 20.1 18.8
Assets held for disposition 9.1 9.1
Deferred income taxes - current 22.8 24.2
Other current assets 3.6 2.0
Total current assets 148.3 158.8
------- -------
Investments 14.5 15.0
Properties:
Transportation:
Road and structures, including land 947.9 909.5
Equipment 71.7 62.4
Other, principally land 40.4 40.6
------- -------
Total properties 1,060.0 1,012.5
Accumulated depreciation (19.3) (15.1)
------- -------
Net properties 1,040.7 997.4
Other assets 10.2 16.2
------- -------
Total assets $1,213.7 $1,187.4
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term debt $ 1.1 $ 11.9
Accounts payable 51.7 53.7
Dividends payable 15.0 6.4
Income taxes payable 3.5 2.2
Casualty and freight claims 24.7 24.6
Employee compensation and vacations 15.8 16.3
Taxes other than income taxes 13.9 12.9
Accrued redundancy reserves 6.8 9.4
Other accrued expenses 28.4 30.8
------- -------
Total current liabilities 160.9 168.2
Long-term debt 347.3 356.9
Deferred income taxes 200.6 170.2
Other liabilities and reserves 138.1 160.6
Contingencies and commitments (Note 12)
Stockholder's equity:
Common stock authorized, issued and
outstanding 100 shares, $1 par value - -
Additional paid-in capital 128.6 125.8
Retained income 238.2 205.7
------- -------
Total stockholder's equity 366.8 331.5
------- -------
Total liabilities and stockhol $1,213.7 $1,187.4
======= =======
</TABLE>
The following notes are an integral part of the
consolidated financial statements.
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
($ in millions)
<TABLE>
<CAPTION>
Years Ended December 31,
1993 1992 1991
<S> <C> <C> <C>
Cash flows from operating activities :
Net income $ 68.5 $ 97.0 $ 65.3
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 (23.7) -
Depreciation and amortization 22.8 21.4 20.5
Deferred income taxes 31.9 20.7 20.3
Special charge - 8.9 -
Equity in undistributed earnings of
affiliates, net of dividends received (0.3) 0.2 (0.1)
Net gains on sales of real estate (0.8) (0.4) (0.7)
Cash changes in working capital (3.1) (15.6) (26.6)
Changes in other assets (0.9) 2.8 (2.8)
Changes in other liabilities and reserves (19.8) 12.8 (14.8)
Net cash provided by (used for) ------ ------ ------
operating activities 121.8 124.1 61.1
Cash flows from investing activities :
Additions to properties (57.1) (49.7) (38.2)
Proceeds from sales of real estate 1.5 1.3 1.8
Proceeds from single track sales - 4.1 16.3
Proceeds from equipment sales 3.8 2.2 1.3
Proceeds from sales of investments 0.8 1.8 3.3
Other (3.2) (5.2) (9.7)
Net cash provided by (used for) ------ ------ ------
investing activities (54.2) (45.5) (25.2)
Cash flows from financing activities :
Proceeds from issuance of debt 344.6 - 167.0
Principal payments on debt (401.9) (61.0) (250.9)
Dividends paid (27.4) (6.4) -
Capital contribution from parent company - - 50.0
Purchase of subsidiary's common stock (0.4) (0.5) (0.6)
Net cash provided by (used for) ------ ------ ------
financing activities (85.1) (67.9) (34.5)
------ ------ -----
Changes in cash and temporary cash investments (17.5) 10.7 1.4
Cash and temporary cash investments at beginning
of period 25.6 14.9 13.5
Cash and temporary cash investments at end
of period $ 8.1 $ 25.6 $ 14.9
Supplemental disclosure of cash flow information : ====== ====== =====
Cash paid during the year for:
Interest (net of amount capitalized) $ 38.3 $ 44.3 $ 55.7
====== ====== =====
Income taxes $ 10.9 $ 15.9 $ 15.7
====== ====== =====
</TABLE>
The following notes are an integral part of the
consolidated financial statements.
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Statements of Stockholder's Equity
<TABLE>
<CAPTION> Shares Equity ($ in millions)
Total
Additional Stock-
Common Common Paid-in Retained holder's
Share Stock Capital Income Equity
------ ------ ------- -------- ------
<S> <C> <C> <C> <C> <C>
Balance December 31, 1990 100 $ - $ 72.2 $ 56.2 $ 128.4
Capital contribution 50.0 50.0
Net income 65.3 65.3
----- ----- ----- ----- -----
Balance December 31, 1991 100 - 122.2 121.5 243.7
Capital contribution 3.6 3.6
Dividends (12.8) (12.8)
Net income 97.0 97.0
----- ----- ----- ----- -----
Balance December 31, 1992 100 - 125.8 205.7 331.5
Capital contribution 2.8 2.8
Dividends (36.0) (36.0)
Net income 68.5 68.5
Balance December 31, 1993 100 $ - $ 128.6 $ 238.2 $ 366.8
===== ===== ===== ===== =====
</TABLE>
The following notes are an integral part of the
consolidated financial statements.
<PAGE>
1. THE RAILROAD
Illinois Central Corporation, a holding company,
(hereinafter, "IC") was formed originally for the purpose
of acquiring, through a wholly-owned subsidiary, the
outstanding common stock of Illinois Central
Transportation Company ("ICTC"). Following a tender
offer and several mergers, the Illinois Central Railroad
Company ("Railroad") is the surviving corporation and the
successor to ICTC and now a wholly-owned subsidiary of
the IC.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the
accounts of the Railroad and its subsidiaries.
Significant investments in affiliated companies are
accounted for by the equity method. Transactions between
consolidated companies have been eliminated in the
accompanying consolidated financial statements.
PROPERTIES
Depreciation is computed by the straight-line method
and includes depreciation on properties under capital
leases. Depreciation for track structure, other road
property, and equipment is calculated using the composite
method. In the case of routine retirements, removal cost
less salvage recovery is charged to accumulated
depreciation. Expenditures for maintenance and repairs
are charged to operating expense.
The Interstate Commerce Commission ("ICC") approves
the depreciation rates used by the Railroad. In 1991,
the Railroad completed a study which resulted in revised
depreciation rates for road properties (excluding track
properties) and equipment. The revised rates did not and
will not have a significant effect on operating results.
The approximate ranges of annual depreciation rates for
major property classifications are as follows:
Road properties .................1% - 8%
Transportation equipment ........1% - 7%
<PAGE>
In 1989, the Railroad initiated a program to convert
approximately 500 miles of double track main line to a
single track main line, with a centralized traffic
control system. This program was completed successfully
in 1991.
REVENUES
Revenues are recognized based on services performed
and include estimated amounts relating to movements in
progress for which the settlement process is not
complete. Estimated revenue amounts for movements in
progress are not significant.
INCOME TAXES
Effective January 1, 1992, the Railroad adopted the
Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("SFAS No. 109"). Under
SFAS No. 109, deferred income taxes are accounted for on
the asset and liability method by applying enacted
statutory tax rates to differences ("temporary
differences") between the financial statement carrying
amounts and the tax bases of assets and liabilities. The
resulting deferred tax assets and liabilities represent
taxes to be collected or paid in the future when the
related assets and liabilities are recovered and settled,
respectively. See Note 10 for discussion of the 1992
impact of adopting SFAS No. 109.
CASH AND TEMPORARY CASH INVESTMENTS
Cash in excess of operating requirements is invested
in certain funds having original maturities of three
months or less. These investments are stated at cost,
which approximates market value.
INCOME PER SHARE
Income per share has been omitted as the Railroad is
a wholly-owned subsidiary of IC.
<PAGE>
FUTURES, OPTIONS, CAPS, FLOORS AND FORWARD
CONTRACTS
In March 1990, the FASB issued Statement of
Financial Accounting Standards No. 105 "Disclosure of
Information about Financial Instruments with Off Balance
Sheet Risk and Financial Instruments with Concentration
of Credit Risk" ("SFAS 105"). Disclosures required by
SFAS 105 are found in various notes where the financial
instruments or related risks are discussed. See
specifically Notes 6, 7, 8, and 12.
CASUALTY AND FREIGHT CLAIMS
The Railroad accrues for injury and damage claims
outstanding based on actual claims filed and estimates of
claims incurred but not filed. Estimated amounts expected
to be settled within one year are classified as current
liabilities in the accompanying Consolidated Balance
Sheets.
EMPLOYEE BENEFIT PLANS
All employees of the Railroad are covered under the
Railroad Retirement Act. In addition, management
employees of the Railroad are covered under a defined
contribution plan. Contribution costs of the plan are
funded currently.
Mr. E. L. Moyers, former Chairman, President and
Chief Executive Officer ("Mr. Moyers") is covered by a
supplemental plan which is discussed in Note 9.
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. In accordance with the provisions of
these standards, years prior to 1993 have not been
restated. See Note 9 for discussion of the impact of
adopting SFAS No. 106 and SFAS No. 112.
<PAGE>
RECLASSIFICATIONS
Certain items relating to prior years have been
reclassified to conform to the presentation in the
current year.
3. EXTRAORDINARY ITEM AND REFINANCING
The 1993 extraordinary loss resulted from the
retirement of the Railroad's 14-1/8% Senior Subordinated
Debentures (the "Debentures") and refinancing the
Permanent Facility. The loss was $23.4 million, net of
tax benefits of $12.6 million. The loss resulted from
the premium paid, the write-off of unamortized financing
fees and debt discount and costs associated with the
calling of the $10.3 million of Debentures not tendered.
The net proceeds of the 6.75% Notes (see Note 8),
borrowings under the $180 million Revolving Credit
Facility and other available cash were used to fund the
retirement of the Debentures.
4. OTHER INCOME, NET
Other Income, Net consisted of the following ($ in
millions):
Years Ended December 31,
1993 1992 1991
---- ---- ----
Rental income, net...... $ 3.9 $ 3.8 $ 3.0
Net gains on real estate
sales.................. .8 .4 .7
Net gain (loss) on disposal
of rolling stock....... (2.3) - -
Equity in undistributed
earnings of affiliates. .5 .3 .4
Net gain on Series K.... - - 3.6
Other, net.............. (.1) (.9) (.7)
------ ------ ------
Other Income, Net..... $ 2.8 $ 3.6 $ 7.0
<PAGE>
5. SUPPLEMENTAL CASH FLOW INFORMATION
Cash changes in components of working capital,
exclusive of Current Maturities of Long-Term Debt,
included in the Consolidated Statements of Cash Flows
were as follows ($ in millions):
<TABLE>
<CAPTION>
Years Ended December 31,
<S> <C> <C> <C>
1993 1992 1991
---- ---- ----
Receivables, net ............. $ (5.5) $ 1.9 $ (2.6)
Materials and supplies ....... (1.4) (3.2) (.6)
Other current assets ......... (1.5) .4 1.0
Accounts payable ............. (1.7) (3.7) (7.1)
Income taxes payable ......... 13.9 1.5 (5.2)
Accrued redundancy reserves... (2.6) (11.0) (11.7)
Other current liabilities .... (4.3) (1.5) (.4)
------ ------- --------
$ (3.1) $ (15.6) $ (26.6)
</TABLE>
Included in changes in Other Liabilities and
Reserves is approximately $6.3 million and $23.4 million
for the years ended December 31, 1993 and 1992,
respectively, reflecting proceeds from the settlement of
casualty claims with numerous insurance carriers.
In 1993, the Railroad entered into a capital lease
for 200 covered hoppers. The lease expires in 2003. See
Note 7 for a recap of the present value of the minimum
lease payments.
In 1991, the Railroad retired several Long-Term Debt
obligations, most significantly its $150 million 15.5%
Series K First Mortgage Bonds ("Series K"). These
retirements resulted in non-cash reductions of debt
balances of $4.6 million. Also, in 1991 the balance of
a long term investment was reduced by $2.5 million.
6. MATERIALS AND SUPPLIES
Materials and Supplies, valued using the average
cost method, consist of track material, switches, car and
locomotive parts and fuel. The Railroad entered into
various hedge agreements designed to mitigate significant
changes in fuel prices. As a result, approximately 93%
of the short-term diesel fuel requirements through March
1995 and 46% through June 1995 are protected against
significant price changes based on the average near-by
contract for Heating Oil #2 traded on the New York
Mercantile Exchange.
<PAGE>
7. LEASES
As of December 31, 1993, the Railroad leased 6,709
of its cars and 227 of its locomotives. The majority of
these leases have original terms of 15 years and expire
between 1994 and 2001. Under the terms of the majority of
its leases, the Railroad has the right of first refusal
to purchase, at the end of the lease terms, certain cars
and locomotives at fair market value. Other leases
include office and computer equipment, vehicles and
office facilities.
Net obligations under capital leases at December 31,
1993 and 1992, included in the Consolidated Balance
Sheets are $5.4 million and $.2 million, respectively.
At December 31, 1993, minimum rental payments under
capital and operating leases that have initial or
remaining noncancellable terms in excess of one year were
as follows ($ in millions):
Capital Operating
Leases Leases
1994 ..................... $ .9 $ 34.6
1995 ..................... .9 28.4
1996 ..................... .8 19.3
1997 ..................... .8 7.8
1998 ..................... .8 4.2
Thereafter ............... 3.1 17.4
Total minimum lease ---- ------
payments............... 7.3 $111.7
Less: Imputed interest ... 1.9
Present value of minimum ----
payments............... $5.4
Total rent expense applicable to noncancellable
operating leases amounted to $48.2 million in 1993, $48.4
million for 1992 and $49.4 million for 1991. Most of the
leases provide that the Railroad pay taxes, maintenance,
insurance and certain other operating expenses.
<PAGE>
8. LONG-TERM DEBT AND INTEREST EXPENSE
Long-Term Debt at December 31, consisted of the
following ($ in millions):
<TABLE>
<CAPTION>
<S> <C> <C>
1993 1992
---- ----
Equipment obligations......................................... $ - $ .5
Debentures and other debt, due 1994 to 2056, 4.5% to 10.9% ... 10.8 11.3
Commercial Paper, at average interest rate 3.57%.............. 38.1 -
Bank Line, at average interest rate 3.49%..................... 40.0 -
Notes, due 2003, 6.75%........................................ 100.0 -
Senior Subordinated Debentures................................ - 145.0
Senior Notes, due 1998 to 2001, 10.02% and 10.4%.............. 159.8 160.0
Permanent Facility, at average interest rate in 1992
of 5.25% ................................................... - 47.6
Capitalized leases (Note 7) .................................. 4.9 .1
Unamortized premium (discount), net .......................... (6.3) (7.6)
------ ------
Total Long-Term Debt ............................ $347.3 $356.9
</TABLE>
At December 31, 1993, the aggregate annual
maturities and sinking fund requirements for debt
payments for 1994 through 1999 and thereafter are $1.1
million, $.8 million, $78.9 million, $.9 million, $55.6
million, $55.6 million and $155.5 million, respectively.
The weighted-average interest rate for 1993 and 1992 on
total debt excluding the effect of discounts, premiums
and related amortization was 9.1% and 10.8%,
respectively.
In November 1993, the Railroad initiated a public
commercial paper program. The commercial paper is rated
A2 by S&P, F2 by Fitch and P3 by Moody's and is supported
by a new $100 million Revolver with the Railroad's bank
lending group. The Railroad views this program as a
significant long-term funding source and intends to issue
replacement notes as maturities occur. Therefore, the
$38.1 million outstanding at December 31, 1993 has been
classified as long-term.
In connection with the commercial paper program, the
bank lending group agreed to replace the $180 million
Revolving Credit Facility (see below) with (i) a new $100
million Revolver, due 1996 and (ii) a $50 million 364-day
facility due October 1994 ("Bank Line"). The new
Revolver will be used primarily for backup for the
commercial paper but can be used for general corporate
purposes. The available amount is reduced by the
outstanding amount of commercial paper borrowings and any
letters of credit issued on behalf of the Railroad under
the facility. No amounts have been drawn under the
Revolver. The $100 million was limited to $57.9 million
because $38.1 million in commercial paper was outstanding
and $4.0 million in letters of credit had been issued.
The Bank Line was structured as a 364-day renewable
instrument and the Railroad intends to renew it on an on-
going basis. The $40 million outstanding at December 31,
1993, has therefore been classified as long-term.
During April 1993, IC and the Railroad reached an
agreement with its bank lending group and the holders of
the privately placed $160 million Senior Secured Notes
("Senior Notes") for a release of all collateral and
those instruments are now unsecured. The bank agreed to
replace the Permanent Facility with a $180 million
Revolving Credit Facility. This was done in connection
with the tender offer made by the Railroad for all of the
Debentures.
The tender offer was funded by issuance of new $100
million 6.75% Notes, due 2003 (the "Notes"), borrowing
under a $180 million Revolving Credit Facility negotiated
with the banks which replaced the Permanent Facility and
cash on hand. See Note 3 for discussion of the
extraordinary loss incurred upon tender for the
Debentures. The Railroad irrevocably placed $12.6
million on deposit with a trustee to cover principal, a
6% premium and interest through the first call date of
October 1, 1994, for the untendered Debentures.
The Notes (issued at a slight discount 1.071%) pay
interest semiannually in May and November and are covered
by an Indenture. Of the Senior Notes, $109.8 million
bears interest at a rate of 10.02% and $50 million at
10.4%. Principal payments of $55 million are due in each
of 1998 and 1999, and $25 million in each of 2000 and
2001. The Senior Notes are governed by a Note Purchase
Agreement.
Various borrowings of the Railroad are governed by
agreements which contain certain affirmative and negative
covenants customary for facilities of this nature
including restrictions on additional indebtedness,
investments, guarantees, liens, distributions, sales and
leasebacks, and sales of assets and capital stock. Some
also require the Railroad to satisfy certain financial
tests, including a leverage ratio, an earnings before
interest and taxes to interest charges ratio, debt
service coverage, and minimum consolidated tangible net
worth requirements. The Railroad may be required to
apply 100% of net after-tax proceeds of sales aggregating
$2.5 million or greater of certain assets to reduce
Revolver commitments. The holders of the Senior Notes
can elect to receive a pro-rata share of after-tax
proceeds.
<PAGE>
Interest Expense, Net consisted of the following ($
in millions):
Years Ended December 31,
1993 1992 1991
Interest expense ..... $33.8 $45.1 $59.7
Less: Interest
capitalized..... .8 .6 .4
Interest income....... 1.2 1.6 3.2
----- ----- -----
Interest Expense, Net. $31.8 $42.9 $56.1
9. EMPLOYEE BENEFIT PLANS
Retirement Plans. All employees of the Railroad are
covered under the Railroad Retirement Act. In addition,
management employees of the Railroad are covered under a
defined contribution plan. Contributions under the plan
vest immediately. Expenses relating to the defined
contribution plan were $.4 million for each of the years
ended December 31, 1993, 1992 and 1991.
Mr. Moyers is covered by a non-qualified, unfunded
supplemental retirement benefit agreement which provides
for a defined benefit payable annually, commencing upon
death, permanent disability or retirement (with benefits
arising from retirement commencing upon his attaining age
65 and compliance with certain non-competition
agreements), in the amount of $250,000 per year for a
maximum of 15 years. In accordance with the term of the
agreement, no payments will be made while Mr. Moyers is
employed by another Class I railroad. The present value
of this agreement was included in the 1992 special
charge. See Note 14.
Postretirement Plans. In addition to the Railroad's
defined contribution plan for management employees, the
Railroad has three benefit plans which provide some
postretirement benefits to most former full-time salaried
employees and selected former union represented
employees. The medical plan for salaried retirees is
contributory, with retiree contributions adjusted
annually if expected inflation rate exceeds 9.5%, and
contains other cost sharing features such as deductibles
and co-payments. The Railroad's contribution will be
fixed at the 1999 year end rate for all subsequent years.
Salaried retirees are covered by a life insurance plan
which provides a nominal death benefit and is non-
contributory. The medical plan for locomotive engineers
who retired under a special early retirement program in
1987 provides non-contributory coverage until age 65.
All benefits under this plan terminate in 1998.
<PAGE>
There are no plan assets and the Railroad will
continue to fund these benefits as claims are paid as was
done in prior years.
Postemployment Benefit Plans. The Railroad provides
certain postemployment benefits such as long-term salary
continuation and waiver of medical and life insurance co-
payments while on long-term disability.
SFAS No. 106 and SFAS No.112. As described in
Note 2 effective January 1, 1993 the Railroad adopted
SFAS No. 106 and SFAS No. 112. With respect to SFAS No.
106, the Railroad elected to immediately recognize the
transition asset associated with adoption which resulted
because the Railroad had previously recorded an amount
under purchase accounting to reflect the estimated
liability for such benefits as of the acquisition date of
ICTC.
As a result of adopting these two standards, the
Railroad recorded a decrease to net income of $84,000
(net of taxes of $46,000) as a cumulative effect of
changes in accounting principles ($ in millions):
Postretirement Benefits (SFAS No. 106):
APBO at January 1, 1993:
Medical.................... $36.5
Life....................... 2.3
Total APB........... 38.8
Liability previously recorded (40.3)
Transition Asset....... 1.5
Postemployment Benefits Obligation
at January 1, 1993 (SFAS 112) (1.6)
Pre-tax Cumulative Effect of Changes
in Accounting Principles..... (.1)
Related tax benefit............... -
-----
Cumulative Effect of Changes
in Accounting Principles..... $ (.1)
Per Share Impact.................. $ -
In accordance with each standard, years prior to
1993 have not been restated. For 1993, the adoption of
these two standards had no significant effect on income
before cumulative effect of changes in accounting
principles as compared to the Railroad's prior pay-as-
you-go method of accounting for such benefits.
<PAGE>
The accumulated postretirement benefit obligations
("APBO") of the postretirement plans were as follows ($
in millions):
January
December 31, 1993 1, 1993
Medical Life Total Total
------- ---- ----- -------
Accumulated post-
retirement benefit
obligation:
Retirees......... $26.4 $ 2.4 $28.8 $33.4
Fully eligible
active plan
participants.... .7 - .7 .7
Other active plan
participants.... 4.7 - 4.7 4.7
----- ----- ----- -----
Total APBO... $31.8 $ 2.4 34.2 38.8
Unrecognized net
gain 5.0 -
----- -----
Accrued liability
for postretirement
benefits $39.2 $38.8
The weighted-average discount rate used in
determining the accumulated post-retirement benefit
obligation was 8.0% at January 1, 1993. As a result of
the Railroad's improved financial condition and
recognizing the overall shift in the financial community,
the Railroad lowered the weighted-average discount rate
to 7.25% as of December 31, 1993. The change in rates
resulted in approximately $2.0 million actuarial loss.
The loss was offset by actual experience gains, primarily
fewer claims and lower medical rate inflation, which
resulted in a $5.0 million unrecognized net gain as of
December 31, 1993.
The components of the net periodic postretirement
benefits cost for 1993 were as follows ($ in millions):
Service costs............................. $ .1
Interest costs............................ 3.0
Net amortization of Corridor excess....... -
Net periodic postretirement -----
benefit costs........................... $ 3.1
The weighted-average annual assumed rate of increase
in the per capital cost of covered benefits (e.g., health
care cost trend rate) for the medical plans is 14.0% for
1993 and is assumed to decrease gradually to 6.25% by
2001 and remain at that level thereafter. The health
care cost trend rate assumption normally has a
significant effect on the amounts reported; however, as
discussed, the plan limits annual inflation for the
Railroad's portion of such costs to 9.5% each year.
Therefore, an increase in the assumed health care cost
trend rates by one percentage point in each year would
have no impact on the Railroad's accumulated
postretirement benefit obligation for the medical plans
as of December 31, 1993, or the aggregate of the service
and interest cost components of net periodic
postretirement benefit expense in future years.
10. PROVISION FOR INCOME TAXES
Effective January 1, 1992, the Railroad adopted the
Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("SFAS No. 109"). As a
result, the Railroad recorded a $23.7 million reduction
in its accrued net deferred income tax liability as of
January 1, 1992. The gain recorded upon adoption could
not be recognized previously in accordance with SFAS No.
96 which the Railroad had adopted in 1988.
The Railroad elected to report this change as the
cumulative effect of a change of accounting principle.
Therefore, prior year amounts were not restated.
On August 10, 1993, the Omnibus Budget
Reconciliation Act of 1993, which contains a deficit
reduction package, became law. Certain aspects of the
Act directly affect the Railroad. Most significantly,
the new law increased the maximum corporate federal
income tax rate from 34% to 35% retroactive to January 1,
1993. This change required the Railroad to record
additional deferred income tax expense of approximately
$3.1 million to reflect the new tax rate's impact on net
deferred income tax liability as of January 1, 1993. The
higher corporate rate is not anticipated to significantly
affect the Railroad's cash flow.
The Provision for Income Taxes for continuing
operations consisted of the following ($ in millions):
Years Ended December 31,
1993 1992 1991
Current income tax:
Federal............ $23.8 $15.4 $ 9.4
State.............. .9 1.6 1.0
Deferred income taxes 31.9 20.7 20.3
Provision for Income ----- ----- -----
Taxes.............. $56.6 $37.7 $30.7
The effective income tax rates for the years ended
December 31, 1993, 1992 and 1991, were 38%, 34% and 32%,
respectively. See Note 3 for the tax benefits associated
with the extraordinary loss.
The items which gave rise to differences between the
income taxes provided for continuing operations in the
Consolidated Statements of Income and the income taxes
computed at the statutory rate are summarized below ($ in
millions):
<TABLE>
<CAPTION>
Years Ended December 31,
<S> <C> <C> <C>
1993 1992 1991
---- ---- ----
Expected tax expense
computed at
statutory rate........ $52.0 35% $37.7 34% $32.7 34%
Dividends received
exclusion ............ (.1) - (.1) - (.1) -
Impact of OBRA 1993 rate
change................ 3.1 2 - - - -
State income taxes, net
of Federal tax
effect ............... .6 - 1.0 1 .7 1
Benefits of net
operating loss
carryforwards ........ - - - - (3.8) (4)
Other items, net ....... 1.0 1 (.9) (1) 1.2 1
Provision for ----- --- ----- --- ----- ---
Income Taxes.......... $56.6 38% $37.7 34% $30.7 32%
</TABLE>
Temporary differences between book and tax income
arise because the tax effects of transactions are
recorded in the year in which they enter into the
determination of taxable income. As a result, the book
provisions for taxes differ from the actual taxes
reported on the income tax returns. The net results of
such differences are included in Deferred Income Taxes in
the Consolidated Balance Sheets.<PAGE>
The Railroad has an Alternative Minimum Tax ("AMT")
carryforward credit of $.1 million at December 31, 1993.
This excess of AMT over regular tax can be carried
forward indefinitely to reduce future U.S. Federal income
tax liabilities. At December 31, 1993, this credit was
used to reduce the recorded deferred tax liability.
At December 31, 1993, the Railroad, for tax or
financial statement reporting purposes, had no net
operating loss carryovers.
Deferred Income Taxes consisted of the following ($
in millions):
December 31,
1993 1992
Deferred tax assets.......... $ 82.2 $ 114.4
Less: Valuation allowance.... (2.2) (3.3)
-------- --------
Deferred tax assets,
net of valuation allowance. 80.0 111.1
Deferred tax liabilities...... (257.8) (257.1)
-------- --------
Deferred Income Taxes......... $ (177.8 $ (146.0)
The valuation allowance is comprised of the portion
of state tax net operating loss carryforwards expected to
expire before they are utilized and non-deductible
expenses incurred with the previous merger of wholly-
owned subsidiaries.
Major types of deferred tax assets are: reserves not
yet deducted for tax purposes ($64.0 million) and safe
harbor leases ($11.8 million). Major types of deferred
tax liabilities are: accelerated depreciation ($203.5
million), land basis differences ($10.3 million) and debt
marked to market ($2.1 million).
IC and the Railroad have a tax sharing agreement
whereby the Railroad's federal tax liability and combined
state tax liabilities (if any) are the lesser of (i) the
Railroad's separate consolidated liability as if it were
not a member of IC's consolidated group or (ii) IC's
consolidated liability computed without regard to any
other subsidiaries of the IC.
<PAGE>
11. EQUITY AND RESTRICTIONS ON DIVIDENDS
Certain covenants of the Railroad's debt restrict
the level of dividends it may pay to IC. At December 31,
1993, approximately $76 million was free of such
restrictions. The Railroad was able to pay dividends of
$27.4 million and $6.4 million in 1993 and 1992,
respectively. In November 1993, the Railroad declared a
$15.0 million dividend which was paid in January 1994.
In 1993 and 1992, IC made capital contributions of
$2.8 million and $3.6 million respectively, to the
Railroad which was equivalent to the vested portion of
the restricted IC Common Stock granted to various
Railroad employees, including Mr. Moyers, in accordance
with an IC benefit plan. Such restricted stock vests in
equal installments through May 1, 1996. In 1991, IC made
a $50 million capital contribution from proceeds of a $63
million public Common Stock offering.
12. CONTINGENCIES, COMMITMENTS AND CONCENTRATION OF
RISKS
The Railroad is self-insured for the first $5
million of each loss. The Railroad carries $295 million
of liability insurance per occurrence, subject to an
annual cap of $370 million in the aggregate for all
losses. This coverage is considered by the Railroad's
management to be adequate in light of the Railroad's
safety record and claims experience.
As of December 31, 1993, the Railroad had $4.0
million of letters of credit outstanding as collateral
primarily for surety bonds executed on behalf of the
Railroad. Such letters of credit expire in 1994 and are
automatically renewable for one year. The letters of
credit reduced the maximum amount that could be borrowed
under the Revolver (see Note 8).
The Railroad has guaranteed repayment of certain
indebtedness of a jointly owned company aggregating $7.8
million. The Railroad's primary share is $1.0 million;
the remainder is a primary obligation of other unrelated
owner companies.
There are various regulatory proceedings, claims and
litigation pending against the Railroad. While the
ultimate amount of liability that may result
cannot be determined, in the opinion of the Railroad's
management, based on present information, adequate
provisions for liabilities have been recorded. See
"Management's Discussion and Analysis - Other" for a
discussion of environmental matters.
<PAGE>
13. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL
INSTRUMENTS
The following methods and assumptions were used to
estimate the fair value of each class of financial
instruments for which it is practicable to estimate that
value:
Cash and temporary cash investments. The carrying
amount approximates fair value because of the short
maturity of those instruments.
Investments. The Railroad has investments of $9.1
million in 1993 and $11.1 million in 1992 for which there
are no quoted market prices. These investments are in
joint railroad facilities, railroad terminal
associations, switching railroads and other
transportation companies. For these investments, the
carrying amount is a reasonable estimate of fair value.
The Railroad's remaining investments ($5.4 million in
1993 and $3.9 million in 1992) are accounted for by the
equity method.
Long-term debt. The fair value of the Railroad's
long-term debt is estimated based on the quoted market
prices for the same or similar issues or on the current
rates offered to the Railroad for debt of the same
remaining maturities.
Fuel hedge agreements. The fair value of fuel
hedging agreements is the estimated amount that the
Railroad would receive or pay to terminate the agreements
as of year end, taking into account the current credit
worthiness of the agreement counterparties. At December
31, 1993 and 1992, the fair value was a liability of $4.6
million and less than $.1 million, respectively.
The estimated fair values of the Railroad's
financial instruments at December 31, are as follows ($
in millions):
1993 1992
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- ----- ------- -----
Cash and temporary
cash Investments... $ 8.1 $ 8.1 $ 25.6 $ 25.6
Investments......... 9.1 9.1 11.1 11.1
Debt................ (348.4) (368.9) (368.8) (418.2)
<PAGE>
14. SPECIAL CHARGE
In 1992, the Railroad recorded a pretax special
charge of $8.9 million as part of operating expense. The
special charge reduced Net Income by $5.9 million.
The special charge consisted of $7 million for
various costs associated with the retirement of Mr.
Moyers and the related organizational changes. The costs
associated with Mr. Moyers' retirement include the
present value of his pension, accelerated vesting of a
portion of his restricted stock award and certain costs
of a non-competition agreement. The remaining $1.9
million was for the disposition costs of railcars and a
building and its adjacent land.<PAGE>
<TABLE>
15. SELECTED QUARTERLY FINANCIAL DATA - (UNAUDITED)($
IN MILLIONS):
<CAPTION>
<S> <C> <C> <C> <C>
FIRST SECOND THIRD FOURTH
1993 QUARTER QUARTER QUARTER QUARTER(A)
Revenues...................... $142.7 $132.1 $147.4 $142.5
Operating income.............. 45.9 37.8 45.9 48.0
Income before extraordinary
item and cumulative effect
of changes in accounting
principles................... 24.1 19.9 21.6 26.4
Net income (loss)............. 24.0 (3.5) 21.6 26.4
1992
Revenues...................... $138.7 $129.9 $131.4 $147.4
Operating income.............. 42.4 36.3 36.2 35.4
Income before cumulative
effect of change in
accounting principle......... 21.3 17.2 17.7 17.1
Net income.................... 45.0 17.2 17.7 17.1
1991
Revenues...................... $138.0 $131.3 $139.8 $140.6
Operating income.............. 37.0 35.1 34.6 38.4
Net income.................... 15.6 13.9 17.4 18.4
</TABLE>
- ----------------
(a) Includes the special charge recorded
in the fourth quarter of 1992, see Note 14.<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
-----------------
---------------------------
F O R M 10-K
FINANCIAL STATEMENT SCHEDULES
SUBMITTED IN RESPONSE TO ITEM 14(a)
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
--------------
--------------
I N D E X
T O
FINANCIAL STATEMENT SCHEDULES
SUBMITTED IN RESPONSE TO ITEM 14(a)
Schedules for the three years ended December 31,
1993:
V-Property, plant and equipment.......... F-22
VI-Accumulated depreciation and amortization
of property, plant and equipment....... F-23
VII-Guarantees of securities of other issuers F-24
VIII-Valuation and qualifying accounts...... F-25
Pursuant to Rule 5.04 of General Rules of
Regulation S-X, all other schedules are omitted
because they are not required or because the
required information is set forth in the financial
statements or related notes thereto.
<PAGE>
<TABLE> ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
SCHEDULE V -- PROPERTY, PLANT AND EQUIPMENT
($ in millions)
<CAPTION>
Year Ended December 31, 1993
<S> <C> <C> <C> <C> <C>
Other
Balance at Charges Balance
Beginning Additions Debit (Credit) At End
Classification Of Year At Cost Retirement (1) Of Year
-------------- ---------- --------- ---------- -------------- -------
Road and structures,
including land......... $ 909.5 $ 50.3 $ 11.9 $ - $ 947.9
Equipment................ 62.4 12.5 4.5 1.4 71.7
Other, principally land.. 40.6 - 0.2 - 40.4
-------- ------ ------- ------- --------
Total................ $1,012.5 $ 62.8 $ 16.6 $ 1.4 $1,060.0
Year Ended December 31, 1992
Other
Balance at Charges Balance
Beginning Additions Debit (Credit) At End
Classification Of Year At Cost Retirement (2) Of Year
-------------- ---------- --------- ---------- -------------- -------
Road and structures,
including land......... $ 864.9 $ 46.4 $ 8.0 $ 6.2 $ 909.5
Equipment................ 58.3 3.3 2.9 3.7 62.4
Other, principally land.. 40.7 - 0.1 - 40.6
------- ------ ------- ------- --------
Total................ $ 963.9 $ 49.7 $ 11.0 $ 9.9 $1,012.5
Year Ended December 31, 1991
Balance at Other Balance
Beginning Additions Charges At End
Classification Of Year At Cost Retirement Debit (Credit) Of Year
-------------- ---------- --------- ---------- -------------- -------
Road and structures,
including land......... $ 846.9 $ 36.3 $ 18.3 $ - $ 864.9
Equipment................ 57.8 1.9 1.4 - 58.3
Other, principally land.. 40.9 - 0.2 - 40.7
------- ------ ------- -------- -------
Total............... $ 945.6 $ 38.2 $ 19.9 $ - $ 963.9
</TABLE>
(1) Reclassification of properties from "Other Assets."
(2) Reclassification of properties from "Assets Held
For Disposition."
<PAGE>
<TABLE> ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
SCHEDULE VI -- ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
($ in millions)
<CAPTION>
Year Ended December 31, 1993
<S> <C> <C> <C> <C> <C>
Additions
Balance at Charged Other Balance
Beginning To Cost And Charges At End
Classification Of Year Expenses Retirement Debit (Credit) Of Year
-------------- ---------- ----------- ---------- -------------- -------
Road and structures,
including land......... $ 10.0 $ 18.9 $ 16.5 $ - $ 12.4
Equipment................ 5.1 3.2 1.4 - 6.9
Other, principally land.. - - - - -
------- ------ ------- --------- -------
Total................ $ 15.1 $ 22.1 $ 17.9 $ - $ 19.3
Year Ended December 31, 1992
Additions
Balance at Charged Other Balance
Beginning To Cost And Charges At End
Classification Of Year Expenses Retirement Debit (Credit) Of Year
-------------- ---------- ----------- ---------- -------------- -------
Road and structures,
including land......... $ 3.7 $ 18.2 $ 11.9 $ - $ 10.0
Equipment................ 3.5 2.6 1.0 - 5.1
Other, principally land.. - - - - -
------- ------ ------- --------- -------
Total................ $ 7.2 $ 20.8 $ 12.9 $ - $ 15.1
Year Ended December 31, 1991
Additions
Balance at Charged Other Balance
Beginning To Cost And Charges At End
Classification Of Year Expenses Retirement Debit (Credit) Of Year
-------------- ---------- ----------- ---------- -------------- -------
Road and structures,
including land......... $ 4.2 $ 17.5 $ 18.0 $ - $ 3.7
Equipment................ 1.8 2.4 0.7 - 3.5
Other, principally land.. - - - - -
------- ------ ------- --------- -------
Total................ $ 6.0 $ 19.9 $ 18.7 $ - $ 7.2
</TABLE>
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
SCHEDULE VII--GUARANTEES OF SECURITIES OF OTHER
ISSUERS
AS OF DECEMBER 31, 1993, 1992 AND 1991
($ IN MILLIONS)
Column A Column B Column C Column D
- -------- -------- -------- --------
Name of Title of Issue Total Amount
Issuer of of Class of Guaranteed Nature of
Securities Securities and Guarantee
Guaranteed Guaranteed Outstanding
by Person
for Which
Statement
is Filed
Terminal Refunding and
Railroad Improvement
Association Mortgage 4% Principal
of St. Bonds, Series and
Louis "C", due annual
7/1/2019 $7.8 interest
<PAGE>
<TABLE> ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
SCHEDULE VIII -- VALUATION AND QUALIFYING ACCOUNTS
($ in millions)
<CAPTION>
Year Ended December 31, 1993
<S> <C> <C> <C> <C>
Balance at Additions Payments Balance
Beginning Charged And At End
Classification Of Year To Expense (Charges) Of Year
-------------- ---------- ---------- --------- -------
Redundancy and guarantee reserve..... $ 51.6 $ 1.8 $ 9.8 $ 43.6
Casualty and other reserves.......... 67.4 18.8 23.9 62.3
Environmental........................ 9.9 2.9 0.9 11.9
Bad debt reserve..................... 2.6 2.0 1.5 3.1
Taxes................................ 3.3 - 1.1 2.2
------ ------ ------ ------
Total.......................... $134.8 $ 25.5 $ 37.2 $ 123.1
Year Ended December 31, 1992
Balance at Additions Payments Balance
Beginning Charged And At End
Classification Of Year To Expense (Charges) Of Year
-------------- ---------- ---------- --------- -------
Redundancy and guarantee reserve..... $ 61.3 $ 2.1 $ 11.8 $ 51.6
Casualty and other reserves.......... 60.4 21.3 14.3 67.4
Environmental........................ 10.1 2.3 2.5 9.9
Bad debt reserve..................... 5.1 1.9 4.4 2.6
Taxes................................ - 3.7 0.4 3.3
------ ------ ------ ------
Total.......................... $136.9 $ 31.3 $ 33.4 $ 134.8
Year Ended December 31, 1991
Balance at Additions Payments Balance
Beginning Charged And At End
Classification Of Year To Expense (Charges) Of Year
-------------- ---------- ---------- --------- -------
Redundancy and guarantee reserve..... $ 84.0 $ - $ 22.7 $ 61.3
Casualty and other reserves.......... 61.2 26.4 27.2 60.4
Environmental........................ 3.1 10.6 3.6 10.1
Bad debt reserve..................... 5.3 1.9 2.1 5.1
------ ------ ------ ------
Total.......................... $153.6 $ 38.9 $ 55.6 $ 136.9
</TABLE>
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Sequential
No. Descriptions Page No.
- ------- ------------ ----------
3.1 Articles of Incorporation of
Illinois Central Railroad, as
amended. (Incorporated by
reference to Exhibit 3.1 to the
Registration Statement of
Illinois Central Railroad on
Form S-1. (SEC File No. 33-
29269))
3.2 By-Laws of Illinois Central
Railroad, as amended.
(Incorporated by reference to
Exhibit 3.2 to the Registration
Statement of Illinois Central
Railroad on Form S-1. (SEC File
No. 33-29269))
4.1 Form of 14-1/8% Senior
Subordinated Debenture
Indenture dated as of September
15, 1989 (the "Senior
Subordinated Debenture
Indenture") between Illinois
Central Railroad and United
States Trust Railroad of New
York, Trustee (including the
form of 14-1/8% Senior
Subordinated Debenture included
as Exhibit A therein).
(Incorporated by reference to
Exhibit 4.1 to the Registration
Statement of Illinois Central
Railroad on Form S-1, as
amended. (SEC File No. 33-
29269))
4.2 Form of the Amended and
Restated Revolving Credit and
Term Loan Agreement dated as of
September 22, 1989, and amended
and restated as of July 23,
1991, among Illinois Central
Railroad and the Banks named
therein (including the Form of
the Restated Revolving Credit
Note, the Form of the Restated
Term Note, the Form of the
Intercreditor Agreement, the
Form of the Security Agreement
Amendment No. 1 dated as of
February 28, 1992, to the
Amended and Restated Revolving
Credit and Term Loan Agreement
dated as of September 22, 1989,
and amended and restated as of
July 23, 1991, among Illinois
Central Railroad and the Banks
named therein. (Incorporated by
reference to Exhibit 4.3 to the
Annual Report on Form 10-K for
the year ended December 31,
1991, for the Illinois Central
Railroad filed March 12, 1992.
(SEC File No. 1-7092))
4.4 Form of Guaranty dated as of
September 22, 1989, and amended
and restated as of July 23,
1991, among Illinois Central
Railroad Company and the Banks
named therein that are or may
become parties to the Amended
and Restated Revolving Credit
and Term Loan Agreement dated
as of September 22, 1989, and
amended and restated as of July
23, 1991, among the Illinois
Central Railroad and the Banks
named therein. (Incorporated
by reference to Exhibit 4.3 to
the Quarterly Report of
Illinois Central Railroad
Company on Form 10-Q for the
three months ended September
30, 1991. (SEC File No. 1-
10720))
- ------------------
* Used herein to identify management contracts or
compensation plans or arrangements as required
by Item 14 of Form 10-K.
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Sequential
No. Descriptions Page No.
- ------- ------------ ----------
4.5 Form of Pledge Agreement dated
as of September 22, 1989, and
amended and restated as of July
23, 1991, among Illinois
Central Railroad Company and
the Banks named therein that
are or may become parties to
the Amended and Restated
Revolving Credit and Term Loan
Agreement dated as of September
22, 1989, and amended and
restated as of July 23, 1991,
among the Illinois Central
Railroad and the Banks named
therein and the Senior Note
Purchasers that are parties to
the Note Purchase Agreement
dated as of July 23, 1991.
(Incorporated by reference to
Exhibit 4.4 to the Quarterly
Report of Illinois Central
Railroad Company on Form 10-Q
for the three months ended
September 30, 1991. (SEC File
No. 1-10720))
4.6 Form Supplemental Indenture
dated July 23, 1991, between
Illinois Central Railroad and
Morgan Guaranty Trust Railroad
of New York relating to First
Mortgage Adjustable Rate
Bonds,Series M. (Incorporated
by reference to Exhibit 4.2 to
the Quarterly Report of
Illinois Central Railroad on
Form 10-Q for the three months
ended September 30, 1991. (SEC
File No. 1-7092))
4.7 Form of Note Purchase Agreement
dated as of July 23, 1991,
among Illinois Central
Railroad, as issuer, and
Illinois Central Railroad
Company, as guarantor, for
10.02% Guaranteed Senior
Secured Series A Notes due 1999
and for 10.4% Guaranteed Senior
Secured Series B Notes due 2001
(including the Form of Series A
Note and Series B Note included
as Exhibits A-1 and A-2,
respectively, therein).
(Incorporated by reference to
Exhibit 4.3 to the Quarterly
Report of the Illinois Central
Railroad on Form 10-Q for the
three months ended September
30, 1991. (SEC File No. 1-
7092))
4.8 Form of the Revolving Credit
Agreement dated as of October
27, 1993, among Illinois
Central Railroad Company and
the Banks named therein
(including the Form of the
Note, the Form of the
Competitive Bid Request, Form
of the Notice of Competitive
Bid Request, Form of the
Competitive Bid and Form of the
Competitive Bid Accept/Reject
Letter included as Exhibits A,
B-1, B-2, B-3 and B-4,
respectively, therein).
4.9 Form of the Amended and
Restated Revolving Credit
Agreement dated as of October
27, 1993, among Illinois
Central Railroad Company and
the Banks named therein
(including the Form of the
Note, the Form of
theCompetitive Bid Request,
Form of the Notice of
Competitive Bid Request, Form
of the Competitive Bid and Form
of the Competitive Bid
Accept/Reject Letter included
as Exhibits A, B-1, B-2, B-3
and B-4, respectively,
therein).
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Sequential
No. Descriptions Page No.
- ------- ------------ ----------
4.10 Form of Commercial Paper Dealer
Agreement between Illinois
Central Railroad Company and
Lehman Commercial Paper, Inc.
dated as of November 19, 1993.
4.11 Form of Issuing and Paying
Agency Agreement of the
Illinois Central Railroad
Company related to the
Commercial Paper Program
between Illinois Central
Railroad Company and Bank
America National Trust Company
dated as of November 19, 1993,
(including Exhibit A the Form
of Certificated Commercial
Paper Note included therein).
10.1* Form of supplemental retirement
and savings plan.
(Incorporated by reference to
Exhibit 10C to the Registration
Statement of Illinois Central
Transportation Co. on Form 10
filed on October 7, 1988, as
amended. (SEC File No. 1-
10085))
10.2 * Form of management incentive
compensation plan.
(Incorporated by reference to
Exhibit 10D to the Registration
Statement of Illinois Central
Transportation Co. on Form 10
filed on October 7, 1988, as
amended. (SEC File No. 1-
10085))
10.3 Consolidated Mortgage dated
November 1, 1949 between
Illinois Central Railroad and
Guaranty Trust Railroad of New
York, Trustee, as amended.
(Incorporated by reference to
Exhibit 10.8 to the
Registration Statement of
Illinois Central Railroad on
Form S-1, as amended. (SEC File
No. 33-29269))
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Sequential
No. Descriptions Page No.
- ------- ------------ ----------
10.4 Form of indemnification
agreement dated as of January
29, 1991, between Illinois
Central Railroad Company and
certain officers and directors.
(Incorporated by reference to
Exhibit 10.9 to the Annual
Report on Form 10-K for the
year ended December 31, 1990,
for the Illinois Central
Railroad Company filed on April
1, 1991. (SEC File No. 1-
10720))
10.5 Railroad Locomotive Lease
Agreement between IC Leasing
Corporation I and Illinois
Central Railroad dated as of
September 5, 1991.
(Incorporated by reference to
Exhibit 10.9 to the Annual
Report on Form 10-K for the
year ended December 31, 1991
for the Illinois Central
Railroad filed March 12, 1992.
(SEC File No. 1-7092))
10.6 Railroad Locomotive Lease
Agreement between IC Leasing
Corporation II and Illinois
Central Railroad dated as of
January 14, 1993. (Incorporated
by reference to Exhibit 10.6 to
the Annual Report on Form 10-K
for the year ended December 31,
1992, for the Illinois Central
Railroad filed March 5, 1993.
(SEC File No. 1-7092))
21 Subsidiaries of Registrant
(Included at E-5)
(A) Included herein but not reproduced.
EXHIBIT 21
Illinois Central Railroad Company
Subsidiaries of the Registrant
as of December 31, 1993
Name Place of Incorporation
- ---- ----------------------
Subsidiaries included in
the financial statements,
which are 100% owned:
Chicago Intermodal Railroad Delaware
Kensington and Eastern Railroad Illinois
Mississippi Valley Corporation Delaware
Waterloo Railroad Company Delaware
EXHIBIT 24.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
ILLINOIS CENTRAL RAILROAD COMPANY
As independent public accountants, we hereby
consent to the incorporation of our report dated
January 19, 1994 included in the Railroad's Form
10-K for the year ended December 31, 1993, into
Illinois Central Railroad's previously filed Form
S-8 Registration Statements File Nos. 33-41052 and
33-51924.
ARTHUR ANDERSEN & CO.
Chicago, Illinois
March 16, 1994
Exhibit 4.10
ILLINOIS CENTRAL RAILROAD COMPANY
455 North Cityfront Plaza Drive
Chicago, Illinois 60611-5504
COMMERCIAL PAPER DEALER AGREEMENT
November 19, 1993
LEHMAN COMMERCIAL PAPER, INC.
3 World Financial Center
New York, New York l0285
Dear Sirs:
ILLINOIS CENTRAL RAILROAD COMPANY, a
Delaware corporation (the "Company") proposes to issue
Notes (as defined below) from time to time and, in connection
therewith, agrees as follows with you ("Lehman"):
1. Definitions.
(a) "Issuing and Paying Agency Agreement"
shall mean the agreement, dated as of the date
hereof, between the Company and BankAmerica
National Trust Company, providing
for the issuance and payment of the Notes; and
"Issuing and Paying Agent" shall mean BankAmerica
National Trust Company in its capacity as issuing
and paying agent under the Issuing and Paying
Agency Agreement.
(b) "Notes" shall mean promissory notes
issued by the Company from time to time in
denominations of at least $100,000 and with
maturities of 270 days or less in the form of (i)
certificated notes substantially in the form of
Exhibit A to the Issuing and Paying Agency
Agreement or (ii) book-entry obligations evidenced
by a master note payable to The Depository Trust
Company or its nominee.
(c) "Offering Documents" shall mean the
Offering Memorandum, initially in the form of
Exhibit A hereto, as the same may be revised from
time to time with the agreement of the Company and
Lehman, and any other materials which the Company
may deliver to Lehman with written instructions to
furnish the same to offerees of the Notes.
2. Issuance and Sale of Notes.
(a) While (i) the Company has and shall have
no obligation to sell Notes to Lehman or to permit
Lehman to arrange any sale of Notes for the account
of the Company and (ii) Lehman has and shall have
no obligation to purchase Notes from the Company or
to arrange any sale of Notes for the account of the
Company, the parties hereto agree that any Notes
which Lehman purchases or the sale of which Lehman
arranges will be purchased or sold by Lehman in
reliance on the representations, warranties,
covenants and agreements of the Company contained
herein or made pursuant hereto and on the terms and
conditions and in the manner provided herein.
Lehman will offer and sell Notes only to
institutional investors and other entities and
individuals who normally purchase short-term
commercial paper in the United States commercial
paper market. The Notes will not be advertised or
otherwise offered for sale, or sold, to the general
public by Lehman.
(b) If the Company and Lehman shall agree on
the terms of the purchase of any Note by Lehman
(including agreement with respect to the date of
issue, principal amount, purchase price, maturity
and interest or discount), the Company shall cause
such Note to be issued and delivered in accordance
with the terms of the Issuing and Paying Agency
Agreement.
(c) Lehman shall cause the purchase price of
Notes purchased by it as principal to be remitted
to the Issuing and Paying Agency Agent in
immediately available funds on the same day such
Notes are issued provided that in the case of
certificated Notes, such Notes shall have been duly
delivered to Lehman in accordance with Lehman's
instructions.
3. Representations and Warranties of the
Company. The Company represents and
warrants that:
(a) The Notes have been duly authorized and,
when issued and delivered as provided in the
Issuing and Paying Agency Agreement and paid for,
will be duly and validly issued and delivered and
will constitute legal, valid and binding
obligations of the Company enforceable against the
Company in accordance with their terms subject to
applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and subject,
as to enforceability, to general principles of
equity (regardless of whether enforcement is sought
in a proceeding in equity or at law).
(b) The Company is a corporation duly
organized, validly existing and in good standing
under the laws of the jurisdiction of its
incorporation and has all requisite power and
authority to execute, deliver and perform its
obligations under the Notes, this Agreement and the
Issuing and Paying Agency Agreement.
(c) This Agreement and the Issuing and Paying
Agency Agreement have been duly authorized,
executed and delivered by the Company and
constitute legal, valid and binding obligations of
the Company, enforceable against the Company in
accordance with their terms, subject to applicable
bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to
enforceability, to general principles of equity
(regardless of whether enforcement is sought in a
proceeding in equity or at law).
(d) There are no consents, authorizations or
approvals of, or filings with, any Federal or state
government authority required in connection with
the issuance or sale by the Company of the Notes
which have not been obtained or made, except as may
be required by state securities laws.
(e) The execution, delivery and performance
by the Company of this Agreement, the Notes and the
Issuing and Paying Agency Agreement will not result
in a breach or violation of, conflict with, or
constitute a default under the charter or by-laws
of the Company, any agreement or instrument binding
on the Company that is material to the Company and
its subsidiaries (taken as a whole) or as to which
such a breach, violation, conflict or default would
materially adversely affect the holders of the
Notes or any law, regulation, order or judgment to
which the Company is a party or by which the
Company or any material part of its property is
bound.
(f) There is no litigation or governmental
proceeding pending, or to the knowledge of the
Company threatened, against or affecting the
Company or any of its subsidiaries as to which
there is a reasonable possibility of an adverse
decision which would materially adversely affect
the business, assets or financial condition of the
Company or the ability of the Company to perform
its obligations under this Agreement or the Notes.
(g) The Company is not an "investment
company" within the meaning of the Investment
Company Act of l940, as amended.
(h) Each delivery of Notes to Lehman shall be
deemed a representation and warranty by the
Company, as of the date thereof, that (i) the Notes
issued on such date have been duly authorized,
issued and delivered and, upon payment therefor,
will constitute legal, valid and binding
obligations of the Company, enforceable against the
Company in accordance with their terms, subject to
applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and subject,
as to enforceability, to general principles of
equity (regardless of whether enforcement is sought
in a proceeding in equity or at law), (ii) the
representations and warranties of the Company set
forth in paragraphs (b) through (g) of this Section
3 are true and correct as if made on such date and
(iii) the Company has complied at all times with
the provisions of Sections 4(a) and 4(b) hereof.
4. Covenants and Agreements of the Company.
The Company covenants and agrees that:
(a) The Company will use the proceeds of
thesale of the Notes for "current transactions"
within the meaning of Section 3(a)(3) of the
Securities Act of l933.
(b) The Company will not permit to become
effective any amendment to or modification of the
Issuing and Paying Agency Agreement which might
adversely affect the interests of the holder of any
Notes then outstanding. The Company will give
Lehman notice of any proposed amendment to or
modification of the Issuing and Paying Agency
Agreement at least 10 days prior to the effective
date thereof (or such shorter time as Lehman may
agree).
(c) The Company will not sell Notes to Lehman
hereunder until Lehman shall have received (i) an
opinion from Ronald Lane, Vice President and
General Counsel of the Company, as to the matters
set forth in paragraphs (a) through (g) of Section
3 hereof and (ii) an opinion from Davis Polk &
Wardwell, specal counsel to the Company, as to the
exemption of the Notes from the registration
requirements of the Securities Act of l933 by
virtue of Section 3(a)(3) thereof.
5. Indemnification.
The Company will indemnify and hold harmless
Lehman against any loss, claim, damages, liability
or expense (including reasonable costs of
investigation and defense) arising out of or based
upon any untrue statement or alleged untrue
statement of a material fact contained in the
Offering Documents (except to the extent the same
relates to Lehman or its activities hereunder), or
the omission or alleged omission to state therein a
material fact necessary to make the statements
therein, in light of the circumstances under which
they were made, not misleading (except to the
extent the same relates to Lehman or its activities
hereunder). The obligations of the Company to
Lehman under this Section 5 shall survive the
termination of this Agreement.
6. General.
(a) All notices required under the terms and
provisions hereof shall be in writing, given in
person, by mail (postage prepaid), or by telex or
telecopier, and any such notice shall be effective
when received at the address specified for the
intended recipient at the head of this Agreement
(or at such other address as such recipient may
designate from time to time by notice to the other
party).
(b) The Company will promptly pay, or
reimburse Lehman on demand for, all reasonable
out-of-pocket costs and expenses (including
reasonable fees and disbursements of counsel to
Lehman) incurred by Lehman in connection with the
preparation and negotiation of this Agreement.
(c) This Agreement shall be governed by and
construed in accordance with the laws of the State
of New York.
(d) The terms of this Agreement shall not be
waived, altered, modified, amended or supplemented
in any manner whatsoever except by written
instrument signed by each of the parties hereto.
(e) This Agrement may be terminated at any
time by the Company or Lehman upon the giving of
written notice of such termination to the other
party hereto, but without prejudice to any rights,
obligations or liabilities of either party hereto
accrued or incurred prior to such termination.
If you agree with the foregoing, please
indicate your acceptance below, whereupon this
letter shall become a binding agreement between
Lehman and the Company as of the day and year first
above written.
Very truly yours,
ILLINOIS CENTRAL RAILROAD COMPANY
By
Accepted and agreed:
LEHMAN COMMERCIAL PAPER, INC.
By
Exhibit 4.11
ISSUING AND PAYING AGENCY AGREEMENT
BankAmerica National Trust Company
2 Rector Street, 14th Floor
New York, New York 10006
Attn: Corporate Trust Division
Re: Illinois Central Railroad Company
Commercial Paper Program
Ladies and Gentlemen:
This letter sets forth the understanding between
you and Illinois Central Railroad Company, a Delaware
corporation (the "Company"), whereby you have agreed to act
as depositary for the safekeeping of certain notes of the
Company which may be issued and sold in the United States
commercial paper market (the "Commercial Paper Notes"), as
issuing agent on behalf of the Company in connection with
the issuance of the Commercial Paper Notes and as paying
agent to undertake certain obligations to make payments in
respect of the Commercial Paper Notes. You have executed or
will promptly hereafter execute a Letter of Representation
(the "Letter of Representation", which term shall include
the Procedures referred to therein) with the Company and The
Depository Trust Company ("DTC") and a Certificate Agreement
(the "Certificate Agreement") with DTC which establish or
will establish, among other things, the procedures to be
followed by you in connection with the issuance and custody
of Commercial Paper Notes in book-entry form.
1. Appointment of Agent. The Company hereby
appoints you and you hereby agree to act, on the terms and
conditions specified herein and in the Letter of
Representation and Certificate Agreement, as custodian and
issuing and paying agent for the Commercial Paper Notes.
The Commercial Paper Notes will, in the case of Commercial
Paper Notes issued in certificated form ("Certificated
Notes"), be substantially in the form attached hereto as
Exhibit A and, in the case of Commercial Paper Notes issued
in book-entry form ("Book-Entry Notes"), be substantially in
the forms attached to the Letter of Representation. The
Commercial Paper Notes will be sold directly by the Company
or through one or more such commercial paper dealers as the
Company shall have notified you from time to time (each a
"Dealer and, collectively, the "Dealers"). The Dealer
currently is Lehman Commercial Paper, Inc.
2. Supply of Commercial Paper Notes. The Company
will from time to time furnish you with an adequate supply
of Commercial Paper Notes, which shall be Book-Entry Notes
and/or Certificated Notes, as the Company in its sole and
absolute discretion considers appropriate. Certificated
Notes shall be serially numbered and shall have been
executed by manual or facsimile signature of an Authorized
Representative (as hereafter defined), with the note number,
principal amount, payee, date of issue, maturity date,
amount of interest (if an interest-bearing Commercial Paper
Note) and maturity value left blank. Book-Entry Notes shall
be represented by one or more master notes which shall be
executed by manual or facsimile signature by an Authorized
Representative in accordance with the Letter of
Representation. Pending receipt of instructions pursuant to
this Agreement, you will hold the Commercial Paper Notes in
safekeeping for the account of the Company or DTC, as the
case may be, in accordance with your customary practice and
the requirements of the Certificate Agreement. The
Certificated Notes shall be printed on a manifold that will
produce one original and three non-negotiable copies.
3. Authorized Representatives. On or before
December 1 of each year, the Company will furnish you with a
certificate, substantially in the form attached hereto as
Exhibit B, certifying the incumbency and specimen signatures
of officers or agents of the Company authorized to execute
Commercial Paper Notes on behalf of the Company by manual or
facsimile signature and/or to take other action hereunder on
behalf of the Company (each an "Authorized Representative").
Until you receive a subsequent incumbency certificate of the
Company, you are entitled to rely on the last such
certificate delivered to you for purposes of determining
the Authorized Representatives. You shall not have any
responsibility to the Company to determine by whom or by
what means a facsimile signature may have been affixed on
the Commercial Paper Notes, or to determine whether any
facsimile or manual signature is genuine, if such facsimile
or manual signature resembles the specimen signature(s)
filed with you by a duly authorized officer of the Company.
Any Commercial Paper Notes bearing the manual or facsimile
signature of a person who is an Authorized Representative on
the date such signature is affixed shall be binding on the
Company after the authentication thereof by you
notwithstanding that such person shall have died or shall
have otherwise ceased to hold his office on the date such
Commercial Paper Note is countersigned or delivered to you.
4. Completion, Authentication and Delivery of
Commercial Paper Notes. (a) Instructions for the issuance
of Commercial Paper Notes will be given via an issuance
system (the "system"), if available, or by telephone,
promptly confirmed in writing (which may be by facsimile)
either by an Authorized Representative, or by any officer or
employee of a Dealer who has been designated by an
Authorized Representative in writing to you as a person
authorized to give such instructions hereunder (each an
"Authorized Dealer Representative"), provided that
instructions may be given in writing if the system is
unavailable or is inoperative. Upon receipt of instructions
as described in the preceding sentence, you will withdraw
the necessary Commercial Paper Notes(s) from safekeeping
and, in accordance with such instructions, shall (i) in the
case of Book-Entry Notes, cause the issuance of such
Book-Entry Notes in the manner set forth in, and take such
other actions as are required by, the Letter of
Representation and the Certificate Agreement or (ii) in the
case of Certificated Notes:
(1) complete each Certificated Note as to note
number, principal amount (which shall not be less than
$100,000), payee, date of issue, maturity date (which
shall not be more than 270 days from the date of
issue), amount of interest (if any) and maturity value;
and
(2) manually countersign each Certificated Note
by any one of your officers or employees duly
authorized and designated for this purpose; and
(3) deliver the Certificated Note(s) to the
appropriate Dealer or its agent within the Borough of
Manhattan, City and State of New York, which delivery
shall be against receipt for payment as herein provided
or as otherwise provided in such instructions.
If such instructions do not provide for such receipt, such
Dealer shall nevertheless pay the purchase price for the
Certificated Note in accordance with Paragraph 5 hereof. Of
the three non-negotiable copies of each Commercial Paper
Note, two shall be retained by you and one shall be sent
promptly to the Company.
(b) Instructions given via the system must be
entered by 12:30 p.m. for physical issuance and 2:00 p.m.
for book-entry issuance, New York City time, and
instructions delivered by telephone or in writing must be
received by you by 1:00 p.m., New York City time, if the
Commercial Paper Note(s) are to be delivered the same day.
Telephone instructions shall be confirmed in writing the
same day.
(c) The Company understands that although you
have been instructed to deliver Commercial Paper Notes
against payment, delivery of Certificated Notes will, in
accordance with the custom prevailing in the commercial
paper market, be made before receipt of payment in
immediately available funds. Therefore, once you have
delivered a Certificated Note to a Dealer or its agent as
provided in Paragraph 4(a)(3) hereof, the Company shall bear
the risk that a Dealer or its agent fails to remit payment
for the Certificated Note to you. It is understood that
each delivery of Commercial Paper Notes hereunder shall be
subject to the rules of the New York Clearing House in
effect at the time of such delivery.
(d) Except as may otherwise be provided in the
Letter of Representation, if at any time the Company
instructs you to cease issuing Certificated Notes and to
issue only Book-Entry Notes, you agree that all Commercial
Paper Notes will be issued as Book-Entry Notes and that no
Certificated Notes shall be exchanged for Book-Entry Notes
unless and until you have received written instructions from
an Authorized Representative (any such instructions from an
Authorized Dealer Representative shall not be sufficient for
this purpose) to the contrary.
5. Proceeds of Sale of the Commercial Paper
Notes. Contemporaneously with the execution and delivery of
this Agreement, and for the purposes of this Agreement, you
will establish an account designated as the Illinois Central
Railroad Company Note Account in the Company's name (the
"Note Account"). On each day on which a Dealer or its agent
receives Commercial Paper Notes (whether through the
facilities of DTC in the manner set forth in the Letter of
Representation or by delivery in accordance with Paragraph
4(a)(3) hereof), the Dealer shall pay the purchase price for
such Commercial Paper Notes in immediately available funds
(such funds referrred to herein as "Proceeds") for credit to
the Note Account. From time to time upon telephonic or
written instructions received by you from an Authorized
Representative, (i) you agree to transfer Proceeds from the
Note Account to any bank or trust company for the Company's
account and (ii) you may, in your discretion, advance to the
Company amounts equal to Proceeds which the Company has
advised you will be made available on such date, but which
Proceeds have not yet been received by you, to pay
Commercial Paper Notes presented for payment upon maturity.
Any such advance shall be repaid from such Proceeds or by
the Company in the event such Proceeds are not received by
you. It is intended that such advance be for no longer than
24 hours. Interest on each such unpaid advance shall be at
a rate negotiated between you and the Company and shall
begin to accrue on the day of such advance.
6. Payment of Matured Commercial Paper Notes. By
1 p.m., New York City time, on the date that any Commercial
Paper Notes are scheduled to mature, there shall have been
transferred to you for deposit in the Note Account
immediately available funds in an amount, together with the
anticipated proceeds from the sale of Commercial Paper
Notes, sufficient to pay all Commercial Paper Notes maturing
on such date, to the extent that you have not made an
advance to the Note Account for the purpose of such payment
as contemplated by Paragraph 5 hereof. When any matured
Commercial Paper Note is presented to you for payment by the
holder thereof (which may, in the case of Book-Entry Notes
held by you in custody pursuant to the Certificate
Agreement, be DTC or a nominee of DTC), payment shall be
made from and charged to the Note Account to the extent
funds sufficient to effect such payment are available in
said account or to the extent you have made an advance to
the Note Account for the purpose of such payment as
contemplated by Paragraph 5 hereof.
7. Reliance on Instructions. Except as otherwise
set forth herein, you shall incur no liability to the
Company in acting hereunder upon telephonic or other
instructions contemplated hereby which the recipient thereof
reasonably believed in good faith to have been given by an
Authorized Representative or an Authorized Dealer
Representative, as the case may be. In the event a
discrepancy exists with respect to such instructions, the
telephonic instructions as recorded by you will be deemed
the controlling and proper instructions, unless such
instructions are required by this Agreement to be in writing
or have not been recorded by you as contemplated by the next
sentence. It is understood that all telephonic instructions
will be recorded by you and the Company hereby consents to
such recording.
8. Cancellation of Commercial Paper Notes. You
will in due course cancel Certificated Note(s) presented for
payment and return them to the Company. After payment of
any matured Book-Entry Note, you shall annotate your records
to reflect the face amount of Book-Entry Notes outstanding
in accordance with the Letter of Representation. Promptly
upon the written request of the Company, you agree to cancel
and return to the Company all unissued Commercial Paper
Notes in your possession at the time of such request.
9. Notices; Addresses. (a) All communications by
or on behalf of the Company or a Dealer, by telephone or
otherwise, relating to the completion, delivery or payment
of the Commercial Paper Note(s) are to be directed to your
Commercial Paper Issuance Unit of the Corporate Trust
Division (or such other department or division which you
shall specify in writing to the Company and the Dealers).
The Company will send all Commercial Paper Notes to be
completed and delivered by you to your Commercial Paper
Issuance Unit of the Corporate Trust Division (or such other
department or division as you shall specify in writing to
the Company). You will advise the Company and the Dealers
from time to time in writing of the individuals generally
responsible for the administration of this Agreement and
will from time to time certify incumbency and specimen
signatures of officers or employees authorized to
countersign Commercial Paper Notes.
(b) Notices and other communications hereunder
shall (except to the extent otherwise expressly provided) be
in writing (which may be by facsimile), and shall be
addressed as follows, or to such other address as the party
receiving such notice shall have previously specified to the
party sending such notice:
If to the Company, at:
Illinois Central Railroad Company
455 North Cityfront Plaza Drive
Chicago, Illinois 60611
Attention: Treasurer
Telecopy No.: (312) 755-7917:
If to you:
(i) concerning the daily issuance of
Commercial Paper Notes:
BankAmerica National Trust Company
Two Rector Street, 2nd floor
New York, New York 10006
Attention: Corporate Trust Operations,
Walter Butler
Telecopy No.: (212) 978-2617
Telephone No: (212) 978-5140
(ii) concerning all other matters;
BankAmerica National Trust Company
Two Rector Street, 9th floor
New York, New York 10006
Attention: Corporate Trust Division,
Geovanni Barris
Telecopy No.: (212) 978-5060
Telephone No.: (212) 978-5015
Notices shall be deemed delivered when received at the
address specified above. For purposes of this paragraph,
"when received" shall mean actual receipt of (i) an
electronic communication by a telex machine, telecopier or
issuance system specified in or pursuant to this Agreement;
(ii) an oral communication by any person answering the
telephone at your office specified in Paragraph 9(a) hereof
and otherwise at the office of the individual or department
specified in or pursuant to this Agreement; or (iii) a
written communication hand-delivered at the office specified
in or pursuant to this Agreement.
10. Additional Information. Upon the request of
the Company given at any time and from time to time, you
shall promptly provide the Company with information with
respect to the Commercial Paper Note(s) issued and paid
hereunder. Such request shall be in written form and, to
the extent known by the Company, shall include the note
number, principal amount, date of issue, maturity date and
amount of interest, if any, of each Commercial Paper Note
which has been issued or paid by you and for which the
request is being made.
11. Liability. Neither you nor your officers,
employees or agents shall be liable for any act or omission
hereunder, except in the case of negligence or willful
misconduct. Your duties and obligations and those of your
officers and employees shall be determined by the express
provisions of this Agreement, the Letter of Representation
and the Certificate Agreement (including the documents
referred to therein), and they shall not be liable except
for the performance of such duties and obligations as are
specifically set forth herein and therein, and no implied
covenants shall be read into any such document against them.
Neither you nor your officers or employees shall be required
to ascertain whether any issuance or sale of Commercial
Paper Note(s) (or any amendment or termination of this
Agreement) has been duly authorized or is in compliance with
any other agreement to which the Company is a party (whether
or not you are a party to such other agreement).
12. Indemnification. The Company agrees to
indemnify and hold you and your officers, employees and
agents harmless from and against all liabilities, claims,
damages, costs and expenses (including reasonable legal fees
and expenses) relating to or arising out of their actions or
inactions in connection with this Agreement, except to the
extent they are caused by your or their negligence or
willful misconduct. This indemnity shall survive
termination of this Agreement.
13. Benefit of Agreement. This Agreement is
solely for the benefit of the parties hereto, and no other
person shall acquire or have any right under or by virtue
hereof.
14. Termination. (a) This Agreement may be
terminated at any time by either you or the Company by 15
days' prior written notice to the other, provided that you
agree to continue acting as issuing and paying agent
hereunder until such time as your successor has been
selected and has entered into an agreement with the Company
to that effect. Such termination shall not affect the
respective liabilities of the parties hereunder arising
prior to such termination.
(b) If no successor has been appointed within 15
days, then you have the right to petition a court of
competent jurisdiction for the appointment of a successor
issuing and paying agent. You shall incur no expense or
liability in connection with any such appointment.
15. Governing Law. (a) This Agreement is to be
delivered and performed in, and shall be construed and
enforced in accordance with, and the rights of the parties
shall be governed by, the laws of the State of New York.
(b) Each party irrevocably and unconditionally
submits to the non-exclusive jurisdiction of the United
States Federal courts located in the Borough of Manhattan
and the courts of the State of New York located in the
Borough of Manhattan.
16. Fees. You shall receive fees from the
Company for acting as issuing and paying agent hereunder in
such amounts as you and the Company shall agree from time to
time in writing.
Please indicate your agreement with and acceptance
of the foregoing terms and provisions by signing the
counterpart of this letter enclosed herewith and returning
it to the Company.
ILLINOIS CENTRAL RAILROAD COMPANY
By__________________________
Its_________________________
Agreed to and accepted
this day of , 93.
BANKAMERICA NATIONAL TRUST COMPANY
as Issuing and Paying Agent
By_____________________________
Its____________________________<PAGE>
EXHIBIT A
FORM OF CERTIFICATED COMMERCIAL PAPER NOTE,
SERIES [ ]]
COMMERCIAL PAPER NOTE, SERIES [ ]
$______________ No.________
[Accrued Interest: $ ]
New York, New York
_______, 19__
For value received, Illinois
Central Railroad Company (the "Issuer")
promises to pay to the order of [_____] the
sum of _____ Dollars [plus Accrued Interest
as shown above] ____ on ____, 19__, at the
office of BankAmerica National Trust Company
(the "Issuing and Paying Agent") at 2 Rector
Street, Corporate Trust Division, New York,
New York 10006.
This Note has been issued pursuant
to, and is subject to the terms of, the
Issuing and Paying Agency Agreement (as from
time to time amended, supplemented or
otherwise modified, the "Issuing and Paying
Agency Agreement"), dated as of November 19,
1993, between the Issuer and the Issuing and
Paying Agent.
Reference is made to such Issuing
and Paying Agency Agreement referred to above
and the other related documents, which, as
from time to time amended, are on file with
the Issuing and Paying Agent at its aforesaid
office. This Note shall be governed by, and
construed in accordance with, the law of the
State of New York.
By: ILLINOIS CENTRAL RAILROAD COMPANY
By:_______________________________
Authorized Signature
Countersigned for authentication
only by BankAmerica National Trust Company,
as Issuing and Paying Agent
By:______________________
Authorized Signature
This Note is not valid for any purpose unless
countersigned by BankAmerica National Trust
Company, as Issuing and Paying Agent.
<PAGE>
EXHIBIT B
TO
AGREEMENT
ISSUING AND PAYING AGENCY
In accordance with Paragraph 2 of the Issuing
and Paying Agency Agreement, dated as of
November 19, 1993 (the "Agreement"), between
the Illinois Central Railroad Company (the
"Company") and BankAmerica National Trust
Company (New York), the following officers
and employees are authorized to execute
Commercial Paper Notes (as defined in the
Agreement) on behalf of the Company by manual
or facsimile signature and to take any other
action under the Agreement on behalf of the
Company.
Name and Title Signature
Dale Phillips
- - Chief Financial Officer ________________
Doug Koman - Treasurer ________________
Illinois Central Railroad Company
By:
Title: Secretary
EXHIBIT 4.8
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT, dated as of
October 27, 1993, among Illinois Central Railroad
Company, a Delaware corporation (the "Borrower"), The
First National Bank of Boston ("FNBB"), Bank of
America National Trust and Savings Association
("BofA"), The Chase Manhattan Bank, N.A., The
Toronto Dominion Bank, Cayman Islands Branch,
Continental Bank N.A., Deposit Guaranty National Bank,
Kleinwort Benson Limited, The Mitsubishi Trust and
Banking Corporation, and such other lenders as may
become parties to this Agreement from time to time in
accordance with the provisions hereof (each, a "Bank",
and collectively, the "Banks"), The First National
Bank of Boston as administrative agent for the Banks
(the "Administrative Agent") and as competitive bid
agent for the Banks (the "Competitive Bid Agent") and
Bank of America National Trust and Savings Association
as co-agent for the Banks (the "Co-Agent").
WHEREAS, the Borrower has requested and the Banks
have agreed, subject to the terms and conditions
contained herein, to provide to the Borrower a
committed revolving credit facility and a competitive
bid revolving credit facility;
NOW, THEREFORE, the Borrower, the Banks, the
Administrative Agent, the Competitive Bid Agent and
the Co-Agent hereby agree as follows.
Section 1. DEFINITIONS. (a) The following terms shall
have the meanings assigned to them below in this Section 1 or
in the provisions of this Agreement referred to below:
"Administrative Agent" - see preamble.
"Affected Bank" - see Setion 3.1(d).
"Affiliate" - in relation to any particular
Person, any other Person which, directly or
indirectly, controls, or is controlled by, or is under
common control with, such Person. For purposes of
this definition, "control" (including, with
correlative meanings, the terms "controlled by" and
"under common control with") shall mean the power,
directly or indirectly, to (a) vote 10% or more of the
outstanding stock having ordinary voting power for the
election of directors of such Person, or (b) direct
the management or policies of such Person, whether by
contract or otherwise.
"Agent's Fee" - see Section 3.8.
"Agent's Fee Letter" - see Section 3.8.
"Agents" - The Administrative Agent and the
Competitive Bid Agent.
"Agreement" - this Revolving Credit Agreement,
with all Exhibits and Schedules hereto, as originally
executed, or if this Revolving Credit Agreement is
amended or supplemented from time to time, as so
amended or supplemented.
"Applicable Margin" - With respect to any period
commencing on an Interest Rate Adjustment Date and
ending on the day prior to the next succeeding
Interest Rate Adjustment Date, if the Rating (as
defined below) in effect on the first day of such
period is equal to:
(a) "BB" or less or "Ba2" or less (as applicable)
or if no Rating is available, then during such period
the Applicable Margin shall be, with respect to (i)
Base Rate Loans, .40% per annum, (ii) Eurodollar
Standby Loans, 1.00% per annum, (iii) C/D Rate Loans,
1.125% per annum, and (iv) the Facility Fee, .375% per
annum;
(b) "BB+" or "Ba1" (as applicable), then during
such period the Applicable Margin shall be, with
respect to (i) Base Rate Loans, 0% per annum, (ii)
Eurodollar Standby Loans, .875% per annum, (iii) C/D
Rate Loans, 1.0% per annum, and (iv) the Facility Fee,
.375% per annum;
(c) "BBB-" or "Baa3" (as applicable), then during
such period the Applicable Margin shall be, with
respect to (i) Base Rate Loans, 0% per annum, (ii)
Eurodollar Standby Loans, .50% per annum, (iii) C/D
Rate Loans, .625% per annum, and (iv) the Facility
Fee, .20% per annum;
(d) "BBB" or "Baa2" (as applicable), then during
such period the Applicable Margin shall be, with
respect to (i) Base Rate Loans, 0% per annum, (ii)
Eurodollar Standby Loans, .50% per annum, (iii) C/D
Rate Loans, .625% per annum, and (iv) the Facility
Fee, .15% per annum;
(e) "BBB+" or "Baa1" (as applicable), then during
such period the Applicable Margin shall be, with
respect to (i) Base Rate Loans, 0% per annum, (ii)
Eurodollar Standby Loans, .375% per annum, (iii) C/D
Rate Loans, .50% per annum, and (iv) the Facility Fee,
.125% per annum; or
(f) "A-" or "A3" (as applicable), then during
such period the Applicable Margin shall be, with
respect to (i) Base Rate Loans, 0% per annum, (ii)
Eurodollar Standby Loans, .375% per annum, (iii) C/D
Rate Loans, .50% per annum, and (iv) the Facility Fee,
.125% per annum; or
(g) "A" or higher or "A2" or higher (as
applicable), then during such period the Applicable
Margin shall be, with respect to (i) Base Rate Loans,
0% per annum, (ii) Eurodollar Standby Loans, 0.25% per
annum, (iii) C/D Rate Loans, 0.375% per annum, and
(iv) the Facility Fee, .125% per annum.
For purposes of the foregoing, the "Rating" in
effect from time to time shall be the lower of the
rating by Moody's or by S&P of the Rated Debt,
provided that (i) if either Moody's or S&P shall not
have in effect a Rating for the Rated Debt (other than
because such rating agency shall no longer be in the
business of rating corporate debt obligations), the
Rating shall be deemed to be the Rating of the other
rating agency in respect of Rated Debt, (ii) if both
Moody's and S&P shall not have in effect a Rating for
the Rated Debt (other than because such rating
agencies shall no longer be in the business of rating
corporate debt obligations or because no Rated Debt
shall be outstanding), then no Rating shall be deemed
to be available for purposes of determining the
Applicable Margin, (iii) if the rating system of
Moody's or S&P shall change, or if either such rating
agency shall cease to be in the business of rating
corporate debt obligations, or if no Rated Debt shall
be outstanding, then the Borrower and the Banks shall
negotiate in good faith to amend the references to
specific ratings in this definition of Applicable
Margin to reflect such changed rating system, the
non-availability of ratings from such rating agency,
or the repayment of all Rated Debt outstanding, as
applicable, and (iv) to determine the lower of the
rating of Rated Debt by Moody's and by S&P, the S&P
ratings set forth in the chart below shall be deemed
to be equivalent to the Moody's rating set forth
opposite such S&P rating:
S&P Moody's
A A2
A- A3
BBB+ Baa1
BBB Baa2
BBB- Baa3
BB+ Ba1
BB Ba2
"Assessment Rate" - for any Interest Period, the
net annual assessment rate (rounded upwards, if
necessary, to the next highest 1/100th of 1%) charged
by the Federal Deposit Insurance Corporation (or any
successor) for such Corporation's (or such
successor's) insuring of time deposits made in dollars
at offices of FNBB in the United States of America
during the most recent period for which such rate has
been determined prior to the commencement of such
Interest Period.
"Assignment and Acceptance" - see Section 15.
"Balance Sheet Date" - December 31, 1992.
"Bank List" - see Section 15(c).
"Bank(s)" - see preamble.
"Banks' Special Counsel" - Bingham, Dana & Gould
of Boston, Massachusetts, or such other counsel as may
be approved by the Majority Banks.
"Base Rate" - for any day, a fluctuating rate per
annum (rounded upwards, if necessary, to the next 1/8
of 1%) equal to the greater of (a) the rate of
interest announced from time to time by the
Administrative Agent at its Head Office as its "base
rate", as in effect on such day, or (b) the sum of the
Federal Funds Effective Rate in effect on such day
plus 1/2%. In the event that at any time the rate
determined as provided in clause (b) above exceeds the
rate determined as provided in clause (a) above, on
each such occasion, the rate set forth in clause (b)
shall apply only to Base Rate Loans borrowed hereunder
no more than five Business Days prior to the date such
rate set forth in clause (b) exceeded the rate set
forth in clause (a) above. For purposes of this
Agreement, any change in the Base Rate due to a change
in the Administrative Agent's "base rate" or the
Federal Funds Effective Rate shall be effective on the
effective date of such change in the Administrative
Agent's "base rate" or the Federal Funds Effective
Rate, as applicable. If the Administrative Agent
shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any
reason, including, without limitation, the inability
or failure of the Administrative Agent to obtain
sufficient bids or publications in accordance with the
terms hereof, the Base Rate shall be the
Administrative Agent's "base rate" as in effect at the
applicable time until the circumstances giving rise to
such inability no longer exist.
"Base Rate Borrowing" - a Borrowing comprised of
Base Rate Loans.
"Base Rate Loan" - any Standby Loan bearing
interest at a rate determined by reference to the Base
Rate in accordance with the provisions of Section 2 hereof.
"BofA" - see preamble.
"Borrower" - see preamble.
"Borrowing" - a group of Loans of a single Type
made by the Banks (or, in the case of a Competitive
Borrowing, by the Bank or Banks whose Competitive Bids
have been accepted by the Borrower pursuant to Section 2.5
hereof) on a single date and as to which a single
Interest Period is in effect.
"Borrowing Notice" - see Section 2.6.
"Business Day" - any day (other than a Saturday or
Sunday) on which commercial banks are open for the
conduct of normal banking business in each of Boston,
Massachusetts and New York, New York, provided that in
the case of any transactions related to Eurodollar
Loans, a Business Day also shall be a day on which
dealings in dollar deposits in the Eurodollar
interbank markets may be transacted.
"C/D Rate" - for any applicable Interest Period,
the interest rate per annum determined by the
Administrative Agent pursuant to the following
formula:
C/D Rate = Domestic C/D Rate* +
Assessment 1.00 - C/D Reserve Percentage Rate
*The components of the fraction to be rounded upwards,
if necessary, to the next highest 1/8th of 1%.
The Administrative Agent shall give the Borrower and the Banks
prompt notice (but in any event no later than one Business Day
prior to the date of commencement of such Interest Period) of
the C/D Rate determined for such Interest Period, and absent
manifest error, each determination of the C/D Rate by the
Administrative Agent shall be conclusive and binding for all
purposes hereof.
"C/D Rate Borrowing" - a Borrowing comprised of
C/D Rate Loans.
"C/D Rate Loans" - any Standby Loans bearing
interest at a rate determined by reference to the C/D
Rate in accordance with the provisions of Section 2 hereof.
"C/D Reserve Percentage" - for any day during an
Interest Period with respect to a C/D Rate Loan, 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,
including, without limitation, any marginal,
emergency, supplemental, special or other reserves,
for a member bank of the Federal Reserve System in New
York City with deposits exceeding $1 billion in
respect of new non-personal time deposits in dollars
in New York City having a maturity comparable to the
Interest Period for such C/D Rate Loan and in an
amount of $100,000 or more. The C/D Rate shall be
adjusted automatically on and as of the effective date
of any change in the C/D Reserve Percentage.
"CERCLA" - see Section 5.18(a)(i).
"Charter" - with respect to any Person other than
an individual, such Person's articles of organization,
certificate of incorporation, statute, constitution,
joint venture or partnership agreement or other
charter documents, in each case as amended and in
effect from time to time.
"Closing Date" - see Section 4.
"Co-Agent" - see preamble.
"Code" - the Internal Revenue Code of 1986, as
amended and in effect from time to time.
"Commitment" - the agreement of each Bank, subject
to the terms and conditions of this Agreement, to make
Standby Loans to the Borrower hereunder.
"Competitive Bid" - an offer by a Bank to make a
Competitive Loan pursuant to Section 2.5 hereof.
"Competitive Bid Accept/Reject Letter" - a
notification made by the Borrower to the Competitive
Bid Agent pursuant to Section 2.5(d) hereof in the form of
Exhibit B-4 attached hereto.
"Competitive Bid Agent" - see preamble.
"Competitive Bid Rate" - as to any Competitive Bid
made by a Bank pursuant to Section 2.5 hereof, (i) in the case
of a Eurodollar Loan, the Margin, and (ii) in the case
of a Fixed Rate Loan, the fixed rate of interest
offered by the Bank making such Competitive Bid.
"Competitive Bid Request" - a request made
pursuant to Section 2.5(a) hereof in the form of Exhibit B-1
attached hereto.
"Competitive Borrowing" - a borrowing consisting
of a Competitive Loan or concurrent Competitive Loans
from the Bank or Banks whose Competitive Bids for such
Borrowing have been accepted by the Borrower under the
bidding procedure described in Section 2.5 hereof.
"Competitive Loan" - a loan from a Bank to the
Borrower pursuant to the bidding procedure described
in Section 2.5 hereof. Each Competitive Loan shall be a
Eurodollar Competitive Loan or a Fixed Rate Loan.
"Compliance Certificate" - see Section 8.3(f).
"Consolidated" or "consolidated" - with reference
to any term used in this Agreement, the relevant
figures for a Person and its Subsidiaries on a
consolidated basis determined in accordance with
Generally Accepted Accounting Principles.
"Consolidated Capital Expenditures" - for any
fiscal period, (1) the aggregate expenditures of the
Borrower and its Subsidiaries during such fiscal
period for the acquisition (including acquisition by
capitalized lease) or improvement of capital assets,
as determined in accordance with Generally Accepted
Accounting Principles, less (2) any portion of the
acquisition or improvement cost of any such capital
assets satisfied by trade-in of capital assets or
insurance proceeds (but only to the extent that such
portion to be offset was included in such acquisition
or improvement cost), as determined in accordance with
Generally Accepted Accounting Principles.
"Consolidated Cash Flow" - for any fiscal quarter
of the Borrower, an amount equal to the result
(without duplication) of (a) Consolidated EBIT for
such period, plus (b) the aggregate amount of
depreciation and amortization charges made in
calculating Consolidated Net Income for such period,
plus (c) Consolidated Rental Expense for such
period, plus (d) the aggregate amount of all
extraordinary gains during such period, plus (e) the
aggregate amount of the non-cash portion of all
charges as extraordinary and/or nonrecurring items of
expense made in calculating Consolidated Net Income
for such period, plus (f) the aggregate amount of all
cash receipts during such period on account of
extraordinary and/or nonrecurring items of income
booked during prior periods, plus (g) the net cash
proceeds resulting from the sale of Relieved Track
Materials, minus (h) federal and state income taxes
paid in cash by the Borrower and its Subsidiaries
during such period, minus (i) the aggregate amount of
the non-cash portion of all income credited as
extraordinary and/or nonrecurring items in calculating
Consolidated Net Income for such period, minus (j) the
aggregate amount of all cash payments made during such
period on account of charges as extraordinary and/or
nonrecurring items of expense made during prior
periods.
"Consolidated EBIT" - for any fiscal period of
the Borrower, the sum of (a) Consolidated Net Income
of the Borrower and its Subsidiaries for such period
before provisions for federal and state income taxes,
minus (b) the aggregate amount of all extraordinary
gains included in the calculation of Consolidated Net
Income of the Borrower and its Subsidiaries for such
period, plus (c) Consolidated Interest Charges of the
Borrower and its Subsidiaries for such period, all as
determined in accordance with Generally Accepted
Accounting Principles. For purposes only of
calculating Consolidated EBIT under Section 9.12 and 9.13
hereof, in the determination of Consolidated Net
Income any extraordinary loss (net of taxes)
calculated in accordance with Generally Accepted
Accounting Principles occurring as a result of the
premium and charges incurred in connection with the
repurchase of Subordinated Debentures shall be
disregarded.
"Consolidated Financial Obligations" - for any
fiscal quarter of the Borrower, an amount equal to the
sum (without duplication) of (a)(i) all scheduled
payments of principal on consolidated Indebtedness,
which are due and payable at any time during such
period; provided that maturities in respect of
commercial paper or loans under any revolving credit
facility (other than upon a termination of (x) the
program pursuant to which such commercial paper was
issued or (y) such revolving credit facility, unless
such maturities are refinanced within 30 days with
borrowings under a revolving credit facility or with
commercial paper proceeds) shall not be included as
Consolidated Financial Obligations, plus (ii) the
aggregate amount of loans under any revolving credit
facility required to be prepaid during such period in
connection with a mandatory reduction of lenders'
commitments to make loans under such revolving credit
facility, less (b) any portion of such payments which
has been mandatorily prepaid pursuant to Sections 8.13
or 8.14 of the Facility B Credit Agreement or refinanced
through sources other than proceeds of Loans during
such period in accordance with the provisions of
Section 9.1(i) hereof, plus (c) Consolidated Rental Expense
for such period, plus (d) Consolidated Interest
Charges for such period, all as determined in
accordance with Generally Accepted Accounting
Principles. Demand obligations shall be deemed to be
due and payable during any and all fiscal periods
during which said obligations are outstanding.
"Consolidated Funded Debt" - as at any date of
determination, an amount equal to the sum (without
duplication) of (a) all consolidated Indebtedness of
the Borrower and its Subsidiaries, plus
(b) Consolidated Rental Obligations, in each case as
such amounts are outstanding or would be calculated on
the date as of which Consolidated Funded Debt is to be
determined and determined in accordance with Generally
Accepted Accounting Principles.
"Consolidated Interest Charges" - for any fiscal
period, the consolidated expenses of the Borrower and
its Subsidiaries paid or accrued for such period for
interest on Indebtedness (including the current
portion thereof) which are deducted in the calculation
of Consolidated Net Income for such period, net of
consolidated interest income, if any, all as
determined in accordance with Generally Accepted
Accounting Principles.
"Consolidated Net Income" - the consolidated net
income of the Borrower and its Subsidiaries for any
period as determined in accordance with Generally
Accepted Accounting Principles.
"Consolidated Rental Expense" - for any fiscal
period, the sum of all consolidated rental expense of
the Borrower and its Subsidiaries during such period
for the lease of real or personal property under lease
agreements that do not constitute capitalized leases
that were deducted from the calculation of
Consolidated Net Income for such period, all as
determined in accordance with Generally Accepted
Accounting Principles.
"Consolidated Rental Obligations" - with respect
to the Borrower and its Subsidiaries, an amount equal
to the sum (without duplication) of (a) the net
present value (calculated at a discount rate of 10%)
of the minimum future consolidated rental payments due
over the term of all of such Persons' operating leases
of real or personal property which extend for a term
of twelve or more months and may not be terminated
prior to the stated maturity thereof, plus (b) the net
present value (calculated at a discount rate of 10%)
of the minimum cost to terminate (including rental
payments until termination thereof) any such leases
which may be terminated.
"Consolidated Tangible Net Worth" - with respect
to the Borrower and its Subsidiaries, the result of
(a) the capital accounts (including common stock,
preferred stock and other paid in capital, but
excluding treasury stock) of the Borrower and its
Subsidiaries on a consolidated basis, plus (b) the
earned surplus and capital surplus of the Borrower and
its Subsidiaries, in each case as reflected in the
Borrower's consolidated books of account as of the
date Consolidated Tangible Net Worth is to be
determined, minus (c) the net book value of all assets
of the Borrower and its Subsidiaries which would be
treated as intangibles under Generally Accepted
Accounting Principles, including, without limitation,
such items as goodwill, trademarks, trade names,
service marks, brand names, copyrights, patents and
licenses, and rights with respect to the foregoing,
minus (d) all amounts representing write-ups in the
consolidated book value of any assets of the Borrower
or its Subsidiaries resulting from a revaluation
thereof subsequent to the Original Closing Date, in
each case as determined in accordance with Generally
Accepted Accounting Principles.
"Consolidated Total Assets" - all assets of the
Borrower and its Subsidiaries determined on a
consolidated basis in accordance with Generally
Accepted Accounting Principles.
"Convert", "conversion" and "converted" -
conversion of any Loan into a Loan of another Type
pursuant to Section 2.8 hereof.
"Conversion Notice" - see Section 2.8.
"Debenture Indenture" - the Indenture, dated as of
September 15, 1989, between the Borrower and United
States Trust Company of New York, as Trustee, pursuant
to which the Borrower issued the Subordinated
Debentures, in the form thereof previously delivered
to the Administrative Agent.
"Debt Service Coverage Ratio" - see Section 9.13.
"Default(s)" - any event which with notice or
lapse of time or notice and lapse of time will become
an Event of Default.
"Distribution" - the payment by any Person of any
dividends, distributions or other payments to its
shareholders as such, other than distributions or
allocations of common stock of such Person; the
declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of
any Person, other than dividends payable solely in
shares of common stock of such Person; or the purchase
or other retirement of any shares of any class of
capital stock of any Person, directly or indirectly,
through a Subsidiary or otherwise, other than solely
through the issuance of the capital stock of such
Person; the return of capital by any Person to its
shareholders as such; or any other distribution on or
in respect of any shares of any class of capital stock
of any Person.
"Distribution Amount" - see Section 9.4(a).
"Domestic C/D Rate" - with respect to any C/D Rate
Loan for any Interest Period, the rate per annum
determined by the Administrative Agent to be the
arithmetic average (rounded upwards, if necessary, to
the next highest 1/8th of 1%) of the prevailing rates
per annum bid at 10:00 a.m. (Boston time) (or as soon
thereafter as practicable) on the first day of any
Interest Period by two or more New York certificate of
deposit dealers of recognized standing for the
purchase at face value from each Reference Bank of its
certificates of deposit in an amount comparable to the
C/D Rate Loan to be made or converted by the Banks to
which such Interest Period applies and having a
maturity comparable to such Interest Period.
"Eligible Assignee" - any bank, insurance company
or other financial institution that the Administrative
Agent and the Borrower may approve, provided that
neither the Borrower's approval nor the Administrative
Agent's approval shall be unreasonably withheld.
"Employee Benefit Plan" - any employee benefit
plan within the meaning of Section 3(3) of ERISA maintained or
contributed to by the Borrower or any ERISA Affiliate,
other than a Multiemployer Plan.
"Environmental Laws" - see Section 5.18(a)(i).
"ERISA" - the Employee Retirement Income Security
Act of 1974, any successor statute of similar import,
and the rules and regulations thereunder, as amended
from time to time.
"ERISA Affiliate" - any Person which is treated as
a single employer with the Borrower under Section 414 of the Code.
"ERISA Reportable Event" - a reportable event with
respect to a Guaranteed Pension Plan within the
meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of
notice has not been waived.
"Eurodollar Borrowing" - a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Competitive Borrowing" - a Competitive
Borrowing comprised of Eurodollar Competitive Loans.
"Eurodollar Competitive Loan" - any Competitive
Loan bearing interest at a rate determined by
reference to the Eurodollar Rate in accordance with
the provisions of Section 2.5 hereof.
"Eurodollar Loan" - any Eurodollar Competitive
Loan or Eurodollar Standby Loan.
"Eurodollar Offered Rate" - for any applicable
Interest Period, the rate per annum determined by the
Administrative Agent to be the arithmetic average
(rounded upwards, if necessary to the next highest
1/8th of 1%) of the respective rates per annum at
which deposits of dollars are offered to each
Reference Bank by prime banks in the London interbank
market at or about 10:00 a.m. local time in such
interbank market, two Business Days prior to the first
day of such Interest Period for a period equal to the
duration of such Interest Period in an amount
substantially equal to the Eurodollar Loan to be
loaned by one or more Banks (in the case of a
Eurodollar Competitive Loan) or to be loaned or
converted by the Banks (in the case of a Eurodollar
Standby Loan).
"Eurodollar Rate" - for any applicable Interest
Period, the interest rate per annum determined by the
Administrative Agent pursuant to the following
formula:
Eurodollar Rate = Eurodollar Offered Rate*
1.00 - Eurodollar Reserve Percentage
*The components of the fraction to be rounded upwards, if
necessary, to the next highest 1/8th of 1%.
The Administrative Agent shall give the Borrower and the Banks
(in the case of a Eurodollar Standby Loan) or the applicable
Banks (in the case of a Eurodollar Competitive Loan) prompt
notice (but in any event no later than one Business Day prior to
the date of commencement of such Interest Period) of the
Eurodollar Rate determined for such Interest Period, and absent
manifest error, each determination of the Eurodollar Rate by the
Administrative Agent shall be conclusive and binding for all
purposes hereof.
"Eurodollar Reserve Percentage" - for any day
during an Interest Period with respect to a Eurodollar
Loan, that percentage (expressed as a decimal) which
is in effect on such day under Regulation D of the
Board of Governors of the Federal Reserve System (or
any successor or similar regulation relating to
reserve requirements) for determining the maximum
reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits
exceeding $1 billion in respect of "Eurocurrency
Liabilities" (as such term is used in Regulation D)
outstanding from time to time, or in respect of any
other category of liabilities which might be incurred
by such member bank in any Eurodollar interbank market
to fund Eurodollar Loans. The Eurodollar Rate shall
be adjusted automatically on and as of the effective
date of any change in the Eurodollar Reserve
Percentage.
"Eurodollar Standby Borrowing" - a Standby
Borrowing comprised of Eurodollar Standby Loans.
"Eurodollar Standby Loan" - any Standby Loan
bearing interest at a rate determined by reference to
the Eurodollar Rate in accordance with the provisions
of Section 2 hereof.
"Event(s) of Default" - see Section 10.
"Facility B Credit Agreement" - the Amended and
Restated Revolving Credit Agreement, dated as of April
2, 1993 and amended and restated as of the date
hereof, among the Borrower, the banks named therein,
the banks that may become parties thereto from time to
time, The First National Bank of Boston, as
administrative agent and competitive bid agent for
such banks, and BofA as co-agent thereunder, as such
agreement may be amended, modified, extended, or
restated and in effect from to time.
"Facility B Notes" - Collectively, the promissory
notes issued by the Borrower pursuant to the Facility
B Credit Agreement.
"Facility Fee" - see Section 3.7.
"Federal Funds Effective Rate" - for any day, a
fluctuating 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, as published
for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the
average of the quotations for such day on such
transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing
selected by it.
"Fixed Rate Borrowing" - a Borrowing comprised of
Fixed Rate Loans.
"Fixed Rate Loan" - any Competitive Loan bearing
interest at a fixed percentage rate per annum
(expressed in the form of a decimal to no more than
four decimal places) specified by the Bank making such
Loan in its Competitive Bid.
"FNBB" - see preamble.
"Generally Accepted Accounting Principles" -
generally accepted accounting principles which are (a)
consistent with the principles promulgated or adopted
by the Financial Accounting Standards Board and its
predecessors, and (b) such that a certified public
accountant would, insofar as the use of accounting
principles is pertinent, be in a position to deliver
an unqualified opinion as to financial statements in
which such principles have been properly applied,
provided that if any changes in generally accepted
accounting principles with which the Borrower's
independent certified public accountants concur result
in a change in the method of calculation of any of the
financial covenants, standards or terms contained in
this Agreement, the Borrower and the Banks agree to
amend such provisions to reflect such changes in
generally accepted accounting principles so that the
criteria for evaluating the consolidated financial
condition of the Borrower and its Subsidiaries shall
be the same after such changes as if such changes had
not been made.
"Guaranteed Pension Plan" - any employee pension
benefit plan within the meaning of Section 3(2) of ERISA
maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed
on termination in full or in part by the PBGC pursuant
to Title IV of ERISA, other than a Multiemployer Plan.
"Hazardous Substances" - see Section 5.18(a)(ii).
"HAZMAT" - see Section 5.18(a)(i).
"Head Office" - the head office of the
Administrative Agent, which is presently located at
100 Federal Street, Boston, Massachusetts 02110.
"Indebtedness" - (a) all debt and similar monetary
obligations, whether direct or indirect (including,
without limitation, obligations under capitalized
leases); (b) all Indebtedness of others secured by any
mortgage, pledge, security interest, lien, charge, or
other encumbrance existing on property owned or
acquired subject thereto, whether or not the
Indebtedness secured thereby shall have been assumed;
(c) all guarantees, endorsements and other contingent
obligations, whether direct or indirect, in respect of
Indebtedness of others, including any obligation to
supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase
Indebtedness, or to assure the owner of Indebtedness
against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the
debtor to make payment of the Indebtedness held by
such owner or otherwise; and (d) the obligations to
reimburse the issuer in respect of any letters of
credit.
"Indemnified Party" - see Section 16.
"Independent Accountant(s)" - a firm of nationally
recognized independent public accountants selected on
behalf of the Borrower by its Board of Directors,
which is "independent" as that term is defined in Rule
2-01 of Regulation S-X promulgated by the Securities
and Exchange Commission.
"Initial 1989 Closing Date" - September 26, 1989.
"Interest Payment Date" - with respect to any
Loan, the last day of the Interest Period applicable
thereto and, in the case of a Eurodollar Loan with an
Interest Period of more than three months duration or
a Fixed Rate Loan or a C/D Rate Loan with an Interest
Period of more than 90 days duration, each day that
would have been an Interest Payment Date for such Loan
had successive Interest Periods of three months
duration or 90 days duration, as the case may be, been
applicable to such Loan and, in addition, the date of
any conversion of a Standby Loan to a Standby Loan of
a different Type.
<PAGE>
"Interest Period" - (a) as to any Eurodollar
Standby Borrowing, the period commencing on the date
of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to
such Borrowing, as the case may be, and ending on the
numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the
calendar month that is 1, 2, 3 or 6 months thereafter,
as the Borrower may elect, (b) as to any Eurodollar
Competitive Borrowing, the period commencing on the
date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar
month that is between 1 and 9 months (inclusive)
thereafter, as the Borrower may elect and as specified
in the Competitive Bids in which the offer to make the
Eurodollar Competitive Loans comprising such Borrowing
were extended, (c) as to any C/D Rate Borrowing, a
period of 30, 60, 90 or 180 days duration, as the
Borrower may elect, commencing on the date of such
Borrowing or on the last day of the immediately
preceding Interest Period applicable to such
Borrowing, as the case may be, (d) as to any Base Rate
Borrowing, the period commencing on the date of such
Borrowing or on the last day of the immediately
preceding Interest Period applicable to such
Borrowing, as the case may be, and ending on the next
succeeding first Business Day of January, April, July
or October or, if earlier, on the Revolving Credit
Commitment Termination Date or the date of prepayment
or conversion of such Borrowing and (e) as to any
Fixed Rate Borrowing, the period commencing on the
date of such Borrowing and ending on the date
specified in the Competitive Bids in which the offer
to make the Fixed Rate Loans comprising such Borrowing
were extended, which shall not be earlier than 7 days
after the date of such Borrowing or later than 180
days after the date of such Borrowing; provided,
however, that if any Interest Period would end on a
day other than a Business Day, such Interest Period
shall be extended to the next succeeding Business Day
or, in the case of Eurodollar Loans only, adjusted in
accordance with the then prevailing practice in the
London interbank market. Notwithstanding the
provisions of clauses (a) and (c) above, with respect
to one Eurodollar Standby Loan or one C/D Rate Loan
during each calendar quarter, the Interest Period with
respect thereto may, at the Borrower's request made in
accordance with the terms hereof, end on any date
which is not (A) with respect to such Eurodollar
Standby Loan, the first, second, third or sixth
monthly anniversary of the date on which such Interest
Period began or (B) with respect to such C/D Rate
Loan, 30, 60, 90 or 180 days after the date on which
such Interest Period began, so long as such date
occurs less than three months or 90 days, as
applicable, after the date on which such Interest
Period began (subject, in the case of Eurodollar
Standby Loans, to the availability of deposits in
United States Dollars in the relevant amount for an
Interest Period of such length in the Eurodollar
interbank market and subject, in the case of C/D Rate
Loans, to the availability of deposits in United
States Dollars in the relevant amount for an Interest
Period of such length in the applicable certificate of
deposit market), provided, that, (i) the Borrower may
only request such an Interest Period once during any
calendar quarter and (ii) such Interest Period must
end on the last day of such calendar quarter (or if
such date is not a Business Day, the next succeeding
Business Day unless, with respect to Eurodollar
Standby Loans, such Business Day falls in another
calendar month, in which case such Interest Period
shall end on the next preceding Business Day).
Interest shall accrue from and including the first day
of any Interest Period to but excluding the last day
of such Interest Period.
"Interest Period Termination Date" - the last day
of any Interest Period, provided that if any Interest
Period Termination Date falls on a day which is not a
Business Day, such Interest Period shall be adjusted
as provided herein.
"Interest Rate Adjustment Date" - the Closing Date
and thereafter each date occurring 5 Business Days
after the Administrative Agent receives evidence
satisfactory to it that the Rating has changed.
"Intermodal Facilities" - those assets of the
Borrower and its Subsidiaries as are more particularly
described on Schedule 1.2 hereto.
"Investments" - the aggregate of all expenditures
made for the acquisition of stock (except redemptions
or repurchases by a corporation of any shares of its
capital stock) or Indebtedness of any Person, all
loans, advances, capital contributions to any Person
and all guarantees (or other commitments as described
under Indebtedness) of obligations of, any Person,
except accounts receivable arising in the ordinary
course of business. In determining the aggregate
amount of Investments outstanding at any particular
time, (a) the amount of any Investment represented by
a guarantee shall be taken at not less than the
aggregate amount of the obligations guaranteed and
still outstanding, (b) there shall be included as an
Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and
until such interest is paid, (c) there shall be
deducted in respect of each such Investment any amount
received as a return of capital, (d) there shall not
be deducted in respect of any Investment any amounts
received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued
interest included as provided in the foregoing clause
(b) may be deducted when paid, and (e) there shall not
be deducted from the aggregate amount of Investments
any decrease in the value thereof.
"Lien" - any mortgage, lien, charge, security
interest or other encumbrance of any kind upon any
property or assets of any character, or upon the
income or profits therefrom, any conditional sale or
other title retention agreement, device or arrangement
(including capitalized leases), or any sale,
assignment, pledge or other transfer for security of
any accounts, general intangibles or chattel paper,
with or without recourse.
"Loan" - any Competitive Loan or Standby Loan.
"Loan Documents" - collectively, this Agreement,
the Notes and the Agent's Fee Letter, in each case as
amended and in effect from time to time.
"Majority Banks" - as of any date, (i) those Banks
having Revolving Credit Commitments on such date (or,
if the Revolving Credit Commitments shall have
terminated pursuant to Section 10 hereof or otherwise, holding
Loans outstanding on such date) representing at least
66-2/3% of the Revolving Credit Commitment Amount on
such date, or, if the Revolving Credit Commitments
shall have terminated pursuant to Section 10 hereof or
otherwise, of the aggregate principal amount of the
Loans outstanding on such date or (ii) for purposes of
acceleration of the Loans and all other amounts owing
under this Agreement and the other Loan Documents
pursuant to Section 10 hereof, those Banks whose Loans
outstanding on such date add up to at least 66-2/3% of
the sum of the aggregate principal amount of Loans
outstanding on such date.
"Margin" - as to any Eurodollar Competitive Loan,
the margin (expressed as a percentage rate per annum
in the form of a decimal to no more than four decimal
places) to be added to or subtracted from the
Eurodollar Rate in order to determine the interest
rate applicable to such Loan, as specified in the
Competitive Bid relating to such Loan.
"Material Subsidiary" - each of Chicago Intermodal
Company, Waterloo Railway Company, and, from and after
the Closing Date, any other Subsidiary of the Borrower
(a) with total assets having a fair market value, as
at any date of determination, in excess of $5,000,000,
or (b) which is material to the business, assets or
financial condition of the Borrower and its
Subsidiaries, taken as a whole.
"Moody's" - Moody's Investors Service, Inc.
"Multiemployer Plan" - any multiemployer plan
within the meaning Section 3(37) of ERISA maintained or
contributed to by the Borrower or any ERISA Affiliate.
"non-Affected Bank(s)" - as at any date of
determination, those Banks which are not Affected
Banks.
"Nonessential Property" - Relieved Track
Materials, Intermodal Facilities and any other
property of the Borrower, which is not used or which
the Borrower reasonably believes will not be used, in
the current or planned operation of the Borrower's
rail lines.
"Note(s)" - see Section 2.2(a).
"1991 Note Purchase Agreement" - that certain Note
Purchase Agreement, dated as of July 23, 1991, as
amended by that certain Amendment and Consent, dated
as of April 1, 1993, among the Borrower, the Parent
and the purchasers of the 1991 Senior Notes, as in
effect from time to time.
"Obligations" - all indebtedness, payment
obligations and liabilities of the Borrower to the
Banks, whether existing on the date of this Agreement
or arising thereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured,
arising by contract, operation of law or otherwise,
arising or incurred under this Agreement, the Notes,
the Agent's Fee Letter, in respect of Loans made or
otherwise, or under other instruments at any time
evidencing any thereof.
"Officer's Certificate" - a certificate signed by
any one of the President, Treasurer or Chief Financial
Officer (or comparable officer) of the Person on whose
behalf the certificate is executed.
"Original Closing Date" - The Closing Date as
defined in that certain Revolving Credit Agreement,
dated as of April 2, 1993, among the Borrower, the
lenders named therein and The First National Bank of
Boston as administrative agent.
"Parent" - Illinois Central Corporation, a
Delaware corporation which is the owner of all of the
issued and outstanding capital stock of the Borrower.
"PBGC" - the Pension Benefit Guaranty Corporation
created by Section 4002 of ERISA and any successor entity or
entities having similar responsibilities.
"Person" - any individual, corporation,
partnership, trust, unincorporated association, joint
stock company or other legal entity or organization,
and any government or agency or political subdivision
thereof.
"Rated Debt" - the 1993 Senior Notes.
"RCRA" - see Section 5.18(a)(i).
"Reemployment Period" - see Section 3.2(a).
"Reference Bank(s)" - collectively, all of FNBB,
BofA and The Chase Manhattan Bank, N.A., and
individually, any of such Persons.
"Relieved Track Materials" - the Borrower's
surplus track materials resulting from the conversion
from double track to single track main line.
"Revolving Credit Commitment" - with respect to
each Bank, the commitment of such Bank hereunder as
set forth on Schedule 1.1 attached hereto, as such
Bank's Revolving Credit Commitment may be permanently
terminated or reduced from time to time pursuant to
the terms of this Agreement. The Revolving Credit
Commitments shall automatically terminate on the
Revolving Credit Commitment Termination Date.
"Revolving Credit Commitment Amount" - the
aggregate amount of Revolving Credit Commitments, as
in effect from time to time.
"Revolving Credit Commitment Percentage" - with
respect to each Bank, the percentage set forth
opposite its name on Schedule 1.1 attached hereto with
respect to Standby Loans (as such percentage on such
schedule is adjusted by the Administrative Agent from
time to time to reflect assignments and reallocations
made pursuant to Sections 3.1(d), 3.5(c) and 15 hereof).
"Revolving Credit Commitment Termination Date" -
that date upon which the Revolving Credit Commitments
terminate, which shall be the earlier to occur of the
following dates: (a) October 26, 1994, or such other
date as the Borrower, the Agents and the Banks may
agree in writing pursuant to Section 2.12 hereof, or (b) such
other date on which the Revolving Credit Commitments
terminate or are terminated pursuant to the terms of
this Agreement.
"SARA" - see Section 5.18(a)(i).
"S&P" - Standard & Poors Corporation.
"Senior Debt Agreements" - collectively, the 1991
Note Purchase Agreement and the Senior Debt Indenture.
"Senior Debt Indenture" - The Indenture, dated as
of May 1, 1993, between the Borrower and FNBB, as
Trustee, together with all the exhibits and schedules
attached thereto, in the form thereof delivered to the
Administrative Agent prior to the Closing Date, as in
effect from time to time.
"Senior Notes" - collectively, the 1991 Senior
Notes and the 1993 Senior Notes.
"1991 Senior Notes" - the promissory notes in the
original aggregate principal amount of $160,000,000
issued by the Borrower pursuant to the 1991 Note
Purchase Agreement.
"1993 Senior Notes" - the promissory notes in the
aggregate principal amount of $100,000,000 issued by
the Borrower pursuant to the Senior Debt Indenture.
"Standby Borrowing" - a borrowing consisting of
simultaneous Standby Loans from each of the Banks.
"Standby Loans" - the revolving credit loans made
by the Banks to the Borrower pursuant to Section 2.1 hereof.
Each Standby Loan shall be a Eurodollar Standby Loan,
a C/D Rate Loan or a Base Rate Loan.
"Start Date" - see Section 9.4.
"Subordinated Debentures" - the Borrower's senior
subordinated debentures due 2001 in the original
aggregate principal amount of $145,000,000 issued by
the Borrower pursuant to the Debenture Indenture, in
the form thereof previously delivered to the
Administrative Agent.
"Subordinated Debt" - Indebtedness of the Borrower
in an aggregate principal amount not to exceed
$72,500,000 from and after the Closing Date evidenced
by the Subordinated Debentures.
"Subsidiary" - in relation to any particular
Person, any corporation, association or other business
entity, a majority (by number of votes) of the
outstanding voting stock of which is at the time owned
or controlled by such Person, or by one or more
Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person and which properly
would be included in such Person's consolidated
balance sheet.
"Total Capitalization" - as at any date of
determination, an amount equal to the sum of (a)
Consolidated Funded Debt plus (b) Consolidated
Tangible Net Worth, in each case determined in
accordance with Generally Accepted Accounting
Principles.
"Type" - when used in respect of any Loan or
Borrowing, shall refer to the Rate by reference to
which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof,
"Rate" shall include the Eurodollar Rate, the C/D
Rate, the Base Rate and the Fixed Rate.
(b) All terms of an accounting character not
specifically defined herein shall have the meanings
assigned thereto by Generally Accepted Accounting
Principles. All terms not specifically defined herein
which are defined in the Uniform Commercial Code as in
effect in the State of New York shall have the same
meanings herein as therein. Each reference herein to
a particular Person (including, without limitation,
the Administrative Agent and each Bank) shall include
a reference to such Person's successors and permitted
assigns. The words "herein", "hereof", "hereunder"
and words of like import shall refer to this Agreement
as a whole and not to any particular Section or
subdivision of this Agreement.
Section 2. THE LOANS.
Section 2.1. Commitments. (a) Subject to the terms
and conditions and relying upon the representations
and warranties herein set forth, each Bank agrees,
severally and not jointly, to make Standby Loans to
the Borrower, at any time and from time to time on and
after the date hereof and until the Revolving Credit
Commitment Termination Date, in an aggregate principal
amount at any time outstanding not to exceed such
Bank's Revolving Credit Commitment minus the amount by
which the Competitive Loans outstanding at such time
shall be deemed to have used such Revolving Credit
Commitment pursuant to Section 2.11 hereof, subject,
however, to the conditions that (i) at no time shall
(A) the sum of (x) the outstanding aggregate principal
amount of all Standby Loans made by all Banks plus (y)
the outstanding aggregate principal amount of all
Competitive Loans made by all Banks exceed (B) the
Revolving Credit Commitment Amount and (ii) at all
times the outstanding aggregate principal amount of
all Standby Loans made by each Bank shall equal such
Bank's Revolving Credit Commitment Percentage of the
outstanding aggregate principal amount of all Standby
Loans made pursuant to Section 2.6 hereof. The Revolving
Credit Commitment Amount may be terminated or reduced
from time to time pursuant to this Section 2.1. Within the
foregoing limits, the Borrower may borrow, pay or
prepay and reborrow hereunder, on and after the
Closing Date and prior to the Revolving Credit
Commitment Termination Date, subject to the terms,
conditions and limitations set forth herein.
(b) The Borrower may at any time prior to the
Revolving Credit Commitment Termination Date, (i)
terminate the Revolving Credit Commitments in full by
giving three Business Days' prior written notice
thereof to the Administrative Agent and repaying in
full the Notes, or (ii) reduce the Revolving Credit
Commitment Amount in part by $5,000,000 or a larger
integral multiple of $1,000,000 by giving three
Business Days' prior written notice thereof to the
Administrative Agent, repaying the amount, if any, by
which the sum of the aggregate unpaid principal amount
of the Loans exceeds the then reduced Revolving Credit
Commitment Amount, together with all interest accrued
on principal amounts repaid, provided that in no event
shall the Revolving Credit Commitment Amount be
reduced to an amount less than $15,000,000 unless it
is terminated pursuant to this Section 2.1(b) and, provided
further that no such reduction shall be made which
would reduce the Revolving Credit Commitment Amount to
an amount less than the aggregate principal amount of
the Competitive Loans outstanding. The Administrative
Agent shall promptly notify each Bank of the contents
of each notice concerning the Revolving Credit
Commitments. Upon the effective date of any such
reduction, the amount of each Bank's Revolving Credit
Commitment shall be reduced pro rata. Subject to the
provisions of Section 3.2 hereof, any termination or reduction
may be effected by the Borrower without penalty. No
termination of the Revolving Credit Commitments or
reduction of the Revolving Credit Commitment Amount
shall be subject to reinstatement.
(c) The aggregate principal amount of all Loans
outstanding on the Revolving Credit Commitment
Termination Date, plus all accrued and unpaid interest
thereon, shall be due and payable in full on such
date.
Section 2.2. Notes; Repayment of Loans. (a) The obligation
of the Borrower to repay the Loans made pursuant to
this Agreement and to pay interest thereon, as set
forth in this Agreement, shall be evidenced by
separate promissory notes of the Borrower
substantially in the form of Exhibit A attached hereto
with appropriate insertions (each, singly, a "Note",
and collectively, the "Notes"), dated as of the
Closing Date or the date the applicable payee Bank
becomes a party to this Agreement, as the case may be,
and payable to the order of such payee Bank in a
principal amount stated to be the lesser of (i) the
Revolving Credit Commitment Amount, or (ii) the
aggregate principal amount of Loans at any time
advanced by such payee Bank and outstanding hereunder.
(b) The Borrower agrees to pay the outstanding
principal balance of each Standby Loan on the
Revolving Credit Commitment Termination Date. The
Borrower agrees to pay the outstanding balance of each
Competitive Loan on the last day of the Interest
Period applicable to such Competitive Loan and on the
Revolving Credit Commitment Termination Date. Each
Loan shall bear interest from the date of the
Borrowing of which such Loan is a part on the
outstanding principal balance thereof as set forth in
Section 2.9 hereof.
(c) Each Bank shall, and is hereby authorized by
the Borrower to, maintain, in accordance with its
usual practice, records evidencing the indebtedness of
the Borrower to such Bank hereunder from time to time,
including the amounts and Types of and the Interest
Periods applicable to the Loans made by such Bank from
time to time and the amounts of principal and interest
paid to such Bank from time to time in respect of such
Loans.
(d) The entries made in the records maintained
pursuant to paragraph (c) of this Section 2.2 and in the Bank
List maintained by the Administrative Agent pursuant
to Section 15(c) hereof shall be prima facie evidence of the
existence and amounts of the obligations of the
Borrower to which such entries relate; provided,
however, that the failure of any Bank or the
Administrative Agent to maintain or to make any entry
in such records or the Bank List, as applicable, or
any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.
Section 2.3. Prepayments. (a) The Borrower shall have
the right at any time prior to the Revolving Credit
Commitment Termination Date to prepay any Standby
Borrowing, without premium or penalty (except as
provided in clause (B) below), in whole or in part,
together with accrued interest to the date of
prepayment on the principal amount prepaid, upon not
less than three Business Days' written, telegraphic or
telephonic notice to the Administrative Agent,
provided that (A) each partial prepayment shall be
in the aggregate principal amount of (i) $3,000,000 or
a larger integral multiple of $1,000,000 in the case
of Base Rate Loans, and (ii) subject to clause (B)
below, $5,000,000 or a larger integral multiple of
$1,000,000 in the case of Eurodollar Standby Loans and
C/D Rate Loans, and (B) if any prepayment or any
repayment of any Eurodollar Standby Loan or C/D Rate
Loan shall be made on any day other than the
applicable Interest Period Termination Date, the
Borrower shall indemnify the Banks against any loss,
cost or expense incurred as a result of such
prepayment or repayment in accordance with the
provisions of Section 3.2 hereof. The Administrative Agent
shall promptly notify each Bank of the contents of
each prepayment notice. Subject to the borrowing
limitations set forth in Section 2.1(a) hereof, amounts
prepaid prior to the Revolving Credit Commitment
Termination Date may be reborrowed. The Borrower
shall not have any right to prepay any Competitive
Borrowing.
(b) If at any time prior to the Revolving Credit
Commitment Termination Date the sum of the aggregate
principal amount of all Loans outstanding exceeds the
Revolving Credit Commitment Amount, the Borrower shall
immediately make such payments of principal of the
Loans (for application first to Standby Loans, then to
Competitive Loans) to the Administrative Agent for the
accounts of the Banks in the amount of such excess,
together with all interest accrued on such principal
amounts repaid. In addition to all other payments
required by this Section 2.3(b), in the event of any reduction
of the Revolving Credit Commitment Amount pursuant to
Section 2.1(b) hereof, the Borrower shall pay to the
Administrative Agent, for the accounts of the Banks,
the Facility Fee accrued to the effective date of each
such reduction on the amount of such reduction, as
well as the full indemnity required, in the case of a
prepayment of Eurodollar Loans and C/D Rate Loans, by
the provisions of Section 3.2 hereof.
(c) Each partial prepayment of Standby Loans made
pursuant to this Section 2.3 shall be allocated among all of
the Banks in proportion (as nearly as practicable) to
the respective unpaid principal amount of each Bank's
Standby Loans, with adjustments to the extent
practical to equalize any prior payments not exactly
in proportion.
Section 2.4. Loans. (a) Each Standby Loan shall be
made as part of a Borrowing consisting of Loans made
by the Banks ratably in accordance with their
Revolving Credit Commitments. Each Standby Loan shall
be made in accordance with the procedures set forth in
Section 2.6 hereof and each Competitive Loan shall be made in
accordance with the procedures set forth in Section 2.5
hereof. The Loans comprising any Borrowing shall be
(i) in the case of Competitive Loans, in an aggregate
principal amount which is an integral multiple of
$1,000,000 and not less than $10,000,000, (ii) in the
case of Base Rate Loans, in an aggregate principal
amount which is an integral multiple of $1,000,000 and
not less than $3,000,000 and (iii) in the case of
Eurodollar Standby Loans and C/D Rate Loans, in an
aggregate principal amount which is an integral
multiple of $1,000,000 and not less than $5,000,000.
(b) Each Competitive Borrowing shall be comprised
entirely of Eurodollar Competitive Loans or Fixed Rate
Loans and each Standby Borrowing shall be comprised
entirely of Eurodollar Standby Loans, C/D Rate Loans
or Base Rate Loans, as the Borrower may request
pursuant to Section 2.5 or Section 2.6 hereof, as applicable.
Borrowings of more than one Type may be outstanding at
the same time; provided, however, that the Borrower
shall not be entitled to request any Borrowing which,
if made, would result in an aggregate of more than
five separate Eurodollar Standby Loans and C/D Rate
Loans of any Bank being outstanding hereunder at any
one time. For purposes of the foregoing, Loans having
different Interest Periods, regardless of whether they
commence on the same date, shall be considered
separate Loans.
(c) Subject to Section 2.7 hereof, each Bank shall make
each Loan to be made by it hereunder on the proposed
date of Borrowing thereof by wire transfer of
immediately available funds to the Administrative
Agent at its Head Office, not later than 1:00 p.m.,
Boston time, and upon satisfaction of the applicable
conditions set forth in this Agreement and upon
receipt from the Banks of the amount to be advanced by
such Banks, on the date of the proposed Borrowing, the
Administrative Agent shall credit the amounts so
received in immediately available funds to the
Borrower's account maintained with the Administrative
Agent at the Head Office. Competitive Loans shall be
made by the Bank or Banks whose Competitive Bids
therefor are accepted pursuant to Section 2.5 hereof, in the
amounts so accepted and Standby Loans shall be made by
the Banks pro rata in accordance with Section 2.11 hereof.
Unless the Administrative Agent shall have received
notice from a Bank prior to the date of any Borrowing
that such Bank will not make available to the
Administrative Agent such Bank's portion of such
Borrowing, the Administrative Agent may assume that
such Bank has made such portion available to the
Administrative Agent on the date of such Borrowing in
accordance with this paragraph (c) 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 made such portion
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, the interest rate applicable at
the time to the Loans comprising such Borrowing 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 shall constitute such Bank's Loan as part of
such Borrowing for purposes of this Agreement.
(d) Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to
request any Borrowing if the Interest Period requested
with respect thereto would end after the Revolving
Credit Commitment Termination Date.
Section 2.5. Competitive Bid Procedure. (a) In order
to request Competitive Bids, the Borrower shall hand
deliver or telecopy (or communicate by telephone with
prompt confirmation in writing) to the Competitive Bid
Agent (with a copy to the Administrative Agent if
different than the Competitive Bid Agent) a duly
completed Competitive Bid Request in the form of
Exhibit B-l attached hereto, to be received by the
Competitive Bid Agent (and the Administrative Agent if
different than the Competitive Bid Agent) (i) in the
case of a Eurodollar Competitive Borrowing, not later
than 10:30 a.m., Boston time, four Business Days
before a proposed Competitive Borrowing and (ii) in
the case of a Fixed Rate Borrowing, not later than
10:30 a.m., Boston time, one Business Day before a
proposed Competitive Borrowing. No C/D Rate Loan or
Base Rate Loan shall be requested in, or made pursuant
to, a Competitive Bid Request. A Competitive Bid
Request that does not conform substantially to the
format of Exhibit B-1 attached hereto may be rejected
in the Competitive Bid Agent's sole discretion, and
the Competitive Bid Agent shall promptly notify the
Borrower of such rejection by telecopier (or by
telephone with prompt confirmation in writing). Such
request shall in each case refer to this Agreement and
specify (w) whether the Borrowing then being requested
is to be a Eurodollar Borrowing or a Fixed Rate
Borrowing, (x) the date of such Borrowing (which shall
be a Business Day), (y) the aggregate principal amount
thereof which shall be in a minimum principal amount
of $10,000,000 and in an integral multiple of
$1,000,000, and (z) the Interest Period with respect
thereto (which may not end after the Revolving Credit
Commitment Termination Date). Promptly after its
receipt of a Competitive Bid Request that is not
rejected as aforesaid, the Competitive Bid Agent shall
invite by telecopier (in the form set forth in Exhibit
B-2 attached hereto) the Banks to bid, on the terms
and conditions of this Agreement, to make Competitive
Loans pursuant to the Competitive Bid Request.
(b) Each Bank may, in its sole discretion, make
one or more Competitive Bids to the Borrower
responsive to a Competitive Bid Request. Each
Competitive Bid by a Bank must be received by the
Competitive Bid Agent via telecopier, in the form of
Exhibit B-3 attached hereto, (i) in the case of a
Eurodollar Competitive Borrowing, not later than 10:00
a.m., Boston time, three Business Days before a
proposed Competitive Borrowing and (ii) in the case of
a Fixed Rate Borrowing, not later than 10:00 a.m.,
Boston time, on the day of a proposed Competitive
Borrowing. Multiple bids will be accepted by the
Competitive Bid Agent. Competitive Bids that do not
conform substantially to the format of Exhibit B-3 may
be rejected by the Competitive Bid Agent, and the
Competitive Bid Agent shall notify the Bank making
such nonconforming bid of such rejection as soon as
practicable. Each Competitive Bid shall refer to this
Agreement, give the identity of the Bank making the
bid, and specify (x) the principal amount (which shall
be in a minimum principal amount of $5,000,000 and in
an integral multiple of $1,000,000 and which may
equal, but not exceed, the entire principal amount of
the Competitive Borrowing requested by the Borrower)
of the Competitive Loan or Loans that the Bank is
willing to make to the Borrower, (y) the Competitive
Bid Rate or Rates at which the Bank is prepared to
make the Competitive Loan or Loans and (z) the
Interest Period and the last day thereof. If any Bank
shall elect not to make a Competitive Bid, such Bank
shall so notify the Competitive Bid Agent by
telecopier (i) in the case of Eurodollar Competitive
Loans, not later than 10:00 a.m., Boston time, three
Business Days before a proposed Competitive Borrowing,
and (ii) in the case of Fixed Rate Loans, not later
than 10:00 a.m.,, Boston time, on the day of a
proposed Competitive Borrowing; provided, however,
that failure by any Bank to give such notice shall not
cause such Bank to be obligated to make any
Competitive Loan as part of such Competitive
Borrowing. A Competitive Bid submitted by a Bank
pursuant to this paragraph (b) shall be irrevocable.
Each Competitive Bid may be greater than the Revolving
Credit Commitment of the Bank giving the bid but may
not exceed the Revolving Credit Commitment Amount less
all outstanding Loans.
(c) The Competitive Bid Agent shall promptly
notify the Borrower by telecopier (or by telephone
promptly confirmed in writing by telecopier) of all
the Competitive Bids made, the Competitive Bid Rate
and the principal amount of each Competitive Loan in
respect of which a Competitive Bid was made and the
identity of the Bank that made each Competitive Bid.
The Competitive Bid Agent shall send a copy of all
Competitive Bids to the Borrower for its records as
soon as practicable after completion of the bidding
process set forth in this Section 2.5.
(d) The Borrower may in its sole and absolute
discretion, subject only to the provisions of this
paragraph (d), accept or reject any Competitive Bid
referred to in paragraph (c) above. The Borrower
shall notify the Competitive Bid Agent by telephone,
confirmed by telecopier in the form of a Competitive
Bid Accept/Reject Letter, whether and to what extent
it has decided to accept or reject any of or all the
Competitive Bids referred to in paragraph (c) above,
(x) in the case of a Eurodollar Competitive Borrowing,
not later than 11:00 a.m., Boston time, three Business
Days before a proposed Competitive Borrowing, and (y)
in the case of a Fixed Rate Borrowing, not later than
11:00 a.m., Boston time, on the day of the proposed
Competitive Borrowing; provided, however, that (i) the
failure by the Borrower to give such notice shall be
deemed to be a rejection of all the Competitive Bids
referred to in paragraph (c) above, (ii) the Borrower
shall not accept a Competitive Bid made at a
particular Competitive Bid Rate if the Borrower has
decided to reject a Competitive Bid made at a lower
Competitive Bid Rate, (iii) the aggregate amount of
the Competitive Bids accepted by the Borrower shall
not exceed the principal amount specified in the
Competitive Bid Request, (iv) if the Borrower shall
accept a Competitive Bid or Competitive Bids made at a
particular Competitive Bid Rate but the amount of such
Competitive Bid or Competitive Bids shall cause the
total amount of Competitive Bids to be accepted by the
Borrower to exceed the amount specified in the
Competitive Bid Request, then the Borrower shall
accept a portion of such Competitive Bid or
Competitive Bids in an amount equal to the amount
specified in the Competitive Bid Request less the
amount of all other Competitive Bids accepted with
respect to such Competitive Bid Request, which
acceptance, in the case of multiple Competitive Bids
at such Competitive Bid Rate, shall be made pro rata
in accordance with the amount of each such Competitive
Bid at such Competitive Bid Rate, and (v) except
pursuant to clause (iv) above, no Competitive Bid
shall be accepted for a Competitive Loan unless such
Competitive Loan is in a minimum principal amount of
$10,000,000 and an integral multiple of $1,000,000;
provided further, however, that if a Competitive
Loan must be in an amount less than $10,000,000
because of the provisions of clause (iv) above, such
Competitive Loan may be for a minimum of $1,000,000 or
any integral multiple thereof, and in calculating the
pro rata allocation of acceptances of portions of
multiple Competitive Bids at a particular Competitive
Bid Rate pursuant to clause (iv) the amounts shall be
rounded to integral multiples of $1,000,000 in a
manner which shall be in the discretion of the
Borrower. A notice given by the Borrower pursuant to
this paragraph (d) shall be irrevocable.
(e) The Competitive Bid Agent shall promptly
notify each bidding Bank whether or not its
Competitive Bid has been accepted (and if so, in what
amount and at what Competitive Bid Rate) by telecopy
sent by the Competitive Bid Agent, and each successful
bidding Bank will thereupon become bound, subject to
the other applicable conditions hereof, to make the
Competitive Loan in respect of which its Competitive
Bid has been accepted. The Competitive Bid Agent
shall also promptly notify the Administrative Agent
(if different than the Competitive Bid Agent) of the
Competitive Bids that have been accepted, the amounts
thereof and the Competitive Bid Rates applicable
thereto.
(f) If the Competitive Bid Agent shall elect to
submit a Competitive Bid in its capacity as a Bank, it
shall submit such bid directly to the Borrower one
quarter of an hour earlier than the latest time at
which the other Banks are required to submit their
bids to the Competitive Bid Agent pursuant to
paragraph (b) above. The Competitive Bid Agent will
in no event disclose the terms of any Bank's
Competitive Bid to any other Bank; provided that
following the acceptance or rejection of Competitive
Bids submitted in response to any Competitive Bid
Request, the Competitive Bid Agent may at the request
of any Bank disclose information as to the range of
the Competitive Bid Rates at which Competitive Bids
were submitted or accepted.
(g) All notices required by this Section 2.5 shall be
given in accordance with Section 18 hereof.
Section 2.6. Standby Borrowing Procedures. In order
to request a Standby Borrowing, the Borrower shall
hand deliver or telecopy (or communicate by telephone
with prompt confirmation in writing) to the
Administrative Agent a duly completed notice of a
Standby Borrowing (a "Borrowing Notice") (a) in the
case of a Eurodollar Standby Borrowing or a C/D Rate
Borrowing, not later than 11:00 a.m., Boston time,
three Business Days before a proposed Borrowing, and
(b) in the case of a Base Rate Borrowing, not later
than 10:00 a.m., Boston time, on the day of a proposed
Borrowing. Each Borrowing Notice shall be irrevocable
and shall in each case specify (i) whether the Standby
Borrowing then being requested is to be a Eurodollar
Standby Borrowing, a C/D Rate Borrowing or a Base Rate
Borrowing; (ii) the date of such Borrowing (which
shall be a Business Day) and the amount thereof, which
shall be in a minimum principal amount of $3,000,000
and in an integral multiple of $1,000,000 in the case
of Base Rate Borrowings and in a minimum principal
amount of $5,000,000 and an integral multiple of
$1,000,000 in the case of Eurodollar Standby
Borrowings and C/D Rate Borrowings; and (iii) if such
Borrowing is to be a Eurodollar Standby Borrowing or a
C/D Rate Borrowing, the Interest Period with respect
thereto. If no election as to the Type of Borrowing
is specified in any such Borrowing Notice, then the
requested Borrowing shall be a Base Rate Borrowing.
If no Interest Period with respect to any Eurodollar
Standby Borrowing or C/D Rate Borrowing is specified
in any such Borrowing Notice, then the Borrower shall
be deemed to have selected an Interest Period of one
month's duration, in the case of a Eurodollar Standby
Borrowing, or 30 days' duration,. in the case of a C/D
Rate Borrowing. The Administrative Agent shall
promptly advise the Banks of any notice given pursuant
to this Section 2.6 and of each Bank's portion of the
requested Borrowing.
Section 2.7. Method of Certain Prepayments and
Repayments. The Borrower may prepay any Standby Loan
in accordance with Section 2.3(a) hereof with the proceeds of
a Competitive Borrowing or repay any Competitive Loan
in accordance with Section 2.2(b) hereof with the proceeds of
a Standby Borrowing; provided, however, that (i) if
the principal amount extended by a Bank in such
Borrowing is greater than the principal amount
extended by such Bank in the Borrowing being prepaid,
in the case of Standby Loans, or repaid in the case of
Competitive Loans, then such Bank shall pay such
difference to the Administrative Agent for
distribution to the Banks described in (ii) below,
(ii) if the principal amount extended by a Bank in the
Borrowing being prepaid, in the case of Standby Loans,
or repaid, in the case of Competitive Loans, is
greater than the principal amount being extended by
such Bank in such Borrowing, the Administrative Agent
shall return the difference to such Bank out of
amounts received pursuant to (i) above, and (iii) to
the extent any Bank fails to pay the Administrative
Agent amounts due from it pursuant to (i) above, any
Loan or portion thereof being prepaid, in the case of
Standby Loans, or repaid, in the case of Competitive
Loans, with such amounts shall not be deemed so
prepaid or repaid, as applicable, in accordance with
Section 2.3(a) or Section 2.2(b) hereof, as applicable,
and in each case, shall be payable by the Borrower at the
applicable time provided for in this Agremeent.
Section 2.8. Conversion and Continuation of Standby
Borrowings. The Borrower shall have the right at
any time upon prior irrevocable notice (a "Conversion
Notice") to the Administrative Agent (i) not later
than 10:00 a.m., Boston time, on the Business Day of
the proposed conversion, to convert any Eurodollar
Standby Borrowing or C/D Rate Borrowing into a Base
Rate Borrowing, and (ii) not later than 11:00 a.m.,
Boston time, three Business Days prior to conversion
or continuation, to convert any Base Rate Borrowing or
Eurodollar Standby Borrowing into a C/D Rate Borrowing
or to convert any Base Rate Borrowing or C/D Rate
Borrowing into a Eurodollar Standby Borrowing or to
continue any C/D Rate Borrowing as a C/D Rate
Borrowing or any Eurodollar Standby Borrowing as a
Eurodollar Standby Borrowing for an additional or
different permissible Interest Period, subject in each
case to the following:
(a) each conversion or continuation shall be made pro
rata among the Banks in accordance with the
respective principal amounts of the Standby Loans
comprising the converted or continued Standby
Borrowing;
(b) if less than all the outstanding principal amount
of any Standby Borrowing shall be converted or continued,
the aggregate principal amount of any such Eurodollar
Standby Borrowing or C/D Rate Borrowing converted or
continued shall be an integral multiple of $1,000,000 and
not less than $5,000,000 and the aggregate principal amount
of any such Base Rate Borrowing converted or continued
shall be in an integral multiple of $1,000,000 and not less
than $3,00,000;
(c) if any Eurodollar Standby Borrowing or C/D Rate
Borrowing is converted at a time other than the end of the
Interest Period applicable thereto, the Borrower shall pay,
upon demand, any amounts due to the Banks pursuant to
Section 3.2 hereof; and
(d) no Interest Period may be selected for any
Standby Borrowing that would end after the Revolving Credit
Commitment Termination Date.
Each notice pursuant to this Section 2.8 shall be by hand
delivery or telecopier (or by telephone with prompt confirmation in
writing), shall be irrevocable and shall refer to this Agreement
and specify (i) the identity and amount of the Standby Borrowing
that the Borrower requests be converted or continued, (ii)
whether such Standby Borrowing is to be converted to or
continued as a Eurodollar Standby Borrowing, a C/D Rate
Borrowing or a Base Rate Borrowing, (iii) if such notice
requests a conversion, the date of such conversion (which shall
be a Business Day) and (iv) if such Standby Borrowing is to be
converted to or continued as a Eurodollar Standby Borrowing or a
C/D Rate Borrowing, the Interest Period with respect thereto.
If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a Eurodollar
Standby Borrowing or a C/D Rate Borrowing, the Borrower shall be
deemed to have selected an Interest Period of one month's
duration, in the case of a Eurodollar Standby Borrowing, or 30
days duration, in the case of a C/D Rate Borrowing. The
Administrative Agent shall advise the other Banks of any notice
given pursuant to this Section 2.8 and of each Bank's portion of
any converted or continued Standby Borrowing. If the Borrower
shall not have given notice in accordance with this Section 2.8 to
continue any Standby Borrowing into a subsequent Interest Period
(and shall not otherwise have given notice in accordance with this
Section 2.8 to convert such Standby Borrowing), such Standby
Borrowing
shall, at the end of the Interest Period applicable thereto
(unless repaid pursuant to the terms hereof), automatically be
continued into a new Interest Period as a Base Rate Borrowing.
Section 2.9. Interest on Loans. (a) Subject to the
provisions of Section 2.10 hereof, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on
the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to (i) in
the case of each Eurodollar Standby Loan, the
Eurodollar Rate for the Interest Period in effect for
such Borrowing plus the Applicable Margin from time to
time in effect and (ii) in the case of each Eurodollar
Competitive Loan, the Eurodollar Rate for the Interest
Period in effect for such Borrowing plus the Margin
offered by the Bank making such Loan and accepted by
the Borrower pursuant to Section 2.5 hereof.
(b) Subject to the provisions of Section 2.10 hereof, the
Loans comprising each C/D Rate Borrowing shall bear
interest (computed on the basis of the actual number
of days elapsed over a year of 360 days) at a rate per
annum equal to the C/D Rate for the Interest Period in
effect for such Borrowing plus the Applicable Margin
from time to time in effect.
(c) Subject to the provisions of Section 2.10 hereof, the
Loans comprising each Base Rate Borrowing shall bear
interest (computed on the basis of the actual number
of days elapsed over a year of 365 or 366 days) at a
rate per annum equal to the Base Rate in effect for
such Borrowing plus the Applicable Margin from time to
time in effect.
(d) Subject to the provisions of Section 2.10 hereof,
each Fixed Rate Loan shall bear interest at a rate per
annum (computed on the basis of the actual number of
days elapsed over a year of 360 days) equal to the
fixed rate of interest offered by the Bank making such
Loan and accepted by the Borrower pursuant to Section 2.5
hereof.
(e) Interest on each Loan shall be payable in
arrears on each Interest Payment Date applicable to
such Loan except as otherwise provided in this
Agreement. The applicable Eurodollar Rate, C/D Rate
or Base Rate for each Interest Period or day within an
Interest Period, as the case may be, shall be
determined by the Administrative Agent, and such
determination shall be conclusive absent manifest
error. The Administrative Agent shall promptly advise
the Borrower and each Bank, as appropriate, of such
determination.
Section 2.10. Interest on Overdue Amounts. Overdue
principal and (to the extent permitted by applicable
law) interest on the Loans and all other overdue
amounts payable hereunder, whether Facility Fee,
Agent's Fee or otherwise, shall bear interest
compounded monthly and payable on demand at a rate per
annum equal to 2% above the rate otherwise applicable
to Base Rate Loans, as such rate is in effect from
time to time, until such amounts shall be paid in full
(to the extent permitted by law, after as well as
before judgment).
Section 2.11. Pro Rata Treatment. Except as required
under Section 3.3 hereof, each Standby Borrowing, each payment
or prepayment of principal of any Standby Borrowing,
each payment of interest on the Standby Loans, each
payment of the Facility Fee, each reduction of the
Revolving Credit Commitments and each refinancing of
any Borrowing with a Standby Borrowing of any Type,
shall be allocated pro rata among the Banks in
accordance with their respective Revolving Credit
Commitments (or, if such Revolving Credit Commitments
shall have expired or been terminated, in accordance
with the respective principal amounts of their
outstanding Standby Loans). Each payment of principal
of any Competitive Borrowing shall be allocated pro
rata among the Banks participating in such Borrowing
in accordance with the respective principal amounts of
their outstanding Competitive Loans comprising such
Borrowing. Each payment of interest on any
Competitive Borrowing shall be allocated pro rata
among the Banks participating in such Borrowing in
accordance with the respective amounts of accrued and
unpaid interest on their outstanding Competitive Loans
comprising such Borrowing. For purposes of
determining the available Revolving Credit Commitments
of the Banks at any time, each outstanding Competitive
Borrowing shall be deemed to have utilized the
Revolving Credit Commitments of the Banks (including
those Banks which shall not have made Loans as part of
such Competitive Borrowing) pro rata in accordance
with such respective Revolving Credit Commitments.
Each Bank agrees that in computing such Bank's portion
of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round
each Bank's percentage of such Borrowing to the next
higher or lower whole dollar amount.
Section 2.12. Extension of Revolving Credit Commitment
Termination Date. Upon the written request of the
Borrower delivered to the Agents and each of the Banks
no earlier than 60 days prior to the Revolving Credit
Commitment Termination Date otherwise then in effect
under this Agreement, and upon the prior written
agreement of each of the Banks and the Agents, in each
of the Banks' and the Agents' sole and absolute
discretion, the Revolving Credit Commitment
Termination Date may be extended hereunder (on one or
more occasions) for a period, not to exceed 364 days
after such extension becomes effective, to a later
date so agreed upon by all of the parties in writing.
Section 3. CERTAIN GENERAL PROVISIONS AND FEES.
Section 3.1. Additional Costs and Expenses. (a)
Anything herein to the contrary notwithstanding and
without duplication of any other amounts payable
hereunder, if, after (x) the Closing Date, in the case
of any Standby Loan or any obligation to make Standby
Loans or (y) the date of the related Competitive Bid,
in the case of any Competitive Loan, any change in any
present law or any future applicable law (which
expression, as used herein, includes statutes, rules
and regulations thereunder and interpretations thereof
by any competent court or by any governmental or other
regulatory body or official charged with the
administration or the interpretation thereof and
requests, directives, instructions and notices at any
time or from time to time hereafter made upon or
otherwise issued to any of the Banks or the
Administrative Agent by any central bank or other
fiscal, monetary or other authority, whether or not
having the force of law) shall:
(i) subject any Bank to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with
respect to such Bank's commitment to lend Eurodollar
Standby Loans or C/D Rate Loans or such Bank's portion of
the Eurodollar Loans or C/D Rate Loans or Fixed Rate Loans
(except for changes in the rate of tax on the overall net
income of such Bank imposed by the jurisdiction in which
such Bank's principal executive office is located); or
(ii) materially change the basis of taxation of
payments to any Bank of the principal of, interest on or
any other amounts payable in respect of the Eurodollar
Loans or C/D Rate Loans or Fixed Rate Loans (except for
changes in the rate of tax on the overall net income of
such Bank imposed by the jurisdiction in which such Bank's
principal executive office is located); or
(iii) impose or increase or render applicable any
special deposit or reserve or similar requirement (whether
or not having the force of law) against assets held by, or
deposits in or for the account of, or loans and commitments
to lend Eurodollar Loans or C/D Rate Loans or Fixed Rate
Loans hereunder by an office of any Bank; or
(iv) impose on any Bank any other condition or
requirement with respect to this Agreement, such Bank's
commitment or such Bank's portion of the Eurodollar Loans
or C/D Rate Loans or Fixed Rate Loans or any class of loans
of which any of the Eurodollar Loans or C/D Rate Loans or
Fixed Rate Loans form a part, and the result of any of the
foregoing is
(A) to increase the cost to any Bank
attributable to the making, funding or maintaining of
Eurodollar Loans or C/D Rate Loans or Fixed Rate
Loans; or
(B) to reduce the amount of principal, interest
or other amount with respect to Eurodollar Loans or
C/D Rate Loans or Fixed Rate Loans payable to any Bank
hereunder;
then, and in each such case, to the extent such cost or
reduction is not reflected in determining the interest rate
applicable to Eurodollar Loans or C/D Rate Loans or Fixed Rate
Loans, the Borrower will, within 30 days after demand made by
such Bank at any time and from time to time as often as the
occasion therefor may arise, pay to such Bank such additional
amounts as will be sufficient, in the good faith opinion of such
Bank, to compensate such Bank for such additional cost or
reduction.
(b) If, after (x) the Closing Date, in the case of any
Standby Loan or any obligation to make Standby Loans or (y) the
date of the related Competitive Bid, in the case of any
Competitive Loan, any change in any present law or governmental
rule, regulation, policy, guideline (including, without
limitation, any change in the risk-based capital guidelines set
forth in the Federal Register, Vol. 4, No. 17, dated
January 27, 1989) or directive (whether or not having
the force of law) or the interpretation thereof by a
court or governmental authority with appropriate
jurisdiction, or any future law or governmental rule,
regulation, policy, guideline or directive (whether or
not having the force of law) or the interpretation
thereof by a court or governmental authority with
appropriate jurisdiction, imposes or increases or
renders applicable any requirement regarding capital
adequacy (whether or not having the force of law), or
otherwise affects the amount of capital required to be
maintained by any Bank or any corporation controlling
any Bank (or the amount of capital that a court or
governmental authority with appropriate jurisdiction
expects any such Bank or corporation to maintain) and
such Bank in good faith determines that the amount of
such capital required is increased by or based upon
the existence of the credit facilities or commitments
established hereunder or any Loans made pursuant
hereto or upon agreements or loans of the type
contemplated hereby, then such Bank may notify the
Borrower of such fact. To the extent that the costs
of such increased capital requirements are not
reflected in the Base Rate, Eurodollar Rate, C/D Rate,
or Fixed Rate, as applicable, the Borrower and such
Bank shall thereafter attempt to negotiate in good
faith an adjustment to the compensation payable
hereunder which will adequately compensate such Bank
in light of these circumstances. If the Borrower and
such Bank are unable to agree to such adjustment
within 30 days of the day on which the Borrower
receives such notice, then commencing on the effective
date of any such change, the fees payable hereunder
shall increase by an amount certified to the Borrower
pursuant to Section 3.4 hereof which will, in such Bank's
reasonable determination, provide adequate
compensation, provided that the Borrower shall not be
liable (pursuant to either Section 3.1(a) or Section 3.1(b)
hereof) to any Bank for any costs incurred more than 90 days
prior to receipt by the Borrower of the notice from
such Bank referred to in such sections.
(c) If any Bank has demanded compensation under
Section 3.1(a), the Borrower may, by giving at least five
Business Days' prior notice to such Bank through the
Administrative Agent, elect to convert all C/D Rate
Loans or Eurodollar Loans or Fixed Rate Loans, as the
case may be, lent by such Bank into Base Rate Loans or
into Eurodollar Loans or C/D Rate Loans or Fixed Rate
Loans (whichever Type is not affected by the
circumstances giving rise to such demand for
compensation) having an Interest Period equal to that
of the Eurodollar Loan or C/D Rate Loan or Fixed Rate
Loan then outstanding and affected by such election,
unless and until such Bank notifies the Borrower that
such circumstances no longer apply.
(d) Within 30 days after (i) any Bank has
demanded compensation from the Borrower pursuant to
either Section 3.1(a) or Section 3.1(b) hereof, or (ii)
the Borrower is required to make a deduction or withholding
for the account of any Bank pursuant to Section 3.5(c) hereof, or
(iii) there shall have occurred a change in law with
respect to any Bank as a consequence of which it shall
have become unlawful for such Bank to make a Loan on
the date of any applicable Borrowing, as described in
Sections 6.4, and 7.3 hereof (any such Bank described in the
foregoing clauses (i), (ii) or (iii) is hereinafter
referred to as an "Affected Bank"), the Borrower may
request that the Non-Affected Banks acquire all, but
not less than all, of the Affected Bank's outstanding
Loans and assume all, but not less than all, of the
Affected Bank's Commitment. If the Borrower so
requests, the Non-Affected Banks may elect to acquire
all or any portion of the Affected Bank's outstanding
Loans and to assume all or any portion of the Affected
Bank's Commitment. If the Non-Affected Banks do not
elect to acquire and assume all of the Affected Bank's
outstanding Loans and Commitment, the Borrower may
designate a replacement bank or banks, which must be
satisfactory to the Administrative Agent, to acquire
and assume that portion of the outstanding Loans and
Commitment of the Affected Bank not being acquired and
assumed by the Non-Affected Banks. The provisions of
Section 15 hereof shall apply to all reallocations pursuant to
this Section 3.1(d), and the Affected Bank and any
Non-Affected Banks and/or replacement banks which are
to acquire the Loans and Commitment of the Affected
Bank shall execute and deliver to the Administrative
Agent, in accordance with the provisions of Section 15 hereof,
such Assignments and Acceptances and other
instruments, including, without limitation, Notes, as
are required pursuant to Section 15 to give effect to such
reallocations. Any Non-Affected Banks and/or
replacement banks which are to acquire the Loans and
Commitment of the Affected Bank shall be deemed to be
Eligible Assignees for all purposes of Section 15. On the
effective date of the applicable Assignments and
Acceptances, the Borrower shall pay to the Affected
Bank all interest accrued on its Loans up to but
excluding such date, along with any fees payable to
such Affected Bank hereunder up to but excluding such
date.
Section 3.2. Indemnification. If the Borrower shall
at any time (a) repay or prepay or convert any
principal of any Fixed Rate Loan, Eurodollar Loan or
C/D Rate Loan on a date other than the Interest Period
Termination Date with respect thereto (as a
consequence of acceleration pursuant to Section 10 hereof, a
mandatory repayment or prepayment required hereunder,
an optional prepayment, a conversion pursuant to
Section 3.1(c) or otherwise), or (b) for any reason fail to
borrow, convert or continue a Fixed Rate Loan,
Eurodollar Loan or C/D Rate Loan on the date specified
therefor in a Borrowing Notice or a Conversion Notice
delivered by the Borrower to the Administrative Agent
(whether as a result of a failure to satisfy any
condition precedent set forth in Section 6 or Section 7
hereof, or otherwise), the Borrower shall indemnify the
applicable payee Banks, on demand made by such Banks
at any time and as often as the occasion therefor may
arise, against all losses, costs or expenses which
such Banks may at any time or from time to time incur
as a consequence of such repayment, prepayment or
failure to borrow. The amount of such losses, costs
or expenses shall be an amount equal to the remainder,
if any, of:
(i) the total amount of interest which would
otherwise have accrued hereunder on the principal so paid,
not borrowed or converted at a rate equal to the interest
rate which otherwise would have been applicable to such
principal less the Applicable Margin during the period (the
"Reemployment Period") (A) in the case of any such
repayment or prepayment, beginning on the date of
such payment and ending on the applicable Interest
Period Termination Date of the Loan so paid, or
(B) in the case of any such failure to borrow or
convert, beginning on the date for the Borrowing
or conversion that shall have been requested in
the Borrowing Notice or the Conversion Notice
relating thereto and ending on the date that would
have been the applicable Interest Period
Termination Date of such Loan had such Borrowing
or conversion been made; minus
(ii) an amount equal to the aggregate interest to be
earned by the applicable payee Banks by reinvesting the
amount prepaid, repaid or not borrowed or converted for the
Reemployment Period at the yield to maturity on a United
States Treasury security selected by the Administrative
Agent equal in amount to the amount prepaid, repaid or not
borrowed or converted and having a maturity approximately
equal to the Reemployment Period.
Section 3.3. Illegality or Impossibility. Notwithstanding
any other provision of this Agreement, if (a) the
introduction of, any change in, or any change in the
interpretation of, any law or regulation applicable to
any Bank shall make it unlawful, or any central bank
or other governmental authority having jurisdiction
thereof shall assert that it is unlawful for such Bank
to perform its obligations in respect of Eurodollar
Loans, or (b) if the Administrative Agent shall
reasonably determine with respect to C/D Rate Loans or
Eurodollar Rate Loans, that (i) by reason of
circumstances affecting the Eurodollar interbank
market, adequate and reasonable methods do not exist
for ascertaining the Eurodollar Rate which would
otherwise be applicable during any Interest Period, or
(ii) by reason of circumstances affecting the United
States market in certificates of deposit, adequate and
reasonable methods do not exist for ascertaining the
C/D Rate which would otherwise be applicable during
any Interest Period, or (iii) deposits of United
States Dollars in the relevant amount for the relevant
Interest Period are not available to one or more of
the Reference Banks in the Eurodollar interbank
market, or (iv) certificates of deposit of the
relevant amount and for the relevant Interest Period
are not available to one or more of the Reference
Banks in the United States market for certificates of
deposits, or (v) the Eurodollar Rate does not or will
not accurately reflect the cost to one or more of the
Reference Banks of obtaining or maintaining the
applicable Eurodollar Loan during any Interest Period,
or (vi) the C/D Rate does not or will not accurately
reflect the cost to any one or more of the Reference
Banks of obtaining or maintaining the applicable C/D
Rate Loan during any Interest Period, then the
Administrative Agent shall promptly give telephonic,
telex or cable notice of such determination to the
Borrower and the Banks (which notice shall be
conclusive and binding upon the Borrower and the
Banks). Before giving any notice to the
Administrative Agent pursuant to this section, a
Reference Bank shall designate a different 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.
Upon such notification by the Administrative Agent,
the obligation of such affected Reference Bank and any
other similarly affected Banks to make or maintain
Eurodollar Loans and/or C/D Rate Loans, as applicable,
shall be suspended until the Administrative Agent
determines that such circumstances no longer exist,
and such Bank's or Banks' outstanding Eurodollar Loans
and/or C/D Rate Loans shall continue to bear interest
at the applicable interest rate until the next
Interest Period Termination Date if lawful (or, if
such continued status is not lawful, until the date of
receipt of such notification by the Borrower), and
thereafter shall be deemed converted to Base Rate
Loans in equal principal amounts. In such event, all
payments and prepayments of principal which otherwise
would have been applied to repay such converted Loans
of such Bank shall instead be applied to repay the
Base Rate Loans resulting from such conversion.
Section 3.4. Bank Certificates. A certificate signed
by an officer of any Bank or the Administrative Agent,
setting forth any additional amount required to be
paid by the Borrower to such Bank or to the
Administrative Agent for the accounts of the Banks
under Sections 3.1 or 3.2 hereof and the basis therefor, shall
be delivered by such Bank or the Administrative Agent
to the Borrower in connection with each demand made at
any time by such Bank or the Administrative Agent upon
the Borrower under any of such sections, and each such
certificate shall constitute conclusive evidence, in
the absence of manifest error, of the additional
amount required to be paid by the Borrower to such
Bank or the Administrative Agent. Each such
certificate shall set forth in reasonable detail any
reasonable averaging or attribution methods used by
such Bank in connection with the calculation of such
additional amount. A claim by any Bank or the
Administrative Agent for all or any part of any
additional amount required to be paid by the Borrower
under Sections 3.1 or 3.2 hereof may be made at any time and
from time to time as often as the occasion therefor
may arise.
Section 3.5. Payments to be Free of Deductions. (a)
All payments by the Borrower under this Agreement
shall be made without set-off or counterclaim, and
free and clear of and without deduction for any taxes,
levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or
levied by any country or any political subdivision
thereof or taxing or other authority therein unless
the Borrower is compelled by law to make such
deduction or withholding. If any such obligation is
imposed upon the Borrower with respect to any amount
payable by it to or for the account of any Bank
hereunder, the Borrower will pay to the Administrative
Agent for the account of such Bank on the date on
which such amount becomes due and payable hereunder
and in United States dollars, such additional amount
as shall be necessary to enable such Bank to receive
the same net amount which it would have received on
such due date had no such obligation been imposed upon
the Borrower, provided that the Borrower shall not be
obligated to make such payment for the account of any
Bank if (i) such Bank has failed to comply with Section
3.5(b) hereof, or (ii) such Bank is not entitled to
exemption from deduction or withholding of United States
Federal income tax for any reason other than a change in
United States law or regulations or any applicable tax
treaty. If the Borrower shall be required by law to
make such deduction or withholding, the Borrower will
deliver to the Administrative Agent tax receipts or
other appropriate evidence of payment.
(b) Each Bank that is not incorporated under the
laws of the United States or a state thereof agrees
that (to the extent it has not already done so prior
to the Closing Date) it will deliver to the Borrower
on the Closing Date two duly completed and accurate
originals of a valid United States Internal Revenue
Service Form 4224 or Form 1001 or any successor form
thereto indicating that such Bank is entitled to
receive payments under this Agreement, including fees,
without deduction or withholding of any United States
federal income taxes. Subject to any change in
applicable laws or regulations, such Bank undertakes
to deliver to the Borrower, upon request, two duly
completed and accurate originals of Form 1001 or Form
4224, or successor form, on or before the date that
any such form expires or becomes obsolete, indicating
that such Bank is entitled to receive payments under
this Agreement without deduction or withholding of any
United States federal income taxes.
(c) Within 30 days after the date on which the
Borrower is required to make a deduction or
withholding for the account of a Bank pursuant to
Section 3.5(a) hereof, the Borrower may replace such Bank in
accordance with the terms of Section 3.1(d) hereof.
Section 3.6. Interest Limitation. Notwithstanding any
other term of this Agreement or the Notes or any other
document referred to herein or therein, the maximum
amount of interest which may be charged to or
collected from any Person liable hereunder or under
any Note shall be absolutely limited to, and shall in
no event exceed, the maximum amount of interest which
could lawfully be charged or collected under
applicable law (including, to the extent applicable,
the provisions of Section 5197 of the Revised Statutes of the
United States of America, as amended, 12 U.S.C.
Section 85, as amended), so that the maximum of all
amounts constituting interest under applicable law,
howsoever computed, shall never exceed as to any
Person liable therefor such lawful maximum, and any
term of this Agreement or the Notes or any other
document referred to herein or therein which could be
construed as providing for interest in excess of such
lawful maximum shall be and hereby is made expressly
subject to and modified by the provisions of this
section.
Section 3.7. Facility Fee. For the period commencing
on the Closing Date and ending on the Revolving Credit
Commitment Termination Date, the Borrower promises to
pay to the Administrative Agent, for the accounts of
the Banks in accordance with their Revolving Credit
Commitment Percentages, a facility fee at a rate per
annum equal to the Applicable Margin in effect from
time to time during each calendar quarter on the daily
average amount during each calendar quarter or portion
thereof of the Revolving Credit Commitment Amount,
whether used or unused (and whether or not the
conditions set forth in Section 7 hereof shall have been
satisfied) (the "Facility Fee"). The Facility Fee
shall be payable quarterly in arrears on the first day
of each January, April, July and October of each year
for the immediately preceding calendar quarter or
portion thereof then ended, commencing on January 1,
1994, with a final payment on the Revolving Credit
Commitment Termination Date.
Section 3.8. Agent's Fee. The Borrower promises to
pay to the Administrative Agent for its own account an
agent's fee (the "Agent's Fee") in the amounts and at
the times provided in that certain letter agreement,
dated as of the date hereof, between the Borrower and
the Administrative Agent (the "Agent's Fee Letter").
Section 4. CLOSING; PAYMENTS AND COMPUTATIONS.
Section 4.1. Closing. The closing of the transactions
contemplated by this Agreement shall occur on the date
(the "Closing Date") of November 12, 1993, or such
other date (which in no event shall be later than
November 30, 1993) agreed upon by the Borrower and the
Administrative Agent.
Section 4.2. Use of Proceeds. The Borrower covenants
and agrees that the proceeds of the Loans shall be
used for working capital and general corporate
purposes, including, without limitation, back-up
liquidity for the Borrower's commercial paper program.
Section 4.3. Payments. All payments hereunder (whether
of principal, interest, Facility Fee, Agent's Fee, or
otherwise) shall be made by the Borrower in United
States dollars to the Administrative Agent in
immediately available funds at the Head Office no
later than 11:00 a.m. (Boston time) on the date due.
Upon receipt by the Administrative Agent of any such
payment of principal, interest or fees (other than
fees or expenses to be retained by the Administrative
Agent for its own account pursuant to the terms of
this Agreement), the Administrative Agent shall remit
promptly (and in any event on the same day) to each
Bank its pro rata (or otherwise applicable) share of
such payment, as provided in Section 2.11 hereof.
Section 4.4. Computations. All computations of
interest in respect of Base Rate Loans, overdue
interest and fees payable hereunder (including the
Facility Fee) shall be based on a 365/366-day year and
the actual number of days elapsed. All computations
of interest payable hereunder in respect of Fixed Rate
Loans, C/D Rate Loans and Eurodollar Loans shall be
based on a 360-day year and the actual number of days
elapsed. Whenever a payment hereunder or under the
Notes becomes due on a day which is not a Business
Day, the due date for such payment shall be extended
to the next succeeding Business Day and interest and
all applicable fees shall accrue during each such
extension.
Section 4.5. Banks' Obligations. The failure or
refusal of any of the Banks at any time to make
available to the Administrative Agent the amount of
the Standby Loans to be made by such Bank at such time
shall not relieve any other Bank from its obligations
hereunder to make Standby Loans in the amount of its
Revolving Credit Commitment Percentage of the Standby
Loans requested, but no Bank shall be responsible for
the failure of any other Bank to make the Standby
Loans to be made by such other Bank. The Banks'
obligations hereunder shall be several and not joint.
Section 4.6. Reference Banks. Each Reference Bank
agrees to use its best efforts to furnish quotations
to the Administrative Agent as contemplated hereby.
If any Reference Bank does not furnish a timely
quotation for any reason other than those set forth in
Section 3.3 hereof, the Administrative Agent shall determine
the relevant interest rate on the basis of the
quotation or quotations furnished by the remaining
Reference Bank or Reference Banks. If any Reference
Bank does not furnish a timely quotation for any of
the reasons set forth in Section 3.3, the provisions of
Section 3.3 shall apply.
Section 5. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks that,
after giving effect to the satisfaction of each of the
conditions precedent set forth in Section 6 hereof (other
than Section 6.2 hereof):
Section 5.1. Existence and Good Standing, Etc.
(a) Each of the Borrower and its Subsidiaries is a
corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of
its incorporation, and has adequate corporate power
and authority to own its property and to conduct its
business as presently conducted.
(b) Each of the Borrower and its Subsidiaries is
qualified to do business and in good standing in each
jurisdiction in which the nature of such Person's
business and property owned or held under lease make
such qualification necessary, except for jurisdictions
in which the failure to qualify will have no material
adverse effect on the business, assets or financial
condition of the Borrower and its Subsidiaries, taken
as a whole, or on the Borrower's ability to perform
its obligations under the Loan Documents.
Section 5.2. Power; Consents; Absence of Conflict with
Other Agreements, Laws, Etc. (a) The Borrower has
adequate corporate power and authority to enter into
each of the Loan Documents, to perform, observe and
comply with all of its agreements and obligations
under each of such documents, and to make the
borrowings contemplated by this Agreement.
(b) The execution and delivery by the Borrower of
the Loan Documents, the performance by the Borrower of
all of its agreements and obligations under each of
such documents and the making by the Borrower of the
borrowings contemplated by this Agreement have been
duly authorized by all necessary corporate action by
the Borrower, and do not and will not (i) violate any
provision of its Charter or bylaws (each as in effect
from time to time), (ii) conflict with, result in a
breach of any term, condition or provision of,
constitute a default under, or result in the creation
of any Lien upon any of its property under, any
agreement, trust deed, indenture, mortgage or other
instrument to which the Borrower or any of its
Subsidiaries is a party or by which the Borrower or
any of its Subsidiaries or any of their property is
bound or affected, (iii) violate or contravene any
provision of any law, regulation, order, ruling or
interpretation thereunder (including, without
limitation, Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System) or any
decree, order or judgment of any court or governmental
or regulatory authority, bureau, agency or official
(all as in effect from time to time and applicable to
it), (iv) require any waivers, consents or approvals
by any of its creditors which have not been obtained,
(v) require any consents or approvals by any of its
shareholders (except such as will be duly obtained on
or prior to the Closing Date and will be in full force
and effect on and as of such date), or (vi) require
any approval, consent, order, authorization or license
by, or giving notice to, or taking any other action
with respect to, any governmental or regulatory
authority or agency under any provision of any
applicable law, except those approvals, consents,
orders, authorizations and actions which are listed
and described on Schedule 5.2 attached hereto, each of
which has been obtained or taken or will be obtained
or taken prior to the Closing Date.
Section 5.3. Binding Effect of Documents. The
Borrower has duly executed and delivered each of the
Loan Documents, and, assuming that each of the
Administrative Agent and the Banks has duly executed
and delivered this Agreement, each of the Loan
Documents is in full force and effect. The agreements
and obligations of the Borrower contained in each of
the Loan Documents constitute its legal, valid and
binding obligations, enforceable against it in
accordance with the respective terms and provisions
hereof and thereof, except as enforceability may be
limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights, and
except to the extent that enforceability is subject to
general principles of equity (regardless of whether
such enforceability is considered in a proceeding in
equity or at law).
Section 5.4. Financial Statements; Solvency.
(a) The consolidated balance sheet of the Borrower and
its Subsidiaries as at the Balance Sheet Date, and the
related statements of income, retained earnings and
cash flows, certified by the Borrower's Independent
Accountants, have been prepared in conformity with
Generally Accepted Accounting Principles applied on a
basis consistent with prior periods (except as
disclosed therein) and fairly and accurately present
the financial condition, assets and liabilities of the
Borrower and its Subsidiaries as at the date hereof
for the period then ended. There are no material
liabilities, contingent or otherwise, of the Borrower
or any of its Subsidiaries as of such date which are
not disclosed on said balance sheet and the related
notes thereto.
(b) The Borrower (both before and after giving
effect to the transactions contemplated hereby) is
solvent, has assets having a fair value in excess of
the amount required to pay its probable liabilities or
its existing debts as they become absolute and
matured, and has, and will have access to, adequate
capital for the conduct of its business and the
ability to pay its debts from time to time incurred in
connection therewith as such debts mature.
Section 5.5. Title to Properties. The Borrower and
its Subsidiaries own all of the assets reflected in
the consolidated balance sheet of the Borrower and its
Subsidiaries as at the Balance Sheet Date or acquired
since that date (except assets sold or otherwise
disposed of in the ordinary course of business since
that date, and except those assets listed and described
on Schedule 9.1 attached hereto), subject in each case to
no Liens except those permitted by Section 9.2 hereof.
Section 5.6. No Adverse Changes. Since the Balance
Sheet Date, there has not been any materially adverse
change in the business, assets, financial condition or
results of operations of the Borrower and its
Subsidiaries, taken as a whole.
Section 5.7. Litigation. Except as disclosed in the
Parent's Form 10-K for the year ended December 31,
1992, there is no restraining order, injunction,
claim, action, suit, proceeding or investigation of
any kind pending or, to the best knowledge of the
Borrower, threatened against or, as of the Closing
Date, affecting, the Borrower or any of the Borrower's
Subsidiaries before any court, tribunal, governmental
or regulatory authority, commission, administrative
agency or board in which there is a significant
possibility of an adverse decision which would,
either by itself or taken together with other such
matters, materially adversely affect the business,
assets or financial condition of the Borrower and its
Subsidiaries, taken as a whole or which questions the
validity or enforceability of this Agreement or any of
the other Loan Documents. As of the Closing Date, the
actions, suits or proceedings described in the
Parent's Form 10-K referred to above, either
individually or in the aggregate, are not expected to
materially adversely affect the business, assets or
financial condition of the Borrower and its
Subsidiaries or question the validity or
enforceability of this Agreement or the other Loan
Documents.
Section 5.8. No Adverse Provisions. Neither the
Borrower nor any of its Subsidiaries is subject to any
charter, corporate or other legal restriction, or any
judgment, decree, order, rule or regulation which in
the judgment of the Borrower's officers has or is
expected in the future to have a materially adverse
effect on the business, assets or financial condition
of the Borrower and its Subsidiaries, taken as a
whole, or on the Borrower's ability to perform its
obligations under the Loan Documents. Neither the
Borrower nor any of its Subsidiaries is a party to any
contract or agreement which in the judgment of the
Borrower's officers has or is expected to have a
materially adverse effect on the Borrower's ability to
perform its obligations under the Loan Documents.
Section 5.9. Compliance with Other Instruments, Laws,
Etc. Neither the Borrower nor any of its
Subsidiaries is violating any provision of its Charter
or by-laws, any agreement, contract or instrument by
which it or any of its properties is bound, or any
decree, order, judgment, statute, license, rule or
regulation applicable to it, in a manner which could
result in the imposition of substantial penalties or
materially adversely affect the business, assets or
financial condition of the Borrower and its
Subsidiaries, taken as a whole.
Section 5.10. Tax Status. Each of the Borrower and the
Borrower's Subsidiaries has (a) made or filed all
material federal and state tax returns, reports and
declarations required by any jurisdiction to which it
is subject, (b) paid all taxes and other governmental
assessments and charges, as shown or determined to be
due on such tax returns, reports and declarations,
except for taxes the amount, applicability or validity
of which is currently being contested by it in good
faith by appropriate proceedings and with respect to
which it has set aside on its books reserves
reasonably deemed by it to be adequate therefor, and
(c) set aside on its books provisions reasonably
adequate for the payment of all taxes for periods
subsequent to the periods to which such returns,
reports or declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction.
Section 5.11. Location of Office. The Borrower's chief
executive office and the location where its books and
records are kept is 455 North Cityfront Plaza Drive,
Chicago, Illinois 60611-5504.
Section 5.12. Disclosure. The representations and
warranties made by the Borrower in this Agreement or
by the Borrower or the Parent in any agreement,
instrument, document, certificate, statement or letter
furnished to the Banks on behalf of the Borrower in
connection with any of the transactions contemplated
by the Loan Documents did not, taken as a whole,
together with all other information provided by or on
behalf of the Borrower in connection with the
transactions contemplated herein contain, when made,
any untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements contained herein or therein not misleading.
Except as previously disclosed in writing to the
Banks, there is no fact known to the Borrower
(excluding general economic and political conditions
affecting business generally) which materially
adversely affects, or which is reasonably likely in
the future to materially adversely affect, the
business, assets or financial condition of the
Borrower and its Subsidiaries, taken as a whole.
Section 5.13. Employee Benefit Plans.
(a) In General. Each Employee Benefit Plan
has been maintained and operated in compliance in all
material respects with the provisions of ERISA and, to
the extent applicable, the Code, including but not
limited to the provisions thereunder respecting
prohibited transactions. The Borrower has heretofore
delivered to the Agent the most recently completed
annual report, Form 5500, with all required
attachments, and actuarial statement required to be
submitted under Section 103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
(b) Guaranteed Pension Plans. The Borrower
and its ERISA Affiliates have fulfilled their
obligations under the minimum funding standards of
ERISA and the Code with respect to each Guaranteed
Pension Plan, and neither the Borrower nor any ERISA
Affiliate has failed to make any contribution to any
Guaranteed Pension Plan which has resulted or could
reasonably be expected to result in the imposition of
a Lien under Section 302(f) of ERISA. No waiver of an
accumulated funding deficiency or extension of
amortization periods has been received with respect to
any Guaranteed Pension Plan. No liability to the PBGC
(other than required insurance premiums, all of which
have been paid) has been incurred by the Borrower or
any ERISA Affiliate with respect to any Guaranteed
Pension Plan, and there has not been any ERISA
Reportable Event (other than an Event as to which the
requirement of 30 days notice has been waived), or any
other event or condition which presents a material
risk of termination of any Guaranteed Pension Plan by
the PBGC. Based on the latest valuation of each
Guaranteed Pension Plan (which in each case occurred
within twelve months of the date of this
representation) and on the actuarial methods and
assumptions employed for that valuation, the aggregate
benefit liabilities of all such Guaranteed Pension
Plans within the meaning of Section 4001 of ERISA did not
exceed the aggregate value of the assets of all such
Plans by more than $5,000,000, disregarding for this
purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of
benefit liabilities.
(c) Multiemployer Plans. Neither the Borrower
nor any ERISA Affiliate has incurred any material
liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan under
Section 4201 of ERISA or as a result of a sale of assets
described in Section 4204 of ERISA. Neither the Borrower nor
any ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or insolvent
under and within the meaning of Section 4241 or Section 4245
of ERISA or that any Multiemployer Plan intends to terminate
or has been terminated under Section 4041A of ERISA.
Section 5.14. Business. Each of the Borrower and its
Subsidiaries enjoys peaceful and undisturbed
possession under all leases which are material to the
Borrower and its Subsidiaries, taken as a whole, of
real or personal property of which any Person is
lessee, subject to the rights of sublessees and other
parties lawfully in possession in the ordinary course
of business, none of which contains any unusual or
burdensome provision which would be reasonably likely
materially adversely to affect or to impair the
operations of the Borrower and its Subsidiaries, taken
as a whole, and all such leases which are material to
the operations of the Borrower and its Subsidiaries,
taken as a whole, are valid and subsisting and in full
force and effect. Each of the Borrower and its
Subsidiaries has rights with respect to all of the
material patents, trademarks, permits, service marks,
trade names, copyrights, licenses and franchises, and
shall have obtained assignments of all other rights of
whatever nature, necessary for the present and planned
future conduct of its business, without any known
conflict with the rights of others which might result
in a material adverse effect on the business, assets
or financial condition of the Borrower and its
Subsidiaries, taken as a whole. Each of the Borrower
and its Subsidiaries owns, leases or has the right to
use all properties, franchises, rights and licenses,
and employs employees, in an amount and manner
sufficient to conduct railroad operations as now
conducted and as proposed to be conducted, without any
conflict with the rights of others.
Section 5.15. Capitalization. (a) The Parent is the
record and beneficial owner, free and clear of all
Liens, of all of the issued and outstanding capital
stock of the Borrower. All shares of such capital
stock have been validly issued and are fully paid and
nonassessable, and no rights to subscribe to
additional shares have been granted or exist.
(b) Schedule 5.15 attached hereto sets forth a
true, accurate and complete list as of the Closing
Date of all of the Subsidiaries of the Borrower and
other Persons in which the Borrower has an equity
investment, the jurisdiction of organization of such
Subsidiaries, the organizational form of such
Subsidiaries, the percentage equity interest of the
Borrower (or its Subsidiaries) in such Subsidiaries,
and the amount and nature of the investment by the
Borrower (or its Subsidiaries) in such Subsidiaries.
Section 5.16. Holding Company and Investment Company
Acts. Neither the Borrower nor any of its
Subsidiaries is a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of a
"holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935; nor is any
of such Persons a "registered investment company" or
an "affiliated company" or a "principal underwriter"
of a "registered investment company", as such terms
are defined in the Investment Company Act of 1940, as
amended.
Section 5.17. Certain Transactions. None of the
officers or directors of the Borrower or its
Subsidiaries is presently a party to any transaction
with the Borrower or its Subsidiaries or any other
Person which is directly or indirectly controlled (as
defined in the definition of Affiliate in Section 1(a)
hereof) by the Parent (other than for services as employees,
officers and directors), including, without
limitation, any contract, agreement or other
arrangement providing for the furnishing of services
to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments
to or from any officer, director or such employee or,
to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any
officer, director, or any such employee has a
substantial interest or is an officer, director,
trustee or partner.
Section 5.18. Environmental Compliance. (a) The
Borrower has taken all appropriate steps to
investigate the past and present condition and usage
of its and its Subsidiaries' properties and the
operations conducted thereon and, based upon such
diligent investigation, has determined that:
(i) except as set forth on Schedule 5.18 attached
hereto, none of the Borrower, its Subsidiaries or, to
the best of the Borrower's knowledge, any lessee of
its properties is in violation, or alleged violation,
of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters,
including without limitation those arising under the
Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986
("SARA"), the Federal Clean Water Act, the Federal
Clean Air Act, the Toxic Substances Control Act, the
Hazardous Materials Transportation Act ("HAZMAT"), or
any state or local statute, regulation, ordinance,
order or decree relating to health, safety or the
environment (hereinafter "Environmental Laws"), which
violation would have a material adverse effect on the
business, assets or financial condition of the
Borrower and its Subsidiaries, taken as a whole;
(ii) except as set forth in Schedule 5.18
attached hereto, none of the Borrower or its
Subsidiaries has received written notice from any
third party including without limitation any federal,
state or local governmental authority, (A) that any
one of them has been identified by the United States
Environmental Protection Agency as a potentially
responsible party under CERCLA with respect to a site
listed on the National Priorities List, 40 C.F.R. Part
300 Appendix B (1986); (B) that any hazardous waste as
defined by 42 U.S.C. Section 6903(5), any hazardous substances
as defined by 42 U.S.C. Section 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. Section 9601(33) and any
toxic substance, oil or hazardous materials or other
chemicals or substances regulated by any Environmental
Laws ("Hazardous Substances") which any one of them
has generated, transported or disposed of has been
found at any site at which a federal, state or local
agency or other third party has conducted or has
ordered that the Borrower or any of its Subsidiaries
conduct a remedial investigation, removal or other
response action pursuant to any Environmental Law; or
(C) that it is or shall be a named party to any claim,
action, cause of action, complaint (contingent or
otherwise), legal or administrative proceeding arising
out of any third party's incurrence of costs,
expenses, losses or damages of any kind whatsoever in
connection with the release of Hazardous Substances
which, in the case of each of (A) or (B), the effect
of which, or in the case of (C) above, if adversely
determined to the Borrower, would have a material
adverse effect on the Borrower and its Subsidiaries,
taken as a whole;
(iii) except as set forth on Schedule 5.18
attached hereto and to the best knowledge of the
Borrower: (A) no portion of the property of the
Borrower or its Subsidiaries has been used for the
handling, manufacturing, processing, storage or
disposal of Hazardous Substances except in accordance
with applicable Environmental Laws or where non-
compliance with applicable Environmental Laws would
not have a material adverse effect on the Borrower and
its Subsidiaries, taken as a whole; and no underground
tank or other underground storage receptacle for
Hazardous Substances is located on such properties;
(B) in the course of any activities conducted by the
Borrower, its Subsidiaries or lessees of its
properties, no Hazardous Substances have been
generated or are being used on such properties except
in accordance with applicable Environmental Laws or
where non-compliance with applicable Environmental
Laws would not have a material adverse effect on the
Borrower and its Subsidiaries, taken as a whole;
(C) there have been no releases (i.e. any past or
present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting,
escaping, disposing or dumping) or threatened releases
of Hazardous Substances on, upon, into or from the
properties of the Borrower or its Subsidiaries, which
releases would have a material adverse effect on the
financial condition of the Borrower and its
Subsidiaries, taken as a whole; and (D) in addition,
any Hazardous Substances that have been generated on
the properties of the Borrower or any of its
Subsidiaries have been transported or disposed of in
accordance with applicable laws and regulations by
transporters and to disposal facilities, which, to the
best knowledge of the Borrower (without independent
inquiry), are operating in compliance in all material
respects with applicable permits and laws;
(iv) none of the properties of the Borrower or
any of its Subsidiaries are or shall be subject to any
applicable environmental cleanup responsibility law or
environmental restrictive transfer law or regulation
by virtue of the transactions set forth herein and
contemplated hereby; and
(v) each of the Borrower and its Subsidiaries is
in material compliance with HAZMAT and the regulations
thereunder (49 C.F.R. Parts 100 to 199).
Section 5.19. Liens. (a) No valid mortgages, chattel
mortgages, assignments, statements of assignment,
security agreements or deeds of trust have been filed
by any person or persons with respect to any part of
the property or assets of the Borrower or any of the
Borrower's Subsidiaries except for mortgages and security
agreements which are otherwise permitted by the
provisions of Section 9.2 hereof.
(b) No valid financing statement which names the
Borrower or any of the Borrower's Subsidiaries as a
debtor, or encumbers or attempts to encumber any of
the material assets or a material portion of the
assets of any of such Persons, has been filed in any
jurisdiction in the United States or any State thereof
pursuant to Article 9 of the Uniform Commercial Code
of any State, and none of the Borrower or any of the
Borrower's Subsidiaries has signed any financing
statement or any security agreement authorizing any
secured party thereunder to file any such financing
statement in any such jurisdiction, other than
financing statements with respect to Liens (including,
without limitation, capitalized leases) permitted by
Section 9.2 hereof and financing statements filed for
protective purposes only by lessors under operating
leases with respect to which the Borrower is lessee.
Section 5.20. Fiscal Year. Each of the Borrower and
its Material Subsidiaries has a fiscal year which is
the twelve months ending on December 31 of each
calendar year.
Section 5.21. No Default. No Default or Event of
Default exists at the delivery of this Agreement.
Section 5.22. Insurance. Schedule 5.22 attached hereto
lists the policies and types and amounts of coverage
(including all deductibles) of theft, fire, liability,
life, property and casualty and other insurance owned
or held by the Borrower and its Subsidiaries on the
date hereof. Such policies of insurance are
maintained with financially sound and reputable
insurance companies, funds or underwriters and are of
the kinds and cover such risks and are in such amounts
and with such deductibles and exclusions as are
consistent with the prudent business practice of
similarly structured and similarly capitalized
companies of similar size in the Borrower's industry.
All such policies (or substitute policies complying
with Section 8.10 hereof) are in full force and effect; are
sufficient for compliance by the Borrower and its
Subsidiaries with all requirements of law and of all
agreements to which such Persons are parties; are
valid, outstanding and enforceable policies and
provide that they will remain in full force and effect
through the respective dates set forth in such
schedule; and coverage thereunder will not be reduced
by, or terminate or lapse by reason of, the
transactions contemplated by or referred to in this
Agreement.
Section 5.23. Regulation U. No proceeds of the Loans
shall be used for the purpose of purchasing or
carrying any "margin security" or "margin stock", as
such terms are used in Regulations G, T, U and X of
the Board of Governors of the Federal Reserve System.
Section 6. CLOSING CONDITIONS. The effectiveness of
this Agreement and the obligations of the Banks to
make the initial Loans hereunder is subject to the
satisfaction, no later than the date specified as the
latest permitted closing date under Section 4.1 hereof, of the
following conditions precedent:
Section 6.1. Delivery of Documents. (a) This
Agreement shall have been duly and properly
authorized, executed and delivered by the Borrower,
the Administrative Agent, the Competitive Bid Agent
and the Banks.
(b) Each of the Notes shall have been duly and
properly authorized, executed and delivered by the
Borrower and shall be in full force and effect.
(c) Executed original counterparts of each of the
Loan Documents shall have been furnished to the
Administrative Agent.
Section 6.2. Representations and Warranties. The
representations and warranties contained herein shall
have been correct as of the date on which made and
shall also be correct at and as of the Closing Date
except to the extent that the facts upon which such
representations and warranties are based may have
changed as a result of transactions permitted or
contemplated hereby.
Section 6.3. No Default. On the Closing Date there
shall exist no Default or Event of Default, and no
Default or Event of Default shall result from
consummation of the transactions on the Closing Date.
Section 6.4. Legality. No change in applicable law
shall have occurred as a consequence of which it shall
have become and continue to be unlawful for any Bank
to make a Loan on such occasion, provided that those
Banks to whom such change in law is not applicable
shall continue to be obligated to make Loans
hereunder, notwithstanding the fact that one or more
other Banks are affected by such change in law.
Within 30 days after any Bank fails to make a Loan as
a result of this section, the Borrower may replace
such Bank in accordance with the terms of Section 3.1(d)
hereof.
Section 6.5. Proceedings and Documents. All
corporate, governmental and other proceedings in
connection with the transactions contemplated by the
Loan Documents and all instruments and documents
incident thereto shall be reasonably satisfactory in
substance and in form to the Banks and to the Banks'
Special Counsel, and the Banks and such counsel shall
have received all information and such counterpart
originals or certified or other copies of such
documents as the Banks or such counsel may reasonably
request.
Section 6.6. Legal Opinions. The Banks shall have
received written opinions addressed to the Banks from
counsel to the Borrower in the form of Exhibits C-l
and C-2 attached hereto. The Banks shall have
received a favorable written opinion of Steptoe &
Johnson, special counsel to the Borrower, which is
satisfactory to the Banks in all respects, with
respect to Interstate Commerce Commission matters.
The Borrower hereby instructs all such counsel to
deliver such opinions to the Banks.
Section 6.7. Financial Condition. The Banks shall
have received the financial statements referred to in
Section 5.4 hereof.
Section 6.8. Delivery of Charter and Other Documents.
The Administrative Agent shall have received from the
Borrower copies, certified by a duly authorized
officer of the Borrower to be true and complete as of
the Closing Date of each of (a) the Charter of the
Borrower as in effect on such date, (b) the bylaws of
the Borrower in effect on such date, (c) the
resolutions of the Board of Directors of the Borrower
authorizing the execution and delivery by the Borrower
of each of the Loan Documents and its performance of
all of its agreements and obligations under each of
such documents and the borrowings and other
transactions contemplated by this Agreement, and (d)
an incumbency certificate giving the name, title, and
bearing a specimen signature of each individual who
shall be authorized to sign, in its name and on its
behalf, each of the Loan Documents, and to make
application for the Loans, and to give notices and to
take other action on its behalf under the Loan
Documents.
Section 6.9. Closing Certificate. (a) The Borrower
shall have delivered a closing certificate
substantially in the form of Exhibit D attached
hereto, and such closing certificate shall be in full
force and effect.
(b) The Administrative Agent shall have executed
this Agreement signifying to the Borrower and the
Banks (i) that it has received satisfactory evidence
that the closing conditions set forth in this Section 6
have been satisfied and (ii) that the Closing Date shall
have occurred.
Section 6.10. Facility B Credit Agreement. The
Borrower, the banks named therein and FNBB, as
administrative agent and competitive bid agent, shall
have executed and delivered the Facility B Credit
Agreement and such agreement shall be in full force
and effect.
Section 6.11. ICC Filings. The Borrower shall have filed
or caused to be filed with the Interstate Commerce
Commission a notice of exemption under 49 C.F.R. 1175
which complies with the provisions of such regulations
and which seeks an exemption from the requirements of
49 U.S.C. 11301 for implementation of the provisions
of this Agreement and such exemption shall have become
effective.
Section 7. CONDITIONS OF BORROWING. The obligation of
the Banks to make any Loans is subject to the
satisfaction of the following conditions precedent:
Section 7.1. Representations and Warranties. The
representations and warranties contained in this
Agreement shall have been correct as of the date on
which made and shall also be correct at and as of the
date of the applicable Borrowing with the same effect
as if made at and as of such time, except to the
extent that the facts upon which such representations
and warranties are based may have changed as a result
of transactions permitted or contemplated hereby.
Section 7.2 No Default. At the time of the applicable
Borrowing, there shall exist no Default or Event of
Default, and no Default or Event of Default shall
result from consummation of the applicable Borrowing.
Section 7.3. Legality. No change in applicable law
shall have occurred as a consequence of which it shall
have become and continue to be unlawful for the
applicable Banks to make such a Loan on such occasion,
provided that those Banks to whom such change in law
is not applicable shall continue to be obligated to
make Loans hereunder, notwithstanding the fact that
one or more other Banks are affected by such change in
law; within 30 days after any Bank fails to make a
Loan as a result of this section, the Borrower may
replace such Bank in accordance with the terms of
Section 3.1(d) hereof.
Section 7.4. Borrowing Notice; Competitive Bid
Request. The Borrower shall have delivered a
Competitive Bid Request in accordance with the
provisions of Section 2.5 hereof or a Borrowing Notice in
accordance with the provisions of Section 2.6 hereof. The
Borrowing Notice or Competitive Bid Request , as the
case may be, shall constitute a certification by the
Borrower that the conditions set forth in this Section 7.4
will be satisfied as of the date of the applicable
Borrowing.
Section 8. AFFIRMATIVE COVENANTS. The Borrower hereby
covenants and agrees that, so long as the Loans or the
Notes are outstanding, any amounts are owing pursuant
to this Agreement, or the Banks have any Commitment to
make Loans hereunder:
Section 8.1. Punctual Payment. The Borrower will duly
and punctually pay or cause to be paid the principal
of and interest on the Loans, the Facility Fee, the
Agent's Fee, and all other amounts from time to time
owing hereunder or under the other Loan Documents, all
in accordance with the terms of this Agreement and the
other Loan Documents.
Section 8.2. Records and Accounts. The Borrower will
and will cause each of its Subsidiaries to keep true
records and books of account in which proper entries
will be made in accordance with Generally Accepted
Accounting Principles and to maintain adequate
accounts and reserves for all taxes (including income
taxes), all depreciation, depletion, obsolescence and
amortization of its properties, all contingencies and
all other reserves in accordance with Generally
Accepted Accounting Principles.
Section 8.3. Financial Statements, Certificates and
Information. The Borrower will furnish to the
Banks:
(a) As soon as practicable and, in any event,
within 90 days after the end of each fiscal year of
the Borrower, consolidated balance sheets of the
Borrower and its Subsidiaries as at the end of such
fiscal year, consolidated statements of income and
consolidated statements of retained earnings and cash
flow of the Borrower and its Subsidiaries for the
fiscal year then ended, each setting forth in
comparative form the figures for the previous fiscal
year, all in reasonable detail, prepared in accordance
with Generally Accepted Accounting Principles,
accompanied by a report and unqualified opinion of the
Borrower's Independent Accountants (who shall be
reasonably satisfactory to the Banks), which report
and opinion shall have been prepared in accordance
with generally accepted auditing standards. In
addition, the Borrower will obtain from such
Independent Accountants and deliver to the Banks
within said period of 90 days the certified statement
of such Independent Accountants that they have read a
copy of this Agreement and that, in making the
examination necessary for said certification,
performing activities within the normal scope of their
audit and without further inquiry, they have obtained
no knowledge of any Default or Event of Default then
existing, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of
Default, they shall disclose in such statement any
such Default or Event of Default.
(b) As soon as practicable and, in any event,
within 45 days after the end of each fiscal quarter in
each fiscal year of the Borrower, consolidated balance
sheets of the Borrower and its Subsidiaries as at the
end of such fiscal quarter, and consolidated
statements of income and consolidated statements of
retained earnings and cash flow of the Borrower and
its Subsidiaries for the portion of the fiscal year
then ended, each in reasonable detail, prepared in
accordance with Generally Accepted Accounting
Principles applied on a basis consistent with prior
periods except as otherwise specified, subject to
year-end audit adjustment, and certified on behalf of
the Borrower by an Officer's Certificate.
(c) As soon as practicable and, in any event,
within 45 days after the end of each fiscal quarter in
each fiscal year of the Borrower, financial and
operating statistics of the Borrower and its
Subsidiaries as at the end of such fiscal quarter, in
reasonable detail and in such form as shall be
satisfactory to the Administrative Agent, which, to
the extent such statistics are in the form of
financial statements, have been prepared in accordance
with Generally Accepted Accounting Principles applied
on a basis consistent with prior periods except as
otherwise disclosed therein, along with an analysis,
in reasonable detail, of the variances, if any, of
such financial and operating statistics from the
projections for such fiscal quarter previously
furnished to the Banks, in each case certified on
behalf of the Borrower by an Officer's Certificate.
(d) Promptly upon receipt thereof, copies of all
management letters which are submitted to the Borrower
by its Independent Accountants in connection with any
annual or interim audit of the books of the Borrower
made by such accountants.
(e) As soon as practicable but, in any event,
within 15 Business Days after the issuance thereof,
copies of such other financial statements, reports and
notices as the Borrower shall send to its bondholders,
noteholders or other lenders and copies of all reports
filed by the Borrower with the Securities and Exchange
Commission and the Interstate Commerce Commission or
any similar or corresponding governmental commission,
department or agency substituted for either of the
foregoing, federal or state.
(f) Within the time periods provided in
paragraphs (a) and (b) above a certificate
substantially in the form of Exhibit E attached hereto
(a "Compliance Certificate").
(g) No later than 30 days after the end of each
fiscal year of the Borrower, projections of the
financial and operating performance of the Borrower
and its Subsidiaries on a monthly basis for the next
succeeding fiscal year, as well as forecasts of the
Borrower and its Subsidiaries' projected compliance
with the covenants contained in Section 9 hereof on a
quarterly basis for such next fiscal year, and
projections of such performance on an annual basis for
each of the four following fiscal years. The Borrower
agrees that it will cause such projections and
forecasts to be amended from time to time as necessary
in light of events affecting operations.
(h) With reasonable promptness, such other data
as any Bank may reasonably request.
All confidential information and documents concerning
the Borrower and its Subsidiaries supplied by the
Borrower to the Banks shall be held in confidence by
the Banks and the Banks shall not disclose such
information and documents, except the Borrower hereby
authorizes the Banks to disclose any information
obtained pursuant to this Agreement or the other Loan
Documents to participants and potential participants
as provided in Section 15(e) hereof, to legal counsel for the
Banks, to consultants of the Banks who have agreed to
be bound by the confidentiality provisions of this
Agreement, to employees of and agents for the Banks in
their ongoing business, and to any independent
auditors of the Banks and to all appropriate
governmental regulatory authorities or courts to the
extent requested or subpoenaed, but only to the extent
permitted by applicable laws and regulations,
including those applying to classified material. Upon
receipt of a request to disclose any information to
governmental authorities or courts other than
governmental bank examiners and independent auditors
of the Banks, the Banks will notify the Borrower, to
the extent permitted by applicable law and
regulations, of such request and, to the extent
practicable, permit the Borrower to seek a protective
order with respect thereto.
Section 8.4. Business and Legal Existence. The
Borrower will and will cause each of its Material
Subsidiaries to keep in full force and effect its
legal existence (except as permitted by Section 9.5 hereof)
and good standing under the laws of its jurisdiction
of incorporation, maintain its qualification to do
business in each state in which the failure to qualify
would have a material adverse effect on the business,
assets or financial condition of such Person and
maintain all rights, licenses, leases and franchises
reasonably necessary and material to the conduct of
its business.
Section 8.5. Payment of Taxes. The Borrower will and
will cause each of its Subsidiaries promptly to pay
and discharge all lawful state and federal taxes,
assessments and governmental charges or levies imposed
upon it or upon its income or profit or upon any
property belonging to it, unless such tax, assessment,
charge or levy shall not at the time be due and
payable or can be paid thereafter without penalty, or
if the validity thereof shall currently be contested
in good faith by appropriate proceedings and adequate
reserves with respect to such tax, assessment, charge
or levy shall have been established in accordance with
Generally Accepted Accounting Principles.
Section 8.6. Inspection of Properties and Books. The
Borrower will and will cause each of its Subsidiaries
to permit the Banks and any designated representatives
to visit and inspect any of the properties of the
Borrower and its Subsidiaries to examine the books of
account (and to make copies thereof and extracts
therefrom), and to discuss the affairs, finances and
accounts of the Borrower and its Subsidiaries with,
and to be advised as to the same by, their officers,
all at such reasonable times as the Majority Banks may
reasonably request.
Section 8.7. Notice of Litigation. The Borrower will
and will cause each of its Subsidiaries promptly to
notify the Banks of the issuance of any restraining
order or injunction or the commencement of any claim,
action, suit, proceeding or investigation of any kind
against any of the Borrower or any of its Subsidiaries
in which there is a reasonable likelihood of an
adverse decision which would either by itself or taken
together with other such matters, materially adversely
affect the business, assets or financial condition of
the Borrower and its Subsidiaries, taken as a whole,
or which question the validity or enforceability of
this Agreement or the other Loan Documents.
Section 8.8. Notice of Default. If the Borrower or
any of its Subsidiaries shall at any time obtain
knowledge of the existence of any Default or Event of
Default, the Borrower shall, within two Business Days
of the occurrence of such Default or Event of Default,
deliver to the Banks a certificate entitled "notice of
default", specifying the nature and period of
existence thereof and what action the Borrower
proposes to take with respect thereto.
Section 8.9. Compliance with Law, Etc. The Borrower
will and will cause each of its Subsidiaries to (a)
comply with all provisions of its Charter and by-laws
and all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it
is or becomes subject and noncompliance with which
would have a material adverse effect on the business,
assets, financial condition or operations of the
Borrower and its Subsidiaries, taken as a whole, or on
the ability of the Borrower to fulfill its obligations
under this Agreement or the other Loan Documents; and
(b) promptly obtain, maintain, apply for renewal, and
not allow to lapse, any authorization, consent,
approval, license or order for, and accomplish any
filing or registration with, any court or judicial,
administrative or governmental authority or any other
Person which is or becomes necessary in order that it
perform in all material respects all of its
obligations under this Agreement, the other Loan
Documents and in order that the same are valid and
binding and effective in accordance with their terms.
Section 8.10. Insurance. The Borrower will and will
cause each of its Subsidiaries to maintain at all
times insurance with substantially similar coverage
and conditions as the insurance listed on Schedule
5.22 attached hereto. Each of such insurance
policies shall provide that such policy may not be
terminated, cancelled or materially modified without
30 days' prior written notice to the Administrative
Agent. The Borrower will not and will not permit any
of its Subsidiaries to reduce the levels of insurance
coverage below those in effect on the Closing Date, as
reflected on such schedule, without the prior written
consent of the Majority Banks unless such coverage is
not available on commercially reasonable terms to the
Borrower or such Subsidiary and to other similarly
sized companies in the Borrower's industry.
Section 8.11. Employee Benefit Plans. Neither the
Borrower nor any ERISA Affiliate will:
(a) engage in any "prohibited transaction"
within the meaning of Section 406 of ERISA or Section4975 of the
Code
which could result in a material liability for the
Borrower; or
(b) permit any Guaranteed Pension Plan to
incur an "accumulated funding deficiency", as such
term is defined in Section 302 of ERISA, whether or not such
deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed
Pension Plan to an extent which, or terminate any
Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on
the assets of the Borrower pursuant to Section 302(f) or
Section 4068 of ERISA; or
(d) permit or take any action which would
result in the aggregate benefit liabilities (with the
meaning of Section 4001 of ERISA) of all Guaranteed Pension
Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in
excess of benefit liabilities, by more than
$10,000,000.
The Borrower will (i) promptly upon the request of
the Administrative Agent, furnish to the
Administrative Agent a copy of the most recent
actuarial statement required to be submitted under
Section 103(d) of ERISA and Annual Report, Form 5500, with
all required attachments, in respect of each
Guaranteed Pension Plan and (ii) promptly upon receipt
or dispatch, furnish to the Administrative Agent any
notice, report or demand sent or received in respect
of a Guaranteed Pension Plan under Sections 302, 4041, 4042,
4043, 4063, 4065, 4066 and 4068 of ERISA, or in
respect of a Multiemployer Plan, under Sections 4041A, 4202,
4219, 4242, or 4245 of ERISA.
Section 8.12. Environmental Compliance. The Borrower
will and will cause each of its Subsidiaries to comply
with all Environmental Laws, including, without
limitation, those concerning the establishment and
maintenance of underground tanks and other underground
storage receptacles or the transportation of hazardous
materials, except where noncompliance with such
Environmental Laws would not have a material adverse
effect on the business, assets or financial condition
of the Borrower and its Subsidiaries, taken as a
whole, and will, upon receipt of any notice of
material non-compliance or knowledge of material
non-compliance, promptly send copies of such notice or
communicate its knowledge of such non-compliance to
the Administrative Agent.
Section 8.13. Maintenance of Property. The Borrower
will and will cause each of its Subsidiaries to
maintain and keep the real and personal properties
used or deemed by it to be useful in its business in
good repair, working order or condition for its
intended use, and make or cause to be made all needful
and proper repairs thereto and replacements thereof.
The Borrower will and will cause each of its
Subsidiaries to maintain the operation of its rail
lines in a manner sufficient to conduct railroad
operations at a level of performance which is in all
material respects equivalent or superior to the
operation of such lines prior to the Closing Date and
in a manner consistent with good railroad operating
procedures.
Section 8.14. Further Assurances. The Borrower will
cooperate with the Banks and execute such further
instruments and documents as the Banks shall
reasonably request to carry out to their
satisfaction the transactions contemplated by
this Agreement and the other Loan Documents.
Section 9. NEGATIVE COVENANTS. The Borrower covenants
and agrees that, so long as the Loans or the Notes are
outstanding, or any amounts are owing pursuant to this
Agreement, or the Banks have any Commitment to make
Loans hereunder:
Section 9.1. Indebtedness. The Borrower will not and
will not permit any of its Subsidiaries to create,
incur, assume, guarantee, agree to purchase or
repurchase, provide funds in respect of, or otherwise
become or be or remain liable with respect to, any
Indebtedness of any type whatsoever owed to any
Person, other than:
(a) Indebtedness evidenced by the Notes and any
other Indebtedness incurred pursuant to this
Agreement;
(b) Indebtedness evidenced by the Facility B
Notes and any other Indebtedness incurred pursuant to
the Facility B Credit Agreement;
(c) Indebtedness evidenced by the Senior Notes or
otherwise incurred pursuant to the Senior Debt
Agreements;
(d) Subordinated Debt;
(e) Indebtedness incurred in the ordinary course
of business and not incurred through the borrowing of
money or the obtaining of credit or the leasing of
property, except that unsecured credit on an open
account basis customarily extended in connection with
purchases of goods or services in the ordinary course
of business shall be permitted;
(f) Indebtedness in respect of taxes, including
withholding and payroll taxes, assessments,
governmental charges, and claims for labor, materials
or supplies and liabilities under employee benefit
plans, including pension plans, to the extent that
payment thereof is not yet due or to the extent that
the amount, applicability or validity of such
Indebtedness is being contested by the applicable
Person in good faith by appropriate proceedings
diligently pursued and adequate reserves therefor are
being maintained in accordance with Generally Accepted
Accounting Principles;
(g) Indebtedness in respect of attachments or
similar proceedings, judgments or awards which have
been in force for less than the applicable period for
taking an appeal so long as execution is not levied
thereunder, or in respect of which the applicable
Person shall at the time in good faith be prosecuting
an appeal or proceedings for review and in respect of
which a stay of execution shall have been obtained
pending such appeal or review;
(h) purchase money Indebtedness for real or
personal property purchased by the Borrower or any
Subsidiary of the Borrower for use in the ordinary
course of such Person's business, but only to the
extent that such Indebtedness does not exceed 100% of
the fair market value of the property so purchased as
at the date of purchase, and Indebtedness in respect
of capitalized leases and operating leases to the
extent that such Indebtedness is permitted by the
other covenants contained herein;
(i) Indebtedness existing on the Closing Date, as
listed and described on Schedule 9.1 attached hereto,
and any renewals, extensions or refinancings of such
Indebtedness, provided that such renewals, extensions
or refinancings shall not increase (i) the amount of
collateral securing such Indebtedness, (ii) the
aggregate amount of such Indebtedness, or (iii) if
such Indebtedness is renewed, extended or refinanced
prior to the maturity thereof, the aggregate annual
debt service requirement during the period prior to
the original maturity thereof with respect thereto;
(j) Indebtedness of the Borrower arising under an
accounts receivable financing facility entered into by
the Borrower on terms and conditions, and pursuant to
documentation, in form and substance satisfactory to
the Majority Banks if, at the time the Borrower enters
into such facility, the Revolving Credit Commitment
Amount (as defined in the Facility B Credit Agreement)
then and thereafter in effect is permanently reduced
by an amount equal to the aggregate credit available
under such accounts receivable financing facility and,
if the aggregate credit available under such accounts
receivable financing facility exceeds such Revolving
Credit Commitment Amount, the Revolving Credit
Commitment Amount hereunder is permanently reduced by
an amount equal to such excess; and
(k) unsecured Indebtedness in addition to the
Indebtedness permitted by clauses (a) through (i)
above, provided that after giving effect thereto, the
Borrower is not in violation of Section 9.11 hereof.
Section 9.2. Liens. The Borrower will not and will
not permit any of its Subsidiaries to create, incur,
assume or permit to exist any Lien on any property or
asset of any of such Persons, other than:
(a) Liens for taxes or assessments or
governmental charges or levies if payment shall not at
the time be required to be made in accordance with
Section 8.5 hereof;
(b) Liens in respect of property or assets of the
Borrower or any of its Subsidiaries (i) under workers'
compensation, unemployment or other insurance, old age
pensions or other Social Security benefits or other
similar laws or similar legislation, (ii) in
connection with surety, appeal and similar bonds
incidental to the conduct of litigation, and (iii) in
connection with bid, performance or similar bonds
which do not exceed in the aggregate $5,000,000;
mechanics', laborers', materialmen's and similar liens
not then delinquent or which are being contested in
good faith by appropriate proceedings; and Liens
incidental to the conduct of the Borrower' business
which were not incurred in connection with the
borrowing of money or the obtaining of advances or
credit, all of which Liens permitted by this paragraph
(b) do not in the aggregate materially detract from
the value of the Borrower's property or materially
impair the use thereof in the operation of the
business of the Borrower and its Subsidiaries;
(c) Liens in respect of judgments or awards the
Indebtedness with respect to which shall be permitted
pursuant to Section 9.1(g) hereof;
(d) encumbrances and liens consisting of
easements, rights of way, general real estate taxes
not yet due and payable, municipal and zoning
restrictions, restrictions on the use of real property
and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which the
Borrower or any of its Subsidiaries is a party, and
other minor liens or encumbrances none of which
interferes materially with the use of the property so
encumbered in the ordinary conduct of the business of
the Borrower and its Subsidiaries and which do not
individually or in the aggregate have a material
adverse effect on the business of the Borrower and its
Subsidiaries, taken as a whole;
(e) Liens securing the purchase price of purchase
money Indebtedness permitted by Section 9.1(h) hereof,
provided that such Liens are limited solely to the
property so purchased and Liens in respect of
capitalized leases, the Indebtedness with respect to
which is permitted by Section 9.1(h) hereof, provided that
such Liens are limited solely to the property subject
to such capitalized leases;
(f) Liens on certain property of the Borrower
which are existing on the Closing Date, as listed and
described on Schedule 9.1 attached hereto and Liens on
the same property securing renewals, extensions and
refinancings of the Indebtedness described in Section 9.1(i)
thereof subject to all the provisos contained therein;
(g) Liens on accounts receivable of the Borrower
that are the subject of, and that secure, the accounts
receivable financing facility referred to in Section 9.1(j)
hereof;
provided, that, in any event, the aggregate amount of
Indebtedness and other obligations secured by Liens
permitted under this Section 9.2 (other than Liens provided
for in clauses (a), (b), and (d) of this Section 9.2) shall
not at any time exceed 20% of Consolidated Total
Assets.
Section 9.3. Investments. The Borrower will not and
will not permit any of its Subsidiaries to make, or
permit to exist, directly or indirectly, any
Investments in any Person, other than:
(a) trade or customer accounts or notes
receivable for inventory sold or services rendered in
the ordinary course of business;
(b) obligations issued or guaranteed as to
principal and interest by the United States of America
and having a maturity of not more than one year from
the date of acquisition;
(c) deposits with or certificates of deposit
issued by any Bank, or any other bank whose commercial
paper is rated not less than prime-one or A-1 or their
equivalents by Moody's or S&P or their successors and
having capital and unimpaired surplus of at least
$500,000,000, and written agreements under which any
Bank or any other bank described in this Section 9.3(c) sells
and agrees to repurchase marketable direct obligations
of the United States of America;
(d) commercial paper or finance company paper
which is rated not less than prime-one or A-1 or their
equivalents by Moody's or S&P or their successors;
(e) Investments in Subsidiaries of the Borrower
and other Persons, as such Investments are in
existence on the Closing Date and as reflected in
Schedule 5.15 attached hereto, plus additional cash
investments in an aggregate amount not to exceed
$1,500,000 in any calendar year during the term of
this Agreement in such Subsidiaries and other Persons;
and
(f) Investments not otherwise contemplated in
this Section 9.3, provided that the aggregate amount of all
Investments made pursuant to this Section 9.3(f) shall not
exceed $2,500,000 at any time.
Section 9.4. Distributions. The Borrower will not,
directly or indirectly, make any Distribution except
as set forth below. The Borrower will not permit any
of its wholly-owned Subsidiaries, directly or
indirectly, to make any Distribution other than
Distributions to the Borrower, nor will the Borrower
permit any of its Subsidiaries which are less than
wholly owned to make, directly or indirectly, any
Distribution other than Distributions in which the
Borrower receives it pro rata share thereof.
Notwithstanding the foregoing, the Borrower may pay
cash dividends to the Parent subject to the following
restrictions: (a) the aggregate amount of cash
dividends declared or paid from and after July 23,
1991 (the "Start Date") shall not exceed the sum of
(i) $25,000,000 plus (ii) 50% of the Consolidated Net
Income of the Borrower for each fiscal quarter of the
Borrower ending after the Start Date in which the
Borrower had a positive Consolidated Net Income minus
(iii) 100% of the amount of the Borrower's
consolidated net loss for each fiscal quarter of the
Borrower ending after the Start Date in which the
Borrower had a consolidated net loss plus (iv) 100% of
the proceeds of each issuance of the Borrower's
capital stock occurring after the Start Date and,
without duplication, the proceeds from any equity
capital contribution made by the Parent to the
Borrower after the Start Date (the sum of (i), (ii),
(iii) and (iv) shall be hereinafter referred to as the
"Distribution Amount"), (b) the Borrower shall have
delivered evidence satisfactory to the Administrative
Agent showing compliance with the provisions of clause
(a) above, and (c) no Default or Event of Default
shall have occurred and be continuing at the time such
cash dividend is to be paid and no Default or Event of
Default shall result from the payment of such cash
dividend. For purposes only of calculating the
Consolidated Net Income of the Borrower under this
Section 9.4, any extraordinary loss (net of taxes)
calculated in accordance with Generally Accepted
Accounting Principles occurring as a result of the
premium and charges incurred in connection with the
repurchase of Subordinated Debentures shall be
disregarded.
Section 9.5. Merger, Consolidation and Sale of Assets.
The Borrower will not and will not permit its
Subsidiaries to become a party to any merger or
consolidation other than mergers or consolidations of
any Subsidiary of the Borrower into the Borrower (so
long as the Borrower is the surviving corporation) or
of any Subsidiary of the Borrower into any other
Subsidiary of the Borrower, or otherwise take any
action looking to the dissolution or liquidation of
any such Person (other than the Borrower's
Subsidiaries which are not Material Subsidiaries).
The Borrower will not and will not permit its
Subsidiaries to sell, lease or otherwise dispose of
any assets (including without limitation, any capital
stock of Subsidiaries) of any such Person which do not
constitute Nonessential Property except for (a) assets
routinely sold in the ordinary course of business for
fair and reasonable value in a manner consistent with
past practice, both as to type of property sold and
aggregate amount sold, and (b) other assets to the
extent that the aggregate book value (at the time of
disposition thereof) of all assets (including shares
of capital stock) disposed of by the Borrower and its
Subsidiaries subsequent to the Start Date under this
clause (b) plus the aggregate book value of all assets
(including shares of capital stock) then proposed to
be disposed of pursuant to this clause (b) does not
exceed 10% of Consolidated Tangible Net Worth as of
the end of the most recently completed fiscal year of
the Borrower. Notwithstanding any other provision of
this Agreement, however, the Borrower will not and
will not permit its Subsidiaries to consummate any
line sales in excess of $1,000,000 per sale or
$2,000,000 in the aggregate per year without the prior
written consent of the Majority Banks. The Borrower
shall cause all proceeds of sales of Nonessential
Property to be applied as set forth in Section 8.14 of the
Facility B Credit Agreement.
Section 9.6. [Intentionally omitted.]
Section 9.7. Sale-Leasebacks. The Borrower will not
and will not permit any of its Subsidiaries to enter
into any sale-leaseback transactions as seller-lessee
without the prior written consent of the Majority
Banks which consent shall not be unreasonably
withheld.
Section 9.8. Business. The Borrower will not and will
not permit its Subsidiaries to engage in any line of
business not substantially similar to the businesses
such Persons were conducting on the Initial 1989
Closing Date.
Section 9.9. Fiscal Year. The Borrower will not
change its fiscal year without the prior written
consent of the Majority Banks.
Section 9.10. Consolidated Tangible Net Worth. The
Borrower will not permit Consolidated Tangible Net
Worth at any time to be less than the sum of (a)
$241,000,000, plus (b) 50% of cumulative positive
Consolidated Net Income for each fiscal quarter of the
Borrower in which the Borrower had a positive
Consolidated Net Income beginning with the quarter
commencing on January 1, 1993 and ending on the date as
of which the calculation is made, with no deductions
for any fiscal quarter of the Borrower in which the
Borrower had a consolidated net loss, plus (c) 100% of
the proceeds of each issuance of the Borrower's
capital stock after the Original Closing Date and 100%
of proceeds from each equity capital contribution made
by the Parent to the Borrower.
Section 9.11. Debt to Capitalization Ratio. The
Borrower will not permit the ratio of (a) Consolidated
Funded Debt to (b) Total Capitalization to exceed at
any time during the periods set forth in the following
chart the ratio set forth opposite the applicable
period:
Period Ratio
Original Closing Date - 12/30/93 0.65 to 1
12/31/93 - 12/31/94 0.60 to 1
1/1/95 and thereafter 0.55 to 1
Section 9.12. Consolidated EBIT Coverage. As at the
end of any fiscal quarter, the Borrower will not
permit the ratio of Consolidated EBIT (as determined
in accordance with the provisions set forth below) as
at the end of such fiscal quarter (for such fiscal
quarter and the three preceding fiscal quarters, taken
as a single period) to Consolidated Interest Charges
for the same period to be less than the ratio set
forth for the applicable period in the chart below:
Four Fiscal Quarter
Period Ending On: Ratio
3/31/93 2.75 to 1
6/30/93 2.75 to 1
9/30/93 2.75 to 1
12/31/93 3.00 to 1
3/31/94 3.00 to 1
6/30/94 3.00 to 1
9/30/94 3.00 to 1
12/31/94 and thereafter 3.35 to 1
Section 9.13. Debt Service Coverage. As at the end of
any fiscal quarter, the Borrower will not permit the
ratio (the "Debt Service Coverage Ratio") of (a)
Consolidated Cash Flow as at the end of such fiscal
quarter of the Borrower (for such fiscal quarter and
the three preceding fiscal quarters, taken as a single
period) less Consolidated Capital Expenditures (for
such four fiscal quarters, taken as a single period)
to (b) Consolidated Financial Obligations (for such
four fiscal quarters, taken as a single period) to be
less than the ratio set forth in the chart below
opposite the applicable period:
Four Fiscal Quarter
Period Ending On: Ratio
3/31/93 1.08 to 1
6/30/93 1.08 to 1
9/30/93 1.08 to 1
12/31/93 and thereafter 1.15 to 1
Section 9.14. Depreciation. The Borrower will not
change the depreciation method pursuant to which it
depreciates its assets from that set forth on Schedule
1.3 attached hereto without the prior written
consent of the Majority Banks.
Section 9.15. Transactions with Affiliates. The
Borrower will not, and will not permit any of its
Subsidiaries to, engage in any transaction with an
Affiliate of the Borrower or any of its Subsidiaries
(other than the Borrower or any of its Subsidiaries)
on terms less favorable to the Borrower or such
Subsidiary (as the case may be) than would have been
obtainable in an arms-length transaction.
Section 10. EVENTS OF DEFAULT; ACCELERATION. If any of
the following events ("Events of Default") shall
occur:
(a) if the Borrower shall default in the payment
of any principal under the Notes when the same shall
become due and payable, whether at maturity or at any
date fixed for payment or prepayment or by declaration
or otherwise; or
(b) if the Borrower shall default in the payment
of any interest, fee or other charge hereunder or
under the Notes within three Business Days of the date
when the same shall become due and payable, whether at
maturity or at any date fixed for payment or
prepayment or by declaration or otherwise; or
(c) if the Borrower shall default in the
performance of or compliance with any of the covenants
contained in Sections8 or 9 hereof (other than Sections
8.3, 8.6, 8.12, or 8.13);
(d) if the Borrower shall default in the
performance of or compliance with any material term,
covenant or agreement contained herein or in the other
Loan Documents (other than those specified in clauses
(a), (b) and (c) above, but including those listed in
the parenthetical in clause (c) above), and such
default shall not have been remedied within 30 days
after written notice of such default shall have been
given to the Borrower by the Administrative Agent
(which notice shall be given on the direction of the
Majority Banks);
(e) if any representation or warranty herein, or
in any certificate or other writing at any time
delivered to the Banks pursuant hereto or in
connection herewith, shall prove to have been false or
incorrect in any material respect on the date as of
which made;
(f) if the Borrower or any of its Material
Subsidiaries shall (i) fail to pay at maturity, or
within any applicable period of grace, Indebtedness in
an aggregate principal amount in excess of $1,000,000,
or (ii) fail to observe or perform any term, covenant
or agreement contained in any agreement by which it is
bound evidencing or securing Indebtedness in an
aggregate principal amount in excess of $10,000,000
for such period of time as would permit the holder or
holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof; or
(g) if the Borrower or any of its Material
Subsidiaries shall fail generally to pay its debts or
make a general assignment for the benefit of
creditors, or if any order for relief is entered in
respect of any such Person under any bankruptcy,
reorganization, arrangements, insolvency, readjustment
of debt, dissolution or liquidation or similar law of
any jurisdiction, now or hereafter in effect; or
(h) if any order is entered in any proceeding by
or against the Borrower or any of its Material
Subsidiaries decreeing or permitting the dissolution
or split-up of such Person or the winding up of its
affairs; or
(i) if any petition or application for the
appointment of a liquidator or receiver or custodian
(or similar official) of the Borrower or any of its
Material Subsidiaries or of any substantial part of
the assets of any such Person is filed by any such
Person; or any such petition or application is filed
against any such Person and such Person approves
thereof, consents thereto or acquiesces therein, or if
any proceeding or case relating to any such Person
under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction is
commenced by any such Person; or if any such
proceeding or case is commenced against any such
Person and such proceeding or case remains undismissed
for a period of forty-five days; or
(j) if there shall remain in force, undischarged,
unsatisfied and unstayed, for more than thirty
consecutive days, any final judgment against the
Borrower or any of its Subsidiaries which, together
with such other outstanding final judgments against
such Persons, exceeds in the aggregate $3,000,000; or
(k) if any judicial lien or attachment on the
property of the Borrower or any of its Subsidiaries in
an amount of $5,000,000 or greater shall not be
released, discharged, bonded or provided for to the
satisfaction of the Banks within thirty days after
such lien or attachment shall have come into
existence; or
(l) if any Loan Document shall be cancelled,
terminated, revoked or rescinded otherwise than in
accordance with the express prior written agreement,
consent or approval of the Majority Banks, or any
action at law, suit in equity or other legal
proceeding to cancel, revoke or rescind any Loan
Document shall be commenced by or on behalf of the
Borrower; or any court or any other governmental or
regulatory authority or agency of competent
jurisdiction shall make a determination that, or shall
issue a judgment, order, decree or ruling to the
effect that any one or more of the Loan Documents or
any one or more of the obligations of the Borrower or
any Subsidiary of the Borrower under any one or more
of the Loan Documents are illegal, invalid or
unenforceable in accordance with the terms thereof;
(m) with respect to any Guaranteed Pension Plan,
an ERISA Reportable Event shall have occurred and such
event reasonably could be expected to result in
liability of the Borrower to the PBGC or the Plan in
an aggregate amount exceeding $10,000,000 and such
event in the circumstances occurring reasonably could
constitute grounds for the termination of such Plan by
the PBGC or for the appointment by the appropriate
United States District Court of a trustee to
administer such Plan; or a trustee shall have been
appointed by the United States District Court to
administer such Plan; or the PBGC shall have
instituted proceedings to terminate such Plan; or
(n) if the Parent shall at any time cease to own
all of the outstanding capital stock of the Borrower
or shall at any time create, incur, or permit to exist
any Lien on any shares of capital stock of the
Borrower;
then (A) if such event is an Event of Default
specified in clauses (g), (h) or (i) of this Section 10 with
respect to the Borrower, automatically the Revolving
Credit Commitments shall immediately terminate and the
Loans (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan
Documents shall immediately become due and payable,
and (B) if such event is any other Event of Default,
then at the direction of the Majority Banks, the
Administrative Agent shall terminate the Revolving
Credit Commitments and by written notice to the
Borrower, declare all amounts owing with respect to
this Agreement and the other Loan Documents to be due
and payable, whereupon the same shall forthwith mature
and become immediately due and payable, together with
interest thereon and all other amounts then owing
thereunder and under this Agreement, without
presentment, demand, protest or notice, all of which
are hereby waived.
Section 11. NOTICE AND WAIVERS OF DEFAULT.
Section 11.1. Notice of Default. If any Person shall
give any notice or take any other action in respect of
a claimed default (whether or not constituting an
Event of Default) under this Agreement or the Notes,
or under any other note, evidence of indebtedness,
indenture or other obligation for borrowed money in an
aggregate principal amount exceeding $1,000,000 as to
which the Borrower or any of its Subsidiaries is an
obligor, whether as principal or surety, the Borrower
shall forthwith, after obtaining knowledge thereof,
give written notice thereof to the Banks, describing
the notice or action and the nature of the claimed
default.
Section 11.2. Waivers of Default. Except as otherwise
specified in Section 21 hereof, any Default or Event of
Default specified in Section 10 hereof may be waived only upon
the written consent of the Majority Banks. Any
Default or Event of Default waived pursuant hereto
shall be deemed to have been cured and not to be
continuing during the period for which such waiver is
applicable; but no such waiver shall extend to or
affect any subsequent like default or impair any
rights arising therefrom.
Section 12. REMEDIES ON DEFAULT, ETC.
Section 12.1. Rights of Banks. In case any one or more
of the Events of Default specified in Section 10 shall have
occurred and be continuing, and whether or not all
amounts owing with respect to the Notes have been
declared due and payable pursuant to Section 10, each Bank,
if owed any amount with respect to its Note, may proceed
to protect and enforce its rights by suit in equity,
action at law and/or other appropriate proceeding,
whether for the specific performance of any covenant
or agreement contained in this Agreement or its Note,
or in aid of any right granted pursuant hereto or
thereto subject to any requirement herein that the
Majority Banks or the Administrative Agent concur
therewith, and, if such amount shall have become due,
by declaration or otherwise, each Bank may proceed to
enforce the payment thereof or any other legal or
equitable right of such Bank.
Section 12.2. Set-off. Subject to the provisions of
this Section 12, regardless of the adequacy of any collateral,
during the continuance of an Event of Default, any
deposits or other sums credited by or due from any
Bank to the Borrower may be set off against any and
all liabilities then due, of the Borrower to such Bank
hereunder. Each Bank agrees with the other Banks that
if an amount to be set off is to be applied to any
Indebtedness of the Borrower to such Bank, whether
Indebtedness evidenced by any of the Notes or due
under this Agreement or otherwise arising, such amount
shall be applied ratably to all such Indebtedness
(except to the extent not permitted by the terms of
any agreement or instrument evidencing the same).
Each Bank further agrees with the other Banks that if
such Bank shall both (i) receive from the Borrower or
from any other source whatsoever, whether by voluntary
payment, exercise of the right of set-off,
counterclaim, cross action, or enforcement of any
claim evidenced by the Notes or this Agreement, or by
proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or
otherwise, and (ii) retain and apply to the payment of
the amounts owing with respect to the Notes or of any
amounts due to such Bank under this Agreement, any
amount which is in excess of its ratable portion of
the payments received by all of the Banks, then such
Bank will make such disposition and arrangements with
the other Banks with respect to such excess, either by
way of distribution until the amount of such excess
has been exhausted, assignment of claims, subrogation
or otherwise, as shall result in each such Bank
receiving in respect of its Notes and the amounts due
such Bank under this Agreement its ratable share of
all such payments as provided in Section 2.11. Each Bank
will give written notice to the Borrower promptly after any
exercise of its rights under this Section 12.2.
Section 13. THE AGENTS.
Section 13.1. Appointment; Co-Agent. Each Bank hereby
irrevocably designates and appoints FNBB as the
Administrative Agent and the Competitive Bid Agent of
such Bank under this Agreement and each Bank hereby
irrevocably authorizes FNBB as the Administrative
Agent and the Competitive Bid Agent to take such
action on its behalf under the provisions of this
Agreement and to exercise such powers and perform such
duties as are expressly delegated to the
Administrative Agent and the Competitive Bid Agent by
the terms hereof, together with such other powers as
are reasonably incidental thereto. Notwithstanding
any provision to the contrary elsewhere in this
Agreement, the Agents shall not have any duties or
responsibilities, except those expressly set forth
herein or therein, or any fiduciary relationship with
any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist
against the Agents. Only each of the Agents shall
have any rights, duties or responsibilities as agent
for the Banks under this Agreement and the other Loan
Documents. The Co-Agent shall have no such rights,
duties or responsibilities. Any reference to an agent
for the Banks in, or in connection with, any Loan
Document shall be a reference to the Administrative
Agent or the Competitive Bid Agent, as applicable.
Section 13.2. Delegation of Duties. Each of the Agents
may execute any of its duties under this Agreement by
or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters
pertaining to such duties. Neither of the Agents
shall be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 13.3. Exculpatory Provisions. Neither of the
Agents nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (a)
liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with
this Agreement (except for its or such Person's own
gross negligence or willful misconduct), or (b)
responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties
made by the Borrower or any officer thereof contained
in this Agreement or any other Loan Document, or in
any certificate, report, statement or other document
referred to or provided for in, or received by such
Agent under or in connection with, this Agreement or
any other Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan
Document or for any failure of the Borrower to perform
its obligations hereunder or thereunder. Neither of
the Agents shall be under any obligation to any Bank
to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan
Document or to inspect the properties, books or
records of the Borrower.
Section 13.4. Reliance by Agents. Each of the Agents
shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document
or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and
statements of legal counsel (including, without
limitation, counsel to the Borrower), independent
accountants and other experts selected by such Agent.
Each of Agents may deem and treat the named payee of
any Note as the owner thereof for all purposes unless
a written notice of assignment, negotiation or
transfer thereof shall have been delivered to the such
Agent. Each of the Agents shall be fully justified in
failing or refusing to take action under this
Agreement and the Notes unless it shall first receive
such advice or concurrence of the Majority Banks as it
deems appropriate and it shall first be indemnified to
its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by
reason of taking or continuing to take any such
action. Each of the Agents shall in all cases be
fully protected in acting, or in refraining from
acting, under this Agreement and the Notes in
accordance with a request of the Majority Banks, and
such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Banks
and all future holders of the Notes.
Section 13.5. Notice of Default. Neither of the Agents
shall be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default
hereunder unless the such Agent has received notice
from a Bank or the Borrower or, in the case of the
Competitive Bid Agent, from the Administrative Agent,
referring to this Agreement, describing such Default
or Event of 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 notice thereof to the
Banks and consult with the Banks with respect to the
action to be taken. The Administrative Agent shall
take such action with respect to such Default or Event
of Default as shall be reasonably directed by such of
the Banks, provided that unless and until the
Administrative Agent shall have received such
directions, the Administrative Agent may (but shall
not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the
best interests of the Banks.
Section 13.6. Non-Reliance on Agents and Other Banks.
Each Bank expressly acknowledges that neither of the
Agents nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by
either of the Agents hereinafter taken, including any
review of the affairs of the Borrower, shall be deemed
to constitute any representation or warranty by such
Agent to any Bank. Each Bank represents to each of
the Agents that it has, independently and without
reliance upon such Agent or any other Bank, and based
on such documents and information as it has deemed
appropriate, made its own appraisal of and
investigation into the business, operations, property,
financial and other condition and credit-worthiness of
the Borrower, and made its own decision to make its
loans hereunder and enter into this Agreement. Each
Bank also represents that it will, independently and
without reliance upon either of the Agents or any
other Bank, and based on such documents and
information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under
this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business,
operations, property, financial and other condition
and credit-worthiness of the Borrower. Except for
notices, reports and other documents expressly
required to be furnished to the Banks by the Agents
hereunder, the Agents shall not have any duty or
responsibility to provide any Bank with any credit or
other information concerning the business, operations,
property, financial and other condition or
credit-worthiness of the Borrower which may come into
the possession of either of the Agents or any of its
officers, directors, employees, agents,
attorneys-in-fact or affiliates.
Section 13.7. Indemnification. The Banks agree to
indemnify each of the Agents in its capacity as such
(to the extent not reimbursed by the Borrower, and
without limiting the obligation of the Borrower to do
so), pro rata based on the amount of the Obligations
outstanding hereunder at the time the event giving
rise to the indemnification obligation occurs, from
and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without
limitation, at any time following the payment of the
Notes) be imposed on, incurred by or asserted against
such Agent in any way relating to or arising out of
this Agreement, or any documents contemplated by or
referred to herein or the transactions contemplated
hereby or any action taken or omitted by the such
Agent under or in connection with any of the
foregoing, provided that no Bank shall be liable for
the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements
resulting solely from such Agent's gross negligence or
willful misconduct. The agreements in this subsection
shall survive the payment of the Notes and all other
amounts payable hereunder.
Section 13.8. Individual Capacity. Each of the Agents
and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with
the Borrower as though such Agent were not an Agent
hereunder. With respect to the Loans made or renewed
by it and any Note issued to it, each of the Agents
shall have the same rights and powers under this
Agreement as any Bank and may exercise the same as
though it were not an Agent, and the terms "Bank" and
"Banks" shall include each of the Agents in its
individual capacity.
Section 13.9. Successor. Either of the Agents may
resign as an Agent upon ten days' notice to the Banks
and the Borrower, and either of the Agents may be
removed by the Majority Banks upon ten days' notice to
the Banks, the Administrative Agent, the Competitive
Bid Agent and the Borrower. Upon such resignation or
removal, the Majority Banks shall appoint from among
the Banks a successor agent in the applicable capacity
for the Banks, which successor agent shall consent to
serve as the administrative agent or competitive bid
agent, as applicable, hereunder and shall be approved
by the Borrower (such approval not to be unreasonably
withheld), whereupon such successor agent shall
succeed to the rights, powers and duties of the
Administrative Agent or Competitive Bid Agent, as
applicable, and the term "Administrative Agent" or
"Competitive Bid Agent," as applicable, shall mean
such successor agent effective upon its appointment,
and the former Agent's rights, powers and duties as an
Agent shall be terminated, without any other or
further act or deed on the part of the former Agent or
any of the parties to this Agreement or any holders of
the Notes. After any retiring Agent's resignation
hereunder as an Agent, the provisions of this Section 13
shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was an Agent under
this Agreement.
Section 14. PARTIES IN INTEREST. All the terms of this
Agreement and the other Loan Documents shall be
binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns
of the parties hereto and thereto, provided that the
Borrower shall not assign or transfer its rights
hereunder.
Section 15. ASSIGNMENTS; PARTICIPATIONS. (a) Except as
provided herein, any Bank may assign to one or more
Eligible Assignees all or a portion of its interests,
rights and obligations under this Agreement
(including, without limitation, all or a portion of
its Revolving Credit Commitment Percentage and its
Commitment to make Standby Loans hereunder, if any,
and/or all or any portion of any Loans at the time
owing to it and the Notes held by it); provided,
however, that (i) the Administrative Agent shall
have given its prior written consent, which consent
shall not be unreasonably withheld or delayed, (ii)
the Borrower shall have given its prior written
consent, which consent shall not be unreasonably
withheld or delayed, (iii) each such assignment shall
be of a constant, and not a varying, percentage of all
the assigning Bank's rights and obligations with
respect to its Revolving Credit Commitment Percentage
and its Commitment hereunder or with respect to the
Loans owing to it and the Notes held by it, as the
case may be, (iv) the amount of the assigning Bank's
portion of the Revolving Credit Commitment Amount
subject to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to
such assignment) shall in no event be less than
$10,000,000, or if the assigning Bank's entire
Commitment is less than $10,000,000, such Bank's
entire Commitment, provided that the assignee is an
existing Bank, (v) the assignee, if it shall not
already be a Bank, shall deliver to the Administrative
Agent and the Competitive Bid Agent an administrative
questionnaire in the form of Exhibit F attached
hereto, and (vi) the parties to such assignment shall
execute and deliver to the Administrative Agent, for
notation in the Bank List, an Assignment and
Acceptance, substantially in the form of Exhibit G
hereto (the "Assignment and Acceptance"), together
with any Note or Notes subject to such assignment, and
together with payment by the Eligible Assignee to the
Administrative Agent for its own account of an
assignment administration fee in the amount of $2,500.
Upon such execution, delivery, acceptance and
notation, from and after the effective date specified
in each Assignment and Acceptance, which effective
date shall be at least five Business Days after the
execution thereof or such earlier date as the
Administrative Agent, the assigning Bank and the
assignee bank may choose, (x) the assignee thereunder
shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and
obligations of a Bank hereby, provided that such
assignee shall have no greater rights than the
assigning Bank under Section 3.1, and (y) the assigning Bank
shall, to the extent provided in such assignment, be
released from its obligations under this Agreement,
other than confidentiality requirements.
(b) By executing and delivering an Assignment and
Acceptance, the parties to such assignment thereunder
confirm to and agree with each other and the other
parties hereto as follows: (i) other than the
representation and warranty that it is the legal and
beneficial owner of the interest being assigned
thereby free and clear of any adverse claim, the
assigning Bank makes no representation or warranty and
assumes and shall have no responsibility with respect
to any statements, warranties or representations made
in or in connection with this Agreement or the
execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant
hereto; (ii) the assigning Bank makes no
representation or warranty and assumes and shall have
no responsibility with respect to the financial
condition of the Borrower or the performance or
observance by the Borrower of any of its obligations
under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this
Agreement, together with copies of the financial
statements referred to in Section 5.4 and the most recent
financial statements delivered pursuant to Section 8.4 and
such other documents and information as it has deemed
appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without
reliance upon the assigning Bank, either of the Agents
or any 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 action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee;
(vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent
by the terms hereof, together with such powers as are
reasonably incidental thereto; (vii) such assignee
appoints and authorizes the Competitive Bid Agent to
take such action as agent on its behalf and to
exercise such powers under this Agreement as are
delegated to the Competitive Bid Agent by the terms
hereof, together with such powers as are reasonably
incidental thereto; and (viii) such assignee agrees
that it will perform in accordance with their terms
all of the obligations which by the terms of this
Agreement are required to be performed by it as a
Bank.
(c) The Administrative Agent shall maintain a
copy of each Assignment and Acceptance delivered to it
and a bank list or similar list for the notation of
the names and addresses of the Banks and the Revolving
Credit Commitment Percentage of, and principal amount
of the Loans owing to, the Banks from time to time
(the "Bank List"). The entries in the Bank List shall
be conclusive, in the absence of manifest error, and
the Borrower, the Administrative Agent and the Banks
may treat each person whose name is noted in the Bank
List as a Bank hereunder for all purposes of this
Agreement. The Bank List shall be available for
inspection by the Borrower or the Banks at any
reasonable time and from time to time upon reasonable
prior notice.
(d) Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment,
together with any Note or Notes subject to such
assignment and the written consent of the Borrower to
such assignment, the administrative questionnaire
referred to above, and the $2,500 fee referred to
above, the Administrative Agent shall (i) note the
information contained therein in the Bank List, and
(ii) give prompt notice thereof to the Borrower and
the Banks. Within five Business Days after receipt of
such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent, in
exchange for the surrendered Note or Notes, a new Note
or Notes to the order of such Eligible Assignee(s) in
an amount equal to the amount assumed by such Eligible
Assignee(s) pursuant to such Assignment and Acceptance
and, if the assigning Bank has retained some portion
of its obligations hereunder, a new Note or Notes to
the order of the assigning Bank in an amount equal to
the amount retained by it hereunder. Such new Note or
Notes shall be in an aggregate principal amount equal
to the aggregate principal amount of the surrendered
Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be
in the form of the assigned Notes. The surrendered
Note or Notes shall be cancelled and returned to the
Borrower.
(e) Each Bank may without the consent of the
Borrower or the Administrative Agent sell
participations to one or more banks or other entities
in all or a portion of its rights and obligations
under this Agreement (including, without limitation,
all or a portion of its Commitment hereunder and the
Loans owing to it and the Note held by it); provided,
however, that the only rights granted to the
participant pursuant to such participation
arrangements with respect to waivers, amendments or
modifications of the Loan Documents shall be the
rights to approve waivers, amendments, or
modifications which require the consent of all of the
Banks as provided in Section 21 hereof. The Borrower further
agrees that a Bank may disclose information obtained
by such Bank pursuant to this Agreement to
participants or potential participants in the Loans,
provided that such participants agree to be bound by
the confidentiality requirements hereunder.
(f) Anything contained in this Section 15 to the
contrary notwithstanding, any Bank may at any time pledge
all or any portion of its interest and rights under this
Agreement (including all or any portion of its Note)
to any of the twelve Federal Reserve Banks organized
under Section 4 of the Federal Reserve Act, 12 U.S.C.
Section 341. No such pledge or the enforcement thereof
shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.
Section 16. EXPENSES; INDEMNITY. (a) Whether or
not the transaction contemplated hereby shall be consummated,
the Borrower will pay (1) the out-of-pocket costs of
the Administrative Agent of (i) preparing, copying and
distributing this Agreement and the other Loan
Documents, (ii) syndicating the credit facility
provided herein, including, without limitation, the
out-of-pocket costs of preparing, copying and
distributing all necessary documentation with respect
thereto, (iii) any transfer taxes, documentary taxes,
assessments or charges made by any governmental
authority by reason of the execution and delivery of
the Loan Documents (the Borrower hereby agreeing to
indemnify the Banks with respect thereto); (2) the
reasonable fees, expenses and disbursements of the
Banks' Special Counsel and the reasonable allocated
costs of staff counsel for the Administrative Agent
incurred in connection with the preparation of this
Agreement and the other Loan Documents or in
connection with amendments, modifications, approvals,
consents or waivers hereto or thereto; (3) all
reasonable costs and expenses (including reasonable
attorneys' fees and costs and the reasonable allocated
costs of staff counsel) incurred or sustained by the
Administrative Agent, the Competitive Bid Agent and
the Banks in connection with the exercise, protection
or enforcement of any of the Administrative Agent's,
the Competitive Bid Agent's or the Banks' rights,
remedies, powers or privileges under this Agreement
and the other Loan Documents or the administration
thereof after the occurrence and during the
continuance of an Event of Default; and (4) all
reasonable costs and expenses (including reasonable
attorney's fees and costs) incurred or sustained by
the Agents and the Banks and their respective
shareholders, directors, agents, officers,
Subsidiaries and affiliates (each an "Indemnified
Party") in connection with any litigation,
proceeding or dispute, whether arising hereunder or
otherwise, in any way related to the Agents' and the
Banks' relationship with the Borrower or any of its
Subsidiaries hereunder, other than as directly caused
by the gross negligence or willful misconduct of any
Indemnified Party. In any investigation, proceeding
or litigation, or the preparation therefor, the Agents
and the Banks shall be entitled to select their own
counsel (which counsel shall be reasonably
satisfactory to the Borrower) and, in addition to the
foregoing indemnity, the Borrower agrees to pay
promptly the reasonable fees and expenses of one such
counsel except to the extent that such fees and
expenses are the result of the gross negligence or
willful misconduct of either of the Agents or the
Banks. The Borrower will not, without the prior
written consent of the Agents and the Banks, settle or
compromise any such investigation, proceeding or
litigation if such settlement or compromise requires
an admission of either of the Agents' or the Banks'
wrongdoing and neither the Agents nor the Banks nor
any other Indemnified Party will settle or compromise
any such investigation, proceeding or litigation
without the prior written consent of the Borrower if
the Borrower is required to indemnify the Agents or
the Banks or such other Indemnified Party therefor.
The covenants of this Section 16 shall survive payment or
satisfaction of payment of amounts owing with respect
to this Agreement or the Notes.
(b) The Borrower covenants and agrees to
indemnify and hold harmless each Indemnified Party and
each Indemnified Party's successors and assigns, from
and against all damages, losses, settlement payments,
obligations, liabilities, claims, suits, penalties,
assessments, citations, directives, demands,
judgments, actions, causes of action, costs and
expenses (including without limitation the fees and
disbursements of counsel and environmental
consultants) incurred, suffered, sustained or required
to be paid by an Indemnified Party and arising under
any Environmental Law, or otherwise related to
environmental or Hazardous Substance matters in
connection with the transactions contemplated by this
Agreement, except any of the foregoing which result
from the gross negligence or willful misconduct of the
Indemnified Party. The Agents and the Banks shall
have the right to employ separate counsel and to
participate in the defense and investigation of any
claim, action or proceeding, and the Borrower shall
bear the expense of such counsel. The covenant of
this Section 16(b) shall survive payment or satisfaction of
payment of amounts owing with respect to the Notes or
any other Loan Document.
Section 17. SURVIVAL OF COVENANTS, ETC. All covenants,
agreements, representations and warranties made herein
and in any certificates or other papers delivered by
or on behalf of the Borrower pursuant hereto shall
survive any investigation made by the Banks and the
making by the Banks of the Loans, as herein
contemplated, and shall continue in full force and
effect so long as the Loans or other amounts due under
this Agreement or the Notes remains outstanding and
unpaid. All representations and warranties contained
in any certificate or other document delivered to the
Banks at any time by or on behalf of the Borrower
pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations
and warranties by the Borrower hereunder.
Section 18. NOTICES. Except as otherwise specified
herein, all notices and other communications made or
required to be given pursuant to this Agreement shall
be in writing and shall be either delivered by hand or
mailed by United States first-class mail, postage
prepaid, or sent by telex or telecopy confirmed by
letter, addressed as follows:
(a) if to the Borrower, at 455 North Cityfront
Plaza Drive, Chicago, Illinois 60611-5504, Attn: Chief
Financial Officer, or such other address for notice as
the Borrower shall last have furnished in writing to
the Person giving the notice;
(b) if to FNBB, or the Administrative Agent or
the Competitive Bid Agent, at 100 Federal Street,
Boston, Massachusetts 02110, Attn: Transportation
Division, 01-08-01, or such other address for notice
as such Bank or the Administrative Agent shall last
have furnished in writing to the Person giving the
notice;
(c) if to any Bank other than FNBB, at the
address for notice for such Bank set forth on the
signature pages hereto or at such other address as
such Bank shall last have furnished in writing to the
Person giving the notice.
Except for Notices of Borrowing, any notice so
addressed shall be deemed to have been duly given or
made and to have become effective (i) if delivered by
hand to an officer of the party to which it is
directed, at the time of the receipt thereof by such
officer, (ii) if sent by first-class mail, postage
prepaid, on the earlier of (A) the fifth Business Day
following the mailing thereof, or (B) the date of its
receipt, if a Business Day, or if not a Business Day,
the next succeeding Business Day, or (iii) if sent by
telex or telecopy, at the time of dispatch thereof, if
in normal business hours in the state or country where
received or otherwise at the opening of business on
the next succeeding Business Day.
Section 19. MISCELLANEOUS. This Agreement shall for all
purposes be construed in accordance with and governed
by the laws of the State of New York. The rights and
remedies herein expressed are cumulative and not
exclusive of any other rights which the Banks would
otherwise have. Any instruments required by any of
the provisions hereof to be in the form annexed hereto
as an exhibit shall be substantially in such form with
such changes therefrom, if any, as may be approved by
the Majority Banks and the Borrower. The captions in
this Agreement are for convenience of reference only
and shall not define or limit the provisions hereof.
This Agreement or any amendment may be executed in
separate counterparts, each of which when so executed
and delivered shall be an original, but all of which
together shall constitute one instrument. In proving
this Agreement, it shall not be necessary to produce
or account for more than one such counterpart.
Section 20. ENTIRE AGREEMENT, ETC. This Agreement and
any other documents executed in connection herewith or
therewith express the entire understanding of the
parties with respect to the transactions contemplated
hereby. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated
orally or in writing, except as provided in Section 21 hereof.
Section 21. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except
as otherwise expressly provided in this Section 21, any action
to be taken or any consent or approval required or
permitted by this Agreement or any other Loan Document
to be given by the Banks may be given, and any term of
this Agreement or any other Loan Document may be
amended and the performance or observance by the
Borrower or any other person of any of the terms
thereof and any Default or Event of Default (as
defined in any of the above-referenced documents or
instruments) may be waived (either generally or in a
particular instance and either retroactively or
prospectively) with, but only with, the written
consent of the Majority Banks; provided, however, that
no such consent or amendment which affects the rights,
duties or liabilities of the Administrative Agent
shall be effective without the written consent of the
Administrative Agent and no such consent or amendment
which affects the rights, duties or liabilities of the
Competitive Bid Agent shall be effective without the
written consent of the Competitive Bid Agent.
Notwithstanding the foregoing, no amendment, waiver or
consent shall do any of the following: (a) increase
the principal amount of any Loans (or subject any Bank
to any additional obligations), or reduce the
principal of or interest on any Loan or any fees
payable hereunder, or extend or postpone any date
fixed for any payment in respect of principal of, or
interest on, the Loans, or any fees payable hereunder,
without the prior written consent of each Bank
affected thereby, or (b) change the definition of
"Majority Banks" or aggregate Revolving Credit
Commitment Percentage or number of Banks which shall
be required for the Banks or any of them to take any
action under the Loan Documents, or amend Section 16 or this
Section 21, or change the Revolving Credit Commitment
Percentage of any Bank (except pursuant to Section 15 hereof)
or extend or postpone any date fixed for the reduction
of the Revolving Credit Commitment Amount, without the
prior written consent of all of the Banks. No waiver
shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of
the Banks in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto.
No notice to or demand upon the Borrower shall entitle
the Borrower to other or further notice or demand in
similar or other circumstances.
Signed and delivered, as of the date set forth at
the beginning of this Agreement by the Borrower, the
Banks, the Administrative Agent and the Competitive
Bid Agent.
ILLINOIS CENTRAL RAILROAD COMPANY
By:
Title: Vice President and
Chief Financial Officer
THE FIRST NATIONAL BANK OF BOSTON,
as Administrative Agent and
Competitive Bid Agent
By:
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Co-Agent
By:
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON
By:
Title: Vice President
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By:
Title: Vice President
Address: Bank of America National
Trust and Savings Association
Atlanta Corporate Office
1230 Peachtree Street N.E.
- - Suite 3600
Atlanta, Georgia 30303
Attention: Dennis M.
Kaiser, Vice President
Glenn F. Edwards, Vice President
THE CHASE MANHATTAN BANK, N.A.
By:
Title: Vice President
Address: The Chase Manhattan Bank N.A.
One Chase Manhattan Plaza - 5th Floor
New York, New York 10081
Attention: Francis M. Cox, III,
Vice President
THE TORONTO DOMINION BANK, CAYMAN
ISLANDS BRANCH
By:
Title:
Address: The Toronto Dominion Bank
Transportation Division
31 West 52nd Street - 22nd Floor
New York, New York 10019
Attention: William
Hoffman, Director
Richard E. Donner, Director
<PAGE>
CONTINENTAL BANK N.A.
By:
Title: Vice President
Address: Continental Bank N.A.
231 South LaSalle Street -
4th Floor
Chicago, Illinois 60697
Attention: Timothy J. Pepowski,
Vice President
DEPOSIT GUARANTY NATIONAL BANK
By:
Title: Senior Vice President
Address: Deposit Guaranty
National Bank
One Deposit Guaranty Plaza
11th Floor
Jackson, Mississippi 39205
Attention: Anthony Thomas,
Senior Vice President
KLEINWORT BENSON LIMITED
By:
Title: Senior Vice President
Address: Kleinwort Benson Limited
Three First National Plaza
- - Suite 1390
Chicago, Illinois 60602
Attention: Kenneth Hamilton,
Senior Vice President
<PAGE>
THE MITSUBISHI TRUST AND BANKING CORPORATION
By:
Title: Deputy General Manager
Address: The Mitsubishi Trust and
Banking Corporation
801 South Figueroa
Suite 2400
Los Angeles, California 90017
Attention: Rex A. Olson,
Assistant Vice President,
Finance and Investment
EXHIBIT 4.9
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This AMENDED AND RESTATED REVOLVING CREDIT
AGREEMENT, dated as of April 2, 1993 and amended and
restated as of October 27, 1993, among Illinois
Central Railroad Company, a Delaware corporation (the
"Borrower"), The First National Bank of Boston
("FNBB"), Bank of America National Trust and
Savings Association ("BofA"), The Chase Manhattan
Bank, N.A., The Toronto Dominion Bank, Cayman Islands
Branch, Continental Bank N.A., Deposit Guaranty
National Bank, Kleinwort Benson Limited, The
Mitsubishi Trust and Banking Corporation, and such
other lenders as may become parties to this Agreement
from time to time in accordance with the provisions
hereof (each, a "Bank", and collectively, the
"Banks"), The First National Bank of Boston as
administrative agent for the Banks (the
"Administrative Agent") and as competitive bid agent
for the Banks (the "Competitive Bid Agent") and Bank
of America National Trust and Savings Association as
co-agent for the Banks (the "Co-Agent").
WHEREAS, pursuant to that certain Revolving Credit
Agreement, dated as of April 2, 1993 (the "Original
Credit Agreement"), the Banks made a revolving
credit facility available to the Borrower for the
purposes described therein; and
WHEREAS, the Borrower has requested and the Banks
have agreed, subject to the terms and conditions
contained herein, to amend and restate the Original
Credit Agreement to add a competitive bid revolving
credit facility to the existing revolving credit
facility and to make certain other changes to the
Original Credit Agreement;
NOW, THEREFORE, the Borrower, the Banks, the
Administrative Agent, the Competitive Bid Agent and
the Co-Agent hereby agree as follows.
Section 1. DEFINITIONS. (a) The following terms shall
have the meanings assigned to them below in this Section 1 or
in the provisions of this Agreement referred to below:
"Administrative Agent" - see preamble.
"Affected Bank" - see Section 3.1(d).
"Affiliate" - in relation to any particular
Person, any other Person which, directly or
indirectly, controls, or is controlled by, or is under
common control with, such Person. For purposes of
this definition, "control" (including, with
correlative meanings, the terms "controlled by" and
"under common control with") shall mean the power,
directly or indirectly, to (a) vote 10% or more of the
outstanding stock having ordinary voting power for the
election of directors of such Person, or (b) direct
the management or policies of such Person, whether by
contract or otherwise.
"Agent's Fee" - see Section 3.8.
"Agent's Fee Letter" - see Section 3.8.
"Agents" - The Administrative Agent and the
Competitive Bid Agent.
"Agreement" - this Amended and Restated Revolving
Credit Agreement, with all Exhibits and Schedules
hereto, as originally executed, or if this Amended and
Restated Revolving Credit Agreement is amended or
supplemented from time to time, as so amended or
supplemented.
"Amendment Fee" - See Section 3.10.
"Applicable Margin" - With respect to any period
commencing on an Interest Rate Adjustment Date and
ending on the day prior to the next succeeding
Interest Rate Adjustment Date, if the Rating (as
defined below) in effect on the first day of such
period is equal to:
(a) "BB" or less or "Ba2" or less (as applicable)
or if no Rating is available, then during such period
the Applicable Margin shall be, with respect to (i)
Base Rate Loans, .40% per annum, (ii) Eurodollar
Standby Loans, 1.00% per annum, (iii) C/D Rate Loans,
1.125% per annum, and (iv) the Facility Fee, .50% per
annum;
(b) "BB+" or "Ba1" (as applicable), then during
such period the Applicable Margin shall be, with
respect to (i) Base Rate Loans, 0% per annum, (ii)
Eurodollar Standby Loans, .875% per annum, (iii) C/D
Rate Loans, 1.0% per annum, and (iv) the Facility Fee,
.375% per annum;
(c) "BBB-" or "Baa3" (as applicable), then during
such period the Applicable Margin shall be, with
respect to (i) Base Rate Loans, 0% per annum, (ii)
Eurodollar Standby Loans, .50% per annum, (iii) C/D
Rate Loans, .625% per annum, and (iv) the Facility
Fee, .375% per annum;
(d) "BBB" or "Baa2" (as applicable), then during
such period the Applicable Margin shall be, with
respect to (i) Base Rate Loans, 0% per annum, (ii)
Eurodollar Standby Loans, .50% per annum, (iii) C/D
Rate Loans, .625% per annum, and (iv) the Facility
Fee, .30% per annum;
(e) "BBB+" or "Baa1" (as applicable), then during
such period the Applicable Margin shall be, with
respect to (i) Base Rate Loans, 0% per annum, (ii)
Eurodollar Standby Loans, .375% per annum, (iii) C/D
Rate Loans, .50% per annum, and (iv) the Facility Fee,
.25% per annum; or
(f) "A-" or "A3" (as applicable), then during
such period the Applicable Margin shall be, with
respect to (i) Base Rate Loans, 0% per annum, (ii)
Eurodollar Standby Loans, .375% per annum,, (iii) C/D
Rate Loans, .50% per annum, and (iv) the Facility Fee,
.25% per annum; or
(g) "A" or higher or "A2" or higher (as
applicable), then during such period the Applicable
Margin shall be, with respect to (i) Base Rate Loans,
0% per annum, (ii) Eurodollar Standby Loans, 0.25% per
annum, (iii) C/D Rate Loans, 0.375% per annum, and
(iv) the Facility Fee, 0.25% per annum.
For purposes of the foregoing, the "Rating" in
effect from time to time shall be the lower of the
rating by Moody's or by S&P of the Rated Debt,
provided that (i) if either Moody's or S&P shall not
have in effect a Rating for the Rated Debt (other than
because such rating agency shall no longer be in the
business of rating corporate debt obligations), the
Rating shall be deemed to be the Rating of the other
rating agency in respect of Rated Debt, (ii) if both
Moody's and S&P shall not have in effect a Rating for
the Rated Debt (other than because such rating
agencies shall no longer be in the business of rating
corporate debt obligations or because no Rated Debt
shall be outstanding), then no Rating shall be deemed
to be available for purposes of determining the
Applicable Margin, (iii) if the rating system of
Moody's or S&P shall change, or if either such rating
agency shall cease to be in the business of rating
corporate debt obligations, or if no Rated Debt shall
be outstanding, then the Borrower and the Banks shall
negotiate in good faith to amend the references to
specific ratings in this definition of Applicable
Margin to reflect such changed rating system, the
non-availability of ratings from such rating agency,
or the repayment of all Rated Debt outstanding, as
applicable, and (iv) to determine the lower of the
rating of Rated Debt by Moody's and by S&P, the S&P
ratings set forth in the chart below shall be deemed
to be equivalent to the Moody's rating set forth
opposite such S&P rating:
S&P Moody's
A A2
A- A3
BBB+ Baa1
BBB Baa2
BBB- Baa3
BB+ Ba1
BB Ba2
"Assessment Rate" - for any Interest Period, the
net annual assessment rate (rounded upwards, if
necessary, to the next highest 1/100th of 1%) charged
by the Federal Deposit Insurance Corporation (or any
successor) for such Corporation's (or such
successor's) insuring of time deposits made in dollars
at offices of FNBB in the United States of America
during the most recent period for which such rate has
been determined prior to the commencement of such
Interest Period.
"Assignment and Acceptance" - see Section 15.
"Available Proceeds" - see Section 8.14.
"Balance Sheet Date" - December 31, 1992.
"Bank List" - see Section 15(c).
"Bank(s)" - see preamble.
"Banks' Special Counsel" - Bingham, Dana & Gould
of Boston, Massachusetts, or such other counsel as may
be approved by the Majority Banks.
"Base Rate" - for any day, a fluctuating rate per
annum (rounded upwards, if necessary, to the next 1/8
of 1%) equal to the greater of (a) the rate of
interest announced from time to time by the
Administrative Agent at its Head Office as its "base
rate", as in effect on such day, or (b) the sum of the
Federal Funds Effective Rate in effect on such day
plus 1/2%. In the event that at any time the rate
determined as provided in clause (b) above exceeds the
rate determined as provided in clause (a) above, on
each such occasion, the rate set forth in clause (b)
shall apply only to Base Rate Loans borrowed hereunder
no more than five Business Days prior to the date such
rate set forth in clause (b) exceeded the rate set
forth in clause (a) above. For purposes of this
Agreement, any change in the Base Rate due to a change
in the Administrative Agent's "base rate" or the
Federal Funds Effective Rate shall be effective on the
effective date of such change in the Administrative
Agent's "base rate" or the Federal Funds Effective
Rate, as applicable. If the Administrative Agent
shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any
reason, including, without limitation, the inability
or failure of the Administrative Agent to obtain
sufficient bids or publications in accordance with the
terms hereof, the Base Rate shall be the
Administrative Agent's "base rate" as in effect at the
applicable time until the circumstances giving rise to
such inability no longer exist.
"Base Rate Borrowing" - a Borrowing comprised of
Base Rate Loans.
"Base Rate Loan" - any Standby Loan bearing
interest at a rate determined by reference to the Base
Rate in accordance with the provisions of Section 2 hereof.
"BofA" - see preamble.
"Borrower" - see preamble.
"Borrowing" - a group of Loans of a single Type
made by the Banks (or, in the case of a Competitive
Borrowing, by the Bank or Banks whose Competitive Bids
have been accepted by the Borrower pursuant to Section 2.5
hereof) on a single date and as to which a single
Interest Period is in effect, or a borrowing hereunder
consisting of Letter(s) of Credit issued by the Letter
of Credit Bank.
"Borrowing Notice" - see Section 2.6.
"Business Day" - any day (other than a Saturday or
Sunday) on which commercial banks are open for the
conduct of normal banking business in each of Boston,
Massachusetts and New York, New York, provided that in
the case of any transactions related to Eurodollar
Loans, a Business Day also shall be a day on which
dealings in dollar deposits in the Eurodollar
interbank markets may be transacted.
"Cash Flow Recapture Amount" - see Section 8.13.
"C/D Rate" - for any applicable Interest Period,
the interest rate per annum determined by the
Administrative Agent pursuant to the following
formula:
C/D Rate = Domestic C/D Rate* + Assessment
1.00 - C/D Reserve Percentage Rate
*The components of the fraction to be rounded upwards,
if necessary, to the next highest 1/8th of 1%.
The Administrative Agent shall give the Borrower and the Banks
prompt notice (but in any event no later than one Business Day
prior to the date of commencement of such Interest Period) of
the C/D Rate determined for such Interest Period, and absent
manifest error, each determination of the C/D Rate by the
Administrative Agent shall be conclusive and binding for all
purposes hereof.
"C/D Rate Borrowing" - a Borrowing comprised of
C/D Rate Loans.
"C/D Rate Loans" - any Standby Loans bearing
interest at a rate determined by reference to the C/D
Rate in accordance with the provisions of Section 2 hereof.
"C/D Reserve Percentage" - for any day during an
Interest Period with respect to a C/D Rate Loan, 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,
including, without limitation, any marginal,
emergency, supplemental, special or other reserves,
for a member bank of the Federal Reserve System in New
York City with deposits exceeding $1 billion in
respect of new non-personal time deposits in dollars
in New York City having a maturity comparable to the
Interest Period for such C/D Rate Loan and in an
amount of $100,000 or more. The C/D Rate shall be
adjusted automatically on and as of the effective date
of any change in the C/D Reserve Percentage.
"CERCLA" - see Section 5.18(a)(i).
"Charter" - with respect to any Person other than
an individual, such Person's articles of organization,
certificate of incorporation, statute, constitution,
joint venture or partnership agreement or other
charter documents, in each case as amended and in
effect from time to time.
"Co-Agent" - see preamble.
"Code" - the Internal Revenue Code of 1986, as
amended and in effect from time to time.
"Commitment" - the agreement of each Bank, subject
to the terms and conditions of this Agreement, to make
Standby Loans to the Borrower hereunder and to
participate in Letters of Credit.
"Competitive Bid" - an offer by a Bank to make a
Competitive Loan pursuant to Section 2.5 hereof.
"Competitive Bid Accept/Reject Letter" - a
notification made by the Borrower to the Competitive
Bid Agent pursuant to Section 2.5(d) hereof in the form of
Exhibit B-4 attached hereto.
"Competitive Bid Agent" - see preamble.
"Competitive Bid Rate" - as to any Competitive Bid
made by a Bank pursuant to Section 2.5 hereof, (i) in the case
of a Eurodollar Loan, the Margin, and (ii) in the case
of a Fixed Rate Loan, the fixed rate of interest
offered by the Bank making such Competitive Bid.
"Competitive Bid Request" - a request made
pursuant to Section 2.5(a) hereof in the form of Exhibit B-1
attached hereto.
"Competitive Borrowing" - a borrowing consisting
of a Competitive Loan or concurrent Competitive Loans
from the Bank or Banks whose Competitive Bids for such
Borrowing have been accepted by the Borrower under the
bidding procedure described in Section 2.5 hereof.
"Competitive Loan" - a loan from a Bank to the
Borrower pursuant to the bidding procedure described
in Section 2.5 hereof. Each Competitive Loan shall be a
Eurodollar Competitive Loan or a Fixed Rate Loan.
"Compliance Certificate" - see Section 8.3(f).
"Consolidated" or "consolidated" - with reference
to any term used in this Agreement, the relevant
figures for a Person and its Subsidiaries on a
consolidated basis determined in accordance with
Generally Accepted Accounting Principles.
"Consolidated Capital Expenditures" - for any
fiscal period, (1) the aggregate expenditures of the
Borrower and its Subsidiaries during such fiscal
period for the acquisition (including acquisition by
capitalized lease) or improvement of capital assets,
as determined in accordance with Generally Accepted
Accounting Principles, less (2) any portion of the
acquisition or improvement cost of any such capital
assets satisfied by trade-in of capital assets
or insurance proceeds (but only to the extent that
such portion to be offset was included in such
acquisition or improvement cost), as determined in
accordance with Generally Accepted Accounting
Principles.
"Consolidated Cash Flow" - for any fiscal quarter
of the Borrower, an amount equal to the result
(without duplication) of (a) Consolidated EBIT for
such period, plus (b) the aggregate amount of
depreciation and amortization charges made in
calculating Consolidated Net Income for such period,
plus (c) Consolidated Rental Expense for such
period, plus (d) the aggregate amount of all
extraordinary gains during such period, plus (e) the
aggregate amount of the non-cash portion of all
charges as extraordinary and/or nonrecurring items of
expense made in calculating Consolidated Net Income
for such period, plus (f) the aggregate amount of all
cash receipts during such period on account of
extraordinary and/or nonrecurring items of income
booked during prior periods, plus (g) the net cash
proceeds resulting from the sale of Relieved Track
Materials, minus (h) federal and state income taxes
paid in cash by the Borrower and its Subsidiaries
during such period, minus (i) the aggregate amount of
the non-cash portion of all income credited as
extraordinary and/or nonrecurring items in calculating
Consolidated Net Income for such period, minus (j) the
aggregate amount of all cash payments made during such
period on account of charges as extraordinary and/or
nonrecurring items of expense made during prior
periods.
"Consolidated EBIT" - for any fiscal period of
the Borrower, the sum of (a) Consolidated Net Income
of the Borrower and its Subsidiaries for such period
before provisions for federal and state income taxes,
minus (b) the aggregate amount of all extraordinary
gains included in the calculation of Consolidated Net
Income of the Borrower and its Subsidiaries for such
period, plus (c) Consolidated Interest Charges of the
Borrower and its Subsidiaries for such period, all as
determined in accordance with Generally Accepted
Accounting Principles. For purposes only of
calculating Consolidated EBIT under Section 9.12 and
9.13 hereof, in the determination of Consolidated Net
Income any extraordinary loss (net of taxes)
calculated in accordance with Generally Accepted
Accounting Principles occurring as a result of the
premium and charges incurred in connection with the
repurchase of Subordinated Debentures shall be
disregarded.
"Consolidated Financial Obligations" - for any
fiscal quarter of the Borrower, an amount equal to the
sum (without duplication) of (a)(i) all scheduled
payments of principal on consolidated Indebtedness,
which are due and payable at any time during such
period; provided that maturities in respect of
commercial paper or loans under any revolving credit
facility (other than upon a termination of (x) the
program pursuant to which such commercial paper was
issued or (y) such revolving credit facility, unless
such maturities are refinanced within 30 days with
borrowings under a revolving credit facility or with
commercial paper proceeds) shall not be included as
Consolidated Financial Obligations, plus (ii) the
aggregate amount of loans under any revolving credit
facility required to be prepaid during such period in
connection with a mandatory reduction of lenders'
commitments to make loans under such revolving credit
facility, less (b) any portion of such payments of
principal which has been mandatorily prepaid pursuant
to Section 8.13 or 8.14 hereof or refinanced through
sources other than proceeds of Loans during such period
in accordance with the provisions of Section 9.1(i) hereof,
plus (c) Consolidated Rental Expense for such period, plus
(d) Consolidated Interest Charges for such period, all
as determined in accordance with Generally Accepted
Accounting Principles. Demand obligations shall be
deemed to be due and payable during any and all fiscal
periods during which said obligations are outstanding.
"Consolidated Funded Debt" - as at any date of
determination, an amount equal to the sum (without
duplication) of (a) all consolidated Indebtedness of
the Borrower and its Subsidiaries, plus
(b) Consolidated Rental Obligations, in each case as
such amounts are outstanding or would be calculated on
the date as of which Consolidated Funded Debt is to be
determined and determined in accordance with Generally
Accepted Accounting Principles.
"Consolidated Interest Charges" - for any fiscal
period, the consolidated expenses of the Borrower and
its Subsidiaries paid or accrued for such period for
interest on Indebtedness (including the current
portion thereof) which are deducted in the calculation
of Consolidated Net Income for such period, net of
consolidated interest income, if any, all as
determined in accordance with Generally Accepted
Accounting Principles.
"Consolidated Net Income" - the consolidated net
income of the Borrower and its Subsidiaries for any
period as determined in accordance with Generally
Accepted Accounting Principles.
"Consolidated Rental Expense" - for any fiscal
period, the sum of all consolidated rental expense of
the Borrower and its Subsidiaries during such period
for the lease of real or personal property under lease
agreements that do not constitute capitalized leases
that were deducted from the calculation of
Consolidated Net Income for such period, all as
determined in accordance with Generally Accepted
Accounting Principles.
"Consolidated Rental Obligations" - with respect
to the Borrower and its Subsidiaries, an amount equal
to the sum (without duplication) of (a) the net
present value (calculated at a discount rate of 10%)
of the minimum future consolidated rental payments due
over the term of all of such Persons' operating leases
of real or personal property which extend for a term
of twelve or more months and may not be terminated
prior to the stated maturity thereof, plus (b) the net
present value (calculated at a discount rate of 10%)
of the minimum cost to terminate (including rental
payments until termination thereof) any such leases
which may be terminated.
"Consolidated Tangible Net Worth" - with respect
to the Borrower and its Subsidiaries, the result of
(a) the capital accounts (including common stock,
preferred stock and other paid in capital, but
excluding treasury stock) of the Borrower and its
Subsidiaries on a consolidated basis, plus (b) the
earned surplus and capital surplus of the Borrower and
its Subsidiaries, in each case as reflected in the
Borrower's consolidated books of account as of the
date Consolidated Tangible Net Worth is to be
determined, minus (c) the net book value of all assets
of the Borrower and its Subsidiaries which would be
treated as intangibles under Generally Accepted
Accounting Principles, including, without limitation,
such items as goodwill, trademarks, trade names,
service marks, brand names, copyrights, patents and
licenses, and rights with respect to the foregoing,
minus (d) all amounts representing write-ups in the
consolidated book value of any assets of the Borrower
or its Subsidiaries resulting from a revaluation
thereof subsequent to the Original Closing Date, in
each case as determined in accordance with Generally
Accepted Accounting Principles.
"Consolidated Total Assets" - all assets of the
Borrower and its Subsidiaries determined on a
consolidated basis in accordance with Generally
Accepted Accounting Principles.
"Convert", "conversion" and "converted" -
conversion of any Loan into a Loan of another Type
pursuant to Section 2.8 hereof.
"Conversion Notice" - see Section 2.8.
"Debenture Indenture" - the Indenture, dated as of
September 15, 1989, between the Borrower and United
States Trust Company of New York, as Trustee, pursuant
to which the Borrower issued the Subordinated
Debentures, in the form thereof previously delivered
to the Administrative Agent.
"Debt Service Coverage Ratio" - see Section 9.13.
"Default(s)" - any event which with notice or
lapse of time or notice and lapse of time will become
an Event of Default.
"Distribution" - the payment by any Person of any
dividends, distributions or other payments to its
shareholders as such, other than distributions or
allocations of common stock of such Person; the
declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of
any Person, other than dividends payable solely in
shares of common stock of such Person; or the purchase
or other retirement of any shares of any class of
capital stock of any Person, directly or indirectly,
through a Subsidiary or otherwise, other than solely
through the issuance of the capital stock of such
Person; the return of capital by any Person to its
shareholders as such; or any other distribution on or
in respect of any shares of any class of capital stock
of any Person.
"Distribution Amount" - see Section 9.4(a).
"Domestic C/D Rate" - with respect to any C/D Rate
Loan for any Interest Period, the rate per annum
determined by the Administrative Agent to be the
arithmetic average (rounded upwards, if necessary, to
the next highest 1/8th of 1%) of the prevailing rates
per annum bid at 10:00 a.m. (Boston time) (or as soon
thereafter as practicable) on the first day of any
Interest Period by two or more New York certificate of
deposit dealers of recognized standing for the
purchase at face value from each Reference Bank of its
certificates of deposit in an amount comparable to the
C/D Rate Loan to be made or converted by the Banks to
which such Interest Period applies and having a
maturity comparable to such Interest Period.
"Effective Date" - See Section 6.
"Eligible Assignee" - any bank, insurance company
or other financial institution that the Administrative
Agent and the Borrower may approve, provided that
neither the Borrower's approval nor the Administrative
Agent's approval shall be unreasonably withheld.
"Employee Benefit Plan" - any employee benefit
plan within the meaning of Section 3(3) of ERISA maintained or
contributed to by the Borrower or any ERISA Affiliate,
other than a Multiemployer Plan.
"Environmental Laws" - see Section 5.18(a)(i).
"ERISA" - the Employee Retirement Income Security
Act of 1974, any successor statute of similar import,
and the rules and regulations thereunder, as amended
from time to time.
"ERISA Affiliate" - any Person which is treated as
a single employer with the Borrower under Section 414 of
the Code.
"ERISA Reportable Event" - a reportable event with
respect to a Guaranteed Pension Plan within the
meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of
notice has not been waived.
"Eurodollar Borrowing" - a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Competitive Borrowing" - a Competitive
Borrowing comprised of Eurodollar Competitive Loans.
"Eurodollar Competitive Loan" - any Competitive
Loan bearing interest at a rate determined by
reference to the Eurodollar Rate in accordance with
the provisions of Section 2.5 hereof.
"Eurodollar Loan" - any Eurodollar Competitive
Loan or Eurodollar Standby Loan.
"Eurodollar Offered Rate" - for any applicable
Interest Period, the rate per annum determined by the
Administrative Agent to be the arithmetic average
(rounded upwards, if necessary to the next highest
1/8th of 1%) of the respective rates per annum at
which deposits of dollars are offered to each
Reference Bank by prime banks in the London interbank
market at or about 10:00 a.m. local time in such
interbank market, two Business Days prior to the first
day of such Interest Period for a period equal to the
duration of such Interest Period in an amount
substantially equal to the Eurodollar Loan to be
loaned by one or more Banks (in the case of a
Eurodollar Competitive Loan) or to be loaned or
converted by the Banks (in the case of a Eurodollar
Standby Loan).
"Eurodollar Rate" - for any applicable Interest
Period, the interest rate per annum determined by the
Administrative Agent pursuant to the following
formula:
Eurodollar Rate = Eurodollar Offered Rate*
1.00 - Eurodollar Reserve Percentage
*The components of the fraction to be rounded upwards, if
necessary, to the next highest 1/8th of 1%.
The Administrative Agent shall give the Borrower and the Banks
(in the case of a Eurodollar Standby Loan) or the applicable
Banks (in the case of a Eurodollar Competitive Loan) prompt
notice (but in any event no later than one Business Day prior to
the date of commencement of such Interest Period) of the
Eurodollar Rate determined for such Interest Period, and absent
manifest error, each determination of the Eurodollar Rate by the
Administrative Agent shall be conclusive and binding for all
purposes hereof.
"Eurodollar Reserve Percentage" - for any day
during an Interest Period with respect to a Eurodollar
Loan, that percentage (expressed as a decimal) which
is in effect on such day under Regulation D of the
Board of Governors of the Federal Reserve System (or
any successor or similar regulation relating to
reserve requirements) for determining the maximum
reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits
exceeding $1 billion in respect of "Eurocurrency
Liabilities" (as such term is used in Regulation D)
outstanding from time to time, or in respect of any
other category of liabilities which might be incurred
by such member bank in any Eurodollar interbank market
to fund Eurodollar Loans. The Eurodollar Rate shall
be adjusted automatically on and as of the effective
date of any change in the Eurodollar Reserve
Percentage.
"Eurodollar Standby Borrowing" - a Standby
Borrowing comprised of Eurodollar Standby Loans.
"Eurodollar Standby Loan" - any Standby Loan
bearing interest at a rate determined by reference to
the Eurodollar Rate in accordance with the provisions
of Section 2 hereof.
"Event(s) of Default" - see Section 10.
"Excess Cash Flow" - for any calendar year, that
amount, if any, by which Consolidated Cash Flow for
such year exceeded the result of (a) Consolidated
Financial Obligations for such year, plus (b) the
aggregate amount of all optional prepayments of the
Senior Notes made during such year, plus (c) to the
extent not included in the calculation of Consolidated
Financial Obligations, the aggregate amount of Loans
prepaid pursuant to Section 2.3(b) hereof in connection with
any reduction of the Revolving Credit Commitment
Amount pursuant to Section 2.1(b) hereof, plus (d)
Consolidated Capital Expenditures made during such
year, minus (e) the aggregate amount of Consolidated
Funded Debt incurred in connection with the
acquisition of the capital assets to which the
foregoing Consolidated Capital Expenditures relate,
plus (f) cash payments made during such year for
back pay or workforce reductions to the extent not
already included in Consolidated Cash Flow for such
year, plus (g) the net cash proceeds from the sale of
Relieved Track Materials.
"Facility A Credit Agreement" - the Revolving
Credit Agreement, dated as of the date hereof, among
the Borrower, the banks named therein, the banks that
may become parties thereto from time to time, The
First National Bank of Boston, as administrative agent
and competitive bid agent for such banks, and BofA as
co-agent thereunder, as such agreement may be amended,
modified, extended, or restated and in effect from to
time.
"Facility A Notes" - Collectively, the promissory
notes issued by the Borrower pursuant to the Facility
A Credit Agreement.
"Facility Fee" - see Section 3.7.
"Federal Funds Effective Rate" - for any day, a
fluctuating 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, as published
for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the
average of the quotations for such day on such
transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing
selected by it.
"Fixed Rate Borrowing" - a Borrowing comprised of
Fixed Rate Loans.
"Fixed Rate Loan" - any Competitive Loan bearing
interest at a fixed percentage rate per annum
(expressed in the form of a decimal to no more than
four decimal places) specified by the Bank making such
Loan in its Competitive Bid.
"FNBB" - see preamble.
"Generally Accepted Accounting Principles" -
generally accepted accounting principles which are (a)
consistent with the principles promulgated or adopted
by the Financial Accounting Standards Board and its
predecessors, and (b) such that a certified public
accountant would, insofar as the use of accounting
principles is pertinent, be in a position to deliver
an unqualified opinion as to financial statements in
which such principles have been properly applied,
provided that if any changes in generally accepted
accounting principles with which the Borrower's
independent certified public accountants concur result
in a change in the method of calculation of any of the
financial covenants, standards or terms contained in
this Agreement, the Borrower and the Banks agree to
amend such provisions to reflect such changes in
generally accepted accounting principles so that the
criteria for evaluating the consolidated financial
condition of the Borrower and its Subsidiaries shall
be the same after such changes as if such changes had
not been made.
"Guaranteed Pension Plan" - any employee pension
benefit plan within the meaning of Section 3(2) of ERISA
maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed
on termination in full or in part by the PBGC pursuant
to Title IV of ERISA, other than a Multiemployer Plan.
"Hazardous Substances" - see Section 5.18(a)(ii).
"HAZMAT" - see Section 5.18(a)(i).
"Head Office" - the head office of the
Administrative Agent, which is presently located at
100 Federal Street, Boston, Massachusetts 02110.
"Indebtedness" - (a) all debt and similar monetary
obligations, whether direct or indirect (including,
without limitation, obligations under capitalized
leases); (b) all Indebtedness of others secured by any
mortgage, pledge, security interest, lien, charge, or
other encumbrance existing on property owned or
acquired subject thereto, whether or not the
Indebtedness secured thereby shall have been assumed;
(c) all guarantees, endorsements and other contingent
obligations, whether direct or indirect, in respect of
Indebtedness of others, including any obligation to
supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase
Indebtedness, or to assure the owner of Indebtedness
against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the
debtor to make payment of the Indebtedness held by
such owner or otherwise; and (d) the obligations to
reimburse the issuer in respect of any letters of
credit.
"Indemnified Party" - see Section 16.
"Independent Accountant(s)" - a firm of nationally
recognized independent public accountants selected on
behalf of the Borrower by its Board of Directors,
which is "independent" as that term is defined in Rule
2-01 of Regulation S-X promulgated by the Securities
and Exchange Commission.
"Initial 1989 Closing Date" - September 26, 1989.
"Interest Payment Date" - with respect to any
Loan, the last day of the Interest Period applicable
thereto and, in the case of a Eurodollar Loan with an
Interest Period of more than three months duration or
a Fixed Rate Loan or a C/D Rate Loan with an Interest
Period of more than 90 days duration, each day that
would have been an Interest Payment Date for such Loan
had successive Interest Periods of three months
duration or 90 days duration, as the case may be, been
applicable to such Loan and, in addition, the date of
any conversion of a Standby Loan to a Standby Loan of
a different Type.
"Interest Period" - (a) as to any Eurodollar
Standby Borrowing, the period commencing on the date
of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to
such Borrowing, as the case may be, and ending on the
numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the
calendar month that is 1, 2, 3 or 6 months thereafter,
as the Borrower may elect, (b) as to any Eurodollar
Competitive Borrowing, the period commencing on the
date of such Borrowing and ending on the numerically
corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar
month that is between 1 and 9 months (inclusive)
thereafter, as the Borrower may elect and as specified
in the Competitive Bids in which the offer to make the
Eurodollar Competitive Loans comprising such Borrowing
were extended, (c) as to any C/D Rate Borrowing, a
period of 30, 60, 90 or 180 days duration, as the
Borrower may elect, commencing on the date of such
Borrowing or on the last day of the immediately
preceding Interest Period applicable to such
Borrowing, as the case may be, (d) as to any Base Rate
Borrowing, the period commencing on the date of such
Borrowing or on the last day of the immediately
preceding Interest Period applicable to such
Borrowing, as the case may be, and ending on the next
succeeding first Business Day of January, April, July
or October or, if earlier, on the Revolving Credit
Commitment Termination Date or the date of prepayment
or conversion of such Borrowing and (e) as to any
Fixed Rate Borrowing, the period commencing on the
date of such Borrowing and ending on the date
specified in the Competitive Bids in which the offer
to make the Fixed Rate Loans comprising such Borrowing
were extended, which shall not be earlier than 7 days
after the date of such Borrowing or later than 180
days after the date of such Borrowing; provided,
however, that if any Interest Period would end on a
day other than a Business Day, such Interest Period
shall be extended to the next succeeding Business Day
or, in the case of Eurodollar Loans only, adjusted in
accordance with the then prevailing practice in the
London interbank market. Notwithstanding the
provisions of clauses (a) and (c) above, with respect
to one Eurodollar Standby Loan or one C/D Rate Loan
during each calendar quarter, the Interest Period with
respect thereto may, at the Borrower's request made in
accordance with the terms hereof, end on any date
which is not (A) with respect to such Eurodollar
Standby Loan, the first, second, third or sixth
monthly anniversary of the date on which such Interest
Period began or (B) with respect to such C/D Rate
Loan, 30, 60, 90 or 180 days after the date on which
such Interest Period began, so long as such date
occurs less than three months or 90 days, as
applicable, after the date on which such Interest
Period began (subject, in the case of Eurodollar
Standby Loans, to the availability of deposits in
United States Dollars in the relevant amount for an
Interest Period of such length in the Eurodollar
interbank market and subject, in the case of C/D Rate
Loans, to the availability of deposits in United
States Dollars in the relevant amount for an Interest
Period of such length in the applicable certificate of
deposit market), provided, that, (i) the Borrower may
only request such an Interest Period once during any
calendar quarter and (ii) such Interest Period must
end on the last day of such calendar quarter (or if
such date is not a Business Day, the next succeeding
Business Day unless, with respect to Eurodollar
Standby Loans, such Business Day falls in another
calendar month, in which case such Interest Period
shall end on the next preceding Business Day).
Interest shall accrue from and including the first day
of any Interest Period to but excluding the last day
of such Interest Period.
"Interest Period Termination Date" - the last day
of any Interest Period, provided that if any Interest
Period Termination Date falls on a day which is not a
Business Day, such Interest Period shall be adjusted
as provided herein.
"Interest Rate Adjustment Date" - the Effective
Date and thereafter each date occurring 5 Business
Days after the Administrative Agent receives evidence
satisfactory to it that the Rating has changed.
"Intermodal Facilities" - those assets of the
Borrower and its Subsidiaries as are more particularly
described on Schedule 1.2 hereto.
"Investments" - the aggregate of all expenditures
made for the acquisition of stock (except redemptions
or repurchases by a corporation of any shares of its
capital stock) or Indebtedness of any Person, all
loans, advances, capital contributions to any Person
and all guarantees (or other commitments as described
under Indebtedness) of obligations of, any Person,
except accounts receivable arising in the ordinary
course of business. In determining the aggregate
amount of Investments outstanding at any particular
time, (a) the amount of any Investment represented by
a guarantee shall be taken at not less than the
aggregate amount of the obligations guaranteed and
still outstanding, (b) there shall be included as an
Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and
until such interest is paid, (c) there shall be
deducted in respect of each such Investment any amount
received as a return of capital, (d) there shall not
be deducted in respect of any Investment any amounts
received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued
interest included as provided in the foregoing clause
(b) may be deducted when paid, and (e) there shall not
be deducted from the aggregate amount of Investments
any decrease in the value thereof.
"Letter(s) of Credit" - any standby letter(s) of
credit issued from time to time pursuant to the terms
hereof by the Letter of Credit Bank for the account of
the Borrower.
"Letter of Credit Bank" - with respect to any
Letter of Credit issued hereunder, either FNBB or
BofA, as the Borrower may select, in such Person's
capacity as issuer of such Letter of Credit.
"Letter of Credit Fee" - see Section 3.9.
"Lien" - any mortgage, lien, charge, security
interest or other encumbrance of any kind upon any
property or assets of any character, or upon the
income or profits therefrom, any conditional sale or
other title retention agreement, device or arrangement
(including capitalized leases), or any sale, assignment,
pledge or other transfer for security of any accounts,
general intangibles or chattel paper, with or without
recourse.
"Loan" - any Competitive Loan or Standby Loan.
"Loan Documents" - collectively, this Agreement,
the Notes and the Agent's Fee Letter, in each case as
amended and in effect from time to time.
"Majority Banks" - as of any date, (i) those Banks
having Revolving Credit Commitments on such date (or,
if the Revolving Credit Commitments shall have terminated
pursuant to Section 10 hereof or otherwise, holding Loans
outstanding on such date and shares of the Maximum Drawing
Amount of Letters of Credit as of such date) representing
at least 66-2/3% of the Revolving Credit Commitment Amount
on such date, or, if the Revolving Credit Commitments shall
have terminated pursuant to Section 10 hereof or otherwise,
of the sum of (A) the aggregate principal amount of the
Loans outstanding on such date plus (B) the aggregate
Maximum Drawing Amount of all Letters of Credit as of such
date or, (ii) for purposes of acceleration of the Loans and
all other amounts owing under this Agreement and the other
Loan Documents pursuant to Section 10 hereof, those Banks
whose Loans outstanding on such date plus whose share of the
aggregate Maximum Drawing Amount of all Letters of Credit as
of such date add up to at least 66-2/3% of the sum of the
aggregate principal amount of Loans outstanding on such date
plus the aggregate Maximum Drawing Amount of all Letters of
Credit on such date.
"Margin" - as to any Eurodollar Competitive Loan, the
margin (expressed as a percentage rate per annum in the form
of a decimal to no more than four decimal places) to be added
to or subtracted from the Eurodollar Rate in order to determine
the interest rate applicable to such Loan, as specified in the
Competitive Bid relating to such Loan.
"Material Subsidiary" - each of Chicago Intermodal
Company, Waterloo Railway Company, and, from and after
the Effective Date, any other Subsidiary of the
Borrower (a) with total assets having a fair market
value, as at any date of determination, in excess of
$5,000,000, or (b) which is material to the business,
assets or financial condition of the Borrower and its
Subsidiaries, taken as a whole.
"Maximum Drawing Amount" - as at any date of
determination, with respect to any Letter of Credit,
the maximum amount which the beneficiary thereof may
draw under such Letter of Credit as at such date
pursuant to the terms of such Letter of Credit, plus
any amounts previously drawn thereunder and not yet
reimbursed by the Borrower, whether from the proceeds
of Loans or otherwise.
"Moody's" - Moody's Investors Service, Inc.
"Multiemployer Plan" - any multiemployer plan
within the meaning Section 3(37) of ERISA maintained or
contributed to by the Borrower or any ERISA Affiliate.
"non-Affected Bank(s)" - as at any date of
determination, those Banks which are not Affected
Banks.
"Nonessential Property" - Relieved Track
Materials, Intermodal Facilities and any other
property of the Borrower, which is not used or which
the Borrower reasonably believes will not be used, in
the current or planned operation of the Borrower's
rail lines.
"Note(s)" - see Section 2.2(a).
"1991 Note Purchase Agreement" - that certain Note
Purchase Agreement, dated as of July 23, 1991, as
amended by that certain Amendment and Consent, dated
as of April 1, 1993, among the Borrower, the Parent
and the purchasers of the 1991 Senior Notes, as in
effect from time to time.
"Obligations" - all indebtedness, payment
obligations and liabilities of the Borrower to the
Banks, whether existing on the date of this Agreement
or arising thereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured,
arising by contract, operation of law or otherwise,
arising or incurred under this Agreement, the Notes,
the Agent's Fee Letter, in respect of Loans made or
otherwise, or under other instruments at any time
evidencing any thereof.
"Officer's Certificate" - a certificate signed by
any one of the President, Treasurer or Chief Financial
Officer (or comparable officer) of the Person on whose
behalf the certificate is executed.
"Original Closing Date" - the Closing Date as
defined in the Original Credit Agreement.
"Original Credit Agreement" - see preamble.
"Parent" - Illinois Central Corporation, a
Delaware corporation which is the owner of all of the
issued and outstanding capital stock of the Borrower.
"PBGC" - the Pension Benefit Guaranty Corporation
created by Section 4002 of ERISA and any successor entity or
entities having similar responsibilities.
"Person" - any individual, corporation,
partnership, trust, unincorporated association, joint
stock company or other legal entity or organization,
and any government or agency or political subdivision
thereof.
"Rated Debt" - the 1993 Senior Notes.
"RCRA" - see Section5.18(a)(i).
"Reemployment Period" - see Section 3.2(a).
"Reference Bank(s)" - collectively, all of FNBB,
BofA and The Chase Manhattan Bank, N.A., and
individually, any of such Persons.
"Relieved Track Materials" - the Borrower's
surplus track materials resulting from the conversion
from double track to single track main line.
"Revolving Credit Commitment" - with respect to
each Bank, the commitment of such Bank hereunder as
set forth on Schedule 1.1 attached hereto, as such
Bank's Revolving Credit Commitment may be permanently
terminated or reduced from time to time pursuant to
the terms of this Agreement. The Revolving Credit
Commitments shall automatically terminate on the
Revolving Credit Commitment Termination Date.
"Revolving Credit Commitment Amount" - the
aggregate amount of Revolving Credit Commitments, as
in effect from time to time.
"Revolving Credit Commitment Percentage" - with
respect to each Bank, the percentage set forth
opposite its name on Schedule 1.1 attached hereto with
respect to Standby Loans and Letters of Credit (as
such percentage on such schedule is adjusted by the
Administrative Agent from time to time to reflect
assignments and reallocations made pursuant to Section 3.1(d),
3.5(c) and 15 hereof).
"Revolving Credit Commitment Termination Date" -
that date upon which the Revolving Credit Commitments
terminate, which shall be the earlier to occur of the
following dates: (a) December 31, 1996, or (b) such
other date on which the Revolving Credit Commitments
terminate or are terminated pursuant to the terms of
this Agreement.
"SARA" - see Section 5.18(a)(i).
"S&P" - Standard & Poors Corporation.
"Senior Debt Agreements" - collectively, the 1991
Note Purchase Agreement and the Senior Debt Indenture.
"Senior Debt Indenture" - The Indenture, dated as
of May 1, 1993, between the Borrower and FNBB, as
Trustee, together with all the exhibits and schedules
attached thereto, in the form thereof delivered to the
Administrative Agent prior to the Effective Date, as
in effect from time to time.
"Senior Notes" - collectively, the 1991 Senior
Notes and the 1993 Senior Notes.
"1991 Senior Notes" - the promissory notes in the
original aggregate principal amount of $160,000,000
issued by the Borrower pursuant to the 1991 Note
Purchase Agreement.
"1993 Senior Notes" - the promissory notes in the
aggregate principal amount of $100,000,000 issued by
the Borrower pursuant to the Senior Debt Indenture.
"Standby Borrowing" - a borrowing consisting of
simultaneous Standby Loans from each of the Banks.
"Standby Loans" - the revolving credit loans made
by the Banks to the Borrower pursuant to Section 2.1 hereof.
Each Standby Loan shall be a Eurodollar Standby Loan,
a C/D Rate Loan or a Base Rate Loan.
"Start Date" - see Section 9.4.
"Subordinated Debentures" - the Borrower's senior
subordinated debentures due 2001 in the original
aggregate principal amount of $145,000,000 issued by
the Borrower pursuant to the Debenture Indenture, in
the form thereof previously delivered to the
Administrative Agent.
"Subordinated Debt" - Indebtedness of the Borrower
in an aggregate principal amount not to exceed
$72,500,000 from and after the Effective Date
evidenced by the Subordinated Debentures.
"Subsidiary" - in relation to any particular
Person, any corporation, association or other business
entity, a majority (by number of votes) of the
outstanding voting stock of which is at the time owned
or controlled by such Person, or by one or more
Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person and which properly
would be included in such Person's consolidated
balance sheet.
"Total Capitalization" - as at any date of
determination, an amount equal to the sum of (a)
Consolidated Funded Debt plus (b) Consolidated
Tangible Net Worth, in each case determined in
accordance with Generally Accepted Accounting
Principles.
"Type" - when used in respect of any Loan or
Borrowing, shall refer to the Rate by reference to
which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof,
"Rate" shall include the Eurodollar Rate, the C/D
Rate, the Base Rate and the Fixed Rate.
(b) All terms of an accounting character not
specifically defined herein shall have the meanings
assigned thereto by Generally Accepted Accounting
Principles. All terms not specifically defined herein
which are defined in the Uniform Commercial Code as in
effect in the State of New York shall have the same
meanings herein as therein. Each reference herein to
a particular Person (including, without limitation,
the Administrative Agent and each Bank) shall include
a reference to such Person's successors and permitted
assigns. The words "herein", "hereof", "hereunder"
and words of like import shall refer to this Agreement
as a whole and not to any particular Section or
subdivision of this Agreement.
Section 2. THE LOANS AND LETTERS OF CREDIT.
Section 2.1. Commitments. (a) Subject to the terms
and conditions and relying upon the representations
and warranties herein set forth, each Bank agrees,
severally and not jointly, to make Standby Loans to
the Borrower, at any time and from time to time on and
after the date hereof and until the Revolving Credit
Commitment Termination Date, in an aggregate principal
amount at any time outstanding not to exceed such
Bank's Revolving Credit Commitment minus the amount by
which the Competitive Loans outstanding at such time
shall be deemed to have used such Revolving Credit
Commitment pursuant to Section 2.16 hereof, minus such Bank's
pro rata participation in Letters of Credit
outstanding, subject, however, to the conditions that
(i) at no time shall (A) the sum of (x) the
outstanding aggregate principal amount of all Standby
Loans made by all Banks plus (y) the outstanding
aggregate principal amount of all Competitive Loans
made by all Banks plus (z) the aggregate Maximum
Drawing Amount of all Letters of Credit outstanding
exceed (B) the Revolving Credit Commitment Amount and
(ii) at all times the outstanding aggregate principal
amount of all Standby Loans made by each Bank shall
equal such Bank's Revolving Credit Commitment
Percentage of the outstanding aggregate principal
amount of all Standby Loans made pursuant to Section 2.6
hereof. The Revolving Credit Commitment Amount may be
terminated or reduced from time to time pursuant to
this Section 2.1. Within the foregoing limits, the Borrower
may borrow, pay or prepay and reborrow hereunder, on
and after the Effective Date and prior to the
Revolving Credit Commitment Termination Date, subject
to the terms, conditions and limitations set forth
herein.
(b) The Borrower may at any time prior to the
Revolving Credit Commitment Termination Date, (i)
terminate the Revolving Credit Commitments in full by
giving three Business Days' prior written notice
thereof to the Administrative Agent, repaying in full
the Notes, and depositing with the Administrative
Agent in pledge, as provided in Section 10 hereof, cash or
other readily marketable securities acceptable to the
Administrative Agent in an amount equal to the
aggregate Maximum Drawing Amount of all Letters of
Credit then outstanding pursuant to pledge agreements
in form and substance satisfactory to the
Administrative Agent, as collateral security for the
Borrower's Obligations hereunder (which agreements
shall provide that upon the expiration, undrawn, of
each Letter of Credit, cash in an amount equal to the
undrawn portion of the Maximum Drawing Amount of such
Letter of Credit shall be returned to the Borrower),
or (ii) reduce the Revolving Credit Commitment Amount
in part by $5,000,000 or a larger integral multiple of
$1,000,000 by giving three Business Days' prior
written notice thereof to the Administrative Agent,
repaying the amount, if any, by which the sum of the
aggregate unpaid principal amount of the Loans plus
the aggregate Maximum Drawing Amount of all Letters of
Credit outstanding exceeds the then reduced Revolving
Credit Commitment Amount, together with all interest
accrued on principal amounts repaid, and, as
necessary, depositing with the Administrative Agent,
as described above, collateral in the amount, if any,
by which the aggregate Maximum Drawing Amount of all
Letters of Credit then outstanding exceeds the then
reduced Revolving Credit Commitment Amount, provided
that in no event shall the Revolving Credit Commitment
Amount be reduced to an amount less than $15,000,000
unless it is terminated pursuant to this Section 2.1(b) and,
provided further that no such reduction shall be
made which would reduce the Revolving Credit
Commitment Amount to an amount less than the aggregate
principal amount of the Competitive Loans outstanding.
The Administrative Agent shall promptly notify each
Bank of the contents of each notice concerning the
Revolving Credit Commitments. Upon the effective date
of any such reduction, the amount of each Bank's
Revolving Credit Commitment shall be reduced pro rata.
Subject to the provisions of Section 3.2 hereof, any
termination or reduction may be effected by the
Borrower without penalty. No termination of the
Revolving Credit Commitments or reduction of the
Revolving Credit Commitment Amount shall be subject to
reinstatement.
(c) The Revolving Credit Commitment Amount shall
be reduced from time to time in accordance with the
provisions of Section 8.13 and 8.14 hereof.
(d) The aggregate principal amount of all Loans
outstanding on the Revolving Credit Commitment
Termination Date, plus all accrued and unpaid interest
thereon, shall be due and payable in full on such
date.
Section 2.2. Notes; Repayment of Loans. (a) The obligation
of the Borrower to repay the Loans made pursuant to
this Agreement and to pay interest thereon, as set
forth in this Agreement, shall be evidenced by
separate restated promissory notes of the Borrower
substantially in the form of Exhibit A attached hereto
with appropriate insertions (each, singly, a "Note",
and collectively, the "Notes"), dated as of May 13,
1993 and restated as of the Effective Date or the date
the applicable payee Bank becomes a party to this
Agreement, as the case may be, and payable to the
order of such payee Bank in a principal amount stated
to be the lesser of (i) the Revolving Credit
Commitment Amount, or (ii) the aggregate principal
amount of Loans at any time advanced by such payee
Bank and outstanding hereunder. On or promptly after
the occurrence of the Effective Date, each of the
Banks shall return to the Borrower the Note issued by
the Borrower under the Original Credit Agreement for
cancellation.
(b) The Borrower agrees to pay the outstanding
principal balance of each Standby Loan on the
Revolving Credit Commitment Termination Date. The
Borrower agrees to pay the outstanding balance of each
Competitive Loan on the last day of the Interest
Period applicable to such Competitive Loan and on the
Revolving Credit Commitment Termination Date. Each
Loan shall bear interest from the date of the
Borrowing of which such Loan is a part on the
outstanding principal balance thereof as set forth in
Section 2.9 hereof.
(c) Each Bank shall, and is hereby authorized by
the Borrower to, maintain, in accordance with its
usual practice, records evidencing the indebtedness of
the Borrower to such Bank hereunder from time to time,
including the amounts and Types of and the Interest
Periods applicable to the Loans made by such Bank from
time to time and the amounts of principal and interest
paid to such Bank from time to time in respect of such
Loans.
(d) The entries made in the records maintained
pursuant to paragraph (c) of this Section 2.2 and in the Bank
List maintained by the Administrative Agent pursuant
to Section 15(c) hereof shall be prima facie evidence of the
existence and amounts of the obligations of the
Borrower to which such entries relate; provided,
however, that the failure of any Bank or the
Administrative Agent to maintain or to make any entry
in such records or the Bank List, as applicable, or
any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.
Section 2.3. Prepayments. (a) The Borrower shall have
the right at any time prior to the Revolving Credit
Commitment Termination Date to prepay any Standby
Borrowing, without premium or penalty (except as
provided in clause (B) below), in whole or in part,
together with accrued interest to the date of
prepayment on the principal amount prepaid, upon not
less than three Business Days' written, telegraphic or
telephonic notice to the Administrative Agent,
provided that (A) each partial prepayment shall be
in the aggregate principal amount of (i) $3,000,000 or
a larger integral multiple of $1,000,000 in the case
of Base Rate Loans, and (ii) subject to clause (B)
below, $5,000,000 or a larger integral multiple of
$1,000,000 in the case of Eurodollar Standby Loans and
C/D Rate Loans, and (B) if any prepayment or any
repayment of any Eurodollar Standby Loan or C/D Rate
Loan shall be made on any day other than the
applicable Interest Period Termination Date, the
Borrower shall indemnify the Banks against any loss,
cost or expense incurred as a result of such
prepayment or repayment in accordance with the
provisions of Section 3.2 hereof. The Administrative Agent
shall promptly notify each Bank of the contents of
each prepayment notice. Subject to the borrowing
limitations set forth in Section 2.1(a) hereof, amounts
prepaid prior to the Revolving Credit Commitment
Termination Date may be reborrowed. The Borrower
shall not have any right to prepay any Competitive
Borrowing.
(b) If at any time prior to the Revolving Credit
Commitment Termination Date the sum of the aggregate
principal amount of all Loans outstanding plus the
aggregate Maximum Drawing Amount of all Letters of
Credit outstanding exceeds the Revolving Credit
Commitment Amount, the Borrower shall immediately make
such payments of principal of the Loans (for
application first to Standby Loans, then to
Competitive Loans) to the Administrative Agent for the
accounts of the Banks in the amount of such excess,
together with all interest accrued on such principal
amounts repaid; and, if after giving effect to such
repayments of the Loans the aggregate Maximum Drawing
Amount of Letters of Credit outstanding then exceeds
the Revolving Credit Commitment Amount, the Borrower
then shall immediately deposit with the Administrative
Agent, as collateral security for the Obligations
pursuant to pledge agreements satisfactory in form and
substance to the Administrative Agent, cash in the
amount of such excess portion (if any) of such Maximum
Drawing Amount. In addition to all other payments
required by this Section 2.3(b), in the event of any reduction
of the Revolving Credit Commitment Amount pursuant to
Section 2.1(b) hereof, the Borrower shall pay to the
Administrative Agent, for the accounts of the Banks,
the Facility Fee accrued to the effective date of each
such reduction on the amount of such reduction, as
well as the full indemnity required, in the case of a
prepayment of Eurodollar Loans and C/D Rate Loans, by
the provisions of Section 3.2 hereof.
(c) Each partial prepayment of Standby Loans made
pursuant to this Section 2.3 shall be allocated among all of
the Banks in proportion (as nearly as practicable) to
the respective unpaid principal amount of each Bank's
Standby Loans, with adjustments to the extent
practical to equalize any prior payments not exactly
in proportion.
Section 2.4. Loans. (a) Each Standby Loan shall be
made as part of a Borrowing consisting of Loans made
by the Banks ratably in accordance with their
Revolving Credit Commitments. Each Standby Loan shall
be made in accordance with the procedures set forth in
Section 2.6 hereof and each Competitive Loan shall be made in
accordance with the procedures set forth in Section 2.5
hereof. The Loans comprising any Borrowing shall be
(i) in the case of Competitive Loans, in an aggregate
principal amount which is an integral multiple of
$1,000,000 and not less than $10,000,000, (ii) in the
case of Base Rate Loans, in an aggregate principal
amount which is an integral multiple of $1,000,000 and
not less than $3,000,000 and (iii) in the case of
Eurodollar Standby Loans and C/D Rate Loans, in an
aggregate principal amount which is an integral
multiple of $1,000,000 and not less than $5,000,000.
(b) Each Competitive Borrowing shall be comprised
entirely of Eurodollar Competitive Loans or Fixed Rate
Loans and each Standby Borrowing shall be comprised
entirely of Eurodollar Standby Loans, C/D Rate Loans
or Base Rate Loans, as the Borrower may request
pursuant to Section 2.5 or Section 2.6 hereof, as applicable.
Borrowings of more than one Type may be outstanding at
the same time; provided, however, that the Borrower
shall not be entitled to request any Borrowing which,
if made, would result in an aggregate of more than
five separate Eurodollar Standby Loans and C/D Rate
Loans of any Bank being outstanding hereunder at any
one time. For purposes of the foregoing, Loans having
different Interest Periods, regardless of whether they
commence on the same date, shall be considered
separate Loans.
(c) Subject to Section 2.7 hereof, each Bank shall make
each Loan to be made by it hereunder on the proposed
date of Borrowing thereof by wire transfer of
immediately available funds to the Administrative
Agent at its Head Office, not later than 1:00 p.m.,
Boston time, and upon satisfaction of the applicable
conditions set forth in this Agreement and upon
receipt from the Banks of the amount to be advanced by
such Banks, on the date of the proposed Borrowing, the
Administrative Agent shall credit the amounts so
received in immediately available funds to the
Borrower's account maintained with the Administrative
Agent at the Head Office. Competitive Loans shall be
made by the Bank or Banks whose Competitive Bids
therefor are accepted pursuant to Section 2.5 hereof, in the
amounts so accepted and Standby Loans shall be made by
the Banks pro rata in accordance with Section 2.16 hereof.
Unless the Administrative Agent shall have received
notice from a Bank prior to the date of any Borrowing
that such Bank will not make available to the
Administrative Agent such Bank's portion of such
Borrowing, the Administrative Agent may assume that
such Bank has made such portion available to the
Administrative Agent on the date of such Borrowing in
accordance with this paragraph (c) 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 made such portion
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, the interest rate applicable at
the time to the Loans comprising such Borrowing 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 shall constitute such Bank's Loan as part of
such Borrowing for purposes of this Agreement.
(d) Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to
request any Borrowing if the Interest Period requested
with respect thereto would end after the Revolving
Credit Commitment Termination Date.
Section 2.5. Competitive Bid Procedure. (a) In order
to request Competitive Bids, the Borrower shall hand
deliver or telecopy (or communicate by telephone with
prompt confirmation in writing) to the Competitive Bid
Agent (with a copy to the Administrative Agent if
different than the Competitive Bid Agent) a duly
completed Competitive Bid Request in the form of
Exhibit B-l attached hereto, to be received by the
Competitive Bid Agent (and the Administrative Agent if
different than the Competitive Bid Agent) (i) in the
case of a Eurodollar Competitive Borrowing, not later
than 10:30 a.m., Boston time, four Business Days
before a proposed Competitive Borrowing and (ii) in
the case of a Fixed Rate Borrowing, not later than
10:30 a.m., Boston time, one Business Day before a
proposed Competitive Borrowing. No C/D Rate Loan or
Base Rate Loan shall be requested in, or made pursuant
to, a Competitive Bid Request. A Competitive Bid
Request that does not conform substantially to the
format of Exhibit B-1 attached hereto may be rejected
in the Competitive Bid Agent's sole discretion, and
the Competitive Bid Agent shall promptly notify the
Borrower of such rejection by telecopier (or by
telephone with prompt confirmation in writing). Such
request shall in each case refer to this Agreement and
specify (w) whether the Borrowing then being requested
is to be a Eurodollar Borrowing or a Fixed Rate
Borrowing, (x) the date of such Borrowing (which shall
be a Business Day), (y) the aggregate principal amount
thereof which shall be in a minimum principal amount
of $10,000,000 and in an integral multiple of
$1,000,000, and (z) the Interest Period with respect
thereto (which may not end after the Revolving Credit
Commitment Termination Date). Promptly after its
receipt of a Competitive Bid Request that is not
rejected as aforesaid, the Competitive Bid Agent shall
invite by telecopier (in the form set forth in Exhibit
B-2 attached hereto) the Banks to bid, on the terms
and conditions of this Agreement, to make Competitive
Loans pursuant to the Competitive Bid Request.
(b) Each Bank may, in its sole discretion, make
one or more Competitive Bids to the Borrower
responsive to a Competitive Bid Request. Each
Competitive Bid by a Bank must be received by the
Competitive Bid Agent via telecopier, in the form of
Exhibit B-3 attached hereto, (i) in the case of a
Eurodollar Competitive Borrowing, not later than 10:00
a.m., Boston time, three Business Days before a
proposed Competitive Borrowing and (ii) in the case of
a Fixed Rate Borrowing, not later than 10:00 a.m.,
Boston time, on the day of a proposed Competitive
Borrowing. Multiple bids will be accepted by the
Competitive Bid Agent. Competitive Bids that do not
conform substantially to the format of Exhibit B-3 may
be rejected by the Competitive Bid Agent, and the
Competitive Bid Agent shall notify the Bank making
such nonconforming bid of such rejection as soon as
practicable. Each Competitive Bid shall refer to this
Agreement, give the identity of the Bank making the
bid, and specify (x) the principal amount (which shall
be in a minimum principal amount of $5,000,000 and in
an integral multiple of $1,000,000 and which may
equal, but not exceed, the entire principal amount of
the Competitive Borrowing requested by the Borrower)
of the Competitive Loan or Loans that the Bank is
willing to make to the Borrower, (y) the Competitive
Bid Rate or Rates at which the Bank is prepared to
make the Competitive Loan or Loans and (z) the
Interest Period and the last day thereof. If any Bank
shall elect not to make a Competitive Bid, such Bank
shall so notify the Competitive Bid Agent by
telecopier (i) in the case of Eurodollar Competitive
Loans, not later than 10:00 a.m., Boston time, three
Business Days before a proposed Competitive Borrowing,
and (ii) in the case of Fixed Rate Loans, not later
than 10:00 a.m., Boston time, on the day of a proposed
Competitive Borrowing; provided, however, that failure
by any Bank to give such notice shall not cause such
Bank to be obligated to make any Competitive Loan as
part of such Competitive Borrowing. A Competitive Bid
submitted by a Bank pursuant to this paragraph (b)
shall be irrevocable. Each Competitive Bid may be
greater than the Revolving Credit Commitment of the
Bank giving the bid but may not exceed the Revolving
Credit Commitment Amount less (i) all outstanding
Loans and (ii) the aggregate Maximum Drawing Amount of
all Letters of Credit outstanding.
(c) The Competitive Bid Agent shall promptly
notify the Borrower by telecopier (or by telephone
promptly confirmed in writing by telecopier) of all
the Competitive Bids made, the Competitive Bid Rate
and the principal amount of each Competitive Loan in
respect of which a Competitive Bid was made and the
identity of the Bank that made each Competitive Bid.
The Competitive Bid Agent shall send a copy of all
Competitive Bids to the Borrower for its records as
soon as practicable after completion of the bidding
process set forth in this Section 2.5.
(d) The Borrower may in its sole and absolute
discretion, subject only to the provisions of this
paragraph (d), accept or reject any Competitive Bid
referred to in paragraph (c) above. The Borrower
shall notify the Competitive Bid Agent by telephone,
confirmed by telecopier in the form of a Competitive
Bid Accept/Reject Letter, whether and to what extent
it has decided to accept or reject any of or all the
Competitive Bids referred to in paragraph (c) above,
(x) in the case of a Eurodollar Competitive Borrowing,
not later than 11:00 a.m., Boston time, three Business
Days before a proposed Competitive Borrowing, and (y)
in the case of a Fixed Rate Borrowing, not later than
11:00 a.m., Boston time, on the day of the proposed
Competitive Borrowing; provided, however, that (i) the
failure by the Borrower to give such notice shall be
deemed to be a rejection of all the Competitive Bids
referred to in paragraph (c) above, (ii) the Borrower
shall not accept a Competitive Bid made at a
particular Competitive Bid Rate if the Borrower has
decided to reject a Competitive Bid made at a lower
Competitive Bid Rate, (iii) the aggregate amount of
the Competitive Bids accepted by the Borrower shall
not exceed the principal amount specified in the
Competitive Bid Request, (iv) if the Borrower shall
accept a Competitive Bid or Competitive Bids made at a
particular Competitive Bid Rate but the amount of such
Competitive Bid or Competitive Bids shall cause the
total amount of Competitive Bids to be accepted by the
Borrower to exceed the amount specified in the
Competitive Bid Request, then the Borrower shall
accept a portion of such Competitive Bid or
Competitive Bids in an amount equal to the amount
specified in the Competitive Bid Request less the
amount of all other Competitive Bids accepted with
respect to such Competitive Bid Request, which
acceptance, in the case of multiple Competitive Bids
at such Competitive Bid Rate, shall be made pro rata
in accordance with the amount of each such Competitive
Bid at such Competitive Bid Rate, and (v) except
pursuant to clause (iv) above, no Competitive Bid
shall be accepted for a Competitive Loan unless such
Competitive Loan is in a minimum principal amount of
$10,000,000 and an integral multiple of $1,000,000;
provided further, however, that if a Competitive
Loan must be in an amount less than $10,000,000
because of the provisions of clause (iv) above, such
Competitive Loan may be for a minimum of $1,000,000 or
any integral multiple thereof, and in calculating the
pro rata allocation of acceptances of portions of
multiple Competitive Bids at a particular Competitive
Bid Rate pursuant to clause (iv) the amounts shall be
rounded to integral multiples of $1,000,000 in a
manner which shall be in the discretion of the
Borrower. A notice given by the Borrower pursuant to
this paragraph (d) shall be irrevocable.
(e) The Competitive Bid Agent shall promptly
notify each bidding Bank whether or not its
Competitive Bid has been accepted (and if so, in what
amount and at what Competitive Bid Rate) by telecopy
sent by the Competitive Bid Agent, and each successful
bidding Bank will thereupon become bound, subject to
the other applicable conditions hereof, to make the
Competitive Loan in respect of which its Competitive
Bid has been accepted. The Competitive Bid Agent
shall also promptly notify the Administrative Agent
(if different than the Competitive Bid Agent) of the
Competitive Bids that have been accepted, the amounts
thereof and the Competitive Bid Rates applicable
thereto.
(f) If the Competitive Bid Agent shall elect to
submit a Competitive Bid in its capacity as a Bank, it
shall submit such bid directly to the Borrower one
quarter of an hour earlier than the latest time at
which the other Banks are required to submit their
bids to the Competitive Bid Agent pursuant to
paragraph (b) above. The Competitive Bid Agent will
in no event disclose the terms of any Bank's
Competitive Bid to any other Bank; provided that
following the acceptance or rejection of Competitive
Bids submitted in response to any Competitive Bid
Request, the Competitive Bid Agent may at the request
of any Bank disclose information as to the range of
the Competitive Bid Rates at which Competitive Bids
were submitted or accepted.
(g) All notices required by this Section 2.5 shall
be given in accordance with Section 18 hereof.
Section 2.6. Standby Borrowing Procedures. In order
to request a Standby Borrowing, the Borrower shall
hand deliver or telecopy (or communicate by telephone
with prompt confirmation in writing) to the
Administrative Agent a duly completed notice of a
Standby Borrowing (a "Borrowing Notice") (a) in the
case of a Eurodollar Standby Borrowing or a C/D Rate
Borrowing, not later than 11:00 a.m., Boston time,
three Business Days before a proposed Borrowing, and
(b) in the case of a Base Rate Borrowing, not later
than 10:00 a.m., Boston time, on the day of a proposed
Borrowing. Each Borrowing Notice shall be irrevocable
and shall in each case specify (i) whether the Standby
Borrowing then being requested is to be a Eurodollar
Standby Borrowing, a C/D Rate Borrowing or a Base Rate
Borrowing; (ii) the date of such Borrowing (which
shall be a Business Day) and the amount thereof, which
shall be in a minimum principal amount of $3,000,000
and in an integral multiple of $1,000,000 in the case
of Base Rate Borrowings and in a minimum principal
amount of $5,000,000 and an integral multiple of
$1,000,000 in the case of Eurodollar Standby
Borrowings and C/D Rate Borrowings; and (iii) if such
Borrowing is to be a Eurodollar Standby Borrowing or a
C/D Rate Borrowing, the Interest Period with respect
thereto. If no election as to the Type of Borrowing
is specified in any such Borrowing Notice, then the
requested Borrowing shall be a Base Rate Borrowing.
If no Interest Period with respect to any Eurodollar
Standby Borrowing or C/D Rate Borrowing is specified
in any such Borrowing Notice, then the Borrower shall
be deemed to have selected an Interest Period of one
month's duration, in the case of a Eurodollar Standby
Borrowing, or 30 days' duration,. in the case of a C/D
Rate Borrowing. The Administrative Agent shall
promptly advise the Banks of any notice given pursuant
to this Section 2.6 and of each Bank's portion of the
requested Borrowing.
Section 2.7. Method of Certain Prepayments and
Repayments. The Borrower may prepay any Standby Loan
in accordance with Section 2.3(a) hereof with the proceeds of
a Competitive Borrowing or repay any Competitive Loan
in accordance with Section 2.2(b) hereof with the proceeds of
a Standby Borrowing; provided, however, that (i) if
the principal amount extended by a Bank in such
Borrowing is greater than the principal amount
extended by such Bank in the Borrowing being prepaid,
in the case of Standby Loans, or repaid, in the case
of Competitive Loans, then such Bank shall pay such
difference to the Administrative Agent for
distribution to the Banks described in (ii) below,
(ii) if the principal amount extended by a Bank in the
Borrowing being prepaid, in the case of Standby Loans,
or repaid, in the case of Competitive Loans, is
greater than the principal amount being extended by
such Bank in such Borrowing, the Administrative Agent
shall return the difference to such Bank out of
amounts received pursuant to (i) above, and (iii) to
the extent any Bank fails to pay the Administrative
Agent amounts due from it pursuant to (i) above, any
Loan or portion thereof being prepaid, in the case of
Standby Loans, or repaid, in the case of Competitive
Loans with such amounts shall not be deemed so prepaid
or repaid, as applicable, in accordance with Section 2.3(a)
or Section 2.2(b) hereof, as applicable, and, in each case,
shall be payable by the Borrower at the applicable time
provided for in this Agreement.
Section 2.8. Conversion and Continuation of Standby
Borrowings. The Borrower shall have the right at
any time upon prior irrevocable notice (a "Conversion
Notice") to the Administrative Agent (i) not later
than 10:00 a.m., Boston time, on the Business Day of
the proposed conversion, to convert any Eurodollar
Standby Borrowing or C/D Rate Borrowing into a Base
Rate Borrowing, and (ii) not later than 11:00 a.m.,
Boston time, three Business Days prior to conversion
or continuation, to convert any Base Rate Borrowing or
Eurodollar Standby Borrowing into a C/D Rate Borrowing
or to convert any Base Rate Borrowing or C/D Rate
Borrowing into a Eurodollar Standby Borrowing or to
continue any C/D Rate Borrowing as a C/D Rate
Borrowing or any Eurodollar Standby Borrowing as a
Eurodollar Standby Borrowing for an additional or
different permissible Interest Period, subject in each
case to the following:
(a) each conversion or continuation shall be made pro
rata among the Banks in accordance with the
respective principal amounts of the Standby Loans
comprising the converted or continued Standby
Borrowing;
(b) if less than all the outstanding principal amount
of any Standby Borrowing shall be converted or continued,
the aggregate principal amount of any such Eurodollar
Standby Borrowing or C/D Rate Borrowing converted or
continued shall be an integral multiple of $1,000,000 and
not less than $5,000,000 and the aggregate principal amount
of any such Base Rate Borrowing converted or continued
shall be in an integral multiple of $1,000,000 and not less
than $3,00,000;
(c) if any Eurodollar Standby Borrowing or C/D Rate
Borrowing is converted at a time other than the end of the
Interest Period applicable thereto, the Borrower shall pay,
upon demand, any amounts due to the Banks pursuant to
Section 3.2 hereof; and
(d) no Interest Period may be selected for any
Standby Borrowing that would end after the Revolving Credit
Commitment Termination Date.
Each notice pursuant to this Section 2.8 shall be by hand
delivery or telecopier (or by telephone with prompt confirmation in
writing), shall be irrevocable and shall refer to this Agreement
and specify (i) the identity and amount of the Standby Borrowing
that the Borrower requests be converted or continued, (ii)
whether such Standby Borrowing is to be converted to or
continued as a Eurodollar Standby Borrowing, a C/D Rate
Borrowing or a Base Rate Borrowing, (iii) if such notice
requests a conversion, the date of such conversion (which shall
be a Business Day) and (iv) if such Standby Borrowing is to be
converted to or continued as a Eurodollar Standby Borrowing or a
C/D Rate Borrowing, the Interest Period with respect thereto.
If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a Eurodollar
Standby Borrowing or a C/D Rate Borrowing, the Borrower shall be
deemed to have selected an Interest Period of one month's
duration, in the case of a Eurodollar Standby Borrowing, or 30
days duration, in the case of a C/D Rate Borrowing. The
Administrative Agent shall advise the other Banks of any notice
given pursuant to this Section 2.8 and of each Bank's portion of
any converted or continued Standby Borrowing. If the Borrower
shall not have given notice in accordance with this Section 2.8 to
continue any Standby Borrowing into a subsequent Interest Period
(and shall not otherwise have given notice in accordance with this
Section 2.8 to convert such Standby Borrowing), such Standby
Borrowing shall, at the end of the Interest Period applicable
thereto (unless repaid pursuant to the terms hereof), automatically
be continued into a new Interest Period as a Base Rate Borrowing.
Section 2.9. Interest on Loans. (a) Subject to the
provisions of Section 2.10 hereof, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on
the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to (i) in
the case of each Eurodollar Standby Loan, the
Eurodollar Rate for the Interest Period in effect for
such Borrowing plus the Applicable Margin from time to
time in effect and (ii) in the case of each Eurodollar
Competitive Loan, the Eurodollar Rate for the Interest
Period in effect for such Borrowing plus the Margin
offered by the Bank making such Loan and accepted by
the Borrower pursuant to Section 2.5 hereof.
(b) Subject to the provisions of Section 2.10 hereof,
the Loans comprising each C/D Rate Borrowing shall bear
interest (computed on the basis of the actual number
of days elapsed over a year of 360 days) at a rate per
annum equal to the C/D Rate for the Interest Period in
effect for such Borrowing plus the Applicable Margin
from time to time in effect.
(c) Subject to the provisions of Section 2.10 hereof,
the Loans comprising each Base Rate Borrowing shall bear
interest (computed on the basis of the actual number
of days elapsed over a year of 365 or 366 days) at a
rate per annum equal to the Base Rate in effect for
such Borrowing plus the Applicable Margin from time to
time in effect.
(d) Subject to the provisions of Section 2.10 hereof,
each Fixed Rate Loan shall bear interest at a rate per
annum (computed on the basis of the actual number of
days elapsed over a year of 360 days) equal to the
fixed rate of interest offered by the Bank making such
Loan and accepted by the Borrower pursuant to Section 2.5
hereof.
(e) Interest on each Loan shall be payable in
arrears on each Interest Payment Date applicable to
such Loan except as otherwise provided in this
Agreement. The applicable Eurodollar Rate, C/D Rate
or Base Rate for each Interest Period or day within an
Interest Period, as the case may be, shall be
determined by the Administrative Agent, and such
determination shall be conclusive absent manifest
error. The Administrative Agent shall promptly advise
the Borrower and each Bank, as appropriate, of such
determination.
Section 2.10. Interest on Overdue Amounts. Overdue
principal and (to the extent permitted by applicable
law) interest on the Loans and all other overdue
amounts payable hereunder, whether Facility Fee,
Agent's Fee or otherwise, shall bear interest
compounded monthly and payable on demand at a rate per
annum equal to 2% above the rate otherwise applicable
to Base Rate Loans, as such rate is in effect from
time to time, until such amounts shall be paid in full
(to the extent permitted by law, after as well as
before judgment).
Section 2.11. Letters of Credit. Subject to the
terms and conditions set forth in this Agreement, upon
written request of the Borrower to the Administrative
Agent with a copy to the Letter of Credit Bank in
accordance with this Section 2.11, the Letter of Credit Bank,
at its option, may issue, with pro rata participation
by all of the Banks, at any time prior to the
Revolving Credit Commitment Termination Date, and
subject to the satisfaction of the conditions
precedent set forth in Section 7 hereof, Letters of Credit in
such form as the Borrower and the Letter of Credit
Bank may agree for the account of the Borrower,
provided that at no time shall the aggregate Maximum
Drawing Amount of all Letters of Credit outstanding
exceed $30,000,000, and provided further that at no
time shall the sum of the aggregate principal amount
of all Loans outstanding plus the aggregate Maximum
Drawing Amount of all Letters of Credit outstanding
exceed the Revolving Credit Commitment Amount. Each
such request shall be in writing and shall be received
by the Administrative Agent at least five Business
Days prior to the proposed date of issuance. The
Administrative Agent shall promptly notify each Bank
of the contents of each such request. In addition,
the Administrative Agent shall give written
confirmation by telecopy to the Letter of Credit Bank
no later than two Business Days prior to the requested
date of issuance of each Letter of Credit as to the
availability under the Letter of Credit facility
herein to issue such Letter of Credit and shall
enclose with such confirmation a copy of the Borrowing
Notice received pursuant to Section 7.4 hereof. The
expiry dates, amounts and beneficiaries of the Letters of
Credit will be as agreed by the Borrower and the
Letter of Credit Bank. The Letter of Credit Bank
shall send to the Administrative Agent for
distribution to the Banks copies of all Letters of
Credit issued hereunder as soon as reasonably
practicable after the issuance thereof. The Borrower
may request, and the Letter of Credit Bank, upon terms
and conditions approved by the Borrower, shall issue,
with pro rata participation by all of the Banks,
substitute Letters of Credit for the Letters of Credit
to reflect reductions in the amount of the Borrower's
obligations supported by such Letters of Credit. Each
Letter of Credit issued by the Letter of Credit Bank
hereunder shall identify: (i) the dates of issuance
and expiry of such Letter of Credit, (ii) the amount
of such Letter of Credit (which shall be a sum
certain), (iii) the beneficiary and account party of
such Letter of Credit, and (iv) the drafts and other
documents necessary to be presented to the Letter of
Credit Bank upon drawing thereunder. No Letter of
Credit issued hereunder shall expire after the earlier
of (A) the first anniversary of its date of issuance,
or (B) the Revolving Credit Commitment Termination
Date.
Section 2.12. Effects of Drawings. The Borrower hereby
promises to pay the Administrative Agent for the
account of the Letter of Credit Bank in immediately
available funds no later than the second Business Day
after each drawing the amount of such drawing under
Letters of Credit, plus interest thereon at an annual
rate equal to the Base Rate plus the Applicable Margin
with respect to Base Rate Loans. Each Bank agrees
that on the third Business Day after any such drawing,
such Bank will immediately make available to the
Administrative Agent for the account of the Letter of
Credit Bank at the Administrative Agent's Head Office,
in Federal or other immediately available funds, its
ratable share of any such drawing, plus any interest
which shall have accrued thereon, provided that each
Bank's obligation shall be reduced by its pro rata
share of any reimbursement by the Borrower in respect
of such drawing pursuant to this Section 2.12. The obligation
of the Borrower under this Agreement to reimburse the
Letter of Credit Bank in respect of drawings under
Letters of Credit shall be Obligations of the Borrower
hereunder which shall be due and payable
simultaneously with all other Obligations hereunder.
Section 2.13 hereof shall govern the Borrower's
obligations with respect to drawings under Letters of
Credit.
Section 2.13. Letter of Credit Loan Obligations
Absolute. (a) The obligation of the Borrower to
reimburse the Letter of Credit Bank as provided
hereunder in respect of drawings under Letters of
Credit shall rank pari passu with the obligation of
the Borrower to repay the Loans hereunder, and shall
be absolute and unconditional under any and all
circumstances. Without limiting the generality of the
foregoing, the Borrower's obligation to reimburse the
Letter of Credit Bank in respect of drawings under
Letters of Credit shall not be subject to any defense
based on the non-application or misapplication by the
beneficiary of the proceeds of any such payment or the
legality, validity, regularity or enforceability of
the Letters of Credit or any other document
whatsoever. The Letter of Credit Bank may accept or
pay any draft presented to it under any Letter of
Credit regardless of when drawn or made and whether or
not negotiated, if such draft, accompanying
certificate or documents and any transmittal advice
are presented on or before the expiry date of the
Letter of Credit, or any renewal or extension thereof
then in effect. Furthermore, neither the Letter of
Credit Bank nor any of its correspondents shall be
responsible, as to any document presented under a
Letter of Credit which appears to be regular on its
face, and appears on its face to conform to the terms
of the Letter of Credit, for the validity or
sufficiency of any signature or endorsement, for delay
in giving any notice or failure of any instrument to
bear adequate reference to the Letter of Credit, or
for failure of any person to note the amount of any
draft on the reverse of the Letter of Credit.
(b) Any action, inaction or omission on the part
of the Letter of Credit Bank or any of its
correspondents under or in connection with any Letter
of Credit or the related instruments, documents or
property, if in good faith and in conformity with such
laws, regulations or customs as are applicable, shall
be binding upon the Borrower and shall not place the
Letter of Credit Bank or any of its correspondents
under any liability to the Borrower, in the absence of
(i) gross negligence or willful misconduct by the
Letter of Credit Bank or its correspondents or (ii)
the failure by the Letter of Credit Bank to pay under
a Letter of Credit after presentation of a draft and
documents strictly complying with such Letter of
Credit. The Letter of Credit Bank's rights, powers,
privileges and immunities specified in or arising
under this Agreement are in addition to any heretofore
or at any time hereafter otherwise created or arising,
whether by statute or rule of law or contract. All
Letters of Credit issued hereunder will, except to the
extent otherwise expressly provided, be governed by
the Uniform Customs and Practice for Documentary
Credits (1983 Revision), International Chamber of
Commerce, Publication No. 400, and any subsequent
revisions thereof.
Section 2.14. Banks' Obligations in Respect of Letters
of Credit. Each Bank agrees with the Letter of
Credit Bank and the other Banks that its obligation to
participate in Letters of Credit and to reimburse the
Letter of Credit Bank for its ratable share of all
drawings under Letters of Credit as provided in Section 2.12
hereof shall not be affected in any way by any
circumstances (other than the gross negligence or
willful misconduct of the Letter of Credit Bank),
including, without limitation:
(a) any modification or amendment of, or any consent,
waiver, release or forbearance with respect to, any of the
terms of this Agreement or any other instrument or document
referred to herein;
(b) the existence of any Default or Event of Default,
or the termination of the Revolving Credit Commitments
pursuant to Section 10 in connection with any Event of Default;
or
(c) any change of any kind whatsoever in the
financial position or creditworthiness of the Borrower.
Section 2.15. Existing Letters of Credit. The Borrower
agrees that with respect to each letter of credit
listed and described on Schedule 2.15 attached hereto,
for the period commencing on the Effective Date and
ending on the first to occur of the expiration,
undrawn, of such letter of credit or the date all
reimbursement obligations with respect to such letter
of credit have been satisfied in full, such letter of
credit shall be a Letter of Credit for all purposes of
this Agreement, and the Borrower hereby affirms its
liability with respect to the reimbursement
obligations thereunder as provided herein. The Banks
affirm their pro rata participation in such Letters of
Credit.
Section 2.16. Pro Rata Treatment. Except as required
under Section 3.3 hereof, each Standby Borrowing, each payment
or prepayment of principal of any Standby Borrowing,
each payment of interest on the Standby Loans, each
payment of the Facility Fee, each reduction of the
Revolving Credit Commitments and each refinancing of
any Borrowing with a Standby Borrowing of any Type,
shall be allocated pro rata among the Banks in
accordance with their respective Revolving Credit
Commitments (or, if such Revolving Credit Commitments
shall have expired or been terminated, in accordance
with the respective principal amounts of their
outstanding Standby Loans). Each payment of principal
of any Competitive Borrowing shall be allocated pro
rata among the Banks participating in such Borrowing
in accordance with the respective principal amounts of
their outstanding Competitive Loans comprising such
Borrowing. Each payment of interest on any
Competitive Borrowing shall be allocated pro rata
among the Banks participating in such Borrowing in
accordance with the respective amounts of accrued and
unpaid interest on their outstanding Competitive Loans
comprising such Borrowing. For purposes of
determining the available Revolving Credit Commitments
of the Banks at any time, each outstanding Competitive
Borrowing shall be deemed to have utilized the
Revolving Credit Commitments of the Banks (including
those Banks which shall not have made Loans as part of
such Competitive Borrowing) pro rata in accordance
with such respective Revolving Credit Commitments.
Each Bank agrees that in computing such Bank's portion
of any Borrowing to be made hereunder, the
Administrative Agent may, in its discretion, round
each Bank's percentage of such Borrowing to the next
higher or lower whole dollar amount.
Section 2.17. Existing Loans. On and as of the
Effective Date (i) all Loans outstanding under (and as
defined in) the Original Credit Agreement shall constitute
Loans outstanding under this Agreement, (ii) each Base
Rate Amount outstanding under (and as defined in) the
Original Credit Agreement shall constitute a Base Rate
Loan outstanding hereunder, shall bear interest from
and after the Effective Date at the rate of interest
for Loans comprising each Base Rate Borrowing as set
forth in Section 2.9(c) hereof and all interest accrued
with respect to such Base Rate Amount, including all
interest accrued prior to the Effective Date, shall be
payable by the Borrower on the next Interest Payment
Date for such Base Rate Borrowing hereunder, (iii)
each C/D Rate Amount outstanding under (and as defined
in) the Original Credit Agreement shall constitute a
C/D Rate Loan outstanding hereunder with the same
Interest Period as was applicable to such C/D Rate
Amount, shall bear interest from and after the
Effective Date at the rate of interest for Loans
comprising each C/D Rate Borrowing as set forth in
Section 2.9(b) hereof and all interest accrued with respect
to such C/D Rate Amount, including all interest
accrued prior to the Effective Date, shall be payable
by the Borrower on the next Interest Payment Date for
such C/D Rate Borrowing hereunder, and (iv) each
Eurodollar Rate Amount outstanding under (and as
defined in) the Original Credit Agreement shall
constitute a Eurodollar Standby Loan outstanding
hereunder with the same Interest Period as was
applicable to such Eurodollar Rate Amount, shall bear
interest from and after the Effective Date at the rate
of interest for Loans comprising each Eurodollar
Borrowing as set forth in Section 2.9(a) hereof and all
interest accrued with respect to such Eurodollar Rate
Amount, including all interest accrued prior to the
Effective Date, shall be payable by the Borrower on
the next Interest Payment Date for such Eurodollar
Rate Borrowing hereunder. The obligations of the
Borrower with respect to all such Loans shall be
subject to and governed by the applicable terms and
provisions of this Agreement and the other Loan
Documents. The Borrower hereby promises to pay to the
Administrative Agent on the Effective Date, for the
accounts of the Banks, all Commitment Fees (as defined
in the Original Credit Agreement) accrued to the
Effective Date.
Section 3. CERTAIN GENERAL PROVISIONS AND FEES.
Section 3.1. Additional Costs and Expenses. (a)
Anything herein to the contrary notwithstanding and
without duplication of any other amounts payable
hereunder, if, after (x) the Effective Date, in the
case of any Standby Loan or any obligation to make
Standby Loans or (y) the date of the related
Competitive Bid, in the case of any Competitive Loan,
any change in any present law or any future applicable
law (which expression, as used herein, includes
statutes, rules and regulations thereunder and
interpretations thereof by any competent court or by
any governmental or other regulatory body or official
charged with the administration or the interpretation
thereof and requests, directives, instructions and
notices at any time or from time to time hereafter
made upon or otherwise issued to any of the Banks or
the Administrative Agent by any central bank or other
fiscal, monetary or other authority, whether or not
having the force of law) shall:
(i) subject any Bank to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with
respect to such Bank's commitment to lend Eurodollar
Standby Loans or C/D Rate Loans or such Bank's portion of
the Eurodollar Loans or C/D Rate Loans or Fixed Rate Loans
(except for changes in the rate of tax on the overall net
income of such Bank imposed by the jurisdiction in which
such Bank's principal executive office is located); or
(ii) materially change the basis of taxation of
payments to any Bank of the principal of, interest on or
any other amounts payable in respect of the Eurodollar
Loans or C/D Rate Loans or Fixed Rate Loans (except for
changes in the rate of tax on the overall net income of
such Bank imposed by the jurisdiction in which such Bank's
principal executive office is located); or
(iii) impose or increase or render applicable any
special deposit or reserve or similar requirement (whether
or not having the force of law) against assets held by, or
deposits in or for the account of, or loans and commitments
to lend Eurodollar Loans or C/D Rate Loans or Fixed Rate
Loans hereunder by an office of any Bank; or
(iv) impose on any Bank any other condition or
requirement with respect to this Agreement, such Bank's
commitment or such Bank's portion of the Eurodollar Loans
or C/D Rate Loans or Fixed Rate Loans or any class of loans
of which any of the Eurodollar Loans or C/D Rate Loans or
Fixed Rate Loans form a part, and the result of any of the
foregoing is
(A) to increase the cost to any Bank
attributable to the making, funding or maintaining of
Eurodollar Loans or C/D Rate Loans or Fixed Rate
Loans; or
(B) to reduce the amount of principal, interest
or other amount with respect to Eurodollar Loans or
C/D Rate Loans or Fixed Rate Loans payable to any Bank
hereunder; then, and in each such case, to the extent such
cost or reduction is not reflected in determining the interest
rate applicable to Eurodollar Loans or C/D Rate Loans or Fixed Rate
Loans, the Borrower will, within 30 days after demand made by
such Bank at any time and from time to time as often as the
occasion therefor may arise, pay to such Bank such additional
amounts as will be sufficient, in the good faith opinion of such
Bank, to compensate such Bank for such additional cost or
reduction.
(b) If, after (x) the Effective Date, in the case of any
Standby Loan or any obligation to make Standby Loans or (y) the
date of the related Competitive Bid, in the case of any
Competitive Loan, any change in any present law or governmental
rule, regulation, policy, guideline (including, without
limitation, any change in the risk-based capital guidelines set
forth in the Federal Register, Vol. 4, No. 17, dated
January 27, 1989) or directive (whether or not having
the force of law) or the interpretation thereof by a
court or governmental authority with appropriate
jurisdiction, or any future law or governmental rule,
regulation, policy, guideline or directive (whether or
not having the force of law) or the interpretation
thereof by a court or governmental authority with
appropriate jurisdiction, imposes or increases or
renders applicable any requirement regarding capital
adequacy (whether or not having the force of law), or
otherwise affects the amount of capital required to be
maintained by any Bank or any corporation controlling
any Bank (or the amount of capital that a court or
governmental authority with appropriate jurisdiction
expects any such Bank or corporation to maintain) and
such Bank in good faith determines that the amount of
such capital required is increased by or based upon
the existence of the credit facilities or commitments
established hereunder or any Loans made pursuant
hereto or upon agreements or loans of the type
contemplated hereby, then such Bank may notify the
Borrower of such fact. To the extent that the costs
of such increased capital requirements are not
reflected in the Base Rate, Eurodollar Rate, C/D Rate,
or Fixed Rate, as applicable, the Borrower and such
Bank shall thereafter attempt to negotiate in good
faith an adjustment to the compensation payable
hereunder which will adequately compensate such Bank
in light of these circumstances. If the Borrower and
such Bank are unable to agree to such adjustment
within 30 days of the day on which the Borrower
receives such notice, then commencing on the effective
date of any such change, the fees payable hereunder
shall increase by an amount certified to the Borrower
pursuant to Section 3.4 hereof which will, in such Bank's
reasonable determination, provide adequate
compensation, provided that the Borrower shall not be
liable (pursuant to either Section 3.1(a) or Section 3.1(b)
hereof) to any Bank for any costs incurred more than 90 days
prior to receipt by the Borrower of the notice from
such Bank referred to in such sections.
(c) If any Bank has demanded compensation under
Section 3.1(a), the Borrower may, by giving at least five
Business Days' prior notice to such Bank through the
Administrative Agent, elect to convert all C/D Rate
Loans or Eurodollar Loans or Fixed Rate Loans, as the
case may be, lent by such Bank into Base Rate Loans or
into Eurodollar Loans or C/D Rate Loans or Fixed Rate
Loans (whichever Type is not affected by the
circumstances giving rise to such demand for
compensation) having an Interest Period equal to that
of the Eurodollar Loan or C/D Rate Loan or Fixed Rate
Loan then outstanding and affected by such election,
unless and until such Bank notifies the Borrower that
such circumstances no longer apply.
(d) Within 30 days after (i) any Bank has
demanded compensation from the Borrower pursuant to
either Section 3.1(a) or Section 3.1(b) hereof, or (ii) the
Borrower is required to make a deduction or withholding for the
account of any Bank pursuant to Section 3.5(c) hereof, or
(iii) there shall have occurred a change in law with
respect to any Bank as a consequence of which it shall
have become unlawful for such Bank to make a Loan on
the date of any applicable Borrowing, as described in
Section 6.4, and 7.3 hereof (any such Bank described in the
foregoing clauses (i), (ii) or (iii) is hereinafter
referred to as an "Affected Bank"), the Borrower may
request that the Non-Affected Banks acquire all, but
not less than all, of the Affected Bank's outstanding
Loans and assume all, but not less than all, of the
Affected Bank's Commitment. If the Borrower so
requests, the Non-Affected Banks may elect to acquire
all or any portion of the Affected Bank's outstanding
Loans and to assume all or any portion of the Affected
Bank's Commitment. If the Non-Affected Banks do not
elect to acquire and assume all of the Affected Bank's
outstanding Loans and Commitment, the Borrower may
designate a replacement bank or banks, which must be
satisfactory to the Administrative Agent, to acquire
and assume that portion of the outstanding Loans and
Commitment of the Affected Bank not being acquired and
assumed by the Non-Affected Banks. The provisions of
Section 15 hereof shall apply to all reallocations pursuant to
this Section 3.1(d), and the Affected Bank and any
Non-Affected Banks and/or replacement banks which are
to acquire the Loans and Commitment of the Affected
Bank shall execute and deliver to the Administrative
Agent, in accordance with the provisions of Section 15 hereof,
such Assignments and Acceptances and other
instruments, including, without limitation, Notes, as
are required pursuant to Section 15 to give effect to such
reallocations. Any Non-Affected Banks and/or
replacement banks which are to acquire the Loans and
Commitment of the Affected Bank shall be deemed to be
Eligible Assignees for all purposes of Section 15. On the
effective date of the applicable Assignments and
Acceptances, the Borrower shall pay to the Affected
Bank all interest accrued on its Loans up to but
excluding such date, along with any fees payable to
such Affected Bank hereunder up to but excluding such
date.
(e) The provisions of Section 3.1(b) hereof concerning
increased capital requirements shall apply to Letters
of Credit issued hereunder.
Section 3.2. Indemnification. If the Borrower shall
at any time (a) repay or prepay or convert any
principal of any Fixed Rate Loan, Eurodollar Loan or
C/D Rate Loan on a date other than the Interest Period
Termination Date with respect thereto (as a
consequence of acceleration pursuant to Section 10 hereof, a
mandatory repayment or prepayment required hereunder,
an optional prepayment, a conversion pursuant to
Section 3.1(c) or otherwise), or (b) for any reason fail to
borrow, convert or continue a Fixed Rate Loan,
Eurodollar Loan or C/D Rate Loan on the date specified
therefor in a Borrowing Notice or a Conversion Notice
delivered by the Borrower to the Administrative Agent
(whether as a result of a failure to satisfy any
condition precedent set forth in Section 6 or Section 7
hereof, or otherwise), the Borrower shall indemnify the
applicable payee Banks, on demand made by such Banks
at any time and as often as the occasion therefor may
arise, against all losses, costs or expenses which
such Banks may at any time or from time to time incur
as a consequence of such repayment, prepayment or
failure to borrow. The amount of such losses, costs
or expenses shall be an amount equal to the remainder,
if any, of:
(i) the total amount of interest which would
otherwise have accrued hereunder on the principal so paid,
not borrowed or converted at a rate equal to the interest
rate which otherwise would have been applicable to such
principal less the Applicable Margin during the period (the
"Reemployment Period") (A) in the case of any such
repayment or prepayment, beginning on the date of
such payment and ending on the applicable Interest
Period Termination Date of the Loan so paid, or
(B) in the case of any such failure to borrow or
convert, beginning on the date for the Borrowing
or conversion that shall have been requested in
the Borrowing Notice or the Conversion Notice
relating thereto and ending on the date that would
have been the applicable Interest Period
Termination Date of such Loan had such Borrowing
or conversion been made; minus
(ii) an amount equal to the aggregate interest to be
earned by the applicable payee Banks by reinvesting the
amount prepaid, repaid or not borrowed or converted for the
Reemployment Period at the yield to maturity on a United
States Treasury security selected by the Administrative
Agent equal in amount to the amount prepaid, repaid or not
borrowed or converted and having a maturity approximately
equal to the Reemployment Period.
Section 3.3. Illegality or Impossibility. Notwithstanding
any other provision of this Agreement, if (a) the
introduction of, any change in, or any change in the
interpretation of, any law or regulation applicable to
any Bank shall make it unlawful, or any central bank
or other governmental authority having jurisdiction
thereof shall assert that it is unlawful for such Bank
to perform its obligations in respect of Eurodollar
Loans, or (b) if the Administrative Agent shall
reasonably determine with respect to C/D Rate Loans or
Eurodollar Rate Loans, that (i) by reason of
circumstances affecting the Eurodollar interbank
market, adequate and reasonable methods do not exist
for ascertaining the Eurodollar Rate which would
otherwise be applicable during any Interest Period, or
(ii) by reason of circumstances affecting the United
States market in certificates of deposit, adequate and
reasonable methods do not exist for ascertaining the
C/D Rate which would otherwise be applicable during
any Interest Period, or (iii) deposits of United
States Dollars in the relevant amount for the relevant
Interest Period are not available to one or more of
the Reference Banks in the Eurodollar interbank
market, or (iv) certificates of deposit of the
relevant amount and for the relevant Interest Period
are not available to one or more of the Reference
Banks in the United States market for certificates of
deposits, or (v) the Eurodollar Rate does not or will
not accurately reflect the cost to one or more of the
Reference Banks of obtaining or maintaining the
applicable Eurodollar Loan during any Interest Period,
or (vi) the C/D Rate does not or will not accurately
reflect the cost to any one or more of the Reference
Banks of obtaining or maintaining the applicable C/D
Rate Loan during any Interest Period, then the
Administrative Agent shall promptly give telephonic,
telex or cable notice of such determination to the
Borrower and the Banks (which notice shall be
conclusive and binding upon the Borrower and the
Banks). Before giving any notice to the
Administrative Agent pursuant to this section, a
Reference Bank shall designate a different 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.
Upon such notification by the Administrative Agent,
the obligation of such affected Reference Bank and any
other similarly affected Banks to make or maintain
Eurodollar Loans and/or C/D Rate Loans, as applicable,
shall be suspended until the Administrative Agent
determines that such circumstances no longer exist,
and such Bank's or Banks' outstanding Eurodollar Loans
and/or C/D Rate Loans shall continue to bear interest
at the applicable interest rate until the next
Interest Period Termination Date if lawful (or, if
such continued status is not lawful, until the date of
receipt of such notification by the Borrower), and
thereafter shall be deemed converted to Base Rate
Loans in equal principal amounts. In such event, all
payments and prepayments of principal which otherwise
would have been applied to repay such converted Loans
of such Bank shall instead be applied to repay the
Base Rate Loans resulting from such conversion.
Section 3.4. Bank Certificates. A certificate signed
by an officer of any Bank or the Administrative Agent,
setting forth any additional amount required to be
paid by the Borrower to such Bank or to the
Administrative Agent for the accounts of the Banks
under Section 3.1 or 3.2 hereof and the basis therefor, shall
be delivered by such Bank or the Administrative Agent
to the Borrower in connection with each demand made at
any time by such Bank or the Administrative Agent upon
the Borrower under any of such sections, and each such
certificate shall constitute conclusive evidence, in
the absence of manifest error, of the additional
amount required to be paid by the Borrower to such
Bank or the Administrative Agent. Each such
certificate shall set forth in reasonable detail any
reasonable averaging or attribution methods used by
such Bank in connection with the calculation of such
additional amount. A claim by any Bank or the
Administrative Agent for all or any part of any
additional amount required to be paid by the Borrower
under Section 3.1 or 3.2 hereof may be made at any time and
from time to time as often as the occasion therefor
may arise.
Section 3.5. Payments to be Free of Deductions. (a)
All payments by the Borrower under this Agreement
shall be made without set-off or counterclaim, and
free and clear of and without deduction for any taxes,
levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or
levied by any country or any political subdivision
thereof or taxing or other authority therein unless
the Borrower is compelled by law to make such
deduction or withholding. If any such obligation is
imposed upon the Borrower with respect to any amount
payable by it to or for the account of any Bank
hereunder, the Borrower will pay to the Administrative
Agent for the account of such Bank on the date on
which such amount becomes due and payable hereunder
and in United States dollars, such additional amount
as shall be necessary to enable such Bank to receive
the same net amount which it would have received on
such due date had no such obligation been imposed upon
the Borrower, provided that the Borrower shall not be
obligated to make such payment for the account of any
Bank if (i) such Bank has failed to comply with Section
3.5(b) hereof, or (ii) such Bank is not entitled to exemption
from deduction or withholding of United States Federal
income tax for any reason other than a change in
United States law or regulations or any applicable tax
treaty. If the Borrower shall be required by law to
make such deduction or withholding, the Borrower will
deliver to the Administrative Agent tax receipts or
other appropriate evidence of payment.
(b) Each Bank that is not incorporated under the
laws of the United States or a state thereof agrees
that (to the extent it has not already done so prior
to the Effective Date) it will deliver to the Borrower
on the Effective Date two duly completed and accurate
originals of a valid United States Internal Revenue
Service Form 4224 or Form 1001 or any successor form
thereto indicating that such Bank is entitled to
receive payments under this Agreement, including fees,
without deduction or withholding of any United States
federal income taxes. Subject to any change in
applicable laws or regulations, such Bank undertakes
to deliver to the Borrower, upon request, two duly
completed and accurate originals of Form 1001 or Form
4224, or successor form, on or before the date that
any such form expires or becomes obsolete, indicating
that such Bank is entitled to receive payments under
this Agreement without deduction or withholding of any
United States federal income taxes.
(c) Within 30 days after the date on which the
Borrower is required to make a deduction or
withholding for the account of a Bank pursuant to
Section 3.5(a) hereof, the Borrower may replace such Bank in
accordance with the terms of Section 3.1(d) hereof.
Section 3.6. Interest Limitation. Notwithstanding any
other term of this Agreement or the Notes or any other
document referred to herein or therein, the maximum
amount of interest which may be charged to or
collected from any Person liable hereunder or under
any Note shall be absolutely limited to, and shall in
no event exceed, the maximum amount of interest which
could lawfully be charged or collected under
applicable law (including, to the extent applicable,
the provisions of Section 5197 of the Revised Statutes of the
United States of America, as amended, 12 U.S.C.
Section 85, as amended), so that the maximum of all
amounts constituting interest under applicable law,
howsoever computed, shall never exceed as to any
Person liable therefor such lawful maximum, and any
term of this Agreement or the Notes or any other
document referred to herein or therein which could be
construed as providing for interest in excess of such
lawful maximum shall be and hereby is made expressly
subject to and modified by the provisions of this
section.
Section 3.7. Facility Fee. For the period commencing
on the Effective Date and ending on the Revolving
Credit Commitment Termination Date, the Borrower
promises to pay to the Administrative Agent, for the
accounts of the Banks in accordance with their
Revolving Credit Commitment Percentages, a facility
fee at a rate per annum equal to the Applicable Margin
in effect from time to time during each calendar
quarter on the daily average amount during each
calendar quarter or portion thereof of the Revolving
Credit Commitment Amount, whether used or unused (and
whether or not the conditions set forth in Section 7
hereof shall have been satisfied) (the "Facility Fee").
The Facility Fee shall be payable quarterly in arrears on
the first day of each January, April, July and October
of each year for the immediately preceding calendar
quarter or portion thereof then ended, commencing on
January 1, 1994, with a final payment on the Revolving
Credit Commitment Termination Date.
Section 3.8. Agent's Fee. The Borrower promises to
pay to the Administrative Agent for its own account an
agent's fee (the "Agent's Fee") in the amounts and at
the times provided in that certain letter agreement,
dated as of the date hereof, between the Borrower and
the Administrative Agent (the "Agent's Fee Letter").
Section 3.9. Letter of Credit Fee. The Borrower shall
pay to the Administrative Agent for the account of the
Letter of Credit Bank a fee in respect of each Letter
of Credit issued by it pursuant to Section 2.11 hereof
calculated at the rate of 1/4% per annum on the daily
average Maximum Drawing Amount of each such Letter of
Credit, payable quarterly in arrears during the term
of such Letter of Credit, commencing upon the last day
of the quarter in which such Letter of Credit was
issued, and upon the Revolving Credit Commitment
Termination Date. The Borrower shall also pay to the
Administrative Agent for the accounts of the Banks
(including FNBB if the Letter of Credit Bank is FNBB
and BofA if the Letter of Credit Bank is BofA) in
accordance with their Revolving Credit Commitment
Percentages a fee in respect of each such Letter of
Credit calculated at the rate per annum equal to the
Applicable Margin in effect from time to time during
such quarter with respect to Eurodollar Standby Loans
on the daily average Maximum Drawing Amount thereof,
payable quarterly in arrears during the term of such
Letter of Credit, commencing upon the last day of the
quarter in which such Letter of Credit was issued, and
upon the Revolving Credit Commitment Termination Date
(the foregoing fees are referred to collectively as
the "Letter of Credit Fee"). In addition (but without
duplication), the Borrower shall pay to the
Administrative Agent for the account of the Letter of
Credit Bank (upon presentation by the Letter of Credit
Bank to the Administrative Agent, and in turn by the
Administrative Agent to the Borrower, of an invoice
documenting such fees) the Letter of Credit Bank's
standard processing, negotiating, amendment and
administrative fees, as determined in accordance with
the Letter of Credit Bank's customary fees and charges
for similar facilities.
Section 3.10. Amendment Fee. In consideration of the
Banks' agreement, subject to the terms and conditions
set forth herein, to make Standby Loans to the
Borrower and to participate in Letters of Credit
issued for the account of the Borrower, pursuant to
this amendment and restatement of the Original Credit
Agreement, the Borrower hereby agrees to pay to the
Administrative Agent, on the Effective Date, for the
accounts of the Banks in accordance with their
Revolving Credit Commitment Percentages, an amendment
fee (the "Amendment Fee") in the amount of $100,000.
Section 4. CLOSING; PAYMENTS AND COMPUTATIONS.
Section 4.1. Closing. The closing of the transactions
contemplated by this Agreement shall occur on November
12, 1993, or such other date (which in no event shall
be later than November 30, 1993) agreed upon by the
Borrower and the Administrative Agent.
Section 4.2. Use of Proceeds. The Borrower covenants
and agrees that the proceeds of the Loans shall be
used for working capital and general corporate
purposes, including, without limitation, back-up
liquidity for the Borrower's commercial paper program.
Section 4.3. Payments. All payments hereunder (whether
of principal, interest, Facility Fee, Agent's Fee,
Amendment Fee, Letter of Credit Fee or otherwise)
shall be made by the Borrower in United States dollars
to the Administrative Agent in immediately available
funds at the Head Office no later than 11:00 a.m.
(Boston time) on the date due. Upon receipt by the
Administrative Agent of any such payment of principal,
interest or fees (other than fees or expenses to be
retained by the Administrative Agent for its own
account pursuant to the terms of this Agreement or
fees to be retained by FNBB in its capacity as Letter
of Credit Bank for its own account), the
Administrative Agent shall remit promptly (and in any
event on the same day) to each Bank its pro rata (or
otherwise applicable) share of such payment, as
provided in Section 2.16 hereof.
Section 4.4. Computations. All computations of
interest in respect of Base Rate Loans, overdue
interest and fees payable hereunder (including the
Facility Fee) shall be based on a 365/366-day year and
the actual number of days elapsed. All computations
of interest payable hereunder in respect of Fixed Rate
Loans, C/D Rate Loans and Eurodollar Loans shall be
based on a 360-day year and the actual number of days
elapsed. Whenever a payment hereunder or under the
Notes becomes due on a day which is not a Business
Day, the due date for such payment shall be extended
to the next succeeding Business Day and interest and
all applicable fees shall accrue during each such
extension.
Section 4.5. Banks' Obligations. The failure or
refusal of any of the Banks at any time to make
available to the Administrative Agent the amount of
the Standby Loans to be made by such Bank at such time
shall not relieve any other Bank from its obligations
hereunder to make Standby Loans in the amount of its
Revolving Credit Commitment Percentage of the Standby
Loans requested, but no Bank shall be responsible for
the failure of any other Bank to make the Standby
Loans to be made by such other Bank. The Banks'
obligations hereunder shall be several and not joint.
Section 4.6. Reference Banks. Each Reference Bank
agrees to use its best efforts to furnish quotations
to the Administrative Agent as contemplated hereby.
If any Reference Bank does not furnish a timely
quotation for any reason other than those set forth in
Section 3.3 hereof, the Administrative Agent shall determine
the relevant interest rate on the basis of the
quotation or quotations furnished by the remaining
Reference Bank or Reference Banks. If any Reference
Bank does not furnish a timely quotation for any of
the reasons set forth in Section 3.3, the provisions of
Section 3.3 shall apply.
Section 5. REPRESENTATIONS AND WARRANTIES. The
Borrower represents and warrants to the Banks that, after
giving effect to the satisfaction of each of the conditions
precedent set forth in Sectin 6 hereof (other than Section
6.2 hereof):
Section 5.1. Existence and Good Standing, Etc.
(a) Each of the Borrower and its Subsidiaries is a
corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of
its incorporation, and has adequate corporate power
and authority to own its property and to conduct its
business as presently conducted.
(b) Each of the Borrower and its Subsidiaries is
qualified to do business and in good standing in each
jurisdiction in which the nature of such Person's
business and property owned or held under lease make
such qualification necessary, except for jurisdictions
in which the failure to qualify will have no material
adverse effect on the business, assets or financial
condition of the Borrower and its Subsidiaries, taken
as a whole, or on the Borrower's ability to perform
its obligations under the Loan Documents.
Section 5.2. Power; Consents; Absence of Conflict with
Other Agreements, Laws, Etc. (a) The Borrower has
adequate corporate power and authority to enter into
each of the Loan Documents, to perform, observe and
comply with all of its agreements and obligations
under each of such documents, and to make the
borrowings contemplated by this Agreement.
(b) The execution and delivery by the Borrower of
the Loan Documents, the performance by the Borrower of
all of its agreements and obligations under each of
such documents and the making by the Borrower of the
borrowings contemplated by this Agreement have been
duly authorized by all necessary corporate action by
the Borrower, and do not and will not (i) violate any
provision of its Charter or bylaws (each as in effect
from time to time), (ii) conflict with, result in a
breach of any term, condition or provision of,
constitute a default under, or result in the creation
of any Lien upon any of its property under, any
agreement, trust deed, indenture, mortgage or other
instrument to which the Borrower or any of its
Subsidiaries is a party or by which the Borrower or
any of its Subsidiaries or any of their property is
bound or affected, (iii) violate or contravene any
provision of any law, regulation, order, ruling or
interpretation thereunder (including, without
limitation, Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System) or any
decree, order or judgment of any court or governmental
or regulatory authority, bureau, agency or official
(all as in effect from time to time and applicable to
it), (iv) require any waivers, consents or approvals
by any of its creditors which have not been obtained,
(v) require any consents or approvals by any of its
shareholders (except such as will be duly obtained on
or prior to the Effective Date and will be in full
force and effect on and as of such date), or (vi)
require any approval, consent, order, authorization or
license by, or giving notice to, or taking any other
action with respect to, any governmental or regulatory
authority or agency under any provision of any
applicable law, except those approvals, consents,
orders, authorizations and actions which are listed
and described on Schedule 5.2 attached hereto, each of
which has been obtained or taken or will be obtained
or taken prior to the Effective Date.
Section 5.3. Binding Effect of Documents. The
Borrower has duly executed and delivered each of the
Loan Documents, and, assuming that each of the
Administrative Agent and the Banks has duly executed
and delivered this Agreement, each of the Loan
Documents is in full force and effect. The agreements
and obligations of the Borrower contained in each of
the Loan Documents constitute its legal, valid and
binding obligations, enforceable against it in
accordance with the respective terms and provisions
hereof and thereof, except as enforceability may be
limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights, and
except to the extent that enforceability is subject to
general principles of equity (regardless of whether
such enforceability is considered in a proceeding in
equity or at law).
Section 5.4. Financial Statements; Solvency. (a) The
consolidated balance sheet of the Borrower and its
Subsidiaries as at the Balance Sheet Date, and the
related statements of income, retained earnings and
cash flows, certified by the Borrower's Independent
Accountants, have been prepared in conformity with
Generally Accepted Accounting Principles applied on a
basis consistent with prior periods (except as
disclosed therein) and fairly and accurately present
the financial condition, assets and liabilities of the
Borrower and its Subsidiaries as at the date hereof
for the period then ended. There are no material
liabilities, contingent or otherwise, of the Borrower
or any of its Subsidiaries as of such date which are
not disclosed on said balance sheet and the related
notes thereto.
(b) The Borrower (both before and after giving
effect to the transactions contemplated hereby) is
solvent, has assets having a fair value in excess of
the amount required to pay its probable liabilities or
its existing debts as they become absolute and
matured, and has, and will have access to, adequate
capital for the conduct of its business and the
ability to pay its debts from time to time incurred in
connection therewith as such debts mature.
Section 5.5. Title to Properties. The Borrower and
its Subsidiaries own all of the assets reflected in
the consolidated balance sheet of the Borrower and its
Subsidiaries as at the Balance Sheet Date or acquired
since that date (except assets sold or otherwise
disposed of in the ordinary course of business since
that date, and except those assets listed and
described on Schedule 9.1 attached hereto), subject in
each case to no Liens except those permitted by Section 9.2
hereof.
Section 5.6. No Adverse Changes. Since the Balance
Sheet Date, there has not been any materially adverse
change in the business, assets, financial condition or
results of operations of the Borrower and its
Subsidiaries, taken as a whole.
Section 5.7. Litigation. Except as disclosed in the
Parent's Form 10-K for the year ended December 31,
1992, there is no restraining order, injunction,
claim, action, suit, proceeding or investigation of
any kind pending or, to the best knowledge of the
Borrower, threatened against or, as of the Effective
Date, affecting, the Borrower or any of the Borrower's
Subsidiaries before any court, tribunal, governmental
or regulatory authority, commission, administrative
agency or board in which there is a significant
possibility of an adverse decision which would,
either by itself or taken together with other such
matters, materially adversely affect the business,
assets or financial condition of the Borrower and its
Subsidiaries, taken as a whole or which questions the
validity or enforceability of this Agreement or any of
the other Loan Documents. As of the Effective Date,
the actions, suits or proceedings described in the
Parent's Form 10-K referred to above, either
individually or in the aggregate, are not expected to
materially adversely affect the business, assets or
financial condition of the Borrower and its
Subsidiaries or question the validity or
enforceability of this Agreement or the other Loan
Documents.
Section 5.8. No Adverse Provisions. Neither the
Borrower nor any of its Subsidiaries is subject to any
charter, corporate or other legal restriction, or any
judgment, decree, order, rule or regulation which in
the judgment of the Borrower's officers has or is
expected in the future to have a materially adverse
effect on the business, assets or financial condition
of the Borrower and its Subsidiaries, taken as a
whole, or on the Borrower's ability to perform its
obligations under the Loan Documents. Neither the
Borrower nor any of its Subsidiaries is a party to any
contract or agreement which in the judgment of the
Borrower's officers has or is expected to have a
materially adverse effect on the Borrower's ability to
perform its obligations under the Loan Documents.
Section 5.9. Compliance with Other Instruments, Laws,
Etc. Neither the Borrower nor any of its
Subsidiaries is violating any provision of its Charter
or by-laws, any agreement, contract or instrument by
which it or any of its properties is bound, or any
decree, order, judgment, statute, license, rule or
regulation applicable to it, in a manner which could
result in the imposition of substantial penalties or
materially adversely affect the business, assets or
financial condition of the Borrower and its
Subsidiaries, taken as a whole.
Section 5.10. Tax Status. Each of the Borrower and the
Borrower's Subsidiaries has (a) made or filed all
material federal and state tax returns, reports and
declarations required by any jurisdiction to which it
is subject, (b) paid all taxes and other governmental
assessments and charges, as shown or determined to be
due on such tax returns, reports and declarations,
except for taxes the amount, applicability or validity
of which is currently being contested by it in good
faith by appropriate proceedings and with respect to
which it has set aside on its books reserves
reasonably deemed by it to be adequate therefor, and
(c) set aside on its books provisions reasonably
adequate for the payment of all taxes for periods
subsequent to the periods to which such returns,
reports or declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction.
Section 5.11. Location of Office. The Borrower's chief
executive office and the location where its books and
records are kept is 455 North Cityfront Plaza Drive,
Chicago, Illinois 60611-5504.
Section 5.12. Disclosure. The representations and
warranties made by the Borrower in this Agreement or
by the Borrower or the Parent in any agreement,
instrument, document, certificate, statement or letter
furnished to the Banks on behalf of the Borrower in
connection with any of the transactions contemplated
by the Loan Documents did not, taken as a whole,
together with all other information provided by or on
behalf of the Borrower in connection with the
transactions contemplated herein contain, when made,
any untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements contained herein or therein not misleading.
Except as previously disclosed in writing to the
Banks, there is no fact known to the Borrower
(excluding general economic and political conditions
affecting business generally) which materially
adversely affects, or which is reasonably likely in
the future to materially adversely affect, the
business, assets or financial condition of the
Borrower and its Subsidiaries, taken as a whole.
Section 5.13. Employee Benefit Plans.
(a) In General. Each Employee Benefit Plan
has been maintained and operated in compliance in all
material respects with the provisions of ERISA and, to
the extent applicable, the Code, including but not
limited to the provisions thereunder respecting
prohibited transactions. The Borrower has heretofore
delivered to the Agent the most recently completed
annual report, Form 5500, with all required
attachments, and actuarial statement required to be
submitted under Section 103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
(b) Guaranteed Pension Plans. The Borrower
and its ERISA Affiliates have fulfilled their
obligations under the minimum funding standards of
ERISA and the Code with respect to each Guaranteed
Pension Plan, and neither the Borrower nor any ERISA
Affiliate has failed to make any contribution to any
Guaranteed Pension Plan which has resulted or could
reasonably be expected to result in the imposition of
a Lien under Section 302(f) of ERISA. No waiver of an
accumulated funding deficiency or extension of
amortization periods has been received with respect to
any Guaranteed Pension Plan. No liability to the PBGC
(other than required insurance premiums, all of which
have been paid) has been incurred by the Borrower or
any ERISA Affiliate with respect to any Guaranteed
Pension Plan, and there has not been any ERISA
Reportable Event (other than an Event as to which the
requirement of 30 days notice has been waived), or any
other event or condition which presents a material
risk of termination of any Guaranteed Pension Plan by
the PBGC. Based on the latest valuation of each
Guaranteed Pension Plan (which in each case occurred
within twelve months of the date of this
representation) and on the actuarial methods and
assumptions employed for that valuation, the aggregate
benefit liabilities of all such Guaranteed Pension
Plans within the meaning of Section 4001 of ERISA did not
exceed the aggregate value of the assets of all such
Plans by more than $5,000,000, disregarding for this
purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of
benefit liabilities.
(c) Multiemployer Plans. Neither the Borrower
nor any ERISA Affiliate has incurred any material
liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan under
Section 4201 of ERISA or as a result of a sale of assets
described in Sectopm 4204 of ERISA. Neither the Borrower nor
any ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or insolvent
under and within the meaning of Section 4241 or Section 4245 of
ERISA or that any Multiemployer Plan intends to terminate or
has been terminated under Section 4041A of ERISA.
Section 5.14. Business. Each of the Borrower and its
Subsidiaries enjoys peaceful and undisturbed
possession under all leases which are material to the
Borrower and its Subsidiaries, taken as a whole, of
real or personal property of which any Person is
lessee, subject to the rights of sublessees and other
parties lawfully in possession in the ordinary course
of business, none of which contains any unusual or
burdensome provision which would be reasonably likely
materially adversely to affect or to impair the
operations of the Borrower and its Subsidiaries, taken
as a whole, and all such leases which are material to
the operations of the Borrower and its Subsidiaries,
taken as a whole, are valid and subsisting and in full
force and effect. Each of the Borrower and its
Subsidiaries has rights with respect to all of the
material patents, trademarks, permits, service marks,
trade names, copyrights, licenses and franchises, and
shall have obtained assignments of all other rights of
whatever nature, necessary for the present and planned
future conduct of its business, without any known
conflict with the rights of others which might result
in a material adverse effect on the business, assets
or financial condition of the Borrower and its
Subsidiaries, taken as a whole. Each of the Borrower
and its Subsidiaries owns, leases or has the right to
use all properties, franchises, rights and licenses,
and employs employees, in an amount and manner
sufficient to conduct railroad operations as now
conducted and as proposed to be conducted, without any
conflict with the rights of others.
Section 5.15. Capitalization. (a) The Parent is the
record and beneficial owner, free and clear of all
Liens, of all of the issued and outstanding capital
stock of the Borrower. All shares of such capital
stock have been validly issued and are fully paid and
nonassessable, and no rights to subscribe to additional
shares have been granted or exist.
(b) Schedule 5.15 attached hereto sets forth a
true, accurate and complete list as of the Effective
Date of all of the Subsidiaries of the Borrower and
other Persons in which the Borrower has an equity
investment, the jurisdiction of organization of such
Subsidiaries, the organizational form of such
Subsidiaries, the percentage equity interest of the
Borrower (or its Subsidiaries) in such Subsidiaries,
and the amount and nature of the investment by the
Borrower (or its Subsidiaries) in such Subsidiaries.
Section 5.16. Holding Company and Investment Company
Acts. Neither the Borrower nor any of its
Subsidiaries is a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of a
"holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935; nor is any
of such Persons a "registered investment company" or
an "affiliated company" or a "principal underwriter"
of a "registered investment company", as such terms
are defined in the Investment Company Act of 1940, as
amended.
Section 5.17. Certain Transactions. None of the
officers or directors of the Borrower or its
Subsidiaries is presently a party to any transaction
with the Borrower or its Subsidiaries or any other
Person which is directly or indirectly controlled (as
defined in the definition of Affiliate in Section 1(a) hereof)
by the Parent (other than for services as employees,
officers and directors), including, without
limitation, any contract, agreement or other
arrangement providing for the furnishing of services
to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments
to or from any officer, director or such employee or,
to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any
officer, director, or any such employee has a
substantial interest or is an officer, director,
trustee or partner.
Section 5.18. Environmental Compliance. (a) The
Borrower has taken all appropriate steps to
investigate the past and present condition and usage
of its and its Subsidiaries' properties and the
operations conducted thereon and, based upon such
diligent investigation, has determined that:
(i) except as set forth on Schedule 5.18 attached
hereto, none of the Borrower, its Subsidiaries or, to
the best of the Borrower's knowledge, any lessee of
its properties is in violation, or alleged violation,
of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters,
including without limitation those arising under the
Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986
("SARA"), the Federal Clean Water Act, the Federal
Clean Air Act, the Toxic Substances Control Act, the
Hazardous Materials Transportation Act ("HAZMAT"), or
any state or local statute, regulation, ordinance,
order or decree relating to health, safety or the
environment (hereinafter "Environmental Laws"), which
violation would have a material adverse effect on the
business, assets or financial condition of the
Borrower and its Subsidiaries, taken as a whole;
(ii) except as set forth in Schedule 5.18
attached hereto, none of the Borrower or its
Subsidiaries has received written notice from any
third party including without limitation any federal,
state or local governmental authority, (A) that any
one of them has been identified by the United States
Environmental Protection Agency as a potentially
responsible party under CERCLA with respect to a site
listed on the National Priorities List, 40 C.F.R. Part
300 Appendix B (1986); (B) that any hazardous waste as
defined by 42 U.S.C. Section 6903(5), any hazardous substances
as defined by 42 U.S.C. Section 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. Section 9601(33) and any
toxic substance, oil or hazardous materials or other
chemicals or substances regulated by any Environmental
Laws ("Hazardous Substances") which any one of them
has generated, transported or disposed of has been
found at any site at which a federal, state or local
agency or other third party has conducted or has
ordered that the Borrower or any of its Subsidiaries
conduct a remedial investigation, removal or other
response action pursuant to any Environmental Law; or
(C) that it is or shall be a named party to any claim,
action, cause of action, complaint (contingent or
otherwise), legal or administrative proceeding arising
out of any third party's incurrence of costs,
expenses, losses or damages of any kind whatsoever in
connection with the release of Hazardous Substances
which, in the case of each of (A) or (B), the effect
of which, or in the case of (C) above, if adversely
determined to the Borrower, would have a material
adverse effect on the Borrower and its Subsidiaries,
taken as a whole;
(iii) except as set forth on Schedule 5.18
attached hereto and to the best knowledge of the
Borrower: (A) no portion of the property of the
Borrower or its Subsidiaries has been used for the
handling, manufacturing, processing, storage or
disposal of Hazardous Substances except in accordance
with applicable Environmental Laws or where non-
compliance with applicable Environmental Laws would
not have a material adverse effect on the Borrower and
its Subsidiaries, taken as a whole; and no underground
tank or other underground storage receptacle for
Hazardous Substances is located on such properties;
(B) in the course of any activities conducted by the
Borrower, its Subsidiaries or lessees of its
properties, no Hazardous Substances have been
generated or are being used on such properties except
in accordance with applicable Environmental Laws or
where non-compliance with applicable Environmental
Laws would not have a material adverse effect on the
Borrower and its Subsidiaries, taken as a whole;
(C) there have been no releases (i.e. any past or
present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting,
escaping, disposing or dumping) or threatened releases
of Hazardous Substances on, upon, into or from the
properties of the Borrower or its Subsidiaries, which
releases would have a material adverse effect on the
financial condition of the Borrower and its
Subsidiaries, taken as a whole; and (D) in addition,
any Hazardous Substances that have been generated on
the properties of the Borrower or any of its
Subsidiaries have been transported or disposed of in
accordance with applicable laws and regulations by
transporters and to disposal facilities, which, to the
best knowledge of the Borrower (without independent
inquiry), are operating in compliance in all material
respects with applicable permits and laws;
(iv) none of the properties of the Borrower or
any of its Subsidiaries are or shall be subject to any
applicable environmental cleanup responsibility law or
environmental restrictive transfer law or regulation
by virtue of the transactions set forth herein and
contemplated hereby; and
(v) each of the Borrower and its Subsidiaries is
in material compliance with HAZMAT and the regulations
thereunder (49 C.F.R. Parts 100 to 199).
Section 5.19. Liens. (a) No valid mortgages, chattel
mortgages, assignments, statements of assignment,
security agreements or deeds of trust have been filed
by any person or persons with respect to any part of
the property or assets of the Borrower or any of the
Borrower's Subsidiaries except for mortgages and
security agreements which are otherwise permitted by
the provisions of Section 9.2 hereof.
(b) No valid financing statement which names the
Borrower or any of the Borrower's Subsidiaries as a
debtor, or encumbers or attempts to encumber any of
the material assets or a material portion of the
assets of any of such Persons, has been filed in any
jurisdiction in the United States or any State thereof
pursuant to Article 9 of the Uniform Commercial Code
of any State, and none of the Borrower or any of the
Borrower's Subsidiaries has signed any financing
statement or any security agreement authorizing any
secured party thereunder to file any such financing
statement in any such jurisdiction, other than
financing statements with respect to Liens (including,
without limitation, capitalized leases) permitted by
Section 9.2 hereof and financing statements filed for
protective purposes only by lessors under operating
leases with respect to which the Borrower is lessee.
Section 5.20. Administrative Agent as Senior Debt
Agent. The Administrative Agent is the "Senior
Debt Agent" under the Debenture Indenture.
Section 5.21. Fiscal Year. Each of the Borrower and
its Material Subsidiaries has a fiscal year which is
the twelve months ending on December 31 of each
calendar year.
Section 5.22. No Default. No Default or Event of
Default exists at the delivery of this Agreement.
Section 5.23. Insurance. Schedule 5.23 attached hereto
lists the policies and types and amounts of coverage
(including all deductibles) of theft, fire, liability,
life, property and casualty and other insurance owned
or held by the Borrower and its Subsidiaries on the
date hereof. Such policies of insurance are
maintained with financially sound and reputable
insurance companies, funds or underwriters and are of
the kinds and cover such risks and are in such amounts
and with such deductibles and exclusions as are
consistent with the prudent business practice of
similarly structured and similarly capitalized
companies of similar size in the Borrower's industry.
All such policies (or substitute policies complying
with Section 8.10 hereof) are in full force and effect; are
sufficient for compliance by the Borrower and its
Subsidiaries with all requirements of law and of all
agreements to which such Persons are parties; are
valid, outstanding and enforceable policies and
provide that they will remain in full force and effect
through the respective dates set forth in such
schedule; and coverage thereunder will not be reduced
by, or terminate or lapse by reason of, the
transactions contemplated by or referred to in this
Agreement.
Section 5.24. Regulation U. No proceeds of the Loans
shall be used for the purpose of purchasing or
carrying any "margin security" or "margin stock", as
such terms are used in Regulations G, T, U and X of
the Board of Governors of the Federal Reserve System.
Section 6. EFFECTIVE DATE; CONDITIONS TO EFFECTIVENESS.
This Agreement shall not become effective and the
Original Credit Agreement shall remain in full force
and effect unless and until the date (the "Effective
Date"), which must be no later than the date specified
as the latest permitted closing date under Section 4.1
hereof, that each of the conditions precedent
specified in this Section 6 is satisfied.
Section 6.1. Delivery of Documents. (a) This
Agreement shall have been duly and properly
authorized, executed and delivered by the Borrower,
the Administrative Agent, the Competitive Bid Agent
and the Banks.
(b) Each of the Notes shall have been duly and
properly authorized, executed and delivered by the
Borrower and shall be in full force and effect.
(c) Executed original counterparts of each of the
Loan Documents shall have been furnished to the
Administrative Agent.
Section 6.2. Representations and Warranties. The
representations and warranties contained herein shall
have been correct as of the date on which made and
shall also be correct at and as of the Effective Date
except to the extent that the facts upon which such
representations and warranties are based may have
changed as a result of transactions permitted or
contemplated hereby.
Section 6.3. No Default. On the Effective Date there
shall exist no Default or Event of Default, and no
Default or Event of Default shall result from
consummation of the transactions on the Effective
Date.
Section 6.4. Legality. No change in applicable law
shall have occurred as a consequence of which it shall
have become and continue to be unlawful for any Bank
to make a Loan on such occasion, provided that those
Banks to whom such change in law is not applicable
shall continue to be obligated to make Loans
hereunder, notwithstanding the fact that one or more
other Banks are affected by such change in law.
Within 30 days after any Bank fails to make a Loan as
a result of this section, the Borrower may replace
such Bank in accordance with the terms of Section 3.1(d)
hereof.
Section 6.5. Proceedings and Documents. All
corporate, governmental and other proceedings in
connection with the transactions contemplated by the
Loan Documents and all instruments and documents
incident thereto shall be reasonably satisfactory in
substance and in form to the Banks and to the Banks'
Special Counsel, and the Banks and such counsel shall
have received all information and such counterpart
originals or certified or other copies of such
documents as the Banks or such counsel may reasonably
request.
Section 6.6. Legal Opinions. The Banks shall have
received written opinions addressed to the Banks from
counsel to the Borrower in the form of Exhibits C-l
and C-2 attached hereto. The Banks shall have
received a favorable written opinion of Steptoe &
Johnson, special counsel to the Borrower, which is
satisfactory to the Banks in all respects, with
respect to Interstate Commerce Commission matters.
The Borrower hereby instructs all such counsel to
deliver such opinions to the Banks.
Section 6.7. Financial Condition. The Banks shall
have received the financial statements referred to in
Section 5.4 hereof.
Section 6.8. Delivery of Charter and Other Documents.
The Administrative Agent shall have received from the
Borrower copies, certified by a duly authorized
officer of the Borrower to be true and complete as of
the Effective Date of each of (a) the Charter of the
Borrower as in effect on such date, (b) the bylaws of
the Borrower in effect on such date, (c) the
resolutions of the Board of Directors of the Borrower
authorizing the execution and delivery by the Borrower
of each of the Loan Documents and its performance of
all of its agreements and obligations under each of
such documents and the borrowings and other
transactions contemplated by this Agreement, and (d)
an incumbency certificate giving the name, title, and
bearing a specimen signature of each individual who
shall be authorized to sign, in its name and on its
behalf, each of the Loan Documents, and to make
application for the Loans, and to give notices and to
take other action on its behalf under the Loan
Documents.
Section 6.9. Amendment Fee. The Administrative Agent
shall have received the Amendment Fee as provided in
Section 3.10.
Section 6.10. Closing Certificate. (a) The Borrower
shall have delivered a closing certificate
substantially in the form of Exhibit D attached
hereto, and such closing certificate shall be in full
force and effect.
(b) The Administrative Agent shall have executed
this Agreement signifying to the Borrower and the
Banks (i) that it has received satisfactory evidence
that the closing conditions set forth in this Section 6
have been satisfied and (ii) that the Effective Date shall
have occurred.
Section 6.11. Original Credit Agreement. All fees,
including the Commitment Fee (as defined in the
Original Credit Agreement), expenses and other amounts
payable pursuant to the Original Credit Agreement,
excluding all outstanding Loans (as defined in the
Original Credit Agreement) and accrued interest
thereon, shall have been paid in full.
Section 6.12. ICC Filings. The Borrower shall have filed
or caused to be filed with the Interstate Commerce
Commission a notice of exemption under 49 C.F.R. 1175
which complies with the provisions of such regulations
and which seeks an exemption from the requirements of
49 U.S.C. 11301 for implementation of the provisions
of this Agreement and such exemption shall have become
effective.
Section 6.13. Facility A Credit Agreement. The Borrower,
the banks named therein and FNBB, as administrative
agent and competitive bid agent, shall have executed
and delivered the Facility A Credit Agreement and such
agreement shall be in full force and effect.
Section 7. CONDITIONS OF BORROWING. The obligation of
the Banks to make any Loans, and the obligation of the
Letter of Credit Bank, with the pro rata participation
of the Banks, to issue any Letters of Credit, is
subject to the satisfaction of the following
conditions precedent:
Section 7.1. Representations and Warranties. The
representations and warranties contained in this
Agreement shall have been correct as of the date on
which made and shall also be correct at and as of the
date of the applicable Borrowing with the same effect
as if made at and as of such time, except to the
extent that the facts upon which such representations
and warranties are based may have changed as a result
of transactions permitted or contemplated hereby.
Section 7.2 No Default. At the time of the applicable
Borrowing, there shall exist no Default or Event of
Default, and no Default or Event of Default shall
result from consummation of the applicable Borrowing.
Section 7.3. Legality. (i) In the case of the
obligation to make any Loans, no change in applicable
law shall have occurred as a consequence of which it
shall have become and continue to be unlawful for the
applicable Banks to make such a Loan on such occasion,
provided that those Banks to whom such change in law
is not applicable shall continue to be obligated to
make Loans hereunder, notwithstanding the fact that
one or more other Banks are affected by such change in
law; within 30 days after any Bank fails to make a
Loan as a result of this section, the Borrower may
replace such Bank in accordance with the terms of
Section 3.1(d) hereof; and (ii) in the case of the
obligation to issue a Letter of Credit, no change in
applicable law shall have occurred as a consequence of
which it shall have become and continue to be unlawful
for the Letter of Credit Bank to issue a Letter of
Credit.
Section 7.4. Borrowing Notice; Competitive Bid
Request. The Borrower shall have delivered a
Competitive Bid Request in accordance with the
provisions of Section 2.5 hereof, or a Borrowing Notice in
accordance with the provisions of Section 2.6 hereof, or, if
the Borrower is requesting the issuance of a Letter of
Credit, a request for such issuance in accordance with
the provisions of Section 2.11 hereof. The Borrowing Notice,
Competitive Bid Request or request for the issuance of
a Letter of Credit, as the case may be, shall
constitute a certification by the Borrower that the
conditions set forth in this Section 7.4 will be satisfied as
of the date of the applicable Borrowing.
Section 8. AFFIRMATIVE COVENANTS. The Borrower hereby
covenants and agrees that, so long as the Loans or the
Notes are outstanding, any amounts are owing pursuant
to this Agreement, or the Banks have any Commitment to
make Loans hereunder:
Section 8.1. Punctual Payment. The Borrower will duly
and punctually pay or cause to be paid the principal
of and interest on the Loans, the Facility Fee, the
Agent's Fee, the Letter of Credit Fee and all other
amounts from time to time owing hereunder or under the
other Loan Documents, all in accordance with the terms
of this Agreement and the other Loan Documents.
Section 8.2. Records and Accounts. The Borrower will
and will cause each of its Subsidiaries to keep true
records and books of account in which proper entries
will be made in accordance with Generally Accepted
Accounting Principles and to maintain adequate
accounts and reserves for all taxes (including income
taxes), all depreciation, depletion, obsolescence and
amortization of its properties, all contingencies and
all other reserves in accordance with Generally
Accepted Accounting Principles.
Section 8.3. Financial Statements, Certificates and
Information. The Borrower will furnish to the
Banks:
(a) As soon as practicable and, in any event,
within 90 days after the end of each fiscal year of
the Borrower, consolidated balance sheets of the
Borrower and its Subsidiaries as at the end of such
fiscal year, consolidated statements of income and
consolidated statements of retained earnings and cash
flow of the Borrower and its Subsidiaries for the
fiscal year then ended, each setting forth in
comparative form the figures for the previous fiscal
year, all in reasonable detail, prepared in accordance
with Generally Accepted Accounting Principles,
accompanied by a report and unqualified opinion of the
Borrower's Independent Accountants (who shall be
reasonably satisfactory to the Banks), which report
and opinion shall have been prepared in accordance
with generally accepted auditing standards. In
addition, the Borrower will obtain from such
Independent Accountants and deliver to the Banks
within said period of 90 days the certified statement
of such Independent Accountants that they have read a
copy of this Agreement and that, in making the
examination necessary for said certification,
performing activities within the normal scope of their
audit and without further inquiry, they have obtained
no knowledge of any Default or Event of Default then
existing, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of
Default, they shall disclose in such statement any
such Default or Event of Default.
(b) As soon as practicable and, in any event,
within 45 days after the end of each fiscal quarter in
each fiscal year of the Borrower, consolidated balance
sheets of the Borrower and its Subsidiaries as at the
end of such fiscal quarter, and consolidated
statements of income and consolidated statements of
retained earnings and cash flow of the Borrower and
its Subsidiaries for the portion of the fiscal year
then ended, each in reasonable detail, prepared in
accordance with Generally Accepted Accounting
Principles applied on a basis consistent with prior
periods except as otherwise specified, subject to
year-end audit adjustment, and certified on behalf of
the Borrower by an Officer's Certificate.
(c) As soon as practicable and, in any event,
within 45 days after the end of each fiscal quarter in
each fiscal year of the Borrower, financial and
operating statistics of the Borrower and its
Subsidiaries as at the end of such fiscal quarter, in
reasonable detail and in such form as shall be
satisfactory to the Administrative Agent, which, to
the extent such statistics are in the form of
financial statements, have been prepared in accordance
with Generally Accepted Accounting Principles applied
on a basis consistent with prior periods except as
otherwise disclosed therein, along with an analysis,
in reasonable detail, of the variances, if any, of
such financial and operating statistics from the
projections for such fiscal quarter previously
furnished to the Banks, in each case certified on
behalf of the Borrower by an Officer's Certificate.
(d) Promptly upon receipt thereof, copies of all
management letters which are submitted to the Borrower
by its Independent Accountants in connection with any
annual or interim audit of the books of the Borrower
made by such accountants.
(e) As soon as practicable but, in any event,
within 15 Business Days after the issuance thereof,
copies of such other financial statements, reports and
notices as the Borrower shall send to its bondholders,
noteholders or other lenders and copies of all reports
filed by the Borrower with the Securities and Exchange
Commission and the Interstate Commerce Commission or
any similar or corresponding governmental commission,
department or agency substituted for either of the
foregoing, federal or state.
(f) Within the time periods provided in
paragraphs (a) and (b) above a certificate
substantially in the form of Exhibit E attached hereto
(a "Compliance Certificate").
(g) No later than 30 days after the end of each
fiscal year of the Borrower, projections of the
financial and operating performance of the Borrower
and its Subsidiaries on a monthly basis for the next
succeeding fiscal year, as well as forecasts of the
Borrower and its Subsidiaries' projected compliance
with the covenants contained in Section 9 hereof on a
quarterly basis for such next fiscal year, and
projections of such performance on an annual basis for
each of the four following fiscal years. The Borrower
agrees that it will cause such projections and
forecasts to be amended from time to time as necessary
in light of events affecting operations.
(h) With reasonable promptness, such other data
as any Bank may reasonably request.
All confidential information and documents concerning
the Borrower and its Subsidiaries supplied by the
Borrower to the Banks shall be held in confidence by
the Banks and the Banks shall not disclose such
information and documents, except the Borrower hereby
authorizes the Banks to disclose any information
obtained pursuant to this Agreement or the other Loan
Documents to participants and potential participants
as provided in Section 15(e) hereof, to legal counsel for the
Banks, to consultants of the Banks who have agreed to
be bound by the confidentiality provisions of this
Agreement, to employees of and agents for the Banks in
their ongoing business, and to any independent
auditors of the Banks and to all appropriate
governmental regulatory authorities or courts to the
extent requested or subpoenaed, but only to the extent
permitted by applicable laws and regulations,
including those applying to classified material. Upon
receipt of a request to disclose any information to
governmental authorities or courts other than
governmental bank examiners and independent auditors
of the Banks, the Banks will notify the Borrower, to
the extent permitted by applicable law and
regulations, of such request and, to the extent
practicable, permit the Borrower to seek a protective
order with respect thereto.
Section 8.4. Business and Legal Existence. The
Borrower will and will cause each of its Material
Subsidiaries to keep in full force and effect its
legal existence (except as permitted by Section 9.5 hereof)
and good standing under the laws of its jurisdiction
of incorporation, maintain its qualification to do
business in each state in which the failure to qualify
would have a material adverse effect on the business,
assets or financial condition of such Person and
maintain all rights, licenses, leases and franchises
reasonably necessary and material to the conduct of
its business.
Section 8.5. Payment of Taxes. The Borrower will and
will cause each of its Subsidiaries promptly to pay
and discharge all lawful state and federal taxes,
assessments and governmental charges or levies imposed
upon it or upon its income or profit or upon any
property belonging to it, unless such tax, assessment,
charge or levy shall not at the time be due and
payable or can be paid thereafter without penalty, or
if the validity thereof shall currently be contested
in good faith by appropriate proceedings and adequate
reserves with respect to such tax, assessment, charge
or levy shall have been established in accordance with
Generally Accepted Accounting Principles.
Section 8.6. Inspection of Properties and Books. The
Borrower will and will cause each of its Subsidiaries
to permit the Banks and any designated representatives
to visit and inspect any of the properties of the
Borrower and its Subsidiaries to examine the books of
account (and to make copies thereof and extracts
therefrom), and to discuss the affairs, finances and
accounts of the Borrower and its Subsidiaries with,
and to be advised as to the same by, their officers,
all at such reasonable times as the Majority Banks may
reasonably request.
Section 8.7. Notice of Litigation. The Borrower will
and will cause each of its Subsidiaries promptly to
notify the Banks of the issuance of any restraining
order or injunction or the commencement of any claim,
action, suit, proceeding or investigation of any kind
against any of the Borrower or any of its Subsidiaries
in which there is a reasonable likelihood of an
adverse decision which would either by itself or taken
together with other such matters, materially adversely
affect the business, assets or financial condition of
the Borrower and its Subsidiaries, taken as a whole,
or which question the validity or enforceability of
this Agreement or the other Loan Documents.
Section 8.8. Notice of Default. If the Borrower or
any of its Subsidiaries shall at any time obtain
knowledge of the existence of any Default or Event of
Default, the Borrower shall, within two Business Days
of the occurrence of such Default or Event of Default,
deliver to the Banks a certificate entitled "notice of
default", specifying the nature and period of
existence thereof and what action the Borrower
proposes to take with respect thereto.
Section 8.9. Compliance with Law, Etc. The Borrower
will and will cause each of its Subsidiaries to (a)
comply with all provisions of its Charter and by-laws
and all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it
is or becomes subject and noncompliance with which
would have a material adverse effect on the business,
assets, financial condition or operations of the
Borrower and its Subsidiaries, taken as a whole, or on
the ability of the Borrower to fulfill its obligations
under this Agreement or the other Loan Documents; and
(b) promptly obtain, maintain, apply for renewal, and
not allow to lapse, any authorization, consent,
approval, license or order for, and accomplish any
filing or registration with, any court or judicial,
administrative or governmental authority or any other
Person which is or becomes necessary in order that it
perform in all material respects all of its
obligations under this Agreement, the other Loan
Documents and in order that the same are valid and
binding and effective in accordance with their terms.
Section 8.10. Insurance. The Borrower will and will
cause each of its Subsidiaries to maintain at all
times insurance with substantially similar coverage
and conditions as the insurance listed on Schedule
5.23 attached hereto. Each of such insurance
policies shall provide that such policy may not be
terminated, cancelled or materially modified without
30 days' prior written notice to the Administrative
Agent. The Borrower will not and will not permit any
of its Subsidiaries to reduce the levels of insurance
coverage below those in effect on the Effective Date,
as reflected on such schedule, without the prior
written consent of the Majority Banks unless such
coverage is not available on commercially reasonable
terms to the Borrower or such Subsidiary and to other
similarly sized companies in the Borrower's industry.
Section 8.11. Employee Benefit Plans. Neither the
Borrower nor any ERISA Affiliate will:
(a) engage in any "prohibited transaction"
within the meaning of Section 406 of ERISA or Section 4975
of the Code which could result in a material liability for
the Borrower; or
(b) permit any Guaranteed Pension Plan to
incur an "accumulated funding deficiency", as such
term is defined in Section 302 of ERISA, whether or not such
deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed
Pension Plan to an extent which, or terminate any
Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on
the assets of the Borrower pursuant to Section 302(f) or
Section 4068 of ERISA; or
(d) permit or take any action which would
result in the aggregate benefit liabilities (with the
meaning of Section 4001 of ERISA) of all Guaranteed Pension
Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in
excess of benefit liabilities, by more than
$10,000,000.
The Borrower will (i) promptly upon the request of
the Administrative Agent, furnish to the
Administrative Agent a copy of the most recent
actuarial statement required to be submitted under
Section 103(d) of ERISA and Annual Report, Form 5500, with
all required attachments, in respect of each
Guaranteed Pension Plan and (ii) promptly upon receipt
or dispatch, furnish to the Administrative Agent any
notice, report or demand sent or received in respect
of a Guaranteed Pension Plan under Section 302, 4041, 4042,
4043, 4063, 4065, 4066 and 4068 of ERISA, or in
respect of a Multiemployer Plan, under Section 4041A, 4202,
4219, 4242, or 4245 of ERISA.
Section 8.12. Environmental Compliance. The Borrower
will and will cause each of its Subsidiaries to comply
with all Environmental Laws, including, without
limitation, those concerning the establishment and
maintenance of underground tanks and other underground
storage receptacles or the transportation of hazardous
materials, except where noncompliance with such
Environmental Laws would not have a material adverse
effect on the business, assets or financial condition
of the Borrower and its Subsidiaries, taken as a
whole, and will, upon receipt of any notice of
material non-compliance or knowledge of material
non-compliance, promptly send copies of such notice or
communicate its knowledge of such non-compliance to
the Administrative Agent.
Section 8.13. Cash Flow Recapture. (a) With respect to
each calendar year during the term of this Agreement
if any Default or Event of Default shall have occurred
at any time during such year, the Borrower will, on
the date 90 days after the end of each such calendar
year, commencing with the year ending December 31,
1993, if applicable, permanently reduce the Revolving
Credit Commitment Amount by and apply to the 1991
Senior Notes as a prepayment thereof, in accordance
with the provisions of clause (b) hereof, an amount (a
"Cash Flow Recapture Amount") equal to 50% of Excess
Cash Flow for such calendar year.
(b) With respect to each calendar year during the
term of this Agreement during which any Default or
Event of Default shall have occurred at any time
during such year and with respect to each Cash Flow
Recapture Amount from Excess Cash Flow determined
pursuant to clause (a) above, the Borrower shall offer
to pay to the holders of the 1991 Senior Notes in
accordance with Section 5.3 of the 1991 Note Purchase
Agreement an amount equal to the 1991 Senior Notes'
proportionate share of such Cash Flow Recapture Amount
(based on the Revolving Credit Commitment Amount and
the 1991 Senior Notes outstanding as at the date of
such offer); and the Revolving Credit Commitment
Amount shall be permanently reduced by the balance of
such Cash Flow Recapture Amount (including at time of
such reduction any amounts rejected by the holders of
the 1991 Senior Notes). To the extent applicable, the
Borrower shall, at the time of such reduction, make
any payments then required by Section 2.3(b) hereof.
Section 8.14. Proceeds of Sales of Assets. (a) The
Borrower shall be entitled to retain for its own use
all of the proceeds of any individual sale of any
asset which is Nonessential Property (except Relieved
Track Materials) if the net after-tax proceeds of such
sale are less than $2,500,000. In addition, the
Borrower shall be entitled to retain for its own use
all of the proceeds of any sale of a group of such
assets in a single transaction if the net after-tax
proceeds of such sale are less than $2,500,000. The
Borrower shall also be entitled to retain for its own
use all of the proceeds from the sale of Relieved
Track Materials in any calendar year where the
Borrower receives less than $2,500,000 in net
after-tax proceeds from the sale of Relieved Track
Materials. All proceeds from the sale of Nonessential
Property which the Borrower is not entitled to retain
pursuant to the foregoing three sentences (the
"Available Proceeds") shall be applied as mandatory
prepayments of the 1991 Senior Notes in the manner
(and to the extent) set forth in paragraphs (b) and
(c) below, and, if any Default or Event of Default has
occurred and is continuing on any of the occasions
referred to in paragraph (b)(i) below or has occurred
during any of the calendar years referred to in
paragraph (b)(ii) below, the Revolving Credit
Commitment Amount shall be reduced in the manner (and
to the extent) set forth in paragraphs (b) and (c)
below. To the extent applicable, the Borrower shall,
at the time of such reduction, make any payments then
required by Section 2.3(b) hereof. The Borrower may retain
for its own use the remainder (if any) of such
proceeds of the sale of Nonessential Property which
the Borrower is not so required to apply to prepayment
of the 1991 Senior Notes or to the making of any
payments required under Section 2.3(b) hereof.
(b) (i) Upon each occasion that the Borrower
shall have received cumulative net after-tax proceeds
from any sale of Nonessential Property which is not
Relieved Track Materials which proceeds the Borrower
is not entitled to retain pursuant to the first three
sentences of paragraph (a) above, or
(ii) if during any calendar year, the
Borrower shall have received cumulative after-tax
proceeds from sales of Relieved Track Materials in an
aggregate amount in excess of $2,500,000, then,
(A) with respect to clause (i), on the fifteenth
day after the receipt of such Available Proceeds, if
on the date on which the Borrower receives such
applicable Available Proceeds a Default or Event of
Default has occurred and is continuing and, with
respect to clause (ii), on the fifteenth day after the
end of such applicable calendar year, if a Default or
Event of Default shall have occurred during such
applicable calendar year, then the Revolving Credit
Commitment Amount shall then automatically be reduced
by an amount equal to the Banks' proportionate share
of such Available Proceeds (based on the Revolving
Credit Commitment Amount and the 1991 Senior Notes
outstanding on the date of the Borrower's related
offer to pre-pay the 1991 Senior Notes in accordance
with Section 5.3 of the 1991 Note Purchase Agreement), and (B)
the Borrower will cause an amount equal to the 1991
Senior Notes' proportionate share of such applicable
Available Proceeds (based on the Revolving Credit
Commitment Amount and the 1991 Senior Notes
outstanding on the date of the Borrower's related
offer to prepay the 1991 Senior Notes in accordance
with Section 5.3 of the 1991 Note Purchase Agreement) to
be applied as prepayments of the 1991 Senior Notes in
accordance with the provisions of Section 8.14(c) below.
In addition, the Borrower agrees that if the Borrower
shall have received insurance proceeds as a result of
the diminution of its capital assets and within 90
days of the receipt thereof shall not have applied
such proceeds to the purchase of capital assets
similar to those diminished, the Borrower shall treat
such proceeds as though they were proceeds of sales of
Nonessential Property to be retained or paid over and
applied as contemplated by this Section 8.14(b).
(c) With respect to any Available Proceeds
arising out of the operation of paragraph (b) above,
the Borrower shall offer to pay, in accordance with
Section 5.3 of the 1991 Note Purchase Agreement, an amount
equal to the 1991 Senior Notes' proportionate share of
the applicable Available Proceeds (based on the
Revolving Credit Commitment Amount and the 1991 Senior
Notes outstanding as at the date of such offer) to the
holders of the 1991 Senior Notes. If, pursuant to the
provisions of paragraph (b) of this Section 8.14, an automatic
reduction of the Revolving Credit Commitment Amount
shall have occurred with respect to any such
applicable Available Proceeds, and any amount thereof
which is offered by the Borrower to the holders of the
1991 Senior Notes as a prepayment thereof as aforesaid
shall be rejected by said holders, then, in addition
to such automatic reduction of the Revolving Credit
Commitment Amount referred to in paragraph (b) above,
the Revolving Credit Commitment Amount in effect on
the date which has been specified in such offer as the
proposed date of prepayment of the 1991 Senior Notes
shall, on such date, automatically be reduced by an
amount equal to the amount of such offered Available
Proceeds so rejected by the holders of the 1991 Senior
Notes.
(d) Notwithstanding paragraphs (b) and (c) above,
if the Borrower receives, (i) at any time, net
after-tax proceeds of the type described in clause (i)
of paragraph (b) above in any single transaction in an
aggregate amount less than $25,000,000 or (ii) in any
calendar year, cumulative net after-tax proceeds from
sales of Relieved Track Materials in an aggregate
amount less than $25,000,000, then the Majority Banks,
may, notwithstanding the voting provisions of Section 21
hereof, elect, on behalf of all of the Banks, not to
give effect to any reduction in the Revolving Credit
Commitment Amount which would otherwise be required
pursuant to this Section 8.14.
Section 8.15. Maintenance of Property. The Borrower
will and will cause each of its Subsidiaries to
maintain and keep the real and personal properties
used or deemed by it to be useful in its business in
good repair, working order or condition for its
intended use, and make or cause to be made all needful
and proper repairs thereto and replacements thereof.
The Borrower will and will cause each of its
Subsidiaries to maintain the operation of its rail
lines in a manner sufficient to conduct railroad
operations at a level of performance which is in all
material respects equivalent or superior to the
operation of such lines prior to the Effective Date
and in a manner consistent with good railroad
operating procedures.
Section 8.16. Further Assurances. The Borrower will
cooperate with the Banks and execute such further
instruments and documents as the Banks shall
reasonably request to carry out to their satisfaction
the transactions contemplated by this Agreement and
the other Loan Documents.
Section 9. NEGATIVE COVENANTS. The Borrower covenants
and agrees that, so long as the Loans or the Notes are
outstanding, or any amounts are owing pursuant to this
Agreement, or the Banks have any Commitment to make
Loans hereunder:
Section 9.1. Indebtedness. The Borrower will not and
will not permit any of its Subsidiaries to create,
incur, assume, guarantee, agree to purchase or
repurchase, provide funds in respect of, or otherwise
become or be or remain liable with respect to, any
Indebtedness of any type whatsoever owed to any Person,
other than:
(a) Indebtedness evidenced by the Notes and any
other Indebtedness incurred pursuant to this
Agreement;
(b) Indebtedness evidenced by the Facility A
Notes and any other Indebtedness incurred pursuant to
the Facility A Credit Agreement;
(c) Indebtedness evidenced by the Senior Notes or
otherwise incurred pursuant to the Senior Debt
Agreements;
(d) Subordinated Debt;
(e) Indebtedness incurred in the ordinary course
of business and not incurred through the borrowing of
money or the obtaining of credit or the leasing of
property, except that unsecured credit on an open
account basis customarily extended in connection with
purchases of goods or services in the ordinary course
of business shall be permitted;
(f) Indebtedness in respect of taxes, including
withholding and payroll taxes, assessments,
governmental charges, and claims for labor, materials
or supplies and liabilities under employee benefit
plans, including pension plans, to the extent that
payment thereof is not yet due or to the extent that
the amount, applicability or validity of such
Indebtedness is being contested by the applicable
Person in good faith by appropriate proceedings
diligently pursued and adequate reserves therefor are
being maintained in accordance with Generally Accepted
Accounting Principles;
(g) Indebtedness in respect of attachments or
similar proceedings, judgments or awards which have
been in force for less than the applicable period for
taking an appeal so long as execution is not levied
thereunder, or in respect of which the applicable
Person shall at the time in good faith be prosecuting
an appeal or proceedings for review and in respect of
which a stay of execution shall have been obtained
pending such appeal or review;
(h) purchase money Indebtedness for real or
personal property purchased by the Borrower or any
Subsidiary of the Borrower for use in the ordinary
course of such Person's business, but only to the
extent that such Indebtedness does not exceed 100% of
the fair market value of the property so purchased as
at the date of purchase, and Indebtedness in respect
of capitalized leases and operating leases to the
extent that such Indebtedness is permitted by the
other covenants contained herein;
(i) Indebtedness existing on the Effective Date,
as listed and described on Schedule 9.1 attached
hereto, and any renewals, extensions or refinancings
of such Indebtedness, provided that such renewals,
extensions or refinancings shall not increase (i) the
amount of collateral securing such Indebtedness, (ii)
the aggregate amount of such Indebtedness, or (iii) if
such Indebtedness is renewed, extended or refinanced
prior to the maturity thereof, the aggregate annual
debt service requirement during the period prior to
the original maturity thereof with respect thereto;
(j) Indebtedness of the Borrower arising under an
accounts receivable financing facility entered into by
the Borrower on terms and conditions, and pursuant to
documentation, in form and substance satisfactory to
the Majority Banks if, at the time the Borrower enters
into such facility, the Revolving Credit Commitment
Amount then and thereafter in effect is permanently
reduced by an amount equal to the aggregate credit
available under such accounts receivable financing
facility; and
(k) unsecured Indebtedness in addition to the
Indebtedness permitted by clauses (a) through (i)
above, provided that after giving effect thereto, the
Borrower is not in violation of Section 9.11 hereof.
Section 9.2. Liens. The Borrower will not and will
not permit any of its Subsidiaries to create, incur,
assume or permit to exist any Lien on any property or
asset of any of such Persons, other than:
(a) Liens for taxes or assessments or governmental
charges or levies if payment shall not at the time be
required to be made in accordance with Section 8.5 hereof;
(b) Liens in respect of property or assets of the
Borrower or any of its Subsidiaries (i) under workers'
compensation, unemployment or other insurance, old age
pensions or other Social Security benefits or other
similar laws or similar legislation, (ii) in
connection with surety, appeal and similar bonds
incidental to the conduct of litigation, and (iii) in
connection with bid, performance or similar bonds
which do not exceed in the aggregate $5,000,000;
mechanics', laborers', materialmen's and similar liens
not then delinquent or which are being contested in
good faith by appropriate proceedings; and Liens
incidental to the conduct of the Borrower' business
which were not incurred in connection with the
borrowing of money or the obtaining of advances or
credit, all of which Liens permitted by this paragraph
(b) do not in the aggregate materially detract from
the value of the Borrower's property or materially
impair the use thereof in the operation of the
business of the Borrower and its Subsidiaries;
(c) Liens in respect of judgments or awards the
Indebtedness with respect to which shall be permitted
pursuant to Section 9.1(g) hereof;
(d) encumbrances and liens consisting of
easements, rights of way, general real estate taxes
not yet due and payable, municipal and zoning
restrictions, restrictions on the use of real property
and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which the
Borrower or any of its Subsidiaries is a party, and
other minor liens or encumbrances none of which
interferes materially with the use of the property so
encumbered in the ordinary conduct of the business of
the Borrower and its Subsidiaries and which do not
individually or in the aggregate have a material
adverse effect on the business of the Borrower and its
Subsidiaries, taken as a whole;
(e) Liens securing the purchase price of purchase
money Indebtedness permitted by Section 9.1(h) hereof,
provided that such Liens are limited solely to the
property so purchased and Liens in respect of
capitalized leases, the Indebtedness with respect to
which is permitted by Section 9.1(h) hereof, provided that
such Liens are limited solely to the property subject
to such capitalized leases;
(f) Liens on certain property of the Borrower
which are existing on the Effective Date, as listed
and described on Schedule 9.1 attached hereto and
Liens on the same property securing renewals,
extensions and refinancings of the Indebtedness
described in Section 9.1(i) thereof subject to all the
provisos contained therein; and
(g) Liens on accounts receivable of the Borrower
that are the subject of, and that secure, the accounts
receivable financing facility referred to in Section 9.1(j)
hereof; provided, that, in any event, the aggregate
amount of Indebtedness and other obligations secured
by Liens permitted under this Section 9.2 (other than Liens
provided for in clauses (a), (b), and (d) of this Section 9.2)
shall not at any time exceed 20% of Consolidated Total
Assets.
Section 9.3. Investments. The Borrower will not and
will not permit any of its Subsidiaries to make, or
permit to exist, directly or indirectly, any
Investments in any Person, other than:
(a) trade or customer accounts or notes
receivable for inventory sold or services rendered in
the ordinary course of business;
(b) obligations issued or guaranteed as to
principal and interest by the United States of America
and having a maturity of not more than one year from
the date of acquisition;
(c) deposits with or certificates of deposit
issued by any Bank, or any other bank whose commercial
paper is rated not less than prime-one or A-1 or their
equivalents by Moody's or S&P or their successors and
having capital and unimpaired surplus of at least
$500,000,000, and written agreements under which any
Bank or any other bank described in this Section 9.3(c)
sells and agrees to repurchase marketable direct obligations
of the United States of America;
(d) commercial paper or finance company paper
which is rated not less than prime-one or A-1 or their
equivalents by Moody's or S&P or their successors;
(e) Investments in Subsidiaries of the Borrower
and other Persons, as such Investments are in
existence on the Effective Date and as reflected in
Schedule 5.15 attached hereto, plus additional cash
investments in an aggregate amount not to exceed
$1,500,000 in any calendar year during the term of
this Agreement in such Subsidiaries and other Persons;
and
(f) Investments not otherwise contemplated in
this Section 9.3, provided that the aggregate amount of all
Investments made pursuant to this Section 9.3(f) shall not
exceed $2,500,000 at any time.
Section 9.4. Distributions. The Borrower will not,
directly or indirectly, make any Distribution except
as set forth below. The Borrower will not permit any
of its wholly-owned Subsidiaries, directly or
indirectly, to make any Distribution other than
Distributions to the Borrower, nor will the Borrower
permit any of its Subsidiaries which are less than
wholly owned to make, directly or indirectly, any
Distribution other than Distributions in which the
Borrower receives it pro rata share thereof.
Notwithstanding the foregoing, the Borrower may pay
cash dividends to the Parent subject to the following
restrictions: (a) the aggregate amount of cash
dividends declared or paid from and after July 23,
1991 (the "Start Date") shall not exceed the sum of
(i) $25,000,000 plus (ii) 50% of the Consolidated Net
Income of the Borrower for each fiscal quarter of the
Borrower ending after the Start Date in which the
Borrower had a positive Consolidated Net Income minus
(iii) 100% of the amount of the Borrower's
consolidated net loss for each fiscal quarter of the
Borrower ending after the Start Date in which the
Borrower had a consolidated net loss plus (iv) 100% of
the proceeds of each issuance of the Borrower's
capital stock occurring after the Start Date and,
without duplication, the proceeds from any equity
capital contribution made by the Parent to the
Borrower after the Start Date (the sum of (i), (ii),
(iii) and (iv) shall be hereinafter referred to as the
"Distribution Amount"), (b) the Borrower shall have
delivered evidence satisfactory to the Administrative
Agent showing compliance with the provisions of clause
(a) above, and (c) no Default or Event of Default
shall have occurred and be continuing at the time such
cash dividend is to be paid and no Default or Event of
Default shall result from the payment of such cash
dividend. For purposes only of calculating the
Consolidated Net Income of the Borrower under this
Section 9.4, any extraordinary loss (net of taxes)
calculated in accordance with Generally Accepted
Accounting Principles occurring as a result of the
premium and charges incurred in connection with the
repurchase of Subordinated Debentures shall be
disregarded.
Section 9.5. Merger, Consolidation and Sale of Assets.
The Borrower will not and will not permit its
Subsidiaries to become a party to any merger or
consolidation other than mergers or consolidations of
any Subsidiary of the Borrower into the Borrower (so
long as the Borrower is the surviving corporation) or
of any Subsidiary of the Borrower into any other
Subsidiary of the Borrower, or otherwise take any
action looking to the dissolution or liquidation of
any such Person (other than the Borrower's
Subsidiaries which are not Material Subsidiaries).
The Borrower will not and will not permit its
Subsidiaries to sell, lease or otherwise dispose of
any assets (including without limitation, any capital
stock of Subsidiaries) of any such Person which do not
constitute Nonessential Property except for (a) assets
routinely sold in the ordinary course of business for
fair and reasonable value in a manner consistent with
past practice, both as to type of property sold and
aggregate amount sold, and (b) other assets to the
extent that the aggregate book value (at the time of
disposition thereof) of all assets (including shares
of capital stock) disposed of by the Borrower and its
Subsidiaries subsequent to the Start Date under this
clause (b) plus the aggregate book value of all assets
(including shares of capital stock) then proposed to
be disposed of pursuant to this clause (b) does not
exceed 10% of Consolidated Tangible Net Worth as of
the end of the most recently completed fiscal year of
the Borrower. Notwithstanding any other provision of
this Agreement, however, the Borrower will not and
will not permit its Subsidiaries to consummate any
line sales in excess of $1,000,000 per sale or
$2,000,000 in the aggregate per year without the prior
written consent of the Majority Banks. The Borrower
shall cause all proceeds of sales of Nonessential
Property to be applied as provided in Section 8.14 hereof.
Section 9.6. Other Debt Agreements. The Borrower will
not and will not permit its Subsidiaries to effect or
permit any change in or amendment to the 1991 Note
Purchase Agreement, the 1991 Senior Notes, or any
document or instrument pertaining thereto, if the
effect of such amendment or modification would be to
commence payment or repayment of the 1991 Senior Notes
prior to the first scheduled principal payment date
therefor (as in effect on the Original Closing Date)
or shorten the time or schedule of repayment of the
1991 Senior Notes, or change in a manner adverse to
the Borrower or any of its Subsidiaries the rate,
computation, amount, or time of payment of, interest,
prepayment premiums, penalties, charges, fees, or
other amounts payable under any of such documents. In
addition, the Borrower will not and will not permit
its Subsidiaries to effect or permit any change in or
amendment to the 1991 Note Purchase Agreement, the
1991 Senior Notes or any document or instrument
pertaining thereto, which would change, amend, or
otherwise affect the defaults, events of default, any
mandatory prepayment provisions, financial covenants
or other affirmative or negative covenants in any such
document if the effect of any such amendment or
modification is to subject the Borrower or any of its
Subsidiaries to any more onerous or restrictive
provisions or to impose any additional covenants on
the Borrower or any of its Subsidiaries.
Notwithstanding the foregoing, the 1991 Note Purchase
Agreement may be amended to conform the covenants
therein to any amendments of the covenants contained
in Section 8 and 9 of this Agreement after the Original
Closing Date.
Section 9.7. Sale-Leasebacks. The Borrower will not
and will not permit any of its Subsidiaries to enter
into any sale-leaseback transactions as seller-lessee
without the prior written consent of the Majority
Banks which consent shall not be unreasonably
withheld.
Section 9.8. Business. The Borrower will not and will
not permit its Subsidiaries to engage in any line of
business not substantially similar to the businesses
such Persons were conducting on the Initial 1989
Closing Date.
Section 9.9. Fiscal Year. The Borrower will not
change its fiscal year without the prior written
consent of the Majority Banks.
Section 9.10. Consolidated Tangible Net Worth. The
Borrower will not permit Consolidated Tangible Net
Worth at any time to be less than the sum of (a)
$241,000,000, plus (b) 50% of cumulative positive
Consolidated Net Income for each fiscal quarter of the
Borrower in which the Borrower had a positive
Consolidated Net Income beginning with the quarter
commencing on January 1, 1993 and ending on the date as
of which the calculation is made, with no deductions
for any fiscal quarter of the Borrower in which the
Borrower had a consolidated net loss, plus (c) 100% of
the proceeds of each issuance of the Borrower's capital
stock after the Original Closing Date and 100% of proceeds
from each equity capital contribution made by the Parent
to the Borrower.
Section 9.11. Debt to Capitalization Ratio. The
Borrower will not permit the ratio of (a) Consolidated
Funded Debt to (b) Total Capitalization to exceed at
any time during the periods set forth in the following
chart the ratio set forth opposite the applicable
period:
Period Ratio
Original Closing Date - 12/30/93 0.65 to 1
12/31/93 - 12/31/94 0.60 to 1
1/1/95 and thereafter 0.55 to 1
Section 9.12. Consolidated EBIT Coverage. As at the
end of any fiscal quarter, the Borrower will not
permit the ratio of Consolidated EBIT (as determined
in accordance with the provisions set forth below) as
at the end of such fiscal quarter (for such fiscal
quarter and the three preceding fiscal quarters, taken
as a single period) to Consolidated Interest Charges
for the same period to be less than the ratio set
forth for the applicable period in the chart below:
Four Fiscal Quarter
Period Ending On: Ratio
3/31/93 2.75 to 1
6/30/93 2.75 to 1
9/30/93 2.75 to 1
12/31/93 3.00 to 1
3/31/94 3.00 to 1
6/30/94 3.00 to 1
9/30/94 3.00 to 1
12/31/94 and thereafter 3.35 to 1
Section 9.13. Debt Service Coverage. As at the end of
any fiscal quarter, the Borrower will not permit the
ratio (the "Debt Service Coverage Ratio") of (a)
Consolidated Cash Flow as at the end of such fiscal
quarter of the Borrower (for such fiscal quarter and
the three preceding fiscal quarters, taken as a single
period) less Consolidated Capital Expenditures (for
such four fiscal quarters, taken as a single period)
to (b) Consolidated Financial Obligations (for such
four fiscal quarters, taken as a single period) to be
less than the ratio set forth in the chart below
opposite the applicable period:
Four Fiscal Quarter
Period Ending On: Ratio
3/31/93 1.08 to 1
6/30/93 1.08 to 1
9/30/93 1.08 to 1
12/31/93 and thereafter 1.15 to 1
Section 9.14. Depreciation. The Borrower will not
change the depreciation method pursuant to which it
depreciates its assets from that set forth on Schedule
1.3 attached hereto without the prior written
consent of the Majority Banks.
Section 9.15. Transactions with Affiliates. The
Borrower will not, and will not permit any of its
Subsidiaries to, engage in any transaction with an
Affiliate of the Borrower or any of its Subsidiaries
(other than the Borrower or any of its Subsidiaries)
on terms less favorable to the Borrower or such
Subsidiary (as the case may be) than would have been
obtainable in an arms-length transaction.
Section 10. EVENTS OF DEFAULT; ACCELERATION. If any of
the following events ("Events of Default") shall
occur:
(a) if the Borrower shall default in the payment
of any principal under the Notes when the same shall
become due and payable, whether at maturity or at any
date fixed for payment or prepayment or by declaration
or otherwise, or if the Borrower shall fail to
reimburse the Letter of Credit Bank by the second
Business Day after any drawing under a Letter of
Credit; or
(b) if the Borrower shall default in the payment
of any interest, fee or other charge hereunder or
under the Notes within three Business Days of the date
when the same shall become due and payable, whether at
maturity or at any date fixed for payment or
prepayment or by declaration or otherwise; or
(c) if the Borrower shall default in the
performance of or compliance with any of the covenants
contained in Section 8 or 9 hereof (other than Section 8.3,
8.6, 8.12, or 8.15);
(d) if the Borrower shall default in the
performance of or compliance with any material term,
covenant or agreement contained herein or in the other
Loan Documents (other than those specified in clauses
(a), (b) and (c) above, but including those listed in
the parenthetical in clause (c) above), and such
default shall not have been remedied within 30 days
after written notice of such default shall have been
given to the Borrower by the Administrative Agent
(which notice shall be given on the direction of the
Majority Banks);
(e) if any representation or warranty herein, or
in any certificate or other writing at any time
delivered to the Banks pursuant hereto or in
connection herewith, shall prove to have been false or
incorrect in any material respect on the date as of
which made;
(f) if the Borrower or any of its Material
Subsidiaries shall (i) fail to pay at maturity, or
within any applicable period of grace, Indebtedness in
an aggregate principal amount in excess of $1,000,000,
or (ii) fail to observe or perform any term, covenant
or agreement contained in any agreement by which it is
bound evidencing or securing Indebtedness in an
aggregate principal amount in excess of $10,000,000
for such period of time as would permit the holder or
holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof; or
(g) if the Borrower or any of its Material
Subsidiaries shall fail generally to pay its debts or
make a general assignment for the benefit of
creditors, or if any order for relief is entered in
respect of any such Person under any bankruptcy,
reorganization, arrangements, insolvency, readjustment
of debt, dissolution or liquidation or similar law of
any jurisdiction, now or hereafter in effect; or
(h) if any order is entered in any proceeding by
or against the Borrower or any of its Material
Subsidiaries decreeing or permitting the dissolution
or split-up of such Person or the winding up of its
affairs; or
(i) if any petition or application for the
appointment of a liquidator or receiver or custodian
(or similar official) of the Borrower or any of its
Material Subsidiaries or of any substantial part of
the assets of any such Person is filed by any such
Person; or any such petition or application is filed
against any such Person and such Person approves
thereof, consents thereto or acquiesces therein, or if
any proceeding or case relating to any such Person
under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction is
commenced by any such Person; or if any such
proceeding or case is commenced against any such
Person and such proceeding or case remains undismissed
for a period of forty-five days; or
(j) if there shall remain in force, undischarged,
unsatisfied and unstayed, for more than thirty
consecutive days, any final judgment against the
Borrower or any of its Subsidiaries which, together
with such other outstanding final judgments against
such Persons, exceeds in the aggregate $3,000,000; or
(k) if any judicial lien or attachment on the
property of the Borrower or any of its Subsidiaries in
an amount of $5,000,000 or greater shall not be
released, discharged, bonded or provided for to the
satisfaction of the Banks within thirty days after
such lien or attachment shall have come into
existence; or
(l) if any Loan Document shall be cancelled,
terminated, revoked or rescinded otherwise than in
accordance with the express prior written agreement,
consent or approval of the Majority Banks, or any
action at law, suit in equity or other legal
proceeding to cancel, revoke or rescind any Loan
Document shall be commenced by or on behalf of the
Borrower; or any court or any other governmental or
regulatory authority or agency of competent
jurisdiction shall make a determination that, or shall
issue a judgment, order, decree or ruling to the
effect that any one or more of the Loan Documents or
any one or more of the obligations of the Borrower or
any Subsidiary of the Borrower under any one or more
of the Loan Documents are illegal, invalid or
unenforceable in accordance with the terms thereof;
(m) with respect to any Guaranteed Pension Plan,
an ERISA Reportable Event shall have occurred and such
event reasonably could be expected to result in
liability of the Borrower to the PBGC or the Plan in
an aggregate amount exceeding $10,000,000 and such
event in the circumstances occurring reasonably could
constitute grounds for the termination of such Plan by
the PBGC or for the appointment by the appropriate
United States District Court of a trustee to
administer such Plan; or a trustee shall have been
appointed by the United States District Court to
administer such Plan; or the PBGC shall have
instituted proceedings to terminate such Plan; or
(n) if the Parent shall at any time cease to own
all of the outstanding capital stock of the Borrower
or shall at any time create, incur, or permit to exist
any Lien on any shares of capital stock of the
Borrower;
then (A) if such event is an Event of Default
specified in clauses (g), (h) or (i) of this Section 10
with respect to the Borrower, automatically the Revolving
Credit Commitments shall immediately terminate and the
Loans (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan
Documents shall immediately become due and payable,
and (B) if such event is any other Event of Default,
then at the direction of the Majority Banks, the
Administrative Agent shall terminate the Revolving
Credit Commitments and by written notice to the
Borrower, declare all amounts owing with respect to
this Agreement and the other Loan Documents to be due
and payable, whereupon the same shall forthwith mature
and become immediately due and payable, together with
interest thereon and all other amounts then owing
thereunder and under this Agreement, without
presentment, demand, protest or notice, all of which
are hereby waived. If any Letters of Credit are
outstanding upon the occurrence of an Event of
Default, the Administrative Agent may demand that cash
or other readily marketable securities acceptable to
it in an amount equal to the Maximum Drawing Amount of
all then outstanding Letters of Credit be deposited
with the Administrative Agent in pledge pursuant to
pledge agreements in form and substance satisfactory
to the Administrative Agent, as collateral security
for the Borrower's Obligations hereunder (which
agreements shall provide that upon the expiration,
undrawn, of each Letter of Credit, cash in an amount
equal to the undrawn portion of the Maximum Drawing
Amount of such Letter of Credit shall be returned to
the Borrower). The Borrower agrees to make such
deposit with the Administrative Agent immediately upon
such demand.
Section 11. NOTICE AND WAIVERS OF DEFAULT.
Section 11.1. Notice of Default. If any Person shall
give any notice or take any other action in respect of
a claimed default (whether or not constituting an
Event of Default) under this Agreement or the Notes,
or under any other note, evidence of indebtedness,
indenture or other obligation for borrowed money in an
aggregate principal amount exceeding $1,000,000 as to
which the Borrower or any of its Subsidiaries is an
obligor, whether as principal or surety, the Borrower
shall forthwith, after obtaining knowledge thereof,
give written notice thereof to the Banks, describing
the notice or action and the nature of the claimed
default.
Section 11.2. Waivers of Default. Except as otherwise
specified in Section 21 hereof, any Default or Event of
Default specified in Section 10 hereof may be waived only upon
the written consent of the Majority Banks. Any
Default or Event of Default waived pursuant hereto
shall be deemed to have been cured and not to be
continuing during the period for which such waiver is
applicable; but no such waiver shall extend to or
affect any subsequent like default or impair any
rights arising therefrom.
Section 12. REMEDIES ON DEFAULT, ETC.
Section 12.1. Rights of Banks. In case any one or more
of the Events of Default specified in Section 10 shall have
occurred and be continuing, and whether or not all
amounts owing with respect to the Notes have been
declared due and payable pursuant to Section 10, each Bank, if
owed any amount with respect to its Note, may proceed
to protect and enforce its rights by suit in equity,
action at law and/or other appropriate proceeding,
whether for the specific performance of any covenant
or agreement contained in this Agreement or its Note,
or in aid of any right granted pursuant hereto or
thereto subject to any requirement herein that the
Majority Banks or the Administrative Agent concur
therewith, and, if such amount shall have become due,
by declaration or otherwise, each Bank may proceed to
enforce the payment thereof or any other legal or
equitable right of such Bank.
Section 12.2. Set-off. Subject to the provisions of
this Section 12, regardless of the adequacy of any collateral,
during the continuance of an Event of Default, any
deposits or other sums credited by or due from any
Bank to the Borrower may be set off against any and
all liabilities then due, of the Borrower to such Bank
hereunder. Each Bank agrees with the other Banks that
if an amount to be set off is to be applied to any
Indebtedness of the Borrower to such Bank, whether
Indebtedness evidenced by any of the Notes or due
under this Agreement or otherwise arising, such amount
shall be applied ratably to all such Indebtedness
(except to the extent not permitted by the terms of
any agreement or instrument evidencing the same).
Each Bank further agrees with the other Banks that if
such Bank shall both (i) receive from the Borrower or
from any other source whatsoever, whether by voluntary
payment, exercise of the right of set-off,
counterclaim, cross action, or enforcement of any
claim evidenced by the Notes or this Agreement, or by
proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or
otherwise, and (ii) retain and apply to the payment of
the amounts owing with respect to the Notes or of any
amounts due to such Bank under this Agreement, any
amount which is in excess of its ratable portion of
the payments received by all of the Banks, then such
Bank will make such disposition and arrangements with
the other Banks with respect to such excess, either by
way of distribution until the amount of such excess
has been exhausted, assignment of claims, subrogation
or otherwise, as shall result in each such Bank
receiving in respect of its Notes and the amounts due
such Bank under this Agreement its ratable share of
all such payments as provided in Section 2.16. Each Bank will
give written notice to the Borrower promptly after any
exercise of its rights under this Section 12.2.
Section 13. THE AGENTS.
Section 13.1. Appointment; Co-Agent. Each Bank hereby
irrevocably designates and appoints FNBB as the
Administrative Agent and the Competitive Bid Agent of
such Bank under this Agreement and each Bank hereby
irrevocably authorizes FNBB as the Administrative
Agent and the Competitive Bid Agent to take such
action on its behalf under the provisions of this
Agreement and to exercise such powers and perform such
duties as are expressly delegated to the
Administrative Agent and the Competitive Bid Agent by
the terms hereof, together with such other powers as
are reasonably incidental thereto. Notwithstanding
any provision to the contrary elsewhere in this
Agreement, the Agents shall not have any duties or
responsibilities, except those expressly set forth
herein or therein, or any fiduciary relationship with
any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist
against the Agents. Only each of the Agents shall
have any rights, duties or responsibilities as agent
for the Banks under this Agreement and the other Loan
Documents. The Co-Agent shall have no such rights,
duties or responsibilities. Any reference to an agent
for the Banks in, or in connection with, any Loan
Document shall be a reference to the Administrative
Agent or the Competitive Bid Agent, as applicable.
Section 13.2. Delegation of Duties. Each of the Agents
may execute any of its duties under this Agreement by
or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters
pertaining to such duties. Neither of the Agents
shall be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 13.3. Exculpatory Provisions. Neither of the
Agents nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (a)
liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with
this Agreement (except for its or such Person's own
gross negligence or willful misconduct), or (b)
responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties
made by the Borrower or any officer thereof contained
in this Agreement or any other Loan Document, or in
any certificate, report, statement or other document
referred to or provided for in, or received by such
Agent under or in connection with, this Agreement or
any other Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan
Document or for any failure of the Borrower to perform
its obligations hereunder or thereunder. Neither of
the Agents shall be under any obligation to any Bank
to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan
Document or to inspect the properties, books or
records of the Borrower.
Section 13.4. Reliance by Agents. Each of the Agents
shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document
or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and
statements of legal counsel (including, without
limitation, counsel to the Borrower), independent
accountants and other experts selected by such Agent.
Each of Agents may deem and treat the named payee of
any Note as the owner thereof for all purposes unless
a written notice of assignment, negotiation or
transfer thereof shall have been delivered to the such
Agent. Each of the Agents shall be fully justified in
failing or refusing to take action under this
Agreement and the Notes unless it shall first receive
such advice or concurrence of the Majority Banks as it
deems appropriate and it shall first be indemnified to
its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by
reason of taking or continuing to take any such
action. Each of the Agents shall in all cases be
fully protected in acting, or in refraining from
acting, under this Agreement and the Notes in
accordance with a request of the Majority Banks, and
such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Banks
and all future holders of the Notes.
Section 13.5. Notice of Default. Neither of the Agents
shall be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default
hereunder unless the such Agent has received notice
from a Bank or the Borrower or, in the case of the
Competitive Bid Agent, from the Administrative Agent,
referring to this Agreement, describing such Default
or Event of 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 notice thereof to the
Banks and consult with the Banks with respect to the
action to be taken. The Administrative Agent shall
take such action with respect to such Default or Event
of Default as shall be reasonably directed by such of
the Banks, provided that unless and until the
Administrative Agent shall have received such
directions, the Administrative Agent may (but shall
not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the
best interests of the Banks.
Section 13.6. Non-Reliance on Agents and Other Banks.
Each Bank expressly acknowledges that neither of the
Agents nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by
either of the Agents hereinafter taken, including any
review of the affairs of the Borrower, shall be deemed
to constitute any representation or warranty by such
Agent to any Bank. Each Bank represents to each of
the Agents that it has, independently and without
reliance upon such Agent or any other Bank, and based
on such documents and information as it has deemed
appropriate, made its own appraisal of and
investigation into the business, operations, property,
financial and other condition and credit-worthiness of
the Borrower, and made its own decision to make its
loans hereunder and enter into this Agreement. Each
Bank also represents that it will, independently and
without reliance upon either of the Agents or any
other Bank, and based on such documents and
information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under
this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business,
operations, property, financial and other condition
and credit-worthiness of the Borrower. Except for
notices, reports and other documents expressly
required to be furnished to the Banks by the Agents
hereunder, the Agents shall not have any duty or
responsibility to provide any Bank with any credit or
other information concerning the business, operations,
property, financial and other condition or
credit-worthiness of the Borrower which may come into
the possession of either of the Agents or any of its
officers, directors, employees, agents,
attorneys-in-fact or affiliates.
Section 13.7. Indemnification. The Banks agree to
indemnify each of the Agents in its capacity as such
(to the extent not reimbursed by the Borrower, and
without limiting the obligation of the Borrower to do
so), pro rata based on the amount of the Obligations
outstanding hereunder at the time the event giving
rise to the indemnification obligation occurs, from
and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without
limitation, at any time following the payment of the
Notes) be imposed on, incurred by or asserted against
such Agent in any way relating to or arising out of
this Agreement, or any documents contemplated by or
referred to herein or the transactions contemplated
hereby or any action taken or omitted by the such
Agent under or in connection with any of the
foregoing, provided that no Bank shall be liable for
the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements
resulting solely from such Agent's gross negligence or
willful misconduct. The agreements in this subsection
shall survive the payment of the Notes and all other
amounts payable hereunder.
Section 13.8. Individual Capacity. Each of the Agents
and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with
the Borrower as though such Agent were not an Agent
hereunder. With respect to the Loans made or renewed
by it and any Note issued to it, each of the Agents
shall have the same rights and powers under this
Agreement as any Bank and may exercise the same as
though it were not an Agent, and the terms "Bank" and
"Banks" shall include each of the Agents in its
individual capacity.
Section 13.9. Successor. Either of the Agents may
resign as an Agent upon ten days' notice to the Banks
and the Borrower, and either of the Agents may be
removed by the Majority Banks upon ten days' notice to
the Banks, the Administrative Agent, the Competitive
Bid Agent and the Borrower. Upon such resignation or
removal, the Majority Banks shall appoint from among
the Banks a successor agent in the applicable capacity
for the Banks, which successor agent shall consent to
serve as the administrative agent or competitive bid
agent, as applicable, hereunder and shall be approved
by the Borrower (such approval not to be unreasonably
withheld), whereupon such successor agent shall
succeed to the rights, powers and duties of the
Administrative Agent or Competitive Bid Agent, as
applicable, and the term "Administrative Agent" or
"Competitive Bid Agent," as applicable, shall mean
such successor agent effective upon its appointment,
and the former Agent's rights, powers and duties as an
Agent shall be terminated, without any other or
further act or deed on the part of the former Agent or
any of the parties to this Agreement or any holders of
the Notes. After any retiring Agent's resignation
hereunder as an Agent, the provisions of this Section 13 shall
inure to its benefit as to any actions taken or
omitted to be taken by it while it was an Agent under
this Agreement.
Section 14. PARTIES IN INTEREST. All the terms of this
Agreement and the other Loan Documents shall be
binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns
of the parties hereto and thereto, provided that the
Borrower shall not assign or transfer its rights hereunder.
Section 15. ASSIGNMENTS; PARTICIPATIONS. (a) Except as
provided herein, any Bank may assign to one or more
Eligible Assignees all or a portion of its interests,
rights and obligations under this Agreement
(including, without limitation, all or a portion of
its Revolving Credit Commitment Percentage and its
Commitment to make Standby Loans and to participate in
Letters of Credit hereunder, if any, and/or all or any
portion of any Loans at the time owing to it and the
Notes held by it); provided, however, that (i) the
Administrative Agent shall have given its prior
written consent, which consent shall not be
unreasonably withheld or delayed, (ii) the Borrower
shall have given its prior written consent, which
consent shall not be unreasonably withheld or delayed,
(iii) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Bank's
rights and obligations with respect to its Revolving
Credit Commitment Percentage and its Commitment
hereunder or with respect to the Loans owing to it and
the Notes held by it, as the case may be, (iv) the
amount of the assigning Bank's portion of the
Revolving Credit Commitment Amount subject to each
such assignment (determined as of the date of the
Assignment and Acceptance with respect to such
assignment) shall in no event be less than
$10,000,000, or if the assigning Bank's entire
Commitment is less than $10,000,000, such Bank's
entire Commitment, provided that the assignee is an
existing Bank, (v) the assignee, if it shall not
already be a Bank, shall deliver to the Administrative
Agent and the Competitive Bid Agent an administrative
questionnaire in the form of Exhibit F attached
hereto, and (vi) the parties to such assignment shall
execute and deliver to the Administrative Agent, for
notation in the Bank List, an Assignment and
Acceptance, substantially in the form of Exhibit G
hereto (the "Assignment and Acceptance"), together
with any Note or Notes subject to such assignment, and
together with payment by the Eligible Assignee to the
Administrative Agent for its own account of an
assignment administration fee in the amount of $2,500.
Upon such execution, delivery, acceptance and
notation, from and after the effective date specified
in each Assignment and Acceptance, which effective
date shall be at least five Business Days after the
execution thereof or such earlier date as the
Administrative Agent, the assigning Bank and the
assignee bank may choose, (x) the assignee thereunder
shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and
obligations of a Bank hereby, provided that such
assignee shall have no greater rights than the
assigning Bank under Section 3.1, and (y) the assigning Bank
shall, to the extent provided in such assignment, be
released from its obligations under this Agreement,
other than confidentiality requirements.
(b) By executing and delivering an Assignment and
Acceptance, the parties to such assignment thereunder
confirm to and agree with each other and the other
parties hereto as follows: (i) other than the
representation and warranty that it is the legal and
beneficial owner of the interest being assigned
thereby free and clear of any adverse claim, the
assigning Bank makes no representation or warranty and
assumes and shall have no responsibility with respect
to any statements, warranties or representations made
in or in connection with this Agreement or the
execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant
hereto; (ii) the assigning Bank makes no
representation or warranty and assumes and shall have
no responsibility with respect to the financial
condition of the Borrower or the performance or
observance by the Borrower of any of its obligations
under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such
assignee confirms that it has received a copy of this
Agreement, together with copies of the financial
statements referred to in Section 5.4 and the most recent
financial statements delivered pursuant to Section 8.4 and
such other documents and information as it has deemed
appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without
reliance upon the assigning Bank, either of the Agents
or any 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 action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee;
(vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent
by the terms hereof, together with such powers as are
reasonably incidental thereto; (vii) such assignee
appoints and authorizes the Competitive Bid Agent to
take such action as agent on its behalf and to
exercise such powers under this Agreement as are
delegated to the Competitive Bid Agent by the terms
hereof, together with such powers as are reasonably
incidental thereto; and (viii) such assignee agrees
that it will perform in accordance with their terms
all of the obligations which by the terms of this
Agreement are required to be performed by it as a
Bank.
(c) The Administrative Agent shall maintain a
copy of each Assignment and Acceptance delivered to it
and a bank list or similar list for the notation of
the names and addresses of the Banks and the Revolving
Credit Commitment Percentage of, and principal amount
of the Loans owing to, the Banks from time to time
(the "Bank List"). The entries in the Bank List shall
be conclusive, in the absence of manifest error, and
the Borrower, the Administrative Agent and the Banks
may treat each person whose name is noted in the Bank
List as a Bank hereunder for all purposes of this
Agreement. The Bank List shall be available for
inspection by the Borrower or the Banks at any
reasonable time and from time to time upon reasonable
prior notice.
(d) Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment,
together with any Note or Notes subject to such
assignment and the written consent of the Borrower to
such assignment, the administrative questionnaire
referred to above, and the $2,500 fee referred to
above, the Administrative Agent shall (i) note the
information contained therein in the Bank List, and
(ii) give prompt notice thereof to the Borrower and
the Banks. Within five Business Days after receipt of
such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent, in
exchange for the surrendered Note or Notes, a new Note
or Notes to the order of such Eligible Assignee(s) in
an amount equal to the amount assumed by such Eligible
Assignee(s) pursuant to such Assignment and Acceptance
and, if the assigning Bank has retained some portion
of its obligations hereunder, a new Note or Notes to
the order of the assigning Bank in an amount equal to
the amount retained by it hereunder. Such new Note or
Notes shall be in an aggregate principal amount equal
to the aggregate principal amount of the surrendered
Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be
in the form of the assigned Notes. The surrendered
Note or Notes shall be cancelled and returned to the
Borrower.
(e) Each Bank may without the consent of the
Borrower or the Administrative Agent sell
participations to one or more banks or other entities
in all or a portion of its rights and obligations
under this Agreement (including, without limitation,
all or a portion of its Commitment hereunder and the
Loans owing to it and the Note held by it); provided,
however, that the only rights granted to the
participant pursuant to such participation
arrangements with respect to waivers, amendments or
modifications of the Loan Documents shall be the
rights to approve waivers, amendments, or
modifications which require the consent of all of the
Banks as provided in Section 21 hereof. The Borrower further
agrees that a Bank may disclose information obtained
by such Bank pursuant to this Agreement to
participants or potential participants in the Loans,
provided that such participants agree to be bound by
the confidentiality requirements hereunder.
(f) Anything contained in this Section 15 to the contrary
notwithstanding, any Bank may at any time pledge all
or any portion of its interest and rights under this
Agreement (including all or any portion of its Note)
to any of the twelve Federal Reserve Banks organized
under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341.
No such pledge or the enforcement thereof shall release
the pledgor Bank from its obligations hereunder or
under any of the other Loan Documents.
Section 16. EXPENSES; INDEMNITY. (a) Whether or not the
transaction contemplated hereby shall be consummated,
the Borrower will pay (1) the out-of-pocket costs of
the Administrative Agent of (i) preparing, copying and
distributing this Agreement and the other Loan
Documents, (ii) syndicating the credit facility
provided herein, including, without limitation, the
out-of-pocket costs of preparing, copying and
distributing all necessary documentation with respect
thereto, (iii) any transfer taxes, documentary taxes,
assessments or charges made by any governmental
authority by reason of the execution and delivery of
the Loan Documents (the Borrower hereby agreeing to
indemnify the Banks with respect thereto); (2) the
reasonable fees, expenses and disbursements of the
Banks' Special Counsel and the reasonable allocated
costs of staff counsel for the Administrative Agent,
incurred in connection with the preparation of this
Agreement and the other Loan Documents or in
connection with amendments, modifications, approvals,
consents or waivers hereto or thereto; (3) all
reasonable costs and expenses (including reasonable
attorneys' fees and costs and the reasonable allocated
costs of staff counsel) incurred or sustained by the
Administrative Agent, the Competitive Bid Agent and
the Banks in connection with the exercise, protection
or enforcement of any of the Administrative Agent's,
Competitive Bid Agent's or the Banks' rights,
remedies, powers or privileges under this Agreement
and the other Loan Documents or the administration
thereof after the occurrence and during the
continuance of an Event of Default; and (4) all
reasonable costs and expenses (including reasonable
attorney's fees and costs) incurred or sustained by
the Agents and the Banks and their respective
shareholders, directors, agents, officers,
Subsidiaries and affiliates (each an "Indemnified
Party") in connection with any litigation,
proceeding or dispute, whether arising hereunder or
otherwise, in any way related to the Agents' and the
Banks' relationship with the Borrower or any of its
Subsidiaries hereunder, other than as directly caused
by the gross negligence or willful misconduct of any
Indemnified Party. In any investigation, proceeding
or litigation, or the preparation therefor, the Agents
and the Banks shall be entitled to select their own
counsel (which counsel shall be reasonably
satisfactory to the Borrower) and, in addition to the
foregoing indemnity, the Borrower agrees to pay
promptly the reasonable fees and expenses of one such
counsel except to the extent that such fees and
expenses are the result of the gross negligence or
willful misconduct of either of the Agents or the
Banks. The Borrower will not, without the prior
written consent of the Agents and the Banks, settle or
compromise any such investigation, proceeding or
litigation if such settlement or compromise requires
an admission of either of the Agents' or the Banks'
wrongdoing and neither the Agents nor the Banks nor
any other Indemnified Party will settle or compromise
any such investigation, proceeding or litigation
without the prior written consent of the Borrower if
the Borrower is required to indemnify the Agents or
the Banks or such other Indemnified Party therefor.
The covenants of this Section 16 shall survive payment or
satisfaction of payment of amounts owing with respect
to this Agreement or the Notes.
(b) The Borrower covenants and agrees to
indemnify and hold harmless each Indemnified Party and
each Indemnified Party's successors and assigns, from
and against all damages, losses, settlement payments,
obligations, liabilities, claims, suits, penalties,
assessments, citations, directives, demands,
judgments, actions, causes of action, costs and
expenses (including without limitation the fees and
disbursements of counsel and environmental
consultants) incurred, suffered, sustained or required
to be paid by an Indemnified Party and arising under
any Environmental Law, or otherwise related to
environmental or Hazardous Substance matters in
connection with the transactions contemplated by this
Agreement, except any of the foregoing which result
from the gross negligence or willful misconduct of the
Indemnified Party. The Agents and the Banks shall
have the right to employ separate counsel and to
participate in the defense and investigation of any
claim, action or proceeding, and the Borrower shall
bear the expense of such counsel. The covenant of
this Section 16(b) shall survive payment or satisfaction of
payment of amounts owing with respect to the Notes or
any other Loan Document.
Section 17. SURVIVAL OF COVENANTS, ETC. All covenants,
agreements, representations and warranties made herein
and in any certificates or other papers delivered by
or on behalf of the Borrower pursuant hereto shall
survive any investigation made by the Banks and the
making by the Banks of the Loans, as herein
contemplated, and shall continue in full force and
effect so long as the Loans or other amounts due under
this Agreement or the Notes remains outstanding and
unpaid. All representations and warranties contained
in any certificate or other document delivered to the
Banks at any time by or on behalf of the Borrower
pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations
and warranties by the Borrower hereunder.
Section 18. NOTICES. Except as otherwise specified
herein, all notices and other communications made or
required to be given pursuant to this Agreement shall
be in writing and shall be either delivered by hand or
mailed by United States first-class mail, postage
prepaid, or sent by telex or telecopy confirmed by
letter, addressed as follows:
(a) if to the Borrower, at 455 North Cityfront
Plaza Drive, Chicago, Illinois 60611-5504, Attn: Chief
Financial Officer, or such other address for notice as
the Borrower shall last have furnished in writing to
the Person giving the notice;
(b) if to FNBB, or the Administrative Agent or
the Competitive Bid Agent, at 100 Federal Street,
Boston, Massachusetts 02110, Attn: Transportation
Division, 01-08-01, or such other address for notice
as such Bank or the Administrative Agent shall last
have furnished in writing to the Person giving the
notice;
(c) if to any Bank other than FNBB, at the
address for notice for such Bank set forth on the
signature pages hereto or at such other address as
such Bank shall last have furnished in writing to the
Person giving the notice.
Except for Notices of Borrowing, any notice so
addressed shall be deemed to have been duly given or
made and to have become effective (i) if delivered by
hand to an officer of the party to which it is
directed, at the time of the receipt thereof by such
officer, (ii) if sent by first-class mail, postage
prepaid, on the earlier of (A) the fifth Business Day
following the mailing thereof, or (B) the date of its
receipt, if a Business Day, or if not a Business Day,
the next succeeding Business Day, or (iii) if sent by
telex or telecopy, at the time of dispatch thereof, if
in normal business hours in the state or country where
received or otherwise at the opening of business on
the next succeeding Business Day.
Section 19. MISCELLANEOUS. This Agreement shall for all
purposes be construed in accordance with and governed
by the laws of the State of New York. The rights and
remedies herein expressed are cumulative and not
exclusive of any other rights which the Banks would
otherwise have. Any instruments required by any of
the provisions hereof to be in the form annexed hereto
as an exhibit shall be substantially in such form with
such changes therefrom, if any, as may be approved by
the Majority Banks and the Borrower. The captions in
this Agreement are for convenience of reference only
and shall not define or limit the provisions hereof.
This Agreement or any amendment may be executed in
separate counterparts, each of which when so executed
and delivered shall be an original, but all of which
together shall constitute one instrument. In proving
this Agreement, it shall not be necessary to produce
or account for more than one such counterpart.
Section 20. ENTIRE AGREEMENT, ETC. This Agreement and
any other documents executed in connection herewith or
therewith express the entire understanding of the
parties with respect to the transactions contemplated
hereby. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated
orally or in writing, except as provided in Section 21 hereof.
Section 21. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except
as otherwise expressly provided in this Section 21, any action
to be taken or any consent or approval required or
permitted by this Agreement or any other Loan Document
to be given by the Banks may be given, and any term of
this Agreement or any other Loan Document may be
amended and the performance or observance by the
Borrower or any other person of any of the terms
thereof and any Default or Event of Default (as
defined in any of the above-referenced documents or
instruments) may be waived (either generally or in a
particular instance and either retroactively or
prospectively) with, but only with, the written
consent of the Majority Banks; provided, however, that
no such consent or amendment which affects the rights,
duties or liabilities of the Administrative Agent
shall be effective without the written consent of the
Administrative Agent and no such consent or amendment
which affects the rights, duties or liabilities of the
Competitive Bid Agent shall be effective without the
written consent of the Competitive Bid Agent.
Notwithstanding the foregoing, no amendment, waiver or
consent shall do any of the following: (a) increase
the principal amount of any Loans (or subject any Bank
to any additional obligations), or reduce the
principal of or interest on any Loan or any fees
payable hereunder, or extend or postpone any date
fixed for any payment in respect of principal of, or
interest on, the Loans, or any fees payable hereunder,
subject to the provisions of Section 8.14(d) hereof, without
the prior written consent of each Bank affected
thereby, or (b) change the definition of "Majority
Banks" or aggregate Revolving Credit Commitment
Percentage or number of Banks which shall be required
for the Banks or any of them to take any action under
the Loan Documents, or amend Section 16 or this Section 21,
or change the Revolving Credit Commitment Percentage of any Bank
(except pursuant to Section 15 hereof) or extend or postpone
any date fixed for the reduction of the Revolving
Credit Commitment Amount, subject to Section 8.14(d) hereof,
without the prior written consent of all of the Banks.
No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on
the part of the Banks in exercising any right shall
operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the
Borrower shall entitle the Borrower to other or
further notice or demand in similar or other
circumstances.
<PAGE>
Signed and delivered, as of the date set forth at
the beginning of this Agreement by the Borrower, the
Banks, the Administrative Agent and the Competitive
Bid Agent.
ILLINOIS CENTRAL RAILROAD COMPANY
By:
Title: Vice President and
Chief Financial Officer
THE FIRST NATIONAL BANK OF BOSTON,
as Administrative Agent and
Competitive Bid Agent
By:
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Co-Agent
By:
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON
By:
Title: Vice President
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By:
Title: Vice President
Address: Bank of America National
Trust and Savings Association
Atlanta Corporate Office
1230 Peachtree Street N.E.
- Suite 3600
Atlanta, Georgia 30303
Attention: Dennis M. Kaiser,
Vice President
Glenn F. Edwards,
Vice President
THE CHASE MANHATTAN BANK, N.A.
By:
Title: Vice President
Address: The Chase Manhattan Bank N.A.
One Chase Manhattan Plaza -
5th Floor
New York, New York 10081
Attention: Francis M. Cox, III,
Vice President
THE TORONTO DOMINION BANK,
CAYMAN ISLANDS BRANCH
By:
Title:
Address: The Toronto Dominion Bank
Transportation Division
31 West 52nd Street - 22nd Floor
New York, New York 10019
Attention: William Hoffman, Director
Richard E. Donner, Director
<PAGE>
CONTINENTAL BANK N.A.
By:
Title: Vice President
Address: Continental Bank N.A.
231 South LaSalle Street -
4th Floor
Chicago, Illinois 60697
Attention: Timothy J. Pepowski,
Vice President
DEPOSIT GUARANTY NATIONAL BANK
By:
Title: Senior Vice President
Address: Deposit Guaranty National Bank
One Deposit Guaranty Plaza
11th Floor
Jackson, Mississippi 39205
Attention: Anthony Thomas,
Senior Vice President
KLEINWORT BENSON LIMITED
By:
Title: Senior Vice President
Address: Kleinwort Benson Limited
Three First National Plaza
- Suite 1390
Chicago, Illinois 60602
Attention: Kenneth Hamilton,
Senior Vice President
<PAGE>
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By:
Title: Deputy General Manager
Address: The Mitsubishi Trust and Banking
Corporation
801 South Figueroa - Suite 2400
Los Angeles, California 90017
Attention: Rex A. Olson,
Assistant Vice President,
Finance and Investment
